Employee engagement and its importance to organizations

This chapter mainly deals with the research problem and provides a review of the work by different authors on this construct. It also provides various discrepancies and contradictions within the research on employee engagement. This will include a discussion on different definitions for employee engagement by different authors, development as a construct, importance of employee engagement, its measurement, drivers that promote it and finally its relation with other well established constructs.

The concept of employee engagement is a relatively latest one. Most of the organisations feel that employees work for the pay that is being given to them. But this type of thinking is outdated and faulty. There are several other non financial factors that affects the employee engagement like advancement, autonomy, civilized treatment, employer commitment, environment, exposure to senior people, praise, support, the feeling of being challenged and trusted, the feeling of working for a reliable organisation, the feeling of working on important assignments and the feeling of respect in work-life balance (Woodruffe, 2006). Most of the major organisations provide tools for assessing the drivers that enhance the employee engagement (Bakker & Schaufeli, 2008).

When you search for “Employee Engagement” in Wikipedia, the website highlights the information about employee engagement by stating that “Employee Engagement, also called as work engagement or worker engagement, is a business management concept and an engaged employee is the 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” (Wikipedia, Employee Engagement, 2010).

Endres and Mancheno-Smoak (2008) mentioned employee engagement as a fad and it has also been described as an old wine in new bottles (Little & Little, 2006). There exists some people who see engagement as a fluffy and costly distraction and that it is not practical and a waste of time (Engen, 2008).

2.2. DEFINING EMPLOYEE ENGAGEMENT:

According to Sanchez (2007), employee engagement is defined as “an outcome of how employees perceive their work, leadership of their organizations, the recognition and rewards they receive, and the communication ethos of the organization”. On the other hand, Cook (2008) defined Employee engagement as the term that is “personified by the passion and energy employee have to give of their best to the organisation to serve the customer. It is all about the willingness and ability of the employees to give sustained discretionary effort to help their organisation succeed”. Shaw (2005) defined employee engagement as intellectual and emotional commitment to an organisation.

In addition to this, Stairs et al (2006) also defined employee engagement as “the extent to which the employees thrive at work, are committed to their employer, and are motivated to do their best, for the benefit of themselves and their organisation”. Truss et al (2009) defined employee engagement as “Engagement is about creating opportunities for employees to connect with their colleagues, managers and wider organisation. It is also about creating an environment where employees are motivated to want to connect with their work and really care about doing a good job. It is a concept which places flexibility, change and continuous improvement at the heart of what it means to be an employee and an employer in a twenty first century workplace”. Employee engagement is a positive feeling about the job as well as being ready to put more effort to make sure that the given job is accomplished to the best of the employee’s ability (Galpin et al, 2008).

Dvir et al (2004) defined engagement behaviourally as a “high level of activity, initiative and responsibility”. Wellins and Concelman (2005) also gave a definition to behavioural engagement as a “passion, extra effort, commitment, the illusive force that motivates employees to higher levels of performance”. Kim and Maurborgne (2005) perceive engagement as engaging the employee in the strategic process which is differed from the behaviour and attitude. Employee engagement is said to be a fair process with justification and clearness of expectations. They stated in their model regarding engagement as a reasonable process which is tracked by commitment and trust so called attitude. Thereby the employee willingly cooperates (conduct) and surpasses the expectations (strategy implementation). They finally defined engagement as “involving individuals in the strategic decisions that affect them by asking for their input and allowing them to refute the merits of one another’s idea and assumptions”.

One can say from the above definitions of employee engagement is that it is a desirable circumstance which has an organizational intention and represents passion, commitment, enthusiasm, involvement, focused energy and effort, so it contains both attitudinal and behavioural aspects.

