Editor's Note: Today's Classic features Derek Irvine with some data and insights about the importance of employee engagement - even (and some might argue especially) in a union environment. The questions raised here are very relevant today, particularly as we consider today's organization efforts around some of the new work models, including those featuring independent contractors (think Uber and Lyft).
Unions. That word alone sparks an emotional reaction in people. Before you read further, what was your reaction to that word? Appreciation, expectation, anger, loathing, indifference?
The reality of unions is they came into existence to protect employees where company leadership refused to. Regardless of industry or job role, unions rose up to defend employee interests, even the most basic such as the right to survive a day’s work. Literally.
In today’s workplace, unions still have power when they need to step in for employee rights. There are strong arguments that the union has run its course in some fields. Anger or just disbelief over union actions in France this week is making headlines around the world. Regardless of your position on unions, the bottom line in private-sector companies is that leadership would not have to be concerned about unionization in their workforce if they create a work environment in which employees do not see a need unionize, in which employees feel their interests are attended to, they have a safe and fair work environment, they are not just allowed but encouraged to work and achieve to their full potential.
Ann Bares, our editor here on Compensation Café, recently wrote on her Compensation Force blog about Union Employees & Variable Pay, citing recent Hewitt research showing that “13% of union employees working at the 130 organizations covered by the study are participating in a variable pay (incentive) plan."
What does this mean? To me, it implies that even in a unionized environment, where every detail of compensation is negotiated to be equal, people still crave acknowledgment when they go above and beyond, when they do the exceptional, when they put their best into helping the company achieve its objectives.
Research out of Gallup found, unsurprisingly:
“Whether unionized or not, world-class organizations have two crucial things in common: They recognize that talented managers are the core of an organization’s success, and they understand and leverage the fact that engagement predicts performance.”
Should you consider introducing variable pay or any other form of recognition into a unionized environment? Consider these statistics from the Gallup report reference above:
- 38% of union employees are engaged.
- 45% of non-union employees are engaged.
- Union workgroups are at the 39th percentile in Gallup's global employee engagement database and have, on average, 6% lower productivity compared to the median.
- Non-union workgroups are at the 45th percentile in Gallup's global employee engagement database and are on par with average productivity among all groups in the global database.
- 17% of union workgroups, compared to 22% of non-union workgroups, are in the top quartile of Gallup's global employee engagement database. Groups in the top quartile are considered best practice.
- 34% of union workgroups, compared to 26% of non-union workgroups, are in the bottom quartile of Gallup's global employee engagement database. Groups in the bottom quartile are considered low performing -- not only for engagement, but for business outcomes as well.
And now consider this from Gallup research released last month:
“If employee perceptions are the main cause of financial performance rather than the reverse, we know that managers can take action to improve employee perceptions and therefore have an impact on the bottom line.”
That’s right. Employee engagement leads to financial performance, not the other way around. Regardless of union or non-union, engaged employees deliver more to your bottom line. Now what do you think about adding programs that can influence employee engagement, even in a union environment?
As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.