Thomas J Walter

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Gallup and Employee Engagement

September 16, 2013 by Thomas Walter

A few weeks ago, a study by the Gallup Organization out of Omaha, Nebraska, was reported in the national press. The study showed significant findings that a majority of workers are not engaged in their jobs. The average organization in the United States, according to a Gallup survey, could only report that 29% of the employees were engaged in their jobs. By “engaged,” it is meant that they have emotional and rationale commitments to their work at their organization. Fifty-nine percent of the employees were neutral about their jobs, according to the same study. They may have a rational commitment, meaning that they stay with the organization and do what is needed because the pay and benefits are better than alternatives. This neutral commitment is lukewarm at best. However, the study also showed that 17% were actively disengaged and working against the organization. They dislike their jobs. They may be passive aggressive toward what they should do, or actively working to hurt the organization through being rude to customers, doing a poor job, and not caring about quality. World-class organizations have a much better level of employee engagement, as reported by Gallup, with 67% of employees engaged, 26% neutral, but still 7% actively disengaged.

So why is this important? Employees do the work of the organization. How they approach their work is critical to the success and sustainability of the organization. They are the ones that can make a good customer experience into a great one, and a good product into one that is error-free. Gallup, and others like it, make the claim that an engaged employee is critical to creating an engaged customer.

What is an engaged customer, and how is that different than a satisfied customer? A customer that is satisfied is one that has experienced a good transaction. They are satisfied with it, but according to a 2005 article in the Harvard Business Review, that is all. The transaction is just that, nothing more. If a better option comes around, the customer may switch to the other provider. An engaged customer, however, has an emotional commitment to the organization. It may be because of the product, or how the customer was treated in the experience with the organization before or after the sale, or it may simply be the connection of that product or service with some other experience in his or her life. For this reason, some advertisements use music and life experiences in their spots in order to better connect the customer to the product to something special in the customer’s life.

Besides the advertising, the organization cannot do much about emotional connections generated between customers’ life experiences and a company’s product or service, but they can do a lot about making sure the customer is delighted with that particular product or service. Those organizations need to get their employees engaged in order to get the customer engaged. Engaged employees working with engaged customers lead to 3.4 times the transactions than not having engaged employees or customers. This was demonstrated in the same 2005 HBR article by Fleming et. al.

So, why don’t senior leaders of organizations start looking at the employees as a source of more profit, engaging them in doing so superior performance? That is a good question. Top organizations seem to know how to make a competitive advantage out of the quality of their employees. Conversely, other organizations seem to focus on employees as a cost center.

In a 2013 book, It’s My Company Too! (Greenleaf Book Group Press), we, the authors, reviewed eight different organizations. Two were Baldrige recipients, and five were acknowledge as the “best places to work,” by Inc. Magazine. One organization was noted for their work in their community and in skill training that reduced the recidivism rate, in that community, to 4% while the national average is still in the mid-60s.

What we found, through these case studies, is that each organization viewed its employees as a critical asset to the success of the organization. Management recruited for skill and attitude, making sure the potential new hire would embrace the values important to the culture of the organization.

And what of the culture? Each organization had defined its values around the centrality of the employee to make things happen; and each employee was highly valued by the organization. Each organization had a customer-focus as well as a commitment to high performance and profitability. Trust and ethical conduct by all was a prerequisite for each member in the organization. Values, though, were not the only thing that created these highly-engaged work environments.

Senior leadership delivered on its promise stated in company values, and had expectations that their employees would do the same. These high quality organizations focused on developing each employee through training and getting them involved in company decision-making. Some of the organizations practiced “open-book” management, training employees to understand financial statements and budgeting, and letting them work toward reaching critical numbers for the organization, upon which their bonus would be based. Two organizations practiced weekly meetings, called “huddles,” where each team would report the numbers for which they were responsible, all connected to the final bonus pool. These people were engaged in helping each other to deliver the product and services necessary to create the kind of customer experience that lead to high customer engagement.

There is hope for the quality of the customer experience and for building a work environment that is also a fun place to work. It is exciting to see leaders and employees working as a team. Look for it. It is out there. We can learn a lot from these caring (and highly profitable) organizations.

Filed Under: Employee Engagement

Companies & Organizations

Catering

Tasty Catering is a top Chicago caterer with an award winning culture. Tom is the founder and Chief Culture Officer.

Marketing

nuphoriq specializes in marketing for catering and event planning companies throughout the U.S. Tom is a partner and advisor.

Social Responsibility

That's Caring produces high end gifts for all occasions. With every gift purchased, weekend meals are supplied to a US child in need. Tom is a partner and advisor.

Motorcycles

iMotorsports is an internet based motorcycle dealership with nationwide reach. Tom is an investor and advisor.

Mentorship

True Mentors connects aspiring business professionals with today’s successful leaders. Tom is a mentor.

Manufacturing

T.F. Processors is a wholesale contract manufacturer of baked goods. Tom is a partner and advisor.

Financing

Touhy Capital provides funding for capital investments and employee assistance programs for 80NINE Holdings companies. Tom is President.

Education

The Junto Institute is a leadership and revenue accelerator for growth-stage companies. Tom is an instructor and supporter.

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