Engaging Employees

Engage your employees by following new principles and ideas

Learning Objectives
At the end of this module, you will be able to:
List what employee engagement is and why it matters to your business. Use best practices for engaging employees. Identify new ideas from an award-winning small-business owner.

F I! "#$I %ducation #odule: %ngaging %mployees

About FDIC Small usiness !esource Effort &he Federal eposit Insurance !orporation '(F I!)*

recogni+es the important contributions made by small, ,eteran, and minority and women-owned businesses to our economy. For that reason, we stri,e to pro,ide small businesses with opportunities to contract with the F I!. In furtherance of this goal, the F I! has initiated the F I! -mall .usiness /esource %ffort to assist the small ,endors that pro,ide products, ser,ices, and solutions to the F I!. &he ob0ecti,e of the -mall .usiness /esource %ffort is to pro,ide information and the tools small ,endors need to become better positioned to compete for contracts and subcontracts at the F I!. &o achie,e this ob0ecti,e, the -mall .usiness /esource %ffort references outside resources critical for 1ualified ,endors, le,erages technology to pro,ide education according to percei,ed needs, and offers connecti,ity through resourcing, accessibility, counseling, coaching, and guidance where applicable. &his product was de,eloped by the F I! "ffice of #inority and $omen Inclusion '"#$I*. "#$I has responsibility for 3 F I! "#$I %ducation #odule: %ngaging %mployees o,ersight of the -mall .usiness /esource %ffort.2

E"ecutive Summary
%mployee engagement is a critical factor in running a successful business. %mployee engagement has dropped significantly in the past se,eral years due to the economic downturn, resulting layoffs, and other cost-cutting measures. Increasing your le,el of employee engagement will ensure the long-term success of your business.

F I! "#$I %ducation #odule: %ngaging %mployees

$%at Is Employee Engagement&

%mployee engagement can be defined as (the e5tent to which employees en0oy and belie,e in what they do, feel ,alued for it and are willing to spend their discretionary effort to ma6e the organi+ation successful.) '7!I 2889* %lements of employee engagement include:
Individual value: doing interesting wor6, learning, and growing. Focused wor#: clear direction, efficient wor6 processes, defined performance standards. Interpersonal support: high le,els of trust, cooperation, and support.

%mployee engagement le,els are measured in ,arious ways :from ,ery informal (as6ing around) to formal employee sur,eys; no matter how it is measured, the results are 1uite compelling.

F I! "#$I %ducation #odule: %ngaging %mployees

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=umerous studies show a strong correlation between le,els of employee engagement and se,eral business performance indicators including:
> ?rofitability > %arnings per share '%?-* > "perating income > =et income > ?rofit margins > !ustomer satisfaction > -ales

$%y is Employee Engagement Important&

F I! "#$I %ducation #odule: %ngaging %mployees

!onsider these statistics from getfeedbac6.net:

$%y is Employee Engagement Important&

>In 288@, Aallup e5amined 23,9B8 business units and compared top 1uartile and bottom 1uartile financial performance with engagement scores. &hey found that businesses with engagement scores in the top 1uartile a,eraged B2C higher customer ad,ocacy, BDC higher producti,ity, and B2C higher profitability. >A second Aallup study in 288@ of earnings per share growth of D9 organi+ations found the %?- growth rate of organi+ations with engagement scores in the top 1uartile was 2.@ times higher than organi+ations with below-a,erage engagement scores. >&he !orporate Leadership !ouncil reported that engaged organi+ations grew profits as much as 3 times faster than their competitors. >7ewitt reported that businesses with more than B8C profit growth, had 39C more engaged employees, and 4<C fewer disengaged employees than businesses with less than B8C growth. F I! "#$I %ducation #odule: %ngaging %mployees

-tudies ha,e also shown a high correlation between le,els of employee engagement and important employee statistics, such as producti,ity, turno,er, absences, accidents, and sic6 days.
#ore statistics from getfeedbac6.net:
Aallup found that engagement le,els can be predictors of sic6ness absence, with more highly engaged employees ta6ing an a,erage of 2.E days per year, compared with disengaged employees ta6ing an a,erage of @.2 days per year. %ngaged employees are DEC less li6ely to lea,e the organi+ation than the disengaged employees. &he cost of high turno,er among disengaged employees is significant; some estimates put the cost of replacing each employee at e1ual to annual salary.

$%y is Employee Engagement Important&

&hese findings emphasi+e what good leaders already instincti,ely 6now: Increasing the le,el of employee engagement in your business is good for business. F I! "#$I %ducation #odule: %ngaging %mployees
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'ow to (easure Employee Engagement

=umerous sur,eys and tests measure employee engagement le,els. #ost high 1uality sur,eys are geared and priced for larger businesses. Listening to employee feedbac6, acting on your findings, and continually impro,ing is more important than a fancy sur,ey. "ne of the most simple yet impactful sur,eys for measuring engagement le,els is the Aallup FB2 Inde5 which includes B2 1uestions that ha,e been used by thousands of wor6groups internationally to understand and increase le,els of engagement. Gou can contact Aallup to use the FB2 Inde5. &he ideas on the following pages B3HB4 demonstrate how a business owner 6eeps his employee engagement high without a formal sur,ey. 7is super,isors informally collect data e,ery 1uarter to pro,ide the management team a sense of employee engagement le,els. Important Note! o not as6 for feedbac6 or issue a sur,ey if youF are committed using%ngaging the responses to ma6e 9 I! not "#$I %ducation to #odule: %mployees positi,e changes. It can do more harm than good and

est )ractices for Engaging Employees

&he relationship between the direct super,isor and the employee is the point of most le,erage. -uper,isors can:
%arn trust by being open and ,ulnerable 'admit mista6es, listen to feedbac6, encourage cross-organi+ational con,ersations, etc.* 7a,e regular con,ersations with employees 'whatIs going wellJ whatIs notJ what can I do to help you be your bestJ* Learn employeesI passions and strengths and figure out how to let employees use them in their 0ob 'this may ta6e creati,ity and e5pansion of 0ob descriptions*. Loo6 for de,elopmental opportunities to gi,e employees and support them in their growth -how appreciation in meaningful ways 'as6 employees to find out what is meaningful to them*.

