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Employee Engagement as a Tool for Organizational Effectiveness :A Case Study of Harrod UK

Introduction One of the most important parts of any organization is the Human Resource Department. Human labour is one of the most important factors of production and this human labour is monitored by the Human Resource Department. The human resource department ensures that the firm has the best labour quality in the market and the department also ensures that the labour providers are well remunerated to ensure that their satisfaction and motivation is guaranteed. The human resource department has become a point of concern in several companies since it has been found to be directly related to the performance of any organization. The manner in which the employees of an organization perform their roles play an important part in determining the performance of that specific organization (Armstrong, 1998). The relationship between the organization and its employees plays an important role in determining the commitment of employees and the strength with which the employees perform the duties they are assigned to by their employers (Baron, 2005). On the other hand the concept of employee engagement has also become an issue of focus under the human Resource approach. Several strategies are needed in order to make the employees more engaged to their work. Many organizations are aware of these motivation strategies that need to be employed for effective performance and engagement of employees but there are still issues in many firms as a result of lack of employee engagement and motivation. Study has been carried out in global markets and these studies have revealed low levels of commitment and engagement of employees in their workplaces. For instance a study in Europe revealed that only 24% of the total number of employees is committed to their jobs. Most of the employees lack motivation and satisfaction and this has greatly contributed to the low levels. A close study of the European market has also revealed that 83% of the total employees in the UK and Ireland do not feel engaged towards their jobs (Fletcher, 1997). Therefore from the above statistics it is clear that employee engagement is still poor and a larger percentage of the employees in the labour market are not motivated and demand more satisfaction in their jobs and work places. In an attempt to study employee engagement as a tool for organizational effectiveness, a case study of Harrods UK was conducted. Harrods is a departmental store in the UK that was founded in the year 1834. The organization has a total of 12,000 employees and it employs different HR strategies to ensure that its workers are highly engaged and motivated in their practices. The study will encompass a critical evaluation of the linkages between Human Resource Management and organizational performance. The study will also appraise the importance of performance management strategies and processes in achieving performance across different organizations, nationalities and cultures. The study will also evaluate frameworks, models and theories relevant to performance management. Finally, the study will then critique a range of approaches/ interventions used to obtain effective employee performance in a variety of organizational and geographical contexts. Linkages between HRM and Organizational Performance Several researches have been conducted and they have revealed that there is a clear link between HR activity and organizational performance. Under this we are going to look at several studies that have been conducted to look at the nature of the link between HRM and Organizational Performance. These studies seek to establish how exactly Human Resource activity affects organizational performance. In the year 2003 black box studies were carried out under the leadership of Professor John Purcell. This study was conducted on twelve organizations that were based in the UK. From their research they found out that when an organization has performing HR policies and practices there is always a positive response from the employees of that organization. This positive response of employees is expressed in terms of motivated employees, job satisfaction, the organizational commitment of employees to their jobs as well as the organizational commitment of the employees to their employer organizations (Fenwick, 2004). Well motivated employees work harder and strive to improve their performance. When they improve their performance the performance of the organization is also enhanced and improved. The black box studies found out that if HR practices and approaches are implemented effectively they bring about superior organizational performance. This was explained by the fact that well implemented HR policies give the employees the ability to perform well, a motivation to perform well as well as an opportunity to perform well. When the employees get motivated, they are able to improve their individual performance and this individual performance across different employees translates into collective performance and this finally results to organizational success in general. Some of the HR practices that were found to have a positive impact on organizational performance were; providing good training to the workers. Organizations that offer good training to their workers aid in the improvement of the worker’s output levels. Through training the workers become more productive and efficient and this productivity and efficiency is then translated into organizational performance (Dessler, 2005). Another HR practice that was found to have a positive impact on organizational performance is appraising employees regularly on their individual performance. As we have discussed individual performance is then translated into organizational performance. When employees are appraised regularly on their individual performance they feel motivated and recognized by the organization. This also encourages other employees to work more so that they can also be appraised like the rest. The other HR practice that has a positive impact on organizational performance is team work. With team work in an organization the employees are able to work jointly and combine their skills to generate maximum output. With team work employees are able