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Employee Commitment
and Your Profits are
Directly Connected |
It's a sad fact: Many employees are not committed to the work they do. In the last four years, more than 10 studies have been devoted to the subject of employee engagement or commitment and how it affects businesses. They found that at least half of all employees feel disconnected from their jobs and their companies, and are not doing their best work.
As we celebrate Labor Day, it's a good time to ask yourself: How dedicated is your staff?
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A Misnamed Holiday? |
The one thing most people don't expect to do on Labor Day is labor. When the holiday was conceived 125 years ago, it was to establish a "workingman's holiday," a day when the wheels of industry were silent in order to recognize and appreciate the contribution of the workforce to the success of our mammoth economy.
Back then, there was a prescribed way to celebrate Labor Day, which included street parades, community festivals and speeches by prominent citizens in the public square.
Whose idea was it to celebrate working people? Stories conflict, but the U.S. Department of Labor gives some credit to each of two men whose surnames sound the same.
Union official and co-founder of the American Federation of Labor, Peter McGuire seems to have been the first to suggest a day to honor those "who from rude nature have delved and carved all the grandeur we behold." But other records report that another union man, Matthew Maguire, really got the ball rolling.
While serving as secretary for New York's Central Labor Union in 1882, Maguire proposed plans for a work holiday and those plans were actually used in the first celebration.
The first Labor Day was held on September 5th, 1882, and the next year it was also held on September 5th. By the third year it was changed to the first Monday in September.
As labor unions increased, the Labor Day holiday spread. Although New York was the first to propose making Labor Day a state holiday, Oregon was the first to sign it into law (in 1887). And in 1894, Congress passed a law making Labor Day a legal holiday in Washington D.C. and the territories.
Over the years, Labor Day celebrations have become less public and more likely to include a backyard barbecue or one last visit to the beach as a farewell to summer. Either way, it's a good time to consider the contribution employees make to your business and plan to improve their level of engagement. |
The Conference Board, a not-for-profit organization that studies management and the marketplace, recently reviewed various studies and put together a report entitled Employee Engagement. It reveals three major conclusions about today's workforce:
In some U.S. companies, as many as 80 percent of employees are not engaged in their jobs. Levels of engagement for U.S. employees ranged from a low of 21 percent to a high of 52 percent. In other countries, studies found employee engagement ranged from 12 percent in France and Germany to 70 percent in Canada.
First-line supervisors are the most important factor in engagement. Employees view their companies based on the relationship they have with those they report directly to. A bad supervisor often equates to a bad employer.
Employee engagement is directly connected to an organization's financial success. The Conference Board report states: "When employee engagement levels increased, a corresponding increase in financial performance indicators followed." It adds that "...employee engagement actually causes an increase in a company's overall financial performance." What Exactly is Employee Engagement?
One definition of engagement, according to the report, is the "connection between employees and their companies that involves minds, hearts and hands."
Three factors are involved in engagement: cognitive commitment, emotional attachment, and a connection to the employer. In plain language, engaged employees care more about their companies, bosses and colleagues, and the part they play in the overall performance of the organization. Therefore, they expend more effort.
Obviously then, higher levels of employee engagement have several positive effects including these areas cited by the Conference Board: recruiting, turnover, individual productivity, customer service, customer loyalty, growth in operating margins, increased profit margins, and revenue growth rates.
One study showed that highly engaged employees may outperform those who are moderately engaged by 23 percent and those who are disengaged by 28 percent. That means that an employer who succeeds in helping employees commit to their work can significantly raise employee productivity.
What Can You Do?
Start by looking at your managers. The Conference Board stresses that first-line managers and supervisors are crucial in determining whether or not employees are engaged. A "manager who is inspirational and enthusiastic," is the first driver of employee engagement, the report explains. To improve employee engagement, as well as the relationships between managers and employees, the Conference Board suggests these steps:
- Using surveys to gather opinions and employee concerns.
- Acting on employee feedback.
- Keeping promises. Employees want to know their employers are truthful and act with integrity.
- Rewarding the right people for the right things.
- Engaging in an open and honest dialogue with staff members at all levels.
- Demonstrating to employees how their individual performance affects company performance. Employees who can see a direct connection between their work and the end product or service generally perform better.
- Fostering an atmosphere of trust and integrity by communicating well with employees, listening to their concerns and ideas, and keeping your promises. This helps enhance your reputation as a good employer, which in itself is another driver of employee engagement. Employees derive self-esteem from an association with a quality employer.
- Examining how team members and the entire staff work together. Colleagues can greatly influence employee attitudes toward their jobs.
- Establishing pathways for employee development.
When possible, reduce decision-making hierarchies to allow employees more autonomy and some decision-making authority.
Taking steps to increase the level of employee engagement at your company can lead to significant mutual benefits. The Conference Board report noted that "emotional drivers," such as the relationship between staff members and managers and pride on the job, have four times greater impact on the effort employees put in than pay and benefits. As the nation celebrates Labor Day, it's a good time to consider ways to inspire employee loyalty, and as a result, strengthen your company's bottom line.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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