The Correlation Between Employee Engagement and Performance

The Correlation Between Employee Engagement and Performance
Facebook Twitter Email LinkedIn

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.

  1. 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.Link Between Employee Engagement and Revenue Growth
  2. 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?

    Correlation Between Employee Engagement and Stock Price

  3. 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.

    Correlation Between Feeling Valued and Performance

  4. 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.

    Correlation Between Career Growth and Performance

  5. 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

 

Evaluate your Performance

Toolkits

Get key strategy, culture, and talent tools from industry experts that work

More

Health Checks

Assess how you stack up against leading organizations in areas matter most

More

Whitepapers

Download published articles from experts to stay ahead of the competition

More

Methodologies

Review proven research-backed approaches to get aligned

More

Blogs

Stay up to do date on the latest best practices that drive higher performance

More

Client Case Studies

Explore real world results for clients like you striving to create higher performance

More