Employee development

Relating Employee Engagement to Company Performance

This is the final post in our series on employee engagement.  We hope you’ve found the posts helpful and insightful.

We know Employee Engagement is a hot topic in the business community, and we think it’s more than just a passing fad.  There are some fundamental things in the concept of employee engagement that can help you save money and make more of it.

If you’ve been following this series, then you’ll know we posted articles about each of the 12 questions in Gallup’s Q12 employee engagement assessment.  That can be overwhelming.

To help make it easier to understand, we created an infographic to help illustrate the relationship between the 12 elements of employee engagement and four key dimensions of business performance.

The vertical axis is composed of the 12 Gallup questions. Gallup organized these into groupings.

Employee Engagement, Productivity, Customer Satisfaction, Turnover, Employee Turnover, Profitability, Performance

The bold colors indicate Gallup determined there was a high degree of correlation between dimensions of employee engagement and measures of company performance. We added lighter-shaded colors where we felt there were other intersections between engagement and performance that merited consideration. Click on the infographic to see a larger version that’s easier to read.

Base Camp represented the very basics of employee engagement – providing employees the information and tools to do their jobs.

Camp One was grouped around questions that reflected what employees could give back to their employers.

Camp 2 deals with questions about employees having a sense of belonging.

The Summit is comparable to the peak of Maslov’s hierarchy of needs: self-actualization. In fact, the whole Gallup Q12 has many parallels with Maslov’s model in that it is essentially a spectrum from basic needs (to do the job right) to more emotional or intellectual needs that make the job resonate with the employee.

The horizontal axis is composed of four dimensions that measure success in an organization: Productivity, Profitability, Customer Satisfaction and Employee Turnover.

According to Gallup’s research, Employee turnover is really driven by the first six questions.  If you don’t do the basics, you will lose employees.  We included question 12 as well, because we feel employees will leave when they no longer see opportunities to grow in an organization. It may be a bit of a gray area, because it may be something beyond the control of the company.

Productivity is influenced by all but 2 of the 12 factors. What seems to be important is having the right tools/technology, recognition, feedback and having a sense of belonging.

Profitability appears to be impacted by management style. When employees have clear direction and feel they have support, perhaps they’re more willing to take calculated risks that positively impact the bottom line.  Also, when they have opportunities to grow and develop, they can bring new skills to the organization that can help improve processes and grow profitability.  We added in “right tools” because we felt, intuitively, that technology contributes immediately to productivity, but ultimately to productivity.

When employees perceive themselves as treated fairly, Customer Satisfaction is positively affected. Sometimes employees have to go outside procedures to ensure customers are looked after and, when they do so, and feel they will be supported for doing what’s right for the customer, they’ll continue to take those risks. We added “opinions” because we feel it’s an indicator the company is paying more than lip service to employee ideas. This could include input that some company procedures do not support customer satisfaction.

What You Can Do

If you really want to assess the level of engagement among your employees, the Gallup Q12 is a very simple tool to administer.  You might want to consider bringing in a consultant to oversee the project and to act as a buffer between employees and management to help ensure employees open up.

What is your management team saying are the main issues in the organization?

Use the dimensions from the Q12 to explore where you might be lacking and where you can implement some changes.

Make a point of regularly getting out of your office to connect with employees and listen to their views.  They’ll be more likely to come to you when they see problems and you may find they have some valuable suggestions to offer. Face-to-Face interaction is so much more effective than the traditional suggestion box.

 

As we said last week, we’ll be compiling all the posts in this series into a White Paper so you can have the entire series in a single document.  Watch your email to find out when it will be available.  Like all our White Papers, they’re complimentary.

Keys to Employee Engagement: 12. Development

With this post, we’re reaching the end of our series on employee engagement.

 

As an older job-seeker, I frequently was asked how long I planned to continue working. While I think this was a way to side-step around asking me my age, I usually took it at face value.  My answer was that I’d continue to work as long I was learning something.

When I look back at my career, the companies where I stayed the longest were the ones where I was learning new things – and, coincidentally, where I felt I had the most fun.

engagement, development, growth, opportunityAt one company, it was learning how to compete effectively against a giant like Procter & Gamble. At Lawson Mardon, the corporate culture revolved around the study of management, leadership and strategy. When I worked for Plasmatreat, it was an introduction to nanotechnology and learning about a lot of leading-edge manufacturing processes in dynamic industries such as aerospace and medical devices.

Ironically, when Gallup analyzed the effects of the Q12 on four different dimensions – turnover, productivity, profitability and customer satisfaction – they found that giving employees the opportunity to grow and develop did not correlate with reduced turnover. Instead, they suggest growth opportunities are more strongly correlated with increased company profitability.

