Higher levels of employee engagement correlate with better business performance, but offering cash bonuses will not necessarily drive this, new research has found.
A study commissioned by Reward Gateway | Edenred asked more than 300 organisations in Australia, the US, the UK and the EU about their levels of engagement and what they have been doing to drive them.
Researchers collected metrics including eNPS scores, retention figures, productivity statistics, skills development, values alignment and wellbeing to gauge employees’ levels of engagement with their organisation.
It compared these with metrics capturing business performance, including customer satisfaction, revenue growth and profitability, detecting a “discernible correlation” between the combined scores for employee engagement and business outcome.
Reward and motivation
One of the key findings was that desk-based employers (where most employees work at a computer or are knowledge workers) tended to see a greater correlation between employee engagement and business outcomes compared to those where there are many frontline workers. They also tended to have more generous benefits packages.
Frontline organisations, in comparison, tended to have more task-driven working patterns so are not always easily contactable for engagement initiatives. These companies also tended to receive fewer benefits and have lower expectations of their benefits packages.
That said, employee engagement in frontline roles was often higher as they were more likely to see the direct impact of their jobs on customers and the business.
Employee engagement was the top priority influencing employers’ approaches to people strategy in the UK, and this was especially the case in frontline organisations. Forty-eight per cent of frontline employers said employee engagement was a top priority.
For desk-based workers, a focus on retention means ensuring a compensation, benefits or total rewards package that would be enticing for both existing and potential staff, researchers found.
In terms of the types of bonus on offer, cash bonuses only go so far, the study revealed.
High performers used to receiving a bonus may begin to see it as part of their overall compensation package, which removes the “sentiment of appreciation”, the report said. Low performers received no motivation from a cash bonus at all.
Nick Burns, CEO at Reward Gateway, said that prioritising high employee engagement is a “strategic necessity” to drive up business results. “Companies that fail to nurture an engaged workforce place themselves at a critical disadvantage versus their more invested competitors,” he said.
“However, there is no one-size-fits-all approach to boosting engagement. Workforce dynamics are changing as new generations come into the workplace, preferred working patterns are ever-changing, and strategies that work for easy-to-reach desk-based workers can be harder to replicate when communication challenges arise among harder-to-reach workers such as those in retail, manufacturing or transport.”
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Nebel Crowhurst, chief appreciation officer at the company, said the findings would help HR show the tangible value of people initiatives. “For my whole career there’s been an ongoing discussion about how HR adds value, where we feel like we have to catch senior leaders at the right time. This means we can show that every incremental step we takw creates a ripple, and that there is a correlation between employee engagement and performance.”
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