Inside Logistics

Learning curve

Employee engagement


December 2, 2010
by Tracy Clayson

MM&D MAGAZINE, SEPTEMBER-OCTOBER 2010: With the Canadian economy well into recovery, companies are shifting from cutting their workforces to retention efforts and more hiring. That may be good news for employees who are feeling downtrodden and abused as a result of the recession.

Consistent with the drastic cost-cutting efforts by companies to survive and thrive in this new economy is a sense of frustration and dissatisfaction among employees. Hewitt Associates Inc followed 900 companies globally who have consistently conducted employee engagement surveys, and over 46 percent experienced an annual decline in engagement levels over the last two years, marking the most significant decline in 15 years.

Don’t underestimate the importance of employee engagement: Hewitt’s study shows a company’s success and profitability is directly tied to engagement levels and shareholder value. Organizations with 65 percent or more engagement report a 19 percent higher average shareholder return. By contrast, those with an engagement  level of less than 40 percent have a 44 percent lower than average shareholder return.

When employees are not engaged, productivity and quality of work suffer. Employees who have “checked out” due to lack of opportunity, poor communication, declining investment in professional development and an absence of validation for a job well done can become a serious burden to your organization. Engagement research suggests employee satisfaction levels significantly alter the quality of work performance and can be damaging to your company’s reputation and your customer retention.

Employee engagement is not a new idea. Progressive companies have polled their employee base to determine job satisfaction, evaluated the effectiveness of leadership using ‘360’ measurements and explored employee expectations and perceptions on a consistent basis. Determining engagement levels within your workforce and the connection to your overall company performance offers many benefits.

Time to think about retention

The last few months have shown business increasing and employers to be more concerned about losing their top talent. Some companies are already on top of retention efforts and are conducting engagement surveys, running focus groups, giving individual interviews and taking the engagement research findings and translating them into actionable items to improve the work-life experience among their employee base. A CareerBuilder survey showed that employees are looking for companies that offer open communication, a lower-stress work environment, sense of ownership and belonging, financial stability, growth opportunities and education and training.

A Richard Ivey School of Business 2006 research paper by Gerard Seijts and Dan Crim entitled “What engages employees the most or, the Ten C’s of employee engagement” offers insights into building a people-centered company. They tell employers to connect with employees by showing them they are valued, offer challenging and meaningful work, have clarity of vision and goals, convey feedback and expectations, congratulate on achievements, validate employees’ contribution to the company’s success, control the pace and flow of responsibilities and employers response to needs, encourage collaboration and teamwork toward goals, make leadership credible through genuine efforts to strengthen employee buy-in, show confidence in the company and ensure that executives are role models for high ethical standards.

Conducting employee attitude surveys can tell you a lot about your company’s competitive advantage. Motivated and engaged employees drive results. Realizing employees’ full potential requires coaching, creating an open communication environment, allowing them to reap the benefits of their results, acknowledging efforts and achievements, and giving them opportunities to optimize on skills and talents and rise to the challenge.

Organizational cultures that operate under heavy control, place unreasonable demands on workers, run with a hierarchical structure where employees cannot freely offer ideas and have a compliance rather than a commitment mentality, run the risk of losing key performers who respond to more autonomy and recognized competence-based leadership.

There will be a problem teasing out employee satisfaction levels if the company employs managers who do not value employee engagement. Employees may not give feedback if they feel their information will not be kept confidential or their opinions won’t result in actions by management to improve their work situation. Morale and retention problems develop when employees don’t feel safe or secure in their job and with the people they work for.

A great company with great products and services and industry leadership can suffer if the managers are not good to their staff. Georgina Mellas from Hirepower, an HR consulting firm based in Toronto, states “employees don’t leave organizations, they leave their managers.”

You may only get a chance to learn about engagement at the exit interview. But if you follow some of these tips, hopefully your organization will be conducting some feedback interviews allowing you to make changes where needed and reduce turnover.

Tracy Clayson (tracy@in-transit.com) is managing partner, business development, of Mississauga, Ontario-based In Transit Personnel.