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An "engaged employee" is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers their organization's interests. According to Scarlett Surveys, "Employee Engagement is a measureable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn & perform at work". Thus engagement is distinctively different from satisfaction, motivation, culture, climate and opinion and very difficult to measure.
Employee Engagement is the extent to which workforce commitment, both emotional and intellectual, exists relative to accomplishing the work, mission, and vision of the organization. Engagement can be seen as a heightened level of ownership where each employee wants to do whatever they can for the benefit of their internal and external customers, and for the success of the organization as a whole. Employee engagement was described in the academic literature by Schmidt et al. (1993). A modernized version of job satisfaction, Schmidt et al.'s influential definition of engagement was "an employee's involvement with, commitment to, and satisfaction with work." This integrates the classic constructs of job satisfaction (Smith et al., 1969), and organizational commitment (Meyer & Allen, 1991). Harter and Schmidt's (2003) most recent meta-analysis can be useful for understanding the impact of engagement. Linkage research (e.g., Treacy) received significant attention in the business community because of correlations between employee engagement and desirable business outcomes such as retention of talent, customer service, individual performance, team performance, business unit productivity, and even enterprise-level financial performance (e.g., Rucci at al, 1998 using data from Sears). Some of this work has been published in a diversity context (e.g., McKay, Avery, Morris et al., 2007). Directions of causality were discussed by Schneider and colleagues in 2003. Employee engagement is derived from studies of morale or a group's willingness to accomplish organizational objectives which began in the 1920s. The value of mor le to organizations was a matured by US Army researchers during WWII to predict unity of effort and attitudinal battle-readiness before combat. In the postwar mass production society that required unity of effort in execution, (group) morale scores were used as predictors of speed, quality and militancy. With the advent of the knowledge worker and emphasis on individual talent management (stars), a term was needed to describe an individual's emotional attachment to the organization, fellow associates and the job. Thus the birth of the term "employee engagement" which is an individual emotional phenomenon whereas morale is a group emotional phenomenon of similar characteristics. In other words, employee engagement is the raw material of morale composed of 15 attitudinal drivers.(e.g.Scarlett 2001).
Studies by Consultants
Engaged employees care about the future of the company and are willing to invest the discretionary effort. Engaged employees feel a strong emotional bond to the organization that employs them. (Robinson)
Only 31% of employees are actively engaged in their jobs. These employees work with passion and feel a profound connection to their company. Peopl that are actively engaged help move the e organization forward. 88% of highly engaged employees believe they can positively impact quality of their organization's products, compared with only 38% of the disengaged.72% of highly engaged employees believe they can positively affect customer service, versus 27% of the disengaged.
68% of highly engaged employees believe they can positively impact costs in their job or unit,
compared with just 19% of the disengaged. Engaged employees feel a strong emotional bond to the organization that employs them. This is associated with people demonstrating a willingness to recommend the organization to others and commit time and effort to help the organization succeed. It suggests that people are motivated by intrinsic factors (e.g. personal growth, working to a common purpose, being part of a larger process) rather than simply focusing on extrinsic factors (e.g., pay/reward).
Eileen Appelbaum and her colleagues (2000) studied 15 steel mills, 17 apparel manufacturers, and 10 electronic instrument and imaging equipment producers. Their purpose was to compare traditional production systems with flexible high-performance production systems involving teams, training, and incentive pay systems. In all three industries, the plants utilizing high-involvement practices showed superior performance. In addition, workers in the high-involvement plants showed more positive attitudes, including trust, organizational commitment and intrinsic enjoyment of the work. The concept has gained popularity as various studies have demonstrated links with productivity. It is often linked to the notion of employee voice and empowerment.
It has been routinely found that employee engagement scores account for as much as half of the variance in customer satisfaction scores. This translates into millions of dollars for companies if they can improve their scores. Studies have statistically demonstrated that engaged employees are more productive, more profitable, more customer-focused, safer, and less likely to leave their employer. Employees with the highest level of commitment perform 20% better and are 87% less likely to leave the organization, which indicates that engagement is linked to organizational performance. For example, at the beverage company of MolsonCoors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. In fact, the average cost of a safety incident for an engaged
employee was $63, compared with an average of $392 for a non-engaged employee. Consequently, through strengthening employee engagement, the company saved $1,721,760 in safety c sts in o 2002. In addition, savings were found in sales performance teams through engagement. In 2005, for example, low-engagement teams were seen falling behind engaged teams, with a difference in performance-related costs of low- versus high-engagement teams totaling $2,104,823.3 (Lockwood).
