Feature Article - March/April 2011

Shining Stars

How High Performing Companies Optimize Engagement

By Rick Dandes

As the global economy moves toward recovery, organizations are facing tough and complex decisions about how to retool for growth. And one of the key challenges is the importance of developing and retaining a skilled and engaged workforce that can deliver results and drive profitability.

It's no secret, say human resource experts: Top-performing companies—even in turbulent economic times—understand the connection and force impact of employee engagement motivation on their businesses' bottom line. In the best organizations, the ones that are market leaders, "engagement is more than a human resources initiative. It is, in fact, a sound strategic foundation for the way they do business," said Louise Anderson, president of Anderson Performance Improvement, based in Hastings, Minn.

Anderson cited research by her own firm showing that engaged employees are more productive. "They are more profitable," she said, "more customer-focused, safer and more likely to withstand temptations to leave."

The best-performing companies know that an employee engagement improvement strategy linked to the achievement of corporate goals will help them win in the marketplace, added Mike Ryan, senior vice president of marketing and client strategy, Madison Performance Group, headquartered in New York City. The question always has been how to achieve that goal.

If you have an incentive program geared toward optimizing engagement, Ryan cautioned, and it's not done right, "you have a problem. An organization could, in a very real sense, lose the focus of the workforce—not to mention the huge costs incurred when you launch such a program."

Gallup recently analyzed data from more than 152 organizations, and the results of that survey showed dramatic differences between top- and bottom-quartile workgroups on key business outcomes. Beyond the significant differences engaged workgroups show in productivity, profitability, safety incidents and absenteeism versus disengaged workgroups, the study indicated that engaged organizations have 3.9 times the earnings per share (EPS) growth rate compared with organizations with lower engagement in their same industry.

Top companies invariably understand the importance of employee engagement motivation, said Melissa Van Dyke, president of The Incentive Research Foundation, based in St. Louis. "After all," she continued, "there are volumes of surveys and research papers out there connecting engagement and company performance. But, in the end, I have found that organizational success really boils down to five things: expectations, resources, development, manager quality and reward/recognition."

Successful companies set clear expectations, Van Dyke said. They give employees the resources needed to do their work. They allow employees to develop and hone their strengths. They hire quality managers—mangers who are "people" people, managers who take interest in their employees both personally and professionally—and finally, top companies recognize and reward performance.