Employee Engagement

Employee engagement is a concept that is generally viewed as managing discretionary

effort, that is, when employees have choices, they will act in a way that furthers their
organization's interests. An engaged employee is a person who is fully involved in, and
enthusiastic about, his or her work.

The primary behaviors of engaged employees are speaking positively about the
organization to coworkers, potential employees and customers, having a strong desire to
be a member of the organization, and exerting extra effort to contribute to the
organization’s success. Many smart organizations work to develop and nurture
engagement. It is important to note, the employee engagement process does require a
two-way relationship between employer and employee.

Why is Employment Engagement so important?

An organization’s capacity to manage employee engagement is closely related to its

ability to achieve high performance levels and superior business results.

Engaged employees will stay with the company, be an advocate of the company and its
products and services, and contribute to bottom line business success. Engaged
employees also normally perform better and are more motivated. There is a significant
link between employee engagement and profitability. Employee engagement is critical to
any organization that seeks not only to retain valued employees, but also increase its level
of performance.

Factors of Engagement
Many organizational factors influence employee engagement and retention such as:
 • A culture of respect where outstanding work is valued
• Availability of constructive feedback and mentoring
• Opportunity for advancement and professional development
• Fair and appropriate reward, recognition and incentive systems
• Availability of effective leadership
• Clear job expectations
• Adequate tools to complete work responsibilities
• High levels of motivation

Many other factors exist that might apply to your particular business and the importance
of these factors will also vary within your organization.

Engagement Essentials

How will you know to what degree your employees are engaged? The first step is to
determine the current level of employee engagement. The best tool to determine this base
line is a comprehensive employee satisfaction survey. A well administered satisfaction
survey will let you know at what level of engagement your employees are operating.
Customizable employee surveys will provide you with a starting point towards your
efforts to optimize employee engagement.

The key to successful employee satisfaction surveys is to pay close attention to the
feedback from your staff. This is the only way to identify their specific concerns. When
leaders listen, employees respond by becoming more engaged. This results in increased
productivity and employee retention. Engaged employees are much more likely to be
satisfied in their positions, remain with the company, be promoted, and strive for higher
levels of performance.

Listening to employee ideas, acting on employee contributions and actively involving

employees in decision making are essential to employee engagement.

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Taking Action to Improve Employee Engagement
Nothing is more discouraging to employees than to be asked for their feedback and see
no movement toward resolution of their issues. Even the smallest actions taken to address
concerns will let your staff know that their input is valued. Feeling valued will boost
morale, motivate and encourage future input.

Taking action starts with listening to employee feedback. Then the data needs to be
analyzed. Next, a definitive action plan will need to be put in place and finally, change
will be implemented. It is important that employee engagement is not viewed as a one
time action. Employee engagement should be a continuous process of measuring,
analyzing, defining and implementing.

What is the Alternative to Employee Engagement?

Conditions that prevent employee engagement seldom alleviate themselves. They should
be assessed and addressed as soon as possible. Left to multiply, negative employee
satisfaction issues can result in:

Higher employee turnover - Employees leave, taking their reservoir of knowledge and
experience to another workplace

Diminished performance - Competency of the workforce is reduced, at least short term,

until new employees are trained

Lost training dollars - Time and money invested in training and development programs
for departing workers is wasted

Lower morale - Remaining employees can be overburdened with new duties, in addition
the unresolved issues that already prevent their full engagement

How Can You Attain Employee Engagement?

Listen to your employees and remember that this is a continuous process. The
information your employees supply will provide direction. Insist upon increased

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engagement at the managerial level, and create and deploy a customized employee
satisfaction survey from Alpha Measure to assess your current level of employee
engagement. Identify problem areas, make a plan and take action towards improvement.

The Super Seven Factors for Employee Engagement

A new report identifies seven clear indicators of employee engagement and points to how
Canadian employers should be addressing employee satisfaction and retention.

