Productivity and Employee engagement: what’s the correlation?

gytenis galkis

We know that businesses pour billions in marketing: A/B testing is a must, real-time data driven analytics is continuous. However, it is not the case in HR. Companies still heavily rely on annual employee surveys which could be compared to a person measuring his heart rate in August and buying medication in May next year.

Employee Engagement in the Business Cycle

According to a meta-analysis of 1.4 million employees conducted by “Gallup”, organizations with a high level of engagement benefit from 21% higher productivity (Sorenson, 2013). As reported by “Harvard Business Review”, one of the ways to gain competitive advantage and improve overall business performance is to focus on a so-called service-profit chain. It establishes relationships between profitability, customer loyalty, and employee satisfaction, loyalty, and productivity. The structure of the chain: ”Profit and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value is created by satisfied, loyal, and productive employees. Employee satisfaction, in turn, results primarily from high-quality support services and policies that enable employees to deliver results to customers“. (Harvard Business Review, 2015)

Data Collection and Decision Making takes too much time

We know that businesses pour billions in marketing. Alpha – Beta testing is a must, real-time data driven analytics where seconds in delay make a difference, and most importantly all this data drives the decisions behind advertisement, client communication, and branding.

However, it is not the case in HR. There is no real-time analytics, most of the decisions are conducted based on feeling or outdated data. I could compare an annual employee survey to a person measuring his heart rate in August and buying medication in May next year. That is how HR collects data today, not to mention the paper based survey method used by most of the blue-collar intensive workplaces.

And still, companies want to succeed by running the cycle described by Harvard Business Review. I think it should stop today! Reconsider how you make decisions in Human Resource Management until it is too late and because you can change it.

Losses are all over the place

According to Office for National Statistics, productivity growth for whole UK market in 2015 was 1,6% (Foote, 2015), while Finland and Denmark have shown better results. Average estimated productivity gain in Denmark in 2015 was 2% and in Finland was 3%. Using these indices as a productivity target, we found possible financial gains for previously investigated companies: HSBC might save/gain €95,5 million, BP- €121 million, Danske- €24 million, Maersk- €34 million, Nokia- €21 million, Neste- €6 million. The total amount of these gains is more than €300 million! And it’s a result of the lowest, minimal predicted productivity growth rate. Imagine the extent of gains that successful HR solutions on employee engagement might bring, which would double or even triple your employee productivity, just because disengaged employees are slacking, driving customers away, even stealing, and much more!

Improvement is possible

Sounds straightforward and easy, but the only question is – how to implement these changes and know exactly what the most important priorities are? Real-time people analytics are crucial in solving these issues in the competing talent acquisition environment of the XXI century. Make the change, shift from the annual employee engagement, voice-of-employee surveys to something agiler, allowing continuous improvement while democratizing the employee environment in a distraction free method for the employees. Consider PulseTip as a helpful daily tool to engage your staff in relevant daily discussions and topics. In the long run, it enables managers to receive feedback on more important topics such as — employee satisfaction, team, training, engagement, personal achievements, etc. Despite the informative side for HR department, pulse feedback is the bonding element between staff and management. It gives a feeling that every employee matters. Appreciated people are less likely leave companies and are more likely to feel engaged, encouraged, and supported to perform better. Just listen to all your employees – technology supports it. Transform your organization to a more accountable, transparent, and engaging atmosphere where employees feel appreciated and valued. You will instantly see the drop in employee turnover.

Simply start today with PulseTip by asking “My manager showed gratitude for a well delivered job” (Answers: Strongly Agree, Agree, Disagree, and Strongly Disagree). Deliver the results to the managers already next day. Track the progress in 2 weeks by repeating the question. Start a gratification campaign in your organization. Do not forget to appreciate your employees and they will value the relationship with the company.

Hope you got inspired and encouraged to start the change today. Get in touch with me (gytenis@pulsetip.com) if you would be interested in a discussion on the HR management topic.

Next Steps

It was my last post for now from the series of articles on employee engagement and its impact on the bottom line. Thank you for reading, commenting, and following. I suggest checking my previous publications about absenteeism, employee turnover, and on-boarding, you might find it interesting. Feel free to get in touch regarding any HR topic. My team and I are focusing on HR tech development, so we might have an interesting and fruitful discussion about where HR tech is heading.

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