to work hand in hand with their supervisors and other management officials and through this they are able to jointly drive the organization into the right direction in terms of performance. The other HR practice that has a positive impact on organizational performance is that which gives the employees career development opportunities (Clark, 1998). These career development opportunities motivate the employees to work harder in an attempt to go higher in the job ranking ladder. In an attempt to move up the ladder the employees improve their performance and as a result they raise the organizational performance. Another HR practice that was found to have a positive link with organizational performance is the involvement of employees in decision making processes. By doing this the engagement of employees in the organization is increased and with increased engagement the employees feel part of the organization and they perform their roles and tasks assigned effectively as a way of raising the performance of their organization. Gallup organization which is a research based organization conducted a research in 2009 that pointed out some key aspects and findings that can be used to explain the link between human resource management practices and organizational performance. The study found out that there was a strong correlation between the levels of employee engagement in a business unit and the success of the business unit. Organizations with the highest rates of employee engagement were found to be more successful as compared to those with the lowest engagement levels of employees. Employee engagement levels are determined by the HR practices and policies in place and those organizations where engagement levels were high, the HR practices were found to be effective also. The study also pointed out that there exist a strong relationship between the levels of employee involvement and the rates of staff turnover. High turnover industries were found to perform poorly while low turnover industries were found to perform well and these low turnover rates were an indicator of employee satisfaction and motivation (Brumback, 2003). In conclusion it is clear that the way people are treated by an organization has an influence on their individual performance and on the organizational performance in general. Therefore in a nutshell we can conclude that good HR practices and policies have appositive link to organizational performance. The importance of performance management strategies and processes in achieving effective performance across different organizations, nationalities and cultures Performance management is one of the fields in human resource management. It can be defined as a continuous process of identifying, measuring and developing the performance of individuals as well as aligning this performance with the strategic goals of the organization. Performance management has been explained mostly by the use of performance management cycle and in the cycle it comprises of 5 main elements and these elements show how performance management system should be implemented in an organization (Emery, 2004). These elements include; setting of objectives, measuring the performance, feedback of performance results, reward system based on performance outcomes and finally amendments to objectives and activities. Under this section we are going to focus on the importance of performance management systems. The concept of performance management is more of a recent development and it mainly focuses on the adoption of future oriented strategic focus that is applied to employees in the workforce as a way of maximizing their current and future performance. Performance management in an organization plays the role of determining how people work, how they are managed and developed to improve their performance and it also seeks to maximize the contribution of the workforce to the organization (Fletcher, 1997). Performance management is associated with several advantages to an organization. One of the advantages is that it is a strategic process that is aligned to the organization’s wider objectives and long-term direction. Performance management helps the organization to move in the right direction in terms of performance and achievements of the organizational objectives. It ensures that the workforce directs its efforts towards the success of the organization. The other importance of performance management to an organization is that it is integrative. By integrative it means that apart from aligning the organizational objectives with individual objectives it also links different aspects of human resource management such as human resource development, employee reward as well as organizational development (Brumback, 2003). This is because it focuses on both individual development as well as organizational development. Performance management is also associated with performance enhancement. Performance enhancement in this case is achieved in two aspects; one is through the achievement of individual effectiveness and the other is through organizational effectiveness. It aids in performance enhancement based on the fact that it ensures that employee efforts are goal directed and they must be in line with the organizational goals and objectives. The other importance of performance management is that it brings about communication and understanding. This is because performance management is based on an agreement between the managers of an organization and the employees (Fenwick, 2004). This brings about continued dialogue as management evaluates the performance of the employees and through this communication management is able to receive feedback and using this feedback managers are able to plan effectively on how performance can be enhanced. The other importance of a performance management system is that it supports a climate of continuous improvement and it focuses agenda for development and it ensures that it places individuals and teams in place to ensure that the organizational and individual performance is maintained. The other importance is that the performance management system clarifies critical performance aspects, it reinforces the desired competencies and it also identifies the strengths that can be used to the best advantage of the organization (Clark, 1998). From its evaluation