The independent study, conducted by WarrenShepell and Canadian HR Reporter,

surveyed more than 300 organizational leaders across Canada. “The report’s data shows
links between the presence of seven top job and workplace factors and positive employee
mental health, a lower rate of turnover, and satisfaction.”
The top seven workplace factors are as follows:

1. Trust senior management.

2. Asked for their ideas and opinions on important matters.
3. Clearly understand the organization’s vision and strategic direction.
4. Trust their supervisors.
5. Receive recognition and praise for good work.
6. Have a clear say in decisions that affect their work.
7. Perceive their supervisors as caring and considerate of their well-being.

When asked to evaluate how much of a presence these top workplace characteristics had,
Canadian business leaders responded as follows:

1. Trust senior management: 37%

2. Asked for their ideas and opinions on important matters: less than 50%
3. Clearly understand the organization’s vision and strategic direction: 33%
4. Trust their supervisors: 42%
5. Receive recognition and praise for good work: less than 50%
6. Have a clear say in decisions that affect their work: 34%
7. Perceive their supervisors as caring and considerate of their well-being: 45%

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“While business leaders may recognize the importance of the top seven factors,” says
Phillips, “there is still a large gap between what employees need and what is being
provided in Canadian workplaces.”

Note that money, compensation, and perks are not even in the top seven. Rather, intrinsic
factors like psychological and emotional well-being are the drivers for employee
contentment. Employees are concerned with an atmosphere of trust, input, and two-way
communication with all levels of management.Truly engaged employees are attracted to,
and inspired by, their work , committed , and fascinated.

Emotional attachment

Only 29% of employees are actively engaged in their jobs.These employees work with
passion and feel a profound connection to their company. People that are actively
engaged help move the organization forward. 84% of highly engaged employees
believe they can positively impact the quality of their organization's products,
compared with only 31% of the disengaged. 72% of highly engaged employees
believe they can positively effect customer service, versus 27% of the
disengaged.68% of highly engaged employees believe they can positively impact
costs in their job or unit, compared with just 19% of the disengaged. Engaged
employees feel a strong emotional bond to the organization that employs them.
This is associated with people demonstrating a willingness to recommend the
organization to others and commit time and effort to help the organization
succeed. It suggests that people are motivated by intrinsic factors (e.g. personal
growth, working to a common purpose, being part of a larger process) rather than
simply focusing on extrinsic factors.

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Involvement

Eileen Appelbaum and her colleagues (2000) studied 15 steel mills, 17 apparel
manufacturers, and 10 electronic instrument and imaging equipment producers. Their
purpose was to compare traditional production systems with flexible high-performance
production systems involving teams, training, and incentive pay systems. In all three
industries, the plants utilizing high-involvement practices showed superior performance.
In addition, workers in the high-involvement plants showed more positive attitudes,
including trust, organizational commitment and intrinsic enjoyment of the work. The
concept has gained popularity as various studies have demonstrated links with
productivity. It is often linked to the notion of employee voice and empowerment.

Commitment

It has been routinely found that employee engagement scores account for as much as half
of the variance in customer satisfaction scores. This translates into millions of dollars for
companies if they can improve their scores. Studies have statistically demonstrated that
engaged employees are more productive, more profitable, more customer-focused, safer,
and less likely to leave their employer.

Employees with the highest level of commitment perform 20% better and are 87% less
likely to leave the organization, which indicates that engagement is linked to
organizational performance.For example, at the beverage company of MolsonCoors, it
was found that engaged employees were five times less likely than non-engaged
employees to have a safety incident and seven times less likely to have a lost-time safety
incident. In fact, the average cost of a safety incident for an engaged employee was $63,
compared with an average of $392 for a non-engaged employee. Consequently, through
strengthening employee engagement, the company saved $1,721,760 in safety costs in
2002. In addition, savings were found in sales performance teams through engagement.
In 2005, for example, low-engagement teams were seen falling behind engaged teams,

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with a difference in performance-related costs of low- versus high-engagement teams
totaling $2,104,823.3 (Lockwood).

