MASTERS IN BUSINESS ADMINISTRATION

KARANJA SAMUEL
HD 333-0928/2010

ORGANIZATION BEHAVIOUR

ASSIGNMENT

TITLE: EMPLOYEE ENGAGEMENT AND INFLUENCE

ON ORGANIZATION PERFOMANCE
Definition of employee engagement

 Employees are engaged when many different levels of employees are feeling fully
involved and enthusiastic about their jobs and their organizations.
 Engagement is the willingness and ability to contribute to company success the extent to
which employees put discretionary effort into their work, in the form of extra time,
brainpower and energy" according to a Towers Perrin study.

The employee engagement model

Its a developed model that lays out the roadmap to increase employee engagement. A major
point is the conviction that the best way to increase employee engagement is to focus on creating
a culture of engagement. We define culture as including the practices, shared mindset and ethos
of an organization. Once the culture is created, engagement becomes 'the way we do things
around here' and it does not have to be recreated year after year.

On the left side of the model are the five most important drivers of a culture of engagement. We
selected these five after reviewing a wide range of research studies. Each driver must be
translated into practical systems, practices and structures that are embedded in the organization.

i. Two-way feedback

Most organizations do well in terms of communication down from management to employees.

What are often missing are mechanisms for employees to communicate up on a regular basis.
Relying on a suggestion box and an annual employee survey just doesn't do the job. Two helpful
ways to ensure the upward flow of feedback are employee town meetings and quarterly, brief,
online surveys the capture the changing concerns of employees.

ii. Trust in leadership

Trust can be shattered instantly when executives appear to suddenly change directions or seem to
break promises. Building trust is a slower process. Executives build trust by developing a clear
vision of the organizations' future and communicating this to all employees.

iii. Career development.

Engagement levels rise when there is a formal career development system that includes
components such as formal career tracks, mobility systems to help employees move about in the
organization, and annual career conversations.

iv. Employees understand their role in success

Employees need to understand how their job fits into the big picture and what they must do more
of and do differently to help the business succeed. HR can help by clarifying what are the
competencies, the capacities that this particular organizations needs to grow and helping
employees upgrade their skills to match the needs of the future.

v. Shared decision making

When employees participate in making decisions, they take feel more engaged in the
organization. Decision-making needs to be pushed down to the lowest possible level.

Tools for increasing employee engagement

There are dozens of tools and programs that can help increase employee engagement. Here are
three programs they we have found particularly effective:

1) Coaching program for new hires

Since research has shown that the first day at an organization is a key factor is determining the
level of employee commitment and engagement in the years ahead, what happens as a new hire
comes on board is critical. "Learning the Ropes" developed at the MITRE Institute provides a
new hire with a coach for the first six weeks. The coach, who is someone in the work group of
the new employee, spends time (usually lunch) with the new employee on his or her first day and
then on a weekly basis over the next several weeks. They become a valued guide through the
confusing maze of a new workplace.

2) Career conversations

A formal career conversation program ensures that managers sit down with each of their direct
reports on a yearly basis to discuss their career advancement and career plans. These discussions
can focus and inspire employees and also managers can spot employees whose job fit is not right
before they jump ship.
 3)Large group meetings

The level of engagement skyrockets when 60 to 600 employees representing all parts of an
organization gather together to give input to the organization, These meeting can be used to
review a vision, plan for the future, review progress to date, or introduce a new program such as
an employee engagement initiative. This is the best way to reach all employees when there is an
important message or a shift in direction.

Measuring employee engagement

Most companies (75 percent) try to measure employee engagement at this point in time. In
addition to the reported level of engagement, organizations use measures such as retention,
organizational performance, increased productivity, and financial success.

Overall, employee engagement is one of today's most important business issues. It is a place
where we as HR are in a position to make a real difference.

Creating employee engagement

Given the fact that significant and practically important relationships exist between
aggregated employee attitudes and organizational performance, it is important to question what
factors contribute to satisfaction. The predominant view has focused on the situational context
(e.g., supervisory support) as a cause of satisfaction and has argued that high-performance work
practices and thus a positive working climate foster employee satisfaction (see, e.g., Bowen, &
Ostroff, 2004; Wright, Dunford, & Snell, 2001; Wright, Gardner, Moynihan, & Allen, 2005).

