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J. Lee Whittington is a s we continue to work our way through this most recent economic downturn, most of
Professor of Management
and Timothy J. Galpin is an
Associate Professor of
A those who are still employed are grateful. However, they may be grateful, but not
really committed to their current employer for the long haul. In fact, when the
economy heats up and opportunities become more abundant, many employees will leave
Management, both at the for what they perceive to be greener pastures. Managers need to be aware of this and work
College of Business, to build employee commitment now in order to avoid the costs of high turnover when the
University of Dallas, Irving,
economy returns to a healthier state.
Texas, USA.
A recent article in Business Week described the fact that in the midst of urgent economic
reality, many managers have overlooked some critical but elementary tasks in terms of their
employees. Yet the need to engage employees is particularly crucial during a recession,
when mantras such as ‘‘do more with less’’ seem to replace happy talk about the value of
human resources. Often, employees are required to take on extra duties after their
colleagues are laid off. But, with no financial incentive for doing so, affective commitment to
the organization begins to wear thin.
It is imperative that organizations focus on their employees now. Waiting to implement these
suggestions when people begin to leave will be too late. In this paper, we provide some
specific prescriptions for managers who seek to attract and retain a quality workforce. These
prescriptions are based on solid empirical research presented in an integrative model. The
purpose of this paper is to provide a bridge between solid academic research and the needs
of practicing managers. Therefore, rather than offering research propositions, we offer a
series of evidence-based engagement practices that provide a prescriptive framework for
managers seeking to enhance their employees’ commitment to the organization.
Creating a committed workforce requires organizational practices that emanate from both
macro and micro levels of the organization. However, macro-level human resource policies
alone will not create a high level of employee engagement. Thus, we present a model that
integrates elements of both macro and micro-level practices which lead to high levels of
employee engagement. As shown in Figure 1, we view engagement as the central construct
in this multi-level model. According to this model, engagement occurs within a context of
macro-level organizational practices we refer to as the HR value chain. Then moving to a
micro level we see leader behavior, job characteristics, and challenging goals as the
antecedents to employee engagement. When employees experience engagement, there
will be positive in-role and extra-role performance. Finally, we see trust as an important
enhancer of these relationships.
PAGE 14 j JOURNAL OF BUSINESS STRATEGY j VOL. 31 NO. 5 2010, pp. 14-24, Q Emerald Group Publishing Limited, ISSN 0275-6668 DOI 10.1108/02756661011076282
Figure 1 Integrative model of employee engagement
Organizational Strategy
(e.g. service excellence, innovation, low-cost provider)
Macro-Level
HR Value Chain
Recruitment, Selection, Performance Planning and Employee Separation
Orientation and Socialization Evaluation, Pay and Rewards,
Training and Development,
Career Development
Full-Range
Leadership
Micro-Level
Performance
Enriched ENGAGEMENT • In-Role
Jobs • Extra-Role
(OCB)
Goal
Setting
Trust
environments that provide a sense of challenge and meaningfulness for employees. Pfeffer
(1998) advocates the creation of new organizations that emphasize seven characteristics:
employment security, selective hiring of new personnel, self-managed teams and
decentralized decision-making as the basic principles of organizational design,
comparatively high compensation contingent on organizational performance, extensive
training, reduced status distinctions and barriers, and extensive sharing of financial and
performance information throughout the organization.
Many of the practices suggested by Pfeffer (1998) are macro-level practices. While these
have been associated with organizational success, these practices may lose their impact if
they are not supported by a complimentary set of micro level practices. Indeed, as Griffin
(1982, p. 153) observed: ‘‘the task that a person performs and the person to whom the
individual is responsible are probably the two most basic points of contact that employees
have in the organization.’’ The manner in which an employee perceives and responds to
these factors may ultimately determine the impact of the organization’s macro-level
practices. The best-intentioned macro-level high-performance practices may be
undermined by the actions of first line managers.
The need to focus on employee engagement was emphasized recently in the popular
business press. BusinessWeek (Holly and Clifton, 2009) cited work done by the Gallup
organization on levels of employee engagement:
Based on extensive, long-term research, Gallup has determined that less than 30% of the
corporate workforce is truly engaged in its work. That’s less than 30% of employees who work with
passion and feel a profound connection to their companies. Yet employee engagement leads to
increased customer engagement, which leads to real revenues and, eventually, more job
opportunities for others.
We address this need in the balance of this paper. First, we define employee engagement.
