Is Your Company Engagement-Capable?
15-Sep-2011New research has uncovered the core capabilities that companies require to lift their levels of employee engagement.
The study, jointly undertaken by business advisory Shirlaws, and reward and recognition company RedBalloon, confirmed that organisations with highly engaged employees outperform their competitors.
Specifically, compared to companies with average engagement, they have:
- 27 per cent higher profitability;
- 20 per cent higher employee satisfaction;
- 38 per cent higher productivity;
- 30 per cent better staff retention; and
- 50 per cent higher customer loyalty.
According to RedBalloon's James Wright, the correlation means that organisations can use engagement capability as a predictive tool to determine where to invest time, effort and money to deliver the greatest engagement results.
Engagement Capability Findings
If employee engagement is defined as "the extent to which employees commit - both rationally and emotionally - to something or someone in their organisation, how hard they work, and how long they stay as a result of that commitment", then engagement capability can be defined as an organisation's ability and readiness to deliver in specific areas that contribute to engagement, Shirlaws business coach Oliver Christen says.
The Engagement Capability Framework that Shirlaws created includes 20 common activities for organisations to measure their understanding and mastery within (on a scale from "this capability is non-existent in our organisation" through to "this capability is fully integrated and leveraged in the organisation"), to gauge their ability to engage staff.
The capabilities include:
- Purpose, intent, cause - the business has a clear purpose, beyond making money, that all employees can engage with;
- Culture - What is important to the people in the business and what guides their behaviour - capability to express the culture, manage it and bring it alive;
- Commercial vision - The three-to-five-year vision of the organisation, and the drivers that build the equity value of the business;
- KPIs - Defining and managing meaningful KPIs that help drive the vision and strategy of the organisation;
- Rewards and recognition - A program that reinforces chosen values and behaviours as well as commercial KPIs;
- Communication - The ability to communicate effectively with anyone in the business;
- Recruitment - Based on values, attitudes and behaviour first, and skills and experience second;
- Onboarding - Providing clarity and connection for new employees and raising awareness of the importance of their role in relation to the vision;
- Performance management - Proactive performance management and the ability to have difficult conversations; and
- Effective meetings - The ability to run effective, time efficient and relevant meetings where everyone has their agenda addressed and clear actions are driven.
Working on culture and purpose reaps the greatest returns, followed by improving communication, training and development, and non-cash rewards and incentives.
Further findings from the study include:
- Highly-engaged companies balance their commercial and cultural aspects. The five capabilities they are most committed to are culture, KPIs, commercial vision, purpose, and reward and recognition;
- Organisations with an engagement score of more than 80 per cent are 30 per cent more capable than those with average levels of engagement (so the higher the capability, the greater effectiveness the engagement activity has); and
- If an organisation can increase its capability from below 50 per cent to above 70 per cent, the chances of achieving an 80+ per cent engagement score increase by a factor of 11.
Comment