This rationale is consistent with recent research on the impact of financial and nonfinancial
incentives (e.g., training) on business-unit outcomes. For example, Peterson and Luthans (2006)
used a quasi-experimental, control group design and found that both types of incentives had a
significant impact on store profit, customer service, and employee turnover. Initially, the
financial incentive had a greater effect on all three outcomes (as one might expect). But over
time, however, the financial and nonfinancial incentives exhibited equally significant impacts on
two of the three outcomes (the exception was employee turnover).

So how can employee engagement help?

Employee engagement is the sum total of the work place behaviour demonstrated by the people.
Such behaviour is characterised by:
 Belief in the organisation
 Drive to work to make things better
 Understanding of business context
 Respect and support for others
 Desire to learn new skills.

The level of employee engagement affects key results such as sales, customer satisfaction,
innovation and employee turnover. An engaged workforce is capable of delivering sustained
differentiation and a significant competitive advantage.
Benefits of Employee Engagement
One major issue regarding many of the reviewed studies relates to the causal nature of the
relationship between aggregated employee satisfaction and organizational (or unit-level)
performance. The implicit belief both in academe and practice is that the relationship runs from
employee satisfaction sentiments to organizational effectiveness and efficiency outcomes.

Moreover, this implicit assumption is apparent in the research studies reviewed here. That is, the
attitude data were typically collected at one time period and performance outcomes were
concurrently collected or at multiple time periods following the collection of the employee
attitude data. The study conducted by Schneider et al. (2003) suggests that collecting data in this
fashion may lead researchers to draw erroneous conclusions because their data prevent them
from discovering significantly stronger relationships for performance causing satisfaction.

It could be argued, for example, that employees who are in higher performing organizations are
more likely to be satisfied than those in lower performing organizations simply because their
organizations are doing well. Indeed, this causal pattern was found in the study conducted by
Schneider and his colleagues (2003). Specifically, their data supported causal relationships
between financial and market performance outcomes and employees’ overall job satisfaction and
satisfaction for security. Although more research is needed before concrete conclusions are
drawn, Schneider et al.’s (2003) research demonstrates that employees can derive satisfaction
from the knowledge or feedback that their organization is performing well and is accomplishing
its goals – a finding that is in stark contrast to the presumption found in the academic literature
(see, e.g., Likert, 1961).

When we consider the studies collectively, directional causality may work in both
directions; employee satisfaction causes organizational performance and vice versa. Therefore,
it seems most likely that reciprocal relationships exist and that, as noted by Gross and Etzioni
(1985), “organizational reality and human happiness go hand and hand” (p. 4). Thus, although
directions of causality remain unresolved, initial evidence suggests that aggregate employee
attitudes have connections with organizational performance outcomes.

Benefits are numerous, both to the company and to the individual employee.

Value Added to the Company

 Increased productivity - employees return refreshed and inspired. Line managers report
greater productivity in returning employees.
 Improved employee compentency - the experience can build 'soft skills' that simply
cannot be taught in a training room environment. Participants report an increase in
confidence across all aspects of their lives, making them more effective at their jobs.
Improvements are common in areas such as team building, communication, analytical
thinking, leadership, diplomacy, flexibility, conflict resolution, change-readiness,
problem solving, and listening.
  Recruitment - research indicates that if faced with a decision between two equal
companies, highly qualified staff will opt for the one with the better environmental
performance/stance. The programme forms part of value proposition to graduate recruits
(CPI Shell Research 2005).
 Retention - Demonstrating commitment to corporate citizenship is likely to be a string
factor in retaining staff. Aligning individual's personal values with those of the company
is a powerful motivator.
 Enhanced corporate pride - through demonstrating a commitment to sustainable
development, partners engender a feeling of corporate pride amongst their employees.
Investing in the programme also sends a clear message that staff development is high on
the organisation's agenda.
 Integrate fellowship into HR practice - when programmes are embedded in the
partner's HR strategy, they can become an important part of professional development
plans.
 Motivational driver - placements can be used as a reward for employees in a way that
pay does not.
 Identify internal champions for change - employee engagement programmes help CR
practitioners to identify and develop internal 'champions' who can be a driving force for
change within the organisation.

