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Why Employee Engagement is the Key to a Successful Business Performance

Updated on October 7, 2010
Are your employees engaged in your business?
Are your employees engaged in your business?

Why Employee Engagement is Important

Is employee disengagement threatening your business? According to a disturbing article in the April 2007 issue of Training & Development magazine, Employee Disengagement Strike Early, by Michael Laff, there are compelling reasons to examine whether your employees are engaged or disengaged. Why, you may ask? Perhaps you’re making a profit and you have seasoned employees who’ve been with your organization for some time now. You may even have a loyal customer base that ensures a decent month of sales. The situation seems under control. Or is it? If you don’t know for sure if your employees are feeling engaged or not, now is the time to find out. Why? Here are two reasons:

Reason One: A whopping 43% of employees feel disengaged by their third year of employment! Laff reports that “employee disengagement is a real concern for employers and can occur as quickly as six months after an employee starts a new job.” Reasons cited for disengagement include inadequate training and unfair compensation. Other reports cite employees not committed to the company’s mission or understanding how to achieve it.

Reason Two: Your bottom-line may take a direct hit. In a report published by the SHRM Foundation, Robert J. Vance, Ph.D. cites Caterpillar, construction-equipment manufacturer, directly link’s employee engagement with achieving a “$2 million increase in profit and a 34% increase in highly satisfied customers.” The Molson Coors Brewing Company reported “engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident.”

Former General Electric CEO Jack Welch identifies the three best measures for gauging an organization’s health is employee engagement first with customer satisfaction second and free cash flow third. Why is employee engagement first? Engaged employees are committed to their work and organizations resulting in higher productivity and lower turnover.

What is Employee Engagement?

The definition is simple: when your employees are engaged in their work then your customers become engaged in your business, resulting in superior customer service, sales, morale, and better overall business results..

Employee engagement means providing your workforce with the leadership, environment, resources, and accountability to perform their job effectively and efficiently. Your employees not only like working for you, they love their jobs! When this level of engagement is achieved your customers are directly impacted with superior customer service.

There are variations of what is employee engagement by organization; here are a few that get the point across:

  • “The extent of employees’ commitment, work effort, and desire to stay in an organization” (Caterpillar)
  • “…win over the minds and the hearts of employees in ways that lead to extraordinary effort.” (Dell Inc.)
  • “…the state of emotional and intellectual commitment to an organization…fulfilling promises to customers…improve business results.” (Hewitt Associates)

 The concept of employee engagement paves the way for improving customer satisfaction, which directly links to “free cash flow” and a healthy bottom-line. In fact, if your employees are engaged then your customer will also be engaged by experiencing superior customer service.

How to Engage Your Employees

Before implementing any program or initiative to engage employees, first find out what’s on your employees minds. “That’s why you need to take a measure of employee engagement at least once a year through anonymous surveys in which people feel completely safe to speak their minds,” says Jack Welch.

The Employee Engagement and Commitment, a guide to understanding, measuring and increasing engagement in your organization (Vance 2006), identifies the ten common themes for measuring employee engagement in surveys:

  • Pride in employer
  • Satisfaction with employer
  • Job satisfaction
  • Opportunity to perform well at challenging work
  • Recognition and positive feedback for one’s contributions
  • Personal support from one’s supervisor
  • Effort above and beyond the minimum
  • Understanding the link between one’s job and the organization’s mission
  • Prospects for future growth with one’s employer
  • Intention to stay with one’s employer

Your employees’ feedback on these themes will enable you to take a holistic approach to employee engagement that may require a cultural shift in your organization. Survey feedback may result in examining your practices in job/task design, recruiting, employee selection, training and development, compensation, and performance management. Fine-tuning these practices will build a sturdy foundation for employee engagement.

Seems like a lot of work! And it is and well worth the effort. Consider this, “the 2007 WorkCanada Survey Report on Driving Employee Engagement to Improve Financial Performance finds that worker expectations are rising… [Employees] are looking for greater involvement in and understanding of the companies for which they work.” Additionally, a “firm’s successes are more dependent than ever on their ability to be willing to change and to comprehend that factors that engage their workers.” (ASTD Buzznews 4/16/07).

By focusing on the human side of business – customers and employees – all businesses have an opportunity to thrive and succeed at a level we only dream of. Yes, it’s worth the effort, your success depends on it!

Employee Engagement Poll

As an employee, I am:

See results


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    • Grategy profile image

      Lisa Ryan 5 years ago from Cleveland, OH

      Thanks for this article. The numbers can be pretty shocking when it comes to the percentage of disengaged employees. With just a few simple strategies, employers can engage the chronically disengaged.

    • profile image

      Veronica 7 years ago

      I found this article on how Employee Engagement is linked to Customer Engagement...and how CE is related to profits. Might be a good follow-up to this article!