Life insurance industry

Two studies of employees in the life insurance industry examined the impact of employee
perceptions that they had the power to make decisions, sufficient knowledge and
information to do the job effectively, and rewards for high performance. Both studies
included large samples of employees (3,570 employees in 49 organizations and 4,828
employees in 92 organizations). In both studies, high-involvement management practices
were positively associated with employee morale, employee retention, and firm financial
performance. Watson Wyatt found that high-commitment organizations (one with loyal
and dedicated employees) out-performed those with low commitment by 47% in the 2000
study and by 200% in the 2002 study.

Productivity

In a study of professional service firms, the Hay Group found that offices with engaged
employees were up to 43% more productive.

The most striking finding is the almost 52% gaps in operating incomes between
companies with highly engaged employees and companies whose employees have low-
engagement scores. High-engagement companies improved 19.2% while low-
engagement companies declined 32.7% in operating income during the study period. For
example, New Century Financial Corporation, a U.S. specialty mortgage banking
company, found that account executives in the wholesale division who were actively
disengaged produced 28% less revenue than their colleagues who were engaged.
Furthermore, those not engaged generated 23% less revenue than their engaged
counterparts. Engaged employees also outperformed the not engaged and actively
disengaged employees in other divisions. It comes as no surprise, then, that engaged

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employees have been statistically linked with innovation events and better problem
solving.

Generating engagement

Recent research has focused on developing a better understanding of how variables such
as quality of work relationships and values of the organization interact and their link to
important work outcomes.84% of highly engaged employees believe they can positively
impact the quality of their organization's products, compared with only 31 percent of the
disengaged. From the perspective of the employee, "outcomes" range from strong
commitment to the isolation of oneself from the organization. The study done by the
Gallup Management Journal has shown that only 29% of employees are actively engaged
in their jobs. Those "engaged" employees work with passion and feel a strong connection
to their company. About ⅔ of the business units scoring above the median on employee
engagement also scored above the median on performance.. Moreover, 54% of employees
are not engaged meaning that they go through each workday putting time but no passion
into their work. Only about ⅓ of companies below the median on employee engagement
scored above the median on performance.

Access to a reliable model enables organizations to conduct validation studies to establish

the relationship of employee engagement to productivity/performance and other measures
linked to effectiveness.

It is an important principle of industrial and organizational psychology (i.e. the

application of psychological theories, research methods, and intervention strategies
involving workplace issues) that validation studies should be anchored in reliable scales
(i.e. organized and related groups of items) and not simply focus on individual elements
in isolation. To understand how high levels of employee engagement affect
organizational performance/productivity it is important to have an a priori model that
demonstrates how the scales interact. There is also overlap between this concept and
those relating to well-being at work and the psychological contract.

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As employee productivity is clearly connected with employee engagement, creating an
environment that encourages employee engagement is considered to be essential in the
effective management of human capital.

Influences

• Employee perceptions of job importance. According to a 2006 study by Gerard

Seijts and Dan Crim, "...an employees attitude toward the job['s importance] and
the company had the greatest impact on loyalty and customer service then all
other employee factors combined."

• Employee clarity of job expectations. "If expectations are not clear and basic
materials and equipment not provided, negative emotions such as boredom or
resentment may result, and the employee may then become focused on surviving
more than thinking about how he can help the organization succeed."

• Career advancement/improvement opportunities. "Plant supervisors and managers

indicated that many plant improvements were being made outside the suggestion
system, where employees initiated changes in order to reap the bonuses generated
by the subsequent cost savings."

• Regular feedback and dialogue with superiors. "Feedback is the key to giving
employees a sense of where they’re going, but many organizations are remarkably
bad at giving it." "'What I really wanted to hear was 'Thanks. You did a good job.'
But all my boss did was hand me a check.'"

