Employee Engagement Surveys 101

The idea of creating a more engaged workforce is not a new idea. For more than 20 years, managers have been looking at the organizational factors, which engage (or disengage) employees. Research studies have been conducted to determine the link, if any, between an engaged workforce and organizational performance. While some research remains inconclusive, there is a growing body of work that suggests a link between employee engagement and organizational performance does exist. One study, for example, found that employees who responded more favorably to survey questions on engagement also worked in business units with higher levels of productivity, profit, retention and customer satisfaction. These researchers also found that the manager, not the pay, benefits, perks, etc. was the key in building and sustaining a strong workplace.

For 50 years, furthermore, companies have been surveying their employees to determine their level of satisfaction. At present, about 50 percent of Fortune 500 companies conduct formal employee engagement surveys on a periodic basis, such as every two years. In addition, thousands of smaller companies also conduct such surveys.

After thousands of surveys, a set of "best practices" actions has emerged to guide companies in conducting engagement surveys. Foremost, if you are going to conduct an engagement survey, you must have a strategy in place to implement the results. To understand how essential, researchers from the Gallup Organization in the book Follow This Path concluded that only 25 percent of employees in companies that conducted engagement studies said they were engaged. One of the primary reasons, according to the book, was that the employees didn't believe that management had any interest in making changes based on whatthey said in the surveys. In short, the studies were counter-productive because the employees felt that the results were ignored.

What happens if you do implement the results? Over the long run, it appears highly likely that companies who listen to their employees and implement key suggested changes see an increase in engagement, productivity, and profitability. Gallup went so far as to estimate that actively disengaged employees in the U.S. cost their companies $254 to $363 billion annually. When companies focus on the problem, research suggests that it is possible to increase the number of engaged employees significantly, resulting in an almost corresponding increase in profitability.

How much can you increase engagement? While there is no set number, results have been as spectacular as double or triple in one year, and numerous companies have reported increases of 10 to 15 percent annually. In the employee engagement studies we have conducted, we have found highly significant data that should lead to solid improvements in productivity and revenues for those clients. To cite one example, we found a high correlation between a franchisor's optimum job profile and franchisee performance. Franchisees who fit the optimum profile generated royalties that were more than three times the profile of an average franchisee and twice more than the profile of a good franchisee. By using the profile when selecting new franchisees, the franchisor expects to see a significant increase in royalties per franchisee.

The bottom line about employee engagement surveys is that they work, provided that you commit to implementing the results. For more information about how an employee engagement study might help your company, just give us a call.