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How to increase employee profitability by Heather McIntosh

Debbie Stanfield - Monday, November 14, 2011

Despite a plethora of evidence in wide ranging reports from academics, businesses and consultants over the last few years, the coalition government has set up another taskforce to help increase the understanding of employee engagement and its potential benefits. The taskforce will generate debate, share good practice and ultimately offer employers support via a new website due to launch next year. http://bis.gov.uk/news/topstories/2011/Mar/employee-engagement-task-force

But how much more evidence do we need?

Roffey Park’s 2010 research report ‘The human voice of employee engagement’ clearly establishes the crucial role of line managers in the engagement process and states that “…whatever factors are at play elsewhere in the organisation, employees day-to-day experience of work is most heavily influenced by their line manager…”

After a two year study The People and the bottom line’ report published in 2008 by the Work Foundation also  established a strong correlation between high levels of employee engagement and  high performance and identified that the current low levels in the UK could be costing our organisations dear.

The report suggests that more effective people management strategies could increase profitability by up to £1,500 per employee.

Despite these findings, relatively few organisations put emphasis on developing managers as part of their engagement strategy –rather focusing on more traditional suggestion schemes, recognition awards and corporate buy-in approaches.

The CIPD’s study, ‘Management competencies for enhancing employee engagement’ published in March this year comes to a similar conclusion and highlights the importance of  developing the right behaviours. These include

• managers giving the right levels of guidance
• constructive feedback
• appropriate levels of autonomy to staff
• setting realistic but challenging targets
• making time for employees
• treating them fairly
• making them feel valued
• managing individual performance

The current taskforce hopes to present its conclusions in 2012, although whether it will really shed any more light on existing evidence remains to be seen.

What will make a difference is organisations having a renewed emphasis on coaching and developing managers. This is what will bring a significant return on investment and an increase in profits, not waiting for the great and the good to tell us yet again what we really already know – that developing your line managers’ people management skills will improve your bottom line! 

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