- In This Issue
How Committed—and Motivated— Is Your Workforce?
The success of a business is deeply connected to the engagement of its employees. These days, there are both significant challenges and great opportunities
This article was published in the Q1 2012 issue of Aon One, April 2012.
At Honda of America Manufacturing, everyone wears specially designed white shirts and pants. There are no preferred parking lots and no special cafeterias. Everyone eats together, paying the same price for the same food. And while there are titles, there are no job descriptions. The job is to do whatever is necessary to accomplish the company's goals.
"We all had the exact same uniform, from the CEO on down. That visual reminder that we were all members of the same team reinforced the organizational value that we were all equally important to the company and its success," says Tim Garrett, former vice president of administration at Honda of America Manufacturing, in Marysville, Ohio, and author of For the Betterment of the People.
Garrett is credited with helping to create a great workplace at Honda during his tenure there from 1983 to 2008. In fact, Honda employees so loved their company that they voted against a union. "Employees didn't feel they needed an outsider to advocate for them," recalls Garrett. "Give your people the respect they deserve, the sense of belonging that they need and the fair compensation they earn, and you've beaten the unions at their own game."
Garrett says a will-do spirit permeated the halls. "People would do anything they were asked because they wanted to help out Honda. It didn't matter what the person's title was, they felt empowered by not having a job description."
At Honda it's not about cult, but culture—one consciously created to be 100 percent about engagement.
Why Engagement Matters
It's not only Honda that's focused on employee engagement. Corporations around the globe are focusing on it for a good reason—a company is only as good as its people. Attracting, motivating and retaining top talent is priority No. 1. The key to all three is engagement.
"Keeping employees engaged, by definition, keeps them motivated, involved and contributing at a high level to an organization's results. It helps with retention, especially top talent. Our research has also shown that there is a strong link between engagement and total shareholder return—it helps the bottom line," says Daniel Rubin, associate partner, Talent and Rewards, and U.S. employee engagement practice leader at Aon Hewitt. "Organizations achieve their strategies—innovation, customer focus, efficiency and the like, much quicker and more effectively."
In fact, even in turbulent financial times, Aon's research continues to show a strong correlation between employee engagement and financial performance. Organizations with high levels of engagement (65 percent or greater) continue to outperform the total stock market index and posted total shareholder returns 22 percent higher than average in 2010. On the other hand, companies with low engagement (45 percent or less) had a total shareholder return that was 28 percent lower than the average.
Low employee engagement reduces employee satisfaction and lessens an employee's emotional attachment to an organization. It also raises turnover, and productivity and creative performance are negatively affected, explains Kevin Groves, Ph.D., associate professor of Organizational Theory and Management at the Graziadio School of Business and Management at Pepperdine University.
Turnover is expensive. "A well-known hospitality company implemented a series of high-involvement work practices and reduced its turnover from 37 percent to 23 percent, saving the firm more than $500,000," Groves says.
Equally important, employee satisfaction and loyalty are strongly tied to customer satisfaction and loyalty. "Lose one and you risk the other," says Rita McGrath, an associate professor at Columbia Business School.
Engaged employees are as good as gold. They enthusiastically and proactively take part in activities they believe will help the organization, even if these lie outside their areas of responsibility.
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