Benefits to The Individual

 Learning about sustainability - discover more about the challenges that the natural
world faces and learn what sustainability means to you and your workplace.
 Professional development - enhanced by learning and applying new skills.
 Broadening perspectives -  meet people from different nationalities, backgrounds and
cultures and form lifelong bonds.
 Lead the way - first step to becoming an internal environment champion within your
organisation.
 Be part of the solution - enjoy a hands-on, pro-active experience, rather than hearing
about the issues through the news.
 See something different - a refreshing and stimulating change of scenery for desk bound
employees.

CONCLUSION
The current understanding of how aggregated employee attitudes influence and are influenced by
important business outcomes is limited. Based on the evidence to date, we conclude that
employee satisfaction is related to meaningful business outcomes and that these relationships
generalize across companies (and industries). Research efforts directed at further exploring these
issues are sorely needed, and we believe there is potential for longitudinal research in the area of
aggregated employee satisfaction.
For example, future research should emphasize research designs that study changes in employee
satisfaction and the causes of such changes. Through such longitudinal designs, the connections
between aggregated job attitudes and performance can be more fully understood. At this point,
evidence of directionality would suggest not only some directionality from employee attitudes to
business outcomes (as well as the reverse) but also a reciprocal relationship in some cases!

REFERENCES
 Konrad, Alison M. (March 2006). "Engaging Employees through High-Involvement
Work Practices". Ivey Business Journal. Retrieved 2006-11-14.
 "Engage Employees and Boost Performance". Hay Group. 2002. Archived from the
original on 2006-11-23. Retrieved 2006-11-09.
 Robinson, Dilys and Sue Hayday (2003). "Employee Engagement". In Brief (129).
Retrieved 2006-11-06.
 Wilkinson, Adrien, et al. (2004). "Changing patterns of employee voice". Journal of
Industrial Relations 46,3 (3): 298–322. doi:10.1111/j.0022-1856.2004.00143.x.
 Lockwood, Nancy R. "Leveraging Employee Engagement for Competitive Advantage:
HR's Strategic Role." HRMagazine Mar. 2007: 1-11. SearchSpot. ABI/INFORM Global
(PQ). McIntyre Library, Eau Claire. 22 Apr. 2007 <
 "Employee Commitment". Susan de la Vergne. 2005. Retrieved 2007-02-03.
 "Employee Commitment Remains Unchanged....". Watson Wyatt Worldwide. 2002.
Retrieved 2006-11-07.
 What Is Engagement?, Ken Scarlett, (2008). Retrieved on 2008-07-16.
 Harter, James K., Frank L. Schmidt, and Corey L. M. Keyes (2003). "Well-Being in the
Workplace and its Relationships to Business Outcomes". Flourishing: the Positive Person
and the Good Life: 205–244. Retrieved 2006-11-08.
 Ryan, Richard M. and Edward L. Deci (January 2000). "Self-Determination Theory and
Facilitation of Intrinsic Motivation, Social Development, and Well-Being". American
Psychologist Association 55: 68–78. Archived from the original on 2006-12-12.
Retrieved 2006-11-06.
 Robinson, D., S. Perryman, and S. Hayday (2004). "The Drivers of Employee
Engagement". Institute for Employment Studies. Retrieved 2006-11-07.
 Wilkinson, Adrien (1998). "Empowerment: Theory and Practice". Personnel Review
27,1: 40–56. doi:10.1108/00483489810368549.
 CIPD Staff (2008). "Employee Engagement". CIPD. Retrieved 2008-10-01.
 Kahn, William A. (1990). Psychological Conditions of Personal Engagement and
Disengagement at Work. The Academy of Management Journal, Vol. 33, No. 4 (Dec.,
1990), pp. 692–724. http://www.jstor.org/stable/256287
 Harter, James K.; Schmidt, Frank L.; Hayes, Theodore L. (2002). Business-unit-level
relationship between employee satisfaction, employee engagement, and business
outcomes: A meta-analysis. Journal of Applied Psychology. Vol 87(2), Apr 2002, 268-
279
 Macey, Schneider (2008). The meaning of employee engagement. Industrial
Organizational Psychology.