Incentive - August 2008 - (Page 16) COVER STORY 16 | Incentive | August 2008 | incentivemag.com Photo: Shaun Fenn n the past few years, employee engagement has become one of the biggest and fastest-growing management trends, and with good reason: There is ample evidence it works. While part of this is common sense—an engaged employee is almost by definition a happier, more productive employee—hard numbers back it up as well. As part of its 2007-2008 Global Workforce Study, consulting firm Towers Perrin surveyed 90,000 employees in 18 countries about a number of topics, including what drives engagement—the desire and willingness of employees to go the extra mile in their jobs, to put in discretionary effort. While the firm came up with a number of answers about how companies drive engagement, the most eye-catching part of the survey was why. Towers Perrin compared the financial results of 50 multinational companies. In the course of one year, the companies with high employee engagement posted a 19 percent increase in operating income and a 28 percent increase in earnings per share; conversely, Getting an in Engagement I BY LEO JAKOB SON “A” those with poor employee engagement scores saw operating income decline by nearly one third, and earnings per share drop 11 percent. More broadly, the firm has concluded that a 15 percent improvement in engagement will cause a 2 percent improvement in a firm’s operating margin. “For a Fortune 500 company, two percent equals billions of dollars in shareholder value,” says Eric Mosley, CEO of Southborough, Mass. and Dublin, Ireland–based Globoforce, which specializes in global recognition programs designed to drive engagement. “What was a small topic of interest to a few progressive companies a few years ago now is across the board. When people believe something will provide business benefits, they will get involved.” While the incentive industry has traditionally focused on sales programs that recognize the best employees, generally the top 10 to 20 percent, this new focus on employee engagement is clearly driving a change. For one thing, it focuses on every employee, sales and non-sales alike. For another, it frequently What do Amgen, a biotech-driven pharmaceutical company, and Avnet, a distributor of high-tech parts, have in common? Worldclass global recognition programs http://incentivemag.com
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