More Evidence that Engagement Pays Off

Another study was recently published which makes the link between employee engagement and profitability. This one was done by the Workplace Research Foundation in cooperation with the University of Michigan. (Full disclosure: Michigan is my alma mater. Go Blue!)

This was a hefty project. It took place over seven years (2001 to 2007) and looked at survey data from 3490 employees at 841 corporations that were listed in the Wall Street Journal 1000. Apparently this WSJ index covers 98% of the US gross domestic product, so the sample clearly cuts across Main Street.

What the researchers learned was that for every five points added to a firm's Employee Motivation Index—the instrument they used to measure engagement—it returned an additional 2% in stock price the following year.

Palmer Morrel-Samuels, PhD, was the lead author of the study. In describing his perspective on engagement, he makes a point to distinguish it from employee satisfaction. A satisfied employee is not necessarily productive; they may simply like the work environment. In comparison, when an organization is encouraging engagement, "It has to do with the intellectual challenge, pride in developing a sense of mastery and the need to make a contribution to both your job and society."

I've always believed that an enlightened organization sets in motion a wonderful virtuous circle of success. As employees become more engaged, they act in ways that benefit the organization and its customers. This in turn generates a handsome profit for the company, creating a solid financial foundation as well as the ability to reinvest in their best asset—their people. So for anyone needing a reminder, this study once again demonstrates that businesses and the people they touch all benefit from a healthy, vibrant workplace.

Jennifer

People are Messy

I recently facilitated a conference for the Forum for People Performance Management, and one of the livelier discussions was on the theme, "People are Messy." We were grappling with the idea that businesses have a wish for employees to be entirely predictable and dependable in their behavior. By this we mean they're never absent at inconvenient times; they never make a mistake, especially when it really matters; they don't bring personal concerns with them when they show up for work, whether it's broken pipes or sick children; the list goes on.

But in reality, people are messy, and we're messy because we're human. Things go wrong in our lives, mistakes are made and companies are impacted. However, instead of creating policies with the intent of limiting or controling the messiness, what if we simply accepted the reality of it, and designed organizations that acknowledged it?

For example, what if you abandoned the idea of set office hours, and instead told everyone to establish their own work schedule? That's what Best Buy did. Or what if you enacted the belief that productive work can happen anytime and anywhere, and rather than assign everyone a dedicated cube, you had them check out a desk to work at (assuming they needed to be in the office that day.) This practice is called hoteling, and IBM and Microsoft are among the many that use this strategy.

These are simple examples, but the idea is that when you take actions that are designed to reign in the messiness, you're probably going to fall short of your vision. And you also end up with unintended consequences. In the end, you're better off creating a system that can be easily adapted to the needs of many. The result will be an environment that ultimately brings out the best in people, even when they're being messy.

Jennifer

Pizza with Purpose

If you get a chance, pick up the February issue of Inc Magazine and check out the cover story on Nick's Pizza and Pub.

Nick's is a Chicago area restaurant started by Nick Sarillo in 1995. There are two locations, and they're enormous places designed to provide a great meal and a place to gather for family and friends. And while every town in America may have a pizza place, none are like Nick's.

Rather than focus on the taste of the crust or the speed of the service, his enterprise is about "Pizza with Purpose." He has established his business as a true partner in the community, and has created a culture that trusts his employees to work intelligently and respectfully without a "command and control" environment—and they're primarily teenagers!

He regularly hosts fundraisers for all kinds of local non-profits, and then donates 100 percent of the gross profit for the day. Right now, he's also offering "Half Price Mondays" in the dining room, and half price for takeout on Tuesday until the unemployment rate goes down.

From an employee perspective, he describes his approach to leadership as "trust and track," which is a deliberate alternative to "command and control." Essentially, he has a culture and process which trains his employees, trusts them to perform well, and then tracks their progress to the company's goals. He considers it the heart of his business success.

I got the chance to meet Nick last fall, and at first he strikes you as just a regular guy running a fun business. But when he gets going, his passion for his employees becomes clear. As he says in the article, "People really do want to have a meaningful place to work," and as he's clearly proven, the path to achieving that vision can even be by making pizza!

Jennifer