2.3 IMPORTANCE OF EMPLOYEE ENGAGEMENT:

Engagement is very important by considering the fact that disengagement of any employee leads to employees’ lack of commitment to work and lack of motivation. It has been highlighted by the Corporate Leadership Council (2004) that highly engaged employees perform 20% more than those employees with average engagement levels. In addition to this, ISR (2003) also shown that companies having higher levels of engagement noticed an increase of 3.74 percent in operating margin and 2.06 percent of increase in profits for one year period, whereas, companies with lower levels of engagement noticed a fall of 2 percent and 1.38 percent in the respective groups. On the other hand, Towers Perrin (2005) found that there is a 5 percent increase in operating margin with 7 percent increase in employee engagement.

A highly engaged employee always provide an output beyond expectations and during a research on employee engagement, Harter et al (2002) found that one in five employees agree that they have an opportunity to do what they do best every day. From the above research, one can say that employee engagement is vital to the success of any organisation and as organisations globalize and depend more on latest technologies, there is always a need for engaged employees to present them an organizational identity (Vazirani, 2007).

2.4 EMPLOYEE ENGAGEMENT AS A CONSTRUCT:

The definition of employee engagement made us to think that it is something which needs to be managed, fostered and enhanced by the organisation which is well explained by Social Exchange Theory (SET). This theory argues that a series of interactions between parties can generate obligations that are in mutual interdependence state (Saks, 2006). It is believed that relationships develop into loyal, trusting and mutual commitments and hence, the way for individual to pay back their organisation is through employee engagement (Cropanzano & Mitchell, 2005). That means, employees will get ready to engage themselves in their work in response to their organisational resources.

Employee engagement not only requires call but also actions as the employees are very valuable asset to any organisation. Employees should be aware of the new rules which are to be implemented by the senior management to make them believe in what they do. There should be a link between employee engagement and leadership which acts as the best source for success (Townsend & Gebhardt, 2008). On the other hand, Crabtree (2005) defined three types of employees: engaged employees; not-engaged employees and actively disengaged employees. In employee engagement, people express and employ themselves cognitively, emotionally and physically during their performances. Engaged employees always feel enthusiastic towards their work and provide improvement in helping the organisation move forward (Roche, 2005).

The next related build to the engagement is the concept of flow mentioned by Csikszentmihalyi (1990) as the “holistic sensation” when people feel when they take action with full involvement. In order to measure the employee engagement in an organisation, surveys are the best method to find out employees’ perceptions and attitudes towards the organisation. But, Kennedy and Daim (2009) felt that companies are not addressing these issues properly and suggested that they should take advantage of these surveys and refine the goals accordingly thereby incorporating them into a hierarchical decision model (HDM).

Welbourne (2007) provided the ways to improve employee engagement by suggesting a role based model which particularly noticed the behavioural types that are expected from the employees to foster the organisational performance. The key roles are being defined as Core job holder role, which is mentioned in the job description; entrepreneur role who comes with innovative ideas; team member role which involves in participating and acting as teams; career role which helps in improving personal knowledge and skills and finally, organisational member role which involves doing good things that promotes the organisational success.

Many of the authors declared that employee engagement foresees the outcomes of the employees, financial and organisational performance (Richman, 2006; Baumruk, 2004). But, Saks (2006) gave a better idea on the antecedents and consequences of employee engagement by separating them into job and organisational engagements. On the other hand, Vance (2006) felt that many of the corporations have restructured themselves in order to face increasing worldwide competition, costly and scarce resources and high labour costs which allowed them to have staff reductions. This made the employees to feel less committed to the organisational goals as they feel that they can no longer continue in the organisation until they retire.

Kahn (1990) reported that employees feel more engaged to the work most of the time if they receive some benefits in the form of external rewards and jobs that are focused more on the core job characteristics which will provide employees to bring themselves more into the work or to become more engaged. Pegg (2009) agreed with Kahn (1990) by emphasizing on the effective delivery of the benefits to the employees to be most important to make a positive effect on an employee. But for this to happen, an employee must understand the benefits the company is currently offering to him/her. In addition to this, Hardaker and Fill (2005) points out that organisational communication levels recognized by employees connects the levels of employee engagement.