Life insurance industry
Two studies of employees in the life insurance industry examined the impact of employee perceptions that they had the power to make decisions, sufficient knowledge and information to do the job effectively, and rewards for high performance. Both studies included large samples of employees (3,570 employees in 49 organizations and 4,828 employees in 92 organizations). In both studies, high-involvement management practices were positively associated with employee morale, employee retention, and firm financial performance. Watson Wyatt found that high-commitment organizations (one with loyal and dedicated employees) out-performed those with low commitment by 47% in the 2000 study and by 200% in the 2002 study.
In a study of professional service firms, the Hay Group found that offices with engaged employees were up to 43% more productive. The most striking finding
is the almost 52% gaps in operating incomes between companies
with highly engaged employees and companies whose employees have low -engagement scores. High-engagement companies improved 19.2% while low-engagement companies declined 32.7% in operating income during the study period
. For example, New Century Financial
Corporation, a U.S. specialty mortgage banking company, found that account executives in the wholesale division who were actively disengaged produced 28% less revenue than their colleagues who were engaged. Furthermore, those not engaged generated 23% less revenue than their engaged counterparts. Engaged employees also outperformed the not engaged and actively disengaged employees in other divisions. It comes as no surprise, then, that engaged employees have been statistically linked with innovation events and better problem solving.
Recent research has focused on developing a better understanding of how variables such as quality of work relationships and values of the organization interact and their link to important work outcomes. 84% of highly engaged employees believe they can posi ively impact the quality of their t organization's products, compared with only 31 percent of the disengaged.From the perspective of the employee, "outcomes" range from strong commitment to the isolation of oneself from the organization. The study done by the Gallup Management Journal has shown that only 29% of employees are actively engaged in their jobs. Those "engaged" employees work with passion and feel a strong connection to their company. About of the business units scoring above the median on
employee engagement also scored above the median on performance.Moreover, 54% of employees are not engaged meaning that they go through each workday putting time but no passion into their work. Only about of companies below the median on employee engagement scored above the
median on performance. Access to a reliable model enables organizations to conduct validation studies to establish the relationship of employee engagement to productiv ity/performance and other measures linked to effectiveness. It is an important principle of industrial and organizational psychology (i.e. the application of psychological theories, research methods, and intervention strategies involving workplace issues) that validation studies should be anchored in reliable scales (i.e. organized and related groups of items) and not simply focus on individual elements in isolation. To understand how high levels of employee engagement affect organizational performance/productivity it is important to have an a priori model that demonstrates how the scales interact. There is also overlap between this concept and those relating to well-being at work and the psychological contract. As employee productivity is clearly connected with employee engagement, creating an environment that encourages employee engagement is considered to be essential in the effective management ofhuman capital.
10 C¶s: I¶ve posted before on the importance of engagement (here, here and here). I recently stumbled across an interesting article ³The ten C¶s of employee engagement´ from The Ivey Business Journal which provides a number of insightful pointers as to what¶s required to improve employee engagement. The authors describe an engaged employee as a person who: ³«.is fully involved in, and enthusiastic about, his or her work«« Engaged employees care about the future of the company and are willing to invest the discretionary effort exceeding dutys call to see that the organization succeeds.´
The shocking part of the employee engagement challenge is that research indicates that only between 17% and 29% (depending on the resear ch) of employees are actively engaged in their job at any one time. This would mean that if you were a soccer or football team only 2 players -3 on the team would be 100% committed to the team¶s success. It seems to me that the odds of winning a game with only 2-3 players 100% committed to a teams success are pretty slim!
