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Valuing people is better for business

Five employee engagement concepts to help your organization thrive


CHRISTOPHER A. PIZZI, CFM, MSFM, MJ-LEL CAPSTONIAN, MARCH 21, 2023


 

Organizations that promote employee-centric organizational design, humane leadership behaviors, and continuous improvement methodologies will be the most successful in terms of business objectives, sustain employee engagement, and have a positive overall culture. Furthermore, organizations will be more successful fostering these types of environments by promoting these ideologies through commitment to diversity, equity and inclusion, collaborative environments, and compliance and acceptance to the employee friendly labor and employment laws of today.


Organizations that successfully sustain employee engagement throughout the entire employee lifecycle are finding that they are most always operationally more successful and more profitable.


Here are five employee engagement concepts that will help your organization thrive by prioritizing your 'people'.


1 Measuring the Investment into Human Capital


For material assets and equipment, it is easy to calculate the payback or the ROI (return on investment). The payback is the time it takes to recover an initial investment. The ROI directly measures the financial return on a particular investment, relative to the investment’s cost, typically expecting a 10% to 20% profit for businesses to deem the investment a success.


Most experts agree that people are an organization’s greatest asset. Why do we not measure the payback or ROI for the investments into our workforce. Can we? Are these investments tangible. According to Steve Klemash, Bridget M. Neill, and Jamie C. Smith in How and Why Human Capital Disclosures are Evolving’; The talent paradigm is shifting. A company’s intangible assets, which include human capital and culture, are now estimated to comprise on average 52% of a company’s market value.” Furthermore, the article in the PMO Leader titled ‘People! The Organization's Greatest Asset’ by Fola Alabi it states “The research by Hay Group found that ‘highly engaged employees are, on average, 50% more likely to exceed expectations than the least-engaged workers. Organizations with highly engaged employees outperform other organizations with the most disengaged employees—by 54% in employee retention, by 89% in customer satisfaction, and by fourfold in revenue growth.’”


In the article 2021 Forbes article ‘Why High Employee Engagement Results In Accelerated Revenue Growth’, Ashish Devalekar states, “According to the Gallup’s State of the American Workforce report, companies with an engaged workforce are 21% more profitable. Companies that lead in customer experience have 60% more engaged employees. And study after study has shown that investing in employee experience impacts the customer experience and can generate a high ROI for the company. And here's my favorite stat of all, proving once and for all that if you're not taking your employees' experience into consideration, your customers will go elsewhere: Companies with highly engaged employees outperform their competitors by 147%. . . . The better we make our employees feel, the more they'll contribute to the company's growth.”


This is shocking to most leaders. Even more shocking is that these leaders have difficulty measuring their success rates in these intangible areas. Therefore, they don’t.

As leaders, when we treat our workforce as valuable assets utilizing sustainable engagement practices, we need to determine how to measure the value of our people in terms of dollars. Only then will the C-suite decision makers take stock in the value of sustainable employee engagement practices and promoting a highly desirable and diverse culture.


When organizations provide less than adequate investment into their people; corporate culture may be negatively affected and higher risk of becoming a liability.


2 Toxic Culture is a Liability


In the 2019 business journal from the Wharton School of the University of Pennsylvania article ‘So Your Workplace Is Toxic: How Can You Fix It?’, “A toxic workplace not only discourages creativity, but also increases turnover and stress, ‘so it is a very costly experience, . . . And if any of those people experience anything that crosses the line into harassment they are more likely to sue rather than settle with the organization.’” Furthermore, in the 2019 Security Magazine article ‘One in Five Americans Leave Job Due to Toxic Workplace’, “One in five Americans has left a job in the past five years due to a ‘toxic workplace culture’ with the turnover costing employers an estimated $223 billion during that time.”


If employees do not feel connected, valued, or comfortable with their work environment, they are less productive, less effective, less retainable, and less motivated. This will typically cause internal struggles and conflicts within the organization creating a negative internal culture. Essentially:

- poor employee engagement results in a poor organizational culture; simultaneously;

- a poor organizational culture results in dissatisfied and sometimes disgruntled employees; and

- dissatisfied employees do not ‘buy-in’ and are more likely to leave, give the organization a poor image, and more apt to file lawsuits related to their employment.


Employees that do not ‘buy-in’ are dissatisfied, and a hindrance to promoting and achieving company-initiated changes or improvements.


