Measuring the Impact of a Holistic Approach to Employee Engagement

This theoretical case study of a high-tech farm equipment maker demonstrates how statistical process controls long used in total quality management make it easy to effectively measure the impact of almost any type of engagement effort. This report demonstrates how technology can help correlate behaviors with outcomes, as shown in the graphs below. The key is to have all the engagement levers available on one platform to harmonize stakeholder engagement and allow for effective analytics.

The case study below demonstrates the practical use of statistical process controls to measure engagement program effectiveness long used in hospitals and factories around the world to measure the

impact of efforts to improve safety and quality. The only reason more organizations overlook these basic practices? The majority of regular incentive, recognition and loyalty efforts generally receive much less analysis, according to Jack and Patti Phillips, Chairman and CEO respectively of the ROI Institute Inc., Birmingham, AL, worldwide recognized authorities on the subject and advisors to the Enterprise Engagement Alliance.

This engagement design and measurement process can be greatly facilitated by the use of Enterprise Engagement Impact Technology (EEIT), that is technology that enables organizations to manage all the key levers of engagement for each stakeholder group on a single platform to ensure aligned interests and more effective impact measurement.

In response to the increasing demand for measurability in the world of engagement, the Enterprise Engagement Alliance, with input from an Impact Council, is developing a set of open-source processes and metrics to help organizations measure the impact of almost any type of people engagement process. Statistical process controls were first proposed for this use by the American Productivity and Quality Center in a report entitled, “Master Measurement Model” produced for the Incentive Research Foundation in the early 2000s.

The EEA freely shares the methodology because it’s already used in probably over one million companies as part of total quality management practices. In fact, the concept of strategic management and statistical process controls is baked into the 14 Management Principles of W. Edward Deming, one of the early innovators in management consulting and total quality management.

The Enterprise Engagement Alliance Impact Academy offers formal training on the implementation of this process and provides customizable ROI templates; the PVIC analytics tools to help companies and solution providers better analyze impact and correlations, and the ability to benchmark with outside data and with the aggregate and anonymous data of other organizations over time. For organizations seeking an outside expert for impact analysis, the International Center for Enterprise Engagement is the first to offer these services.

The Measurable Impact of Holistic Employee Engagement: A Three-Year Study

In 2022, the Advanced Agra farm equipment company invested in a comprehensive engagement and recognition initiative to boost productivity, referrals, and innovation while reducing

turnover costs. The program included an enterprise engagement technology that supported:

An effort to improve productivity through a proactive suggestion program to encourage cost-savings or innovations.
A new job training program to encourage more job sharing to reduce overtime costs.
A formal referral program to reduce the cost of replacing employees.
A peer-to-peer recognition program giving employees a budget for recognizing peers for excellent internal customer service and timely and diligent completion of tasks.
An ongoing communications program that provided frequent, concise reminders about the various programs as well as short profiles of people who make useful suggestions, refer employees who get hired, get recognized for great service and diligence, excel at the training program.
Each employee had a $400 annual budget for giving points and an unlimited ability to recognize through other forms of appreciation.
In addition, the company awarded points for successful completion of training, referrals, and suggestions.

The Results (2022–2023)

Financial Performance:

Revenues grew from $249 million in 2021 to $287 million in 2023 an overall 15% increase in two years.
Net profit rose 27%, from $17.4 million to $22.2 million, with profit margins improving from 7% to 7.7%.
Profits per employee jumped 24%, reaching nearly $96K per employee by 2023.
Human Capital ROI rose from 2.32 to 2.91 (+25%).
The enhanced productivity was attributed to increased job sharing.

Engagement and Participation:

Engagement scores climbed from 0.72 to 0.83 (+15%).
768 recognitions were given in peer recognition in 2023, with 877 recognized using points (avg. $150 each).
Recognition costs totaled $71,250 (2022) and $131,550 (2023).

Retention and Turnover Savings:

Voluntary departures dropped from 29 to eight over two years, a 72% decrease.
Cost of voluntary departures fell from $441K to $136K, saving $305K annually by 2023.
This was also attributed to in part the job sharing program.

Referrals and Innovation:

Value of referrals grew from $588K to $1.38 million (+135%).
Suggestion submissions increased to 136 per year with 16 accepted, generating $123K in value.

Overall ROI:

Analysis shows the program returned $37 to $44 for every $1 spent in recognition and engagement costs when factoring in incremental profit, turnover savings, and referral value.