Over the past few years, much research has done to understand what employee engagement means. Simply put, it is the process of strengthening the psychological contract between the and the organization. Well engaged employees
• positively influence other employees and help create a good organizational culture
• promote the organization as a preferred employer
• are more productive and thus increase the profitability of the organization
• provide better customer service
• are more enthusiastic about their work and more satisfied with their jobs
• stay with the employer for longer periods of time
Their personal goals overlap with those of the organization and therefore they are willing to go the extra mile to help the organization achieve their business objectives.
Through this report we will explore what employee engagement means, some related concepts, how it is beneficial for the organization and the results of investing energy into creating a more engaged workforce.
1.1 Analyse the meaning, principal dimensions and components of ’employee engagement’ and compare with other related concepts.
Employee engagement is the emotional attachment employees feel towards their place of work, job role, position within the company, colleagues and culture and the affect this attachment has on wellbeing and productivity. (HRZone, 2018) An engaged employee buys into the culture and goals of the organization and cares about the physical, mental and emotional efforts they make to align their own goals with those of the organization. Engaged employees exhibit organizational citizenship behaviour by taking ownership of their contribution to the success of the organization.
It is important to note that employee engagement and employee satisfaction are different concepts.
Employee Satisfaction only indicates how happy or content employees are, but does not address their levels of motivation, involvement, or emotional commitment. So making changes based on employee satisfaction does not necessarily lead to increased engagement.
(State of Employee Engagement in 2018, Report by Glint)
CIPD proposes three dimensions that make up employee engagement – intellectual, affective and social engagement.
• Intellectual engagement reflects the employees’ desire to deliver to the role expectations and the efforts they make to increase their own efficiency
• Affective engagement refers to the emotional investment of the employees and the extent to which they expect achieving organizational goals as a means to achieving their own goals too.
• Social engagement reflects appreciating the contribution of one’s colleagues and the effort one makes towards team work and collaborative efforts.
Institute of Employment Studies (IES) has proffered that the main driver of engagement is a sense of feeling valued and involved. The main components of this are:
• involvement in decision-making
• freedom to share ideas
• feeling enabled to perform well
• having opportunities to develop the job
• feeling the organisation is concerned for employees’ health and well-being.
Comparison with similar concepts
Engagement Commitment Involvement Job satisfaction Motivation
Refers to the desire of the employees that encourages them to go above ; beyond the call of duty to further the causes of the organization Refers to the employee’s identification with the goals of the organization Entails involving the employees by giving them a chance to participate in decisions that impact them, process improvement plans & exercises Mean less investment into the goals of the organization, but more focus on oneself with respect to the job/role at hand Often motivated by a reward or desired result. Mayor may not be aligned with the organizational goals
Measures affiliation and effort High accountability for success Employees may not be giving their best Deals with how happy people are in the office Based on getting something in return for one’s efforts
1.2 Justify the need for alignment between engagement practices and other corporate components if the full benefits of high engagement are to be realised.
Engaged employees think and feel positively about the organization and have a greater propensity to engage in discretionary efforts designed to achieve organizational goals. Research clearly shows that levels of employee engagement are directly proportional to better business performance across a variety of indicators.
Some of the key metrices that substantiate the need for alignment between employee engagement and business success are:
Employee satisfaction ; job performance A fortune 100 company study found that disengaged employees measured a 1,000% percent increase in errors compared to engaged employees. (Source: Gonring)
Increased productivity ; employee retention • 37% of engaged employees are looking for jobs or watching for opportunities, as are 56% of not engaged and 73% of actively disengaged employees. (Source: Gallup, Knurr, 2018).
