User:MGMT90018 2015S2 EmployeeEngagement/sandbox

This sandbox is being edited as part of a class assignment. This is directly copied from https://en.wikipedia.org/wiki/Employee_engagement

Employee engagement can be defined as the state of emotional and intellectual involvement that motivates employees to do their best work. Research conducted by Joshi and Sodhi (2011) and Swetha et al. (2014) found that employee engagement is the driving force for business success, as it fosters a positive work environment.

Bhuvanaiah et al. (2014) found that “employee engagement is one of the emerging concepts addressing multiple challenges organisations face such as attrition, company reputation, customer loyalty, customer satisfaction, profitability, and business productivity”. Herzberg (1968) concluded there are six internal motivating factors driving employee performance and engagement: sense of achievement, recognition, the work itself, responsibility, the opportunity for advancement and personal growth. Individual employee engagement can be influenced by culture, religion, sociological factors, economy, lifestyle, and other factors.

A review of research by Eichinger et al. (2009) identified that the single most important factor in driving employee engagement is the immediate manager working relationship with the employee. Academics who specialise in Human Resource Management believe that effective management is an essential factor that is positively correlated with retention rates and the ability to create an environment where employees feel engaged in their workplace. For a manager to be effective in creating an engaged workforce academics have determined that they need possess specific skills required to keep employees aware of their job requirements, creating an effective feedback system to evaluate employee performance, and can provide opportunities for advancement. Eichinger et al.'s (2009) research concludes that all these required managerial skill sets are all positively correlated in creating a positive work environment, and an engaged and productive workforce. This suggests that an organisation with 'enhanced' employee engagement levels have an to expectation to outperform any organisation with reduced levels employee engagement, all else being equal.

It should be noted that a variety of definitions have emerged around the complexity of employee engagement concepts. Research has studied in-depth the requirements, commitment and enhanced productivity of employees, concluding that many of these factors are interlinked. Generating engagement amongst a workforce is a central topic for organisations as opposed to finding different systems to measure it. As a result care must therefore be taken when looking at some of the statistics presented around engagement.

Definitions
William Kahn created the first formal definition of employee engagement, characterising the term as "the harnessing of organisation members selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances". Roberts (2013) later on refined the term as being a state of emotional and intellectual involvement that motivates employees to do their best work for both themselves, their colleagues, and the organisation as a whole.

In 1993, Schmidt et al. proposed a bridge between the pre-existing concept of 'job satisfaction' and employee engagement with the definition: "an employee's involvement with, commitment to, and satisfaction with work. Employee engagement is a part of employee retention. This definition integrates several components of job satisfaction, with organisational commitment.

In his review of employee engagement literature in 2013, Chaplan identified four main sub-concepts within the term:
 * 1) "Satisfaction": An individual ability to value and feel content i.e. achievement and recognition.
 * 2) "Burnout antithesis": The required energy, involvement, efficacy are presented as the opposites of established 'burnout' constructs: exhaustion, cynicism and lack of accomplishment.
 * 3) Satisfaction-engagement approach: Employee engagement is a more mechanical form of job satisfaction, founded by Gallup's Q12 engagement survey presentingan r=.91 correlation with one (job satisfaction) measure.
 * 4) The multidimensional approach: Concise division is preserved between an employees job, managerial and organisational engagement, focusing primarily on qualifications and costs to job performance rather than organisational identification.

Employee engagement practices has increased in popularity over the last 20 years,however there is still some variation with respect to academic definitions of employee engagement. These different definitions vary in the weight they give to the individual versus the organisation in creating and maintaining engagement. Despite the variation in the definition of engagement business organisations need to predominantly focus on the actions and investments that they makes in order to bolster employee engagement.

Team-based causes
The following theories are examples of team-based causes of employee engagement. They predominantly discuss the relationship between employees and their managers and how this drives employee engagement.

