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Article -> Engaged Employees are Profitable

Date Added: December 2005

The number of engaged employees a company has is an important determinant to the success of the organization. On average, only 29% of employees are fully engaged at work.1 Engaged employees have excellent attendance and safety records, outperform others in productivity and profitability, have higher retention rates, and offer greater customer satisfaction. In contrast, more than 50% of all employees arrive at work and perform the bear minimum - just enough to sustain employment. These disengaged employees cost companies about $300 billion a year in lost profits and damaged customer relationships. These statistics demonstrate that effectively managing and measuring employee engagement can add value to your bottom line.1

Engaged employees are more cost-effective and efficient. They produce higher quality work at faster rates than their average counterparts. Higher employee productivity transfers to customers, and customers receive better customer service. This equates to complete customer satisfaction and loyalty, resulting in increased revenues. Only one of the most beneficial elements of engaged employees is their impact on customers.

Engaged employees foster stronger relationships with customers. Employee demeanor affects customer perceptions. A customer can determine whether the employee is dedicated to providing them excellent customer service or if the employee is simply performing a job task by taking orders. A customer's experience with an organization is determined by whom the customer encounters. To ensure complete, emotional customer satisfaction, an organization needs to encourage employees to become engaged.

Organizational leaders must encourage engaged employee behavior by reinforcing how the work impacts the company. By understanding employee contributions to the organization, employees are more productive. Employees' development is directly related to leadership. Executives should lead by example by being engaged at work themselves.

Some leaders believe that rewards will motivate and encourage workers to be more productive. Employees, however, do not rank monetary rewards as the highest motivational factor. The easiest way to understand what drives employees is to ask them. A Voice of the Employee process can help.

By measuring employee engagement, one also can assess the employee-customer relationship. This is most effective when it is performed at the local level. The local level refers to a specific regional area or branch office of a larger corporation. By focusing on the local offices, rather than the headquarters, issues that relate to the local offices can be addressed.

The local measure provides not only organizational-specific information, but also can highlight problems or successes. Keeping the measurement to the local environment allows each entity the luxury of identifying and correcting its own issues. If a large organization does not measure locally, generalities are most likely to be formulated. For example, a cellular company can tout excellent reception, but that promise does not hold up for customers who constantly encounter "dropped" calls in a particular region.

Measuring employee engagement is beneficial to organizational health. Companies can become more productive and successful by asking employees what motivates them, and incorporating those factors into the work environment. Engaged employees are more productive and maintain stronger customer relationships, generating more revenues.

1 Fleming, John, H., Coffman, Curt, Harter, James K. "Manage Your Human Sigma." Harvard Business Review. July-August 2005: 107-114.

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