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est )ractices for Engaging Employees

Gou can ad0ust the culture of the company to more fully engage employees. .usiness owners can:
emonstrate the same beha,iors recommended for super,isors with your direct reports. A clear e5ample will inspire your super,isors to emulate you. /ally your employees around a meaningful purpose. %,eryone wants to 6now what the real goal is and whether the goal is being accomplished. !ommunicate your current reality in simple terms. For instance, e5plain the details of your profits, sales, customer ser,ice le,els, and as6 your employees for help in ma6ing impro,ements. -how appreciation and create company-wide gestures of than6s. &hese can be low-cost or no-cost things, such as time off, brown bag meetings with the owner, ,endor supplied education sessions, etc. e,elop your staff throughout the year. ecide what you want to do and put these e,ents on your calendar at the beginning of the year. &reat these time commitments if they were BB F I! "#$I %ducation #odule: %ngagingas %mployees meetings with your most important clients.

 !ommunication is critical for all employees. %5plain measures you ha,e ta6en to a,oid letting people go, and why you now ha,e no other choice. For the impacted employees:
Ai,e as much ad,ance warning as possible. Follow these acts of goodwill that cost you ,ery little:

If *imes Are *oug% and +ou (ust Let Employees ,o (Slide 1 of 2)

Allow for at least 2 wee6Is notice. %5plain the companyIs financials and e5press your sincere regrets. "ffer 0ob leads and ad,ice, and offer letters of recommendation. Use them on a contractual basis 'if you can*, and let them 6now that they will be welcomed bac6 if things get better.

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 For the employees who remain:

If *imes Are *oug% and +ou (ust Let Employees ,o (Slide 2 of 2)

Understand that they are stressed about what has happened, and they ha,e worries of their own. .e aware that, more than li6ely, you are as6ing them to wor6 harder for no rewards. =ow more than e,er, they need to see and hear from you on how things are going at a macro le,el and how it may impact them. Ao out of your way to show appreciation for their efforts. Loo6 for ways to impro,e their lifeKwor6 balance.

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Ideas From an Awardwinning Small usiness Owner (Slide 1 of

2) %5ample: &he !%" of a small bo5 company 'BD< employees*. !ompany was recogni+ed as the Best Company to Work for by a global employee benefit consulting firm and a business information #aga+ine Leadership practices at the small bo5 company:
"nce e,ery 2 years, the !%" teaches finance basics to e,eryone in the company, relating it to their personal finances. =ew business positions are posted internally first to gi,e e5isting employees chances to grow and mo,e up. &he !%" created the ."L incenti,e '.ig "utrageous eLtra,agan+a*. If the business meets a stretch profit goal, e,ery employee gets to go on an (all inclusi,e long wee6end) business paid trip; recent e5amples include Las Megas and ?uerto /ico. "nce e,ery si5 months, the !%" meets with small groups of employees to tal6 about whatIs happening and to as6 for feedbac6. B4 F I! "#$I %ducation #odule: %ngaging %mployees

Ideas From an Awardwinning Small usiness Owner (Slide 2 of

#ore of 2) the small bo5 company !%"Ns practices:
Interested employees are in,ited to strategy sessions. &he business holds < sessions led by < different people, organi+ed by type of strategy, including increasing sales, decreasing costs, impro,ing customer ser,ice. -uper,isors as6 4 1uestions of employees e,ery 1uarter:
7ow are we doingJ 7ow are you doing personallyJ $hat can we do to help youJ 7ow am I doing as your super,isorJ

-uper,isors as6 employees annually to de,elop <-B8 personal goals 'business related or other*. &he !%" creates outlets for employees to play together, including building room for a gym, bas6etball courts, and a sandpit for beach ,olleyball. &he business encourages healthy habits. %mployees get points for e5ercising which can be turned in for pri+es. &he business pro,ides fresh fruit daily. F I! "#$I %ducation #odule: %ngaging %mployees
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 .assi, #c#urrer, 7ar,ard .usiness /e,iew, Maximizing Your Return on People .uc6ingham and !offman, First, Break All t e Rules Lundin, ?aul, and !hristensen, F!"#$ A Remarka%le Way to Boost Morale and !mpro&e Results "#$I education module, Building Your 'eaders ip "kills &ere+, (( )eys to Creating a Meaningful Workplace

Additional Employee Engagement !esources

F I! "#$I %ducation #odule: %ngaging %mployees

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.ey *a#eaways from *%is (odule

%mployee engagement is critical to the success of your business. .ringing out the best in each employee and appreciating employee efforts will help 6eep employees engaged. Find out what your employees want most from you, and be creati,e in gi,ing employees what they need.

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Sources and Citations

Iworld.com: Measuring *mployee *ngagement %ntrepreneur.com: Wanted+ Fully *ngaged *mployees Ainny -chlosser, ?ro-idian !onsulting, LL!: !mpro&ing *mployee *ngagement at Your Business Aetfeedbac6.net: #o, to "ell an *ngagement "ur&ey to "enior Management 7ighbeam.com: Rules of *ngagement 7ighbeam.com: Packing t e Perfect #R Punc 7uman !apital Institute: #uman Capital "trategist Curriculum

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