New Research Shows the Path from Engagement to Productivity
By William Keenan Jr.
There is a real ROI to corporate efforts to engage employees, according to research by Corporate Executive Board research arm CLC-Genesee, which has been surveying and analyzing employee engagement at companies for a number of years.
According to Sarah Johnson, Managing Director of CLC-Genesee, “Engagement represents an employee’s degree of identification with their organization, with their company, and involves both a rational and an emotional component. And we have learned over the years that the emotional component is really very significant in driving people to go above and beyond – to not only perform their jobs, but to support the company.”
Specifically, Johnson says, “Research that has been done by CLC-Genesee and others in the field has shown consistently that highly engaged employees are more productive, and that in turn has a positive influence on the company’s bottom line,” adding that CLC-Genesee has also done a fair amount of research that links engagement levels to revenue per employee.
Engagement and Productivity
Research by CLC-Genesee and its parent, the Corporate Executive Board, shows that average three-year revenue growth for “high-performing companies” – meaning, in part, those that effectively manage employee engagement – was more than twice that of their industry peers.
In another recent study of U.S. retailers, CLC-Genesee research revealed that there is a relationship between employee engagement and inventory “shrink.” According to Johnson, “The more engaged employees are, the lower the inventory shrink in those stores. We’ve seen this at an aggregate level, but we’ve also seen that kind of a relationship on an individual level with some of the retail clients we’ve worked for.”
Engagement is also one of the major factors driving employee retention. “The engaged employee is more likely to stay with their employer than one who has a lower level of engagement,” Johnson explains. “So that’s a clear benefit to having an engaged workforce as well, because it’s very costly to continuously have to hire new employees, train them and wait for them to get up to speed in terms of their ability to produce for the company.”
In doing research for a client with a large percentage of its employee population in customer-facing roles, CLC-Genesee found that engagement is strongly related to customers’ ratings of satisfaction with that particular company and with the services they receive from that company. “In fact, there has been a lot of research over the years that has linked the engagement of customer-facing employees with the satisfaction of customers,” notes Johnson.
Making a Connection
Even more interesting than the link between engagement, productivity and customer satisfaction, says Johnson, is that you can use employee engagement analysis to identify areas in your company where a change is necessary, and where those changes that can be implemented are going to have a positive impact.
For instance, “One of the biggest levers that we’ve identified is a feeling of connection between what it is an employee does and what the company is all about,” Johnson says. “So if I feel that my work is essential to this business, that it reflects what our company is all about [and] I can see that link and the value of what it is I do, that drives engagement – which then has all sorts of positive consequences.”
A company’s reward and recognition efforts, Johnson adds, can help reinforce an employee’s feeling that ‘I am valued by this organization, that I am important here and that I make a contribution.’ But an organization has to stress transparency in order for reward and recognition programs to work most effectively to support engagement.
“Companies have to be clear about what their objectives are for serving customers,” Johnson says. “What kinds of competencies and behaviors are they looking for employees to demonstrate? You can tell employees what you’d like them to do and how you would like them to behave, but how you actually act upon that – and what you reinforce through rewards and recognition – is what’s really going to make people take notice and understand what the organization is all about.”
“There is great value in understanding multiple aspects of the work environment, because all of those components ultimately influence how engaged one’s workforce is,” Johnson explains. “It’s influenced not only by my sense of connection with the company strategy, but by the work that I do, the people I work with and my relationships with them. It’s also influenced a great deal by my manager – because that person comes to represent the company in many ways.”
In fact, she says, “to the extent that my manager communicates with me, and to the extent that I view this person as someone who is honest, has high integrity and articulates clear goals for my group – all of those influence my level of engagement.” Other key factors include an individual’s ability to get the job done effectively – in other words, says Johnson, “Do I have the tools and resources that I need?” “Are the processes as simple and as non-bureaucratic as they could be?”
Finally, she says, “I have to feel I have the ability to grow my capabilities within the organization – that I can learn more things and take on additional responsibilities; that I have opportunities.”
In general, “people are highly motivated to do a good job, to do a better job and to learn more,” Johnson concludes. “To the extent that you can provide those opportunities, that has a big influence on how engaged your workforce can be.”
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