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Employee engagementFrom Wikipedia, the free encyclopedia

Employee engagement, also called worker engagement, is abusiness managementconcept. An "engaged

employee" is one who is fully involved in, and enthusiastic about theirwork, and thus will act in a way thatfurthers theirorganization's interests. According to Scarlett Surveys, "Employee Engagement is a measurable

degree of an employee's positive or negative emotional attachment to their job, colleagues and organization

that profoundly influences their willingness to learn and perform is at work". Thus engagement is distinctively

different from employee satisfaction, motivation and organisational culture. Employee engagement was

described in the academic literature by Schmidt et al. (1993). A modernised version of job satisfaction, Schmidt

et al.'s influential definition of engagement was "an employee's involvement with, commitment to, and

satisfaction with work. Employee engagement is a part of employee retention." 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.

The opposite of employee engagement is a zombie employee. A zombie employee is a disengaged employee

that will stumble around the office, lower morale and cost the company money.[1].

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 et 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 morale to organizations was 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 intrinsic and extrinsic

attitudinal drivers.(e.g. Scarlett Surveys 2001).

More recently employee engagement has become an area of focus within organizations for the purpose of

retention as a means of avoiding expensive employee replacement costs resulting from staff who voluntarily

quit their jobs.[2]According to SHRM (Society of Human Resource Management) the cost of replacing one $8
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per hour employee can exceed $3,500, which gives companies a strong financial incentive to maintain their

existing staff members through strong employee engagement practices.[3]

Contents

[hide]

1 Research studies

o 1.1 Emotional attachment

o 1.2 Involvement

o 1.3 Commitment

o 1.4 Life insurance industry

o 1.5 Productivity

2 Generating engagement

3 Drivers of engagement

4 Drivers of disengagement

5 Potential red flags

6 Initiatives

7 Engagement levels

8 References in popular culture

9 See also

10 References

11 Further reading

Research studies [edit]

Engaged employees care about the future of thecompanyand are willing to invest discretionary

effort.[4]Engaged employees feel a strong emotional bond to the organisation that employs them (Robinson),

which results in higher retention levels and productivity levels and lower absenteeism. When reliably measured,

positive employee engagement can be causally related or correlated to specific positive business outcomes by

workgroup and job type. Scarlett Surveys refers to these statistical relationships as engageonomics.

Emotional attachment [edit]

Only 31% of employees are actively engaged in their jobs.[5]These employees work with passion and feel a

profound connection to their company. People that are actively engaged help move the 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.[6]72% of highly engaged employees believe they can positively

affectcustomer service, versus 27% of the disengaged.[citation needed]68% of highly engaged employees believe
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_red_flagshttp://en.wikipedia.org/wiki/Employee_engagement#Drivers_of_disengagementhttp://en.wikipedia.org/wiki/Employee_engagement#Drivers_of_engagementhttp://en.wikipedia.org/wiki/Employee_engagement#Generating_engagementhttp://en.wikipedia.org/wiki/Employee_engagement#Productivityhttp://en.wikipedia.org/wiki/Employee_engagement#Life_insurance_industryhttp://en.wikipedia.org/wiki/Employee_engagement#Commitmenthttp://en.wikipedia.org/wiki/Employee_engagement#Involvementhttp://en.wikipedia.org/wiki/Employee_engagement#Emotional_attachmenthttp://en.wikipedia.org/wiki/Employee_engagement#Research_studieshttp://en.wikipedia.org/wiki/Employee_engagementhttp://en.wikipedia.org/wiki/Employee_engagement#cite_note-3


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they can positively impact costs in their job or unit, compared with just 19% of the disengaged.[4]Engaged

employees feel a strong emotional bond to the organization that employs them.[7]This is associated with people

demonstrating a willingness to recommend the organization to others and commit time and effort to help the

organization succeed.[8]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).[9]

Involvement [edit]

Eileen Appelbaum and her colleagues (2000) studied 15steel 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, includingtrust, organizational

commitment and intrinsic enjoyment of the work.[7]The concept has gained popularity as various studies have

demonstrated links withproductivity. It is often linked to the notion of employee voice andempowerment.[10]