• Disengaged employees actually cost organizations between £330 – £400 billion annually. (Officevibe, 2018)
• In the UK, disengagement has been calculated to cost £2,048 per employee. (Hive.HR, 2018)
Reduced sickness, absenteeism and turnover • Engaged employees are 87% less likely to leave an organisation than the disengaged. (Source: Corporate Leadership Council)
• In the UK, engaged employees take 2.7 days off per year compared to 6.7 days for disengaged employees. (Source: CBI)
Better customer service ; retention • 70% of engaged employees indicate they have a good understanding of how to meet customer needs; only 17% of non-engaged employees say the same. (Source: Wright Management)
• Customer retention rates are 18% higher on average when employees are highly engaged (Source: Cvent)
Improved Innovation ; Creativity Higher levels of engagement are strongly related to higher levels of innovation. 59% of engaged employees say that their job brings out their most creative ideas against only 3% of disengaged employees. (Source: Gallup)
Increased Profitability • Companies with engaged employees generate up to 2.5 times more revenue in comparison with competitors with lower engagement levels, and up to 26% higher revenue per employee. (Themuse.com, Knurr, 2018)
• A study of 64 organizations revealed that organizations with highly engaged employees achieve twice the annual net income of organizations whose employees lag behind on engagement. (Source: Kenexa)
2.1 Identify the principle drivers of employee engagement and evaluate the business benefits for the organisation and different stakeholders
The key drivers of employee engagement
A study conducted by Willis Towers Watson revealed the following engagement drivers:
(Willis Towers Watson, 2018)
Salary obviously effects employees’ happiness quotient. Any perceived inequality will have a negative impact on the employees, but if they believe they are being offered competitive compensation, they are more likely to be happy with the organization and therefore more engaged.
• Strategic alignment, sense of being valued and a good organizational culture
The most engaged organizations ranked feeling valued and trust in senior leaders the most favourably. Organizations where the employees can see a link between their jobs and the vision and aims of the organization, and have faith in the capability of the leadership to achieve those goals reflect higher engagement figures. Because these organization have successfully linked the organization’s goals with the goals of the employees, they have successfully inspired and encouraged their employees to emotionally invest in the success of the organization. Their employees are aware of the value the leadership has placed on them, and they know that their opinions and their voices will be heard.
• Engaging Managers
The extent to which employees feel that their managers listen to their views and opinions, and value their contributions has a big impact on employee engagement. One study found that 75% of the employees leave their jobs because of their managers/bosses. (Officevibe, 2018) So organizations where the top down approach is focussed on building strong working relationships, clearly defining expectations, offering good support structures and developing cohesive teams definitely have a more engaged workforce.
• Role autonomy
Employees are far productive in organizations that respect their freedom and encourage self-expression. Authority should be decentralized and employees should have more scope for decision making. This increases employee engagement, brand loyalty, productivity and profitability
• Scope for growth, recognition and constructive feedback
Offering the potential for growth through training and other programs makes the employees feel that the organization is invested in them and they are more likely to feel engaged. Recognition and rewards help employees feel more competent and enhances their self-esteem. Providing regular constructive feedback helps employees see that the organization is supportive of them and is prepared to offer support to them when required.
Business benefits for the organization and different stakeholders:
• Benefits for the organization and its culture:
? Improved productivity because of an intrinsically motivated workforce: Employees who are actively engaged are 43% more productive at work.
? Improved employee retention and reduced absenteeism
? Better organizational culture and employer-brand value
• Benefits for the customers:
? Engaged employees provide better customer service and brand-experience as they rare happy to go the extra mile to ensure that the customers are pleased with the products and services that they receive.
Customers who experience great customer service are 10-30% more loyal than customers who aren’t. (Gamble, 2018)
? Engaged employees make the organization more customer-focused as they have a customer-centric approach in all that they do.
Employees who understand customer-centric business practices will help to increase customer loyalty. (Gamble, 2018)
2.2 Explain the application of employee engagement through job design, discretionary behaviour, role autonomy and organizational citizenship.
Job design, discretionary behaviour, role autonomy and organizational citizenship can be seen as the building blocks of a highly engaged employee culture. These concepts are interrelated and work in synergy to increase levels of engagement, and are directly proportional to the concept.
• Job design
Christian et al (2011) found that job features such as task variety, autonomy, significance and feedback had all been positively related to engagement in a wide range of studies. (Engageforsuccess.org, 2018) Interesting, varied and challenging jobs can motivate employees to maximize the use of resources available to them thus encouraging engagement with the job and the organization.
• Discretionary Behaviour:
Good job design also encourages employees to engage in discretionary behaviours aimed at better job performance because they have been intellectually stimulated enough to realize those behaviours that are not as specified in their job descriptions, but do have a massive impact on the organization’s key deliverables. In other words, employees are encouraged to go beyond the call of duty because they are engaged with their jobs and committed to the organization.
