Employee Engagement: Soft Stuff Becomes Important

By Dr. Klaus M. Blache, Univ. of Tennessee Reliability and Maintainability Center (RMC)

The year 2020 and the first half of 2021 were difficult for companies and individuals. According to Gallup, employee engagement in the United States fluctuated more than it has since Gallup began tracking it in 2000. Even though it wasn’t easy, the most engaged workplaces in the world continued to put people first.

They found that, “favorable job attitudes have a stronger relationship to organizational outcomes in bad economic times than they do in normal or good times.” The opportunity, and vulnerability, is magnified during a recession. Gallup Exceptional Workplace Award winners (39 world-class organizations), on average have 18.3 engaged employees for every actively disengaged employee—seven times the U. S. average. Employee engagement drives business improvement, even during disruption:

• 81% lower absenteeism
• 18% lower turnover (high-turnover organizations)
• 43% lower turnover (low-turnover organizations)
• 28% less shrinkage
• 64% fewer employee safety incidents
• 58% fewer patient safety incidents
• 41% fewer quality incidents (defects)
• 10% higher customer loyalty/engagement
• 18% higher productivity
• 23% higher profitability
• 66% higher employee wellbeing
• 13% higher organizational citizenship

(From Announcing the 2021 Gallup Exceptional Workplace Award Winners.)

Some of my own research shows similar positive benefits. In order of importance, the focus at companies was safety, profit, quality, and productivity/throughput. Engagement topics such as people/culture and continuous improvement/learning organization were lower on the list. In a related study I did, we learned that, if people are properly engaged early in the initiative, they are seven times more likely to be successful, especially in complex and long-term initiatives. In addition, increased engagement helps improve the four main focus items.

In another study, I looked at throughput (hours per unit of production) as related to engagement (measured as suggestions implemented per employee) in manufacturing facilities. It was found that, on average, for a facility:

• Most of North America averaged less than one suggestion implemented per employee.

• Suggestions implemented per employee ranged from less than 1 to more than 30.

• At three suggestions implemented per employee, throughput improved 20%.

• At 10 suggestions implemented per employee, throughput improved 30%.

• At 20 suggestions implemented per employee, throughput improved 35%.

• At 30 suggestions implemented per employee, throughput improved 38%.

There is diminishing return after three suggestions implemented per employee but getting there is well worth the effort.

Engaged teams improve plant-floor-team decision making and problem elimination by at least 35%.

In a related study (see chart), throughput improved with increasing plant-floor-team decision making and problem-elimination involvement. Highly engaged teams resulted in at least 35% more throughput. Examples of items in the Team Influence Index were level of problem solving by the team, continuous-improvement involvement, and personnel issues handled by the team.

Level of employee engagement (operations and maintenance teams) has significant positive influence on operational results. In these times of turbulent and fast-paced change, an engaged workforce will many times be the difference between winning and losing the competitive performance battle of operating your business efficiently and effectively. EP