Watch What You Say: Keeping Workers Informed

Communication from the top is a leading factor in employee motivation, morale and even loyalty, according to a study from consultancy Hay Group. But keeping workers informed is not something executives do well.

From its surveys of 1.2 million employees at 400 organizations, Hay Group reports that most give their companies poor marks for internal communication.

The study suggests that executives promote turnover when they don’t communicate clearly about where their organizations are headed.

“One of the most important predictors of employee commitment, and ultimately loyalty, is the connection between the individual and the big picture,” says Mark Royal, a Hay Group senior consultant who authored the study.

Among employees surveyed, only 49 percent said they were happy with the openness and honesty of communications within their organizations, while 42 percent said their organizations did not do a good job of informing them about the state of the business. Furthermore, fewer than half of respondents said that company executives do a good job of communicating major changes or informing them of the reasons behind decisions affecting them.

Hay Group also asked employees whether they intended to stay with their current company for more than two years. Fifty-seven percent of those who answered yes also expressed confidence in the direction communicated by senior company leaders. In contrast, among employees who said they would leave within two years, only 27 percent said they were clear where their companies were headed.

Employers fared a little better when it came to explaining how they assess workers’ performance. More than half of employees surveyed said they understand how their performance is judged. But in a separate survey of more than 1,200 compensation managers (conducted by Hay Group in conjunction with WorldatWork, an HR professional association), 65 percent of respondents said that half or fewer of employees understood their company’s philosophy for linking pay to performance. More than two-thirds gave low marks to their companies’ communications about pay.

That’s a bad sign for employee commitment, Royal says. “In high-workload environments, which increasingly describes many organizations, there’s pressure on companies to reward employee contributions,” he says. “But this is a time when compensation budgets are tight. That’s where communication is particularly critical.” Good communication “takes what might seem capricious about pay decisions and makes that easier for employees to understand and perhaps easier to accept,” he says.