There's an often forgotten way to boost employee motivation, productivity and performance, and it won't cost your organization a dime. What is this management practice? Better communication between managers and employees.

Communication is a powerful and often-underutilized workplace tool. As I wrote in previous posts, it's key to building manager-employee trust and coaching for performance. Effective communication also increases employees' engagement with their jobs and the business. After all, an engaged and happy employee is more productive and performs better than one who is not.

A new study reinforces the importance of communication and suggests that performance may be taking a hit because not enough information is being shared – or sought – by managers. The consulting firm European Leaders surveyed 2,000 workers in June and found that 64% would work more efficiently if they were better motivated. Moreover, they also say that their overall performance would improve if senior management communicated more effectively.

Another set of answers revealed signs of no or poor communication. European Leaders found that 68% of respondents failed to understand their company's vision. Only 18 percent described their employer as a "good" company. It's not hard to see why these employees don't feel motivated. A number of studies have shown that motivation impacts performance and productivity

In addition, a large percentage of these workers believe strong management is key to maintaining motivation in the workplace. Managers, they say, must communicate passion and enthusiasm for the job – and challenge employees. The best managers, the respondents said, know how to motivate the workplace and make jobs more engaging. In short, they're great communicators.

"A seemingly negligible investment can get teams much closer to their full potential performance, resulting in a happier workforce and significant financial benefits,” says Ashley Ward, director of European Leaders. Managers, however, shouldn't only be talking. Effective communication also includes listening, observing and asking appropriate questions.

More than a third of respondents to the European Leaders survey said good managers should notice when a worker has talent that's not being put to use. At the same time, only 36% said their talents are being fully utilized on the job. Another 15% claimed they have skills from outside the job that could be put to use in the office – if the manager only asked.

"The fact that people want to be more involved in their work and their company shows they think about their employer’s business and care about how they’re managed," Ward says. Most employees want to perform at a high level and contribute to the greater good of the organization, but many aren't sure how best to do it.

An effective manager will not only ask questions, listen to answers and observe behaviours, but also use that information to help workers achieve their highest potential. At the very least, workers will get a much clearer sense of direction from their boss. Managers who communicate effectively with employees at a personal level also are more likely to discover previously unknown talents. Employees will feel more connected to their employer and, ultimately, more motivated, engaged and productive. It's a big payoff for a minimal investment.

Reference Leadership? What Leadership? Lack of Management Communication Is Holding Back UK Plc, Claims European Leaders