Employee engagement is the level of employee commitment, pride, and loyalty, as well as the feeling of employees of being advocates for their company.
Capability Building > Employee Engagement
Because it is closely linked to how much a company develops its employees and supports their careers, internal hiring to management and expert positions positively affects employees’ commitment and loyalty. This hypothesis was confirmed by a study by Bedarkar & Pandita (2014), which identified “career opportunities” as the key driver of employee engagement.
Social Investment > Employee Engagement
By engaging our employees in social sabbaticals, their creating of significant social impact led to increased employee engagement.
Mueller et al. (2012) have found that employees’ perception of a company’s commitment to corporate social responsibility is positively linked to their own commitment to the organization.
Employee Engagement > Profitability
From 2014 to 2018, we used real data from SAP to analyze and proof the financial impact of employee engagement. We showed what a change by 1pp of employee engagement would mean for SAP’s operating profit.
Profitability > Employee Engagement
In our view, a high operating profit, as great business news, can raise employee morale, encourage identification with our purpose, and thus drive employee engagement. On the other hand, we believe that a high profit can also have a negative impact on employee engagement. For example, if cost savings and budget cuts are implemented to reach an ambitious profit target, employees might feel constrained and dissatisfied.
Business Health Culture Index (BHCI) > Employee Engagement
Since 2014, we have been using real data from SAP to analyze and prove the financial impact of the BHCI. We have been able to prove a significant positive correlation between the BHCI and employee engagement. The BHCI positively influences the Leadership Trust Index, which positively influences the Employee Engagement Index; all correlations are significant. This hypothesis was also confirmed by several studies, for example by Johnson, Sheena et al. (2018).
Employee Engagement > Employee Retention
From 2014 to 2018, we used real data from SAP to analyze and prove the financial impact of employee engagement. We were able to prove a significant positive correlation between employee engagement and employee retention.
Carbon Emissions > Employee Engagement
We believe that lowering SAP’s carbon emissions can have a positive impact on employee engagement because loyalty should rise as employees see their company act responsibly towards the environment. However, because lowering emissions also brings certain restrictions, such as on business travel, it may also have a negative impact on employee engagement.
Employee Engagement > Carbon Emissions
We believe that engaged employees are more likely to want to help SAP achieve our own target in lowering carbon emissions. Yet another possible outcome is that a higher level of employee engagement may lead to more business activity requiring travel, and therefore could lead to an increase in carbon emissions.
Employee Engagement > Growth
From 2014 to 2018, we used real data from SAP to analyze and prove the financial impact of employee engagement. We were able to prove a significant positive correlation between employee engagement and revenue.
Growth > Employee Engagement
We believe that higher revenue has a positive impact on a company’s work environment, thereby increasing employee pride and loyalty. This is also stated in a study of Harter et al. (2010), which states that improving financial performance appears to increase general satisfaction and some specific work perceptions.