subject: Qualitative Variables in the New Millennium [print this page] Qualitative Variables in the New Millennium
Financial statement are one of the primary means for owners and investors to review the financial health of an organization. These statements review financial positions, earning statements and changes in owners' equity. In other words they review quantitative data of a company's assets. As we move forward into the 21st century more companies assets are of a qualitative basis for which there is yet a accounting model for which to review.
An engaged workforce is one of the most well known forces in an organization for which as of yet there is not a comparable review within the accounting field. An engaged workforce is one that is highly motivated, focused and driven to help a company succeed. Studies have shown that an engaged workforce is based on many factors, the least correlated of which is pay and benefits. Engagement is focused on variables which are outside of the norm for the accounting field including execution, career development and concepts such as fairness and honesty. These aspects cannot be studied in a way one would review net income against operating expenses yet hold just as much value.
The most efficient way to review engagement in the workforce is through an engagement survey. Topics can range from overall strategic direction and work supervision to compensation and performance reviews. Engagement surveys can be quantitative in their approach to reviewing employee feedback. Many surveys while having multiple statements will actually be focusing on four, five or six core factors. These factors take into consideration major elements of one's work life. Surveying employees in a confidential but not anonymous manner gives the employees the ability to express honest feedback while also enabling the organization to review the data in a format which will show them areas of success and areas of challenge.
It is not enough to simply review ones internal employee feedback. This is not unlike reviewing the financial statement of only one company when there are many organizations within the same field whose statements could be used to compare against. Reviewing employee feedback only compared to itself in many cases leads to a false understanding of what the employees responses are actually saying. For instance a company may review their employees responses and find they are least engaged to their pay and benefits and most engaged to the organizations direction. Now if one compares this to an aggregate response from a group of companies one may find they are actually stronger in pay and benefits then they initially thought and actually have a much less engaged workforce in direction then they assumed. To have a true understanding of employee feedback it must be compared to an external benchmark.
One can create benchmarks of many different varieties. The benchmark can be against organizations within the same industry, the same region or size. The goal is for one to see where there employees responses compare to other organizations of some comparable measure. Once comparable measurement has taken place then an organization can start having a real understanding of where they have issue areas and where there are areas of great strength. This leads to the next step of organizational development within the company.
Just as in an internal accounting review, if a company found an area where they were running a deficit they would make changes so should an organization that finds it has an engagement deficit make changes. Through organizational development a company utilizes the responses they have received to create a change agent. Through this the company and their employees are able to fix their own issues and move forward into a state of self renewal. Becoming self corrective is often a multi step process. First the organization needs to receive feedback based on the initial responses from the surveying of their employees. This can involve meeting where behavior and actions are reviewed and analyzed in a forum of what is working, what isn't working and what should be implemented. Then moving forward with action planning where through this feedback and in a collaborative process the organizations looks for ways to eliminate negative actions and behaviors and replace them with more effective means. Finally the company should move forward where the behaviors have been modified and new best practices are in place. The goal is for the company to become self corrective on an active level.
Through these actions an organization can take into accountability their employees engagement health as they would their own economic health. Not only will this provide companies with the means of taking qualitative variables and reviewing them in a quantitative manner but also the ability to take corrective actions as one would in an economic environment.
