Employee engagement key to success for SMEs

Top Stories

»	49% Indian startups now from tier 2, 3 cities: Jitendra Singh
»	'India ranks 3rd in global startup ecosystem & number of unicorns'
»	Tripura exported over 9K tonnes of pineapples in 2 years
»	CPI inflation eases to 6.71% in July, IIP falls to 12.3%
»	Rupee depreciates 12 paise to close at 79.64 against US dollar

Saurabh Gupta | 24 Jun, 2009
Small and medium enterprises (SMEs) are worst affected due to recession and during challenging economic era when resources are scarce, competition is intense and customers are more demanding then ever, emotionally engaged employees are critical for business success especially in SMEs. Such employees work with passion. They feel connected to the company. They are critical to driving innovation and propelling the organization forward.

Savita Kailash Chhabra, owner of Hygienic Research Institute (HRI) strongly support that employee engagement is the key to success for SMEs. She said, "I strongly believe that no motivation can surpass the emotional bonding."

Employee engagement, also erroneously called 'work engagement,' is a widely employed, yet poorly defined concept, developed principally from the consulting community.

Engaged employees feel a strong emotional bond to the organization that employs them. This is associated with people demonstrating a willingness to recommend the organization to others and commit time and effort to help the organization succeed.

The most striking finding is the almost 52% gaps in operating incomes between companies with highly engaged employees and companies whose employees have low-engagement scores.

High-engagement companies improved 19.2% while low-engagement companies declined 32.7% in operating income during the study period.

Karnika Seth Attorney at law. & Partner Seth Associates told SME Times, "Engaging one's employees in a meaningful manner is most crucial to the success of an organization. Employee motivation and training are essential parameters that contribute to the growth of any company."

She also said that the proper work orientation, reward-based approach and time management skills are equally important as are the acquisition effective skills for execution of work.

According to Dr. Gerard Seijts and Dan Crim, "Engaged employees care about the future of the company and are willing to invest the discretionary effort. Engaged employees feel a strong emotional bond to the organization that employs them. About 68% of highly engaged employees believe they can positively impact costs in their job or unit, compared with just 19% of the disengaged."

While there are many studies conducted by a handful of very credible consulting firms that successfully find links between employee engagement and desirable business outcomes such as retention of talent, individual performance, team performance, business unit productivity, and even enterprise-level financial performace, nobody of research has yet successfully met the standards of causality in order to demonstrate that employee engagement itself was the primary cause for these outcomes.

According to Blessing White's report on 'Employee Engagement': Only 29% of employees are actively engaged in their jobs. These employees work with passion and feel a profound connection to their company. People that are actively engaged help move the organization forward.

About 84% of highly engaged employees believe they can positively impact quality of their organization's products, compared with only 31% of the disengaged.

About 72% of highly engaged employees believe they can positively affect customer service, versus 27% of the disengaged.

It suggests that people are motivated by intrinsic factors (e.g. personal growth, working to a common purpose, being part of a larger process) rather than simply focusing on extrinsic factors (e.g., pay/ reward).

Dr. Raj K. Solani, MD Rup International told SME Times that the employee engagement was a history. Although he didn't deny its importance, he thinks that the present business and job scenario has changed.

He said, "Now a days no one is attach emotionally with their company. There is definitely much, more better results if the employee are attached with company."

"A fully engaged employee goes beyond the basic job responsibility to delight the customers and drive the business forward. Moreover, in times of diminishing loyalty, employee engagement is a powerful retention strategy. The truth of the matter is that employee engagement does have a strong tangible impact on the bottom-line, but now this is history," he added.