Employee Experience and a Positive Bottom-Line

For companies looking to get an edge, the employee experience is increasingly a key area of focus as an enabler of this type of capability. Much like the customer experience, the employee experience is defined as the full set of perceptions that an employee has interacting with an organization, with colleagues, and with the work itself. It is broader than either engagement or commitment, which have tended to emphasize how organizations can get more out of their human capital – a notion that still lingers from the Industrial Revolution. This article provides insight into what defines the employee experience, what it takes to create it, and the benefits companies will reap if they successfully incorporate it into their culture.

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Companies that are successful in today’s global marketplace are adept at responding to complexity. They understand the full scope of their customers’ experiences and expectations—customers who now not only include those directly interacting with the company and its products or services, but entire communities as well.

Critically, these companies possess the agility to be responsive and even anticipate the changes required to meet those expectations. Changes that often span business processes and strategies, partnerships and supplier relationships, and of course the workforce itself.

For companies looking to get an edge, the employee experience is increasingly a key area of focus as an enabler of this type of capability.

What Is the Employee Experience?

Much like the customer experience, the employee experience is defined as the full set of perceptions that an employee has interacting with an organization, with colleagues, and with the work itself. It is broader than either engagement or commitment, which have tended to emphasize how organizations can get more out of their human capital—a notion that still lingers from the Industrial Revolution.

Instead, a positive employee experience is about organizations creating a human workplace where employees can bring more of themselves to their work. It is about environments that support a holistic sense of belonging, purpose, achievement, happiness, and vigor. It is about the power of humanity when higher level needs are met.

What Creates a Positive Employee Experience?

Alongside the development of the first validated measure of employee experience and understanding its outcomes, research from Globoforce and IBM also sought to more fully understand the drivers of that experience. In that research, a set of Human Workplace Practices emerged from the data that provide insight into the ways in which companies can create a positive employee experience

Six core principles emerged to comprise the human workplace practices, which together form a powerful and integrated philosophy of management. Based on the results of a key driver analysis, meaningful work emerged as the largest influence on the employee experience, accounting for 27%. It was closely followed by empowerment and voice (17%), feedback, recognition, and growth (16%), coworker relationships (16%), organizational trust (15%), and finally, work-life balance (9%).

There are often exponential benefits to designing work in such a way as to touch upon multiple practices. In one example from that research, a culture of social recognition increases the employee experience by 11%, tapping into the feedback, recognition, and growth driver. For a more powerful result, social recognition can also be aligned to core values, a critical piece of meaningful work, which leads to an additional improvement of 17%, or a 31% improvement over the baseline of no recognition platform.

Many such initiatives in the workplace today can be framed through the lens of these drivers, and what seems like small adjustments can lead to outsized impact on the employee experience.

How Does the Employee Experience Benefit the Organization?

The employee experience is no longer a nice-to-have, but increasingly a source of competitive advantage. Global research from Globoforce and IBM has shown that employees with a positive experience are 32% more likely to perform at a high level and 52% less likely to leave. Critically, they are also 73% more likely to go above and beyond in their roles and devote the kind of discretionary effort that leads to business success.

It’s no secret that the level of organizational change required in an agile organization can place a strain on even the best performing employees. By emphasizing the employee experience, those stresses can be transformed into positives. Against a foundation of belonging and purpose (especially when other-focused, such as on the customers of the company or other key stakeholders), dealing with such change is easily reframed into a sense of achievement that provides energy rather than saps it away.

There are many other potential settings in which a positive employee experience benefits the employee and organization alike.

The Employee Experience and the Bottom-Line

Research from Globoforce’s WorkHuman Analytics and Research Institute and IBM’s Smarter Workforce Institute has found positive relationships between the employee experience and performance, for individual employees and the business’ bottom line. Specifically, recent data show a positive correlation between a top-rated employee experience and three-times greater returns on assets (ROA) and two-times greater returns on sales (ROS).

The employee experience is foundational in creating an organization that is agile, change-ready, and responsive to customer expectations.

Employees with positive experiences at work are more likely to approach each day with a sense of achievement and energy, which translates into downstream efficiencies revealed in positive returns on assets. They are also in a better position to meet customers where they are, working with a sense of purpose and positivity that can keep pace with changing stakeholder landscapes and achieve positive returns on sales.

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Greg Stevens, Ph. D., Analytics Manager, WorkHuman Analytics and Research Institute. As a research consultant, I blend expertise in workplace research and hands-on management consulting experience. I provide evidence-based alignment of people and business strategies, integrating diverse experiences across talent, strategy, learning, and organizational development. I also conduct original research on human behavior in complex organizational systems, addressing critical business challenges and providing innovative insights and thought leadership. You can contact me at Greg.Stevens@globoforce.com.

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