Introduction
Businesses are formed to meet a defined need in the marketplace, in the form of products and services. Those who meet that need, including passing the “wallet test”, in an efficient and effective way, often are profitable and sustainable. Businesses hire employees to create customer value. Employees solve problems, turn inputs into outputs, and meet customer needs through delivery of products and services. All employees are not equal in terms of contribution to customer value. Some employees are better at what they do than others, and some employees do better with what they are.
Employee performance is complicated because there are so many variables. Employee knowledge, skills, abilities, experience, training, instruction, understanding, and attitude all come into play. Businesses that hire employees with the knowledge, skills, abilities, and competencies needed to perform the required work position themselves to have high-performing employees creating value for customers. However, great hires are just the start.
To be top performers, employees must clearly understand what is expected, have the information, tools and training to perform, receive appropriate feedback on performance, and be fully engaged.
Employee Value Proposition
Every employer has an Employee Value Proposition (EVP). Simply stated, the EVP represents what the employer offers in return for the employee’s time and talent, and what the employee is willing to accept in return for their time and talent. When the EVP is balanced, that is, when the employer’s offerings fully match the employee’s needs and expectations, productivity, employee engagement, and labor costs are optimized.
The EVP is more than pay and benefits. As illustrated below, the Company brand and reputation, the work and career opportunities, employee recognition, and monetary and non-monetary rewards combine to formulate the Company’s EVP.
Employee engagement is one of the positive outcomes of a balanced EVP.
What is Employee Engagement?
Employee engagement relates to the level of an employee’s commitment and connection to an organization, and their relationship to productive work behaviors. Engagement affects the employee’s understanding of what needs to be done to promote Company success, and the employee’s willingness to invest discretionary effort to do what needs to be done. In other words, highly-engaged employees know what to do, and really want to do it.
Employee engagement and job satisfaction are related but different. Pay, benefits, and job security can result in satisfaction without engagement. However, employee engagement is difficult to sustain without satisfaction.
Why Should I Care?
Employee engagement directly impacts a company’s performance and profitability. For example:
- Shareholder return
- Companies with highly engaged employees earned 13% greater total returns to shareholders.
- Productivity
- Companies with highly engaged employees enjoy 26% higher employee productivity.
- Performance
- Highly-engaged employees are twice as likely to be top performers, and 75% of them exceeded or far exceeded expectations in their most recent performance review.
- Absenteeism
- Highly-engaged employees miss 20% fewer days of work.
- Turnover
- Employee turnover can be very costly to a business. Employers with highly-engaged, creative, workers will attract and retain the best employees.
- Support and resiliency
- Highly-engaged workers tend to be less resistant to organizational change initiatives and quicker to recover from a major change.
Employee engagement leads to business success, and provides a clear competitive advantage to businesses that have it. High levels of engagement result in:
- Improved performance
- Customer loyalty
- Retention of talent
- Increased stakeholder value.
I’m convinced. So, what should I do?
The short answer is to promote and sustain a culture of engagement and accountability. Simple? Not really. However, if you understand what drives engagement, and how your Employee Value Proposition is addressing these drivers, you will be able to make adjustments to increase employee engagement.
What Drives Employee Engagement?
As would be expected, organizations and managers both influence employee engagement. At the organization level, a well-communicated, clear, compelling direction, open, honest, communication, employee empowerment, focus at all levels on the customer, rewards and recognition tied to results and customer service, focus on career growth and opportunity, and benefits that demonstrate commitment to employee well-being are among key drivers of engagement. At the management level, well-communicated, clear, expectations, good relationships with employees and supervisors, tools and equipment to do the job well, freedom and support to make work decisions, and opportunity to grow through feedback and assignments drive employee engagement.
A balanced Employee Value Proposition will likely provide all these drivers, both at the organization and management levels, and will create the desired culture of engagement and accountability.
But, how do you know if your EVP is meeting the needs of your employees, and, therefore, promoting a culture of engagement and accountability?
Simple. Ask them. . . .
Employee Engagement Survey
A properly-administered survey can reveal how the Company is enabling or stifling employee engagement. A simple custom survey, based on all elements of the Employee Value Proposition, can show specifically what is properly balanced, and what needs work. The survey can be designed with open-ended questions, to better explain the meanings behind the ratings.
Follow up will be dependent on survey results. The survey should be designed such that it can be administered multiple times after changes have been made (e.g., annually) to determine the impact of any follow up actions.
Summit Human Resources Consulting can help you assess your current level of employee engagement and implement changes to better balance your EVP and increase profitability.
If you are interested in learning more about driving results through increased employee engagement, we invite you to contact us through e-mail or by giving us a call at 866-435-0268
Reference
Much of the information about business results from highly-engaged employees, and drivers of employee engagement may be found in Developing and Sustaining Employee Engagement, published by the Society for Human Resources Management (SHRM), May 21, 2013.
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