Talent Management

Engagement and High Performance: The Link Could Not Be Any Clearer

Photo illustration by istockphoto.com

I was talking with the CEO and CMO of a startup software company in the HCM space yesterday. One of the things we talked about was the ready availability of data that link organizational performance with employee engagement.

No longer the stuff of smoke and mirrors, the correlation between higher revenue, lower costs and greater customer satisfaction with employee engagement is rock solid.

Whether the data come from academic researchers, think tanks, research/analysis firms or other interested parties, we can cite legitimate sources to underpin our ROI calculations. (See my previous posts here and here.)

Why pushing engagement really matters

Gallup’s recently released State of the American Workforce is one example of such data. In the “From the CEO” introduction, Gallup Chairman and CEO Jim Clifton says:

Here’s what you need to know: Gallup research has found that the top 25 percent of teams – the best managed – versus the bottom 25 percent in any workplace – the worst managed – have nearly 50 percent fewer accidents and have 41 percent fewer quality defects. What’s more, teams in the top 25 percent versus the bottom 25 percent incur far less in health care costs. So having too few engaged employees means our workplaces are less safe, employees have more quality defects, and disengagement – which results from terrible managers – is driving up the country’s health care costs.”

Here’s the corresponding chart from the report:gallup-engagement-kpix

A clear relationship between engagement and performance

You may or may not have an opinion about Gallup’s Q12 methodology, but the longitudinal nature of their data — together with their periodic meta-analysis — says to me that their findings have weight. We can take to the bank – and to our CEOs and CFOs – the relationship between higher engagement and stronger organizational performance.

This is the data of sound and persuasive business cases for investing in the well-being of our employees. Take a look at the Gallup findings. You’ll find something that will spark an ah-ha moment.

Or maybe two or three.

This originally appeared on China Gorman’s blog at ChinaGorman.com.

For more than 25 years, China Gorman has held strategic business leadership roles in the human capital management sector. She's currently the CEO for Great Place to Work, a company dedicated to improving society by helping companies create better workplaces. Well known for her tenure as Chief Operating Officer and interim CEO of SHRM (the Society for Human Resource Management), China also held the posts of President of DBM North America, and President of Lee Hecht Harrison, the global consulting division of Adecco, which became the performance leader in its industry under her leadership. Read her blog at ChinaGorman.com, and contact her at china@chinagorman.com.
  • http://www.achievers.com/ Elyssa Thome

    Super helpful. Clearly employee engagement is a worthwhile investment (safer office!) but it can be difficult to make a convincing argument for something that strikes you as obvious. Thanks for providing useful data to take to the C-suite for an effective campaign!

  • jacque vilet

    China —- glad you shared the results of the Gallup survey. We need to be very careful of saying “engagement improves performance” in such a general way. What Gallup does that no other engagement survey (as far as I know and I have done some research) is to stick to things that are CLEARLY measurable: safety records, absenteeism, sick days, quality measurable as defects, etc. They do not use performance indicators like: profit, revenue, increase in stock price, happiness, etc. These indicators cannot be measured — flat out no. And many surveys seem to think differently.

    And the relationship between engagement and ANY indicator is not “causal” but a “correlation”. Meaning there is some relationship between the two —- but engagement doesn’t “cause” anything. There are a number of reasons why engagement may be high. In fact Dr. John Sullivan raises an interesting point and says: Maybe performance of the company increases engagement.

    So I cringe when HR people use the word “performance” without stating very clearly what the indicators are. And Gallup does that.