Democratic Business: High-Engaged Workers Are 7 Times More Profitable Than Low-Engaged Workers

Thursday, February 5, 2009

High-Engaged Workers Are 7 Times More Profitable Than Low-Engaged Workers

In 2006, Gallup estimated that disengaged employees cost the American economy $350 billion per year. A study done by Kenexa Research Institute found that of 4,000 worldwide companies, the top 25 engaged workplaces outperformed the 25 lowest engaged businesses 7-to-1--based on shareholder return, on a five-year basis.

If engaging employees is the driver of productivity, what can a company do to engage its workers? Kenexa Research Institute suggests that there are four main drivers that help create engagement in the workplace:

(1) "Leaders who inspire confidence in the future of the organization."
(2) "Managers who respect and recognize employees."
(3) "Employees are inspired and engaged by exciting work that they know how to do."
(4) "Employees are inspired by organizations that demonstrate genuine responsibility to two critical stakeholders groups: employees and communities."

It may seem counterintuitive that putting engagement above productivity leads to greater productivity until you realize that engagement is what creates productivity. Maybe the answer to our economic crisis is not to create more money, but to engage the American workforce.

(Information from http://www.kenexa.com/getattachment/8c36e336-3935-4406-8b7b-777f1afaa57d/The-Impact-of-Employee-Engagement.aspx)

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How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.