Any business adviser or business owner will tell you that employees are the most important asset of any business.
Given this truism, does every business do all it can to get the best out of its main asset?
One term commonly used to describe when employees are being most effective is that they are ‘engaged’. Another term is that they have ‘stepped up’.
An engaged workforce does not come about by simply giving them instructions and telling them what to do.
In this article, I would like to share the three secrets to getting truly engaged employees.
What is an engaged employee?
In a business owned by individual shareholders, the profit derived from the efforts of the employees leaves the business. Creating engaged employees therefore requires concerted action, as employees do not get rewarded for their hard work.
For businesses owned by an Employee Ownership Trust (EOT), however, the employees are the (indirect) owners of the business. One would therefore imagine that employees would automatically feel engaged.
This can go both ways, however, it means that an expectation is set by the employees that they will participate in the business. Fail to meet this expectation, and disappointment and discontent can set in.
In order for someone to feel motivated, they need three things*:
- Being allowed to get on with the job
- Being capable of doing the job
- Seeing the purpose of their job and how it affects others
The good news is that this is easily remedied with three secrets to creating employee engagement in, or as part of the transition to, the sale to the EOT.
Secret No. 1: Sharing information
In order to find relatedness between their work and the work of the company, employees need information about the business.
There is an additional word required here, however: they require meaningful information. It’s no good simply sending out numbers around the performance of the business, if employees do not understand what they mean. This may therefore include some training to help them understand the information they are being given (to give the employees competence).
Some of this information might be uncomfortable, or may not have been shared before, particularly around the profit of the business. However, the employees are now, indirectly, the owners of the business. They not only have a right to know, but if they understand how the profit is generated, they will be better equipped to help generate it.
Secret No 2: Sharing profit
The mechanism for sharing profit within an EOT owned business is that the profit is paid to the trust, and is then distributed amongst the employees.
The formula for how the profit is distributed among employees differs between firms, but it will be a variant based on pro rata salary and service – and nothing else.
Getting that annual bonus, and being financially rewarded for their efforts, is a big motivation and positive factor for employees in EOT owned companies.
Secret No 3: Sharing influence
What surprises many owners, however, is the extent to which having a say in the company, is as big as, if not bigger a factor than having a profit share.
As (indirect) owners, employees should be given a voice within the business – remember, they don’t get a vote, but they feel they have influence. This is a large contributor to autonomy, feeling they have a role to play.
Contribution to the daily running of the business is important. However, this should arguably be in place anyway, and be routed through the usual management structures.
Employees should also, however, have a voice into the Board, via the trustees. The sharing of information is key in ensuring this voice is meaningful, and that the dialogue is two-way.
Working On The Three Areas
In conclusion, creating these three key areas will not just happen automatically. Expectations need to be managed, feedback needs to be given – indeed, this is not a job that is ever finished.
Go to any meeting of employee-owned companies, and you will see employee engagement as being the number one topic of conversation. These three areas are the key to unlocking real employee engagement.
*This is an incredibly brief summation of self-determination theory