The Ten C's of Employee Engagement
Seijts and Crim (2006) summarise that there are ten "avenues for action" which drive employee engagement, otherwise known as the 'The Ten C's of Employee Engagement'. The Ten C's of Employee Engagement are:
 * 1) Connect: Managers should convey their appreciation for the value of their employees, through various schemes such as profit sharing and work-life balance practices. Seijts and Crim (2006) conclude that employee engagement levels are a reflection of an employee's relationship with their manager.
 * 2) Career: Administering employees with challenging and meaningful work that provide opportunities for career advancement is positively correlated with employee engagement.
 * 3) Clarity: Clear understanding of the organisation's vision is positively correlated with organisational success.
 * 4) Convey: Procedures should be establish by managers to facilitate task mastery and ensure goal achievement.
 * 5) Congratulate: Seijts and Crim (2006) conclude that employees believe they only receive immediate evaluation if performance is subpar. It is believed that "coaching and conveying" is the approach of successful leaders, as a combination of encouragement and congratulating with feedback are complimentary.
 * 6) Contribute: Employees want to be reassured that their contribution to the organisation matters. Seijts and Crim (2006) summarise that organisations should provide an appropriate platform for employee contribution in order to bolster employee engagement.
 * 7) Control: Being given the opportunity to participate in workplace decision-making is linked with reducing work stress and increasing employee engagement.
 * 8) Collaborate: Working in effective teams fosters employee engagement and synergy.
 * 9) Credibility: The credibility of an organisation in terms of corporate social responsibility methods and reputation has also been positively linked to employee engagement, as pride in their job and organisation stimulates engagement.
 * 10) Confidence: Closely linked to credibility, Seijts and Crim (2006) also believe that employees need to have confidence in their organisation and its reputation and ethical standards in order to increase employee engagement.

Eichinger et al.'s theory
Eichinger et al. (2009) states that the single most important causing factor that drives employee engagement is the immediate manager working relationship. Eichinger et al. (2009) conclude in their research that a good manager is skilled in informing employees of the required task, providing constructive performance feedback, recognising good performance and positive contributions, supporting career development and effective divination and allocation of tasks. Combinations of these factors have been shown to foster positive work environments and increase levels of employee engagement.

Herzberg's Motivators
According to Frederick Herzberg, there are six internal motivating factors that drive employee engagement. These are:
 * 1) Sense of achievement: Feeling accomplished from completing work tasks.
 * 2) Recognition: Providing employees with positive and consistent feedback.
 * 3) The work itself: Employees feeling that their job and tasks have purpose towards reaching the goals of the organisation.
 * 4) Responsibility: Employees feeling that their job is of significant importance.
 * 5) The opportunity for advancement: Providing employees with opportunities for career development.
 * 6) Personal growth: Employees feeling a sense of personal development as a result of their work for the organisation.

Job Design
Jobs which are diverse in nature, are significant, encourage autonomy, and provide performance appraisal are shown by studies to promote internal motivation, personal responsibility and job satisfaction, which are all linked to positive levels of employee engagement. Considering that individuals are motivated and satisfied by different components of their career and work, academics suggest that customising job design based on an individual's characteristics and drivers should bolster employee engagement. Literature concludes that effective job design is integral for an employee to work to the standards of managers and organisations with "undue stress", providing "enough challenge and variety to keep the job performer engaged and motivated".

An example of job design connected to employee engagement relates to the jobs at The Vet Group, which academics believe are designed to encourage specialisation. Work is divided into specific tasks, resulting in each employee becoming very competent and efficient at their assigned tasks. However, specialisation is shown to have a negative impact on employee motivation. Despite that the employee may become very competent at a particular task, lack of variety in work duties can result in boredom and reduced productivity. From this study, a suggested implication is that managers should find the optimal level of specialisation that encourages both employee engagement and productivity.

Pay & Remuneration Strategies
Each individual employee are motivated by a different set of factors that cause them to remain and continue to be engaged in their job. According to Frederick Herzberg's Motivation and Hygiene factors, pay and remuneration strategies dissatisfy employees, as opposed to motivating them.

Category-based measurement
There are several frameworks which categories the various levels of employee engagement.

