StrategyDriven Business Politics Impacts Article | Business Politics Impacts – Cost of Employee Productivity Loss

StrategyDriven Business Politics Impacts Whitepaper | Business Politics Impacts – Calculating the Cost of Employee Productivity LossUnseen millions are lost by companies every year; the result of employees withholding the full commitment of their physical, intellectual, and emotional contributions. Surveys conducted by the Gallup Organization identified an 18 percent difference in productivity between the best and worst performing companies. Yet, as we shall explain, even the best performing companies have room for improvement.

Cost of the Unproductive

Gallup Organization studies reveal a startling lack of employee engagement. These studies show that within the average organization 33 percent of employees are ‘engaged,’ 49 percent are ‘not engaged,’ and 18 percent are ‘actively disengaged.’ Furthermore, employee productivity varied with the degree of employee engagement. Engaged employees apply the full measure of their abilities to the achievement of company goals, disengaged employees do just enough to satisfactorily get by, and actively disengaged employees may actually work against the achievement of corporate goals.

Applying some mathematical assumptions to the various employee engagement levels suggests that engaged employees are 100 percent productive (as productive as humanly possible), disengaged employees are 70 percent productive, and actively disengaged employees are 50 percent productive. Using these assumptions and Gallup’s finding that there exists an 18 percent productivity difference between top and bottom performing organizations suggests that top performers achieve an 88.7 percent overall productivity level, average performers 76.3 percent, and bottom performers 70.7 percent.

The difference in physical labor productivity between top and bottom performing companies with 250 employees making an average of $43,000 per year is estimated to be $1.94M annually.

Using the StrategyDriven Calculating the Cost of Employee Productivity Loss nomographs and method outlined here, organization leaders can gain a better appreciation for the direct monetary cost associated with diminished employee productivity associated with destructive workplace politics.

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