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Posted: July 15, 2013
James O'Toole

James O’Toole is a senior fellow in business ethics at Santa Clara University’s Markkula Center for Applied Ethics and the author of 17 books, including The Executive's Compass and Leading Change.

 

 
 

U.S. Employees Are Disengaged—and Mismanaged

Given the lingering recession and stubborn rates of unemployment, you’d think Americans lucky enough to have jobs would be working their tails off to keep them. But accordingly to a recently released Gallup poll, only about 30 percent of employed Americans are actively engaged at work. 

The survey also revealed that more than half of the U.S. workforce passively shows up at the office without enthusiasm, kills time till lunch and closing, and exerts little effort to maintain the customers and productivity of the organizations that print their paychecks. Worse, nearly 20 percent of the workforce is actively disengaged, contributing to inventory “shrinkage,” causing accidents, blowing off customers, showing up late (or not at all), and, in general, creating extra work for supervisors and colleagues. Gallup estimates the latter group costs employers US$500 billion annually in lost productivity.

Scientific studies identify two main drivers of worker productivity, loyalty, and commitment: participation in the decisions that affect one’s work, and participation in the financial returns that work generates. Regardless of worker age, gender, race, education, place in the hierarchy, or profession, the greater the extent of involvement in the management of one’s own (or one’s team’s) tasks, the more productive the worker. And the greater the extent of participation in team gain-sharing, organization profits, performance-based bonuses, and stock ownership, the more productive the worker.

Two other engagement factors, flagged by Gallup, are also found in high-performing organizations. The first is the palpable sense of community that employees feel when they are valued and respected as members of an organization in which they can count on co-workers to carry their fair share and offer support when needed. Such organizations are typically values-driven with a motivating “higher” purpose (alarmingly, only 41 percent of the employees Gallup polled said they understood their organization’s mission and purpose). The other factor is the opportunity to develop one’s skills and abilities, and to put those to productive use on the job.

In addition, the Gallup data shows that organizations in which workers are most engaged enjoy a whopping 240 percent advantage on an index of nine measures of performance over companies where workers are disengaged. For example, companies ranked in the top quartile of engagement are 22 percent more profitable than those in the bottom quartile. High levels of engagement are also in the national interest: These companies are adding jobs, while low-engagement ones are shedding them.

In fact, for more than 50 years, it has been understood that the strongest driver of profitability is an engaged workforce (along with an effective strategy to sell customers goods and services they are willing to pay for). And since the publication of the Work in America report (MIT Press, 1973) that my colleagues and I prepared during the Nixon administration, knowledge about how to generate such involvement has been widely available and free to use.

Yet the Gallup poll is quick to point out the root cause of our disengagement today: mismanagement. Why do so many managers fail to do the things necessary to generate employee involvement? At some companies—Walmart and McDonald’s, for instance—business models are designed to discourage employee engagement, the goal being to ensure workers simply do as they are told. But in most organizations the cause of the failure is more hidden, and is deeply rooted in the little recognized truth that good management is unnatural behavior. Ego, greed, and the desire for power are parts of human nature, and thus devilishly hard for managers to overcome.

Simply put, those at the top feel entitled to the lion’s share of the money “their” companies earn, and managerial egos are threatened when subordinates speak their minds in the workplace and when they don’t just do what managers tell them to do. And it seems that most managers learn only through personal failure that being “the boss” isn’t about bossing people around and that, instead, their task is to create conditions in which those who report to them can effectively self-manage.

So the new Gallup report is really old news. And, unless human nature changes, 40 years from now, survey research probably will come up with the same signs of mismanagement that my colleagues and I “discovered” four decades ago—ensuring that there always will be a need for management consultants and business professors!

 

 
 
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