BlessingWhite Organization's Employee Engagements categorisations
BlessingWhite's framework classifies employee engagement into five categories. These categories are defined by the level of individual contribution towards organisational achievement and satisfaction received from the job.


 * 1) The engaged: Employees who exhibit high levels of productivity and happiness. These individuals strive to perfect their work and are committed towards their job and organisation.
 * 2) Almost engaged: Employees who are reasonably productive and content with their job. There is room for their engagement levels to be enhanced by managers and the organisation.
 * 3) Honeymooners and Hamsters: Employees who are satisfied with designation holding, the organisation they work for and the rewards they receive. These individuals however do not contribute significantly to organisational success. This period of satisfaction may be temporary, and there is room for their engagement levels to be enhanced by managers and the organisation.
 * 4) Crash Burners: Employees who have high levels of productivity and contribute significantly to the organisation, however are not happy with their personal success. There is potential for these employees to become disengaged.
 * 5) Disengaged: Employees who are dissatisfied with their work and their organisation.

Gallup Institute's Types of Employees
The Gallup Institute's model is a simplified version of BlessingWhite's framework. It concludes there are three types of engagement levels:
 * 1) Engaged employees: Employees who consistently strive to achieve excellence for themselves and their organisation.
 * 2) Not Engaged employees: Employees who focus solely on their tasks and are not concerned with the goals of the organisation.
 * 3) Disengaged employees: Employees who underperform in regards to their work and also demotivate performers within the organisation.

Survey-based Measurement
Engagement surveys are a broadly applied approach that enable employees to rate their own levels of engagement. Assuming that all questions are answered truthfully, these surveys provide a qualitative insight into the drivers and inhibitors of employee engagement. The questions for these surveys vary depending on the values of the organisation and the industry in which it is situated. The Gallup Institute's annual employee engagement survey is based on the following criteria:
 * 1) The primary needs of employees;
 * 2) How employees contribute to the organisation and how they are valued;
 * 3) The organisational fit of employees; and
 * 4) Career and personal development.

Organisations cannot ensure that employees' answers are objective using survey-based measurement. Answers can be also be time sensitive due to availability bias, as employees may only think of recent events. There is also the potential for gamed results, where employees tell you what they think you want to know, instead of their true feelings and opinions.

People Analytics
People analytics is a recently developed technology related to big data generation. When applied to employee engagement, organisations can examine engagement levels by analysing quantitative metrics (actual engagement levels) as opposed to qualitative data (self-perceived engagement). Some example metrics include: Big data technology can be used to determine which factors contribute to the organisation's overall employee engagement levels.
 * 1) The quantity of work employees conduct outside of their scheduled working hours;
 * 2) The number of professional connections and amount of time spent with colleagues or associates outside their primary team;
 * 3) The percentage of employees participating in ad-hoc meetings and initiatives compared to regular meetings and procedures; and
 * 4) The amount of time spent collaborating with customers outside the scope of an employee's job requirements.

Organisational
Many managers consider investing in employee engagement an important component of reaching organisational success, as academics have concluded that talent management is strongly correlated with improved business performance. Research has found that organisations that achieve a standard deviation of 0.43 above the median in regards to employee engagement levels experience a "103% higher success rate at the business level" compared to employees situated at the lower end of the median. The following are samples of various organisational consequences.


