Engagement

Analysis
What You Need to Know
Leading high-performing organizations take employee engagement seriously, when times are good or bad. It is a well-proven, major contributing factor to organizational success. However, many organizations don't understand what employee engagement is, or how it can impact business performance. Improving employee engagement and reducing disengagement should be apriority for all leaders. This research explains employee engagement, its business impact, and the technologies and best practices to support it.
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Defining Employee Engagement
Employee engagement is extensively discussed in academic circles and by some consultancies, but many organization leaders don't know what it is, why it is important, how to measure it or how to influenceit. Improving employee engagement should be a fundamental issue for all leaders and managers. It plays a vital role in driving business success, and the evidence is overwhelming.
There are a variety of definitions for employee engagement, with no single definition yet dominant in either business or academic circles.
The MacLeod Report, a major U.K. government study, defines employee engagementas "a workplace approach designed to ensure that employees are committed to their organization's goals and values, motivated to contribute to organizational success, and are able at the same time to enhance their own sense of well-being."
Another way to consider engagement is from the perspective of the employee. Engaged employees experience a blend of job satisfaction, organizationalcommitment, job involvement and feelings of empowerment (see Institute of Employment Studies [IES] 2008). Many definitions use the term "discretionary effort" demonstrated by employees to describe their engagement level, and it is a useful way to explain what engagement is to managers.
In times of economic uncertainty, many managers think that engagement doesn't matter, because they think that employeesare less likely to leave and more likely to work hard because they are afraid of losing their jobs. This is a misinterpretation of the situation. Reductions in workforce can wreck havoc with the engagement levels of those who keep their jobs, and employees have long memories. For some, more uncertainty (e.g., EU crisis) will mean continuing challenges in the coming months related to employeemorale, engagement and performance.
When things are good, engagement comes much more easily. The best organizations nurture engagement in tough times, as well as good.
Leading organizations will deploy technologies specifically to improve employee engagement, and to illustrate its positive impact on business performance. Some of these tools are already available. Over the next few years, we will seea marked increase in deployments, and we expect the tools will improve significantly, becoming easier to use and delivering better analytics.
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Managers and Leaders Must Take Employee Engagement Seriously
Organizations that have an engaged workforce are more successful than those that do not. Gallup, HayGroup, Towers Watson and several academic studies show a strongcorrelation between good employee engagement ratios and organizational performance. Gallup's study shows that companies with world-class engagement have 3.9 times the earnings per share (EPS) growth rate compared with organization in the bottom quartile (see APA PsychNET, Human Resource Management Review, Wiley Online Library and Gallup).
HayGroup notes that organizations in the top quartile onengagement demonstrate revenue growth 2.5 times higher than those in the bottom quartile (see HayGroup Employee Engagement). Towers Watson notes a 52% gap in the performance improvement in operating income over the year between companies with highly engaged employees versus companies whose employees had low engagement scores.
The MacLeod Report notes:
* "But at its (employee engagement) core is a...