Employee Engagement; improving the bottom line

A common (and often correct) criticism of the Human Resources (HR) function and HR initiatives is that they are not business minded.  Other functions (such as Finance or Operations) criticise that HR gets in the way of running the business.  While this is not always correct, HR needs to ensure that it presents these initiatives in a business manner with a view to how they will impact upon the ability of the organisation to achieve their strategic objectives.

There are opportunities for HR to improve organisational performance through focussing on systems and interventions that improve employee engagement.  Research by Gallup has shown that, in world-class companies, the ratio of engaged employees to disengaged employees is 8:1.  In average organisations, the ratio is only 1.5:1.  The research also shows that engaged organizations have 2.6 times the earnings per share (EPS) growth rate compared to organizations with lower engagement in their same industry. (Note 1)

Similar research shows from Watson Wyatt determined that companies with the most effective employee communications programs had an average total shareholder return of 29.5 percent while those with least effective programs had a negative 15 percent return. (Note 2)

Engagement programmes are not an end in themselves.  However, they are a starting point where HR can make a direct impact in the business.  Talking in the language of the rest of the business will improve how HR is viewed and will lead to an increase in support for other HR intiatives.

Note 1: Employee Engagement: What is your engagement ratio? Gallup Consulting, 2008

Note 2: Watson Wyatt, Effective Communication: A Leading Indicator of Financial Performance – 2005/2006 Communication ROI Study

Managing Performance – Why it is more important than ever

Peter Drucker, the father of management, became internationally renowned for urging corporate leaders to agree objectives and goals with their staff and then give them control over how to achieve these objectives.  However, despite this, many organisations fail to create the link between objectives and the routes to achieving them.  As a result, many performance management systems end up being too prescriptive, leaving little room for individual input.

To create a high performing organisation, it is essential that the goals of a business and its people are correctly aligned.  However, creating a dogmatic approach to performance will not engage employees.  It will certainly not unleash the creativity needed to help the business.  Nor will it ensure that the organisation’s strategic objectives are effectively met.

A first point for managers is to understand the importance of correctly managing performance.   A crucial mistake that many managers make is in assuming that their people understand the direction of the business and are aware of the part that each individual is to play. By focussing directly on managing performance, managers can ensure that they:

1.  Align the organisation, systems and people

2.  Direct employee’s to areas of the greatest benefit

3.  Focus employee’s behaviours

4.  Provide opportunities for feedback

However, this is in itself insufficient.  For real engagement managers need to go further.  The essence of managing performance is providing clear guidance and direction to staff and then allowing them to get on with their work.  This requires trust, communication, transparency and honesty.  In other words, hard work from both sides that does not come from a once or twice a year performance management meeting.

Communication – the Missing Link to Managing Change

This is a summary of an article recently published in the CIPD Ireland magazine, People Focus. For the full article, please click on the link below.

If organisations fail to engage their employees about the need to change, they may find that they are not in a position to take advantage of the upturn in the economic environment that will eventually  emerge. This is beyond survival; this is about businesses being in a position where they can anticipate the next economic upswing or miss it altogether.

Front line managers are the key to communicating with employees regarding the need for change.  While leadership from the top is vital, senior executives are too far removed from the front line for the message to have a lasting impact.  Employees will look to their direct manager for the real lead on change.  Organisations need to ask whether their front line managers understand their role in bringing about change let alone whether they have the skills to properly communicate a difficult message.

If front line managers are not fully engaged into both the communication and change processes, any momentum gained by senior management will stall.  For managers to properly communicate with their team, they need to be given an understanding of the change that they are expected to bring about including why the change is occurring, what will change and how will staff be affected.  How this message is transmitted is as important as what is transmitted.  Managers need to remember that people will hear what they expect to hear and that if it’s possible for something to be misunderstood, it will be.  Some simple steps that managers can follow to maximise the effectiveness of their communication are outlined in Anne Field’s artice in Harvard Management Communication Letter (Winter 2005):

1.    Adapt their communication style to the needs of the individual

2.    Read body language and pay attention to vocal dynamics

3.    Be sensitive to context

4.     Don’t ignore the details

5.     Listen

Change is not a 50-yard race; it is a marathon (Katter and Cohen, HBS, 2002).  It is not enough to announce that the change is taking place; organisations need to engage with their employees again and again to ensure that the momentum for change continues.  Employees will look to their own manager to determine the effect that the change will have on them; if the manager does not appear to act as if the change is important, the employees will not believe that it will impact upon them.  To bring about lasting change requires engagement by all levels of the organisation not just a series of announcements from the top.

If you would like to read the full article, click here:

http://www.hrdynamics.ie/PublishedArticles/PublishedArticles.asp