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How Employee Development Effects the Bottom Line of an Organization

Last week I discussed the high cost of employee retention on the bottom line of an organization. To recap, the Center for American Progress found that the cost to replace a $10 per hour employee is approximately $3,328.00 while the cost to replace a highly educated and experienced CEO making $100K is approximately $213K. In today’s marketplace an organization must find ways to engage their staff to reach their bottom line. The most effective way to do this is to create solid and well thought out staff development programs.

Staff development is in essence the way an organization trains their employees on the business best practices of an organization. It also is what creates the underlying organizational culture. What many people fail to realize is that it is the most effective way to manage an organization’s culture and create a satisfied and dedicated work force. It creates a synergy that bonds the team and their commitment to the mission, vision, goals and objectives of the organization.

So why is staff development such a pivotal piece of the overall health, wellness and sustainability of an organization? The answer is simple – it is based on the basic human need to be connected and protected as a means to reaching their best selves. Maslow called this “Self-Actualization”, but what ever you call it, people will go to the ends of the earth for a leader or organization that builds a strong culture of relationship among its team and supports their basic needs. Money is of course a part of that, but relationship and staff skill building is at the crux of whether your staff stay with an organization or leave.

The psychology of an employee is a fascinating one to say the least, and something I have personally dedicated my life to. As Kaya Ismail points out “Employee engagement is an approach that fosters and creates optimum working conditions that enables staff to willingly commit to the organization’s goals and values while enhancing their sense of their well-being”. As pointed out by Executive Trainer Blake Morgan, companies that effectively engaged employees on the average perform 147% better than their competitors that do not have highly engage staff. Morgan also demonstrates, and as noted by Ismael, “79% of employees who work at companies that deliver above-average customer experience are highly engaged in their jobs, compared to the 49 % of employees who work at companies with either an average or below-average customer experience”.

This can be a challenge for many companies that fail to recognize this important connection and still operate from the much-outdated industrial view of management. Dr. Stephen Covey coined the phrase “The Knowledge Worker”, and in his paper Leading The Knowledge Worker Age, "We live in a Knowledge Worker Age, but operate our organizations in a controlling Industrial Age model that absolutely suppresses the release of human potential”. Covey believed that today’s workforce is more educated and aware of their options than ever before, and successful organization get that. When an organization can see from this new perspective, they treat their employees as an integral resource or asset rather than a replaceable throw away resource.

The message is clear – in today’s global economy, employee engagement is critical for the success of an organization. This will make the difference between if their workforce is going above and beyond, supporting one another, are uplifted and positive, demonstrate company dedication and a high level of effort and work quality versus a workforce that is withdrawn, closed off to one another, complain frequently, have attitude problems, miss work, under perform and generally do the bare minimum. In many cases, when an organization has a negative work culture, employees tend to re-balance the scales in very negative ways such as stealing, backstabbing the company and one another as well as lawsuits.

As an Industrial Organizational Psychologist, I can tell you I have seen many kinds of organizational structures throughout the globe. I have worked in numerous cultures from the Middle East, Europe, Mexico and the US/Canada and I have personally experienced what not to do versus a powerful and positive work environment. What I have also found is that despite culture, people are fundamentally similar in many ways in that they all have the same basic needs. This is why I develop training and development plans, that although customized to the organization I am working with, have the same 7 basic components. Those are; 1) a skilled and effective manager that will implement the plan well; 2) a solid 360 degree assessment of the organization as a means to develop an effective plan; 3) training that is directly aligned to the organizational mission / vision / goals and objectives; 4) an assessment tool that measures the goals and overall effectiveness of the plan; 5) training that is relevant and contains the critical elements necessary to reach the organizational goals and objectives; 6) leaders that support the training and model for their teams the importance of the training; 7) employee support and reinforcement of the training plan.

At the end of the day, everything we do is about human connection, and business is no different. The emotional and psychological connection people instinctively make with “their tribe” is one that cannot be denied, and is at the heart of the human experience. Organizations that understand this basic phenomenon can create a culture and connection with their workforce that will set them apart from their competitors. This can actually make or break a company over time because the power of relationships and building a web of interconnected relationships is how an organization and its workforce will weather the inevitable storms that come. Creating a solid staff development plan is how this is accomplished and what starts and maintains those relationships.

Western Education Institute can develop a customized accredited staff development plan for your organization. Click here to learn more about how WEI can assist you in developing your staff, meet your organizational goals and objectives and maintaining a healthy and productive organization.

Dr. Robin is an Industrial Organizational Psychologists and Dean of Curriculum and Program Administration at Western Education Institute. She also is an Executive Coach and Trainer at Dr.G Consulting

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