But Organisational success mainly comes from satisfying the fundamental human needs at workplace, such as elucidating desired results and raising opportunity for self accomplishment and growth (Wagner & Harter, 2006). Apart from this, the well being of the employees is a major interest of several organisations as they spend much of the amounts on hiring new employees, generating new products, profits and maintaining devotion to the customers (Keyes & Haidt, 2003). And majority of employees wish higher personal development from the work they do and several employees expects their work to be rewarding and socially supportive one (Avolio & Sosik, 1999). Employees who feel emotionally positive towards their work received higher ratings for the performance compared to those who are emotionally negative (Wright & Cropanzano, 2000).

The mentioned different types of research on employee engagement have made a connection of this construct to productivity, customer satisfaction and employee retention (Endres & Mancheno-Smoak, 2008). But there are some researchers who still felt that employee engagement is a “costly, fluffy distraction” and it is merely a waste of time concept (Engen, 2008). Even in the presence of such discrepancies and controversies on the term, it is very useful to carry out research on what happened and what it is up to at present. Reichers and Schneider’s (1990) three stage model which is related to Kuhn’s (1970) beliefs, proved to be the best tool for exploring employee engagement.

The following table illustrates the works of different types of authors on employee engagement and its development:

Year

Authors

Title of the Report

Main focus of the study

Measuring tool

1990

Kahn

Psychological conditions of personal engagement and disengagement at work

Provided an idea on different conditions at work where some people personally engage and some people doesn’t

Qualitative

1992

Kahn

To be fully there: psychological presence at work

Provided the concept of psychological presence which allows the employees to engage personally at work

None

1999

Coffman & Harter

A Hard Look at Soft numbers

Focused on the issue of looking at soft numbers related to Brand, Customer Loyalty Development and Employee Engagement to drive sales and profits

Gallup 12 questions survey and Meta analysis

2001

Maslach, Schaufeli & Leiter

Job Burnout

Provided an extra concept on burnout and work engagement

Work engagement survey

2001

Rothbard

Enriching or depleting? The dynamics of engagement in work and family roles

Provided a model for engagement in both work and family roles

None

2002

Harter, Schmidt & Hayes

Business Unit-Level Relationship Between Employee Satisfaction, Employee Engagement and Business Outcomes: A Meta- Analysis

Examined the relationship between employee satisfaction and business unit outcomes of productivity, customer satisfaction, and profit and employee turnover.

Meta Analysis

2005

Elsey

Building Employee Engagement at Sensis: How a new people strategy transformed company culture and business results

Developed Sensis’ people strategy and described how the company helped in engaging employees to bring improvements in customer service and employee retention

Sensis Employee Engagement Model

2005

Hardaker & Fill

Corporate Service Brands: The Intellectual and Emotional Engagement of Employees

Considered the importance of employees within corporate brands. Presented a case where a company becomes privatised from public sector and how the employees contributed to the new brand development. Also examined the ideas concerned emotional and intellectual engagement and the way the messages were targeted for more effectiveness.

Qualitative and Quantitative

2005

Salanova & Agut

Linking Organisational Resources and Work Engagement to Employee Performance and Customer Loyalty: The Mediation of Service Climate

Described the mediating role of service climate in predicting customer loyalty and employee performance. Found a mutual effect between customer loyalty and service climate

Salanova Work engagement Scale, 7-item Global Service Climate Scale (Schneider et al., 1998), SERVQUAL Empathy Scale (Parasuraman, Zeithaml & Berry, 1988), Service Provider Performance Scale (Price, Arnould, & Tierney, 1995)

2005

Stairs

Work happy: Developing employee engagement to deliver competitive advantage

Emphasized that financial reward is no longer a benefit that only promotes engagement in employees but self actualisation need is playing an important role in today’s workplace.

