Employee Engagement For Dummies
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Employee engagement is tied to innovation, productivity, creativity, and longevity in your workforce. Still,you need to measure employee engagement, just as you would any other business objective, regardless of whether employee engagement becomes part of your balanced scorecard.

Historically, the gold standard for measuring employee engagement has been voluntary employee turnover. The problem? Voluntary turnover is a trailing indicator rather than a leading indicator. That is, you can't use this data until an employee has “left the building,” so to speak.

Also, not all voluntary turnover is created equal. That is, voluntary turnover among disengaged or low-performing staff is of far less concern than voluntary turnover among high-potential or high-performing employees. In fact, in this case, high voluntary turnover can be good!

Of course, if you are losing star employees in droves, that's clearly a problem, and you need to identify the underlying causes. Obviously, you can accomplish this only if you know who your high potentials and high performers are.

If you're not capturing this data, you should. At the very least, you should be benchmarking your voluntary turnover against others in your industry. Yes, it's a trailing indicator, but it's still a revealing data point.

In addition to measuring voluntary employee turnover (flawed though that measurement may be), you should also measure the following at both the organizational level and the department or business-unit level:

  • Employee engagement survey results: Unlike voluntary turnover statistics, employee engagement survey data are leading indicators. If you conduct a survey, you'll be able to benchmark your results against other firms in your industry. Even more important, you can benchmark your progress against your historical survey data and can compare business units with other business units — both of which are important benchmarks.

  • Recognition: Recognition is a key — and free! — engagement driver, but few firms measure it. If you budget a nominal amount per department for recognition efforts, funded at the corporate level, you'll be able to track the amount spent on these efforts on a departmental basis.

  • Employee referral percentage: This is defined as the percentage of new hires who have joined your firm because of an internal employee referral. If none of your internal employees is referring your firm to others, that may indicate a serious lack of engagement.

  • Training and development investment: Best-in-class organizations spend between 3 percent and 5 percent of payroll on training and development. Budgeting and measuring your investment as a percentage of payroll by department will enable you to track who is investing in their employees. There is usually a clear connection between engagement and investment in training and development.

About This Article

This article is from the book:

About the book author:

Bob Kelleher is the founder of The Employee Engagement Group, a global consulting firm that works with leadership teams to implement best-in-class leadership and employee engagement programs. He is the author of Louder Than Words and Creativeship, as well as a thought leader, keynote speaker, and consultant.

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