Business Imperative of Employee Engagement

Business Imperative of Employee
Engagement

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

©CHRODA Copyright 2007 www.chroda.net

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.”

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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

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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

4

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

ISR Report

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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

6

Emotional Commitment Driven By
• Enjoyment of one’s job
• Role clarity
• Understanding the link between one’s job and organisational strategy
• Belief in organisational values
• Respect in direct manager, team and organisation

Emotional commitment drives discretionary effort - PERFORMANCE

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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 don’t leave at the rate their disengaged
counterparts do, despite offers to work elsewhere or opportunities
arising elsewhere.

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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 employee’s 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 employee’s contributions

9

Complimentary Drivers
• Senior management’s interest in employees’ well-being
• Challenging work
• Decision-making authority
• Evidence that the company is focused on customers
• Career advancement opportunities
• The company’s 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.

10

Dimensions of Engagement

Day to Day Work
Rational Commitment: The Intent to stay Employee
Extent to which employees desire to stay with the Retention
Retention
believe that managers, teams organisation, based on
or organisations have their whether they intend
interests in mind. Team to look for a job within a
year.

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

Source: Corporate Leadership Council

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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.

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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

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Role Based Levels of Engagement
There are five work related roles that an employee can assume and these
are:

– Job Holder Role: employees come to work and do the job that is
listed in their job description.

– Team member role: employees go “above and beyond” to help
members of their team work toward common goals.

– Entrepreneur role: employees come up with new ideas and
processes and try to get those ideas implemented.

– Career role: employees do things to enhance their career in the
organisation; they learn, they adapt new skills, and more.

– Organisation member role: employees do things that promote and
help the company even if it’s not part of their jobs or their team’s duties.
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Role Based Levels of Engagement
• Based on these role descriptions, it is clear that employees are in highly
engaged state when they are doing non-job roles.

• most employees have a sense of responsibility, and even if their employers
treat them unfairly, they still show up to work and do the job.

• having employees show up at work simply doing their jobs gets an employer
nowhere in terms of long term competitiveness.

• If all your employees simply show up and only do their jobs, then you are
not building organisational strength and long-term competitiveness through
people.

• It’s the synergy that comes from people working together and gathering
creative ideas that leads to long-term organisation sustainability. That synergy
and “above and beyond” behaviour is evidence of employee engagement.

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Sources of Influence
• Organisations drive engagement by proactively leveraging three
sources of influence for change:
1. Right employees
2. Exceptional leaders
3. Organisational systems and strategies.
• These three drivers work in concert to build an engaging work
environment.
• Although engagement has multiple drivers, the ultimate ownership
rests within the employee.
• Organisations hoping to drive engagement must tap into
employee’s passion, commitment, and identification with the
organisation.

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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.

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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.
• It’s about recognition for a job well done– holding people accountable for their
performance.

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PROFILE OF ENGAGED LEADERS

COACH AND DEVELOP FOR RESULTS MANAGE WORK
Effective leaders know that team members are more engaged when they can Leaders who do a good job of managing work understand the difference
“get it right” the first time. They spend more time coaching for success between delegation and dumping. Effective leaders distribute work
(proactively) than coaching for improvement (reactively). For long term appropriately, and they make it meaningful. They are also effective at making
development, leaders need to know how to position high payoff decisions, planning and organising, and following up.
development activities that benefit the individual, and at the same time,
address the team’s and organisation’s goals and needs.
PARTNER WITHIN AND ACROSS TEAMS
People are more engaged in an environment that is collaborative and not
DRIVE PERFORMANCE
adversarial. Effective leaders have mastered not only the intra-team skills to
We’ve all had that experience - one person on the team not pulling their get people engaged, but also the inter-team skills.
weight and the leader is not holding the person accountable. It’s disengaging
right? Engagement is higher when leaders set clear goals and they hold people
accountable. INFLUENCE THROUGH PERSONAL POWER
Leaders who influence versus those who ‘flex their muscles’ are clearly more
engaging and have learned how to build sufficient commitment to move good
INSPIRE LOYALTY AND TRUST
ideas through their organisation.
Engaging leaders understand that they need to proactively build an
environment where employees are motivated, engaged, and retained.
Effective leaders don’t wait to get the resignation to know that an employee .
is dissatisfied.
SELECT TALENT
It is best to start with people who have a better change of being engaged
and people who not only can do the job, but also want to do the job.
Leaders who have the skills and knowledge to select highly engaged
employees can make a great contribution in both the present and the future

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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.

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

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Introspection
• Am an engaged HR leader?

• How engaged is my workforce?

• Is engagement something important for my organisation

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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.

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Business Imperative of Employee Engagement

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