None

2006

Greenberg & Arakawa

Optimistic Managers & Their Influence on Productivity & Employee Engagement in a Technology Organisation

Investigated whether teams are more engaged and productive when led by optimistic manager. Provided a relation between positive leadership and employee engagement. Emphasized on the importance of positive leadership at workplace

LOT-R Questionnaire and Gallup Q12 Survey

2006

Little & Little

Employee Engagement: Conceptual Issues

Provided the meaning of employee engagement and explained how it relates to other organisational constructs. Also provided the importance of this construct in improving productivity, safety, and employee retention and customer service. Felt that the research on this construct needs to be continued for the proper understanding of its contribution to organisational and individual performance.

Gallup Q12 survey

2006

Pech & Slade

Employee Disengagement: is there evidence of a growing problem?

The main aim of this study is to highlight the importance of knowing the employee disengagement in a company so that relevant steps can be taken by the managers to deal with falling commitment of employees and energy levels which helps in achieving greater grip on the global business landscape.

Quantitative

2006

Saks

Antecedents and Consequences of employee engagement

Tested a model of antecedents and consequences of organizational and job engagements on the basis of social exchange theory

Saks (2006) job and organisational engagement scales (new)

2006

Woodruffe

The crucial importance of employee engagement

Emphasized on the importance of employee engagement by explaining that money is not the only factor which can motivate the employees to work but there are some other non financial motivations like advancement, autonomy, civilized treatment, employee commitment, environment, senior people exposure, recognition, support etc which plays main role in employee engagement. Provided a ten point plan which helps company how to engage the employees in the better way.

None

2007

Bakker

Building engagement in the workplace

Defined employee engagement, discussed the psychological job role and personal resources as engagement predictors, and also provided the downside of engagement. Provided ideas to the companies of how to build engagement in workplace.

Work Engagement Monitor

2007

Ellis & Sorensen

Assessing Employee Engagement: the key to improving productivity

Provided a clear definition of employee engagement and describe a methodology to measure it. Offered an approach to use engagement data to create workforce investments that enhance productivity and steer business results.

Sibson’s 2006 Rewards Of Work (ROW) Study

2007

Gill

Employee Selection and Work Engagement: Do recruitment and selection practices influence work engagement?

Provided an expansion on antecedents and consequences of work engagement which include antecedents like HR practices such as Realistic Job Previews (RJP) and selection tests. Further analysis was conducted to find out the predictability of engagement on organisational and individual outcomes. Finally suggested that HR practices need to be included in the work engagement model.

UWES (Utrecht Work Engagement Scale)

2007

Sanchez

The employee survey: more than asking questions

Provided some basic ideas of why some employee engagement surveys fails in organisations and highlighted ten key areas as project planning, communication, questionnaire design, timing, prioritization of issues, engaging senior management, data delivery, follow-up support, monitoring and accountability and linking survey results to business outcomes. Concluded by giving best practices to avoid common pitfalls in surveys.

None

2008

Dalal, Brummel, Wee & Thomas

Defining employee engagement for Productive Research and Practice

Provided some modifications to Macey and Schneider’s conceptualization of employee engagement. Stated that state engagement is simply called engagement as it contains both trait-like and state-like components and is a cognitive-affective construct and not a behavioural one.

None

2008

Hughes, Avey & Norman

A study of supportive climate, trust, engagement and organisational commitment

Developed the relationship between organisational commitment and supportive climate as intervened by employee engagement and trust

May et al (2004) engagement scale

2008

Miller

An Employee Engagement of XYZ Manufacturing Company

Main purpose is to collect data from the production employees working for XYZ Manufacturing Company in order to show the engagement levels among their employees.

Gallup Q-12 survey instrument

2008

Pugh & Dietz

Employee Engagement at the Organisational Level of Analysis

Described the importance of conceptualizing employee engagement at organisational level by offering three rationales which are theoretical usefulness, the nomological network and practical utility. Also provided the importance of studying this concept at an organisational level.

