Section head

Engaged and motivated employees

Diversity can impact on employee commitment and motivation by creating a culture where every employee feel respected, valued and able to contribute to their full potential. How employees feel about their job has an impact on their work experience, but also on tangible organisational outcomes such as customer satisfaction, sales, and profit.

Satisfied employees are motivated and feel empowered to deliver a better product and service; they have a high energy and willingness to work and they create a more positive environment for colleagues and customers by showing empathy understanding and respect.

Numerous empirical studies show that an increase in employee satisfaction leads to a more productive organisation and an increase in customer/client satisfaction.

A study of a large retailer found that a one point increase in employee motivation can lead to a monthly increase of up to £200,000 in sales per store. [1]
Nationwide Building Society has found that for every 3% increase in employee satisfaction there is a 1% increase in member (customer) satisfaction. [2]
In 2002 a study of nearly 8000 business units in 36 companies found a significant positive relationship between employee satisfaction at business unit level and business unit outcomes such as customer satisfaction, productivity and sales. [3]
A study in 2002 reviewed the relationship between financial success and customer and employee variables (e.g., customer satisfaction, employee satisfaction, etc.) and found that, depending on market segment and industry, between 40 and 80 percent of customer satisfaction and customer loyalty was accounted for by employee attitudes.
A 1999 Cambridge University Study of 30 organisations that have introduced policies aiming to improve work/life balance revealed no financial or organisational cost to the business but many resulting benefits. The most frequently reported benefit was improvements in productivity^{.^[4]}

The psychological contract

In light of this evidence it is worrying that British businesses are experiencing growing levels of employee disengagement and are in the bottom 25% compared to other countries[5]. Many employers have failed to adjust to the fact that the psychological contract (which matches the abilities and needs of the prospective employee with the demands and rewards of the role in the organisation to ensure that the expectations of both are met) has changed. This is partly due to the different expectations of a new generation of workers but is affecting the whole workforce.

There is a move from a job for life towards the concept of employability for life. Focusing on employability means that employers have to attract employees rather than just expecting that someone will join and stay for a long period of time. It also means that all employees, regardless of age, are starting to realise that if they have talent that is in demand, then they can make their own demands about contracts, tailored to suit their own personal circumstances.

According to the Work Foundation [6], employee rewards need to be broader than competitive pay packages, and research on job satisfaction and commitment supports the need for the widest possible range of benefits. Offering employees, for example, choices over their working time and opportunities to work at home are seen to have a powerful effect on employee loyalty and commitment.

The old versus the new psychological contract [7]

Old	New
Stability	Change
Predictability	Uncertainty
Standard work patterns	Flexible work
Valuing loyalty	Valuing performance and skills
Paternalism	Self-reliance
Job security	Employment security
Linear career growth	Multiple careers
One-time learning	Lifelong learning

In this environment, creating a culture of diversity that allows all employees to reach their potential and envisage a fulfilling and flexible career will prove to be a powerful tool for retention and engagement.

A strategy for employee engagement should:

Monitor employee satisfaction on a regular basis
Demonstrate clear senior leader commitment
Strengthen managerial accountability for people management
Ensure managers have people management and diversity management training
Develop effective and multiple communication channels with employees
Implement a work life balance programme
Develop a culture which supports flexible working at all levels

Managing and reducing absence

Research indicates that work on diversity and in particular on work life balance can reduce absence in organisation. Given that the CBI estimates that absence costs the UK £13 Billion a year any reduction represents a significant cost saving to organisations.

Section head

Engaged and motivated employees

The psychological contract

Old

New

Managing and reducing absence