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VOL. 128 | NO. 48 | Monday, March 11, 2013

Profit From Employee Ideas


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Offering employees a say in the decisions that affect them is one of the best tools for engaging their hearts, minds and souls so they are motivated to give their all – and to make better choices as a company.

However, many business leaders have let employee engagement fall by the wayside while trying to navigate the post-recession economy – and inadvertently made it harder to achieve the results they want.

A Towers Watson survey of 32,000 employees worldwide in 2012 found that only one-third are highly engaged – excited about company goals, energized while they’re at the office and free of obstacles to getting their work done.

Another global survey by the consultancy AON Hewitt in 2010 found that engagement was at an all-time low, with employees fatigued by prolonged uncertainty, stress and confusion.

When employees are disengaged, performance drops. Towers Watson found that among companies with low engagement, the average operating margin was 9.9 percent. Those with high “traditional” engagement – where employees were mainly motivated with rewards like a bump in pay – averaged 14.3 percent.

Those with high “sustainable” engagement fared the best, with an average operating margin of 27.4 percent. This group of companies focused on building a great culture by promoting employees’ well being, treating them with respect, coaching them to improve performance, maintaining honesty and integrity, building a strong reputation and other practices that made employees feel great about coming to work.

These findings were not an anomaly. AON Hewitt also discovered a connection between employee engagement and performance. It found that organizations with high levels of engagement outperformed the stock market and posted returns 22 percent greater than average in 2010. Those with disengaged employees posted returns 28 percent lower than average.

The survey found that the top three drivers of engagement were career opportunities, recognition at work and brand alignment.

Including employees in decision-making doesn’t just make them feel better about work – it leads to smoother operations. When employees are involved in the decision-making process, they are more willing to commit to executing on the decision than if they had no say. This leads to more collaboration and smoother execution.

How can leaders foster greater engagement? The first step is ditching the mindset that many executives learned in business school. They feel they can get results by telling people what to do. This stale thinking is often reinforced by their peers. A boss who complains to other execs about problems with an employee is likely to hear: “You need to fire the guy.” They’re not going to say he doesn’t have enough freedom, autonomy and purpose in his job.

Employees want rules and boundaries, but, at the same time, need to be heard. They want to work toward a mission that’s bigger than earning a paycheck. If your employees are unmotivated and your company is underperforming, now is the time to look within – and turn things around!

Verne Harnish is the founder of Gazelles. Michael Synk is the founder of In-Synk and is the Gazelles coach in Memphis. Contact Michael at msynk@in-synk.com.

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