Why is the Value of Employee Engagement Not Easily Understood By Organizations?

Tom Walter Culture, Leadership

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Tom Walter is a “serial entrepreneur” who has launched nearly 30 companies. He is the CEO of Tasty Catering, named one of Winning Workplaces best small companies in 2010. This post is republished with permission from Serial Entrepreneur.
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During my emerging stage as an entrepreneur, one of my most tedious daily disruptors was “managing” people. This daily grind included defining individual tasks, explaining expectations, observing and correcting staff during the execution of those tasks and a follow-up review at the end of the day. Employees did what they were told, and I had to think about what to tell them. That left little time to think about how to grow the business. As the popular phrase states, “I was working in the business, not on the business.”

Back in 1973, an opportunity to open a second Tasty Pup location arose. Due to centralized management, no staff member had been developed to be a “leader.” The second location struggled in the beginning because I needed to use Problem Based Learning to understand how to manage both locations. I had to grow before the business could grow. The key to that growth was becoming a leader and engaging my staff in the operations of the company. What a concept!

An analysis released by Aon Hewitt at the end of the third quarter in 2011 indicated that employee engagement is at the lowest point since 2008. Their research database consisted of 5,700 employers representing over five million employees worldwide, and their findings indicated an average engagement level of 56%.

According to this report, engagement levels between 65% and 100% represent a high-performing culture, 45-65% indicates the workforce is indifferent to their organizational success or failure, and anything lower than 45% is considered the destructive range where employees stifle performance and productivity of the overall company.

The analysis stated that the reason for the drop is the employees’ perception of how companies manage staff performance has dropped. Workers also believe their employers have not provided the appropriate focus or level of management that would lead to increased performance among staff members.

There is that word “management” again. Employees do not engage well with managers, but they do with leaders. Employee engagement will increase at the same rate that managers transition themselves into leaders.

A surprising fact was that the lowest—or most destructive—ranking of the individual categories, was in recognition. This was defined in the analysis as “Appropriate recognition beyond pay and benefits for an employee’s contribution.” Only 40% of surveyed employees worldwide thought that they were appropriately recognized.

This is inexcusable. Recognition is a basic human need, and there is very little expense involved in providing recognition.

What impact would be made on organizational performance if leaders would just publicly recognize exceptional efforts made by their staff? Productivity in staff performance would continue to accelerate if this was a constant practice.

It is my hope that someday our universities will arise from their slumber of teaching the same management principles and instead teach the value of leadership. Successful businesses are already ahead of the university schools of management in this aspect. Those businesses place leadership traits and positive attitude in a higher level of hiring importance than job skills. The result is leaders who engage employees, resulting in higher than average performance. Better leaders, better performances, better overall company growth…it all starts with a small transition of focus.
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Tom’s blogs appear here once a month. To read more from Tom, visit here or here.