Employee Engagement is Worth Caring About: The Increased Employee Productivity Factor

To understand how employee engagement increases employee productivity it’s important to put employee engagement into context and acknowledge how we as organizations play an influential role.

In simple terms, we’ve all heard, read about, or experienced a customer service interaction exemplifying employee engagement. You know the kind: where the person you’re dealing with does their utmost to help no matter their own constraints.

There’s a real, palpable, “above and beyond” commitment to you on behalf of their employer. You’re not just another run of the mill customer standing at the counter or listening on the other end of the phone to someone prattling lines from a script.

It’s that difference that paints the picture of engagement.

An engaged employee is the one who busts a gut for you or their colleagues and other stakeholders. They put in the extra effort, take initiative.

While we can recognize and applaud these behaviors, as organizations with the ability to influence behavior it’s imperative we understand those “over and above” behaviors are rooted deep within the individual. And nurtured by us.

Employees don’t do these things because they feel they “have to” or because they’re paid to.

Why then?

Engaged employees do so because they sincerely and genuinely “want” to. There’s emotional investment.

People want to feel their employer cares about them as individuals.

When they feel that’s the case, they care back.

When they care back they put in that extra discretionary effort.

And when there’s a critical mass of employees who are doing and feeling these things and exhibiting these behaviors, their organizations see positive results. Chief among them, increased employee productivity.

How increases in employee engagement increase employee productivity (and profitability) has been quantified scores of times by scores of studies.  A 2015 report in Harvard Business Review refers to this outcome as a service-profit chain that links employee loyalty and productivity to customer loyalty and profitability.

Profit and growth, the report explains, are stimulated primarily by customer loyalty.

Loyalty is a direct result of customer satisfaction.

Satisfaction is largely influenced by the value of services provided to customers.

And value is created by engaged, loyal, and productive employees.

Best Buy, for example, had been tracking and monitoring its employee engagement and customer satisfaction levels, exploring how they related to one another. If higher employee engagement led to higher customer satisfaction, which in turn translated into more sales, then a case could be made to invest in more strategic employee engagement initiatives. The retailer found exactly that. For every 10th of a point it boosted employee engagement, it saw a $100,000 increase in operating income annually.

Campbell’s Soup is another case in point. Over a seven-year period this company shifted from an abysmal employee dis-engagement rate to a 23:1 engaged to disengaged employee ratio, and increased earnings by 4% year over year during the same timeframe.

Separating Productivity from Profitability

To say quantifying employee productivity outside of profitability measures is complex, is an understatement.

High numbers of outbound sales calls may suggest one thing, successful closure rates, another. Long hours at the office could indicate productivity, or its polar opposite.

And to complicate matters further, blog writer Claire Autruong raises a good point: not all tasks create the same amount of value for an organization. Does responding to an email create as much value as closing a sale? Most of us would say no, Autruong suggests. But what if that email builds a relationship with a contact who turns out to be a critical investor down the road?

A compendium of factors influences increased employee productivity. Subtle, blatant, large and small. Take Dell Technologies as another for-instance.  Dell found sales teams led by an inspiring leader were 6% more productive than those with an average leader. That 6% by the way, translated into an extra $1 billion in annual revenue.

The point is, as organization’s we can influence employee productivity and discretionary effort through a host of measures. Employee engagement data bears this out. Focusing our efforts on engaging the hearts and minds of employees is by far the most productive of all.

 

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