Wednesday, October 15, 2008

Gallup Employee Engagement Event

Yesterday I went to the “Gallup World Class Employee Engagement Seminar” to learn about best practices for employee engagement. You can read my previous post about the Gallup Q12 for a more detailed description of the tool.

I could wax poetic about how an engaged employee will lead to lower turnover, better business unit performance and more engaged clients. But the entire concept was best summed up by an analyst this way;

“Using the Gallup Q12 doesn’t add to the plate of busy managers it eats the lima beans”

In other words, when an employee is engaged many of the minor problems disappear. Engaged employees look for solutions, stay longer and produce more. They are also prerequisites to sustainable business growth.

The bad news is that in a typical organization, only 30% of the employees are fully engaged and roughly 20% are actively disengaged. The remainder of employees fall somewhere in the middle. Not exactly a recipe for success.

The ratio of engaged : actively disengaged employees is predictive, not only of profit/performance, but also of absenteeism, employee turnover, safety incidents, productivity and client satisfaction.

To quantify it, the average company has a ratio of 1.5 engaged employees for every 1 actively disengaged employee. A world class company has a ratio of 8:1.

When client engagement is optimized the company performs 1.7x better. When employee engagement is optimized the company performs 1.7x better. When both employee and customers are optimally engaged the company performs 2.4x better. In fact if a company is in the top 1% of each the multiplier is closer to 5.4x.

Employee and customer engagement are synergistically related rather than just additive.

The seminar itself was short (3 hours) but informative. Unfortunately, within 15minutes of arriving the hosts asked us how many people we employee. I told them 60 and they said that Gallup only dealt with companies of greater than 1,000. That pretty much ended their interest in our small company as the room (roughly 20 others) was made up of representatives from multi-national organizations. In the end, I got the distinct impression the “course” was more of a sales pitch for Gallup services* and we didn’t fit the mold.

Regardless, yesterday’s event took me well out of my managerial comfort zone and I learned several important perils. Employee satisfaction is not employee engagement and engagement is vital to productivity as well as some techniques to measure and drive engagement.

If your company is over 1,000 you may want to look at Gallup’s services. For the rest of us, the books Human Sigma or The Best of the Gallup Management Journal are good starting points for small organizations. Alternatively, there are some managerial courses provided by Gallup that are approximately $4000 pp.

*Part of Gallup’s value system is to share its’ information with leaders. This course was part of that but you could also hear musing from the staff about “teeing us up” for various services. The Gallup Q12 is also copyrighted and cannot be used without payment. It is a catch-22 since they seem to have no interest in supporting a company our size.


David Zinger said...

I have never hear of employee engagement as eating lima beans! Thanks for the information on the seminar. If you have a small business or are looking for assistance I encourage you to visit The Employee Engagement Network -

Anonymous said...

How does Gallup figure their engagement ratio?

Dave Newton said...

Ian, did you ever find a company to do your survey?