Employee engagement

A sample of the research by various organizations over the past five years is as follows:- (Source . Employee Engagement: The Key to Realizing Competitive Advantage Richard Wellins, Paul Bernthal & Mark Phelps 2005):

  1. DDI has compiled an engagement database of thousands of employees across 200 organizations. Analysis of this database has shown that those employees with higher engagement scores are more satisfied with their jobs, less likely to leave their companies, and more capable of achieving their performance goals. We estimate that in an organization of 10,000 employees, moving a workforce from low to high engagement can have an impact of over $42 million. For example, in a Fortune 100 manufacturing company, turnover in low-engagement teams averaged 14.5 percent, and absenteeism hovered around 8 percent. For highly engaged teams, absenteeism was only 4.8 percent, and turnover came down to 4.1 percent. Quality errors (as measured by external and internal parts per million) stood at 5,658 for the low-engagement group and only 52 for the high-engagement group. That’s right—52! In a services organization, there is a strong relationship between sales performance and employee engagement. Highly engaged employees achieved an average of 99 percent of their sales goals, while disengaged sales reps averaged 91 percent.
  2. Michael Treacy, author of Double-Digit Growth— How Great Companies Achieve It No Matter What, worked with Hewitt Associates to demonstrate the relationship between double-digit growth companies and engagement. Employee engagement scores were 21 percent higher in double-digit versus single-digit growth companies. Hewitt showed similar results with its Employee Engagement and Best Employer Database of 1,500 companies. In companies where 60 to 70 percent of employees were engaged, average total shareholder’s return (TSR) stood at 24.2 percent. In companies with only 49 to 60 percent of their employees engaged, TSR fell to 9.1 percent. Companies with engagement below 25 percent suffered negative TSR. (12)
  3. Towers Perrin, looking at over 35,000 employees across dozens of companies, showed a positive relationship between employee engagement and sales growth, lower cost of goods sold, customer focus, and reduced turnover. For example, highly engaged employees are almost three times more likely to feel that their company really cares about customers and has the ability to serve them better than their competitors. Companies with highly engaged employees beat average revenue growth in their sector by 1 percent while companies with low engagement were behind their sector’s revenue growth by an average of 2 percent. (13)
  4. The Corporate Executive Board surveyed 50,000 employees in 59 organizations worldwide. Employees with lower engagement are four times more likely to leave their jobs than those who are highly engaged. Even more important, moving from low to high engagement can result in a 21 percent increase in performance. (14)