None

2008

Wildermuth & Pauken

A perfect match: decoding employee engagement- Part I: Engaging cultures and leaders

Introduced the concept of employee engagement and found a connection of environment, leadership, job and individual factors to employee engagement

None

2009

Pegg

Creating engagement through employee benefits

Investigated how the benefits can bring impact on employees and as a whole how the organisations are approaching the employees about the benefits they offer.

None

2009

Suan

Factors that influence Employee Engagement: A study of Celestica Malaysia SDN. BHD

Conducted a study on Celestica Malaysia Sdn. Bhd for better understanding of the drivers that promote employee engagement.

Quantitative

2009

Weaver

The Global Financial Meltdown: Is it a recipe for disaster to Employee Engagement?

Provided an understanding of how the financial crisis during 2007-2009 had a negative impact on employee engagement. Resilience, Emotional Intelligence, Culture and Leadership are the factors which are selected for the study

Quantitative

2010

Kennedy & Daim

A strategy to assist management in workforce engagement and employee retention in the high tech engineering environment

Focused on the importance of utilizing the results that comes from employee engagement surveys to cater for employees’ needs and meet the stakeholder expectations. Presented a case from the high tech industry.

Quantitative and Qualitative

The above table clearly illustrates the research that is being carried out on employee engagement and the tools that were used by various researchers to measure employee engagement in their particular study. Some researchers used either Quantitative or Qualitative approach and whereas the others used the mixed methods. One can say that there are not more records of research on employee engagement in animation industry and hence the researcher mainly focused her research to conduct study on a reputed production and animation company like Creativemine which is based in India. There should be some drivers for this employee engagement and hence the remaining part of the literature covers the research that has been focused on these drivers and also on the various constructs that are related to it in one way or the other.

2.5 DRIVERS OF EMPLOYEE ENGAGEMENT:

The engagement drivers always lead to the creation of an engaged team of employees (Wellins et al., 2006) and this engaged work environment will always have a positive impact on employee attitudes and behaviours. Several Engagement studies took place to come up with the drivers of employee engagement and Ketter (2008) provided some of the drivers namely having career growth, learning and development opportunities; having challenging work; receiving pay and benefits; being recognized; supportive management; respected and valued. On the other hand, Vazirani (2007) during his study on Employee Engagement listed some important drivers of employee engagement namely Career Development- Opportunities for personal development, Effective Talent Management, Clarity of Organisational values, Respectful treatment of employees, Image, Empowerment, Equal Opportunities, Pay and Benefits, Performance Appraisal, Job Satisfaction, Health and Safety, Proper Communication, Cooperation and Family Friendliness.

It is very important to highlight some of the studies carried out on these drivers of employee engagement. Clampitt (2005) felt that employees better understand their role if they are better communicated and contribute to the success of an organisation. During a study by CIPD, it was made clear that having career progression and being well informed are the two most important drivers of employee engagement. From this study, one can say clearly that employees should be communicated effectively about the changes that are to be made in the organisation well in advance to avoid confusion among employees. Even it is clear that communication plays a major role and is a key driver of employee engagement; employees feel that their work needs to be recognised in the form of day to day informal recognition (Wellins et al., 2006). Besides this, appropriate recognition also helps to build psychological contract where employer values their employees and employees feel being valued. This increases the employees’ commitment which in turn leads to enhanced work performance and reduced turnover of employees (ibid).

During a research conducted by ASTD on employee engagement, more than fifty percent of the employees responded that “quality of training and learning opportunities” have the strong impact on the employee engagement which is the strongest response of that survey. One more study by Bernthal and Erker (2004) provided evidence by showing that most of the employees leave the organisation for the career growth opportunities offered by other organisations. Most of the employees feel energetic in the workplace if there is a scope of learning and building new skills and investments in development programs relates to the financial success of an organisation (Wellins et al., 2006). A study by ASTD found that most of the employees need some recognition of their work, which acts as an additional motivator for them instead of placing too much emphasis on their weaknesses.