Employee engagement and business performance go hand in hand. But not every company with high level of engagement sees a corresponding lift in the bottom line. Here are three things you can do to unleash the potential of your engaged employees and build more effective organisations.

Korn Ferry research repeatedly demonstrates a powerful link between employee engagement and organisational performance. Numerous studies confirm this. For instance, in reference to Glassdoor’s Best Place to Work analysis, Andrew Chamberlain, their Chief Economist said that “For employers, we know that a satisfied and engaged workforce helps drive financial performance.” Although the evidence is clear, I often hear business and HR leaders saying that they have continuously measured and improved their levels of employee engagement, but their efforts have not moved the productivity or performance needle.

This begs a question: if higher level of employee engagement leads to improved performance, why aren’t more companies reaping the benefits? To answer this, we must go back to the basics and really understand what employee engagement is and how it plays a role in business success.

The superior performance equation = engagement + enablement

Consider the following comment from an employee, drawn from a Korn Ferry employee opinion survey.

“I need support and my manager and his boss are not doing their best to provide it. I’m inundated with work and I end up staying here late each night. I believe in the company and think we are one of the good guys in the industry. I like my job despite this situation and think the situation will change for the better eventually. But waiting for that time to come is very challenging. I’m almost ready to throw in the towel.”

This verbatim depicts a very common story: Most people want to do well in their jobs and take pride in working for their companies. But more often than not, they do not get the support they need.

Most people want to do well in their jobs and take pride in working for their companies. But more often than not, they do not get the support they need. #engagement #productivity #performance Click To Tweet

What we see time and again is that many organisations focus on what can be seen as the ‘happiness’ or soft side of their employee engagement. They offer their people a smorgasbord of perks and benefits, which can in fact improve levels of pride and motivation.  However, the problem is that motivation alone is not enough to deliver superior performance.

Our employee opinion norm reveals that motivation has to be matched by jobs and work environments that facilitate optimal performance. We call this employee enablement: How equipped employees are with the tools and processes that actively allow them to perform at their best. When your motivated and dedicated employees who really care about their jobs cannot get the organisational support they need to get things done, they become frustrated, disengaged and often, they leave in search of the next challenge.

Conversely, organisations that effectively combine employee engagement and enablement programs—the two “E’s” to success—not only reduce staff turnover, they see improvements in many productivity measures (see figure 1).

Click to enlarge

Employee effectiveness: The connection is clear

Based on linkage case studies using Korn Ferry’s global normative database we know that:

Employee performance: Highly engaged employees are 10% more likely to exceed performance expectations. But when you look at those organisation with high levels of engagement as well and enablement, we find that employees are 50% more like to exceed performance expectations.

Employee retention: Companies with high levels of engagement show turnover rates 40% lower than companies with low levels of engagement. Whereas the turnover drops to 54% in organisations where employees are engaged and enabled.

Financial success: Organisations in top quartile on engagement demonstrate revenue growth 2.5 times that of organisations in bottom quartile. Revenue growth jumps to 4.5 times in companies where employees are also highly enabled.

But I’m already investing in engagement and still don’t see the performance lift.

Why? We often see three reasons that might be preventing companies from realizing a positive impact on performance:

Investing in engagement but don’t see the performance lift? Here are three reasons that might be preventing your company from realizing a positive impact on performance. Click To Tweet

  1. Measurement does not equal improvement – merely running an engagement survey every year does not automatically improve engagement and/or enablement to shift that the productivity or performance needle. True improvements can only be achieved through targeted and sustainable initiatives. In fact, running an engagement survey and not acting on the feedback from your employees, can have the opposite effect in damaging current levels of engagement and enablement.
  2. Disruptive Action Planning – well-intentioned efforts to improve often don’t get off the ground. The level of insights and focus areas that you uncover through a survey can sometimes be overwhelming, leading companies to feel that they need to tackle every issue raised by their employees. This leads to a lack of focus, diluting efforts and overloading the business with too many initiatives to roll out. And what started off as well-intentioned efforts to improve, often don’t get off the ground as it competes with other business priorities and processes. Instead, companies should aim to identify 2 to 3 areas to focus on and execute these really well by taking a parallel top-down and bottom-up approach.
  3. Engagement does not belong to HR – low engagement or enablement is not a HR issue to tackle, it is a business issue. Lack of leadership buy-in squashes any attempts to change the needle on engagement and enablement. There is an education piece to this, business leaders need to champion and drive efforts to improve those elements of the work experience that are driving low levels of engagement and enablement.

Getting these basics right can get you on the path to enjoying those performance lifts that are closely associated with higher levels of engagement and enablement.

Engaged employees are indeed a precursor to business success

The benefits of having a highly engaged and enabled workforce cannot be overestimated. By taking a broader view of engagement and addressing the common hurdles above, companies can truly unleash the potential of their people and build more effective organisations. To learn more about building an engaging workplace culture, download our latest engagement paper: Winning with Enthusiasm – How Employee Engagement drives business success.

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About the contributor

Nadhisha Piyasena is a Senior Client Director for Korn Ferry Advisory, Australia. He works with clients to solve people challenges that get in the way of business performance. He focuses on thinking broadly, commercially, and critically to provide evidence-based and practical solutions that add noticeable value to organisations in the areas of leadership development, employee engagement and talent management.

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