What Is The Correlation Between Employee Engagement and Performance?
The good news is that research proves that there is a positive correlation between employee engagement and performance. Highly engaged workplaces grow 16.29% faster and have a 26% higher stock performance. It can be said with confidence that employee engagement does indeed have a measurable impact on your bottom line.
Employee Engagement Matters
We conducted a study of 21 organizations all of which were publicly traded and have conducted a Best Places to Work Employee Engagement Survey in at least three consecutive years. Each averaged more than 2,000 employees, and they represented different industries and diverse geographical areas.
5 Factors that Struck Our Research Team
Five performance factors stood out to our research team regrading the positive correlation between employee engagement and performance.
- Revenue Growth
The companies in the study with the highest employee engagement ratings experienced 16.29 percentage points higher revenue growth over three years than those with lower engagement scores. This is quite a statement considering that all survey participants are purposefully trying to win the Great Places to Work Contest as part of their talent management strategy and employee brand proposition.While average revenue grew for all entrants over the three year period (a sign to us that engaged workers perform well), those with higher revenue growth (39.74% compared to 23.45%) had nearly 21% more engaged employees (75.6% compared to 54.8%).With regard to quarterly revenue growth, organizations with the highest level of engagement experienced a whopping 18% greater quarterly revenue growth during the past 12 months.
- Stock Price Appreciation
Organizations with the highest level of engagement also experienced 26% greater stock price growth during the past 52 weeks. The chart below illustrates the difference in stock price growth. Now wouldn’t your shareholders like that?
- Perception of Feeling Valued
One employee engagement survey item dealt with whether or not employees believed that the “leaders of the organization value people as their most important resource.” This is a clear measure of engagement and, indeed, showed the greatest difference in engagement scores (15.2% higher) between the two groups.
- Opportunities for Career Growth
Another significant factor in creating high employee engagement is the opportunity for career growth and advancement. When employees see where their career path could take them within the company, they are more engaged. Here is also reflection of that measure on overall growth with a 12.4% difference in career growth scores between high and medium growth companies.
- Employee Retention and Trust In Leadership
In the area of Employee Retention, the difference between the two company groups was .48 on a six-point scale. And in the area of Trust in Leadership, there was a .47 difference. Both are statistically significant enough to take notice.
The Bottom Line
If you are looking to grow your company, you had better be sure your employees will be working with, not against, you. How engaged are they? Do they feel valued? Do they have career development opportunities? Do they want to stay? Do they trust their leaders? Get the answers to these questions and make the moves required to raise people and business performance.
To learn more about how to more effectively engage your workforce, download The Top 10 Most Powerful Ways to Boost Employee Engagement
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