Business Imperative of Employee Engagement

Organizations that fail to engage their employees fail to realise value.

Defining Engagement
The extent to which an employee is committed to their work and their organization, and the extent to which this commitment impacts their performance and intent to stay with the organization. A positive attitude held by the employee towards the organisation and its value. An engaged employee is aware of business contexts and works with colleagues to improve performance within the job.

The extent to which employees identify with, are motivated by, and are willing to expend energy and extra effort for their employer.

So What is it?
Based on these definitions, engagement is the sum total of the behaviour employees espouse in the organisation which primarily should be characterised by:

Belief in the organisation

Drive to work and make things better

Respect and support for others

Desire to learn new skills

Engagement is Commitment Based

Rational Commitment: Employees believe they will personally benefit financially, developmentally, or professionally from the team or organization. It makes sense for them to stay with the organization. Emotional Commitment: Believing in, valuing, or enjoying their day-to-day work, teams, managers or organizations. Because they can make a link between their role and organizational objectives and value system, and they enjoy or find fulfillment in the work

ISR report
Organizations with highly engaged employees have lower staff turnover, and lower absenteeism. The most dramatic results are seen when engagement is measured in the context of other business measures. In organizations with high levels of engagement operating income improved by 19.2 percent over 12 months, while in organizations with low levels of engagement it declined by 32.7 percent

Rational Commitment Driven By

Remuneration Incentives Career growth opportunities Health benefits Work environment Learning and development opportunities Work-life balance

Rational commitment drives intent to stay RETENTION

Emotional Commitment Driven By

Enjoyment of ones job Role clarity Understanding the link between ones job and organisational strategy Belief in organisational values Respect in direct manager, team and organisation Emotional commitment drives discretionary effort - PERFORMANCE

Tangible Business Benefits

Better performance: engaged employees work smarter. They keep looking for ways to improve performance. This means more sales, lower costs, better quality and innovative products. Greater stakeholder satisfaction: engaged employees go out of their way to meet stakeholder needs leading to customer retention and reducing the cost to business of acquiring or attracting new customers. Lower employee turnover and greater ability to attract key talent: engaged employees dont leave at the rate their disengaged counterparts do, despite offers to work elsewhere or opportunities arising elsewhere.

Drivers of Engagement
One of the strongest drivers is a sense of feeling valued and involved. This has four key components: 1. The opportunities employees have to develop themselves through their jobs and career opportunities 2. The extent to which the organisation is concerned for employees health and wellbeing 3. Involvement in decision making, and 4. The extent to which employees feel able to voice their ideas, and managers listen to these views and value employees contributions

Complimentary Drivers
Senior managements interest in employees wellbeing Challenging work Decision-making authority Evidence that the company is focused on customers Career advancement opportunities The companys reputation as a good employer A collaborative work environment where people work well in teams Resources to get the job done Input on decision making A clear vision from senior management about future success.

Dimensions of Engagement
Source: Corporate Leadership Council

Day to Day Work Rational Commitment: The Extent to which employees believe that managers, teams or organisations have their interests in mind.

Team

Intent to stay Employee desire to stay with the organisation, based on whether they intend to look for a job within a year.

Retention

Direct Manager Emotional Commitment: The extent to which employees value, enjoy, and believe in their jobs, managers, teams or organisations. Discretionary Effort: Employees willingness to go above and beyond the call of duty.
Performance

Organisation

Only Useful Engagement is Directed

If engagement does not lead to increased effort, and or intent to stay, it is not directed. Engagement drivers are those things that will enhance an employees directed commitment to the organisation. Simply put, they are an exploration of the conditions under which are employees are either engaged or disengaged and examine what happens under both conditions.

Why is it an issue now?

Greater and more challenging opportunities arise for employees Greater mobility of the workforce The war for talent is intensifying Businesses under more pressure to perform

1.Right Employees in the Right Job

Skills to do the job (can do) and that their jobs tap into their personal motivators (will do). Effectively deploy talents When job fit is high, an employee performs better and is more likely to stay with the organisation. Engagement propensity In ten studies across six organisations and seven job families (using a number of propensity test items) it was found that engagement was significantly correlated to these six factors: Attachment to the job Agreeableness Emotional stability Openness to experience Achievement orientation Self efficacy These findings show that in addition to assessing motivational job fit when hiring new employees, organisations can use appropriate and validated tests to identify employees who are more likely to be engaged on the job.

2. Exceptional Leadership
Employee engagement is directly affected by the quality of leadership. Leaders have the influence and power to serve as catalysts for higher levels of engagement, not only in one or two areas, but in all aspects of leadership. Our research shows that: More engaged managers have more engaged direct reports The direct reports of engaged managers are less likely to leave the organisation Higher performing managers have direct reports who are more highly engaged Engaged leaders understand that their role is not to take charge of all the decisions, but to be more encouraging. Its about recognition for a job well done holding people accountable for their performance.

3. Organisational Systems and Processes

It almost has to go without saying organisations need strong systems and strategies that support and foster engagement. Examples of these systems are: Screening at hiring promotion, performance management, recognition, compensation, training and career development. Aligned, these systems provide a firm foundation upon which to accelerate engagement. A shaky or incomplete foundation will make your efforts to build engagement more difficult, if not impossible.

Value Proposition
ENGAGEMENT DRIVERS Right employees in the right jobs Exceptional leadership Organisational systems and strategies INPUT WORK ENVIRONMENT Aligned effort and strategy Empowerment Teamwork/collaboration Growth and development Support and recognition

ENGAGED EMPLOYEES Intend to stay longer Enhanced effort

ORGANISATIONAL SUCCESS Satisfied / loyal customers Increased retention Higher output, productivity and/or profits Revenue/ value growth

OUTPUT

Introspection
Am an engaged HR leader? How engaged is my workforce? Is engagement something important for my organisation

Conclusion
Engagement is the extent to which an employee is committed to their job, and the extent to which this commitment drives their performance and intent to stay with the organisation. Engagement does not just materialise, organisations must hire employees who fit the job, develop leaders and provide support through strong systems and strategies. Further more, organisations must invest in understanding, measuring and developing solutions to engagement challenges.