Then we provide an overview of the HR value chain. Within the overall context provided by
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VOL. 31 NO. 5 2010 JOURNAL OF BUSINESS STRATEGY PAGE 15
‘‘ It is imperative that organizations focus on their employees
now. Waiting to implement these suggestions when people
begin to leave will be too late. ’’
the HR value chain we then turn to a discussion of the leader behaviors and job
characteristics that have significant positive relationships with critical employee and
organizational outcomes.
For example, to gain employee commitment early, Proctor and Gamble has an established
college intern program as part of their new-hire process that assigns interns to work on high
profile projects visible by the CEO and other senior management (Ready and Conger, 2007).
While an extensive intern program can drain management resources (e.g. managers’ time
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PAGE 16 JOURNAL OF BUSINESS STRATEGY VOL. 31 NO. 5 2010
spent monitoring, mentoring, and coaching interns), Proctor and Gamble feels this is time
well spent because the company converts a much higher-than-industry-average of interns
into full-time employees who are productive from day one.
Once new hires are brought on board, a process of continuous employee development
begins. Pfeffer (2005) suggests that organizations which are excellent in this realm employ
a range of activities, including incentive pay, employee ownership, information sharing,
participation and empowerment, self-managed teams, training and skill development,
cross-utilization and cross-training, and promotion from within. The global financial services
firm HSBC reinforces its strategy of being the ‘‘world’s local bank’’ by developing local
talent while maintaining global standards including potential new-hire assessment,
recruiting, performance and career management, 360-degree feedback, and leadership
development. The firm also maintains a global talent pool of high-potentials who are given
assignments that cross geographic and organizational boundaries (Ready and Conger,
2007).
The last stage of the HR value chain addresses the exiting of talent from the organization.
How employees are let go from an organization can have as much, if not more, impact on
workforce engagement than either of the first two stages. Whether the choice for separation
is the company’s (employees being let go for integrity violations, non-performance, or
layoffs due to economic conditions) or is the employee’s choice (to pursue a new job,
retirement, or other aspirations), more than just the exiting employee is attentive to how the
process of separation is being handled. The people remaining in the organization also view
the way separations are addressed as a clear indicator of the value a firm places on its
workforce. It is important for employees who leave and those who stay to perceive that
termination process are conducted fairly. Welch (2005, p. 121) emphasizes the need for
companies to be fair and honest during all instances of employee separation. He stresses
that layoffs due to economic conditions should not be a surprise, ‘‘every employee, not just
the senior people, should know how a company is doing’’. Moreover, he contends that
separations for non-performance should be done with candor and with minimal humiliation.
When employee separations are conducted in a manner that demonstrates both respect
for the individual and the integrity of the organization, people leave with a sense of fairness.
This also helps foster a sense of engagement and commitment among those employees
who remain in the organization because they view the separation process as being fair
(a summary of the key engagement principles is displayed in Table I):
Key engagement principle 1. Employee engagement will be positively impacted when the
organization has an integrated HR value chain.
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VOL. 31 NO. 5 2010 JOURNAL OF BUSINESS STRATEGY PAGE 17
Table I Summary of key engagement principles
Key engagement principle 1 Employee engagement will be positively impacted when the
organization has an integrated HR value chain
Key engagement principle 2 When managers engage in a full-range of leader behaviors that
incorporate contingent reward and transformational behaviors,
employee engagement will be positively impacted
Key engagement principle 3 The level of employee engagement will increase when
employees work in jobs that are enriched by providing variety,
significance, and task identity
Key engagement principle 4 When employees are working to achieve challenging and
specific performance goals, their level of engagement will
increase
Key engagement principle 5 Engaged employees are high performers
Key engagement principle 6 Engaged employees go beyond the minimum requirements
specified in job descriptions and performance evaluations. They
are outstanding organizational citizens who engage in a wide
variety of extra-role performance behaviors
Key engagement principle 7 When employees have a high level of trust in their leader the
amount of engagement increases
practices may be even more important than the macro practices. In the next section we
discuss several proven strategies operating at the micro-level that have implications for
creating a high commitment organization.
Full-range leadership
During the past three decades, academic research and the popular press have been
dominated by the transformational paradigm. And for good reason – the outcomes
associated with transformational leadership are impressive. Transformational leadership has
consistently been linked to high levels of in-role performance (Whittington et al., 2004),
satisfaction with the leader (Podsakoff et al., 1990), employees’ affective commitment to the
organization (Whittington et al., 2004), and trust in the leader (Podsakoff et al., 1990).
