This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

September 8, 2010

Engaged Employees Increase Bottom Line Performance

According to a recent survey by Sibson Consulting, "employee engagement" remains low. Sibson defines employee engagement slightly differently than we do: "employees knowing what to do and wanting to do it". (We typically use the Conference Board's definition: "A heightened emotional connection that an employee feels for his or her organization, that influences the individual to exert greater discretionary effort to his or her work.")

You might expect that anyone with a job during these challenging economic times would be happy to have one. However, Sibson's research shows close to half of today's employees are not happy at work, and the cost to employers is substantial.

Employees who considered themselves engaged represented only 52 percent of those surveyed. The most engaged employees linked their positive feeling about work to management. The top four reasons for employee engagement were support of the employee, understanding of performance management, trust in management, and performance management effectiveness.

According to Gallup Inc. research conducted on employee perceptions of work conditions, doing a better job engaging employees has a direct effect on a company's bottom line.

Gallup psychologist James Harter, a researcher in Omaha, Nebraska, examined ten companies' employee satisfaction surveys, employee retention rates, customer loyalty, and financial performance. He found a direct relationship between employee satisfaction and overall company performance. Gallup's results indicated that when employees have positive perceptions of their jobs, their organizations experience higher employee retention, increased customer loyalty, and improved financial outcomes. The journal "Perspectives on Psychological Science" published Harter's research.

Reading between the lines, we can easily infer that having positive perceptions of their jobs will result in higher levels of employee engagement. Harter added some advice to managers: Help increase job satisfaction and help your organization by clarifying expectations for employees. Help "employees see the ultimate outcomes the organization is working to achieve and how they play a role in achieving those outcomes".

It is vital for employers to recognize that if they do not pay attention to negative feedback from their employees, they will be in trouble when the coming recovery arrives. They can expect unprecedented churning. Wise employers are looking at what they have to do now and will reap the financial rewards.


OOPS: Special thanks to Alan Applegate, VP of Business Development for Palladin Industries. Alan called to our attention that "Polycom, Teliris, and Tandberg all have Telepresence[-like] systems that were out much earlier and [for] longer [periods] than Cisco and Hewlett-Packard. The latter two just happen to be larger companies with more market presence and financial resources to promote the concept and technology."

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