 * 1) Enhanced efficiency: High levels of engagement have been found to increase both the efficiency and effectiveness of operations within an organisation, and is positively correlated with employee retention and high quality output. According to the Harvard Business Review, top-quartile engagement firms generally have lower absenteeism and turnover, and highly engaged organisations experience double the rate of success of lower engaged organisations.
 * 2) Positive financial outcomes: Research has indicated that organisations with highly engaged employees portray a strong positive correlation to positive financial outcomes, measured in terms of Return on Assets, Profitability, and Shareholder Value. Increased levels of employee engagement are also shown by studies to foster a positive organisational culture. Academics delineated that engaged employees view their organisation and job as a healthy environment, which in turn leads them to support the organisation and its business goals. Researches have deemed that an organisation that is able to cultivate a positive work environment, challenging enough for its employees to feel engaged will maximise organisational value . Financial News, March 2001, stated by Accord Management Systems (2004), discloses that disengaged employees are associated with increased costs in terms of profitability, productivity, and absenteeism. According to the report, employees who are disengaged miss an average of 3.5 more days per year , resulting in less productivity and therefore costing the US economy approximately $292 to $355 billion each year.
 * 3) Customer Loyalty and Satisfaction:  Customer loyalty and satisfaction is a “behavioral construct and refers to a customer’s behavioral intentions as measured by the likelihood that the customer will return to an establishment. Customer loyalty and satisfaction are strongly linked to a favourable service environment and excellent employee performance, both of which are strongly influenced by employee engagement. Salanova et al (2005) determined that developing positive interactive relationships between employees and customers increases the likelihood of customer loyalty.
 * 4) Methodological: Practitioners believe there are a number of risks in working with engagement data, which are typically drawn from survey evidence. There are considered to be many difficulties in measuring employee engagement and performance, including the risk of mistaking correlations for causation, making invalid comparisons between similar-sounding data drawn from diverging methodologies and/or incomparable populations, misunderstanding or misrepresented basic concepts and assumptions, and accurately establishing margins of error in data (ensuring signal and noise are kept distinct). Academics also find it difficult to define the scope of employee engagement research, as it can be administered on a variety of organisational levels.
 * 5) Administrative: A focus on survey administration, data gathering and analysis of results (rather than taking action) may also damage engagement efforts. Academics believe that organisations that survey their workforce without acting on the feedback appear to negatively impact engagement scores . The reporting and oversight requirements of engagement initiatives are considered to represent a claim on the scarcest resources (time and money) of the organisation, and therefore requires management time to demonstrate value added. At the same time, actions on the basis of engagement surveys are usually devolved to local management, where any 'value add' is counted in local performance. Central administration of employee engagement is therefore challenging to maintain over time.
 * 6) Consistency: Zigarmi et al. (2009) and other scholars believed that there is a gap between the research results on employee engagement, and the practice of increasing employee engagement levels by managers. According to several studies, researchers and practitioners have many differences of opinions on how to foster employee engagement, thus making it difficult to study the field in an appropriate context.
 * 7) Ethical: Were it proven possible to alter employees' attitudes and behaviours in the manner intended, and with the expected value-adding results for the organisation, many questions remain from academics as to whether it would be ethical to do so. Generally practitioners acknowledge that the old model of the psychological contract is gone, but attempting to programme a one-way identification in its place, from employee to organisation, may be seen as morally and perhaps politically loaded.
 * 8)  Globalisation: Studies have shown that employee engagement is not able to keep up with the pace of the globalisation of organisations, due to employees struggling to understand the cultures and performance drivers of their global counterparts.

Employees
Several consequences exist at the personal level which employees face in terms of employee engagement. The following are samples of these consequences.
 * 1) Work relationships: Employees who are highly engaged are found to have greater interpersonal attraction to fellow employees. Researchers determined that engaged employees are also more likely to respond positively to positive social influence attempts of a fellow employee. Anitha (2013) concluded that developing trust and supportive teams is influential in foster a supportive work environment that promotes individual development without fearing failure. When examined as a motivational construct, it is possible for engagement levels to be shared between employees, thus bolstering morale.
 * 2) Relationship with organisation: Studies have shown that employees who are engaged are more likely to have and express positive feelings towards an organisation, and are more readily to adapt to organisational change.
 * 3) Improved quality of work and health: Studies have shown that business units with higher employee engagement score report 48% less safety incidents, 41% less patient safety incidents, and 41% less quality incidents.
 * 4) Higher performance: According to Trahant's (2009) research, employees who are highly engaged are twice as likely as those who are less engaged to be "top performers in their organisations". In addition, three-quarters of highly engaged employees were found to either exceed or far exceed the expectations of their work requirements.
 * 5) Increased task activity and persistence: Employees who are highly engaged are found to persist with their tasks for longer periods of time.
 * 6) Productivity: An engaged employee often portrays enthusiasm and commitment to their work and takes positive action to further the organisation’s business goals and interests. Scientific research has increasingly found that having a highly engaged workforce maximises a company's investment in human capital and improves individual and overall productivity for the work place. In addition, it significantly reduces turnover costs. In a study of professional service firms, the Hay Group found that offices with engaged employees were up to 43% more productive.

