I’ve been hearing a lot of discussion about employee engagement and how ineffective it is in impacting business. Business managers also frequently ask if they should focus on business or focus on employee engagement. I agree wholeheartedly with people who believe that we should not invest time in employees. Instead, they should concentrate on our business.
CASE STUDY
Employee Engagement & Well-being in Services Sector
As a consultant, I had the opportunity of working with numerous great CEOs and CHROs. I had the opportunity to learn a lot from these clients. I was meeting the managing director of a telecom company.
MD: Prashant I believe in employee engagement and well-being. I feel engaged employees deliver better customer service, higher revenue and profits. Therefore, we invest a lot of money, time and effort every year in employee engagement. As the market is maturing, we have to manage costs better. My colleagues are questioning our investment. How should we convince them?
ME: You have a valid point. Your colleagues are also right. Let us look at the business performance of all the circles for the 3-month period after the last survey.
My colleague quickly tabulated the engagement of the teams for each of the circles against the business performance of the circles, provided by the CFO, while I was engaging with the MD. As she ran a correlation between the two, both the MD and I were pleasantly surprised to see a correlation of 0.86.
MD: Can you translate this correlation to dollar revenues?
My Colleague: Why not? The circles with high employee engagement are delivering 130% of the targets, while those with low engagement levels are achieving only 70% of their target.
ME: So, your colleagues have to engage their teams if they want to exceed their targets and outperform competition in all the circles.
MD: I am impressed with your ability to quantify the soft behavioral data into dollar revenue. Let us present this analysis next month in the leadership retreat.
Employee Engagement & Well-being in Manufacturing
Let us go through another situation of a cement manufacturing company. I met the Managing Director of a large cement manufacturing company.
He told me that cement was produced not by people, but by kilns. He believed employee engagement mattered more in service industries.
I asked if he had patented kilns that competitors didn’t have. He said all manufacturers used similar kilns globally. However, plants running 345 days were highly profitable vs 300 days which were loss-making.
When asked what differentiated high-performing plants, he said: people — especially leadership enthusiasm and ownership.
3 Steps to Establish Importance of Employee Engagement
Identify a business reason to engage employees:
There must be a clear business reason. Business—not HR—owns people outcomes. Engagement must solve real business challenges.
Engaged employees deliver higher-quality work, better productivity, and stronger customer satisfaction.
Sustained Performance vs. Short Term Performance:
Short-term performance can be driven through pressure, but it is not sustainable. Long-term success requires engaged teams.
Monitoring Employee Engagement at Board Level:
Just like financial health is tracked, employee engagement should also be monitored at the board level.
To unlock full productivity, organizations must invest not just in hiring but in engagement and well-being.
