“Effective employee communication is a leading indicator of financial performance and a driver of employee engagement,” according to the 2009/2010 Communication ROI Study Report by Watson Wyatt. “Companies that are highly effective communicators had 47% higher total returns to shareholders over the last five years compared with firms that are the least effective communicators.”

The Baldrige Criteria ask four questions specifically about communication:

• How do senior leaders communicate with and engage the entire workforce?
• How do senior leaders encourage frank, two-way communication throughout the organization?
• How do senior leaders communicate key decisions?
• How do you foster an organizational culture that is characterized by open communication?

An organization that can answer these questions with effective processes can claim effective employee communication, which, as the Wyatt study shows, improves employee engagement and financial performance. Representatives of 328 organizations in more than 25 industries worldwide participated in the study.

The report offers five steps your organization can take to become an effective communicator:

1. Re-communicate your employee value proposition. Be clear about what employees can expect from your company and what the company expects from them.
2. Talk about the new deal now. Educate employees about your company’s values and culture.
3. Help employees appreciate what they have today. Make sure employees understand the value of their compensation and benefits programs.
4. Trust and train your leaders to talk about change. Leaders and managers need to know how to lead and communicate with integrity during times of change—which is pretty much all the time.
5. Learn how to communicate effectively with diverse employees. Highly effective companies train managers to communicate to a diverse audience.

The report also noted that less than half of the companies surveyed say they are effective at communicating how employees’ actions affect the customer or increase productivity. In Baldrige organizations, these issues are addressed by the strategic planning and performance measurement processes, which align the work that employees are doing with organizational goals, objectives, and action plans that typically support customer satisfaction and quality/productivity metrics.

The bottom line: Act on a documented communication strategy that includes measuring communication performance. According to the survey, 70% of the companies that communicate effectively include communication measures on their balanced scorecards.

The best way to define and deploy that strategy is to ask and answer the questions in the Baldrige Criteria.

To learn more about effective communication, read:

• The Baldrige Criteria
• Why HR Needs Baldrige
• The 90-Day Action Plan
• Hands-On Leadership
• KEYSTONE: Mission and Vision

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