Commitment [edit]

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 ofcommitmentperform 20% better and are 87% less likely to leave theorganization, which indicates that engagement is linked to organizational performance.[11]For example, at the

beverage company ofMolsonCoors, 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 costs in 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 [edit]

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
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and 4,828 employees in 92 organizations). In both studies, high-involvement management practices were

positively associated with employeemorale,employee retention, and firm financial performance.[7]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.[12]

Productivity [edit]

In a study of professional service firms, the Hay Group found that offices with engaged employees were up to

43% more productive.[13]Job satisfaction is also linked to productivity.[14]

The most striking finding[citation needed] 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[citation needed]. 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.[4]...

Generating engagement [edit]

Commitment theories are rather based on creating conditions, under which the employee will feel compelled to

work for an organization, whereas engagement theories aim to bring about a situation in which the employee

by free choice has an intrinsic desire to work in the best interests of the organization.[15]

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.[16]84% of highly

engaged employees believe they can positively impact the quality of their organization's products, compared

with only 31 percent of the disengaged.[4]From the perspective of the employee, "outcomes" range from strong

commitment to the isolation of oneself from the organization.[17]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.[7]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.[7]

Access to a reliable model enables organizations to conduct validation studies to establish the relationship of

employee engagement to productivity/performance and other measures linked to effectiveness.[16]
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It is an important principle ofindustrial 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 ana priorimodel that demonstrates how the scales interact.[18]

There is also overlap between this concept and those relating towell-being at workand thepsychological

contract.[7]Research by Gallup Consulting has shown a strong correlation between the degree of well-being of

an individual and the extent to which they are engaged as an employee - high well-being yields high

engagement. A well and engaged employee is likely to have less sick days, lowering the cost of lost

productivity to their organization, and come to work energized and focused. A well and engaged employee is

efficient and effective and a valuable asset in the workplace.

As employeeproductivityis clearly connected with employee engagement, creating an environment that

encourages employee engagement is considered to be essential in the effective management ofhuman

capital.[17]

Drivers of engagement [edit]

While it is possible to measure engagement itself through employee surveys, this does not assist in identifying

areas for improvement within organisations. There are a range of factors, known as drivers, that are thought to

increase overall engagement. By managing the drivers, an organisation can effectively manage engagement

levels of its employees. Drivers such as communication, performance clarity and feedback, organisational

culture, rewards and recognition, relationships with managers and peers, career development opportunities andknowledge of the organisation's goals and vision are some of the factors that facilitate employee engagement.

Some points from the research are presented below:

* Employee perceptions of job importance - "...an employee's attitude toward the job's importance and the

company had the greatest impact on loyalty andcustomer servicethan all other employee factors combined."[4]

* Employee clarity of job expectations - "If expectations are not clear and basic materials and equipment are

not provided, negative emotions such as boredom or resentment may result, and the employee may then

become focused on surviving more than thinking about how he can help the organization succeed."[8]

* Career advancement/improvement opportunities - "Plant supervisors and managers indicated that many

plant improvements were being made outside the suggestion system, where employees initiated changes in

order to reap the bonuses generated by the subsequent cost savings."[18]

* Regular feedback and dialogue with superiors - "Feedback is the key to giving employees a sense of

where theyre going, but many organizations are remarkably bad at giving it."[8]"'What I really wanted to hear

was 'Thanks. You did a good job.' But all my boss did was hand me a check.'"[13]
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* Quality of working relationships with peers, superiors, and subordinates - "...if employees' relationship

with their managers is fractured, then no amount of perks will persuade the employees to perform at top levels.

