There’s a great article in HR Magazine today about whether interest in engagement is on the wane.
Whether or not you think that the term is over used, there’s plenty of evidence on how high engagement can have a positive impact on performance and productivity; much needed in the UK economy today. Despite unemployment reducing and output growing official figures show we still produce less per hour than our economic rivals; 30% less than Germany, France and the US. It matters as the more productive we are the more we can earn as individuals and as a country.
As Prof. John Van Reenan of the LSE illustrates “by Thursday lunchtime the other countries have produced as much as it takes us to produce by Friday afternoon when we know off work. So basically we could take every Friday off if we could be as productive as those other countries and earn the same amount of money.”
Or putting it another way we could work the same hours and increase our wages by 30%.
But its not just about an ‘engagement score’, we need to respond to the fact that the work force and workplace are changing; the new workforce is looking for a purpose-driven company, regular feedback, career opportunities, and interesting work.
Employees need to understand how they directly impact business success for their jobs to feel valuable. Recognition aligns employees to business objectives by reinforcing behaviours tied to corporate results and values. It’s a catalyst for engagement as it creates an emotional connection. Employees feel valued when they have done a great job and the company has celebrated their success. Engaged employees are more likely to stay with their employer and promote the company to others and there’s a strong correlation between employee engagement and customer loyalty all of which are good for the long term sustainability of the company.
Engagement as part of a suite of Environmental, Social and Governance (ESG) factors give an indication of how well a company is run. Together with appropriate financial metrics that evaluate competitive advantage, they are factors that underpin long term value creation. Using them in compensation plans more directly aligns executive pay to sustainable value creation for shareholders.
There is a growing expectation from shareholders that ESG factors are incorporated into executive pay so if, as Stephen Dando says, we can get the metrics right, perhaps more attention will be paid to engagement if investors and analysts get switched on and executives feel the impact in their pay.
Image Courtesy of Tibbygirl