Congratulations on your engagement

Sales is a numbers game. Companies measure everything from the cost of getting a prospect into the pipeline to the final profit margin on a sale. But very few measure the cost of bad management. The numbers are significant and well worth examining.

In her book, One Foot Out The Door (AMACOM, 2007), management consultant Judith Bardwick points out that employees’ emotions have a direct financial outcome. And employees’ emotions are largely determined by how they are managed. In short, poor management practices produce employees who don’t care. And their disengagement – which usually starts within six months of working for a manager who doesn’t care about his employees as individuals, who focuses on their weaknesses instead of their strengths, who doesn’t listen respectfully to their input and who doesn’t clearly communicate his expectations – results in low productivity, poor retention, and high absenteeism.

The problem of disengaged workers is shockingly widespread. Between 2002 and 2005, the Gallup Organization collected a database of 4.5 million employees in 12 industries and found that overall, only 20 percent of employees were engaged with their work. The bulk of those surveyed: 60 percent, were not engaged and were doing just enough to get by. The remaining 20 percent were “actively disengaged,” spreading their discontent to anyone who would listen and seeking ways to undermine the organization.

These statistics have enormous implications for your bottom line, as one specialty mortgage lender discovered a few years ago. The lender, seeking to quantify the connection between an employee’s engagement level and his or her productivity, used a Gallup instrument to measure engagement, and then tracked employee productivity for six months. The results, says Bardwick, were revealing.

“Non-engaged account executives produced 23 percent less revenue, and actively disengaged employees produced 28 percent less revenue than engaged account executives,” Bardwick points out. When the lender put practices in place to improve employee engagement, productivity followed right behind. Specifically, in branches that improved their engagement scores twice in a row, per-person revenue growth was six times higher than in branches where scores remained flat.

Keep in mind that commitment and engagement reflect emotional states, rather than rational, logic-based states, cautions Bardwick. “Organizations currently have tools to measure engagement and commitment, but they generally miss the emotional essence of these conditions,” she says. “The standardized questions too often suggest the ‘right’ answer and they don’t provide any way for the person to describe the emotional component.” The only way to get there, she adds, is to ask open-ended questions that allow respondents to say what they feel. So rather than, “Is your boss fair?” ask your employees, “How would you describe your relationship with your boss?”

In an era when half of U.S. employees are either actively looking for a new job or seriously thinking about it, these issues are well worth exploring within your own company. “Organizations are paying a lot for really bad management practices,” Bardwick concludes. “It’s past time for organizations to get the connection.”