Managers
In order to maintain employee engagement, academics believe that managers must keep up with the ever-changing skills of its employees so they can adapt their management style to suit and drive engagement. Managers who express care and concern for their employees' well being, who encourage the development of new key skills, and actively cultivate a supportive work environment, are found to be those who most maintain and increase engagement levels of employees.

Anitha (2013) believes that effective leadership is a crucial skill for managers to utilise in order to effectively drive employee engagement. Effective leadership (being self aware, making decisions carefully and effectively, transparency with employees, consistent moral standards) is found to naturally foster employee engagement, thus is considered by academics to be a more effective method of raising employee engagement levels.

A survey by the Harvard Business Review found that companies who actively seek to foster high levels of employee engagement ensure that goal alignment is clearly communicated by managers (both senior and middle) throughout every level of the organisation. They also implement a variety of engagement initiatives to improve performance such as customer satisfaction surveys and feedback to ensure appropriate alignment of activities linked to high levels of performance.

Case Studies of Employee Engagement
Involvement Case Studies

In 2000, a group of academics studied 15 steel mills, 17 apparel manufacturers, and 10 electronic instrument and imaging equipment producers, with the intention of comparing traditional production systems with flexible high-performance production systems (designed to increase employee engagement through training, teamwork, and pay and renumeration strategies). The results concluded that in each industry, plants that utilised high-involvement practices performed exceptionally compared to those which utilised traditional systems. Employees at the high-involvement plants exhibited greater positivity for their work and the organisation (including organisational commitment, trust between colleagues, and genuinely enjoying their work). This study is also linked to productivity, employee voice and empowerment.

Several other studies have examined employees in the life insurance industry and the impact of perception (when employees thought they had the autonomy and power to make decisions regarding their work, were sufficiently proficient at their job, and were rewarded for exceptional work). Results concluded that high-involvement management practices were linked positively to retention of employees, morale, and the organisation's financial performance.

Organisational Performance Case Study: Caterpillar 

Caterpillar, a construction-equipment maker has achieved notable results from its employee engagement initiatives. The results included:
 * 1) Savings of up to $8.8 million from a decrease in attrition, absenteeism and overtime;
 * 2) Output increases of 70% in less than four months;
 * 3) Decrease in the break-even point by approximately 50% in units/day;
 * 4) Decrease in grievances by 80%;
 * 5) Profit increases of $2 million; and
 * 6) Customer satisfaction increases of 34%.

Aon Hewiitt Case Studies

Aon Hewitt worked with a larger retailer (with over 1000 stores) to analyse linkages between employee engagement and performance measures (sales growth, loss prevention, and customer satisfaction). Their report also discussed key employee engagement drivers and the factors that were deemed most likely to improve and maintain engagement. It was discovered that:
 * 1) Customer satisfaction ratings were 5% higher in stores with higher engagement levels as opposed to stores with lower engagement levels; and
 * 2) Sales growth was 2% higher in stores with higher engagement levels as opposed to stores with lower engagement level.

The data analysed was compiled from 2011 to 2012, which means that researchers were able to examine links and relationships within the data over a period of time. It is possible that these results were affected by several factors including type of store and location.

Bain & Company: Trends in Employee Engagement

A survey conducted by Bain & Company in conjunction with Netsurvey found several negative trends associated with employee engagement. This survey analysed responses from 200 000 employees across 40 companies in 60 countries. The major trends consisted of the following:
 * 1) As employee tenure increases, engagement scores decline.
 * 2) Employees who are of a lower hierarchy on the organisational chart tend to have lower engagement scores when compared with those of higher seniority.
 * 3) Sales and service employees have the lowest engagement levels out of all industries examined.