Workplace Recognition and Incentive Programs

Employee Engagement Study

Posted on April 18, 2010 by Carl Bonura in Uncategorized

In 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 (now Towers Watson) 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, 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 2 percent improvement in a firm’s operating margin.