Employee engagement is a direct reflection of how employees feel about their relationship with the boss."[17]

* Perceptions of the ethos and values of the organization - "'Inspiration and values' is the most important of

the six drivers in our Engaged Performance model. Inspirational leadership is the ultimate perk. In its absence,

[it] is unlikely to engage employees."/>

* Effective Internal Employee Communications - which convey a clear description of "what's going on". "'If

you accept that employees want to be involved in what they are doing then this trend is clear (from small

businesses to large global organisations). The effect of poor internal communications is seen as its most

destructive in global organisations which suffer from employee annexation - where the head office in one

country is buoyant (since they are closest to the action, know what is going on, and are heavily engaged) but its

annexes (who are furthest away from the action and know little about what is happening) are dis-engaged. In

the worst case, employee annexation can be very destructive when the head office attributes the annex's low

engagement to its poor performance when its poor performance is really due to its poor communications.

* Reward to engage - Look at employee benefits and acknowledge the role of incentives. "An incentive to

reward good work is a tried and test way of boosting staff morale and enhancing engagement." There are a

range of tactics you can employ to ensure your incentive scheme hits the mark with your workforce such as:

Setting realistic targets, selecting the right rewards for your incentive programme, communicating the scheme

effectively and frequently, have lots of winners and reward all achievers, encouraging sustained effort, present

awards publicly and evaluate the incentive scheme regularly.[19]It further tends to improve the overall

productivity.

Drivers of disengagement [edit]

Primary drivers of employee disenagement
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The drivers of employee disengagement are not all the same as the drivers of engagement. In a statistical

analysis of employee engagement and disengagement across 150 organizations,[20]CustomInsight found that

the most common drivers of disengagement include:

Problems with direct supervisors (poor employee-manager relationships) account for 49% of disengaged

employees. This finding is specific to disengaged employees. Good employee-manager relationships are

usually a prerequisite for engagement but not something that leads to higher levels of engagement.

Lack of respect for or confidence in senior leadership, lack of organization direction (strategic alignment),

poor performance and quality standards, and related topics account for 33% of disengaged employees.

These areas are drivers of engagement as well - things that drive engagement as well as disengagement.

Basic Needs compensation, workplace conditions, and related topics account for the remaining 18% of

disengaged employees. If basic needs are not being met, employees are disengaged, but once those

needs are met, these things do not drive higher levels of employee engagement.

Primary drivers of employee disenagement - breakdown of causes related to managers

Breakdown - Types of Manager Disengagement

Among the 49% of employees whose disengagement is related to their managers, CustomInsight identified four

distinct clusters i.e. the most common scenarios.,[21]

11% of disengaged employees rated their managers low, but still gave (relatively) high marks to senior

leadership and the organization as a whole. In other words, these employees are specifically disengaged

with their managers, but they distinguish this from how they feel about the organization overall. The

problems employees in this group have with their managers are broad-based, indicating employee-

manager relationships that are generally dysfunctional or toxic.

15% are disengaged with their managers due to poor accountability, communication, direction, and

feedback. These are managers who are not communicating expectations and direction, helping employees

set goals, or holding people accountable.
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12% are disengaged with their managers due to a lack of recognition, teamwork, and personal expression.

These are managers who are not building relationships and supporting the emotional or interpersonal

needs of their employees.

11% are disengaged with their managers due to a lack of autonomy, fairness, and personal expression.

These employees gave their managers (relatively) high marks for accountability, meaning these managers

are doing a good job of driving and enforcing, but they are failing to give their employees enough respect

and freedom.

Potential red flags [edit]

Inappropriate use of Benchmark Data - some of the more well established Employee Engagement survey

companies will state that the most important part of post survey follow up is related to comparison of

internal survey data to numerous external benchmarks. This seems to have rubbed off onto internal

sponsors who demand very specific benchmarks. Whilst some research analysts claim that the standard

comparisons by industry sector are flawed others disagree. Is it right to compare a Bentley employee to

one from Vauxhall (GM) because they are in the same automotive sector? The alternative argument is that

both organisations would likely draw from similar worker pools and would as such wish to better

understand expectations of workers in that industry and how they compare to competing employers.

A focus on data gathering rather than taking action may also damage engagement efforts. Organizations

that survey their workforce without acting on the feedback appear to negatively impact engagement

scores.[5]

According to the Conference Board and other recent studies, employee engagement has deteriorated

significantly in the US and the UK over the last five years. Measuring and managing the wrong or

incomplete set of engagement drivers is partly if not mostly to blame. Rigorous engagement measurement

encompasses 15 attitudinal drivers formed by employee experiences.