Further, Whittington et al. (2004) find that transformational leadership is positively related to a
variety of organizational citizenship behaviors (OCBs). Lowe et al. (1996) provide additional
support for the strong positive relationship between transformational leadership and work
unit effectiveness.
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Transactional leadership
The essence of transactional leadership is the exchange of promises of reward for
performance. These exchanges are based on the leader identifying performance
requirements and clarifying the conditions under which rewards are available for meeting
these requirements. Transactional leadership is generally easily identifiable because the
behaviors involve concrete acts that are centered on key issues of employment such as
compensation, performance feedback, and rewards for performance such as promotions.
Transactional leaders address the self-interests of their followers by offering incentives for
the followers to achieve the goals identified by the leader (Avolio, 1999). These incentives
are structured in such a way that the leader can accomplish his or her goals and also satisfy
the interests of the followers. These transactions can take either of two forms: constructive
and corrective. Constructive transactions are those that are used to clarify expectations and
identify the linkages between performance and rewards. These transactions clarify the ‘‘line
of sight’’ between an employee’s performance and the rewards they can expect for meeting
those expectations. In contrast, corrective transactions focus on creating a desired change
in behavior, cooperation, or attitude. These transactions are somewhat negative in that they
clarify what must be done to avoid censorship, reproof, punishment, or other disciplinary
actions (Avolio, 1999).
Constructive and corrective transactions are both important to the effectiveness of
transactional leaders. When leaders honor the commitments associated with constructive
agreements and consistently apply corrective measures, these exchanges form a ‘‘compact
of expectations’’ (Avolio, 1999, p. 36). When these psychological contracts are kept,
followers develop positive judgments concerning the consistency and trustworthiness of the
leader.
Although transactional leadership is not enough to develop the full potential of followers, it is
a necessary transitional step in developing the trust between a leader and follower that is
required for transformational leadership to be implemented and become effective (Avolio,
1999). Transactional leadership behaviors provide a clear sense of the leader’s expectations
in terms of performance. When the leader consistently follows through with the rewards that
are promised in exchange for that performance, then trust and commitment are likely to
emerge. Mutual agreement on clear performance expectations also provides the basis for
the development of a high quality relationship between the leader and his or her followers.
Transformational leadership
Transformational leaders do more with their followers than simply develop conditional
exchanges and agreements. Their leadership style also includes one or more of the
following behaviors: idealized vision, inspirational motivation, intellectual stimulation, and
individualized consideration (Avolio, 1999; Bass and Riggio, 2005). These behaviors
transform followers and motivate them to transcend their self-interests for the good of the
organization.
Idealized vision refers to the role-modeling behavior of transformational leaders. These
leaders are admired, respected, and trusted. Consequently, their followers identify with and
attempt to emulate them (Bass and Avolio, 1994). To earn this credibility, transformational
leaders consider the needs of others over their own, share risk with their followers and
demonstrate high standards of moral conduct. These leaders engender faith in others by
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VOL. 31 NO. 5 2010 JOURNAL OF BUSINESS STRATEGY PAGE 19
‘‘ [. . .] transformational leaders consider the needs of others
over their own, share risk with their followers and
demonstrate high standards of moral conduct. These leaders
engender faith in others by empowering followers and
creating a joint sense of mission. ’’
empowering followers and creating a joint sense of mission (Avolio, 1999). Inspirational
motivation occurs through envisioning and articulating an attractive future that provides
meaning and challenge for followers (Bass, 1985). Clear expectations are communicated
with a demonstrated commitment to goals and the shared vision. Intellectual stimulation is
created by the transformational leader’s questioning of assumptions, reframing of problems,
and approaching existing situations from a fresh perspective (Bass, 1985). This behavior
encourages innovation and creativity. Participation and creative risk-taking are encouraged
without the fear of public criticism or penalty for departure from the leader’s ideas (Heifetz,
1994). Individualized consideration refers to the transformational leader’s mentoring role.
Through this role, the leader pays special attention to each individual’s need for achievement
and personal growth (Bass, 1985). Delegation is used as a developmental tool to advance
followers to successively higher levels of potential. Learning opportunities are created within
the context of a supportive environment to further facilitate the development of followers.
Leaders who exhibit this full-range of behaviors can expect ‘‘performance beyond
expectations’’ (Bass, 1985), as well as a wide variety of other positive outcomes in
organizational settings. Direct supervisors and managers are one of the primary points of
contact between an employee and the organization, thus it is important for them to engage in
a full-range of leadership behaviors:
Key engagement principle 2. When managers engage in a full-range of leader behaviors,
employee engagement will be positively impacted.