So, ³How can leaders engage employees¶ heads, hearts, and hands? by starting to apply the ³, following 10 C¶s of employee engagement: 1. 2. Connect: Leaders must show that they value employees. Employee engagement is a direct reflection of how employees feel about their relationship with the boss. Career: Leaders should provide challenging and meaningful work with opportunities for career advancement. Most people want to do new things in their job. For example, do organizations provide job rotation for their top talent? Are people assigned stretch goals?
Clarity: Leaders must communicate a clear vision. Success in life and organizations is, to a great extent, determined by how clear individuals are about their goals and what they really want to achieve. In sum, employees need to understand what the organization¶s goals are, why they are important, and how the goals can best be attained.
4. 5. 6.
Convey: Leaders clarify their expectations about employees and p rovide feedback on their functioning in the organization. Congratulate: Exceptional leaders give recognition, and they do so a lot; they coach and convey. Contribute: People want to know that their input matters and that they are contributing to the organization¶s success in a meaningful way. In sum, good leaders help people see and feel how they are contributing to the organization¶s success and future.
Control: Employees value control over the flow and pace of their jobs and leaders can create opportunities for employees to exercise this control. A feeling of ³being in on things,´ and of being given opportunities to participate in decision making often reduces stress; it also creates trust and a culture where people want to take ownership of problems and t heir solutions.
Collaborate: Studies show that, when employees work in teams and have the trust and cooperation of their team members, they outperform individuals and teams which lack good relationships. Great leaders are team builders; they create an environment that fosters trust and collaboration.
Credibility: Leaders should strive to maintain a company¶s reputation and demonstrate high ethical standards.
10. Confidence: Good leaders help create confidence in a company by being exemplars of high ethical and performance standards. Looking at the above list it seems that many of the characteristics are about practicing effective leadership. To me employee engagement is not really about the employees, it¶s really about effective leadership.
Employee engagement can be defined as an employee putting forth extra discretionary effort, as well as the likelihood of the employee being loyal and remaining with the organization over the long haul. Research shows that engaged employees: perform better, put in extra efforts to help get the job done, show a strong level of commitment to the organization, and are more motivated and optimistic about their work goals. Employers with engaged employees tend to experience low employee turnover and more impressive business outcomes. Employee engagement is more than just the current HR 'buzzword'; it is essential. In order for organizations to meet and surpass organizational objectives, employees must be engaged. Research has proven that wholly engaged employees exhibit, § Higher self-motivation. § Confidence to express new ideas. § Higher productivity. § Higher levels of customer approval and service quality. § Reliability. § Organizational loyalty; less employee turnover. § Lower absenteeism.
Focus on employee engagement: Current studies show that organizations are focusing on the meaning of employee engagement and how to make employees more engaged. Employees feel engaged when they find personal meaning and motivation in their work, receive positive interpersonal support, and operate in an efficient work environment. What brought engagement to the forefront and why is everyone interested in it? Most likely, the tight economy has refocused attention on maximizing employee output and making the most of organizational resources. When organizations focus attention on their people, they are making an investment in their most important resource. You can cut all the costs you want, but if you neglect your people, cutting costs won¶t make much of a difference. Engagement is all about getting employees to ³give it their all.´ Some of the most successful organizations are known for their unique work environments in which employees are motivated to do their very best. These great places to work have been recognized in such lists as Fortune¶s 100 Best Companies to Work For. The concept of engagement is a natural evolution of past research on high-involvement, empowerment, job motivation, organizational commitment, and trust. All of these research streams focus on the perceptions and attitudes of employees about the work environment. In some ways, there are variations on the same fundamental issue. What predicts employees ³giving their all?´ Obviously, all organizations want their employees to be engaged in their work. Several standardized tools exist for assessing employee engagement and providing feedback for making changes. These tools tend to have several common goals and characteristics: Create a simple and focused index of workplace engagement-Many organizations are using very short, simple, and easy to use measures that focus on the fundamentals of a great workplace. Instead of conducting broad culture/climate surveys with 100 or more questions, organizations are opting for a focused approach that measures fundamental qualities of the workplace that likely will be important 10 years from now (e.g., feedback, trust, cooperation). Allow for benchmarking-Most organizations want to know how they compare to other organizations. Using a standard measure of engagement allows organizations to see how they compare to other companies along a simple set of fundamental work qualities. Direct action-Engagement measures tend to be very actionable. This means that the organization can alter practices or policies to affect employees¶ responses to every item in the measure. Show relationship to company performance-Without a link to company performance or other critical outcomes, measures of engagement have little value. The whole idea behind engagement is that it leads to enhanced performance. The link to performance outcomes is a necessary underlying assumption of all engagement measures. Engagement Predicts Organizational Success Many studies have shown that investments in people (i.e., HR-related practices) have a reliable impact on the performance of organizations. The Bureau of Labor conducted a comprehensive review of more than 100 studies and found that people practices have significant relationships to improvements in productivity, satisfaction, and financial performance. Research has shown that when engagement scores are high, employees are more satisfied, less likely to leave the organization, and more productive.