Initiatives [edit]

Some of the initiatives commonly undertaken by HR departments towards employee engagement are:[22]

On-boarding: When an employee joins the organisation s/he needs to be exposed to the organisations

policies and culture. There may be some fresh out of campuses that need to know the basics of

communication skills and job related skills. During the induction programme itself, they can be given an

exposure about these aspects, skills sets and the expectations. The on-boarding event experience itself

leaves a mark on the minds of the new recruits about the companys desire to enhance their skills.
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Learning and development events: When business practices and processes are changing. In this

environment, there is an acute necessity for enhancing the skill levels of employees already discharging

various functions.

Engagement levels [edit]

Organisations that believe in increasing employee engagement levels concentrate on the following levels:[23]

Culture: It consists of a foundation of leadership, vision, values, effective communication, a strategic plan

and HR policies that are focussed on the employee. Commitment - It is the foundation of engagement.

Employees with high level of organisational commitment are willing to exert considerable effort for the

organisation and make discretionary contributions.

Cooperation: It encompasses positive relationship among employees within a group. It is the inherent

willingness of individuals working in a team to pull in the same direction and achieve organisational goals.

Taking responsibility: Taking initiative and responsibility to become a part of the solutions is an important

ingredient of engagement. For an employee to display loyalty towards his organisation, the first thing he

needs to do is to take responsibility. Taking responsibility refer to feeling empowered. Employees who

feel empowered have a sense of belonging and excitement about their jobs, they feel engaged at an

emotional level and are willing to give their best all the time.

References in popular culture [edit]

Dilbert comic strip

OneFTE comic stripSee also [edit]

Corporate social responsibility

Human Resources

Organizational commitment

Empowerment

Flow (psychology)

Positive psychology

Internal marketing

Brand engagement

Work engagement

Onboarding

Internal communications
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Employee Engagement".Ivey Business Journal. Retrieved 2013-01-24.

5. âbBlessingWhite (December 2010).Employee Engagement Report 2011. Retrieved 2010-12-12.

6. ^http://www.towersperrin.com/tp/getwebcachedoc?webc=HRS/USA/2008/200802/GWS_handout_web.pdf

7. âbcdefKonrad, Alison M. (March 2006)."Engaging Employees through High-Involvement Work

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19.^Derrick Hardman, Capital Incentives (part of Accor Services),Reward to Engage > rewards, benefits and

employee engagement in today's organisations

20.^Gutzman, David."Employee Enagement vs. Disengagement". CustomInsight. Retrieved 26 April 2013.

21.^Gutzman, David."Employee Enagement vs. Disengagement". CustomInsight. Retrieved 26 April 2013.

22.^"deccanherald". Retrieved 18 November 2012.

23.^"Deccan Herald". Retrieved 18 November 2012.

Robinson, D., S. Perryman, and S. Hayday (2004)."The Drivers of Employee Engagement".Institute for

Employment Studies. Retrieved 2006-11-07.

Wilkinson, Adrien (1998). "Empowerment: Theory and Practice". Personnel Review27: 40

56.doi:10.1108/00483489810368549.

CIPD Staff (2008)."Employee Engagement". CIPD. Retrieved 2008-10-01.

Further reading [edit]

Brady, Chris & MacLeod, David (2008). The Extra Mile - How to Engage Your People to Win.

MacLeod, David & Clarke, Nita (2009). Engaging for Success: enhancing performance through employee

engagement.

Ayers, Keith (2008). Engagement Is Not Enough: You Need Passionate Employees to Achieve Your

Dream.

Kahn, William A. (1990). Psychological Conditions of Personal Engagement and Disengagement at Work.

