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Happy employees create happy shareholders

Feb 14, 2011 Business Daily, Management

“…companies with high levels of engagement (65 percent or greater) outperformed the total stock market index and posted shareholder returns 19 percent higher than average in 2009. Still not convinced? Companies with disinterested employees (40 percent or less engagement) had a total shareholder return that was 44 percent lower than average.”

COURTNEY RUBIN, www.inc.com (20 September 2010)

If you’re a business leader, do you give a flying damn about the happiness of your employees? The chances are high that you really don’t. It’s not your job to make every one of your thousands of employees happy, you say to yourself; that’s what family and friends and lovers and priests are for. My job is to treat workers professionally and give them a good working environment and competitive compensation. Their job is to perform their duties diligently, regardless of how ‘happy’ they feel. In fact, it’s better they leave all those emotions at home.

That attitude is prevalent, and is responsible for the unravelling of many a successful organization. The study quoted here (in Inc.com) was conducted by Hewitt Associates and tracked 900 global organizations. It studied the level of ‘engagement’ felt by employees: morale, confidence in the organization, career opportunities, rewards and recognition programs and trust in leadership.

The results did not surprise me one bit. Organizations with high levels of employee engagement generally outperform the market; those with high proportions of disengaged workers just don’t deliver the gains to shareholders.

Too many of us are guilty of regarding people at work as ‘human resources’ – in other words, just another input into the production process, alongside funding, machinery and technology. Wrong. People are THE input in producing pretty much anything. You get people right, other things generally click into place. But if you are clueless about engaging your people properly, the best equipment and funding and computers in the world aren’t going to help you. Or your shareholders.

We have to reboot our thinking as leaders. Business 1.0 regarded employees as worker drones – dispensable and replaceable. Our only responsibility was to give them fair pay and decent working conditions (and many even failed to do that). Business 2.0 is rather different. It regards the energy, enthusiasm, attitudes and talents of all employees as absolutely central to the business model – and makes their ‘happiness’ a key organizational performance measure.

Please note: you can’t fake this. Employee engagement is not about insincere speeches, hollow promises, vague noises about the importance of people. It is a continuous culture embedded in every day-to-day behaviour. It involves a constant, genuine dialogue with your people. It involves listening to their ideas for the business; meaningful face-time with leaders; genuine channels through which to air grievances; a feeling of comfort and belonging at work; and the absence of repression and intimidation. In sum, it involves making engagement at work as easy, pleasurable and meaningful as in any other arena of life.

Not everyone can pull that off, and most don’t. Yet it does not require rocket science. We simply have to construct workplaces that reflect our common humanity: where people are handled with dignity; where they can contribute meaningfully; and where they experience personal growth and advancement. That so many fail at these basics is indeed a paradox. We specialize in companies with two sets of rules: one for the leaders and another for the worker bees. We create workplaces where an atmosphere of intimidation, rigid formality, secrecy and opprobrium prevails. How can anyone be happy there? Most workers in most companies are just biding their time, looking for the first opportunity to run out of the door forever.

Given these unfortunate legacies, creating a happy workplace may not be easy. If you can pull it off, however, the first people to applaud may well be your shareholders.

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