Employee engagement drives work performance. Engaged employees work harder and smarter. They stick around longer, refer new people, and help to grow your business. Best of all, engaged employees create a virtuous circle where they encourage and uplift other employees to be more engaged, too.
A 5% increase in employee engagement creates a 3% rise in revenue growth the following yearAon Hewitt
The problem is that employee engagement is thoroughly misunderstood in most organizations. At The Brew, we have seen Leaders think it’s a ‘nice to have.’ Others equate high engagement with flashy perks. The decision maker group simply isn’t sure what engagement looks like or what to do about it in their own organizations.
Employee Engagement & Business Outcomes
Almost everyone can agree that employee engagement is important. Companies with highly engaged employees outperform their peers in terms of customer loyalty (10% increase), productivity (20%), and profitability (21%). Not as many people can agree on how to define it. And just to see how much does disengagement costs, no points for guessing that it’s very substantial (Estimate the disengagement costs)
Gallup says that a ratio of 1.5 to 1 is the average healthy company’s employee engagement, and ratio of 8:1 is a world-class company’s employee engagement ratio. It as well estimates that nearly half of US workforce, or 49 percent, is disengaged while 18 percent is actively disengaged. Comparatively, Companies with engaged employees outperform their competition by 147% in earnings. Each Disengaged employee costs 34 % of their salary, along with being an organizational drag.
Employee Engagement – Industry Leaders POV
Each industry leader has its own interpretation:
- Gallup defines engaged employees as: “those who are involved in, enthusiastic about and committed to their work and workplace.”
- For Aon Hewitt, employee engagement is: “the level of an employee’s psychological investment in their organization.”
- IBM Kenexa defines Employee engagement as: “the extent to which employees are motivated to contribute to organizational success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organizational goals.”
- Harvard Business Review sees it as “Employee engagement is when employees want to come to work, are capable of doing their jobs, and understand how their work contributes to the success of the organization.
Employee Engagement – The Brew’s Perspective
After quite a research & reflections, the irony was that each organization had its own definition for Employee Engagement, accompanied with their respective metrics & with minimal commonalities. The Brew, on the other hand settled with the following fundamental understanding:
Employee engagement is what happens when an employee’s objectives are in resonance with the organization’s objectives.The Brew’s take on Employee Engagement
This happens because the organization gives a feeling that he/she is part of something that is bigger than him/her. As an effect, an employee is in a state of flow in all the activities he/she performs.
State of Flow is the state of mind when a person is completely immersed in the activity he/she is performing. He/She feels that the body and mind are working in such symphony that they needn’t put in any kind of effort. A state characterized with energy, rather than being drained.
Therefore, What Employee Engagement is not !
Too often, employee engagement is confused with employee satisfaction or performance management.
- Employee satisfaction is merely the extent to which employees are content with their position. Employees can be satisfied or happy with certain aspects of their work (i.e. workload, hours, location), without being engaged with or committed to the organization’s success.
- Like employee engagement, performance management can take the form of surveys or employee questionnaires. But performance management is about setting and tracking goals for individual employees. Employee engagement, the other hand, gathers specific signals at a specific time, and is best measured across the entire company at once.
Global Drivers of Employee Engagement (not exhaustive)
|Senior Leadership||Communication||Physical Work Environment||Customer Focus|
|Innovation||Performance Enablement||Safety||Organizational Purpose|
|Manager||Learning & Development||Sense of Accomplishment||Organizational Capability Maturity|
|Recognition||Organizational Reputation||Diversity||People Capability Maturity|
|Work – Life Balance||Total Rewards||Career Opportunities||Collaboration|
|Belongingness||Recognition||Talent Management||Psychological Safety Etc.|
Ingredients of The Brew’s Employee Engagement Index
The Brew’s Engagement Solutions uniquely blends the Indicators & Drivers, enabling businesses with a state of employee classification as Engaged, Disengaged & Actively Disengaged.
- Employee Engagement Indicators – Pride, Motivation, Commitment, Connection, Belongingness, Accomplishment, Organizational Confidence
- Employee Engagement Drivers – Leadership (Senior Leaders), Management (Manager), People & Teams (Communication & Collaboration, Teamwork & Enablement), Role (Enablement, Alignment & Involvement), Culture (Work & Life blend, Health & Wellbeing, Psychological Safety, Innovation, Service & Quality Focus, Employer Reputation, Autonomy & Rewards) , Growth & Development (Feedback & Recognition, Learning & Development)
Business Case for The Brew’s Employee Engagement Index
The Brew’s Employee Engagement Index enables Organizations & Businesses to figure out the following effectively, in a data driven & scientifically validated manner:
- Which elements of the work experience have the largest influence on our employee engagement and retention?
- How can we improve growth and profitability through our employees?
- How can we improve employee retention / reduce employee turnover and save costs?
- How can we improve our Employee Value Proposition to be more attractive to current and potential employees?
- How does engagement differ for employees in our top-performing units?
- In which area will our HR spend deliver the greatest return on investment?
- Which actions are best addressed as corporate-wide initiatives and which at a smaller group level
The Business Case of Engaged Employee – By investing in engagement and enablement of employees, companies can reduce turnover rates by 54 per cent and increase revenue growth by 4.5 times.
Asking the right questions ensures that HR leaders can be as impactful as possible. And hence instead of starting with the templatized “one-size-fits-all” employee engagement tools, one should be focused on gathering specific employee insights, through data-driven initiatives that focus on the most urgent areas for improvement within your company.
The Key to solving business problems, with root causes attributed to human capital is to track the right metrics, so that one know’s where to devote the employee engagement effortsRealizations from our experiences at The Brew