HR & Management

How employee engagement and respect drives gains for a business

7 min read

20 August 2015

A survey conducted by Harvard Business Review (HBR) in June 2014 strived to find out how bosses could increase productivity. It revealed that when it came to garnering commitment and engagement from staff, there was one thing that leaders needed to demonstrate – respect.

In fact, HBR suggested that no other form of behaviour had a bigger effect on employees. It said: “Being treated with respect was more important to employees than opportunities for learning, growth, and development.”

This in itself isn’t surprising news. Of course, when we feel more appreciated, we tend to perform better. So imagine how the North East of England could boost Britain’s economy if bosses were more attentive to staff.

Despite the North East having led the charge for mid-market productivity in 2013, employees have suggested that their bosses have yet to grasp the fundamentals of praising work.

This is according to research by Office Genie, which strangely revealed a north-south divide between employees’ attitudes to their bosses. More than one in ten in the North East said employers were either unfair or lazy. And double the number of north eastern office workers also thought their managers were patronising.

Ciaron Dunne, CEO at Office Genie, said: “It’s unclear why there should be such a divide between North and South of the country, but it’s evident that developing and maintaining a strong relationship between colleagues and bosses in the office is vital. Office workers who hate their bosses are less likely to be motivated at work, which can seriously damage a company’s productivity and overall success.”

An example of a leader demonstrating respect to win employees and gain returns was when Campbell’s Soup had lost half of its market value and was on the verge of collapsing. The company’s environment was supposedly so bad that a manager from polling and research firm Gallup had described it as “the worst [he had] ever seen among the Fortune 500.”

Doug Conant, the former CEO of Campbell’s Soup, wrote more than 30,000 individualised notes of thanks to his 20,000 employees. He took every opportunity to connect with people and make them feel valued. By 2010, employees were setting all-time performance records, including out-pacing the S&P.

A 2010 study published in HBR also found that at Best Buy, a 0.1 per cent increase in employee engagement drove $100,000 in operating income to the bottom line of each store per year. And according to Chester Elton, co-author of “The Carrot Principle”, simple recognition was the single most important factor.

“The number one driver of engagement is opportunity and well-being,” he said. “The number one driver of opportunity and well-being is recognition and appreciation. The Harvard study showed that you don’t just want employees satisfied, you want them engaged, because an engaged employee gives you their discretionary efforts.”

Bill Mixon, president of Universal Hospital Services, suggested that the key to earning employee respect is to empower employees and model the leadership behaviour you desire by treating employees with dignity and respect. 

Developing employee potential is also important. Mixon noted: “When employees feel valued and appreciated, they take stronger ownership of their work and seek new opportunities to grow in their roles. This not only benefits the employee, but also the company and its customers.”

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The retired president of Starbucks, Howard Behar, used uniquely different tactics. For example, Starbucks made sure there were no special perks for executives. 

“All employees are called ‘partners’ and there is no separation in any way of partners and the management team,” he said. “Outside of pay and stock, every partner gets the same – even the same health insurance. We did this because it was the right thing to do, not because we thought it would help us build respect.”

In the case of Southwest Airlines, employee engagement was also shown to lead to better customer service. According to Kevin Freiberg in the book “Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success”, Southwest specifically looks for people with other-oriented, outgoing personalities.

To empower its employees, Freiberg suggested that Southwest dispensed with rigid work rules and job descriptions so that members of staff could assume ownership to get the job done and get their planes out on time. The airline also gives employees the flexibility to “bend” company policy if they think it would be in the best interest of its customer. 

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We leave you with one thought to ponder on. Jack Welch, former CEO of General Electric (GE), was known for laying off thousands of employees. However, he is still hailed as one of the best corporate managers.

He offers perhaps the most insightful advice on why a company should focus on garnering the respect of its employees. He said: “There are only three measurements that tell you nearly everything you need to know about your organisation’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energised employees who believe in the mission and understand how to achieve it.”

When a respected CEO like Welch puts employee engagement in the top three factors for business success, you know it is time to start addressing whether you’ve done the some as well.