Organisation Behaviour Assignment-1

Employee Engagement

Kumar Abhishek

PGPIM (2012-13)

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Table of Contents

Inroduction ....................................................................................................................................... 3

Organizational Commitment ............................................................................................................. 3

Job Involvement ............................................................................................................................... 4

Outcomes of Engagement ................................................................................................................. 5

Customer loyalty ........................................................................................................................... 5

Employee retention ...................................................................................................................... 5

Employee productivity .................................................................................................................. 6

Manager self-efficacy .................................................................................................................... 6

Key points ................................................................................................................................. 6

Variations in Employee Engagement ................................................................................................. 7

Are some people more likely to engage than others? .................................................................... 7

Generation Y ................................................................................................................................. 7

Differences in employee lifestyle expectations .............................................................................. 7

Measuring Employee Engagement .................................................................................................... 8

Conclusion ........................................................................................................................................ 8

LEARNING ....................................................................................................................................... 10

Past work experience ...................................................................................................................... 11

Bibliography .................................................................................................................................... 12

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Inroduction Employee engagement has emerged as one of the most important topics in the sphere of human

resource management. It stands for the extent to which the employees are committed to the vision,

mission and goals of the organization and involved with the work they do. Employee engagement

has become a hot topic in the world of human resource management. An engaged employee is the

one who is fully involved in and enthusiastic about his work and thus will act in a way that furthers

his organization's interests.

Engaged employees care about and are loyal to the future of the organization. They are willing to put

in extra efforts to ensure that the organization is led to growth and development. According to

Gallup(2006)1 there are the following three types of people in terms of their level of engagement:

(a) Engaged employees are builders. They perform at consistently high levels. They want to use their

talents and strengths at work every day. They work with passion and they drive innovation and move

their organization forward.

(b) Not Engaged employees tend to concentrate on tasks rather than the goals. They want to be told

what to do. Employees who are not-engaged tend to feel their contributions are being overlooked.

(c) Actively Disengaged employees are the "cave dwellers." They are consistently against virtually

everything. They sow seeds of negativity at every opportunity. Every day, actively disengaged

workers undermine what their engaged coworkers accomplish.

To sum up, the concept of employee engagement is an amalgam of essentially two well-known

constructs, namely, organizational commitment and job involvement.

Organizational Commitment The concept of organizational commitment has attracted considerable attention over the past many

years but has become the central objective of contemporary human resource management (HRM).

Meyer and Allen(1991)2 have identified three types of commitment: affective commitment,

continuance commitment and normative commitment.

1) Affective Commitment: is defined as emotional attachment, identification and involvement

that an employee has with his organization and its goals.

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2) Continuance commitment: is the willingness to remain in an organization because of the

investment that the employee has made with nontransferable investments. Nontransferable

investments include things such as retirement benefits, relationships with other employees

and the benefits that the employee may receive that are unique to the organization.

3) Normative commitment: is the commitment of the person to the organization or his feeling

of obligation to the workplace.

The three types of commitment characterize the employee's relationship with the organization, which

has implication for, among other things, his decision to continue or discontinue membership in the

organization. Employees with a strong affective commitment remain with an organization because

they want to; those with a strong continuance commitment remain because they have to; and those

with a strong normative commitment remain because they feel they ought to.

Kassahun(2005)3 found employee age as the most important predictor of organizational

commitment. Gupta' found that the number of promotions received was significantly related to the

continuance commitment. Kumar and Giri(2007)4 have argued that it is important for organizations

to examine the policies they implement to increase commitment. In a study of 88 managerial

employees from two manufacturing organizations belonging to the .same industry, Mohapatra and

Sharma(2008)5 found organizational commitment to be influenced by three dimensions of

organizational climate (progressive management, participative management and interpersonal

harmony) and one of the personal attributes (need for power). Together these four variables

explained 66.7 percent of the variance in organizational commitment.

Job Involvement Job involvement refers to a person who is fully involved in and enthusiastic about his or her work.

