The Hidden Cost of Disengaged Employees Is Just The Tip of The Iceberg

Finding good employees that know how to do their jobs, work hard, use their initiative and are prepared to do a bit more to get the job done is a rare thing. Even though you have employees like this, it’s highly likely that you have at least some that aren’t. According to the latest research, every one of those employees is costing you at least 34% of their salary in lost productivity.

You can choose to tolerate that situation or you can choose to make some changes because there is a different way. A way adopted by a set of businesses that consistently out-perform all others. Compared to the stock market as a whole, these businesses have performed more than 400 times better.

The problem is most businesses offer their employees little more than a wage. Even those that are more enlightened and offer other benefits – health insurance, pension, stock options, etc. – are for the most part still engaging in a time for money transaction.

Human beings need more than that. They need to be involved in something bigger than themselves – there needs to be a bigger purpose in coming to work every day; a purpose that is more than making shareholders wealthier on the back of their sweat. They need to know how they are contributing to that purpose and see what difference they are making. They need to connect with their colleagues around a common goal, pulling together rather than pulling in different directions. They also need to be able to see how they are developing professionally, personally and in the community. Among all of this, at the very basic level, they want security. Not the kind of pseudo-security that comes from being told their job is safe as long as they keep doing it, but the kind that comes from involvement in decision making. And not just being informed of decisions but actively involved in making decisions.

Few companies operate with that kind of transparency and involvement.

Employee engagement initiatives go some of the way to addressing this, but even they don’t go far enough. Engagement is just a starting point for the stellar-performing businesses highlighted at the start of this piece. It is necessary, but not sufficient for top performance. These businesses have also adopted the following practices:

• • open book management in which employees not only have complete access to the financials of the business, they also actively participate in the creation of budgets and forecasts: they understand how their role impacts on the bottom line profit and balance sheet. In contrast, there’s a good chance that most of your employees don’t know what a balance sheet looks like. It’s not their fault – the curricula of most schools don’t teach it, so most people come into work not understanding how business works.

• • which brings us on to the second thing these business do: teach all their people how the business works – how it makes money and how it generates cash. If you tell people how to do something, they might do it. If you help them understand how it impacts on the business and therefore their job security, they’re more likely to do it to the best of their ability and do the right things to get it done.

• these companies also go a step further because you still won’t get 100% commitment if they’re working hard just to make others wealthy. So they give their employees a stake in the business. It’s more than a share plan though – it involves making the employees as a whole the major shareholder. Many companies, especially publicly traded companies, give shares to employees. However, their shareholding is so small compared to the overall equity and their ability to impact on the share price is so limited, that it is generally not much of a motivator. The share price is probably impacted by global events outside their control far more than it is by the work they do today. It might stop them leaving for a while, particularly if the stock price is depressed, but it rarely motivates to higher levels of performance. However, in a business that is wholly owned by employees, the primary impacts on the share price are strategy and execution – two things the whole workforce can influence and impact.

As a result in these companies, employees don’t just do what their job description tells them to do, they also do whatever is necessary to increase profits and strengthen the balance sheet. They have a common goal, so everyone pulls together as a team (those that don’t are not tolerated by the rest for very long, so they get in or they get out). They are involved in deciding strategy and goals and then in the day to day execution of them. They can see how the business is being managed. In difficult times they are involved in creating the plans to get through to the other side. They can see the real situation instead of filling the gaps with assumptions. While there may not be such a thing as total job security, at least they can see what’s going on and have a say in what happens.The company itself becomes the product in the minds of all the employees. There’s only one sure-fire way to instills an attitude of ownership in all employees and that is to make them owners. Anything else will fall significantly short.

About

If you’re interested in building a stronger business that delivers more to you, your employees and your customers then find out more about our comprehensive business growth system and the tried and tested methodologies of the World Number 1 business coaching organisation, ActionCOACH. Discover more about employee engagement from the world renowned expert coaches at Engage & Grow.