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Change Management and Employee Engagement

In previous blog postings, I have addressed the importance of transparent and frequent communication when implementing organizational change. Communication is only half of the “change management equation”. The other half is “employee engagement”, a concept deemed so important that an entire recent Fast Company article was dedicated to the topic.

The author of this article, Julie Moreland, cites a Gallup study that analyzed the impact of high employee engagement last year. Two significant results stand out from this study: “those organizations that score in the top half of employee engagement have double the odds of success of those in the bottom half…..those in the 99th percentile of engagement have four times the success rate.” [Moreland, 2013]. The other result is equally as impressive: the cost of ignoring employee engagement.  Again, citing the Gallup research, Moreland reports that low employee engagement is estimated “to cost the US economy roughly $370 billion a year.”

Based on these findings, it is no surprise, then, that employee engagement is crucial for positive organizational performance. Moreland reports that Gallup found high employee engagement impacts “nine key performance outcomes”. Among them are:

  • 25% lower turnover [in high turnover organizations]
  • 64% lower turnover [in low turnover organizations]
  • 37% lower absenteeism
  • 22% higher profitability
  • 21% higher productivity

I believe that in the same way employee engagement positively impacts these performance outcomes, it also can be related to the resistance that is a byproduct of most organizational change. Research has shown that resistance is the number one reason for failing change initiatives [Prosci, 2009, 2012].  Thus, the question is posed: What is the relationship between employee engagement and resistance to change? I would argue the relationship is an inverse one-that is, during times of organizational change, the more employees are engaged with the changes that are occurring, the more the resistance to those changes will likely diminish.

Fierce, Inc. lends support to this argument  in its white paper, “What Employees Really Think About Best Practices: Survey Uncovers 3 Things Employees Crave”. The results of their 800 participant study conducted across multiple industries revealed:

Transparency: Nearly 50% identified lack of company-wide transparency and too little involvement in company decisions as key areas of concern.

Autonomy: The freedom to make appropriate decisions ensures employees remain focused and engaged.  Nearly 50% of the respondents identify the most beneficial practices as those which encourage accountability, development, and individual empowerment within the organization [Fierce, 2012].

It is apparent to me that organizational success is predicated upon effective employee engagement and is absolutely necessary for successful organizational change management.  The change management equation is now complete:

Communication  +  Employee Engagement = Success in Managing Organizational Change