Job enrichment
Hackman and Oldham (1976) developed a model of task design that identified five core job
dimensions:
1. task variety;
2. task identity;
3. task significance;
4. autonomy; and
5. feedback.
Jobs that have these dimensions are said to be enriched and have a high motivating
potential. According to their model, the presence of these core dimensions produces three
critical psychological states: a sense of meaningfulness in the work, a sense of responsibility
for the work, and knowledge of the results of one’s work (KOR). These critical psychological
states in turn produce a variety of positive individual and organizational outcomes. Among
these are high internal motivation, high quality of work performance, high satisfaction with
the work, and low levels of absenteeism and turnover.
Griffin (1991) examines the relationships between task design and job satisfaction,
organizational commitment, and performance in a longitudinal field experiment. In his study,
Griffin combines five task characteristics (task variety, identity, significance, autonomy, and
feedback) into an overall motivating potential score (MPS). The MPS is significantly
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PAGE 20 JOURNAL OF BUSINESS STRATEGY VOL. 31 NO. 5 2010
positively related to job satisfaction and organizational commitment. Thus, enriched jobs
appear to lead to a wide variety of positive outcomes, including employee job satisfaction,
commitment to the organization, and performance:
Key engagement principle 3. The level of employee engagement will increase when employees
work in jobs that are enriched by providing variety, significance, and task identity.
Goal setting
The impact of goal setting on employee performance has been documented on a wide
variety of tasks (Locke and Latham, 1990) The robustness of the relationship leads Mento
et al. (1987, p. 74) to conclude that:
[. . .] if there is ever to be a viable candidate from the organizational sciences for elevation to the
lofty status of a scientific law of nature, then the relationships between goal difficulty,
specificity/difficulty, and task performance are most worthy of serious consideration. Certainly, if
nothing else, the evidence from numerous studies indicates that these variables behave lawfully.
The ‘‘lawful’’ nature of the impact of goal setting has been described as the high
performance cycle (Locke and Latham, 1990). The process begins with a high level of
challenge in the form of specific, difficult goals. When employees are committed to these
goals, receive adequate feedback, possess high self-efficacy and suitable task strategies,
high performance will result. If high performance leads to desired intrinsic and extrinsic
rewards, employees will experience high levels of satisfaction. High job satisfaction is, in
turn, strongly related to commitment, and consequently high intentions to remain in an
organization. Employees who are satisfied and committed – in a word, engaged – are then
ready to accept additional challenges. Thus, the cycle repeats itself. The high performance
cycle may lead to performance beyond expectations, extra-role behaviors, and commitment
to the organization:
Key engagement principle 4. When employees are working to achieve challenging and specific
performance goals, their level of engagement will increase.
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VOL. 31 NO. 5 2010 JOURNAL OF BUSINESS STRATEGY PAGE 21
‘‘ We agree with the observation that employees don’t quit
organizations, they quit bosses. Thus, it is important to
extend engagement efforts to the individual level of the
organization. ’’
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PAGE 22 JOURNAL OF BUSINESS STRATEGY VOL. 31 NO. 5 2010
gap between intended and perceived communication. They are willing to confront their own
hypocrisy (Quinn, 2004).
In contrast to these qualities, many leaders attempt to mask their inadequacies. These
pseudo-transformational leaders concentrate on cultivating an image or persona and close
themselves off from, rather than opening up to, others (Price, 2003). In the long run this
serves to foster mistrust and a sense of disconnection with followers and, ultimately, has a
negative impact on personal, team, and organizational outcomes.
The model presented here provides evidence-based prescriptions for increasing employee
engagement. As we have shown, engaged employees provide higher levels of
performance. There is a corollary implied by the model as well: failure to address these
factors will lead to low levels of engagement, low levels of performance, and could lead
potentially high performers to seek opportunities to flourish elsewhere. When the
engagement factor is ignored, the downward spiral of the cesspool syndrome (Bedeian
Keywords: and Armenakis, 1998) may be accelerated. Explicitly, disengaged employees may stay
Employee participation, during an economic slowdown; however, when opportunities begin to emerge as the
Leadership, economy bounces back those talented, but disengaged employees will be the first to leave.
Performance management, Investing the time, effort, and resources now to create an engaged workforce will ultimately
Trust reduce the cost of replacing those employees later.
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