~~A recent Gallup report1 isn't likely to thrill employees, but it does have some important implications for businesses looking for ways to improve company culture. The main finding is that cultivating employee happiness isn't especially helpful in winning new customers, and furthermore, heavily emphasizing team happiness may actually be detrimental to a company’s bottom line.

"It's true that enthusiastic and energetic employees feel better about their work and workplace," said Gallup's Jim Harter and Annamarie Mann. "But engagement is not determined by an abstract feeling. Measuring workers' contentment or happiness levels, as well as catering to their wants, often fails to achieve the underlying goal of employee engagement: improved business outcomes."

Their findings suggest that businesses tend to be more successful if they concentrate on measuring employee engagement rather than happiness. They can improve their business performance when they "treat employees as stakeholders of their own future and the company's future."

So, how can businesses do this? According to Gallup, by making sure expectations are clear and focusing on "concrete performance management" activities. Managers must make sure workers have the tools and resources they need to complete their tasks efficiently, while also making sure that coworkers are able to get along and work well with one another. These procedures may produce some amount of employee happiness, but at the same time, managers are putting the company first, rather than employee contentedness.

The importance of engagement
Gallup's State of the American Workplace report2 found that a majority of American workers aren't engaged in their work. In other words, they're essentially indifferent toward their jobs, neither liking nor disliking them. Harter and Mann say these employees represent a risk, adding, "Many employees who are not engaged want a reason to be inspired. They are the 'show me' group that needs an extra push to perform at their best. While positive feelings, such as happiness, are usually byproducts of engagement, they shouldn't be confused with the primary outcomes. Rather, the primary emphasis should be on elements that engage workers and drive results, such as clarity of expectations, the opportunity to do what they do best, development, and [having their opinions counted]."

The Gallup report used data collected from more than 195,600 U.S. employees in 2015 and 2016, and more than 31 million respondents through Gallup’s client database. Compared with business units in the bottom quartile of engagement, those in the top quartile enjoyed the following advantages:

• Highly engaged business units have 41% less absenteeism and 17% more productivity.
• In companies that typically have high turnover, highly engaged business units have 24% less turnover. In low-turnover companies, highly engaged business units have 59% less turnover.
• Highly engaged business units achieve 10% better customer ratings and 20% more sales.
• When taken together, the behaviors of highly engaged business units result in 21% greater profitability.

What are some ways to increase employee engagement?
It starts with leadership, and more specifically, by leading by example. You can't expect employees to be passionate about their jobs if you aren't passionate yourself. It also means treating employees with respect and rewarding good work adequately. It means being transparent, accessible, and willing to listen to what employees have to say. You don't have to act on all of their ideas, but listening and talking about their ideas can go a long way toward increasing engagement.

Being honest with employees about significant challenges and ways to overcome them is also vital. Engaged employees will fight to make sure the company is performing to the best of their abilities.

Authenticity and appreciation are also important leadership qualities that can lead to employee engagement. These traits foster respect, admiration, and a willingness and desire to please. Showing some amount of flexibility can also keep employee spirits up, and working in the trenches with them shows that you're more than just their superior, but also their colleague.

A great company culture may not be all about employee happiness and giving them everything they want, but if you are inspiring employee engagement, that should represent some level of happiness (and loyalty) after all, as well as a better bottom line.

1. http://www.gallup.com/businessjournal/208487/right-culture-not-employee-happiness.aspx

2. http://www.gallup.com/reports/199961/state-american-workplace-report-2017.aspx

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.