In our experience, while it’s true that employees switch companies to escape bad bosses or for higher salaries, it can just as easily be true that the employee has accomplished as much as they can hope to do with that employer and the only way to continue professional development is to move to another company.

One recruiter I know, who works in the CPG sector, moved people routinely from one kind of company to another: from Food to Personal Care products or Household Product; from large companies to smaller ones.  To some extent, the moves were induced to help the recruiter earn more fees; from the perspective of the employees, it gave them broader exposure – to different industries, competitors, channels – that would render them more highly marketable. The average tenure in CPG marketing was about 2 years – about the time it takes to go through one complete budget cycle and come away with demonstrable results.  I was placed by this recruiter multiple times and I can honestly say I benefitted from the exposure to different industries and corporate cultures.

What You Can Do

One thing you can consider doing is expanding the scope of each employee’s job so they experience new challenges.

Cross-training is one way of doing this, and it helps your organization by enabling employees to be more flexible and versatile so, when someone leaves the company or is on vacation, you have people already trained to fit into the vacant jobs.

This is easier to do in a larger company than a smaller one because there are simply more roles available to move someone into. That’s not to say it’s impossible to do in a smaller company.  In small companies, one way to create growth opportunities for employees is to promote them so they can take on more responsibility.

We tend to think of employee development in a managerial context, developing the proverbial mail-room clerk so he/she can become CEO. But not all employees are good at managing people and some simply don’t want to take on that kind of responsibility. For employees who have no desire to enter management ranks, consider developing a “professional” track whereby they can take on increasingly more challenging projects or become subject-matter experts without having any direct reports.  It’s a way to recognize their contribution to the company while allowing them to develop their professional skills. We had such a system in place at Esso, where you could find engineers who were experts on highly specialized topics such as fluid dynamics or catalysts.

Encourage your employees to acquire more knowledge. Have a program whereby the company provides some degree of financial support when an employee successfully completes a formal outside course.

Encourage your employees to achieve professional certification in their respective areas. This especially applies to employees on the professional career track.

 

Next week, we’ll wrap up the series with a summary.  We’ll be compiling all the posts in this series into a White Paper so you can have the entire series in a single document.

Keys to Employee Engagement: 6. Development

We’ve been focusing lately on factors that can really motivate people to perform their best.

The sixth question in the Q12 is “Is there anyone at work who encourages my development?”

In our last post, we described how employees want to feel their managers care about them as individuals. And, as individuals, each employee has his or her own expectations of what their career can be.

I don’t think anyone wants to work in a repetitive role or task.  Some are more Employee Developmentcomfortable with the status quo and don’t have lofty ambitions to progress further.  Others see careers as ladders, to be mounted one rung at a time, and expect to be in the job role for only a short while before moving up to the next level.  The majority are probably somewhere in between.

Most managers associate the term “employee development” with identifying and promoting employees through the ranks to senior management, But development doesn’t necessarily have to be limited to promotion up the ladder.  It’s more about helping employees realize their potential.  From a manager’s perspective, we need to ensure our employees are developed to the point where they are able to optimize their contribution to the organization.

We should identify courses that can help develop skills and/or knowledge in particular areas.  We also should be thinking about projects and other work assignments that can enable employees to gain experience beyond their current responsibilities.  There could be opportunities for job rotation so employees get a feel for how other jobs relate to the ones they’ve been doing.

But a central principle is that there needs to be ongoing dialogue with the employee to discuss their goals and potential so that, as managers, we can help them realize those goals.  An annual performance review is simply not adequate for achieving this.  With an ongoing dialogue, it’s analogous to reviewing progress and getting feedback from the employees in real time. And this ongoing dialogue can be perceived by employees as a way that managers can demonstrate how they care about their employees.

Some companies have defined development paths for employees. I don’t think the Executive Track needs much explanation. Some companies have implemented something like a “Professional Track” whereby employees can become subject matter experts in their fields – engineering, sales, IT and so on.  People on the professional track don’t necessarily take on responsibilities for managing people.  Some of them recognize they don’t have a talent for leading others; some just don’t want to assume that type of responsibility.

Progressing along a professional track might mean specialized courses to increase depth of knowledge in a topic area.  It could also mean working on progressively more challenging projects. It also allows employees who follow this track to realize increases in compensation as they move from one level of expertise to the next. This can help retain employees with such valuable knowledge: they feel they are being recognized for their expertise and are being rewarded for further developing their expertise.

When employees feel their employer cares about them and helps them realize their potential, they’re much more likely to remain with that employer. The result is reduce hiring costs because the need to hire replacement workers is reduced and employees who are motivated to help their employer to succeed. The latter will manifest itself in improved productivity, innovation and customer satisfaction.