The Real Effects of Employee Engagement

Employee engagement is often credited with being one of the single most difficult to improve, yet important to focus on, factors in workplace performance. Logically, it makes sense that engaged employees will perform better, and that better individual performance leads to more success for the company as a whole. The real challenge is tangibly proving the importance of employee engagement, and more importantly,  figuring out how to improve it. Aberdeen Group has attempted to shed light on this topic with their report “The_Engagement / Performance_Equation.” Using cold, hard, mathematical, facts Aberdeen Group has managed to give validity to what those of us in HR already knew, engagement strategies work, and engaged employees work better.

The study included 438 organizations and measured their current tactics for improved employee engagement and performance. The study then attempted to determine which processes were the most effective. The organizations were then placed into 3 categories based on their performance regarding employee performance, engagement and retention.  43%  of the top performers, or “Best-in-Class” category, have a formal engagement strategy, while only 14% of the lowest performers, or “Laggards”  do. This is only a brief snapshot of the facts, and I encourage you to read the full report, but it does paint a picture. Those who succeed in employee performance, engagement and retention, are more likely to have instituted a formal engagement strategy. While these numbers are useful, it still doesn’t answer the question of how do we improve engagement.

Luckily, the report offers some insight for companies striving to improve employee engagement.  One important step to improvement is teaching managers how to give effective critique. Only 34% of laggards provide managerial training for effective employee reviews, as opposed to 53% of industry-average organizations. In fact employee reviews and employee engagement seem to be correlated in many ways. 84% of  top performers provide formal reviews for their employees, versus 71% of laggards. More telling on the importance of feedback, is that 83% of top performers provide informal quarterly feedback on how employees are doing meeting their goals, as opposed to only 43% of laggards. Manager accountability is also attributed to successfully engaging employees, with 67% of top performers instilling accountability at the managerial level, and only 48% of industry-average performers doing so. Rewards and recognition programs are also important for increasing employee engagement. 65% of top performers, 57% of industry-average performers, and only 46% of laggards, provide rewards and recognition programs for employees. The report details many other methods to improve engagements, and the numbers associated with why they work.

It’s always validating as an HR pro, when a report like this comes out and proves what you already know. If your employees aren’t engaged in the success of your company, then their performance will reflect this lack of engagement, and your company will suffer. Now is the time to put a formal engagement strategy into place, if you haven’t already. With studies like this one corroborating what we already highly suspected, there’s really no excuse to not be actively working on improving, or maintaining, employee engagement.

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