My first experience with the link between financial performance and employee engagement was as a Director of Food and Nutrition Services 4 in a hospital many years ago. It was my first management position and I focused on the tasks I thought managers should do – paperwork, meetings, schedules, understanding the budget, etc. It wasn’t long before things started to unravel, employee morale declined, patient satisfaction plummeted, and sales were down in my retail operations.
In an effort to seek to understand, I met with my employees, and discovered that their perception of me was that I did not care and was only interested in making budget. It definitely hurt, and truth of the matter that was their perspective and their reality, and it became my truth!
In other industries, the link between employee engagement and financial performance has long been recognized. In fact, a 1994 Harvard Business Review article, updated in 2008 (Harvard Business Review, July-August 2008) identified the link between employee engagement and a company’s financial performance.
Many studies, have further validated the link between employee engagement and financial performance including in health care with strong links between employee engagement and patient satisfaction. The broad concept of employee engagement includes various related elements:
- psychological engagement (a positive, fulfilling, work-related state of mind)
- enthusiasm and initiative
- organizational citizenship behaviors and commitment
- involvement in decision-making
- positive representation of the organization to outsiders
I wanted to provide the best leadership possible to my employees; I needed to change the way I managed and led going forward.
Given the evidence suggesting its positive effects, an obvious question for managers is how to develop employee engagement. Research suggests that there are two main sources of engagement: job resources and personal resources.
Job resources that have been shown to significantly influence employee engagement include the primary characteristics of the job such as the level of autonomy in decision making, task identity (performing a complete task from beginning to end with a visible outcome), the significance of tasks performed, and feedback received from supervisors. Other factors leading to high engagement include perceived levels of support from the organization and supervisors, rewards and recognition in front of peers, and fairness in processes. (Saks AM (2006). ‘Antecedents and consequences of employee engagement’. Journal of Managerial Psychology, vol 21, pp 600–619.)
Personal resources linked with engagement includes findings that self-esteem (an individual’s belief that they can satisfy their needs by participating in roles within the organization), self-efficacy (people’s beliefs about their capabilities to control events that affect their lives), and personal optimism are all related to engagement (Xanthopoulou D, Bakker AB, Demerouti E, Schaufeli WB (2009). ‘Work engagement and financial returns: a diary study on the role of job and personal resources’. Journal of Occupational and Organizational Psychology, vol 82, pp 183–200.).
As a leader, I changed my pattern of management. Every day when I came into work, I deliberately avoided my office and instead focused on the team. I said good morning, checked in with each and every one from a personal perspective and a work perspective. I enjoyed the interaction and more importantly become more engaged in the day-to-day activity of the department. At the end of the day, I would make sure that I reconnected with everyone, saying goodbye, and getting an update on the day.
I did not change my values. I still held everyone accountable to doing their jobs and following operating policies and procedures. Because I was closer to the day-to-day operation I was more comfortable in empowering employees to make decisions and take tasks from start to completion. I made sure that everyone was in the right seat on the bus, and for those that could not be successful in their current role I found other opportunities for them. I held myself to a new level of accountability.
As the weeks went by, I noticed a few things start to change: first I really started to enjoy coming to work and our operating metrics started to improve:
- Patient satisfaction improved
- Retail sales jumped by 12%
- Sanitation improved
- Food and supply costs decreased
I know I am not the sharpest knife in the drawer (excuse my analogy, but being a former chef I can’t help myself) but knew I was on to something. I continued rounding with the employees and insisted that all the managers did the same. We had an amazing fun department, so many stories to share, but for me the most important was being recognized as the very first Honoree Nurse of the Year (remember, I am just a cook). It was not me alone that achieved this great honor, it was my team including the dishwasher, cooks, and servers. It was all of as a team and what we did that got me recognized. I still have the trophy on my desk and it brings back very warm memories of my learning time.
In general terms I found that the more positive the experiences of staff, the better the outcomes for the department. Employee engagement has many significant associations with patient satisfaction, patient mortality, infection rates, as well as staff absenteeism and turnover. The more engaged employees are, the better the outcomes for patients and the organization. Employee engagement is built through good staff management; having well-structured appraisals (clear objectives are set and the appraisal is helpful in improving how the employee does their job, and how the employee is left feeling valued by the organization), and working in a well-structured team (where teams have clear shared objectives, work interdependently and meet regularly to discuss their effectiveness). Supervisors and line level managers are a key and integral component here, as is having good job design – meaningful, clear tasks with some opportunity to be involved in appropriate decision-making.
As I progressed in my career from a department director to regional level management I continued to practice this basic rounding with the employees and making it a requirement that all of my management teams do the same. Today I have a successful consulting company and if it had not been for all of the amazing folks that have helped me over the years to learn the hard lessons and how to walk the walk and be truly engaged I would still be flipping burgers today.