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