Each organization is different and there are many factors that affect bottom-line outcomes; however, engagement scores can serve as meaningful predictors of long-term success. Some organizations use engagement scores as lead measures in their HR scorecards. When an organization can show the relationship between engagement scores and bottom-line outcomes, everyone pays attention to the engagement index. Establishing this critical link between people and performance helps HR professionals prove that people-related interventions are a worthwhile investment. Elements of Engagement Someresearches conclude that personal impact, focused work, and interpersonal harmony comprise engagement. Each of these three components has sub-components that further define the meaning of engagement. Personal Impact-Employees feel more engaged when they are able to make a unique contribution, experience empowerment, and have opportunities for personal growth. Past research (e.g., Conger and Kanugo, 1988; Thomas and Velthouse, 1990) concurs that issues such as the ability to impact the work environment and making meaningful choices in the workplace are critical components of employee empowerment. Development Dimensions International¶s (DDI) research on retaining talent (Bernthal and Wellins, 2000) found that the perception of meaningful work is one of the most influential factors determining employees¶ willingness to stay with the organization. Focused Work-Employees feel more engaged when they have clear direction, performance accountability, and an efficient work environment. Aside from the personal drive and motivation to make a contribution, employees need to understand where to focus their efforts. Without a clear strategy and direction from senior leadership, employees will waste their time on the activities that do not make a difference for the organization¶s success. Additionally, even when direction is in place, employees must receive feedback to ensure that they are on track and being held accountable for their progress. In particular, employees need to feel that low performance is not acceptable and that there are consequences for poor performance. Finally, employees want to work in an environment that is efficient in terms of its time, resources, and budget. Employees lose faith in the organization when they see excessive waste. For example, employees become frustrated when they are asked to operate without the necessary resources or waste time in unnecessary meetings. Interpersonal Harmony-Employees feel more engaged when they work in a safe and cooperative environment. By safety, we mean that employee trust one another and quickly resolve conflicts when they arise. Employees want to be able to rely on each other and focus their attention on the tasks that really matter. Conflict wastes time and energy and needs to be dealt with quickly. Some researches also find that trust and interpersonal harmony is a fundamental underlying principle in the best organizations. Employees also need to cooperate to get the job done. Partnerships across departments and within the work group ensure that employees stay informed and get the support they need to do their jobs.
Making Use of Engagement Measurement of employee engagement can have many applications in the organization. Earlier, it is mentioned that engagement could serve as a general index of HR effectiveness in an HR scorecard. Also, engagement measures serve as an easy way to benchmark the work climate against other organizations. Other uses include:
Needs Analysis-The fundamental issues measured in engagement provide a quick index of what leaders and HR need to do to make things better. In addition, items in engagement surveys tend to be very actionable. This means that leaders or others in the organization can take action that will affect the score on a single item. Evaluation-Many learning and performance interventions are designed to impact some aspe of ct engagement. When an engagement measure is used as a pre -implementation baseline, the impact of the intervention can be gauged by measuring post-implementation changes in engagement. Climate Survey-Some organizations like to use engagement measures as simple indexes of the workplace culture. While more extensive surveys are valuable, sometimes it¶s easier to focus attention on a few simple and proven factors. Leader or Department Feedback-Depending on the demographic information collected when the engagement measure is implemented, one can create breakout reports by department or leader. This means departments and leaders can gain a better understanding of how engagement in their groups differs from the rest of the organization. This information can be used to create development plans or plans for larger-scale interventions.
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