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Informed and engaged employees impact performance

Recent research from Hay Group, derived from their database of 7 million employees globally, provides strong evidence of a causal link between employee engagement and business performance.

Figures suggest that firms with a high engagement score have revenue levels on average 4.5 times higher than those with the lowest. Quadrupling revenue is a fairly compelling case for investing in engagement, however it is important to acknowledge that we’re talking about a connection, rather than a cause-effect relationship.

Let's be honest, if it was as simple as treating our staff well, before sitting back and watching the money roll in, we’d all be out buying gifts.

So it’s a connection that most business leaders intuitively ‘get’, but how can we master it? How can we make it more tangible and predictable? There can be no doubt that some of the most profitable organisations in the world have higher than average levels of employee engagement, but what is it they do to bridge the gap between happy staff and a happy CFO?

Hay Group argued that “enablement” is key.“While employees can feel engaged at work, without the right tools they can become frustrated," said Hay Group Europe Research division director Ben Hubbard. "So employees need to ensure staff are “enabled” as well as engaged.” 

Their research found that those identified as having high levels of both engagement and enablement are 50% more likely to exceed performance targets.

I agree that engagement itself is not enough. However, I would argue that information is the next most important ingredient for success. Employees can be highly engaged, and have the right tools and resources to succeed, but if they aren’t informed in ways that lead to effective decision-making, the right business and financial outcomes are unlikely to follow.

For me this is all about how effectively an organisation manages the relationship between its people and its customers. For businesses of all sizes, a vital factor to linking engagement and financial success is their ability to consistently create happy, loyal, profitable customers. The ability to win, grow and retain its most valuable customers through its people.

After all, a business can spend millions on advertising, but if its frontline people don’t fully understand what its customers need and want, the results are likely to feel like a heavy defeat. Organisations that get this right manage to successfully align day-to-day employee behaviours with the right customer outcomes.

Make it a top priority to build customer empathy among staff, support smart decision-making through challenging customer myths and assumptions, and reward customer-centric thinking and ideas.

What sets thriving businesses apart from the rest is they ask one simple question of their employee engagement initiatives: 'What do we want our people to think, feel, or do that they don’t already, and what do we want our customers to think, feel, or do as a result?' 

Rich Webley is the strategy and insight director at Dragonfish, an employee communications agency