All Posts Tagged With: "financial performance"
Effective Employee Communication
“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:
- Re-communicate your employee value proposition. Be clear about what employees can expect from your company and what the company expects from them.
- Talk about the new deal now. Educate employees about your company’s values and culture.
- Help employees appreciate what they have today. Make sure employees understand the value of their compensation and benefits…
Bottom-Line Value of Employee Engagement
Here’s a money quote from a Gallup report on customer engagement:
“Just as the best organizations have eight fully engaged customers for every actively disengaged customer, they also have eight fully engaged employees for every actively disengaged employee. And business units that score above Gallup’s database median on BOTH customer and employee engagement significantly outperform units that rank in the bottom half on both measures.”
As Gallup defines them, a fully-engaged employee is emotionally attached to the unit and rationally loyal, while an actively disengaged employee is emotionally detached and actively agnostic.
The report quantifies the impact of customer and employee engagement as follows, with those that score in the bottom half on both customer and employee engagement being the baseline:
- Those in the upper half on customer engagement and the lower half on employee engagement, or vice versa, get a 70% boost in bottom-line results.
- Those in the upper half on both customer and employee engagement get a 240% boost.
The report’s conclusion could be considered a ringing endorsement for integrating the Baldrige model: “Organizations that employ performance optimization management principles have outperformed their competitors by 26% in gross margin and 85% in sales growth.”
You can read the full report here.
To read more about employee engagement,…
30Oct2009 | Steve George | 0 comments | Continued10 Critical Questions: Results
The Baldrige model focuses on results: You don’t transform an organization without a very good reason, and for those organizations that transform themselves through Baldrige, the reason is because it delivers results. Check out some of the results achieved by Baldrige Award recipients in the following areas:
Better yet, read Category 7 in the award application summary of any winner you choose (click here) and you will find impressive results across all six of the areas measured.
The Results Category is the only Category in the Baldrige Criteria that examines your organization’s performance and improvement—but this one Category is worth 45% of the possible points when scoring a Baldrige application because the Baldrige model focuses on results. The best way to evaluate your results is through an assessment using the Baldrige Criteria. You can find out how to do that here. If you cannot do a full assessment but want insight into how to improve your results, here are 10 critical questions to ask and answer:
What are your current levels and trends in key measures of:
- Product performance OR student learning and improvement in student learning OR health care outcomes, health care process results, patient safety, and patients’ functional status?
- Customer/student/patient and stakeholder satisfaction,…
Baldrige and Financial Performance
Leaders looking for reasons to consider integrating Baldrige should be aware that the Baldrige model focuses on results. Whatever your organization’s goals, evaluating and improving your management system through regular Baldrige assessments will help you achieve them.
You can test the validity of that statement by looking at the results of organizations that have received the Baldrige Award. In this article, let’s consider the key financial results of a sampling of Award recipients:
- Maintained steady per-bushel costs from FY2006 to FY2008 despite 50-80% increase in energy costs, 30% increase in chemical costs, and 10% increase in maintenance costs (Cargill Corn Milling)
- Per-pupil expenditures among the lowest in North Carolina while being ranked academically in the state’s top 10 school systems (Iredell-Statesville Schools)
- Average charge $2,000 lower than that of its main competitor (Poudre Valley Health System)
- Revenue per associate approximately $4 million, nearly four times the IndustryWeek 90th percentile benchmark (PRO-TEC)
- Revenue increase from $33 million in 1989 to $847 million in 2006 (Mercy Health System)
- Increased revenue by 56% from 2001 to 2006 (Sharp HealthCare)
- Overall revenue increased from $640 million in FY2001 to over $1 billion in FY2007 (ARDEC)
- Operating margin grew from 35% in 2003 to 50% in 2006, while operating expenses remained well below those of its…
