Most employees are familiar with the term “ROI” (return on investment). This ratio indicates how much money, on average, an employee contributes to their employer versus how much they collectively spend on things like health insurance and retirement benefits. The theory behind the ROI concept is that you are trading money (the investment) for benefits (the return). Usually, this means that you have to make a significant financial contribution in order to see a significant increase in employment benefits. However, there is another way to think about this number that is even more valuable. What is the expected value of your investment in your team, specifically as it relates to the productivity of those employees (your ROI)?
As an employer, are you confident that you are providing the right environment for your employees in order for them to succeed? More importantly, are you confident that they are equipped with the skills needed to be successful in the role that they play within your team? To address these questions, let’s examine the theory underlying the importance of employee engagement.
Why Is Employee Engagement Important?
To begin, it is important to understand a few things about the human mind. First, humans naturally gravitate toward things that are valuable to them. Second, humans are extremely loyal to those that have proven to be valuable to them. Third, humans tend to protect those that they value, and they will go to great lengths to ensure that these valuable individuals remain loyal to them. As a result of these factors, it is essential, as an employer, that you have a clear understanding of what makes your employees valuable to you and your business.
To determine this, you must examine three things, namely:
- Your employee’s ability (their skillset)
- The employee’s engagement (their interest in the work that they do)
- The employee’s performance (how they execute on their skills)
Each of these three items influences the other two, in particular, how each impacts your employee’s productivity and loyalty. In order to succeed as an employer, you must be confident that you are providing your employees with the environment and resources to be most productive. To do this, it is essential that you understand the value of each of your team members. Thus, it is important to know their skillset, their engagement, and their performance—in that order.
Know Your Employees’ Skillset
An individuals’ skillset is essentially the knowledge, abilities, and expertise that they possess. For example, someone with many years of experience in accounting would have a much different skillset than someone with little or no experience in bookkeeping. Additionally, an individuals’ skillset can be both tangible and intangible, it can consist of both books and practical knowledge. Furthermore, someone’s skillset can be developed through learning and experience—in other words, it can be increased. Most importantly, your employees’ skillset is something that you can and SHOULD be able to measure.
If you can’t measure it, you can’t improve it. As an employer, this should be a source of great concern as a clear understanding of your employees’ skillset and ability is necessary in order to provide the right learning environment for them and your business. Fortunately, there are a number of helpful metrics that you can use to examine and track your employees’ skillsets. For example, you can use employee engagement surveys to determine whether or not your employees are happy with the job that they have, and if not, you can use that information to determine the appropriate next steps for your business.
Know Your Employees’ Interest In The Work
An individuals’ interest in the work that they do is essentially the extent to which they are excited about their job and enjoy what they are doing. For example, a person with a lot of experience in accounting may become over-reliant on this job due to its predictable nature and monotonous tasks. In contrast, a person with little or no experience in bookkeeping may have an easier time finding satisfaction in their work due to the variety of tasks and the ability to improve their skills through learning.
If you can’t measure it, you can’t improve it. As an employer, this should be a source of great concern as a clear understanding of your employees’ interest in the work that they do is necessary in order to provide the right learning environment for them and your business. Fortunately, there are a number of helpful metrics that you can use to examine and track your employees’ interest in the work that they do. One of the simplest and most effective ways to do this is to examine the completeness of their job applications. In general, a high number of completed applications indicates a level of interest on the part of the employees.
Know Your Employees’ Performance
An individuals’ performance is essentially the extent to which they meet (or exceed) expectations. For example, if you think that your employees are underperforming relative to what you are expecting from them, it may be time to re-evaluate their employment situation or offer them additional training. In contrast, if you think that your employees are performing well beyond what you expected, it may be a good indication that their skillset is under-utilized and could eventually lead to further success and growth for your business.
If you can’t measure it, you can’t improve it. As an employer, this should be a source of great concern as a clear understanding of your employees’ performance is necessary in order to provide the right learning environment for them and your business. Fortunately, there are a number of helpful metrics that you can use to examine and track your employees’ performance. For example, you can use employee engagement surveys to determine whether or not your employees are happy with the job that they have, and if not, you can use that information to determine the appropriate next steps for your business.
The Importance Of Employee Loyalty
An individuals’ loyalty is essentially the extent to which they are committed to and supportive of their employer. In general, employees that are loyal to their employers are more likely to go above and beyond what is expected of them, and they are more likely to be committed to the success of their employer. Additionally, employees that are loyal to their employers are more likely to be engaged in their work, feel that they can develop their skills, and be confident that their employer will provide them with adequate support and opportunities for growth.
If you can’t measure it, you can’t improve it. As an employer, this should be a source of great concern as a clear understanding of your employees’ loyalty is necessary in order to provide the right learning environment for them and your business. Fortunately, there are a number of helpful metrics that you can use to examine and track your employees’ loyalty. One of the simplest and most effective ways to do this is to examine their continued employment with your business. In general, an individuals’ loyalty to their employer is something that you can measure and improve upon through consistent and fair treatment.
For example, if you think that your employees are underperforming, treat them with dignity and respect and ensure that they know that you value their contribution. Furthermore, if you notice that they are not acting with loyalty, it may be time to revisit your approach to their employment—are they being paid appropriately for their level of expertise? Moreover, are you providing them with the training and support that they need to succeed in the role that you have for them?
The analysis that you need to perform in order to know your employees’ 4.5 wins expectancy is a rather simple one. Begin by examining their skillset, their interest in the work that they do, and their performance—in that order. You will then be better positioned to make informed decisions about your business’ future.