Job involvement is how people see their jobs in terms of a relationship with the working

environment, the job itself and how their work and life are balanced. Having low job involvement

reflects employees' feelings of alienation of purpose and alienation from the organization, that is, a

feeling of separation between what the employees see as their life and the work they do. Work

alienation and job involvement are, therefore, the opposite poles of the continuum. Mishra and

Gupta6 examined the effect of motivation, alienation and job involvement on performance of blue

collar workers and found that motivation and alienation emerged as the most important predictors of

work performance. Joshi7 compared public and private sector employees in terms of job satisfaction,

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job involvement and work involvement and found that public and private sector employees differed

in terms of the above mentioned factors. Joshi8 also found that the employee's age, job experience

and monthly income were significantly related to job experience and monthly income were

significantly related to job involvement.

Outcomes of Engagement

Customer loyalty Levinson (2007a)

9 suggests that employees who are happy in their work are more likely to create

loyal customers. Engaged employees tend to have a better understanding of how to meet customer

needs (Right Management, 2006)10

and, as a result, customer loyalty tends to be better in

organizations where the employees are engaged (Pont, 2004)11

. Levinson (2007b)12

claims that ‘in

departments where [highly] engaged employees sell to engaged customers, customer loyalty, repeat

purchases and recommendations to friends are double that of companies with average employee

engagement’. Ultimately, this may lead to what is sometimes termed ‘customer engagement’, where

there is a mental and emotional connection between the organization and the customer (Bates, 2004).

Employee retention Levinson (2007a)

9 also suggests that employees who are happy in their work are more likely to stay

in the organisation, and Demourouti et al. (2001, cited in Sonnentag, 2003) found that work

engagement is indeed positively related to organisational commitment. BlessingWhite (2008) reports

that 85 per cent of engaged employees plan on sticking around compared to 27 per cent of

disengaged employees. In addition, 41 per cent of engaged employees said that they would stay if

the organization is struggling to survive.

Personal attributes

Situational factors

Employee Engagement

Organizational Performance

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Employee productivity Engagement affects employee performance (Kahn, 1990)

13. ‘Engaged employees work harder, are

more loyal and are more likely to go the ‘extra mile’ for the corporation’ (Lockwood, 2007, p. 3)14

.

Wellins and Concelman suggest that engagement is an ‘illusive force’ that motivates an individual

to achieve higher levels of performance. A study of 50,000 employees found that the most engaged

and committed perform 20 per cent better than their colleagues (Corporate Leadership Council,

2004). Sonnentag’s (2003)15

survey of employees from six public service organizations found that

high levels of engagement at work support employees in ‘taking initiative and pursuing learning

goals’. Likewise, Watson Wyatt’s (2007)16

survey of 946 companies across 22 countries found that

employees who are highly engaged are more than twice more likely to be top performers than are

other employees.

Manager self-efficacy Academic research by Luthans and Peterson (2002)

17 found employees who are engaged in their

organization and their work are more likely to respond positively to their managers, demonstrate

good performance and achieve success. This then helps their manager to be more effective and

successful, which in turn increases the manager’s self‐efficacy. Research has shown that

self‐efficacy is positively linked to work performance, in that individuals with higher self‐efficacy

are more likely to be proactive in initiating work, and show sustained effort and determination in

their pursuit to achieve the task, even when problems occur.

Key points Research suggests a positive relationship between engaged employees and customer

engagement, expressed in customer loyalty and recommendations to others.

Engaged employees are more likely to stay with the organization, perform 20 percent better

than their colleagues, and act as advocates of the organization.

Engagement can have a significant impact on the performance of the organization, driving

bottom‐line profit and enabling organizational agility and improved efficiency in driving

change initiatives.

Engagement may enable individuals to invest themselves fully in their work, with increased

self‐efficacy and a positive impact upon the employees health and well‐being, which in turn

evokes increased employee support for the organization.

Boosting engagement may have negative repercussions for retention of the ‘almost engaged’.

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Variations in Employee Engagement

Are some people more likely to engage than others? The survey done by Robinson et al.’s (2007)

18 revealed differences in levels according to gender,

age, ethnicity, disability and those with caring responsibilities:

Gender: women appeared slightly more engaged than men in some organizations.

Age: engagement was highest in those under 20 years old and those 60 years plus, but

dropped between 20 and 39 years old, before climbing again.

Ethnicity: ethnic minority groups reported slightly higher engagement levels than their

white counterparts.

Disability: generally, disabled individuals reported higher engagement than those without a

disability or medical condition.

