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How Employee Engagement Hits the Bottom Line

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Thu Nov 08 2012

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(From Harvard Business Review) -- What would contribute most to your being both happier and more productive at work? How about feeling truly taken care of, appreciated, and trusted by your employer?

More than 100 studies have affirmed the connection between employee engagement and performance, but the Towers Watson 2012 Global Workforce Study — 32,000 employees across 30 countries — makes the most powerful, bottom line case yet for the connection between how we feel at work and how we perform.

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This new study concludes that the traditional definition of engagement — the willingness to invest discretionary effort on the job — is no longer sufficient to fuel top performance in a world of relentlessly increasing demand. The problem is that "willing" doesn't guarantee "able."

What's required now is something called "sustainable engagement." The key factor, the study finds, is a work environment that more fully energizes employees by promoting their physical, emotional and social well-being. I'd add to that mental and spiritual well being — or more specifically, the added energy derived from the capacity for absorbed focus and a strong sense of purpose.

"Many employers are pursuing a variety of wellness efforts, typically focused on giving incentives or penalties to people who embrace healthy behaviors like exercise, good diet or effective management of a chronic illness," the report concludes. "These are important, but to sustain energy, employers have to go beyond these core programs and embrace the notion of workplace energy on a far broader plane."

 When they do, the consequences are nothing short of staggering.

In a broader analysis of 50 global companies, Towers Watson found that companies with low engagement scores had an average operating margin just under 10 percent. Those with high traditional engagement had a slightly higher margin of 14 percent. Companies with the highest "sustainable engagement" scores had an average one-year operating margin of 27 percent.

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Forty percent of employees with low engagement scores said they were likely to leave their employers over the next two years, compared to 24 percent of traditionally engaged employees, and just 18 percent of employees with the highest "sustainable engagement" scores.

Read more.

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