Employee Engagement

Employee Engagement
What is it? Why does it matter? What drives it? How can you measure it? Is it significant?

What is it?
Engaged employees are not just committed; not just passionate or
proud. They have line-of-sight on their own future and on the organizations mission and goals. They are enthused and in gear using their talents and discretionary effort to make a difference in their employers quest for sustainable business success.
Blessing White, The State of Employee Engagement 2008

A positive attitude held by the employee towards the organisation

and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organisation. It requires a two-way relationship between employer and employee.
Institute for Employment Studies, Engagement: The Continuing Story 2007

Employee Engagement is a combination of commitment to the

University of York

organisation and its values plus a willingness to help out colleagues.

What is it?
It is inversely associated with stress. Hockey (2000) says that people adapt to the demands of work in three ways:

Effort without distress (Engagement)

Working harder and deriving satisfaction

Distress without effort (Disengagement)

Giving up and feeling bad about it

Effort with distress (Strain)

Working harder but with fatigue and anxiety

What is it?
It is closely linked to Affective Commitment:

The employee's positive emotional attachment to the

Meyer & Allen (1990)

organization. An employee who is affectively committed strongly identifies with the goals of the organization and desires to remain a part of the organization. Employees are involved in occupational activities that they enjoy and that they are able to effectively pursue unfettered by unnecessary organisational constraints.
OMalley (2000)

The relationship exists because it is pleasurable.

What is it?
Definitions may vary, but there is broad agreement on the basics:

a positive attitude towards, and pride in, the organisation belief in the organisations products/services a sense that the organisation enables the employee to perform well a wish to behave collaboratively and be a good team player a willingness to go beyond the requirements of the job. a desire to work to make things better an understanding of business context and bigger picture being respectful of, and helpful to, colleagues keeping up to date with developments in the field.

Why does it matter?

Employee Engagement Business Performance

Companies with HIGH employee engagement saw: 13.2% improvement in net income growth 19.2% improvement in operating income 27.8% improvement in Earnings per Share Companies with LOW employee engagement saw 3.8% decline in net income 32.7% decline in net income growth 11.2% decline in EPS
(Source: ISR. 664,000 employees world wide, one-year study, 2006)

Why does it matter?

Engaged employees: Perform up to 20% better than less-engaged employees Are 87% less likely to leave the organisation than employees with low levels of engagement Are more innovative Are more committed to customer satisfaction Contribute more to their organisation than their less engaged peers Consistently go the extra mile

(Source: CLC. 50,000 employees world wide, 2004)

What drives it?

There have been innumerable studies
looking for the common drivers of Engagement. Substantial differences have been found between nationalities and types of people. There seem to be four principle common themes in which the drivers lie

What drives it?

Organisational Commitment
The psychological attachment of an employee to an organisation The shared ethos of meeting customer needs

Service Commitment

Engagement

Work & Career Commitment

The importance an individual places on the actual work they do and the development of a career

The day to day impact of the work done and the immediate context within which it is set

Job Satisfaction

How can you measure it?

Invite respondents to agree or disagree
with a series of statements that comprehensively address the four key themes. We have identified a bank of 30 items. This list can be reduced to between 10 and 20 items when set in the context of a broader employee survey.

How can you measure it?

For each respondent we use an algorithm to calculate an Engagement score based on the individual items - and express it as a score out of 100.
90 100

80 70 60 50 40 30 20 10 0

68

Engagement Index

How can you measure it?

The index provides a reliable comparative single
number measure for different groupings within the survey and on an historical basis personalised measure is fraught with danger but, in general:
Below 50% 50% to 60% 60% to 70% 70% to 80% Over 80% - critical - poor - moderate - good - excellent

External comparison of such a highly

How can you measure it?

For each, and any, business unit or demographic group within the survey we can then calculate an overall index score and, if numbers permit, an histogram of the way in which Engagement is distributed.
50 40

Frequency

30

Engagement Histogram

20

10

15 %

21 %

39 %

45 %

57 %

63 %

82 %

27 %

33 %

51 %

70 %

76 %

88 %

94 %

3%

9%

Engagement level

10 0%

How can you measure it?

The histogram provides a powerful visual
representation of something very complex. It allows us to identify the proportions that fall into the main engagement categories:
Engaged Enrolled Disenchanted Disengaged (70% engagement or higher) (50 to 70% engagement) (30% to 50% engagement) (30% engagement or less)

Is it significant?
Statistical Significance is based on Confidence
Intervals, and depends on three things:
The degree of confidence is the biggest influence. We often set this at 95%. 90% being much easier to prove, 99% harder. The number of respondents is next the CI for small groups can be enormous. The CI is widest for scores of 50% and gets easier to prove as scores increase or decrease.

What is significant?
At individual item level we can use the
statistical Test for Proportions:

At index level we can use a t-test:

P=[p1n1 + p2n2] / [n1 + n2]

However, this is only relevant to very large

groups.

Is it significant?
Let common sense prevail; we are dealing
with people not data. Significance addresses random variation whilst we are dealing with considered responses. If one figure is more than fractionally higher than another it probably means something. Even if it doesnt it is highly unlikely to mean the opposite!