Motivating and Retaining Top Talent through Employee Engagement

August 05, 2008

According to a recent poll conducted by The Gallup Management Group only 30% of U.S. employees are fully engaged in their jobs. Improving employee engagement can increase productivity and profitability while also reducing employee absenteeism and turnover.

The Gallup Management Group reported that improving employee engagement is important because engaged employees have:

  • 51% lower turnover
  • 27% less absenteeism
  • 18% more productivity
  • 12% higher profitability

What is Employee Engagement?

A single definition of employee engagement is difficult to develop, as each organization develops its own interpretation:

  • Employees’ willingness and ability to contribute to company success (Towers Perrin).
  • Staff commitment and a sense of belonging to the organization (Hewitt).
  • Employees’ commitment to the organization and motivation to contribute to the organization’s success (Mercer).
  • Employees’ exertion of "discretionary effort" - going beyond meeting the minimum standards of the job" (Hay).
  • Creating a sense that individuals are a part of a greater entity (Best Practices, LLC).
  • Engagement represents the energy, effort, and initiative employees bring to their jobs (Harvard Business Review).

Engagement is about motivating employees to go the extra mile in the workplace. It is about encouraging employees to have a passion for their work, and identifying the organization as more than a place to earn money. A recent Harvard Business Review article explained that "employees are motivated by jobs that challenge them and enable them to grow and learn, and they are demoralized by those that seem to be monotonous or to lead to a dead end."

As the economy changes and employee demands become more specific, employee engagement provides an opportunity to increase productivity, and in turn, profitability, while satisfying employee needs.

  • Engaged employees perform 20% better than non-engaged employees (Gallup Management Group)
  • Offices with engaged employees are 43% more productive (The Hay Group)
  • Employees with the highest percentage of engaged employees, on average, increase operating margins 3.64% and net profit margins by 2.06% (Towers Perrin ISR, June 2007)
  • Organizations with the lowest percentage of engaged employees showed declines of 2% in operating margins and 1.38% in profit margins (Towers Perrin ISR, June 2007).

Increasing Employee Engagement

The Best Companies Guide UK 2008 highlights eight possible organizational factors that can improve employee engagement:

  • Leadership: good leadership leads to a happy team
  • My Company: how much people value their company, and are proud to work there
  • Personal growth: whether employees feel challenged by their job
  • My Manager: the employee-manager relationship
  • Giving something back: community service and volunteering opportunities
  • Fair deal: how well employees are treated in terms of pay and benefits compared to similar organizations
  • Wellbeing: balance between work and home life

The following is a list of key factors for best practices in improving and increasing employee engagement:

  • Remember that employees are seeking to gain more than just money from their job and career. They hope to gain both professional and personal skills.
  • Engage employees through direct communication by involving them in important decisions and keeping them informed of new developments or changes within the company.
  • Get to know your employees as well as their goals and aspirations. Together you can develop a clear path for advancement and growth.
  • Develop a strong employee-manager relationship. When employees leave an organization, often they are leaving their manager.
  • Provide efficient and ongoing training for new and experienced employees.
  • Offer rewards and recognition for employees who excel and demonstrate a strong passion for their work and organization.
  • Listen to employees and act on their suggestions. Listening, but not acknowledging or acting on what is said can damage credibility and engagement (Ray Baumruk).
  • Monitor employees' work-life balance while supporting the engagement initiative. Highly engaged people run the risk of burnout by becoming too eager and overworking.
  • Conduct frequent engagement surveys to gain perspective on employee expectations and goals within the organization.

Up next: "Is Your Company Resisting Employee Engagement?

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