employee engagement and business productivity
Post on 15-Apr-2017
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What can employee engagement do for business
productivity?
Mark BeatsonChief Economist
CIPD
Content
• Understanding the link between employee engagement and productivity
• The difference engagement can make to employees• The impact on business performance• Understanding why engagement initiatives can fail to
deliver
Understanding the link between employee engagement and productivity
What are the channels?
• Release of discretionary effort (hours, effort, attention, imagination) – “going the extra mile”
• Alignment of interests allows delegation and decentralisation• Employee insights and knowledge of their customers support
innovation• Social exchange• External reputation – how an organisation treats its employees is one
of the key influences on how (potential) customers think about it
The importance of employees to corporate reputation
Blogger
Board of Directors
Entrepreneur
CEO
Government official
Regular employee
A person like you
NGO representative
Financial or industry analyst
Technical expert in industry
Academic or outside expert
20%
36%
37%
39%
41%
52%
55%
57%
60%
64%
67%
Credibility as a source of in-formation on a company
Consistent financial returnsPartners with third parties
Top global companyAdmired top leadership
InnovatorAddresses society's needs
Community benefitsProtects environmentCommunicates often
EthicalHigh quality products
Acts responsibly in crisisTransparent and open
Looks after employeesCustomers before profits
Listens to customers
27%29%29%30%
33%40%40%
43%50%52%54%55%56%58%59%61%
Importance of actions in building trust in a company
Source: Edelman Trust Barometer 2014.
The difference engagement can make to employees
Employees who feel inspired and involved are better placed to handle demanding workloads
Very true TRUE Somewhat true
Not at all true
Strongly agree
Agree Disagree Strongly disagree
0
10
20
30
40
50
60
70
80
90
% of employees who strongly agree that ‘my job requires that I work very hard’
Always/often come home from work exhausted Work under great deal of tension
‘My job allows me to take part in decisions that affect my work’
‘This organisation really inspires the very best of me in the way of job performance’
Source: Skills and Employment Survey 2012.
Does organisational commitment reduce stress?
19% 17% 14% 12% 10% 10%
33% 35%27% 28% 26% 25%
Excessive pressure every day Excessive pressure 1-2 times per week
Source: CIPD Employee Outlook survey, spring 2014, employees only.
The impact on business performance
Engagement is high on employers’ near term priorities
Other
Improving digital literacy
Reviewing reward/recognition systems
Changing the skills mix of the workforce
Predicting future talent requirements
Employee retention
Recruiting to key vacanices
Business restructuring
Containing labour costs
High levels of employee engagement
Improving leadership skills/capabilities
3
9
18
19
22
23
28
28
33
44
50
Top three workforce priorities in the coming year (% of employers)
Source: ‘Growth for everyone’, CBI/Accenture employment trends survey 2014.
What do employers expect to gain?
Improved health and safety
Increase innovation
Income growth
Increase retention
Reduced absence/higher well-being
Increased client/customer satisfaction
Increased productivity/performance
8
15
22
42
45
65
80
Major benefits of higher levels of employee engagement (% of employers)
Source: ‘Growth for everyone’, CBI/Accenture employment trends survey 2014.
What’s the evidence on the impact of employee engagement?
• ‘Nailing the evidence’ working group found lots of studies … some more plausible than others
• Causality is an issue – does engagement lead to success or success mean businesses can afford engagement?
• Meta-analyses suggest causation more likely from job attitudes to performance – but this is something difficult to nail down (if it matters)
• Impact often happens through impact on customers and customer satisfaction
• Engagement improves quality and innovative behaviour
• Engagement reduces turnover and absenteeism
Some big claims are made …
Absen
teeism
Shrink
age
Safety
incide
nts
Quality
(defe
cts)
Custom
er sa
tisfac
tion
Produc
tivity
Profita
bility
-37%-28%
-48%-41%
10%
21% 22%
% difference in performance between top and bottom quartiles of employee engagement
Source: Gallup 2012, based on data from about 1.4 million employees in 192 organisations across 49 industries and 34 countries using Q12 measure of employee engagement.
Is employee engagement spreading?
Managers treat employees fairlyManagers deal with employees honestly
Managers can be relied upon to keep their promisesINTEGRITY
Satisfied with involvement in decisionsManagers allow employees to influence decisions
Managers good at responding to employee suggestionsManagers good at seeking views of employees
EMPLOYEE VOICESatisfied with sense of achievement from work
Good management-employee relationshipENGAGING MANAGERS
I am proud to tell people who I work forI feel loyal to my organisation
I share many of the values of my organisationSTRATEGIC NARRATIVE
0% 10% 20% 30% 40% 50% 60% 70% 80%
2011 2004
Source: Workplace Employment Relations Studies 2004 and 2011, surveys of employees, GB, workplaces with 5+ employees.%s are those strongly agreeing/agreeing with the statement.
Understanding why engagement initiatives can fail to deliver
What are the common barriers?
• If it’s all one-way• Work-life balance• Development and progression
• Lack of job control• Leadership behaviour• Line managers
• Lack people skills• Ineffective implementation of organisational HR policies
• HR practices• Lack of trust• Lack of effective voice
• Mechanisms• Confidence to use them
What undermines organisational commitment?(% of employees highly motivated by core purpose of organisation)
Never
Very ra
re
Rarely
Someti
mes
Very of
ten
Alway
s
70% 68%
59%52%
36%
27%
Secretiveness
“Important information is only shared with a select few”
Source: CIPD Employee Outlook survey, spring 2014, employees only.
Strongly agree
Agree Neither agree nor disgree
Disagree Strongly disagree
72%
57%
38%32%
24%
Poor managers
“My working relationship with my su-pervisor would be described as very ef-
fective”
Do appraisals help or hinder engagement?
• NHS Staff Survey 2010: overall engagement score = 3.9 for ‘good-quality’* appraisals, 3.5 for ‘poorer quality’ appraisals and no appraisals (West and Dawson, 2012)
• *‘good-quality’ = employee felt it useful in understanding how to do job, clear objectives set, employee left appraisal feeling valued by employer.
Very fa
ir
Somew
hat fa
ir
Neutra
l
Somew
hat u
nfair
Very un
fair
Don’t k
now
Not ap
plica
ble
93%
58%
25%
11%4%
29% 29%
Engagement by perceived fair-ness of performance management
Fairness of performance management process
Source: CIPD Employee Outlook survey, spring 2014, employees only.
19
And can you have “too much” engagement?• Burnout?• Misallocation of
time – forgetting the day job?
• Insufficient challenge?
• Disappointment – what happens if leaders have feet of clay?
• Implications for future jobs – “once bitten, twice shy”?
Thank you
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