• Quality of working relationships with peers, superiors, and subordinates. "...if

employees' relationship with their managers is fractured, then no amount of perks
will persuade the employees to perform at top levels. Employee engagement is a
direct reflection of how employees feel about their relationship with the boss."

• Perceptions of the ethos and values of the organization. "'Inspiration and values' is
the most important of the six drivers in our Engaged Performance model.

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 Inspirational leadership is the ultimate perk. In its absence, [it] is unlikely to
engage employees."

• Effective Internal Employee Communications - which convey a clear description

of "what's going on". "'If you accept that employees want to be involved in what
they are doing then this trend is clear (from small businesses to large global
organisations). The effect of poor internal communications is seen as its most
destructive in global organisations which suffer from employee annexation -
where the head office in one country is buoyant (since they are closest to the
action, know what is going on, and are heavily engaged) but its annexes (who are
furthest away from the action and know little about what is happening) are dis-
engaged. In the worst case, employee annexation can be very destructive when the
head office attributes the annex's low engagement to its poor performance... when
its poor performance is really due to its poor communications.

Potential red flags

• Inappropriate use of Benchmark Data - some of the more well established

Employee Engagement survey companies will state that the most important part
of post survey follow up is related to comparison of internal survey data to
numerous external benchmarks. This seems to have rubbed off onto internal
sponsors who demand very specific benchmarks, being unaware that they are
diluting the accuracy of their analysis. Steve Bicknell, research analyst in over
100 Employee Engagement global projects concluded that the standard
comparisons by industry sector are flawed. Is it right to compare a Bentley
employee to one from Vauxhall (GM) because they are in the same automotive
sector? He concluded that more information can be obtained by looking at the
kind of organisation that employees were a part of (and its employee proposition),
its stage in development, internal communication, its brand, motivation and
culture.

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Employee satisfaction with employee engagement factors

Although the APS results are not a direct measure of employees’ levels of engagement,
they do broadly support the findings of the IES. Satisfaction with both the summary
measure and individual employee engagement factors varied substantially between
different segments of the APS workforce.

Employees agreed/satisfied (%)

Group
Indigenous employees 82
Employees from non-English speaking 64
backgrounds
Employees with disability 66
Employees aged 45 years and over 60
Young employees (under 25 years) 78
Women 72
Men 61
APS 1–6 employees 65
Executive Level employees 68
SES employees 91
<1 year service in APS 90
1–5 years service in APS 76
>5 years service in APS 61
All employees 66

Table: Employee engagement—overall satisfaction by group, 2006–07

Consistent with the IES findings, the SES, Indigenous employees, and employees with
shorter lengths of service were more satisfied overall with the factors relevant to
employee engagement than the APS average. Women were also more satisfied, as were
employees who had received performance feedback in the last 12 months.

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The least satisfied demographic groups were men and employees aged 45 years and over.
Satisfaction levels with the 12 employee engagement factors for each of the diversity
groups are discussed in more detail in Chapter 5. Employees who reported that they had
been subjected to harassment or bullying also reported much lower levels of satisfaction
(38% compared with 72% for those not subjected to harassment or bullying).

These results suggest that in focusing on strategies to increase levels of employee

engagement, agencies should take into account the different needs of particular groups of
employees. The impact of bullying and harassment and performance feedback on the
results also emphasizes the importance of agencies having in place effective and
consistently applied HR policies and practices. Staff surveys are a useful vehicle for
agencies in assessing how levels of engagement and satisfaction vary within their own
organization.

Common Factors Drive Employee Engagement

What is your company doing to drive employee engagement? Do they have varying
strategies depending on the age group of employees? If so, you might want to let
them know that this may not be necessary.

