The Workforce Focus category in the Baldrige Criteria is organized into two Items, the first of which explores how you engage your workforce to achieve organizational and personal success. I’ve written before about the Bottom-Line Value of Employee Engagement, which Gallup states can be as much as a 70% boost in bottom-line results, and Employee Engagement and the Bottom Line, which looked at the financial performance at Best Buy and J.C. Penney.

Fraser Longden is the head of talent and engagement at Kingfisher PLC, the parent company for B&Q, the UK’s equivalent of Home Depot or Lowe’s. In an interview in the Gallup Management Journal (“Do-It-Yourself Engagement,” January 12, 2010), Longden offers an interesting perspective on the flip side of increasing the bottom line: the cost of disengaged employees.

“The harsh reality is that in 2005, 29% of our workforce was actively disengaged,” he says, “and we were spending £120 million a year just on wages of these individuals. So, from a cost perspective, we were spending a whole lot of money on people who didn’t want to be there. In the last survey, that figure has dropped to £31 million, which is a massive turnaround.”

Longden calls it a tug of war, the actively disengaged pulling against the engaged. “The only way you’re going to move forward is by having a lot more people on the engaged end.”

He describes the steps B&Q took to improve employee engagement including:

• Removed a level of store management to flatten the organization
• Consulted nearly 8,000 people about the best way to reorganize
• Increased communication, including being “really honest about what we were doing and why”
• Focused on the team, rather than the individual, level. “If we can start to move a team, then often it becomes a critical mass and moves quite quickly.”
• Switched from running management development courses centrally to helping a manager and his/her team on the floor
• Focused energy on the bottom quartile of managers to help them move forward

Not only did these steps dramatically reduce the amount it was paying actively disengaged employees, but as it did with Best Buy, J.C. Penney, and others, employee engagement delivered a quantifiable boost in sales and profits for B&Q. “When we look at store teams that have had an improvement in engagement versus those that have stayed still or gone backwards slightly,” Langdon says, “then over a period of time we see a 2.2% to 2.5% sales increase and that can be as much, on average, as 6% in profit improvement.”

Based on the experiences of B&Q and others, the correlation between employee satisfaction/engagement and customer satisfaction/loyalty and sales/profit seems to be solid enough that organizations can expect to improve bottom-line results by improving employee engagement.

To read more about employee satisfaction and engagement, click on these articles:

• Baldrige and Workforce Results
• 10 Critical Questions: Your Workforce
• Increasing Employee Satisfaction in a Time of Decline
• 10 Steps to a Successful Workplace
• Recruiting, Retaining, and Engaging
• Employee Satisfaction Pays—Big Time

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