The importance of employee engagement to improving productivity

increasing productivityGeorge Osborne has come under fire after his plans for improving the UK’s lagging productivity were attacked by MP’s in a report.

His “Productivity Plan” for the UK economy, which was published alongside last July’s Budget, puts the UK’s shortfall in productivity down to factors such as lower investment in equipment by businesses and low public infrastructure spending.

Improving productivity is seen as crucial because greater efficiency can be passed on to consumers in the form of lower prices thereby fuelling demand and improving international competitiveness.

However, a committee of MPs have attacked the “Productivity Plan’ for lacking clear objectives and original ideas. And by putting the UK’s shortfall in productivity down to factors such as lower investment in equipment by businesses, I think that George Osborne is missing the point. Yes, investment is needed, but if you really want to improve productivity then you need to first improve employee engagement. No amount of investment will deliver the results the Government and business want if employees aren’t motivated to go the extra mile.

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Employee Engagement Statistics
  • 2014 research from Gallup shows that only 13% of employees are “highly engaged,” and 26% are “actively disengaged.”
  • Glassdoor, a company that allows employees to rate their employers, reports that only just over half (54%) of employees would recommend their company as a place to work.
  • Two-thirds of employees in the high-technology industry believe they could find a better job in less than 60 days if they took the time to look.
  • Four out of five organisations believe their employees are overwhelmed with information and activity at work, yet fewer than one in ten (8%) have programmes to deal with the issue.
  • Nearly three-quarters of Millennials (70%) expect their employers to focus on societal or mission-driven problems; 70% want to be creative at work, and more than two-thirds believe it is management’s job to provide them with accelerated development opportunities for them to stay.


How employee engagement affects productivity

When employees are engaged they will use discretionary effort: office workers will assist colleagues without being asked, or shop assistants will pick up rubbish even if their manager isn’t watching. By doing so, they are helping their employers improve their business.

Kevin Kruse has created what he calls the Engagement-Profit Chain. It shows how ROI comes from employee engagement:

Engaged Employees leads to…

  • Higher service, quality, and productivity, which leads to…
  • Higher customer satisfaction, which leads to…
  • Increased sales (repeat business and referrals), which leads to…
  • Higher levels of profit, which leads to…
  • Higher shareholder returns (i.e., stock price)

As Richard Branson says,

“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”


Taking care of your employees

To increase employee productivity you need an effective employee engagement strategy. The workplace is changing, and employees have increasing bargaining power, which means senior management teams need to create organisations that engage employees in its vision, goals and values, and take care of their employees.

Here are five ideas for developing an effective employee engagement strategy:

  1. Have a company vision and values that excite and inspire employees.
  2. Give employees opportunities for professional and personal development.
  3. Help employees find purpose in their work by showing them how their job helps deliver the vision and goals of the company.
  4. Recognise employees in a meaningful and memorable way.
  5. Remember an employee engagement strategy isn’t ‘fixed’, continue to monitor your employee engagement and adjust it.


John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.
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