What Big Researchers Found about Employee Engagement

●● A Watson Wyatt study of 115 companies suggested that a company with highly engaged employees achieves a financial performance four times greater than companies with poor engagement. They also reported in 2008/9 that the highly engaged are more than twice as likely to be top performers – almost 60 per cent of them exceed or far exceed expectations for performance. Moreover the highly engaged missed 43 per cent fewer days of work due to illness. ●● Gallup found that engagement levels can be predictors of sickness absence, with more highly engaged employees taking an average of 2.7 days per year, compared with disengaged employees taking an average of 6.2 days per year.
●● Hewitt reported that companies with a greater than 10 per cent profit growth had 39 per cent more engaged employees and 45 per cent fewer disengaged employees than those with less than 10 per cent growth.
●● Development Dimension International (DDI) reported that in a Fortune 100 manufacturing company, turnover in low engagement teams averaged 14.5 per cent, compared with 4.8 per cent in high engagement teams. Absenteeism in low engagement teams hovered around 8 per cent, but was down to 4.1 per cent in high engagement teams. Quality errors were significantly higher for poorly engaged teams.
●● Towers Perrin found that broadly three-quarters of the highly engaged believe they can impact costs, quality and customer service; and only 25 per cent of the disengaged believe they can.
●● PricewaterhouseCoopers, who use staff and customer engagement levels as one of their four Key Performance Indicators (KPIs) have found

Does Employee Satisfaction Lead to Higher Profits?

Or more importantly, does low employee engagement lead to a drop in profits? A recently published article from Wharton University of Pennsylvania examines the issue. In a paper titled, "Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices," the stock returns of companies with high employee satisfaction are compared to various benchmarks -- the broader market, peer firms in the same industry, and companies with similar characteristics. This research indicates that companies with high levels of employee satisfaction earn returns that are more than double those of the overall market.

Organizations of all sizes see that employee engagement is directly correlated with employee productivity and company performance. Despite this, senior management sometimes forgets it's still critical to focus on engagement, even during an economic downturn. Some figure, why bother making sure employees are satisfied when they are likely to stick around and perform anyway? See how investing in employee satisfaction surveys can help not only your workplace, but your bottom line in 2009. For a guided Webinar walking you through Insightlink's 4Cs survey process, contact us at info@insightlink.com or call 866-802-8095 x705.

Adaptability, consistency, a clear direction and employee involvement = employee engagement

By Nic Paton

A workplace that values adaptability, consistency, a clear direction and employee involvement is more likely to deliver better returns, sales growth, productivity and shareholder value, according to new research from the U.S.

The study by Denison Consulting has found that, when it comes to delivering positive, bottom-line results, an organisation's culture can make a huge difference."It's possible to measure, monitor and influence organisational culture, and we have developed scientifically valid tools to accomplish such vital tasks" said co-founder Dan Denison.

The organisation's latest study of 102 companies found that businesses with the best organisational culture earned an average return-on-assets of 6.3 percent versus 4.5 percent for firms with the lowest organisational scores.

Companies with the best culture also led in shareholder valueAnd companies with the best culture also led in shareholder value, with average market-to-book values (the ratio of the market price of its shares over its book value in total equity) of 440 per cent as compared with 350 per cent for firms with the lowest culture scores.

"These results represent a dramatic affirmation of the importance of organizational culture, and its link to real-world business results," said Denison research analyst Ryan Smerek.
"The companies that achieved higher scores on mission, consistency, involvement and adaptability earned $6,300 (£3,533) for every $100,000 (£56,089) in assets, while those with lower cultural scores earned $4,500 (£,2524) for every $100,000 (£56.089). "That's a huge difference – a return-on-assets difference totalling 40 percent," he added.

The researchers also took a longer-term look at the 102 companies in the sample. During a three-year period, the firms with the best scores around organisational culture significantly outperformed their industry peers, as well as the companies with the lowest organisational culture scores.

This outperformance came in all three outcome areas: return-on-assets, sales growth, and shareholder value. "Organisational culture is extremely important to business success, and the really good news is that it is not a soft science," said Denison. "With valid data on an organisation's culture, we can pinpoint areas for improvement and predict the positive business results that are likely to be achieved with the right interventions and action plans," he added.