Do you get the most out of your employees that you can? How would you begin to even answer that question? The answer is that it is incredibly complex to measure a productivity gap between capabilities and actual performance.
One formula that we use with our clients to diagnose this issue is: P = M x A (Performance is equal to Motivation multiplied by Ability). The reason this relationship is multiplicative (rather than additive) is because without any Motivation or Ability, than Productivity is equal to ZERO.
We recently wrote an article Lessons in Leadership: 4 Tips to Motivate and Engage Employees and created an E-reader Motivating Others: 8 Tips to Engage Your Team, to address this topic. In these pieces, many tips are provided to increase employee motivation and engagement. One of the questions that these works sparked is: “is there truly a link between productivity and employee engagement?” The answer to this is an unequivocal YES!
Research by (Anitha J., 2014), finds that the relationship between productivity and engagement is very strong, accounting for almost 60% of overall productivity. Baldoni (Harvard Business Review: 2013), cites Gallup reporting that employees with a high level of engagement show 22% higher productivity. This was based on a meta-analysis of research involving 1.4 million employees; making the results highly reliable and generalizable to many industries.
Dr. Jim Harter (Chief Scientist, Gallup Research) describes the difference between engaged and disengaged employees by saying: “Engaged employees are more attentive and vigilant. They look out for the needs of their coworkers and overall enterprise, because they personally ‘own’ the result of their work and that of the organization.” (Baldoni, 2013). The bottom line is that engaged employees undeniably benefit an organization; while disengaged employees might actually hurt an organization’s productivity.
Markos (2010) shows a concrete link between employee engagement and organizational performance. In his work he focuses on specific positive outcomes of highly engaged employees. He cites the following benefits of engaged employees:
Higher retention/reduced turnover
Higher levels of customer satisfaction
Higher profitability
Higher levels of company growth
The fact is that engaged employees do a better job. What is even more important to organizations though, is that it appears that their engagement is synergistic and affects others in a positive way. This leads to a more successful organization in terms of profits and customer satisfaction.
Equally as important as engagement is disengagement. Just as engagement shows powerful, positive outcomes; disengagement has strong negative effects to an organization. Markos makes a powerful claim in his study titled: Employee Engagement: The Key to Improving Performance. He reports that disengaged employees:
Miss an average of 3.5 more days per year
Are less productive
Cost their organization money
Cost the US economy $292 to $355 billion per year
Disengaged employees don’t just show decline in their own performance, but actually negatively impact others and the organization as a whole. It is critical that Leaders turn disengaged employees around or they will realize detrimental effects of their presence to the team and the bottom line.
TAKE AWAYS
Employee Engagement is critical to an organization and all Leaders need to know if their employees are engaged in their work. Leaders must also understand if they are doing the right things to engage their employees. If they aren’t, then they need to target a strategy for how to increase this critical factor.
If you are wondering if you are doing the necessary things to Engage your Employees, take our Employee Engagement Assessment. If you find that you have some gaps, review the Tips we discuss in our E-reader Motivating Others: 8 Tips to Engage Your Team.
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