MacLeod Review provides a timely reminder of the importance of employee engagement
Published today (16 July 2009), the MacLeod Review of employee engagement has recommended government support and more cooperation by UK businesses both large and small, to make sure the relationship between employees and employers is at the centre of successful business plans.
Led by David MacLeod and Nita Clarke, the independent review was commissioned by the Department for Business, Innovation & Skills in September 2008 to make recommendations on promoting employee engagement.
The findings, which are published in this 157-page report, make very interesting reading. There’s nothing particularly new or groundbreaking in there, but the document does provide an excellent overview of the topic, the business case for engagement, the barriers and enables and makes some very sensible and welcome recommendations on the way forward.
Commenting on the report, David MacLeod said: “This is about unleashing the potential of people at work and enabling them to be the best they can be. Whether we are in a downturn or in better economic times, engagement is a key to innovation and competitiveness.
“Engagement is increasingly recognised as vital by senior figures in the public sector, the private sector and trades unions. We are delighted that if our recommendations are accepted, a distinguished sponsor group has already agreed to work with us to raise awareness and understanding.
“Employers in all parts of the economy can make a success of employee engagement through culture change, rather than investing significant financial resources.”
My own view is that this is really useful stuff. First off, it’s a great primer on the subject – essential reading for anyone with an interest in employee engagement. Second, its contents can be used with sceptical leaders and managers to underline the importance of engaging employees and the benefits of doing so.
Importantly, it illustrates some of the links between engagement and performance – swiftly moving the discussion away from the ‘soft and fluffy’. Amongst the hidden gems are some powerful research stats, e.g. Gallup in 2006-8 examined 23,910 business units and compared top quartile and bottom quartile financial performance with engagement scores. They found that:
- Those with engagement scores in the bottom quartile averaged 31 – 51 per cent more employee turnover, 51 per cent more inventory shrinkage and 62 per cent more accidents.
- Those with engagement scores in the top quartile averaged 12 per cent higher customer advocacy, 18 per cent higher productivity and 12 per cent higher profitability.
A second Gallup study of the same year of earnings per share (EPS) growth of 89 organisations found that the EPS growth rate of organisations with engagement scores in the top quartile was 2.6 times that of organisations with below-average engagement scores.
These figures will make most CEOs and cynical finance directors sit up and listen. They are expanded upon in an excellent chapter looking at the business case evidence.
As you might expect, the enablers section is where the discussion turns more directly to organisational communication. Here the role of leaders and managers is scrutinised and the concept of ‘employee voice’ is explored. There is a wide ranging discussion about the role of senior leaders in providing a strong strategic narrative – a clear and compelling vision for the organisation. Executive visibility is highlighted too.
The pivotal role of line managers is then explored – particularly how they create ‘line of sight’ (show the link between the big picture and what an employee does day in,day out) and address those burning ‘me’ questions, what’s my job? how am i doing? does anyone care? (source: Roger D’Aprix).
Note that this is internal communication in its broadest sense – process, not product.
The report then looks at the role of values and, most importantly, the need for consistency between what managers and leaders say and do, whether they walk the talk. Like others before them, MacLeod and Clarke underline the critical importance of behavioural integrity.
The recommendations themselves centre on increasing awareness of the importance and value of engaging employees and providing additional support to organisations to make it happen. All very welcome.
All in all, this is a very timely report and one which should be applauded by those of us who work in this area. It puts engagement back under the spotlight at a time when many organisations are turning their back on it and eroding the psychological contract with their employees through their often short sighted, short term actions. If you’re struggling to convince leaders of the value of engagement and the need to invest in it (or at least not to cut their investment in it) then this should help. No, it’s not specifically about internal communication, but the topic is woven throughout and good IC underpins much of what is discussed here.