• Management’s ability to demonstrate leadership and strategic direction builds

confidence in the prospects for long-term growth and success. Every generation,
with the exception of the 30-39 groups placed this as the number one driver of
engagement.
• Having effective rewards programs was cited as the second driver of employee
engagement. Again, in all age groups except the 30-39 groups this was the
number two driver of employee engagement.
• And finally delivering clear two-way employee communication was cited as the
third driver of employee engagement.

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What are interesting about this survey are the commonalities that exist across all age
groups. Companies that focus on the top three drivers will have a better chance of
creating an engaged and committed workforce.
However, this will not be a straightforward exercise.
Less than half of the survey participants (44%) currently trust their company’s leadership
and that level of trust drops substantially at lower levels of the organization. As well,
only 43% of employees say their leaders respond to questions with “straight answers”.
These statistics will make it very difficult for companies to deliver on the number one
driver of employee engagement. In order to ensure that leaders demonstrate their ability
to lead, we would suggest the following:

• Leader’s need to break out of their comfort zone and create programs that help
demonstrate to the employee base that they can trust them and that they are
“indeed human”.
• Leaders need to “be real”. In other words they need to show their personality. As
well, they need to be accessible. Don’t just say you are accessible.
• Leader’s need to be accessible. Employees can’t trust you, if they don’t know
you. So if they are telling you they don’t trust you – open your door and truly
invite them in!
• Make it a safe environment for employees to really share what is going on. If you
make it so that employees are afraid to deliver bad news – how can you build an
environment of trust?

If you are a Leader that asks – “if it isn’t broken why should we fix it” – then you might
want to look at the reasons why you should be building trust and demonstrating your
ability to lead. Why? Employee engagement directly impacts your bottom-line.

• Companies with low levels of engagement had productivity per employee of

$328,000, and a market premium of -8.8%.
• Companies with high levels of engagement enjoyed productivity per employee of
$484,000, and a market premium of 6.8%.

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The Role of Leaders in Engaging Employees
Leadership plays a vital role in influencing levels of employee engagement. Goal clarity
and direction are identified as factors that can influence an employee’s level of
engagement. Employees perform well when they are clear with their goals and objectives,
and know how to go about achieving them. As a result, employees tend to be motivated
and committed to it. Hence, communication of clear goals and direction from the leader
becomes crucial. In addition, leaders must help employees develop personal
accountability for their goals and help achieve them. Setting performance expectations
and instilling personal accountability among employees are critical for getting results. In
DDI’s Blueprint for Leadership Success, a framework for defining success profiles of
leaders, it focuses on coaching for results and driving performance as two of the seven
People Leader Imperatives that define successful leadership. People leaders spend the
majority of their time leading small groups or individuals to achieve performance
expectations that contribute to their team’s success. They are successful when they attain
the proper balance between achieving results through managing work and leading others
in a way that supports the organization’s cultural strategy or values. People leaders drive
performance by holding both their direct reports and themselves accountable for results
and for desired behaviors while staying focused on their customers and desired outcomes.

Effective Performance Management System Increases

Employee Engagement
With an unstable economy, senior leaders should highlight the need for accountability
and to drive performance. Employees are expected to work harder in order to meet its
targets. However, driving performance is not all about pushing employees to make
figures but equally important is for them to know how to meet their targets. Many leaders
concentrate on what needs to be done instead of how to get there. Refocusing on how
goals are achieved becomes more essential because it facilitates learning and initiating
action in the employee. It also provides support in terms of enhancing an employee’s
capabilities, preparing them to meet future challenges. However, to be able to increase

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employee engagement, an effective performance management system is necessary. In a
performance management study conducted by DDI, Managing Performance: Building
Accountability for Organizational Success, results indicate that a good performance
management system enables employees to attain all their performance goals, which leads
to successful business outcomes. Depending on the type of outcome, such as hard results
like revenue growth, productivity and profitability, or soft results like customer or
employee satisfaction, organizations with effective performance management systems are
more likely to outperform their competitors. In another study that compared the impact of
Maximizing Performance (MAX), DDI’s performance management system, to previously
used performance management system, respondents of the survey consider MAX as a
more effective system because it provided qualities such as having a clear link of
behaviors to objectives or goals, and that both supervisor and employee experience more
ownership, accountability and personalization of expectations. To the respondents, these
qualities made their performance plan more meaningful and valuable to them, influencing
a positive impact on business outcomes, employee productivity and satisfaction.

