Disengage at your own peril

Gaurav Lahiri | Updated on October 11, 2012 Published on October 11, 2012

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Engaged employees can push a company into the green zone, but you need to make more than just financial investments in your staff

We’ve all heard that joke about the Chief Executive Officer (CEO) who was asked how many people worked in his organisation. “Oh, about half of them,” he replied. But jokes apart, measuring how engaged your staff really is with your organisation could make for frightening reading today. Recent research conducted by Hay Group has found that just about two-thirds of employees worldwide are engaged at the workplace. Further, our study found that an average of 33 per cent of employees are unable to perform optimally, admitting that barriers put in place by the organisation are preventing them from excelling at work. These are startling figures indeed.

On the brighter side, all of our research shows that employees want to work and they want to work hard; it is what human beings naturally want to do. Given that the vast majority of us want to work, what then is the driving force behind those who want to work in the same direction as the employer and those that don’t?

Getting the alignment right

The science of measuring and following up on employee engagement (the measure of enthusiasm and alignment to organisational goals) has come a long way in the past three decades. Years of global research with many millions of employees of all levels and demographic groups has given Hay Group a pretty definitive understanding of what really drives people to come to work and work effectively. A well aligned workforce results in better bottom-line performance. It delivers higher scores on pretty much any business critical key performance indicators you care to mention, whether it is profit, innovation, safety or anything else. It also means comparatively better share performance.

Clearly, these days, more than ever, employee engagement must be part of any company’s key performance indicators and should be tied into decisions that affect return on investment.

What is worrying then, is that at a time when global companies are looking to deliver increasingly better performance, we are seeing employee engagement across the world decline or stagnate at 2008 levels. Our study on engagement, that spanned 1,610 organisations across 46 countries, represents the views of almost five million employees — and a great number among them are unwilling and unable to go the extra mile for their organisation. With global engagement scores pegged at 66 per cent, we have found that employers in India are only marginally better off with 68 per cent of engaged employees.

Work support

This unique study also showed that employees across the globe are not properly supported at work — and, as a result, are unable to perform to their full potential. Less than two thirds of employees around the world (62 per cent) feel that conditions at work allow them to be as productive as they could be. Clearly, there is a stubborn gap between the level of discretionary effort that employees globally are willing to put into their work and the corresponding level of support available to enable them to excel. For organisations looking to harness the full productivity of their workforce, leaving this pool of motivation untapped is a wasted opportunity. Employees based in India are slightly better off in terms of employee enablement. However, more than a quarter admit that they could be more effective if workplace conditions allow for greater productivity.

Our experience shows that to truly drive productivity, business leaders must understand the role they have to play in enabling high levels of performance — removing the barriers that are holding their employees and their organisations back. This ability of engaged individuals to make maximum contributions has two key components. The first, personal utilisation, requires that employees are effectively matched to their roles, such that their skills and abilities are put to best use. The second component, an enabling environment, involves structuring work arrangements such that they facilitate, rather than hinder, individual productivity.

Commitment issues

Even so, company loyalty is another metric that has taken a hit in these tough times, with commitment levels falling to a five-year low in every major region. More than two-fifths (44 per cent) of the global workforce has expressed their intent to leave their present employers within five years, with more than one in five employees (21 per cent) amongst these intending to leave within two years! A much larger majority of employees in India (58 per cent) have acknowledged their intent to exit their present organisations within the next years, with about one in every three planning this shift within two years. It is a worrying sign that Indian organisations, despite registering higher engagement levels than the Asia average, find that only about 40 per cent intend to remain loyal to their present organisations in the next five years. Frustrated employees are unlikely to persist over the long-term in this state. Clearly, the opportunities currently available for organisations to improve the bottom line by actively engaging the workforce have never been so good — and the time to act is now.

More than ever, the benefits of real engagement are being recognised. Even minor improvements in employee engagement see measurable, often significant, improvements in business outcomes. In turbulent times a highly engaged workforce dramatically improves the chance of weathering the storm — it’s a real differentiator between winners and losers at such times.

Eye on the curves

The performance curve of organisations with highly engaged employees is generally smoother and generally moves in an upward direction, compared to that of organisations with poor engagement levels, our research shows. In other words, market forces have less of an effect on high engagement environments. Investors are increasingly seeing the link between engagement and business outcomes. Engagement is a great predictor of future financial performance. In fact, our work on The Enemy of Engagement found that organisations in the top quartile on employee engagement demonstrate revenue growth 2.5 times that of those in the bottom quartile; even as companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater.

Invest emotionally

Despite the numbers, getting engaged performance is not just about investing financially in employees through perks or pay hikes. It is about striking a new contract in which the organisation invests emotionally in its workforce. In exchange, employees make a similar emotional investment, pouring their “discretionary effort” into their work and delivering superior performance. The new contract says, “We’ll make your job (and life) more meaningful. You give us your hearts and minds.”

Engagement (and enablement) is about motivating employees to perform at their best by providing necessary resources and support. Managers must combine engagement (the use of motivational tools), with enablement (the act of providing employees with effective resources), in order to reach optimal levels of employee satisfaction and productivity. They must listen carefully to their teams for common frustration themes, and address them by prioritising goals, advocating for resources and minimizing workflow disruptions. They must provide adequate training, support, and discretion to grow — and not hold employees back with excessive procedures, decision processes, lack of resources and overly narrow roles.

(The writer is the Managing Director, Hay Group India.)

Published on October 11, 2012
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