May 19

Maximizing the Power of Employee Engagement Series


By Chuck Coker

What is engagement and why is it important?

We must begin this series by asking ourselves, as employees, is this subject worth our time and energy, and if so why haven’t companies made it a higher priority Lets consider several quotes to establish the value of the notion to the CEO or Manager. Craig Donaldson, in his article Employee Disengagement costs 31.5 Billion (April 2005, Human Resources Magazine) noted that Australia’s losses are small when compared to:  .the cost to the US economy is as much as $350 Billion dollars per year in lost productivity, accidents, theft, and turnover.

Or, you may want to consider a 2007 article from the Harvard Business Review stating: Those organizations that invest more in talent management . . . significantly outperform their competition across every measure of business including earnings per share, gross profit margin, and market capitalization per employee.

Obviously, it is important.

Since it is important, why are most employees not versed in it?

Why have the points we made in earlier chapters of this book not readily accessible or available If it works so well, why don’t most corporate executives insist on its execution? The reality is that most executives are not leaders, they are managers. They manage tasks, NOT inspire employees to excel and perform beyond normal expectations. As we will illustrate multiple times in this book and what the company wants and what the employee wants are most often two different things. The company wants results and the employee is saying: I will give you results, but what are you going to give me besides money?

So, let’s tackle the concepts of Human Capital and Talent management, consolidating them into something we can get our arms around. Let’s define what we are trying to communicate, simply, and succinctly from an organizational perspective. Employee engagement is the level of commitment and involvement an employee has toward their organization and its values (Vizirani, 2007.)

Engagement is the willingness and ability to contribute to company success, the extent to which employees put discretionary effort into their work in the form of extra time, brainpower and energy (Towers, Perrin, 2007.) It is an employee’s decision to apply his discretionary effort to the goals for the organization, to accept those goals as their own and wholeheartedly commit themselves to achieve them (Fineman and Carter 2007.)

What we are trying to help you see is that your production goals do not need to change, your ROI does not need to change, nor do your performance standards only the paradigm from which you approach your employee needs to change. Even if you feel as if you are making an effort in this area, take the combination of the data-driven Human Capital aspects and combine them with the Talent Management aspects to ENGAGE your employees and inspire them to new levels of performance.

You DO NOT have to have an HR background to implement this process. But, do realize that the only way you can achieve the success we allude to (later in this series) is through the use of the 4Cs that’s NOT HR that’s leadership! The purpose of this section is to lay a foundation so you can incorporate the concepts of engagement into your leadership style. Once implemented and you have made it your own, the inspiration will spread throughout the organization, especially if you are supported from the executive level. (According to a 2009 Towers Perrin survey of 90,000+ workers the top single driver of discretionary effort is senior management sincere interest in employee well-being.)

Proof Positive that this process works here’s your data!

Before getting into a plan for engagement using our 4Cs I want you to see some of the documentation and studies that illustrate how the process of engagement impacts organizations like yours regardless of the size:

  • Research has clearly and consistently proved the direct link between employee engagement, customer satisfaction, and revenue growth. Harvard Business Review
  • The data [920,000 employees from 28 multinational companies over 4 years] showed that the share prices for firms who highly engaged employees increased an average of 16% in 2004, compared to an industry average of 6%. Stock prices of companies with high morale outperformed similar companies in the same industries by more than 2.5 to 1 in 2004. How Companies Profit by Giving Employees What They Want, Dr. David Sirota
  • Highly engaged employees believed they can positively impact the quality of their products (84%), customer service (72%), and save costs (68%) for their employers. Towers Perrin Study August 2005
  • Across the board, those that invested more in talent management, performed better (9%) financially. Human Capital Institute/IBM Study 2008
  • In our research, we have observed that building a critical mass of engaged employees contributes significantly to the bottom line. In a recent study of 89 companies, we found that the companies that build this critical mass of engagement receive earnings per share (EPS) at 2.6 times the rate of companies who do not. Gallup, Human Sigma, 2007

About the author 

Chuck Coker

For more than 30 years, Chuck has focused his career on people's development. He has implemented proprietary Personal Formation, Human Capital, Talent Management, and incentive-based programs across a broad scope of Fortune Companies, regional organizations, and educational institutions.


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