However, one of the biggest challenges that leaders face is how to effectively motivate,
initiate change and sustain improved performance among employees. Not all employees
have the same sources of motivation or can they be influenced to initiate action and
change behavior by the considering the same factors. Factors that contribute to an
employee’s level of engagement are can be specific and vary per individual. It then
becomes imperative for leaders to determine what organizational factors contribute to
employee engagement and must be able to enhance and maintain them, both on an
individual and group level.

Employee Engagement Measures

The question many leaders ask now, what engagement factors must we focus on to ensure
that employees will “give it their all”? Several standardized instruments are available
designed to measure employee engagement and offer feedback for making changes.
DDI’s has developed Employee Engagement (E3) Survey, an instrument that helps

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organization determine its levels of engagement and provides results that are actionable;
provide indicators of performance drivers, user-friendly, cost effective and content-valid.
It focuses on the leader, organization and employees as elements that work together to
increase employee engagement. It consists of three (3) factors namely personal impact,
focused work, interpersonal support and satisfaction, each with several sub-factors that
further characterize employee engagement. E3 also includes an employee satisfaction
measure that can be predicted by the other three engagement factors.

The business strategy of employee retention actually lies with employee engagement;
retention is an outcome of engagement. What most organizations fail to realize is that
employee engagement is the biggest retention factor they have control over. Engaged
employees not only stay longer with the organization, they are more productive, more
conscientious, make fewer errors, and take better care of customers. The business
strategy of employee retention must incorporate methods that achieve a high level of
employee engagement among the organization’s top performers, not necessarily the
entire workforce.

Employee Engagement at Each Level

In addition, employee segmentation is an important method to utilize when evaluating
employee engagement at each level. For instance, the factors that engage the most
productive employees in an organization may not be the same as the factors that engage
the least productive employees. Those employees who receive the highest rankings on
their performance reviews may tend to express higher levels of job satisfaction when they
are presented with challenging opportunities that allow them to grow and learn. Those
that receive the lowest rankings might be more focused on issues surrounding work/life
balance and job security. While some factors, such as good communication, are important
among all employees, the attempt to focus on the full spectrum of factors that engage the
entire workforce may cause an organization to omit some of the factors that are the most
important to the company’s most productive people. In other words, by honing in on the

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factors that engage an organization’s top performers, the company is likely to benefit
from the increased longevity of these employees at the organization.
Employee Satisfaction Does Not Equal Engagement While organizations may be aware
“through the grapevine” that employees are unsatisfied, it’s the reasons for the
dissatisfaction that elude them. While employee satisfaction is important, it’s not the end
game — it is only one piece of employee engagement. Satisfaction is imperative in that,
for those individuals who are top performers, satisfaction may be derived from their
achievement orientation, their ambition, or their sense of responsibility. On the other
hand, the attempt to satisfy an under-performer who will only be content with a lightened
workload may not be a worthy cause. Again, the focus is on ensuring that those
individuals who have been identified as top performers and high potentials are engaged in
the organization.

As stated, employee engagement incorporates employee satisfaction, but also includes the
essential elements of pride, commitment and loyalty in the organization. Engaged
employees aren’t concerned with meeting the minimum requirements to complete a task,
they are focused on what they can do to better the company. Essentially, they take
ownership in the company despite whether or not they actually own a share of stock.

