Performance Pointer

From the Penumbra Group - Your Complete Resource for Talent Management Solutions

January 2008
In This Issue - What is Engagement?
Abstract Concept, Absolute Results
The Leadership Link - The ONLY Path to Engagement
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Engagement is a word tossed around quite liberally these days.  Just another empty corporate buzzword or is there something more to this emerging topic?  This month we'll explore the engagement phenomenon, define the role it plays in organizations today, and help you apply key findings from recent research to engage and enrich your own team.

The dictionary definition of the word engage is to occupy the attention or efforts of a person or persons.  In the performance world, the concept of engagement refers to employees' willingness and ability to contribute to the company's success; people's desire to give discretionary effort in their jobs. 


Before you write this off as just another Officefeel-good notion, the abstract concept of discretionary effort has very concrete business results.  The proven financial impact of employee engagement bears witness to its power to build up or break down an organization from the inside out.


According to a newly released global workforce study of nearly 90,000 workers in 18 countries conducted by Towers Perrin:

  • Less than 5% of engaged employees said they were actively looking for another job compared with more than one in four of the disengaged employees.
  • Firms with the highest percentage of engaged employees collectively increased operating income 19% and earnings per share 28% year to year. 
  • Firms with the lowest percentage of engaged employees showed year-to-year declines of 33% in operating income and 11% in earnings per share.



So what does engagement look like?  How can you know if your team really has their head in the game?  Typically organizations utilize tools such as employee surveys, culture/morale studies and focus groups to uncover the engagement level of their workforce. 


The hallmarks of workplace engagement to look for include innovation coming from middle and front line employees, trust, proactive communication, voluntary cooperation, accountability and ownership, optimism, and passion.  If these descriptors don't define your company culture, consider what you've been missing.

  • 84% of highly engaged employees believe they can positively impact the quality of their company's products, compared with 31% of the disengaged.
  • 72% of the highly engaged believe they can positively affect customer service, versus 27% of the disengaged.
  • 68% of the highly engaged believe they can positively impact costs in their job or unit, versus 19% of the disengaged.  (Towers Perrin)
  • Teams with higher engagement are:
    • 56% more likely to have higher-than-average customer loyalty.
    • 38% more likely to have above-average productivity.
    • 27% more likely to report higher profitability (Gallup)

The disengaged also have a significant impact on your company's quality, customer service and costs.  According to a study by Leadership IQ, 87% of employees say that working with a low performer (disengaged) has made them want to change jobs.  93% of employees say that working with a low performer has decreased their productivity. 


The opposite of obligation, the nucleus of engagement is internal, self-directed desire.  Desire is a product of the wholeOffice spirit, logic and emotion.  To truly engage someone you must capture their heart and mind.  You must go beyond the paper-perfect scenario and a perks-for-performance strategy to create a unique connection, a bond with employees that will unlock their secret stash of personal potential.  Not exactly something organizations have been very good at. 


Sadly, just 21% of the employees surveyed around the world say they are engaged in their work and willing to go the extra mile to help their companies succeed. Fully 38% of the global workforce are partly to fully disengaged, according to the Towers Perrin October 2007 findings.


So just how do you get someone to desire to give their all?  To desire to improve themselves and others?  To desire to take the initiative and tap into dormant leadership abilities and intrinsic motivation? 


These are the questions that rightfully keep senior leaders up at night (and let's not forget their fellow engaged, high performing, overworked team members).  And to up the ante, the challenge is made even more difficult by the fact that each and every employee is wired for motivation differently.  Each person can become engaged or disengaged for different reasons.


As different as we are, the human spirit is in many ways the same.  We share certain basic needs and desires.  Could there be common denominators or shared engagement traits within energized and connected work teams? 


The good news is the answer is yes.  Research shows that companies can create and sustain a culture of engagement by focusing on three critical factors - all of which depend solely on LEADERSHIP.

Leadership must be visible and accessible.
Contrary to common thinking, these words are not interchangeable.  Just because an employee knows that a supervisor or senior leader professes to have an open-door policy doesn't mean they
believe they have unfettered access to them.  How many senior executives work on a separate floor or down a mahogany row that requires an appointment and escort to get to?
Even if the leader is physically visible among the workforce, their somber expression, distracted manner, or inability to make time for pleasantries does more harm than good to their perceived accessibility.  Leaders must consistently show themselves to be open and attentive to the good news and the bad news, positive and negative feedback. 
To cultivate engagement, leaders must demonstrate inspiration, vision, and commitment, both publicly and behind the scenes.  This goes for all levels, especially at the top.
Consider this surprising key finding from the global workforce study conducted by Towers Perrin - "The organization itself - particularly senior leadership- is the most powerful influencer of employee engagement.  The influence of the organization far outweighs employees' personal traits (like ambition or learning orientation) or the role of a person's manager." 
Wow, looks like you've got a new agenda topic for your next senior management meeting.

Leaders Must Show Employees Respect and What's In It For Them.

The number one element driving employee engagement on a global basis is this: the extent to which employees believe senior management genuinely cares about their well-being. 
A powerhouse truth that is shockingly basic.  Employees want to be asked for their opinions, to be offered tangible career paths and enriching training and development opportunities. 
They want to see their corporate leadership making fair decisions and to be given the "why's" behind decisions made behind closed doors
that impact them.  Most importantly, employees want to see that they matter in all facets of the organization.


Leadership must strive for excellence in its relationship with employees, customers, and the world at large.


Another interesting finding of the Towers Perrin study is that employees gave greater discretionary effort in their jobs when they felt confident their organization was focused on building a reputation as a great place to work, was socially responsible, and took accountability for senior leadership behavior. 

Transparency at the top and leading by example were significant factors in securing or squelching employee engagement.




The bottom line message is simply this: 


Leadership dictates Engagement.


Engagement dictates Performance.


Performance dictates Financial Results.


The only remaining competitive advantage is engaging LEADERSHIP.

All the best,

Jennifer Shirkani and Faith Csikesz
Penumbra Group Inc.