Employee engagement as a management practice was first brought to the fore by the Gallup organization whose Gallup Management Survey of US workers found that "when it comes to innovation, business leaders aren't necessarily looking to traditional sources, like research and development departments, to contribute big new ideas.

Rather, they're counting on ideas from their employees, customers, and partners to help drive the organization forward. And engaged employees are most likely to contribute those innovations".

Engaged employees are also considerably more productive in good times and bad but it is in times of adversity, that the differences are more starkly highlighted. So what constitutes an engaged employee and what does it take (on a continual basis) to engage them?

Gallup suggests that engaged employees "works with passion and feels a profound connection to their company. They drive innovation and move the organization forward". This results in employees being more productive with the company being more profitable and safer while creating stronger customer relationships besides causing employees to stay longer with their company.

Much of the foregoing would seem intuitive to seasoned managers and yet fostering engagement remains a challenge particularly in adverse times. Unfortunately, a more recent Towers Perrin global survey shows that "only two out of 10 employees are truly engaged although nine out of 10 want to be".

That was despite prior research by the firm that underscored the many benefits of employee engagement including "additional discretionary effort by the employee beyond what was considered enough". A direct positive correlation between customer satisfaction and employee engagement was also identified.

The MGM Grand Hotel and Casino in Las Vegas seems to have taken the employee engagement idea to heart as an article from earlier this year in BusinessWeek indicates. The article quotes Charles A. Scherbaum, an associate professor in the psychology department at Baruch College, City University of New York who praises the company and its CEO Gamal Aziz for "understanding the payoff from stimulating its 10,000 employees." The professor notes that "There are a lot of great hotels in Vegas,"  but "What's going to differentiate MGM Grand? It's service, and that's the employees." Scherbaum observes that "In more difficult times, employee engagement is more critical as managers have to make a lot of negative decisions with real impact on employees." He notes that "96% occupancy won't continue. What's going to happen when they have to cut back on staff?"  Aziz, the company CEO agrees saying that he has "worked to keep employees aware of the challenges, including the broader capital crisis, group cancellations, and the fact that guests are not spending as much per visit." Remarkably, since few CEOs deign to think so, Aziz notes that "every challenge he faces in the corner office, the rank and file is aware of on some level."

But even the MGM Grand falls short in the eyes of the Baruch professor who thinks the company's "decision to cut funding for some of his leadership initiatives is a mistake that could prove short-sighted. The MGM Grand may have enough qualified managers now, but they run the risk of having a dearth when things rebound and they really need them."

That last observation remains the bane of companies across the spectrum of industries as this site has previously noted cutting costs by divesting oneself of leadership talent is a sure recipe for being behind the eight ball when the economy picks up. 

Vijay is Chief Operating Officer and part-founder of Apple Core Hotels- a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city.Member of the board of Directors - Hotel Association of New York.

www.vijaydandapani.com