The Academy of Management Journal, Vol. 33, No. 4 (Dec., 1990), pp. 692

724.http://www.jstor.org/stable/256287

Harter, James K.; Schmidt, Frank L.; Hayes, Theodore L. (2002). Business-unit-level relationship between

employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of

Applied Psychology. Vol 87(2), Apr 2002, 268-279

Kruse, Kevin (2012).Employee Engagement2.0.

Macey, Schneider (2008). The meaning of employee engagement. Industrial Organizational Psychology.

McKay, Avery, & Morris (2008). Mean racial and ethnic differences in sales performance: The moderating

role of diversity climate. Personnel Psychology, 61, 349-374.

Meyer & Allen (1991). A three component conceptualization of organizational commitment. Human

Resource Management Review, 1, 61-89.

Rayton, Bruce A., Dodge, Tanith & D'Analeze, Gillian (2012).Employee Engagement - The

Evidence.Engage for Success.

Rucci, Quinn, Kim (1998). The employee-customer profit chain. Harvard Business Review, pp. 8397.
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Smith, Kendall, & Hulin (1969). The measurement of satisfaction in work and retirement: A strategy for the

study of attitudes.

Schneider, Hanges, & Smith (2003). Which comes first: employee attitudes or organizational financial and

market performance? Journal of Applied Psychology

Treacy, Michael (2006). Double Digit Growth.

Scarlett, Ken (2010) "Quality Employee Engagement Measurement" Pages 108-122 as featured in "The

New HR Analytics" by Dr. Jac Fitz-enz.

Morrell, Finlay (2011), 90 Steps to Employee Engagement & Staff Motivation. 200 pages.

"90stepengagement.com"

Karsan, Rudy & Kruse, Kevin (2011).WE - How to Increase Performance and Profits through Full

Engagement.

National Business Research Institute, Inc. The Importance ofEmployee EngagementInfographic (2011)

http://www.ehow.com/info_8072523_purpose-employee-engagement.html

Employee engagement is an accurate measure of workplace satisfaction. Workplaces in which

employees are alienated and unengaged tend to be unpleasant places to work, with high turnover rates.

Companies that succeed in increasing the engagement levels of their employees are rewarded not only

by happier employees, but by happier customers, higher profits and higher retention rates of both

employees and customers.

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Employee Retention

Engaged employees feel a personal connection to their workplace, the company for whichthey work and their coworkers. Alienated employees, on the other hand, are primarily at

work for a paycheck and will quickly leave if given a better offer. Every time an employeeleaves a company, the company is faced with the time, effort and expense of finding andtraining a new employee. High levels of employee retention lead to a higher percentage ofexperienced employees and lower hiring costs, both of which contribute to the financialhealth of the company.

Customer Retention

When employees stay with the company for the long term, they create stable and well-integrated workforces. This leads to skilled and competent performance of work duties,

which leads to customers who are satisfied with the service they receive. Thus, employeeretention leads directly to customer retention. Customer retention is a primary factor in thefinancial health and profitability of a company. Brand and company loyalty on the part of
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customers creates a solid and dependable customer base, which provides an ongoing cashflow to the company.

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engagement.html#ixzz2Ulg3N757

Increased Profits

Employee engagement is at the root of both employee and customer retention, both ofwhich contribute to increased profits. Increased profits are the primary goal of companyshareholders. Therefore, shareholders who seek increased profits should find ways toincrease employee engagement. By maintaining a positive work environment and providingsuperior pay levels and benefit plans, shareholders can keep workers within their companieshappy while simultaneously increasing their own profits.

Workplace Satisfaction

The elements of employee engagement and workplace satisfaction reinforce each other.Higher levels of employee engagement lead to higher levels of workplace satisfaction, whichin turn lead to higher levels of employee engagement. This is a cycle of profitability that

business managers, owners and shareholders would do well to nurture within theirorganizations. By demonstrating to employees that a company is willing to go the extradistance for them, that company can secure the loyalty and engagement of those employeesand make the process of employment and profit more enjoyable and successful for everyoneinvolved.

Read more:Purpose of Employee Engagement | eHowhttp://www.ehow.com/info_8072523_purpose-employee-

engagement.html#ixzz2Ulg9MxOC
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