By Bruce Fisher
June 18, 2009
During this past year, IIT’s Center for Research and Services has worked with a wide range of clients to demonstrate the impact of employee engagement on important business outcomes. In each case, client results on their employee engagement survey were linked to independent metrics, reflecting outcomes including employee turnover and job performance.
The Relationship Between Engagement and
Individual Job Performance
The Center recently partnered with a large multinational insurance company on an employee engagement survey. As with many of our clients, employee data were uploaded into our survey system for subgroup analysis in areas ranging from department, ethnicity, and gender. Additionally, the client included in their data feed designation of employees who had been previously identified as top performers and/or high potentials.
The client’s interest in including the job performance metric in the database was two-fold: 1) understanding if highly engaged employees were also top performers and 2) learning if the drivers of employee engagement were different for top performers than for average or lower performing employees. As an organization committed to a fully engaged workforce and especially attentive to the need to cultivate top performers, the client sought to integrate an understanding of engagement of top performers with their talent management strategy for both performance development and retention.
The results from the engagement-performance analysis yielded important findings. First, there was a highly significant relationship between employee engagement and job performance. For the overall engagement scale as well as all six items included in our core engagement index, differences between top performers and others within the organization were highly significant. These results are represented in Table 1.
|Engagement Item||Company Excluding High Performers||High Performers|
|If I was offered a similar position and pay at another company, I would stay at this company.||63%||73%|
|I speak highly of this company whenever I get a chance.||70%||77%|
|I frequently volunteer for additional duties.||67%||80%|
|I plan to work here as long as I can.||74%||81%|
|I go the extra mile to help this organization succeed.||92%||97%|
|I would recommend this company to a close friend as a good place to work.||65%||72%|
Further, the profile of key drivers of employee engagement was distinct for top performers. Drivers represent the factors that are significantly correlated with levels of employee engagement. In this case, career development (e.g., Someone at work encourages my development), diversity and inclusion (e.g., I feel free to take reasonable risks in my work without fear of reprisal), and collaboration/co-worker relations (e.g., The right level of teamwork exists across business areas) were all significantly more important in driving employee engagement for top performers than the remainder of employees.
The implications of this research are dramatic. Employee engagement pays off! Talent management strategies should target employee engagement as a key factor in the performance equation, especially for top performers. Finally, strategies for engaging top performers should be customized and targeted for top performers.
Bank Turnover Impacted by Employee Engagement
The Center recently conducted an employee engagement survey for a midsize Midwestern regional bank. This bank had an especially keen interest in understanding and addressing turnover among its frontline employees, such as tellers and personal bankers.
Our survey research program with this bank sought to predict annual turnover rates for bank branches and departments. These turnover rates were calculated as a percentage based on the number of employees that left voluntarily during the year preceding survey administration. The average turnover rate across branches and departments was 18 percent with a range of 0 percent to 171 percent. In contrast, the average level of employee engagement for branches and departments was 84 percent with a range of 30 percent to 100 percent.
A contrasted groups design was used whereby the turnover rates of branches and departments with the highest engagement levels was compared against turnover rates for branches and departments with the lowest engagement scores. The results of this analysis are displayed in Table 2 below.
|Number of Branches and Departments||Average Turnover Rate||Significance|
|46||11.8%||p -ÂÂ¤ .000|
These results clearly demonstrate the relationship between employee engagement and turnover: Highly engaged employees are significantly less likely to leave voluntarily. These results reinforce the business case for creating an engaging work culture. The client focused interest on factors that were shown to be significant drivers of employee engagement. In our driver analysis for branch employees, person-job fit in terms of feeling that one’s skills, abilities, and personality are well matched with job requirements was the most important survey dimension that predicted engagement. Thus, employee selection strategies that effectively match individual traits and characteristics to the job are considered core to frontline employee engagement and retention.
Bruce Fisher is an adjunct professor and director, Center for Research and Service in the Institute of Psychology at Illinois Institute of Technology. Dr. Fisher is responsible for coordinating research and consulting services to business and industry. IIT’s Center for Research is a sponsor of Chicago’s 101 Best and Brightest Companies to Work for. Fisher can be reached at [email protected].