of performance, strengths and weaknesses of individuals and firms are identified and it is from this identification that strongholds under which organizational development can be based are identified. The weak points of individuals and organizations are also identified and suggestions on how to improve these weak points are identified and implemented. Finally, performance management strategies enhance feedback from different individuals at different job levels. This helps in the elimination of discrimination in terms of race, gender, and age or job level. This reduced discrimination ensures that the decisions made by the top managers and the supervisors cuts across all employees in the organization and when policies for performance improvement are being implemented they are tailored in a way that they can clearly cut across all sectors and levels of an organizational workforce. In a nutshell performance management systems and processes play an important role in achieving effective performance across different organizations, nationalities and cultures. Frameworks, models and theories relevant to performance management Performance management is a continuous process where managers and employees work together in planning, monitoring and in reviewing employee’s work objectives or goals and the employee’s overall contribution and how this can be enhanced. There is no specific model of performance management since various scholars and experts have explained this concept differently in their own ways. Performance management system has been explained in many cases using the performance management cycle (Fenwick, 2004). This cycle has elements and processes that are involved in the implementation of a performance management system in an organization. The performance cycle is assumed to be continuous as stated in the introduction that the performance management is a continuous process of planning, monitoring and reviewing employee performance. From http://hrcouncil.ca/images/performance-management-phase-overview The first phase in the performance management cycle is the planning phase. The planning phase is collaboration between the employees and the managers of a given organization. Under this phase they jointly review the employee’s job description and try to determine whether it matches the work that the employee is doing currently (Fenwick, 2004). In case the employee has undertaken new responsibilities that were not stated previously the job description should be updated. Under this phase there is also the identification and review of the links between the employee’s job description, the organizational goals, objectives and the strategic plan. In this phase there is also the development of a work plan that outlines the tasks to be completed, the expected results as well as measures and standards that will be used in the evaluation of performance (Baron, 2005). This phase also encompass the identification of training objectives that will help the employees to grow in skills, knowledge and competency. The second phase is the monitoring phase. During this phase managers and employees meet regularly to assess progress towards meeting performance objectives. In this phase there is also the identification of any barriers that may prevent the employee from accomplishing performance objectives and what needs to be done to overcome them. At this phase the managers and the employees share feedback on progress relative to the goals. The managers and the employees also identify any changes that may be requires to the work plan in case an employee is required to take on new responsibilities (Clark, 1998). At this phase the employees are also able to determine any extra support that is required from the manager in order to assist the employees in achieving their objectives. The third phase of the performance management cycle is the review phase. Under this phase managers and employees summarize the work accomplished during the previous year relative to the goals that were set at the beginning of the performance period. At this stage the results, accomplishments and shortfalls for each objective are identified. The challenges encountered during the year are documented and areas for training and development are identified. At this stage the managers and the employees identify and discuss unforeseen barriers that may hinder the achievement of the set objectives. This marks the end of the performance management cycle and a new cycle is set to begin. There are several theories underlying the concept of performance management One of the theories is the Goal setting theory that was proposed by Edwin Locke in the year 1968. This theory suggests that the individual goals established by an employee play an important role in motivating him for superior performance. This is because the employees keep following their goals. If these goals are not achieved, they either improve their performance or modify the goals and make them more realistic. In case the performance improves it will result in achievement of the performance management system aims. The other theory is the Expectancy theory had been proposed by Victor Vroom in 1964. This theory is based on the hypothesis that individuals adjust their behavior in the organization on the basis of anticipated satisfaction of valued goals set by them. The individuals modify their behavior in such a way which is most likely to lead them to attain these goals. This theory underlies the concept of performance management as it is believed that performance is influenced by the expectations concerning future events (Clark, 1998). There is also the Social cognitive theory that states that motivation is influenced by the interaction of three elements. These three elements include the work environment itself, thoughts of the performer and what the performer does. The theory explains that strong performance requires positive self-beliefs of efficacy in addition to appropriate skills and abilities. Finally there is also the Control Theory that is also referred to as feedback control or cybernetics. It is described in self-regulation terms as an ongoing comparative process aimed at reducing the discrepancy standards for behavior and the observed effects of actual behavior (Fenwick, 2004). All these are theories relevant to performance management.

