Measuring the connection between employee behaviors and business performance is often difficult. Traditional measures of employee satisfaction and commitment fail to link strongly with developments in business results and often leave the HR Professional as a poor cousin when business metrics are used to monitor business performance.

One powerful HR measure which does enable the HR Professional to link employee behaviors with business performance is a metric called employee engagement. Using a specialist employee survey tool, it is possible to measure the employee behaviors which impact on business performance and identify the key drivers of business performance improvement within a business. To date, we have learned that employee engagement:

• differs by company;
• is impacted by at least 16 different drivers in six broad categories;
• not every driver applies to every person;
• does impact financial results; and
• can be measured and managed effectively.

Measuring degrees of employee engagement provides data which enables actions to be taken at the point of business performance. So, for example, what employee engagement measures might do is help an HR Professional to look at all the elements that make up the employment experience and identify which of those elements within the experience motivate employees to stay, and which motivate employees to go above and beyond the simple requirements of their job.

Employee engagement measures can also help HR Professionals to look at which areas of activity have a greater influence on retention.

Engagement measures can also help explain the difference between top performing units and units which perform less well, and thus determine how value can be improved across the business.

Measuring degrees of engagement in staff can help line managers to focus on the areas which will produce the greatest improvement in business performance. If engaged employees and non-engaged employees are compared, there are clear differences. Research has shown that engaged sales employees tend to stay longer with organizations, for instance, and tend to be responsible for larger amounts of sales, thus increasing profits per employee and revenues across a business.

The search for value creation by HR functions has always been legitimate but in the past has tended to incorporate suspicious elements of self-fulfilling prophecy when compared to the value measures presented by many other disciplines within businesses.

We believe that it is now possible to unlock the value of the ‘people quotient’ with clear and unambiguous value drivers and measures which connect directly with broader business metrics.

The HR function has a key role to play in helping organizations to understand their sources of value (strategic style) and in blending the work environment, employee competencies and the lead HR systems which support the organization. The analysis and professional skills required to identify and develop value in this area are very much a part of the development of the role of HR as strategic partner to a business.

Measures such as employee engagement deliver a much closer picture of the link between the people in a business and the overall business performance. An HR function which is able to prioritize its investments in financial, human and infrastructure resources and link these investments to improved business performance is placing itself at the heart of value creation.

HR performance metrics are measuring value creation within businesses. More sophisticated HR functions are using these metrics inside and outside of the function to broaden the scope of business management so HR leaders are now using robust data to measure the impact of investments.

For HR Professionals, the challenge is not so much how quickly they can embrace and deploy these value drivers, but more whether they can retain ownership of them before other disciplines claim them for their own.