LOMBARD, Ill.—A new study shows that organizations that exhibit higher levels of employee engagement perform significantly better than those with lower employee engagement.
Raddon Financial Group recently studied 37 financial institutions and found that FIs exhibiting higher levels of employee engagement report:
- 33% higher average ROA scores
- 69% higher average growth
- 79% higher net promoter scores
- 31% higher share of wallet scores
Raddon looked at four drivers of engagement and said it found what really motivates employees to function at their best is simple.
“Measuring employee engagement includes examining aspects of the work experience that motivate employees to perform above and beyond their basic job requirements,” said Julie Skuturna, group program manager at Raddon. “This is the first step to developing strategies and training programs to facilitate higher levels of employee engagement.”
Raddon measured engagement based on four dimensions:
- Social environment
- The job itself
- Rewards
- The organization
“The interplay of these four dimensions determines the extent of engagement within your organization,” said Skuturna in the latest edition of the Raddon Report.
An organization that fosters social connectivity and camaraderie – specifically with management’s influence – helps facilitate employee engagement, she said.
“Nearly 70% of employees working for higher financial performing organizations in the Raddon study, strongly agree that they respect their immediate supervisor/manager. In addition, almost two-thirds of those higher performers report that they strongly agree that the people they work with are friendly and helpful,” said Skuturna. “Some people make friends at work, but others like to keep things at a professional level. Regardless of how those personal connections evolve, it’s important that such interactions are positive and there is good chemistry among staff. Management’s involvement with this process is key.”
The work employees perform – the job itself – can also impact employee engagement. Employees like to feel confident in their role. Two-thirds of highly engaged employees in the Raddon study strongly agree that they have the necessary skills to perform their job successfully.
“Therefore, those organizations that continually challenge employees to learn new things, and encourage them to continually evolve keeps them motivated to do more,” Skuturna said.
Rewards include all the ancillary benefits of coming to work each day, in addition to getting paid.
“Most employees want a bigger paycheck, but money is not the key item that motivates employees to perform better,” explained Skuturna.
According to the study, employees who feel they have learned a lot from doing their job tend to exhibit higher levels of engagement. Additionally, receiving praise from immediate supervisors goes a long way in boosting engagement. Over half of employees (53%) from top performing organizations strongly agree that their immediate supervisor or manager recognizes their extra efforts.
Raddon found the most important aspect of employee engagement is the employees’ connection to the organization.
“When employees feel they understand where the organization is headed and are kept apprised of what is going on, they likely feel more engaged,” said Skuturna. “Understanding the vision for a company strongly correlates with engagement where 70% employees from top performing organizations strongly agree that they understand the institution’s vision.”
Additionally, employees who understand how their individual performance impacts the bottom line likely exhibit stronger engagement. Communication is key to making employees feel connected and part of the progress, Skuturna said.
“An engaged workforce benefits an organization in many ways, including higher productivity and greater efficiency,” said Skuturna. “Understanding key drivers of engagement may make the difference between average and exemplary performance.”