Do Engaged Employees Create Higher Profits?

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By Douglas A. McIntyre Updated Published
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Do Engaged Employees Create Higher Profits?

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Gallup has a novel concept, based on metadata research. Employees who are more engaged (which is not entirely well defined) at the workplace help companies create higher profits.

In a new study, Gallup researchers found:

Companies everywhere have opportunities for greater productivity — and are leaving money on the table. Gallup’s latest meta-analysis shows that business units in the top quartile of employee engagement are 21% more profitable, are 17% more productive, have 10% better customer ratings, experience 41% less absenteeism and suffer 70% fewer safety incidents compared with business units in the bottom quartile.

The research house says the essential foundation of employee engagement is the ability of management to set clear expectations. Without expectations, it is hard to image employees could be productive at all.

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One key to communicating expectations: “Articulated clearly.” It would be hard for the process to work otherwise.

The other best practice for passing along expectations:

Developed collaboratively. Companies need to get workers’ input, collaborating with them to agree on role expectations. With this approach, workers will be more likely to own their expectations and succeed.

Also:

Aimed at excellence. Workers aren’t inspired by minimum job standards such as showing up on time or submitting time sheets using the proper process. Instead, managers can bring out the very best in each worker by talking about what top performers do differently and then setting expectations based on those best-in-class behaviors.

In many ways, like professional football.

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Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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