The term employee engagement gets tossed around a lot in business, but what does it really mean?
According to Thomas J. Walter, chief culture officer at Tasty Catering: “Employee engagement is the emotional commitment an employee has to the organization and its values, vision and missions, resulting in the increased use of discretionary effort.”
Speaking at a recent NationaLease meeting, Walter shared his formula for employee engagement.
Here are the elements of the formula.
- Leadership: The ingredients for effective leadership fall into four categories — respect, emotional intelligence, psychological capital and practicing ethics.
- Culture: Your culture is what will engage your employees and inspire them to be loyal. It “underpins competitive advantage and higher financial performance,” Walter says.
- Human capital: When it comes to people, while Walter suggest screening people to ensure they have the skills you need, you should hire people who mesh with your culture. Once you hire the right people, remove disruptors and allow them more discretionary thinking.
- Systems/processes/financial transparency/communication: You need to put systems and processes in place that provide guidelines and reduce “the need to manage and allow the ability to lead.” Walter believes that effective internal communications means everyone’s voice is heard but that does not mean everyone necessarily gets their way.
- Recognition and reward: He believes that recognition is a basic human need. However, he adds that monetary incentives alone are not effective. Consider other types of ways to reward employees that focus on the individual.
Walter cited statistics from a Gallup poll that show the average organization has 33% of its employees engaged, while in world-class organizations that number is 67% (at Tasty Catering it is 94%). When it comes to disengaged employees, the average organization has 50% of its workforce in this category, with world-class organizations at 26% of its employees disengaged (6% at Tasty Catering). Actively disengaged employees account for 17% of the workforce on average, 7% at world-class businesses and interestingly, 0% at Tasty Catering.
One result of having a higher percentage of employees engaged is that you need less of them to accomplish the same amount of work. Walter cited an example of an average business needing 303 people, while a world-class organization only needs 149 (Tasty Catering at only 100).
An engaged workforce does not happen by accident. Because Tasty Catering took aggressive, strategic steps to improve employee engagement, by 2017 Walter said 94% of its workforce was engaged. Not coincidentally, sales that year rose 3.4% over 2016 and profits were 12% higher than in 2016.
By focusing on improving employee engagement, this type of improvement is possible for your organization as well.