Employee engagement and the bottom line
Why do some employees come to work filled with enthusiasm while others seem only to wait for the day to end? Why do some want to make a meaningful contribution while others care only about the paycheck? Most of us are likely to say the difference is in the employees and this may be true - but not entirely true. Look at the factors that influence the level of energy and engagement of employees – and why it matters to businesses and their bottom line.
Recent research by Towers Watson found 54% of GCC employees not engaged or inspired by their managers. In another international study by Kenexa, Qatar came in behind Oman, Saudi Arabia, Kuwait, UAE and Bahrain regarding employee engagement. More and more managers get concerned with these figures. Why? “Engagement is vital. A motivated, engaged employee brings disproportionate value to the company” said Mohamed Al Jishi, senior HR advisor at Saudi Aramco, at the 2011 International HR Conference in Abu Dhabi.
An engaged workforce is key to organisational health and economic success. Gallup found that world-class organisations can count on a majority (67%) of the workforce being engaged, whereas in average organisations it is only one third. “Engaged employees are more productive, more profitable, more customer-focused, safer and more likely to withstand temptations to leave”, the study concluded. Engagement is one of the leading factors of financial performance and high-engagement firms have almost four times the earnings-per-share growth rate compared to low engagement firms. Conversely, the cost of a high proportion of actively disengaged people can be a considerable drag on the bottom line.
Qatars need for engaged employees
At 16.3%, Qatar had faster growth than any other country in the world in 2010. The increase in Qatar’s GDP has averaged 11% over the last five years, creating unprecedented demand for all types of companies and organisations and driving rapid growth in the workforce. This creates tremendous challenges like keeping up with a rapidly changing environment, developing appropriate organisational structures and meeting training and development needs. Opportunities to succeed are plentiful and competitive advantage will go to those who give attention to organisational health in times of growth - and employee engagement is at the heart of it all.
Second, the country has set out to realise the ambitious goals of the Qatar National Vision 2030. Corporations and organisations in every sector can play a critical role in achieving these goals, and they certainly cannot contribute their best with an indifferent or disengaged workforce. If anyone argues that companies are successful nevertheless, have them imagine the leap they could make if everyone was truly engaged.
What managers can do to engage employees
organisation leaders and managers are often surprised that there is much within their power to foster employee engagement - to foster commitment to organisational values, goals and success. This is good for the employees, the organisation, and the bottom line. For example, a division of Hunter-Douglas Window Treatments focused on several workplace engagement initiatives that reduced turnover from 42% to 29% over a two-year period. Engagement-related programs led to improvements in productivity, product quality and workplace safety that totaled more than $25 million dollars in savings and waste reduction between 1996 and 2006.
Nitin Vazirani from the College of Management Studies in Mumbai explains that, “Employee engagement is the level of commitment and involvement an employee has towards their organisation and its values.” It goes beyond job satisfaction and is not simply about motivation. If I stay in a job because the pay is ok or I am not sure I could find another job, I may be satisfied but far from engaged. Engagement is something an employee gives; it cannot be commanded into being. Leaders and managers can take steps to foster employee engagement but not to require it.
“An engaged employee is aware of business context, and works with colleagues to improve performance within their job for the benefit of the organisation,” Vazirani continues. High levels of engagement can be seen when employees willingly stay late when needed to meet a deadline for the good of the organisation. Or, when employees are consistently mindful of how their interactions with customers or clients affect the success of the company. It can also be seen in employee retention – engaged employees are less likely to leave when another opportunity comes along.
Why? Most employees want to feel part of something valuable and important, and to be valued for their contribution. And, most want to grow within the organisation. Tim Rutledge, author of Getting Engaged: the New Workplace Loyalty, offers a list of factors that engaged employees say “yes” to:
- I understand how my work fits in the big picture
- I have opportunities for learning and development
- I get to work on effective teams
- I get performance feedback that is constructive, timely, and part of day-to-day practice
- I have skillful and supportive managers
In their book, The Enthusiastic Employee, authors David Sirota, Louis Mischkind and Michael Irwin Meltzer make a strong case for investing in a culture of engagement. They conclude that employees will invariably be productive and add value when the culture has three fundamental ingredients: fair treatment (in terms of compensation and respect), achievement (in terms of challenges and performance) and camaraderie (in terms of teamwork). If your organisation offers such a culture, you put yourself in the pole-position for retaining the talent you have invested in.
There are many ways to improve engagement, starting with assessing the current situation, which can be followed by small- or large-scale initiatives addressing the engagement culture. The most important first step, however, is to explore your own understanding of engagement and then opening up to the possibilities of organisational excellence.
A version of this article first appeared in the Digby Morgan newsletter.