Employees - are they really a resource or an asset?

People matter

“The people part of the business has to be right, otherwise the business will fail. What I’ve learnt is that although you might not always like everybody you work with, it is important that you can trust one another.”
Source: Giles Henschel Olives et Al Open in new window

A catch-phrase these days is Employee Engagement. Traditionally this has been seen as a way of getting employees to work harder, think better of their employer and to stay longer in their job.

However recent research has shown that improving engagement can also have a direct effect on profitability.

The UK has an employee engagement deficit!

** Engagement affects the bottom line.

Are we recruiting the right people??

In the 1990s Gallup devised a 12 point questionnaire to measure employee engagement. This questionnaire was sent to more than 25 million employees in 189 different countries (in a total of 69 languages). Once they had a sufficient data, the survey results were compared (over the following years) with the performance of the companies involved.

Comparing companies in the highest quartile to those in the lowest quartile, the results were quite startling:

  • +10% Customer ratings
  • +22% Profitability
  • +21% Productivity
  • -25% Employee turnover (high turnover organisations)
  • -65% Employee turnover (low-turnover organisations)
  • -48% Safety incidents
  • -28% Shrinkage (theft)
  • -37% Absenteeism
  • -41% Patient safety incidents
  • -41% Quality defects

Note: it's unclear how quartile is defined by Gallup but here it is assumed to be each 25% of the companies studied, ranked by employee engagement.

In the UK, the Office for National Statistics (ONS) regularly compare the UK to our trading partners and we are not doing well - ONS Feb 2015 Open in new window states "The G7 countries excluding the UK were on average 17% more productive than the UK" - it is important to clarify that not everybody agrees with this value but it does indicate that there might be room for improvement.

Analysis indicates that were the UK to move its engagement levels to the middle of the top quartile such as that for the Netherlands this would be associated with a £25.8bn increase in GDP. (Kenexa).

It is important that before organisations begin measuring engagement, managers explain the reasons behind this measurement and the advantages for both the organisation and the employees.

Interestingly, Gallup found that whilst weaknesses are difficult to develop, if at all, talent can be developed extensively. This indicates that employees’ strengths could be a largely under-utilised resource.


Engage for Success is a UK based voluntary "movement" specifically centred on Employee Engagement. They have just released a white paper Open in new window examining the relationship between well-being and engagement.

Their report on employee engagement, commission by the UK Government in 2008, can be found on their web site Open in new window.


One way of assessing employee performance is by periodical (usually annual) "ratings". Recent research has shown that:

  • Today’s widespread ranking- and ratings-based performance management is damaging employee engagement, alienating high performers, and costing managers valuable time.
  • Only 8 percent of companies report that their performance management process drives high levels of value, while 58 percent said it is not an effective use of time.
  • Leading organisations are scrapping the annual evaluation cycle and replacing it with ongoing feedback and coaching designed to promote continuous employee development.

    *Emphasis added
    Source: Deloitte Consulting LLP

There is more to productivity than just engagement. the freedom to actually do the job should not be dismissed. In a survey of software developers, Gail Murphy of Tasktop found:

 "... the two top factors leading to a productive day were when developers complete tasks (53% of respondents) and when they are able to work with few interruptions or distractions (50%). Also not surprising was that developers are productive when they have no meetings (21%). The fourth and fifth most mentioned factors were somewhat more surprising as they indicated the reflective nature of many developers’ work: Developers perceived they were productive when clear goals are set (20%) and they plan their workday (17%).
Source: SD Times Open in new window


Beyond Engagement

Many organisations are looking at (and acting on) research that points to several factors that make for efficient and productive people.

Daniel Pink has looked at the research and identified three factors, The Motivation Trifecta - Autonomy, Mastery and Purpose

Google have set up a unit re:Work Open in new window to investigate what works and identify best practices. A recent survey of 200+ employees identified 5 "Key Dynamics":
    1. Psychological safety: Can we take risks on this team without feeling insecure or embarrassed?
    2. Dependability: Can we count on each other to do high quality work on time?
    3. Structure & clarity: Are goals, roles, and execution plans on our team clear?
    4. Meaning of work: Are we working on something that is personally important for each of us?
    5. Impact of work: Do we fundamentally believe that the work we’re doing matters?

 "... Turns out, we’re all reluctant to engage in behaviors that could negatively influence how others perceive our competence, awareness, and positivity. Although this kind of self-protection is a natural strategy in the workplace, it is detrimental to effective teamwork."

Source: https://rework.withgoogle.com/blog/five-keys-to-a-successful-google-team/  Open in new window


It is interesting that psychological safety came out as the most important dynamic, because another common aspect of high-performing companies is that they "celebrate failures Open in new window".

John Harvey-Jones identified this back in the days when he was the chairman of ICI (1982 to 1987).

"I wanted teams of people to have the freedom to find their own solutions to the challenges that face them – making mistakes as they go along, and learning from them every time."

Source:  Making It Happen: Reflections on Leadership - John Harvey-Jones

Perhaps unsurprisingly Happy Open in new window have a list of companies that celebrate mistakes Open in new window.

"I made 5,127 prototypes of my vacuum before I got it right. There were 5,126 failures. But I learned from each one. That’s how I came up with a solution. So I don’t mind failure."

Source: James Dyson

Next time a colleague, employee or co-worker makes a mistake, think about praising them for discovering what not to do!

Whether Thomas Edison said it or not - "I have not failed 10,000 times. I have successfully found 10,000 ways that will not work." - is not a bad approach to "failure".

There is more information on how to transform your workplace beyond engagement on Organisation.


Finding the right employee can be difficult. The process of recruitment is often sub-contracted out to recruitment companies, not always with the best results; it is worth asking if the agency is working in your interest or in the interest of the applicants.

Recruitment takes effort and thought, probably on a par with marketing. Even if you do use an agency it is worthwhile thinking through what sort of people you actually need. Are high level qualifications any indicator of competence and "fit"? Adaptability, personality and general intelligence may be more important; after all, you will probably need to train your new employee anyway.

DIY recruitment has many advantages and there are software solutions such as Lever Open in new window which can ease and possibly improve the process.

So how do you find the right people?

Here are three simple questions to start with.

  1. Are we looking in the right place?
  2. Are we asking the right questions?
  3. Are we reading the results of our questions in an unbiased way?

Where the right place is and what the right questions are and how you analyse the responses is more complex. Elon Musk has a simple technique Open in new window for discovering if the interviewee has what it takes.

Don't underestimate unconscious bias, we all suffer from this.

Google have carried out a lot of research on unconscious bias in recruitment processes.
Dr Brian Welle, Director of Google People Analytics goes through some important findings

In the recruitment process, it is a sensible approach to include the people who any potential employee will be working with. In some organisations the employees carry out the recruitment themselves.

You may wish to apply the principle of "Hire for attitude, train for skill Open in new window" but with a caveat Open in new window.

Contact William now to discuss employee recruitment, engagement and empowerment.