According to most experts, the most influential factor is leadership. That’s right – it starts
at the top! Leaders are the lens through which employees view your organization. In fact,
how they feel about their direct manager is directly correlated to how they feel about their
jobs and the organization as a whole. So what can Leader’s do to drive employee
engagement?

• Walk-the-walk – Leader’s must live the values of the company every day.
Employee engagement is created when Leaders consistently demonstrate what is
expected of them – all of the time.
• Do what you say you will do – Leader’s must follow through on what they have
said they will do or they need to provide employees with valid and rationale
reasons as to why the direction has changed. Companies that consistently “do
what they say they will go” will build trust and commitment.

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• Has a passion to lead – Leader’s must be passionate about their job and their
leadership position. According to one recent study, slightly less than one in two
senior Leaders, and only 17 percent of front-line Leaders are themselves highly
engaged. Can disengaged Leaders inspire passion and commitment in others? It’s
highly unlikely.
• Articulate the vision – Leader’s must be able to articulate the company’s vision
with consistency and enthusiasm. Why? Employees need to understand the
overall strategic direction of the company and how their role and their work relate
to achieving the vision. If employees understand where the company is going and
how they contribute they will become engaged.
• Promote accountability – Leader’s must be able to articulate what is expected of
their employees and hold them accountable to those expectations.
• Listen and act – employees want to feel that their ideas are listened to and acted
upon. Leaders must consistently demonstrate that they are not only listening, but
are acting on employees ideas and suggestions in order to create engaged and
committed employees.
• Develop talent – employees want opportunities to grow and develop. Leaders
must ensure that they understand what each of their employees want and help
them to achieve their goals and aspirations. Engagement research results are clear
on this issue: 45 percent of employees cite limited opportunities for growth as the
reason they left their company.
• Have a heart – sound ridiculous? More and more employees want to work for
companies and for Leader’s that care about them and their individual goals and
aspirations. According to the Warren Shepell – only 45% of employees perceive
their supervisors as caring and considerate of their well-being! Imagine only
45%....
• Celebrate and reward – Leaders who create highly engaged and committed
employees celebrate and reward employees who consistently contribute to the
organization.

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In our opinion, companies have the most difficulty Leader’s – “walking the walk”;
“doing what they say they will do”; and “having a heart”. Unfortunately, these are all
factors that promote trust – trust in the Leader and trust in the company. According to
WarrenShepell – only 37% of employees actually trust senior management.
At the Employee Factor, we believe that companies need to spend more time helping
their Leader’s be authentic, consistent and real.

The Employee Engagement Gap

From Management-Issues, comes this article on The Disengagement Gap, in which a

study by workplace consulting firm Towers Perrin found:

• Many employees did not believe their organisation or senior management were
doing enough to help or keep them engaged.
• Just a fifth said they felt engaged in their work
• More than a third admitting to feeling partly or fully disengaged.

The Global Workforce Study establishes a definitive link between levels of engagement
and financial performance and, for the first time, begins to quantify that link. The most
striking data about the linkage between employee engagement and financial performance
come from a study of 40 global companies that involved a regression analysis of
company financial results against engagement data.

• Firms with the highest percentage of engaged employees collectively increased

operating income by 19 per cent and earnings per share by 28 per cent year-to-
year.
• Companies with the lowest percentage of engaged employees showed year-to-
year declines of a third in operating income and more than a tenth in earnings per
share.

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What Workplace Factors Drive Employee Engagement
in an Hourly Retail Workforce?
Retaining a qualified hourly workforce is a universal challenge among retail companies.
Employers within this industry report turnover up to 60% depending on the type of
company. Costs associated with turnover among an hourly workforce can significantly
burden retail businesses’ profit margins. Such costs include hiring and training new
employees, disruption in customer service, absenteeism and burnout among remaining
employees, loss of morale, and loss of experience and institutional memory. One strategy
retail companies use to address costly high turnover rates is to make efforts to promote
employee engagement among their hourly workers. Engaged employees, it is said, are
those who are invested in the job, willing to go the extra mile and loyal to the company.
In addition, engaged employees have an impact on other business outcomes, such as
customer satisfaction and organizational performance.