• Role Autonomy:
Bond (2010), in a study of call centre workers, found that a relatively small increase in autonomy led to a significant increase in motivation, alongside a decrease in absenteeism and mental distress. Employees that are given more autonomy feel more empowered in their work and this causes them to develop a greater sense of engagement in their work. They have been found to be more satisfied than their counterparts, as they feel more able to exercise their decision-making skills in fulfilling job-related tasks.
• Organizational Citizenship
Organisational citizenship is the tendency for people at work to help each other and put extra effort in beyond what is required. This behaviour can be encouraged by supporting social connections at work, as having a friend or friends at work is a strong predictor for being a happy and productive employee. Organisational citizenship behaviour relates to displaying a strong psychological commitment to the organization and desire to make a meaningful and positive contribution to it.
These are discretionary behaviours and not explicitly stated goals, but they mark the difference between the most profitable organisations and the rest (West, 2005). Organizations that display high levels of organizational citizenship, will no doubt also show high employee engagement levels.
3.1 Identify and evaluate the use of diagnostic tools for measuring employee attitudes and levels of employee engagement.
Just as engagement is defined in a multitude of ways, similarly organizations can use many different ways to measure engagement. The choice of the tools also depends upon the data and factors that need to be measured. Most common engagement measurement tools are:
Traditionally, organizations tended towards using annual or biannual surveys, but the paradigm has shifted towards pulse surveys in recent times. The main reason for this is that accurately tracking and summing up sentiments for the entire year in just one survey is not the most accurate of practices. Instead pulse surveys allow organizations the flexibility to monitor multiple individual areas in short spans of time (usually less than four minutes) and gather real time data on employee sentiments.
• Measuring metrices such as Absenteeism, Employee Turnover, Employee NPS etc.
As discussed previously in this report, a more engaged workforce reflects through low absenteeism and high employee retention scores. Routinely monitoring these scores is helpful in tracking employee engagement levels. Also, measuring the employee NPS scores reflects the ’employer brand value’ as it shows how many employees actually take ‘pride and ownership’ of the organization and promote it as a preferred employer.
• Focus Groups
Focus groups can be used to supplement to employee surveys. While surveys usually provide quantifiable data, focus groups help to “augment” their results by reflecting the reasons behind the numbers. They are especially useful to gather feedback after pilot projects, to drill down into specific issues and to brainstorm ideas for improvement.
It is important at this stage to realize the significance of benchmarking employee engagement scores, as is any other comparative metric. This score provides us with a target, and helps us build a road map to achieve that target.
Internal benchmarking can help us gather data which we can use to compare our own successes against, and also help us in identifying strategies that aren’t offering us the benefits we hoped to achieve. Externally benchmarking engagement scores can help by setting a standard for comparison against the industry or specific competitors. Both these scorecards can help quantify the direction we need to head in terms of our people strategy.
Gallup suggest using the following tools in different combinations depending upon what aspect of engagement needs to be measured:
• customer ratings
• turnover (for high-turnover and low-turnover organizations)
• safety incidents
• shrinkage (theft)
• patient safety incidents
• quality (defects)
3.2 Construct an ’employee value proposition’ and propose relevant strategies to raise levels of employee engagement and address any barriers.
• Our business context:
The Gym Group is an extraordinary company with a low cost and exciting business model that works for the general public and for the people that work for it whether they are directly employed or as the personal trainers, self-employed. We continue to grow at phenomenal speed with a new gym targeted to open every two weeks and have recently acquired two small chains of gyms, increasing our count to 140 sites as of this month.
• Current Approach
? What works for us is the fact that we let our ‘managers manage’, but also provide a solid support framework through a central team. Our philosophy is for GMs to run and make profitable, their own gyms. Our structure is rather flat, and this ensures that the gym teams have quick access to the information and support that they need. The simple structure developed in the company supports growth for the company and the teams.
? Operating in the leisure sector, the focus on the customer experience is built into the DNA of the team at the Gym Group. The values are known by people and people are genuinely living those values.
? Social/Corporate responsibility is understood and practiced supporting charities such as Jigsaw, Glasgow Children’s Hospital, Wiltshire Air Ambulance, Baby Basics, Movember, Justice ; Care.org, Spinal Injuries, Brain Tumor Support to name some.
? The concept of using Personal Trainers (PTs) that are self-employed and that give their time in exchange for the opportunity to develop their own businesses works extraordinarily well, again building a group of entrepreneurs and of course a pool to recruit from for the Gym Group.
