Employee satisfaction continues to lag

According to Aon Hewitt’s global Employee Engagement Database of more than 5,700 employers, the engagement level for 2011 is currently at 56%—the same as 2010 but lower than 2009 (60%) and 2008 (57%).

Traditionally, engagement levels between 65% and 100% represent a high-performing culture, and scores between 45% and 65% indicate the workforce is indifferent to organizational success or failure, says Aon Hewitt. Anything lower than 45% represents a serious or destructive range.

The largest drop in engagement this year is in employees’ perception of how companies manage performance, says Aon Hewitt. Workers believe their employers have not provided the appropriate focus or level of management that would lead to increased productivity, nor have they connected individual performance to organizational goals.

“A significant number of employees are not motivated enough to provide extra effort beyond the job requirements and many anticipate leaving their employers in the near future,” says Pete Sanborn, talent and organization consulting global practice leader for Aon Hewitt.

“This is critical, as our research continues to show a strong correlation between employee engagement and financial performance, even in turbulent financial times. For example, in 2010, organizations with engagement levels of 65% or greater outperformed the total stock market index and posted total shareholder returns 22% higher than average. On the other hand, companies with engagement of 45% or less had a total shareholder return that was 28% lower than the average return in 2010.”

Aon Hewitt recommends the following practices for improving and maintaining employee engagement:

• Create a strategy for improving employee engagement based on data with specific goals.
• Communicate a clear “employment deal” that links the success of the company to employees.
• Display authentic leadership; be consistently open, honest and transparent.
• Invest in improving the capabilities of middle managers.