The U.S. recession officially ended in June 2009, according to a recent announcement by the National Bureau of Economic Research. But that's little consolation to the countless American businesses -- and their employees -- that are still reeling from the consequences of the economic crisis.
Hope may sound like an airy concept, but it's critical to effective management.
Some businesses emerged better off than others, however. And Gallup research suggests that for many, the ability to optimize their human resources by engaging their employees and customers made a big difference. Organizations with high proportions of engaged employees were less likely than others to see a decline in earnings per share in 2008, the year after the recession officially began, according to Gallup's recent report on the State of the American Workplace: 2008-2010.
The connection between employee engagement and financial performance is easy to understand: The report notes that "employees who are well-supported and who feel valued are emotionally connected to their workplaces and have greater intrinsic motivation to be productive." But Gallup has also measured relationships between engagement and factors that are less commonly accounted for but particularly relevant to employees' resilience under such stressful economic circumstances. Among these are levels of hope and communication in the workplace.
Hope may sound like an airy concept, but it is critical to effective management -- it helps employees remain positive and productive in the face of adversity. After analyzing a range of question items addressing workers' feelings of hope in their workplaces, Gallup researchers identified three items that explained most of the variance in the other items tested. They comprise the Hope Index used in Gallup's employee engagement approach:
I know I will be an important part of this organization in the future.
At work, I set clear, meaningful goals and accomplish them.
I can figure out a way to solve almost any problem at my workplace.
The 2009 study of more than 20,000 employees asked respondents to rate their level of agreement with each statement on a five-point scale in which "5" meant they strongly agreed and "1" meant they strongly disagreed.
Overall, 15% of employees strongly agreed with all three items -- suggesting only a small minority were completely free of doubts about their current and future contributions to their organizations. However, that figure was almost double (29%) among employees who were emotionally engaged in their workplaces. By contrast, 5% of employees who were classified as "not engaged" strongly agreed with all three hope items -- and just 2% of those who were actively disengaged did so.
Results for individual question items indicate that engagement levels are most strongly related to the item that directly addresses employees' sense of security in their organizations. Just one-third of employees overall (33%) strongly agreed with the statement "I know I will be an important part of this organization in the future." However, a majority of engaged employees (56%) strongly agreed, versus 17% of those who were not engaged and 7% of those who were actively disengaged.
Why do these hope-related metrics matter? For one thing, employees with high levels of hope are more likely to maintain their psychological commitment to their current workplace rather than hedge their bets by looking for other opportunities. Workers who scored in the bottom quartile on Gallup's Hope Index were nearly three times as likely to be looking for another job as those in the top quartile -- 34% vs. 12%, respectively.
Clear and honest communication throughout an organization is important in the best of times. But during periods of uncertainty, it can determine whether a workgroup responds by pulling together in solidarity or fragmenting due to lack of trust.
Employees' feelings of fear and powerlessness can amplify an organization's struggles.
Gallup's Communication Index was derived by testing an extensive series of items -- in this case, ones that addressed organizational communication and information flow -- and identifying the three that were best able to account for the variance in the other items that were tested. Those items were:
My immediate supervisor keeps me informed about what is going on at the organization.
At work, the communication I receive is perfect for me.
There is open communication throughout all levels of the organization.
The 2009 study found that 7% of the U.S. working population strongly agreed with all three statements by rating them all "5" on the 5-point scale. In sharp contrast, nearly three times that number -- 19% -- of engaged employees strongly agreed with all items compared to 1% of those who were not engaged and less than 1% of actively disengaged workers.
Individual item results indicate that engaged employees are five times as likely as those who are not engaged to strongly agree that their immediate supervisor keeps them informed about what is going on at the organization -- 45% vs. 9%, respectively.
As with the Hope Index results, Communication Index scores are strongly related to workers' likelihood to be seeking employment elsewhere: 30% of those in the bottom quartile on this index say they are currently looking for another job compared with 11% of those in the top quartile.
In an economic downturn, employees' feelings of fear and powerlessness can amplify an organization's struggles. Insecure employees lose focus. They may begin to detach emotionally from their employers out of a sense of self-preservation so that they aren't emotionally hurt as badly if they are let go. However, Gallup's research indicates that there are strategies employers can take to boost workers' optimism and sense of empowerment. In particular, improving the workplace conditions that lead to engagement may help employees retain a firmer footing through the economic turbulence around them.