• Our current engagement figures
On the whole, we have good engagement figures but have seen a slip of 5% over the last year. We have measured the following 8 factors:
? Wellbeing: How employees feel about stress, pressure at work and life balance
? My Manager: How they feel about and communicate with their direct manager
? Leadership: How employees feel about the head of the organization, senior managers and the organizations values and principles
? The company: The level of engagement employees feel with their job and organization
? Personal growth: How employees feel about training and their future prospects
? My Team: Employees feelings towards their immediate colleagues and how well they work together
? Giving something back: The extent to which employees feel the organization has a positive impact on society
? Fair deal: How happy employees are with pay and benefits
• What we do well
? As the business continues to grow and evolve it is obvious that some more control from the center is inevitable. But we still retain a well-balanced approach to managing the balance between autonomy and control. We still give the GMs the opportunity to run their own businesses, but also have vehicles as ‘My Fit Journey’ which gives structure and uniformity to the customer journey across our gyms. GMs are being given tools to support them running their own business rather than micromanagement from the HQ.
? Corporate and Social responsibility goes from strength to strength and is a very important part of the Gym Group offer.
? Celebration, reward and recognition continue to play an important part of life within the Gym Group.
? Continuous improvement is a major part of the success of the Gym Group. We continue to gather information and use that information to fine-tune our already successful business model.
• What we could do better – suggestions for improving our engagement figures
? Often our Roaming GMs and GMs create and deliver many pieces of training – it would be helpful to keep a central register of such material/ideas so as to be able to share this with the wider organization building a ‘knowledge library’. This will also reflect our interest in furthering our employees’ personal and professional growth.
? We do spend a substantial figure on supporting our employees through professional training programmes – it might be good to reflect this figure in some of our statistics
? Apprenticeships are increasingly popular in the UK and of course have a lot of support from Government – we might benefit from more participation in relation to these
? We do have recognition and reward schemes for our employees, but would benefit for structuring something similar for our PTs also
? The company was floated on the London Stock Exchange in 2016. It would be good to measure and share the employee uptake in share purchase for the past couple of years, as this would be a good measure of the perception of the success of the business.
? Providing a total reward statement – This idea really works well and demonstrates to the workforce the total cost of employment which is so seldom understood.
? It was observed that a substantial chunk of the employees in the organization were unhappy with the salary and perceived this as being lower in comparison with the industry standards. We need to address this issue, and it might be good to revise the salaries we offer after a surveying the sector.
? We should also encourage more team building events to foster workplace friendships – Recently, Gallup found that close work friendships boost employee satisfaction by 50%, while people with a self-described best friend at work are seven times more likely to be fully engaged at work. (SnackNation Guides, 2018)
3.3 Propose relevant people resourcing, development, performance and communication strategies to raise levels of employee engagement.
• Resourcing strategies that positively impact engagement are:
Finding the right fit in terms of the roles and the people doing that role is very important. Finding new employees who fit well with the organization culture means that they would already be invested in the organization because they identify with the latter. This would increase employee engagement as being a part of the organization also suits their personalities. Besides this, a proactive communication and well-structured onboarding process helps ensure that the working relationship starts on the best possible footing. (Greenbean, 2018) During the whole recruitment process, a clear framework for how the employee’s efforts contribute to the company’s overall mission should be presented to the prospective employees.
• Performance management strategies that increase employee engagement
Considering that emphasis has shifted away from leadership and just financial numbers, the industry today realizes that a key factor that influence engagement is ‘management practices’. Building a culture that values giving and receiving continuous feedback and support helps employees know which behaviours are working for them and which ones that aren’t. This is a two-way channel that prioritizes constructive feedback for the entire organization. Through effective performance management, the organization can reap the benefits of showing how invested they are in the employee growth through the psychological contact.
• Communication Strategies:
Effective communication goes a long way in making employees feel on-board with the organizations decisions. Majority of the responsibility for effective communication and dissemination of information lies with the line managers. Appropriate dissemination is not a benefit but it does act as a hygiene factor exhibiting itself by demoralizing the workforce instead of bringing it together.
Communication is an emotional component and it expresses our basic human need to feel valued. Employees feel connected and looped in when they receive proper, positive, and constructive communication, Effective communication also establishes trust and legitimacy between executives and their employees, and between managers and their direct reports.