Want to improve the bottom line? Treat your workers with respect

It’s an old question, really, but an important one — are managerial practices and work design responsible for the behavior of employees? Or does worker engagement and behavior come down to individual personalities, with responsibility thus resting primarily with workers? And what are the impacts on a firm’s financial success?

These questions received newfound attention with the publication of a study conducted by the Gallup organization, based on deceptively interesting survey data. Interesting, because they mirror critical concepts we sociologists of work use in our research. Deceptive, because the report stands as a textbook example of the kind of shallow reasoning that results when analysts proceed without concepts such as power, organizational design, and the normative climate fostered by management.

The report, titled “State of the American Workplace:  Employee Engagement Insights for U.S. Business Leaders ” uses data collected from individuals and their employers to show that a variety of factors that Gallup terms “employee engagement” enhance productivity, profitability and customer ratings while reducing accidents, theft, absenteeism, turnover and defects.

The report bemoans the small share (30%) of “engaged and inspired” workers who are moving their companies forward.  It also implores organizational decision-makers to stem productivity losses totaling as much as $550 billion annually attributed to the 20% of full-time American workers who are “actively disengaged” from their work – those who, according to Gallup, “aren’t just unhappy at work; they’re busy acting out their unhappiness …undermining what their engaged coworkers accomplish.”

This characterization lays much responsibility at workers’ feet – downplaying organizational responsibilities and placing blame on disgruntled workers and individual “bosses from hell.”

According to Gallup, employers can resolve these problems by hiring more “standout” employees, encouraging them to make healthier choices about food, exercise and how to spend their money, and securing managers with “great talent for supporting, positioning, empowering and engaging their staff” – a compelling statement to be sure.  Of course, this assumes that a significant share of firms’ problems are attributable to substandard employees – and that managerial behavior is rooted in some mystical quality called “talent” and divorced from organizational structure, production processes and normative environments that make possible the cooperative management styles known to generate worker enthusiasm and consent.

Viewed through a sociological lens, which calls attention to power, organizational design and normative context, the analyses presented in the report clearly indicate that improvement of the bottom line lies not in relatively quick fixes aimed at increasing employee engagement as Gallup suggests, but in transforming firms’ orientation toward their employees, with structures and ideals promoting respect of workers, recognition of their capabilities, and meeting their needs.

Indeed, the indicators Gallop uses – “I know what is expected of me at work,” “I have the materials and equipment I need to do my work right,” “At work, I have the opportunity to do what I do best every day,” etc. – are clearly shown to have significant implications for organizational performance.   They are not measures of engagement, however, and whether they relate to engagement has not been established.  Rather these indicators are potential sources of dissatisfaction rooted in organizational practices and orientations – ones that track closely with the concept of “managerial citizenship” developed by sociologist  Randy Hodson to assess conformity to norms promoting respect for workers and maintenance of a workable production process for employees.

Gallup’s characterization of workers scoring their jobs low on these dimensions as “actively disengaged” is dubious at best.  The data simply do not support this portrayal.  Whether workers classified as “actively disengaged” are unhappy, acting out unhappiness and/or undermining coworkers as Gallup describes is entirely unclear because these sentiments and behaviors are not part of the analysis presented in the report.

What is clear from Gallup’s measurement and analysis is that when minimal norms of respect for workers and viable production processes are not observed, productivity, profitability, quality and customer ratings fall, and firms experience more accidents, theft, absenteeism and turnover.

To improve organizational performance, business leaders should disregard Gallup’s discussion of the study’s implications and look directly at the variables Gallup so clearly ties to firm performance.  They will find that improving the firm’s bottom line comes down to ensuring workers having the equipment and training they need to do their work, installing programs to develop employees, and ensuring that organizational leaders communicate with – and listen to – employees.

These are not changes that can be made by replacing individual supervisors; they require broader transformation in organizations, including the structural context in which managers themselves do their jobs.  This point is not lost on academics and others asked to reflect on employee engagement in a media item publicizing the Gallup report. They cite supportive supervision, stimulating tasks, job growth and a culture supportive of employee voice and cooperation as pivotal to satisfying employees.

Unfortunately, such insights are likely to be lost on those taking Gallup’s report at face value.  Nevertheless, a reading of the study complemented with use of conceptual tools readily available in sociology can make a valuable contribution to employers and scholars alike. Employers can benefit greatly from solid evidence presented in the report that respect for workers and maintenance of a workable production system improves individual workers’ health AND the firm’s bottom line through increases in productivity, profits and quality, and reductions in costly accidents, defects, absenteeism and turnover. What is more, the report gives specific, measurable targets that can be used to create new approaches and measure their impacts.

Scholars interested in the mechanisms linking managerial citizenship and organizational outcomes addressed here will find that Gallup’s study provides us with an important piece of the puzzle.  Gallup demonstrates that employer orientations to workers matter for outcomes such as quality and productivity – an issue that few sociologists have been able to tackle owing to lack of available data.

Scholars can also use Gallup’s findings to help make the case that organization decision-makers have an economic interest in taking a sociological view of work and workers into account.  This study, after all, shows clearly, and with indicators that mean something to businesses, that organizations can enhance their own success by recognizing workers’ capacities, developing their skills, and treating them with respect.