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Friday, October 13, 2006

Engaging Your Workforce

Jack Welch recently identified three areas that offer the best picture of a company’s well-being: Employee engagement, customer satisfaction, and - of course - cash flow.

Employee engagement is perhaps the most telling indicator of competitive advantage. And, recent research has surfaced that quantifies the difference employee engagement can make to the bottom line.

ISR, a Chicago-based HR research and consulting firm published a study recently and found:

  • 52% difference in one-year performance improvement in operating income between companies with highly engaged employees as compared to those companies with low engagement scores.
  • High engagement companies improved 19.2% while low engagement companies declined 32.7% in operating income over the study period.
  • 91% of companies surveyed have measures that relate to human capital
  • 58% of companies surveyed include such measures as part of their key performance indicators or business performance scorecard, but only 46% actively assess the value of human capital and its impact on business performance.
BOTTOMLINE: Workforce environments reflect the priorities and values of the organization’s leaders. This represents an underutilized benchmark for evaluating CEO performance.

(Thanks to Rob May at BusinessPundit for the tip)

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