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The High Cost of Low Engagement

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It’s no secret: When people work in a stressful environment, they are less productive. But the cost goes far beyond that. In the U.S. economy, studies of high stress organizations have shown:

  • Health care expenditures are nearly 50 percent higher.
  • The American Psychological Association estimates more than 550 million workdays are lost because of stress each year.
  • Sixty to 80 percent of workplace accidents are attributable to stress.
  • More than 80 percent of physician appointments are stress related.
  • In hierarchical organizations, the lower an employee’s rank, the higher the chances of cardiovascular disease and death from heart attacks.

Stress also contributes to disengagement or emotional detachment. While the Office of Personnel Management does not report levels of employee disengagement, morale is known to be low.  Undoubtedly government has pockets of actively disengaged employees, to use the Gallup phrase.  As a group, those employees have higher absenteeism, more accidents, more errors, lower productivity and lower customer satisfaction.

The causes of stress are to a degree personal but the common reasons, especially when budgets are tight, include job insecurity, work overload, ineffective supervision, uncertain performance expectations, and little or no participation in decision making.  

Management actions that increase stress affect all employees. When problems are ignored, stress levels increase over time. When poor performers are ignored it adds to the stress of co-workers.  Even the best performers are impacted if they lose confidence in management.

Advocating a Positive Work Environment

In contrast, numerous research studies confirm organizations that commit to a positive work environment have a far greater chance of succeeding. The business literature solidly supports an enlightened approach to management that supports and encourages engagement.

It’s a proven business strategy. Gallup’s research extends over two decades. Perhaps the most prominent consulting firm, McKinsey, has developed an Organizational Health Index© to help employers assess an organization’s management practices. The common focus is on improving performance.

Toward that end, the APA created the Center for Organizational Excellence in 2013 to promote healthy work management practices. They group work management practices into five categories:

1. Employee Involvement

“Efforts to increase employee involvement empower workers, involve them in decision making and give them increased job autonomy. Employee involvement programs can increase job satisfaction, employee morale and commitment to the organization, as well as increase productivity, reduce turnover and absenteeism and enhance the quality of products and services.”

Empowerment is the buzzword to refer to practices that provide for employee input to work-related decisions. At the extreme there are employers that rely on individuals and teams that work with no direct supervision. The practice emerged in business over 40 years ago. It spread after the 1990 recession when companies downsized, flattened the hierarchy, and delegated accountability.  

Now, companies involve employees in a variety of ways from continuous improvement teams to focus groups and 360-degree feedback surveys. It contributes to job satisfaction and commitment.

2. Work-Life Balance

“Conflict between work and other life responsibilities can diminish the quality of both work and home life for employees, which in turn can affect organizational outcomes such as productivity, absenteeism, and turnover. Efforts to help employees improve work-life balance can improve morale, increase job satisfaction and strengthen employees’ commitment. Additionally, the organization benefits from increased productivity, reduced sick days, and turnover.”

The interest in work-life balance started with flextime and telecommuting but now also includes assistance with childcare and resources to help employees deal with personal financial issues and common family problems like eldercare. The goal of course is to alleviate stress and make it easier for employees to focus on work. Employers and employees both benefit.

3. Employee Growth and Development

“Research shows engaged employees want to grow and strengthen their capabilities and have opportunities that challenge new abilities. Learning of course involves trying new ideas and the confidence that if they are not fully successful it will not trigger a negative reaction. By providing opportunities for growth and development, organizations can improve the quality of their employees’ work experience and realize the benefits of developing workers to their full potential.”

This involves more that formal learning opportunities. The best practice today emphasizes ongoing feedback, mentoring and coaching in addition to skills training, tuition reimbursement, and career counseling.  A recent development is the addition of Chief Learning Officers to the HR staff.

4. Health and Safety

“Health and safety efforts include a wide variety of workplace practices that can help employees improve their physical and mental health, reduce health risks, and manage stress effectively. By investing in the health and safety of their employees, organizations may benefit from greater productivity and reductions in healthcare costs, absenteeism and accident/injury rates.”

Efforts to address health and safety issues include training on safety issues, initiatives to promote healthy lifestyles such as stress management and smoking cessation programs.  It also can include grief counseling, alcohol abuse programs, Employee Assistance Programs and referrals for mental health services.

5. Employee Recognition

“Employee recognition efforts reward employees both individually and collectively for their contributions to the organization. Recognition can take various forms, formal and informal, monetary and non-monetary.”

When recognition practices are seen as fair, it strengthens employee engagement and triggers improved performance. In the private sector, financial rewards are more or less confidential but that’s obviously not true in government. That makes perceived fair management a central issue. When rewards are linked to performance ratings, it heightens the importance of how performance is planned and managed. Public employers have had problems switching to pay for performance policies but there are success stories. The problems do not minimize the importance of recognizing individual and team accomplishments.

This Should be a No-Brainer

High performance does not depend on long hours. Commitment cannot be mandated. Employees broadly want their employer to be successful—and in a positive environment they will work hard to achieve goals.

For reasons that are not apparent, leaders too often take steps that increase stress. The longer stress continues, the more likely workers will disengage and tune out. Chronic stress can trigger counterproductive reactions.

But as the APA list confirms, creating a healthy organization is straightforward. It’s a “do unto others . . .” list of effective supervisory practices. There are no secrets to high performance.

Howard Risher is a consultant focusing on pay and performance. In 1990, he managed the project that led to the passage of the Federal Employees Pay Comparability Act and the transition to locality pay. Howard has worked with a variety of federal and state agencies, the United Nations and OECD. He earned his bachelor’s degree from Penn State and an MBA and Ph.D. in business from the Wharton School, University of Pennsylvania. He is the co-author of the new book It's Time for High-Performance Government: Winning Strategies to Engage and Energize the Public Sector Workforce (2016), with Bill Wilder.

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