Generation Y Blessing White’s

19 survey of over 7,500 individuals and interviews with senior human resource and

line managers found that at least a quarter of Generation Y employees globally are disengaged with

the exception of India, where all generations have higher engagement levels than other regions. They

suggest that the older the employee, the more engaged they are, with employees born since 1980

being the least engaged members of the workplace. Generation Y’s apparent low engagement with

their organizations, compared to their older colleagues, may be a result of their different values, their

different attitudes towards work and the different demands they have of their work and their

employers. If the organization does not respond to these, then non engagement or even

disengagement may be almost inevitable.

Differences in employee lifestyle expectations Organizations need to realize that they are not managing the same world as they were five years ago.

The technology, people, and the overall work environment have moved on, meaning that today’s

organizations need to be flexible (Johnson,2004)20

. Employees now define themselves not by the

work they do but by the lifestyles they have chosen to lead. Engagement now begins with

employees’ lifestyles and what they consider is worth investing themselves in; the choice to engage

lies with the employee (Johnson, 2004). It is something that is given, not taken, by the employer.

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Measuring Employee Engagement The lack of a clear definition of employee engagement and the differing requirements of each

organisation means there is likely to be considerable variation in what is measured in engagement

surveys. Institute of Employment Studies (IES) has developed a statistically reliable measure of

engagement which focuses on organizational citizenship, commitment, aligning individual and

organisational values, and the extent to which the organisation enables the individual to perform

well.

Other measures available include The Gallup Workplace Audit (q12), Roffey Park Institute’s

Engagement Diagnostic Service21

, Net Promoter, The Towers Perrin Rapid Engagement Diagnostic

Survey and The Utrecht Work Engagement Scale22

. To achieve employee confidence and trust in the

actions taken as a result of a survey, feedback needs to be transparent and shown to be directly

related to the feedback received.

Conclusion According to a study done by Sharma Baldev R and Raina Anupama

23, objectivity and recognition

are the critical determinants of organizational commitment. The main objective of the study was to

investigate the relationship between job involvement and organizational commitment as the

dependent variables and certain personal attributes and various situational factors as the independent

variables. An 80-item "structured" questionnaire was used for collection of data. The questionnaire

was designed to cover the following 14 variables:

A. Personal Attributes

1. Locus of Control

2. Work Ethic

B. Situational Factors

3. Benefits

4. Career opportunity

5. Communication

6. Job Content

7. Objectivity

8. Participative Management

9. Pay

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10. Recognition

11. Training and Development

12. Work- life Balance

Ç. Employee Engagement

13. Organizational Commitment

14. Job Involvements

Out of the 12 independent variables used in this study, only two (objectivity & recognition) emerged

as the critical determinants of organizational commitment. Together these two variables explained

93.9 per cent of the variance in organizational commitment. Similarly, only two independent

variables (career opportunity and pay) emerged as the critical determinants of job involvement.

These two variables together explained a little over 91 per cent of the variance in job involvement.

Hence, as far as this organization is concerned, only the following four situational factors are

important in influencing employee engagement:

(a) Determinants of Organizational Commitment

(1) Objectivity

(2) Recognition

(b) Determinants of Job Involvement

(1) Career Opportunity

(2) Pay

IES proposed that attempts to increase levels of engagement are likely be ineffective, unless several

factors are present in the organization:

Good quality line management.

Two‐way communication

Effective internal co‐operation.

A focus on development.

Commitment to employee well‐being.

Clear, accessible HR policies and practices and visible commitment by managers at all

levels.

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Source: IES Survey, 2003

LEARNING Employee engagement is a positive attitude held by the employee towards the organization 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 organization.

Although money or pay is an important aspect for job satisfaction, but cash is not the sole factor that

drives engagement. Three non cash motivators: praise from immediate managers, leadership

attention, and a chance to lead project, are the more effective motivators than the cash bonuses or

increased base pay. Hence organizations need to design flexibility into their reward solutions to

attract different types of talent. A talent strategy that emphasizes the frequent use of the right

financial and non-financial motivators would benefit most companies in bleak times. Generation Y-

whose members are yet to touch the age of 30 want their recognition and they want it now. They are

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not ready to wait till the annual performance appraisal for feedback and recognition. A good work-

life balance features overwhelmingly high in their idea of a preferred working environment.

