Employers getting Hip to Corporate Culture?

If you think the unemployment numbers are high, take a look at the compliment employee engagement, which by all accounts seems to be relatively low.

Blessing White , Leadership IQ and Kenexa Research Institute in Minneapolis all report low levels of motivation among US workers.    Approximately 60-70% are disengaged OR under engaged? These were the figures reported in the  GFK US employee benchmark 2011 survey of organizations with more 5,000 employees.  Kinexa  shows a slightly lower rate of 42% vs. the global average of 47% disengaged.  Of course there is variance by sector, age and  role as well as natural variation due to alternative definitions of engagement.

In a worsening economy, triggered by layoffs, naturally employees begin to despair or experience burnout as they raises or either non-existent or minimal in spite of  increases in their workloads.   Furthering the malaise, Hay group survey results, as recently reported in the WSJ, expect lower median pay increases  in 2012 , or about 3%, which is below the 3.5% annual rate of inflation.  The Labor department survey shows voluntary resignations have dropped to 1.4%, lower than in April 2007 pre-recession levels of 2.2%.  Executive pay however, has increased more sharply due to bonuses and other performance-based pay.

As the seeds of greater income disparities continue to grow, and the economy sputters, without a motivated, fully engaged workforce how will executive management deliver  healthier and consistent corporate performance?

More powerful than the prospect of gain is the fear of loss.  As long as employees continue to fear that the grass isn’t greener elsewhere, many of these survey companies predict that voluntary turnover will  remain low.  Then again, it has always been true that compensation is not the only variable that affects employee attitude, motivation or performance.

High performance companies tend to also been a culture of high performing, and presumably engaged employees.  The  June 2011 report by Kenexa found that firms that rank in the top 25 percent in employee engagement achieve earnings per share almost 2.5 times higher than average.  The variation in engagement definitions even among such leaders as Gallup who seek to align the attributes of behavior and company performance, likely correlate with other strategy initiatives or internal operating factors.

Social Capital and Social Media

Michael Porter has has been aggressively advocating  Shared Value, a new business model that emphasizes long-term sustainable strategy. This work encourages firms to pursue a different agenda, focus on the  need to find common goals and shared values as a basis of  meaningful social change. By focusing on a wider coordination and cooperation of resources, to look  beyond the near term profits, firms can deliver  sustainable returns.  The growth of Corporate Social Responsibility initiatives in many organizations, and the emerging role of outside voluntary compliance metrics are providing new opportunities for firms to distinguish themselves in the minds of a variety of stakeholders in spite of accelerating pressure from existing and new competitors.

Investing in Social Capital improvements , or encouraging the development of ties, networks, norms and trust across an organization not only delivers  higher employee engagement , but can be a winning performance strategy too.  Robert Putnam’s pioneering work on civic communities,  emphasized how the creation of norms around generalized reciprocity delivers higher economic and institutional performance.  Particularly true when the ties facilitate coordination and communication which amplify trust in each other.    Ron Alsop, in Workforce Management current editorial mentions the  pay off and importance of cultural and value alignment that has helped transform Cleveland Clinic and re-positioned Starbuck’s.

The Gallup organization is not alone in its creation of a feedback system for employers that identifies and measures elements of worker engagement most associated to key indicators that result in financial performance –things such as sales growth, productivity and customer loyalty.

If Values define culture and Culture drives values, then the shared value that comes from facilitated coordination and communication across your organization will be a powerful positive force.

Any stories you wish to share about the links between culture and performance in your organization? We’d love to hear about your experiences.