Improving Culture Can Boost Productivity 21%

What is Culture?

Culture is simply how things get done in an organization. ‘How things get done’ directly influences productivity and performance. Managing culture is not simple, but there are simple strategies tailored for smaller organizations that make an impact.

  • Typically 52% of employees are engaged or fully engaged.
  • Disengagement translates to about 30% lost productivity in a typical business.
  • The good news is 72% of those who are disengaged can become engaged with the right actions.
  • As a result, there is an opportunity to reduce your lost productivity from 30% to 21%.
  • If your average productivity is $100,000 per employee, this improvement translates to $21,000 of profitability per employee.

*Towers Perrin Global Workforce Study 2007-2008; Human Capital Institute’s HCS Certification Course 2010; Gallup 2002

It has been proven that engagement directly correlates to productivity. Engaged workers are the baseline to a productivity standard across various businesses with no drags on their speed or output. Fully engaged employees produce 20% more and disengagement drops their results.

How is Culture Managed? 

The iceberg culture model was developed by Stanley Herman of TRW Systems in 1970 to describe the balance between things seen (formal aspects) and things unseen but believed (informal aspects.) Keeping these two components in balance is the goal, and things can be drift out of alignment easily. The hard part about managing culture is that much of it is felt, but never said. And so, without asking employees about their beliefs, perceptions, and opinions you can only see above the waterline.

The part of the iceberg you can see (above the waterline) represents the formal aspects or “the way we say we get things done

The part of the iceberg you cannot see (below the waterline) represents the informal aspects or “the way we really get things done”


Looking Below the Waterline: Employee Engagement

Seeing below the waterline starts with an employee survey measuring engagement. Engagement goes beyond satisfaction, according to Aon Hewitt, employees are engaged when they:

  • SAY – speak positively about the organization to others
  • STAY – are committed to remaining with their current employer
  • STRIVE – are motivated by their organizations’ leaders, managers, culture and values to go “above and beyond” to contribute to business success

The easiest way to measure employee engagement is with the eNPS. eNPS is short for Employee Net Promoter Score and is a method for measuring how willing employees are to recommend their workplace to friends and acquaintances. Another way to put it is that eNPS is the internally focused counterpart to the popular NPS* method. NPS is short for Net Promoter Score and is a method for measuring customer loyalty. Originally developed by Fred Reichheld, Bain & Co and Satmetrix during the 1990’s, NPS is built on the “ultimate” question: “Would you recommend (our company) to a colleague or friend?

eNPS is built in the same way, using the “ultimate” question. In conformity with the NPS, the answers are divided into three categories and the Employee Net Promoter Score is then calculated:

* Net Promoter Score is a registered trademark from Fred Reichheld, Bain & Co and Satmetrix

The major benefit with the eNPS is that it is a quick and easy way to get an overview of how loyal and engaged a company’s employees are. Identifying the drivers under the eNPS is another story. This is where there are many places to probe and to focus. Our approach is to ask employees what they alone can tell you and use other resources for the rest.

In the coming weeks we will continue to examine the drivers underlying the eNPS, and we will discuss the top 5 drivers of engagement across all industries. Check back soon for additional content, and we encourage anyone interested in these topics to contact us with questions regarding culture development, competitiveness and sustainability.

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Date

November 9, 2017

Author

AXIOS HR

Category

Attraction Blog Entries Culture Development Uncategorized