What is employee engagement anyway? Let’s start with what it’s not…
Employee engagement does not mean employee happiness. Someone might be happy at work, but that doesn’t necessarily mean they are working hard, productively on behalf of the organization. While company game rooms, free massages and Friday keg parties are fun–and may be beneficial for other reasons–making employees happy is different from making them engaged.
Employee engagement doesn’t mean employee satisfaction. Many companies have “employee satisfaction” surveys and executives talk about “employee satisfaction”, but the bar is set too low. A satisfied employee might show up for her daily 9-to-5 without complaint. But that same “satisfied” employee might not go the extra effort on her own, and she’ll probably take the headhunter’s call luring her away with a 10% bump in pay. Satisfied isn’t enough.
Definition: Employee engagement is the emotional commitment the employee has to the organization and its goals.
This emotional commitment means engaged employees actually care about their work and their company. They don’t work just for a paycheck, or just for the next promotion, but work on behalf of the organization’s goals.
When employees care—when they are engaged—they use discretionary effort.
This means the engaged computer programmer works overtime when needed, without being asked. This means the engaged retail clerk picks up the trash on the store floor, even if the boss isn’t watching. This means the TSA agent will pull a bag suspicious bag to be searched, even if it’s the last bag on their shift.
Engaged employees lead to better business outcomes. In fact, according to Towers Perrin research companies with engaged workers have 6% higher net profit margins, and according to Kenexa research engaged companies have five times higher shareholder returns over five years.
How does employee engagement lead to higher stock prices? The ROI of engagement comes from what I call the Engagement-Profit Chain:
Engaged Employees lead to…
higher service, quality, and productivity, which leads to…
higher customer satisfaction, which leads to…
increased sales (repeat business and referrals), which leads to…
higher levels of profit, which leads to…
higher shareholder returns (i.e., stock price)
As former Campbell’s Soup CEO, Doug Conant, once said, “To win in the marketplace you must first win in the workplace.”
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Check out, Employee Engagement for Everyone: 4 Keys to Happiness & Engagement at Work by NY Times bestselling author Kevin Kruse.
Read more:
Manage Or Lead? Do Both.
The Real Job Creators: Consumers
The Case For Hiring ‘Under-Qualified’ Employees
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Comments
Kevin,
Very clear and very well stated.
Unfortunately, there is a lot of bum dope out there about engagement. Not knowing what it is is bad enough, but very very few actually know how to achieve it. As Professor John Oliver wrote in the report “Engaging For Success”, “Ninety-nine percent of failure to engage staff is down to management behaviour”.
The times when I achieved a fully engaged workforce, I eschewed top-down and used the approach of meeting the five basic needs of all people: to be heard, to be respected, and to have competence, autonomy, and relatedness (purpose). It worked like a charm, productivity rose by over 300%, morale was sky high, and most literally loved to come to work.
Best regards, Ben
Author “Leading People to be Highly Motivated and Committed”
Completely agree with Ben. I’ve seen management focusing on one or two of these five basic needs but it is often rare to see a consistent pattern for all five of them. Truth is, management prioritizes things differently and although this is understandable (for most employees), it is never a good enough excuse.
Perhaps a distributed approach where team leaders are tasked with becoming internal collaborators as opposed to ‘being the boss’ can get them close enough to their employees so that their needs are not easily forgotten. It would take a lot of time and conscious effort but it s achievable. Open communication is also key.
Ben (and Sandra!), great minds think alike! :-)
Too many engagement efforts fail because they are top down initiatives. To modify and old saying, “People join companies but get disengaged by bosses.” Front-line leaders hold the key to engagement, and as you proved with your “five basic needs” it doesn’t require much time or money to address this. Thanks for the comment.
Good, thought-provoking article here. I agree with Ben’s comments, but I would also submit the following thoughts:
1) engaged employees will tend to become disengaged over the long term if they are not happy, which all ties in with the five basic needs Ben mentioned above. Loyal