When Lamar Odom left the Los Angeles Lakers to join the Dallas Mavericks, Dallas assumed they had gained a valuable asset. Odom had everything you could hope for in a professional basketball player. He was a versatile and talented player. And yet, during that season, he gave nothing to the team. His shoulders slumped. He dragged his feet. As a result, the fans were livid, booing him off the court. Owner Mark Cuban got to the heart of the matter when he confronted Odom during halftime.

"I just asked him, does he want to go for it or not?” Cuban said. “Is he in or is he out? I think he thought we were playing poker. I just didn't get a commitment. And that was the end."

Cuban says the problem was one of engagement.

“Everybody goes through ups and downs. Every player does. We tried to put him in a position to succeed. You guys saw it, saw what we did. It didn't work.”

Smart organizations care about employee engagement and do all they can to maximize it – even in a tight job market that put employers at an advantage. After all, employee engagement is the foundation of satisfied customers, who make the difference between success and failure. So their concern just makes business sense, meaning dollars and cents.

According to Gallup, organizations with above average levels of employee engagement also reaped 27 percent higher profits, 50 percent higher sales, 50 percent higher customer loyalty levels and 38 percent above-average productivity.

Like a scoreboard hanging over your company, those kinds of results are hard to dispute.

Low employee engagement is the “locker room cancer”

In professional sports, some athletes gain the reputation of being a “locker room cancer.” This is a player with a bad attitude whose negativity has an adverse affect on the other team players. This player may be talented, but they have such low engagement that the team never sees his or her full potential. The player’s negativity hurts everyone. Lamar Odom is one such example.

At your company, employees with low engagement have a similar effect on everyone around them. They complain about new assignments. Every hour, they jokingly ask if it’s time to go home yet. They criticize and second guess every decision made.

The high costs of low employee engagement

Gallup has found that disengaged workers cost the economy at least $450 billion a year. The Parkington and Buxton study of the U.S. banking sector in the Journal of Applied Psychology reported that 68 percent of customers leave because of poor employee attitudes. A 2011 LeapCR study reveals that disengaged employees take 3.5 more sick days a year.

With the job market slowly rebounding, 47 percent of top performers are currently looking for new employment, according to Leadership IQ. That means roughly half the employees are hoping that the grass is greener elsewhere. Indeed, 56 percent of human resources managers are concerned their top talent will leave for another job, finds CareerBuilder’s and USA Today’s Job Forecast nationwide survey of employers.

Organizations cannot afford to overlook any tactic to motivate employees and improve their job performance. In performance improvement programs, however, non-cash rewards are actually more effective than cash. It’s not just about a good salary and benefits. An HR department can improve engagement through enterprise career management solutions and common sense. Employees want diverse and meaningful reinforcement to encourage them.

Highly engaged employees are the locker room leaders

Everyone roots for the all-star player. But there are other players, while they may never put up the points, who are invaluable to the team. They are known as locker room leaders. They offer encouragement and support to everyone else. They believe in team and believe in its ability to succeed. Tyson Chandler was such a player for the Dallas Mavericks. He was the moral center of their 2011 championship run. Mavericks legend Dirk Nowitzki said of Chandler, “Not only on the court, but off the court, he was great. He was very vocal; he was hard on the guys when he thought we were slacking defensively or rebounding wise. He always held guys accountable. He was a big reason we won the championship.”

Likewise, highly engaged employees are like a locker room leader. They encourage everyone around them. They boost morale and bring out the best in others.

High engagement offers the winning advantage

The numbers are shouting a fundamental reality: engagement matters. Those organizations that put more into managing their talent significantly outperform their competition across every business metric – earnings per share, gross profit margin, and market capitalization per employee.

Still notconvinced? The Brookings Institution has found that 85 percent of a company’s market value is calculated on intangible assets. These assets include knowledge, reputation and human talent. High employee engagement is another such asset. Between 1998 and 2005, the S&P 500 averaged a cumulative stock return of 45.6 percent. Fortune’s list of “Best 100 Companies to Work For,” however, averaged a 200.6 percent return during the same timeframe.

A significant plurality of customers, 41 percent, is loyal because of good employee attitude, according to MCA Brand Ambassador. They come back because they see that these businesses have their act together. Customers’ brand perception is determined by experiences with employees.

Organizations with high levels of engagement (65 percent or greater) continue to outperform the total stock market index and posted total shareholder returns 22 percent higher than average.

The Intangibles Matter

In sports and in business, it’s easy to chart the stats, the profits and losses. The numbers don’t lie. But the intangibles matter too. And for business, there is no greater intangible than employee engagement. When it’s made a priority, everyone wins.

12 December 2013

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