I visit different companies and see the outcomes of applied employee engagement policies in the companies.
Clearly, there are a lot of works that should be done about employee engagement in businesses in Turkey and abroad.
What is Employee Engagement? Did you ask this question to your leaders and managers? This is a key question for every business leader or manager!
I have to say that employee engagement impacts upon key business and performance metrics against local and global competition.
Today, we can see how people are living and what type of opportunities they have here or abroad. They see and understand everything!
Today, employees want to have more opportunities and better living conditions. But we are living in an uncertain, complex and highly competitive business world. There are a lot of changes in technology, services, customer demands and living style.How companies should compete and achieve a sustainable growth and profitability in a globalized business world, this is a big question of leadership!
Today, employee engagement is a crucial issue for companies. It is an investment we have to make for the privilege of future proofing our organization’s operational excellence, organizational agility, productivity, systematic and competitive innovation, organizational alignment and overall business performance.
Therefore, I want to summarize employee engagement:
Employee Egagement=Employee Motivation= Employee Performance= Employee Productivity= Systematic Innovation = Growth & Profitability =Customer Loyalty
In other words, employee engagement shows the efficiency of employees in expressing themselves cognitively, emotionally and physically during role performances. These are:
If employees engage with their jobs and employers, they are more productive according to researches. They work more efficiently to achieve a high performance organization. If they are highly engaged, they will output twice as likely to be top performers.
In 2009, Harter et Al. Conducted a survey and they detected that an 18% drop in productivity between top and bottom performers in employee engagement and there was a 60% drop in quality in products ( defects).
In another survey, Gonrig 2008, it was found that there was a serious 1,000 percent increase in errors among disengaged and engaged employees in Fortune 100 companies.
Higher Engagement will create lower absenteeism, higher focus, morale, trust and motivation. This will create increased productivity and efficiency.
In a survey made by Harter et Al. 2009, they found that absenteeism is 37% higher in scoring the bottom 25% on employee engagement and this will affect their productivity and overall efficiency.
Of course, I have to say that there are also company spesific factors that affect the productivity. Leaders should consider these factors such as firm’s capability in innovation management, human capital, machinery and equipment. Clearly, investing in machinery and equipment that covers information and communications technology enables the adoption and diffusion of the latest state –of-the- art technologies, which in turn boost productivity and market share in the business. I know that companies that having higher investment in machinery and equipment generally have higher productivity, growth and customer value.
Employee safety is another critical factor in obtaining a higher engagement. If employees are not engaged, they will focus less on their work and they will make mistakes. This will create serious implications for industries in which safety is an important factor for employees.
Harter et al. in 2009 found that top 25% performers in engagement have 49% less safety incidents than bottom 25%.
In another study it was shown that 70% of workplace accidents occur due to unsafe behaviours of employees.
Lockwood studied the average cost of a safety incident for a non-engaged employee was USD392 and for an engaged employee was USD63.
Please note that human and financial cost of safety incidents will cause serious issues on employee engagement and it will negatively affect productivity, product quality, organizational alignment and customer performance.
Leadership should regularly check the workplace and take preventive measures to protect the employee health. They have to give regular training and practices to the employees.
It is evident that engaged employees are less likely to leave their job. Because their emotional commitment is higher than disengaged employees.
I know that retention has a twofold impact on profitability
In a survey, it was detected that the most engaged employees are 87% less likely to leave their organization. For example, this study showed that the average voluntary turnover rate is 13% in 100 best places to work while 28.5% in other business in the same industries.
Higher employee retention rate shows the impact of higher employee motivation, trust, morale and effective organizational alignment. So that companies will keep and improve their organizational knowledge and focus effectively on company purpose to create a high performance organization in a superior commitment.
Employee retention can produce many benefits such as significant cost saving, improved quality and productivity, positive morale and satisfaction, trust to upper management, customer loyalty, innovation capability, continuity of employment, organizational alignment, operational excellence, organizational agility,
4- Customer Loyalty
I have to say that every person in the organization are customers. They can recommend a business to others if they feel positive in the company. If they engaged well they become more customer focused. They are brand ambassadors.
A survey showed that top 25 engaged organizations had 12% higher customer ratings. This is a big impact on business success. We are living in the world of social media, therefore we have to have highly engaged employees who they produce quality products and services and share their experiences in different social media platforms that we can’t control everything. They will interact with customers and share their experiences about company, products, services and culture. If employees are not engaged well this will create failures in long-term company success.
I have to define that having loyal customers who promote a business helps and supports growth and profitability. This enables any organisation to be a low cost provider and achieve competitive customer value.
Higher engagement creates higher voluntary efforts. This improves client service and contributes better customer experience. So that company will obtain increased customer loyalty.
Employee engagement has a positive effect on profitability. Because employees are highly committed and focused in their works. So that employees will have effective communication, collaboration, trust, recognition and hard work to achieve the company purpose on time. The top 25% organizations in employee engagement had 16% more profitability. This shows the importance of employee engagement about the profitability.
6- Competitive Innovation
Employee engagement is important to create an innovative culture in any organization. If they are engaged, they will work effectively, improve their work continuously and create a systematic innovation culture that contributes to a sustainable growth and profitability.
Innovation and productivity improvements are key factors in business performance.Innovation depends on a firm’s ability to create, acquire and manage knowledge. In other words, success involves developing and launching business opportunities by coomercialising new products, businesses, processes or services faster than competitors.
Today, companies can only create transient competitive advantages through acts of innovation. Therefore, companies should invest in skills and knowledge, physical assets, technology, new brands etc, to add new resources, developing and implementing new capabilities to move beyond what the firm is already successful.This action will create the incentives to innovate and support employee engagement.
I have to define that senior leadership should focus on employee engagement and focus on the business risks, key contributors, engagement barriers and culture. Therefore, they have to ask the following questions and take necessary actions accordingly to achieve the highest performance.
- How engaged are the employees?
- What are the results of high engagement in terms of the productivity, operational excellence and organizational agility?
- How can we drive their full commitment and volunteer extra efforts for the job and the organization?
Another important point is the leader/manager activities and attributes that are enabler of employees’ commitment and focus to their jobs, teams, organizations and strategic purpose.
Leadership should know that employee engagement drives high performance and ensures long-term success of the business in growth, profitability, competitive advantage and higher customer value. Top management should take necessary actions for employee engagement and work with the well experienced leaders or advisors to implement the excellence in engagement and achieve the positive outcomes as growth, profitability, longevity and competitiveness in the market.
For example, Hay Group survey study showed that top performers on both both engagement and enablement achive revenue growth 5.5 times greater than their industry peers who ranked lowest in 2010.
Finally, I have to say that measuring and improving employee engagement on a regular basis, will bring high performance to the business leaders.
How do you create and sustain a high-engagement with employees to achieve a high performance in your organization?