Posted by: A.R. Cherian | September 17, 2009

Engaged Employees

No, this isn’t a post about employees who are ready to get married. It’s about a growing trend in business to make employees truly interested in the business and voluntarily invest more effort into their jobs. A WSJ online article highlights this trend and some businesses who have seen performance and financial improvements by employing practices that help employees balance more of their work and personal lives.

The article is interesting because it shows says that a growing body of research is showing that employees who are engaged really do contribute to the bottom line.

Hewitt Associates, Lincolnshire, Ill., tracked about 300 companies over five years, and found that increases in employee engagement clearly preceded improvements in financial performance. Even among companies with below-average profit, an upturn in employee attitudes tended to precede a profit turnaround.

However, as I learned in class tonight, don’t believe all the hype. A lot of the so-called research and stats are from consulting firms that promote employee engagement. If you want your employees to be engaged, then take care of the two biggest factors for employee engagement: Job Satisfaction and organizational commitment.

I think the metrics used to measure success in this initiative should not be purely financial. If it is motivated purely by financial motives, there may be a tendency to abort the program prematurely if the estimated results are not achieved. There are many dimensions that will see an improvement. Some, like employee satisfaction and reduced turnover may take a long time to materialize. Others, such as employee mental health may be hard to quantify. As the companies in the article have shown, financial benefits will come. However, I believe they should be a by-product and not the primary end-product of these initiatives.

Employee engagement initiatives and workplace improvement initiatives should be conducted at all times, in good times and bad. After all, if you believe your employees are not just cogs in a wheel then their happiness and concerns do matter. Finding ways to have happy and engaged employees will improve many aspects of your business, not just the financial statements. It will help create affective commitment, which is something all managers should encourage.

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