A critique of Approaches/ interventions used to obtain effective employee performance in a variety of organizational and geographical contexts A critique of the 360-degree assessment process It is a feedback process that assesses feedbacks from colleagues, peers and managers in the organization. The process also incorporates a well self-assessment of clients, volunteers and other stakeholders. Senior management officials are responsible for the assessment of the performance of other employees but often do not receive adequate feedback themselves. The 360 degree feedback allows the individual to understand how his/ her effectiveness as an employee, manager or coworker is viewed by others in the organization. The 360 degree feedback process is considered to be a beneficial feedback process based on some reasons. One of the reasons is that individuals are able to get a broad perspective of how they are perceived by others and how they impact others both positively and negatively. The process also encourages open feedback and this feedback is often perceived as more valid and objective, leading to acceptance of results and actions required (Brumback, 2003). The other benefit is that the feedback process clarifies critical performance aspects, reinforces desired competencies and identifies strengths that can be used to the best advantage of the organization. The approach also Supports a climate of continuous improvement and focuses agenda for development, identifying key development areas for the individual, a team or the organization as a whole. Finally the approach is also beneficial in that when feedback comes from a number of individuals in various job functions, discrimination because of race, age, gender, and so on, is reduced. The 360 degree approach also has some shortcomings that explain why some organizations opt not to adopt the approach. Some of the reasons behind this are that Feedback from multiple assessors increases the number of people participating in the process and the organizational time invested (Fletcher, 1997). Secondly, the Employees are not ready to give or receive honest and open feedback. The process can be intimidating as few people enjoy being evaluated, especially by a circle of colleagues and peers. Some cultures rigidly avoid passing constructive feedback, or information, to superiors or managers. The other shortcoming is that if a performance management system is tied to pay increase and reward systems, people may be hesitant to participate (Emery, 2004). There is a big difference between providing feedback that will contribute to professional development or providing feedback that determines pay, rewards, and promotion. Finally the other shortcoming of the method is that since feedback is most often provided in written form, not in person to ensure anonymity, people receiving feedback can’t ask directly for clarification of comments or more information about ratings and their basis. Conclusion In a nut shell from the report above it is clear that employee engagement practices play an important role in the performance of any organization. Some of these employee engagement practices as we have discussed above help in enhancing the commitment of employees as well as raising their satisfaction levels. Several studies have revealed that motivated employees are the key determinants of the organizational performance. Lack of motivation and satisfaction from employees results to poor performance in enterprises such as Harrods. We have also seen that employee satisfaction and motivation can be determined in terms of the turnover rates of employees. Organizations with high turnover rates show high levels of employee dissatisfaction and lack of employee motivation in undertaking their duties in the organization. Taking Harrods as an enterprise under study we can conclude that employees help their organizations to achieve superior levels of performance when they have the ability to do so, are motivated to do so and when they are given the opportunity to do so. Harrods among other organizations therefore need to come up with strategies that can will help in raising the levels of employee engagement among their staff by doing this their organizational performance will be enhanced. Employees provide human labour which is a vital factor of production to any organization and therefore they need to be constantly motivated and this will enable them carry out their duties and roles effectively and translate this to organizational performance and development.

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