The following case study was provided as part of the evidence for the effectiveness of employee engagement strategies in improving performance, productivity and, in the private sector profitability. It has been used cumulatively with other submissions compiled by many leading companies and organisations to leave little room for doubt about the statistical importance of engaging employees.
This particular case study is an additional support to The Evidence Paper
Background:
The RBS Group is a large international banking and financial services company. From its headquarters in Edinburgh, the Group operates in the United Kingdom, Europe, the Middle East, the Americas and Asia, serving over 30 million customers worldwide.
Through an extensive Employee Listening Strategy, RBS measures engagement consistently across its global operations. It routinely links this to business measures such as customer service and financial results to establish business insights (Figure 1).
Fig 1: Integrated approach to listening to our people to make the right decisions about our future
An RBS study, which included over 370 anonymised business units,[1] consisting of 6000 employees, aimed to understand the correlation between employee engagement, superior business results, leadership capability and customer service. Using the results of the study, RBS sought to identify the key characteristics of high performing business units vs. low performing business units – in particular what differentials were evident in the top and bottom percentiles. Data was collated from January – December 2011.
When comparing the top 10% of business units by engagement (in this study) with the bottom 10%, RBS found that where there were highly engaged staff there was also strong differentiation in that unit’s customer service and business results.
Results:
The study showed:
1. 7 percentage points difference in Customer Service scores between the top 10% of business units and the bottom 10%.
2. Reviewing Sales vs. Target Performance figures shows significant differences, with performance in the most engaged business units delivering 25% more than the lower engaged units.
3. The cost of absence was circa £250,000 higher in bottom decile business units vs. top decile business units, with an absolute increase in absence rates of 1.5%.
4. Business units within the bottom decile had almost twice the voluntary turnover rate of the top decile, at a cost of circa £650,000.
5. RBS also found that business units within the bottom decile were 3 times more likely to have had more than one unit manager in charge over the 12 month period than those units within the top decile. This emphasises the importance of stability on engagement and performance.
To validate these linkages, the research team used key RBS business metrics and results from the 2011 RBS employee opinion survey. The survey measures employee attitudes across a number of priority areas such as customer focus, collaboration, innovation and change management. The research team applied correlation analysis across the entire study sample to identify any relationships between the business metrics and survey items, and the strength of those relationships.
Co-operation, change management, customer orientation, performance management and quality were also identified as key drivers of income (product sales vs. target) for this study. The strongest driver of income was found to be engagement, with significant coefficient scores indicating a strong relationship between the two measures.
[1] Business units were included in the analysis where there were at least 10 respondents to the 2011 Employee Opinion Survey and headcount of at least 10. This was to ensure comparable measures of engagement, turnover and absence across the units.