The CitiSales Study demonstrates that six workplace factors drive employee engagement:
1. Job fit and resources
2. Supervisor effectiveness
3. Teamwork
4. Development opportunities
5. Schedule satisfaction
6. Schedule flexibility
In one way or another, all of these dimensions of job quality predict employee
engagement among CitiSales hourly workers. As illustrated by the arrows that point to
employee engagement in Diagram 1, four core dimensions of job quality directly effect
employee engagement: job fit and resources, supervisor effectiveness, teamwork, and
development opportunities. Employees who are engaged in their jobs perceive their
supervisors to be those who motivate and inspire rather than demand compliance, who
consider work-family matters to be important, and who provide opportunities for growth
and development on the job. In addition, they have jobs that suit their skills and interests,
work with strong and cooperative teams, and have adequate resources and training to get
the job done.

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The most important factors in employee engagement

69.5%

Challenging work
41.0%
Decision-making authority
21.9%
Evidence the company is focused on customers
59.0%
Career advancement opportunities
60.0%
Senior manager's interest in employees' well-being
52.4%
A collaborative work environment where people work well in teams
50.5%
Resources to get the job done
31.4%
Company's reputation as a good employer
58.1%
Input on decision making
59.0%
Clear vision from senior management about future success

Total Votes: 105

59.0

21
 %
Career advancement opportunities
59.0
%
Clear vision from senior management about future success
69.5
%
Challenging work
60.0
%
Senior manager's interest in employees' well-being
41.0
%
Decision-making authority

21.9
%
Evidence the company is focused on customers
31.4
%
Company's reputation as a good employer
[

58.1
%
Input on decision making
50.5
%
Resources to get the job done
52.4
%
A collaborative work environment where people work well in teams
[

The Six Factors That Drive Employee Engagement

1. Being part of a winning organization.
2. Working for admired leaders.
3. Having positive working relationships.
4. Doing meaningful work.
5. Recognition and appreciation.

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6. Living a balanced life.

Performance Management: Five Factors

for Success
If you want better performance from your employees, the following four
statements may surprise you:

1. Forget about making your managers. lives easier.

2. Dump your performance appraisal and .coach. moniker.
3. Shift accountability away from employees.
4. Stop paying them off.
While these statements may seem to contradict what you have heard about successful
performance management practices, we have found that the following five practices
break away from conventional thinking to help solve the age old problem of the
cumbersome, ineffective, and often ridiculed performance management process.

1. Train Managers to Manage and Employees to Participate-Don’t Skip Basic

Management Practices
2. Eliminate Performance Appraisals, Reviews, and Focus on Performance Conversations
3. Create the Performance Management Systems for Performers, not Managers.
4. Expect Performance Congruency between Managers and Reports
5. Emphasize Intrinsic Motivation and Deemphasize Compensation and Reword

Two final thoughts to keep in mind as you implement a performance management system

! If it.s a best practice, measure it.

Many best practices are adopted wholesale and put into practice. But, as we saw in the
coaching results survey, the visible practice is not the only factor contributing to a
successful result. In addition, when people learn new skills they are often uncomfortable
and their ability to perform a new skill is low. By measuring the application of the skill
you.ll is able to know whether the practice is producing the desired result. If it is not, you

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need to understand why, make adjustments, and support employees through the difficult
period of new skill application.

! Keep it simple.

A CEO.s greatest concern about Performance Management is that it will be too complex.
The performance management system must be intuitive to understand, require little
training to use, and provide useful results for employees and managers. With
Performance Management there is often the urge to implement a software solution as a
starting point. While an automated system can create leverage once sound practices are in
place, it can be detrimental in the initial phases of implementing Performance
Management and will not produce the quick, early wins needed to engage business
managers.

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