How employee engagement drives productivity

Mark BeatsonChief Economist

CIPD

What are the channels?

• Release of discretionary effort (hours, effort, attention, imagination) – “going the extra mile”

• Alignment of interests allows delegation and decentralisation

• Employee insights and knowledge of their customers support innovation

• Social exchange• External reputation – how an

organisation treats its employees is one of the key influences on how (potential) customers think about it

Consistent financial returnsPartners with third parties

Top global companyAdmired top leadership

InnovatorAddresses society's needs

Community benefitsProtects environmentCommunicates often

EthicalHigh quality products

Acts responsibly in crisisTransparent and openLooks after employees

Customers before profitsListens to customers

27%29%29%30%

33%40%40%

43%50%52%54%55%56%58%59%61%

Importance of actions in building trust in a company

Source: Edelman Trust Barometer 2014.

What’s the evidence?• ‘Nailing the evidence’ working group

found lots of studies … some more plausible than others

• Causality is an issue – does engagement lead to success or success mean businesses can afford engagement?

• Meta-analyses suggest causation more likely from job attitudes to performance – but this is something difficult to nail down (if it matters)

• Impact often happens through impact on customers and customer satisfaction

• Engagement improves quality and innovative behaviour

• Engagement reduces turnover and absenteeism

Everybody’s doing it …

OtherImproving digital literacy

Changing the skills mix of the workforceReviewing reward/recognition systems

Employee retentionRecruiting to key vacanices

Business restructuringPredicting future talent requirements

Containing labour costsHigh levels of employee engagement

Improving leadership skills/capabilities

14

1517

252627

3031

5460

Top three workforce priorities in the coming year (% of employers)

Source: ‘On the up’, CBI/Accenture Employment Trends survey 2013.

What do employers expect to gain?

No benefits

Increase innovation

Increase retention

Increased client/customer satisfaction

0

9

22

23

40

45

66

87

Major benefits of higher levels of employee engagement (% of employers)

Source: ‘On the up’, CBI/Accenture Employment Trends survey 2013.

Is employee engagement spreading?

Managers treat employees fairlyManagers deal with employees honestly

Managers can be relied upon to keep their promisesINTEGRITY

Satisfied with involvement in decisionsManagers allow employees to influence decisions

Managers good at responding to employee suggestionsManagers good at seeking views of employees

EMPLOYEE VOICESatisfied with sense of achievement from work

Good management-employee relationshipENGAGING MANAGERS

I am proud to tell people who I work forI feel loyal to my organisation

I share many of the values of my organisationSTRATEGIC NARRATIVE

0% 10% 20% 30% 40% 50% 60% 70% 80%

2011 2004

Source: Workplace Employment Relations Studies 2004 and 2011, surveys of employees, GB, workplaces with 5+ employees.%s are those strongly agreeing/agreeing with the statement.

What are the common barriers?

• Leadership behaviour

• Line managers• Lack of trust• Neglecting

voice

Never

Very ra

re

Rarely

Sometimes

Very ofte

n

Always

72% 68%59%

52%

36%27%

% of employees highly motivated by core purpose of organisation

“Important information is only shared with a select few”

Source: CIPD Employee Outlook survey, spring 2014.

Can you have too much employee engagement?

11% 6% 12%

36%

16%

33%

In love with the boss?

Strongly agree Agree

13% 7% 12% 11%

30%22%

32% 29%

In love with the company?

Strongly agree Agree

Source: CIPD Employee Outlook survey, spring 2014.

Thank you