Why Business Leaders Haven’t Come Around to Employee Engagement

Companies are constantly rating employee engagement as a top priority, but many have done little to improve in this area. A new report, supported by additional studies, shows the pervasiveness of the problem. Let’s take a closer look.

November 7, 2017 – Employee engagement has been identified as one of the leading challenges facing management today, but business leaders have been slow to respond, according to a survey by Cornerstone International Group.

The 11th annual “Global Business Survey” indicates that 65 percent of respondents believe their employees are engaged in their work.

Only 18 percent of those leaders, however, were aware of their engagement score and of those, 80 percent were dissatisfied with it.

“Some companies may be taking the engagement of their employees a bit for granted,” said Larry Shoemaker, president of Cornerstone International Group. “What I see here is a low awareness of the rigor required to raise engagement to the levels that result in improvement on the bottom line.”

Previous surveys have indicated a gap as great as 30 percent in bottom-line performance between companies with low and high employee engagement. Along with retention and succession planning, engagement is among the top three challenges facing HR organizations today, according to the Society for Human Resource Management.


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It Starts at the Top

Previous surveys have suggested that companies with low employee engagement achieve operating income some 30 percent below those with high engagement. Business leaders know this. In the Cornerstone study, 38 percent of the respondents expected higher engagement to improve company performance. Yet they seemed reluctant to take action. Only 35 percent of respondents believed their engagement program was successful. Of the remainder, almost 30 percent blamed lack of leadership for the shortcoming.

In keeping with the thinking in many workplaces today, motivating influences that encourage employees to stay and new hires to join do not necessarily start with compensation. Both total compensation (26 percent) and vacation time (11 percent) were ranked behind culture (32 percent) and workplace environment (31 percent) as key factors in keeping and attracting workers. This aligns with a movement to make cultural fit a top hiring priority. Having a group of employees who share the same business-related values and beliefs, said Cornerstone, will presumably produce happier employees and better performance.

Employee performance programs are the starting line for employee engagement. But for half of respondents, their company’s measurement program was either inadequate or non-existent, said the report. Slightly more of the organizations surveyed give employee feedback twice a year compared with those who follow an annual schedule. Just over 10 percent assess and report monthly.

Several mobile applications are now available to assist in the employee performance measurement process, including self-evaluation, said Cornerstone. These are said to make it easier to conduct feedback sessions more frequently, which in turn should encourage behavior modification when needed. The survey’s respondents appear to be still in the early stages of technology adoption: About 20 percent said they make extensive use of tools while a third are just getting started. Close to half said they have yet to reach the implementation stage.

Employee Recognition

SHRM’s survey, “Influencing Workplace Culture Though Employee Recognition and Other Efforts,” found that a majority of HR professionals felt that their employee recognition programs had positive impacts on employee engagement, workplace cultureretention and employee happiness. Overall, 81 percent of organizations surveyed had an employee recognition program, and 60 percent said their program was tied to organizational core values.

HR professionals in organizations where an employee recognition program is tied to organizational values perceive that the program delivers a stronger return on investment, said the survey, and has a greater impact on instilling and reinforcing corporate values. This, in turn, helps to maintain a strong employer brand, and meeting learning and development goals.


Engaging Employees

Perhaps the best way to get the most out of an employee is to make sure they are engaged in their respective jobs. Employee engagement forms the foundation of many talent acquisition leaders’ approach to human capital. Engagement binds employees to an organization’s core values and its purpose. And it is engagement that puts people first, front and center, as an integral part of corporate business strategy ….. Here’s some further reading from Hunt Scanlon Media.

Influencing Workplace Culture Through Employee Recognition
As employers look for ways to deal with the challenges of low employee retention and high turnover, a new survey by the Society for Human Resource Management (SHRM) and social recognition solutions provider Globoforce shows more orgs. are tying employee recognition efforts to their core values.


Employee engagement is a whole lot like gravity, which binds the employees to core values, what the company stands for and the mission the company is on,” said Vineet Gambhir, vice president and head of talent for Yahoo in Asia Pacific. “If the company were a house, then engaged employees would be its foundation. Even if the house were solidly built, without that foundation it would crumble. I see employee engagement through this sort of lens.” People go home after work and talk about what they worked on, whom they met and what they did, Mr. Gambhir added. “Their work experience is what drives them and how their day went is a function of the culture in the office.”

“Full-time U.S. employees work nearly 50 hours a week – equivalent to almost six working days,” said Mark Royal of Korn Ferry Hay Group. “When you consider that nearly a third of employees are not engaged, that’s a lot of time wasted for both those employees and their employers who are not getting the full impact of their potential.” Additional Korn Ferry Hay Group research demonstrates that an engaged workforce has a significant impact on the bottom line, boosting revenue growth up to two and a half times, depending on the level of engagement.

Engagement Efforts Lacking

A critical need exists to improve employee engagement, according to a survey released by Korn Ferry Hay Group. The survey, which included data from more than 7,500 business and HR leaders in 107 countries, found that across all leadership levels an average of only 36 percent of employees are “highly engaged.”

The vast majority (87 percent) of respondents said that linking an organization’s social responsibility efforts to leadership development has a positive impact on overall engagement and performance. Unfortunately, only 59 percent of respondents said their organizations actually do link the two.

“Real leadership development doesn’t happen in the classroom. That just sets the stage,” said Keith Halperin, a senior partner of Korn Ferry Hay Group. “The real development happens on the job, and in today’s world employees are looking for organizations that are giving back to the community. Where there’s purpose, there’s a sense of meaning. There’s a sense of value. Opportunities to give back and serve are perfect places to develop leadership.”

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media

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1 Comment on "Why Business Leaders Haven’t Come Around to Employee Engagement"

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Bill Fotsch
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In most cases, the problem is with the surveys, which tend to focus on the behavior of the immediate manager, and miss the managerial system. Empowering employees to think and act like owners, driving and participating in the profitable growth of the company, is a proven way to drive results and engagement. Industry leaders like Southwest Airlines, Capital One and BHP Billiton and hundreds of private companies treat their employees like trusted business partners, enabling them to make more money for their company and themselves. They consistently see both profits and engagement soar. This Forbes article provides more background: http://www.forbes.com/sites/fotschcase/2016/05/31/engage-your-employees-in-making-money/
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