April 2012

The Edge

Quick Topic Select:
Benefits of Engagement | Sustainability and Corporate Social Responsibility | A Great Place to Work | The Four Fundamental Drives | Practices to Increase Employee Engagement

Employee Engagement

Employee engagement is a key in driving organizational success. It is defined as the extent to which employees engage in their work, how hard they work, and how long they plan to stay as a result of that engagement. Engaged employees significantly increase company productivity as well as customer satisfaction and overall stakeholder value. However, low engagement is a persistent problem in corporations today. In order to gain a competitive edge, organizations are looking to implement new engagement practices to increase their employee satisfaction and overall productivity.

Benefits of Engagement

According to Gallup, 16% of U.S. workers 18 and older are “actively disengaged.” This lack of engagement in workers costs the U.S. economy nearly $300 billion (Werbach 4). On the other hand, highly engaged employees out perform their disengaged co-workers by 20 to 28 percent. According to a study done by Serota Consulting, share prices of organizations with highly engaged employees rose by an average of 16 percent, compared with an industry average of only 6 percent. Employees with the highest levels of commitment are also 87 percent more likely to stay in their jobs, thereby reducing replacement costs. Motivated employees hammer away at problems and persist until they find creative solutions and solve them. They think outside of the box and contribute more to the organization than their disengaged colleagues.

Individuals become engaged when their work connects to what matters in their personal and professional lives and when they work at a company with a purpose that goes beyond just profit.

Sustainability and Corporate Social Responsibility

One factor that significantly influences high employee engagement is whether or not employees feel that their work is meaningful and contributing to the greater good of the company, and even to society. Organizations that foster sustainability practices will foster engagement. Sustainability unleashes employee creativity and gives opportunities for employee input thereby surfacing new leaders and talent while driving innovation. The best ideas come from where real social, economic, environmental and cultural problems are actually solved, which is not necessarily at the top (Werbach 10). Individuals become engaged when their work connects to what matters in their personal and professional lives and when they work at a company with a purpose that goes beyond just profit. In order to be seen in this light, a company should communicate its mission thoroughly with its employees. Each employee should know how their individual work affects the organization as a whole. This sense of mission taps into what is called “task significance,” seeing the link between the sometimes small tasks an employee performs and the bigger goal. A clear example of task significance is the story of a truck driver working at Nasa in the 1960’s (Cappelli 2). When asked what he does for a living he responded by saying “I’m helping to put a man on the moon.” Companies are also implementing optional employee volunteering initiatives that not only give the employee a chance to give back to the community, but also test their skills that relate to their career. These programs that strengthen employee’s skills as well as create social value are a very effective way to build internal capacity. Another huge factor to consider is meeting the needs and wants of generation Y. They represent the future of the work force and they are increasingly finding CSR to be important. CSR programs not only motivate employees and increase engagement, but they also can improve and develop employees’ skills across all of the organization.

A Great Place to Work

A Great Place to Work determines the top 100 companies to work for through their 5 Dimensions Model. Each of the 5 dimensions pertains to factors that contribute to employee satisfaction and engagement and in order for a company to be considered a top 100 Organization to work for they must meet these 5 dimensions. Credibility, the first dimension, requires that managers regularly communicate with employees about the company’s direction and plans, and actively ask for their input and ideas. The next dimension, Respect, involves providing employees with the resources and training they need to do their job. Fostering a spirit of collaboration across departments and creating a healthy environment is extremely important. Fairness is the third dimension and in order for a company to be considered a great place to work, it must give equitable opportunity to everyone. The workplace must seek to free itself of discrimination and give fair compensation and benefit programs. The last two dimensions, Pride and Camaraderie, relate to workplace relationships between employees and their companies (A Great Place to Work). Clearly, employee engagement is crucial to an organization’s success and increasing engagement is a great first step to becoming a great place to work.

The Four Fundamental Drives

The authors of “Driven: How Human Nature Shapes Our Choices” suggest that there are four basic emotional needs, or drives that people are guided by. These four drives are what also motivate employees in their day to day activities. When all four needs are satisfied, their overall work effort increases. The four drives include: The drive to acquire, the drive to bond, the drive to comprehend and the drive to defend. Fulfilling the drive to bond has the greatest effect on employee commitment, whereas meeting the drive to comprehend is most closely linked with employee engagement. Individual managers influence overall motivation as much as any organizational policy does, thus managers should be aware of how to meet the needs of their employees. The drive to acquire includes anything that bolsters our sense of well-being whether it is social status or getting a corner office. The drive to bond is met when someone feels that they are associated with an organization or community. In the workplace, the drive to comprehend accounts for the desire to make a meaningful contribution (Nohria 3). Employees are motivated by work that challenges them and pushes them to learn new skills. Talented workers who feel stuck or trapped will often leave their companies to find bigger challenges somewhere else. Fulfilling the drive to defend leads to feelings of security and confidence. It tells us a lot about people’s resistance to change. Each of the four drives is independent and important for employee engagement.

Practices to Increase Employee Engagement

1. Open communication vertically.
2. Create a healthy and safe work environment.
3. Provide employees with the resources and tarining they need to succeed.
4. Recognize and reward success.
5. Provide equal opportunities for everyone.
6. CSR and sustainability initiatives
7. 360 degree feedback for executives
8. Develop employees for future positions. Internal development
9. Hire internally.
10. Communicate the overall goals of employee's individual work. Make work meaningful.
11. Clearly communicate the company mission to all employees.
12. Meet the four basic needs that every employee has.

References

1. Lockwood, Nancy R. “Leveraging Employee Engagement for Competitive Advantage: HR’s Strategic Role,” SRM Research Quarterly (2007): 1-10
2. Hohria, Nitin, Boris Groysberg, and Linda-Eling Lee. “Employee Motivation-A Powerful New Model.” Harvard Business Review (2008): 1-7
3. Werbach, Adam. “Strategy for Sustainability.” Harvard Business Press (2009)
4. Cappelli, Peter, Harbir Singh, and Michael Useem. “Managing People-Holistic Engagement of Employees.” Harvard Business Press (2010)
5. Marquis, Christopher. “Corporate Social Responsibility and Employee Engagement.” Harvard Business School (2010)
6. “The Dimensions of a Great Place to Work.” Great Place to Work® Institute. Web. 05 July 2011. http://www.greatplacetowork.com