#211: Engagement and Performance: Key Insights from Gallup’s Meta-Analysis
Dear friends
Last week’s letter was lengthy, so today will be briefer (thank you for your comments and for sharing it with your networks).
/ strategy
Two weeks ago we discussed Gallup’s 2024 State of the Global Workplace Report and focussed on unlocking engagement.
Today, we explore their recently published meta-analysis, The Relationship Between Engagement at Work and Organizational Outcomes.
For the non-researchers, like me, a meta-analysis is simply, ‘a statistical integration of data accumulated across many different studies’. In this case, it incorporates 3,354,784 employee survey responses and 183,806 independent business/work units in 347 organizations. Hefty.
The insights are astounding, “Across companies, business/work units scoring in the top half on employee engagement more than double their odds of success compared with those in the bottom half. Those at the 99th percentile have more than five times the success rate of those at the first percentile”.
More detailed analysis shows, across an array of variables, the top quartile of high-engagement businesses’ median performance is markedly better than those in the bottom quartile:
- 23% in profitability
- 17% in productivity (sales)
- 63% in safety incidents (accidents)
- 78% in absenteeism
- 30% in quality (defects)
- 68% in wellbeing (thriving employees)
And remember, even a 1% or 2% shift in those variables creates significant real-world outcomes.
That 68% increase in well-being is a powerful number. You might occasionally feel disconnected from your organisation’s direction or its leadership. It happens. However, how you lead your team or division has a material impact on people’s well-being and therefore happiness. That’s worth remembering. You can always make a difference.
The report reflects that several studies show a reciprocal relationship between engagement and financial performance. Simply, a better-performing company creates higher levels of employee engagement. Makes sense. Everyone loves success.
That said, the rigour of the meta-analysis reveals employee engagement is a stronger predictor of financial performance than the reverse.
High engagement levels correlate with positive customer perceptions and higher levels of employee retention. Improved financial performance is the downstream result of those positive effects.
Gallup’s analysis shows that this effect is particularly true for sales. It fits neatly with my advice to clients, ‘treat your employees as you want them to treat your customers’.
Varying engagement levels determine performance levels, both inside and between companies, “…business/work units with high employee engagement nearly double their odds of above-average composite performance in their own organizations and increase their odds for above-average success across business/work units in all organizations by 2.45 times”.
Our first instinct is to make conclusions at the level of the company. It is more powerful to understand the nuance at the team level. Even within poor-performing companies, there are often excellent teams. Find them. They’re the building blocks of the future.
Of course, we all know high-performing businesses and teams with terrible cultures. Gallup’s analysis shows this is possible, just not probable. Only 16% of businesses and teams with the lowest levels of employee engagement achieve high performance. In contrast, those at the highest level of employee engagement, have an 84% chance of generating high performance.
I know which odds I prefer.
// self
Last week’s letter, The Inner Work of Leadership, encouraged, ‘Read to Lead’.
Harvard Business School’s faculty are reading these books. It is an eclectic mix, that accords with Jim Collins’s advise ‘read fewer business books’, including Lessons in Chemistry by Bonnie Garmus, Lauren Groff’s Matrix, Hanif Abdurraqib’s Go Ahead in The Rain: Notes to A Tribe Called Quest, Herminia Ibarra’s Working Identity and David Brook’s How to Know a Person.
Wharton Business School’s Adam Grant 2024 reading list has interesting prospects and the Guardian’s Five of the Best traverses themes from fatherhood to maths to West African cities. The postcolonial novels collection is one of my favourites. It starts with Chinua Achebe’s words, “Literature is not a luxury for us. It is a life and death affair because we are fashioning a new man.” A thought that remains as relevant today as when it was first expressed.
If you’re looking for something lighter, Brittle Paper’s 23 African Beach Reads for 2024 is a good place to start.
/// soul
We end today with guidance from Salman Rushdie’s 2015 Commencement Address at Emory University.
He advises, “Try not to be small. Try to be larger than life.
“One of the things I’ve learned as a writer is voraciousness. The novelist’s art is in many ways a vulgar art. The novelist’s job, as I see it anyway, is to plunge his hands as deep into the stuff of life as he can, all the way up to the elbows, all the way up to the armpits, and come up with the stuff of life – what’s really going on in people’s heads, what music is in there, what movies, what dream, which Kardashians – and then to deliver his reports.
“Its not such a bad plan for life either. (Apart from the Kardashian part. If possible, avoid that part.)
Plunge in. Dive into the deep end. Sink or swim. Well, if possible, don’t sink”.
He ends the address, “Make no mistake. You can change things. Don’t believe anyone who tells you you can’t. Here’s how to do it. Question everything. Take nothing for granted. Argue with all received ideas. Don’t respect what doesn’t deserve respect. Speak your mind. Don’t censor yourselves. Use your imagination. And express what it tells you to express.
“You have been given all these tools by your education here on this beautiful campus. Use them. These are the weapons of the mind. Think for yourself and don’t let your mind run along tramlines someone else laid down. We are language animals. We are dreaming creatures. Dream. Speak. Reinvent the world”.
All the best
Karl
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