How Would a 20% Increase in Productivity & Profitability Impact Your Company?

Employee engagement drives company performance. No surprise here, right? It doesn’t take a rocket scientist to conclude that the more engaged a company’s employees are … the better it will perform. Before you dismiss the headline as “click bait”, read the next 800 or so words to see how employee engagement can make a dramatic difference in your bottom line.

Many studies over the years have borne this out. One study that is particularly noteworthy is the Gallup Q12(R) Meta-Analysis Report. This employee engagement study is the ninth that Gallup has conducted over three decades. In Gallup’s words, it “combines decades of employee engagement data and illustrates the connections between highly engaged teams and increases in business outcomes”.

Based on Gallup’s work, top-quartile business units, as measured by employee engagement, outperform bottom-quartile business units across a wide range of performance measures, including:

    • 10% improvement in customer loyalty/engagement


    • 21% increase in profitability


    • 17% increase in productivity


    • 41% decrease in absenteeism


  • 40% improvement in quality

If you lead an organization, a department or a team, you obviously want those around you to be engaged. And you intuitively understand the relationship between employee engagement and company performance.

The challenge, however, is in defining those factors that enhance employee engagement and satisfaction. How can you identify what they are? What can you as a leader do to ensure a highly engaged workforce?

I addressed this briefly in a prior article, Lavish Perks Revisited. Things like ping pong tables, foosball, abundant free food and a corner office are not fundamentally what drive employee engagement and satisfaction. Nor, at the end of the day, does money (although compensation is obviously important).

As I have pointed out previously, such perks can be highly effective if they are integral to an overarching purpose-driven strategy that is directly related to personal development. Otherwise they will ring hollow.

So, what does Gallup have to say about employee engagement? They define several key correlations with employee engagement and satisfaction, including:

    • Expectations. “Defining and clarifying the outcomes that are to be achieved is perhaps the most basic of all employee needs and manager responsibilities.”


    • Materials and equipment. “Getting people what they need to do their work is important in maximizing efficiency, in demonstrating to employees that their work is valued and in showing that the company is supporting them in what they are asked to do.”


    • Opportunity to do what I do best. “Helping people get into roles in which they can most fully use their inherent talents and strengths is the ongoing work of great managers.”


    • Recognition for good work. “Employees need constant feedback to know if what they’re doing matters.”


    • Someone at work cares about me. “For each person, feeling cared about may mean something different. The best managers listen to individuals and respond to their unique needs. In addition, they find the connection between the needs of the individual and the needs of the organization.”


    • Encourages my development. “If the manager is helping the employee improve as an individual by providing opportunities that are in sync with the employee’s talents, both the employee and the company will profit.”


    • Opinions count. “Asking for the employee’s input and considering that input can often lead to better decision-making. This is because employees are often closer to many factors that affect the overall system than the manager is. In addition, when employees feel they are involved in decisions, they take greater ownership for the outcomes.”


    • Mission/Purpose. “Great managers help people see not only the purpose of their work, but also how each person’s work influences and relates to the purpose of the organization and its outcomes.”


    • Associates committed to quality. “Managers can influence the extent to which employees respect one another by selecting conscientious employees, providing some common goals and metrics for quality, and increasing associates’ frequency of opportunity for interaction.”


    • Progress. “Providing a structured time to discuss each employee’s progress, achievements and goals is important for managers and employees.”


  • Learn and grow. “In addition to having a need to be recognized for doing good work, most employees need to know that they are improving and have opportunities to build their knowledge and skills. Great managers choose training that will benefit the individual and the organization.”

All of these factors in one way or another are about appealing to each individual’s self-interest and need for self-fulfillment and, in Maslow’s words, self-actualization. There is no greater driver of change.

So, here’s my question to you … What would a 10% improvement in customer loyalty look like to you? A 20% increase in productivity and profitability? A 40% improvement in quality? Now, extend this for five years. What would your team/organization look like?

Maybe you’re there already, in which case your accomplishments deserve special recognition.

But if you’re not there yet, the next obvious question is … What are you doing to really drive employee engagement and satisfaction? How much energy and attention do you devote on a regular basis to these key correlators? And how can you better leverage employee engagement to enhance your organization’s performance?

Please let me know your thoughts. I would love to hear from you.

Mike Cobb


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