Poor leadership or authoritarian style leaders will drive people away and/or they will become less retainable. Companies that do not invest in or value their workforce also create toxic cultures. Discrimination in the workplace is the number one reason why employees feel disengaged from their employers. It is upon the employer to recognize, accept and to understand the ramifications of not adhering to these employee friendly laws. Companies that look the other way when it comes to discriminatory practices are most at risk for toxic cultures and poor employee engagement, ultimately affecting organizations’ bottom lines and resulting in expensive lawsuits filed by its own employees.


Essentially, a positive organizational culture and positive employee engagement work hand in hand. It is unlikely that an organization achieves positive employee engagement without a positive culture or vice versa. If your organization currently has a negative or toxic culture, it will be difficult to promote positive employee engagement methodologies, and knowing that highly engaged workforces outperform their competitors by almost 150%, the opportunity to capture that success should not be overlooked.



3 Organizational design efforts should include improving the employee experience


Organizational design requires creativity between determining its connection between its business strategy, the employee experience, and its organizational setting, which includes people, place, processes, culture, and technologies. Too often, an organization will forget about the people part of the equation. HR leaders should be part of this transformation or design effort.


This is accomplished with a holistic approach to achieving alignment to how business is accomplished (processes), where business is achieved (place), who is accomplishing the objectives (people), and the tools (technologies) needed to accomplish the business objectives. It includes many psychosocial and physical aspects of the workplace that affect worker safety and health, such as: self-sufficiency, stress, job flexibility, employee leave systems, development, social and corporate responsibility, the workplace environment, and work-life balance.


This leads directly to employee engagement practices, where HR leaders of companies can improve the employee experience through creating a sense of belonging, assuring the workforce has the tools and technologies to help them thrive, instilling a mutual trust between leadership and the workforce, as well as promoting the corporate values and sustaining them.


Ultimately, an employee experience that is employee-centric, engaging and collaborative has a huge impact on the organization’s performance, brand reputation, and increases revenue and returns to the shareholders.



4 Sustaining engagement is not enough – include continuous improvement methods


Continuous improvement is the concept that everything can be improved upon, even small or gradual positive improvements can lead to major advancements over time. For organizations, it is critical to implement continuous improvement methodologies, not only support the growth and value of their business objectives, but also to support the concept of sustainable employee engagement. To sustain the engagement of employees on an ongoing basis, the concept of continuous improvement must be included. As detailed earlier, change is inevitable, therefore sustaining is not enough, we must instill a culture of continuous improvement to adapt to the changing workplace environment and increase engagement levels.


Employee-centric organizational designs that promote positive cultures combined with continuous improvement methodologies and sustainable employee engagement practices will give an organization the best chances of achieving employee ‘buy-in’. Sustaining engagement of its employees, with a goal of employee ‘buy-in’, will ultimately provide the employer with a definitive business advantage, but this will require a commitment from the employer to provide continuous and consistent engagement practices elevating the overall employee experience.



5 Leadership style needs to support the employee experience


Humane leadership is a process whereby, an individual influences a group of individuals to achieve common objectives through kindness, generosity and compassion.

In promoting sustainable engagement methodologies, employees need to feel connected and empowered. Therefore, they need to feel like they are part of the changes and the development of the new programs. For this to be successful, leaders need to keep the employees involved with the changing workplace strategies, and not siloed, or shielded from the objectives. Their leadership should be more collaborative, transparent, trustworthy and supportive, while providing opportunity for growth and training.


As mentioned, poor leadership or authoritarian style leaders will drive people away and/or they will become less retainable. The number one reason for employees leaving an organization is poor leadership, and ultimately costs organizations revenues. Over 30% of workforce turnover can be prevented by more effective leadership and can improve sales and customer satisfaction by almost 5%.


Therefore, leaders need to combine these objectives in a style that is part transformational, part servant, and facilitative, while keeping their objectives and maintaining transparency. Transparency is important, and shows trust amongst the employees, therefore instilling a style of humane leadership. This style leadership will produce a culture that will enable employees to be more creative, productive, collaborative, happy, and ultimately more engaged, with the ultimate goal of employee ‘buy-in’.



 

As an organizations greatest asset, the workforce must be the organizations number one priority. We must create optimum work environments for the workforce to thrive and promote business success through sustainable engagement practices, coupled with a positive internal culture that is employee-centric.


These concepts will promote better business results and get the investment approvals of the decision makers within the company.



"If it weren't for the people" © 2022 by Christopher A. Pizzi is licensed under CC BY-SA 4.0



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