Past work experience I worked for about 3 years in one of India’s largest private sector electrical engineering company.

Having done my graduation in electrical engineering, it was like a dream job for me. The pay was

also quite good. I was appointed as a production engineer and had to work on shop-floor, dealing

with technicians who were ITI holders or diplomas. Gradually I got frustrated as I had to constantly

shout at them to get the work done, there was not much scope of learning. I had expected that after

engineering I would get a cabin or at least a cubicle to work, will be working on computers, doing

some calculations or applying my mind etc. I started searching for jobs. But after 6 months, a new

plant manager was appointed. He started giving me some other assignments for productivity

improvement, sent me for trainings (Six-Sigma, MOST, ISO), vendor development, also used to talk

to me regularly. This motivated me to do my work in a more effective manner. I soon got engaged in

the shop-floor activities too.

Also I observed that the some of the senior or older technicians on the shopfloor were less engaged

as compared to the juniors. They always used to compare the past management with the present and

how the past managers were far better than the present one. They had got a vast experience and were

less inclined to do routine work. But when I used to tell them that only you can do this particular

task, they used to get pumped up and used to put extra efforts to achieve it.

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Bibliography 1) Gallup, "Gallup Study: Engaged Employees Inspire Company Innovation" , The Gallup

Management Journal, http: gmj.gallup.com-(2006).

2) Meyer J.P. and Allen N.J., "A Three-Component Conceptualisation of Organizational

Commitment", Human Resource Management Review, 1 (l), 61-89 (1991)

3) Kassahun T., "Level of Organizational Commitment: Its Correlates and Predictors," Indian

Journal of Industrial Relations ,41(1), 29-63 (2005)

4) Kumar B. and Giri P.N., "Examining the Effect of Job Performance on Organizational

Commitment," Management and Labour Studies, 32 (1), 123-135 (2007)

5) Mohapatra M. and Sharma B.R., "Drivers of Organizational Commitment among Managers

of Industrial Organizations: A Case Study," Global Business Review, 9 (1), 51-63 (2008)

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Blue-Collar Industrial Workers", Proceedings of the 82"^ Sessio'n -of the ISCA, Calcutta

(1995)

7) Joshi G., "Job Satisfaction, Job and Work Involvement among the Industrial Employees: A

Correlation Study," Journal of Indian Academy of Applied Psychology. 25 (1-2), 79-82

(1999).

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of Private and Public Sector," Psychological Studies, 43 (3), 85-90 (1998)

9) Levinson E (2007a), Developing High Employee Engagement Makes Good Business Sense

10) Right Management (2006), Measuring True Employee Engagement, Right Management

11) Pont J (2004), ʹAre they really ‘On the Job’?ʹ, Potentials, 37, 32

12) Levinson E (2007b), Authentic CSR Creates Higher Employee Engagement

13) Kahn WA (1990), ʹPsychological conditions of personal engagement and disengagement at

workʹ, Academy of Management Journal

14) Lockwood NR (2007), ʹLeveraging employee engagement for competitive advantage: HR’s

strategic roleʹ, Society for Human Resource Management

15) Quarterly Sonnentag S (2003), ʹRecovery, work engagement, and proactive behaviour: a new

look at the interface between non‐work and workʹ, Journal of Applied Psychology.

16) Watson Wyatt (2007), Playing to Win in a Global Economy: Global Strategic Rewards

Report and United States Findings, Watson Wyatt Worldwide

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17) Luthans F, Peterson SJ (2002), ʹEmployee engagement and manager self‐ efficacy

implications for managerial effectiveness and developmentʹ, Journal of Management

Development

18) Robinson D, Hooker H, Hayday S (2007), Engagement: The Continuing Story, Institute

for Employment Studies

19) BlessingWhite (2008), The State of Employee Engagement, BlessingWhite

20)Johnson M (2004), The new rules of engagement: life‐work balance and employee

commitment, The Chartered Institute of Personnel and Development

21) Roffey Park Institute (2008)

22) Employee Engagement A review of current thinking, Gemma Robertson-Smith and Carl

Markwick

23) Sharma R.R. and Sharma B.R., "Organizational Commitment and Motivation among

Managerial Staff," Productivity, 44 (2), 251-257 (2003)