Why is Employee Engagement Important?

by Anya Jennings on April 19, 2010

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Employee engagement is not your garden-variety buzzword. It’s an important business concept with a direct impact on company profitability, and yet it’s a concept still widely misunderstood. There is widespread concern among businesses in every industry about the shift in attitudes among workers. Older workers who tend to take ownership in their jobs and demonstrate a real sense of concern for their responsibilities and for their customers are starting to retire in droves. Young workers entering the workforce have a more cavalier attitude, perhaps since job-hopping has become an accepted norm.


Career perceptions have changed radically in 50 years. Two generations ago, success was defined as accepting a job, working as hard as possible, being rewarded for hard work with promotions, perks and raises, and retiring after long years of service at the same job. Today, it’s far more common to take the “onward and upward” view, changing jobs when a better offer comes along…and constantly searching for that better offer. Job ownership is replaced by the driving need for more education and certification – which leaves professionals more educated and less likely to remain with the company, and as a result, less likely to really care about their jobs.

Studies also show that career-driven ambition in upwardly mobile professionals is not the only disconnected link in the chain. Entry-level workers are proving to be important as well. Taco Bell found that the 20% of its stores with the highest rate of employee retention showed 55% higher profit than the 20% of its stores with the highest employee turnover. The conclusion is inescapable, satisfied employees sell more product and draw more customers. Other studies have clearly demonstrated that this paradigm works at all levels of employee relations and across every industry. The California Milk Advisory Board commercial slogan “Great milk comes from happy cows.” seems disturbingly appropriate.

Richard Branson, CEO of Virgin, put it very well. “We embarked on consciously building Virgin into a brand which stood for quality, value, fun and a sense of challenge. We also developed these ideas in the belief that our first priority should be the people who work for the companies, then the customers, then the shareholders. Because if the staff are motivated then the customers will be happy, and the shareholders will then benefit through the company’s success.”

Employee management is the key to employee engagement. The single most powerful path to employee satisfaction is a good relationship with management. Communication and mutual respect are crucial. Other factors include trust, integrity, job stimulation, career options, company pride, interaction with co-workers (friendly atmosphere), new challenges, self-esteem and a clear understanding of why the employee is an asset to the company and how he fits in to the overall scheme of things. In order to care, employees must be validated for their contributions. They must know that what they do is critical to the success of the company. And the most powerful truth in business is that it’s true.

“There is one key to profitability and stability during either a boom or bust economy: employee morale.” – Herb Kelleher, founder of Southwest Airlines

CEO may make the influential decisions, but it’s the 18 year old girl at the checkout register, or the person answering that technical support phone call that is the public face of the company. The more personal responsibility she takes to deliver the product or service to the customer with a friendly attitude, the better public perception is and the potential for more repeat business increases. A 55% difference in profitability that can be directly attributed to employee job attitude should make any business sit up and take notice, and any manager work towards creating the kind of atmosphere that makes working for him the best job in town.

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{ 4 comments… read them below or add one }

Phil Soucheray May 7, 2010 at 3:37 pm

It is becoming apparent that there are a good deal of varying conceptions about what employee engagement really means. At one employer I worked for the importance of “engagement” was heralded as a key ingredient for ensuring productivity and profits. The way engagement was fostered was through calling all employees to some form of community charity outreach and recognition for “innovative” thinking. The ingredient that seemed to be missing, though, was credibility that while the company touted the importance of engagement, the forms it took seemed only driven by the desire to boost productivity and increase profits. The link between those outcomes and engagement was even part of the general messaging around the efforts.

Lesson: unless the primary — PRIMARY — motive of engagement is a desire for fulfilled employees (not some metric that ultimately applies to the company’s bottom line), engagement will be nothing more than a buzzword or fad. It must be authentic to be fruitful.

Anya Jennings May 10, 2010 at 10:45 am

Paul, you’re absolutely right – the engagement must be authentic, and not just an item to check off a checklist.

Samuel Allsopp October 9, 2011 at 6:59 am

I like Phil’s comment about perception of management by employees lower down the chain.
I think that a common issue in the business world today is that too many of top management are providing the wrong message to their employees. ‘More profits’ is too often read as ‘work harder!” by employees. Gone is the day where ‘one shot’ feel good programs will have any discernible difference to real operations and the people in the organisation.
I feel there needs to be a fundamental restructuring of businesses themselves to become bringers of societal value rather than purely economic ones. This will truly foster win win win scenarious for the company, the employee and the larger society as a whole.

Domingo October 28, 2015 at 8:47 pm

Article writing is also a excitement, if you know afterward you can wite if not it is complicated to write.

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