Module-5

Employee engagement and Psychological contract

Employee engagement may be influenced by various factors such as workplace culture, leadership,
and job satisfaction, to name a few. Organizations that prioritize these factors can create a work
environment that fosters engagement and motivation among employees.

Employee engagement is defined as” the emotional investment employees make in their
organizations. It is the passion, involvement, and motivation they bring to work, which they use to
guide their work. Engaged employees identify with the goals of the organization and align their own
goals with the organization’s goals.”

What Are the Drivers of Employee Engagement?

Engagement initiatives in the following areas, spanning the entire employee lifecycle, can prevent the
attrition of high-value and high-potential employees. Earlier, presentations and other handouts did the
trick in communicating with employees and trying to engage them.

Seamless onboarding
Employee engagement truly begins when the employee is recruited and begins the onboarding
process. However, even before being hired, a candidate gets a glimpse of the organization’s
communication culture.

Once hired, the onboarding process gives employees an idea of whether they want to continue in the
organization for the long term. One way to ensure employee engagement during onboarding is to give
employees enough time to master their job before they hit the floor

Positive work culture

Work culture is a broad term, but specific factors contribute to keeping employees engaged.

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Transparency- Communicate how employees’ effort benefits the organization and contributes to the
bigger picture

Openness- An open work culture is essential to make employees feel respected and cared for

Autonomy - Micro-management is rarely well-received by employees

Respectful Treatment – Employees rate respectful treatment and empathy as high as compensation
when it comes to job satisfaction and engagement.

Access to productivity and time management tools

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A slew of unplanned activities, meetings, and workplace distractions can reduce the overall
productive time in a day for an employee. Time management is an inherent skill, but in a dynamic
work environment, even the most efficient employees need time management tools.

Learning and development opportunities -

Organizations that provide structured learning and development opportunities to their employees
notice higher levels of engagement..

In a generation that is on the go, this learning is mainly delivered through learning experience
platforms via m-learning (mobile learning) and microlearning

Effective leadership and succession planning-

In this area, HR teams and leaders of the organizations work together to identify key positions to be
filled and the available talent to fill these positions.

Applying technology to an organization’s succession planning strategy can make it a more

streamlined process.

Workplace wellness initiatives-

Stress is a more common problem in the workplace than is visible. Combined with the physical
inactivity of most office jobs, a cocktail of health issues emerges that can easily be attributed to the
workplace. Workplace wellness initiatives can go a long way in showing employees that employers
care.

Organizations are now investing in wearable technologies to help employees stay fit. These include
fitness bands and smart footwear.

Flexibility -

Organization that allows employees to enjoy a certain amount of flexibility in where they work is more
likely to experience higher levels of engagement.

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Collaboration tools like Slack and Skype enable seamless conversations not only within organizations
but also across remote teams. With the advent of unified HCM platforms, all the benefits that are
offered to in-house employees can be provided to mobile workers as well.

Rewards and recognition-

Employees appreciate meaningful recognition for their work. Regular feedback and checking in on
employees are positive drivers of engagement. This feedback should be designed to communicate
how the employees’ efforts are helping the organization. Companies are also resorting to social
media to boost engagement by publicly recognizing their employees.

Types of employee engagement have different classifications based on the level of

engagement and desired end results

1. Types of employee engagement based on level of engagement

➢ Actively engaged employees
➢ Not engaged employees
➢ Actively disengaged employees

➢ Actively engaged employees

Actively engaged employees are heavily invested in and passionate regarding their work and the
company. They want to drive their company to success with their productivity and high performance.

• Offer creative ideas for enhancing operations.

• Take on initiatives that will benefit the company.

• Support the company’s vision and beliefs.

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 • Show pride in their company.

• Exceed expectations.

• Create bonds within the company and motivate their colleagues

➢ Not engaged

Not engaged employees are emotionally disconnected from their work and workplace. As a result of
their demands not being adequately addressed, they only invest hours in their job, not their passion
or drive.

Consider an employee who completes their job but is motivated by responsibility and a monthly salary
instead of interest. A not-engaged employee will prefer to stay low and decline particularly demanding
tasks.

• Not engaged employees:

• Perform the bare minimum to survive.

• Don’t make recommendations for enhancing processes.

• Don’t like change or growth.

• Will constantly criticize the organization or become uninterested.

➢ Actively disengaged employees

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Actively disengaged employees are not just dissatisfied at work. They are also disappointed that their
demands are not addressed by their workplace. These workers potentially undercut the efforts of their
motivated peers every day.

• Claim credit for another person’s work.

• Blame their lousy performance on a lack of resources.

• Are outspoken about the issues with the company.

• Spread damaging information about the company outside work.

• Are not receptive to learning or growing

2. Types of employee engagement based on the desired end result

➢ Cognitive engagement
➢ Emotional engagement
➢ Physical engagement

Cognitive engagement

This is when an employee is fully and keenly aware of the company’s values, goals and mission.
They also are completely aligned with them and channel all their efforts into completing each task to
meet the goal of their manager and company.An employee’s confidence levels and creativity play key
roles in making them engage with their work at a cognitive level.

Emotional engagement

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Emotional engagement refers to an emotional connection that an employee has with their work, their
team, their manager or the company. It is how mentally attached the employee is to the organisation
and how much of their personal feelings and emotions they bring into their professional life.

Physical engagement

This can be both physical and mental energy and can be seen in the types of activities that the
employee takes part in, who they interact with and how much energy they invest in their work

Fewer Mistakes

Disengaged employees are also more likely to make costly mistakes in their work. If your staff doesn’t feel
committed to the organization and their roles, they aren’t as likely to go the extra mile to ensure their work is perfect
.

It Reduces Employee Stress

Less engaged employees are likely to feel more stressed, and stress decreases engagement, reducing stress and
increasing engagement pays dividends, showcasing another reason why employee engagement is important

Greater Employee Commitment

In addition to increased output, engaged employees are in general more committed to the future of their
organization. That means they are more likely to put time and energy into tasks that aren’t as easy to measure but
that have a big impact

It provides Safer Workplaces

Workplace accidents can have tragic consequences and pose a huge reputational and financial risk for
organizations. Since engaged employees tend to pay closer attention to their work and feel more empowered to
speak up about concerns, they are less likely to take risks that can lead to injury

More Effective Leadership

That means that when managers are highly engaged, their positive relationship with the company can have
outsized impacts on overall performance.

It improves Employee Health

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Employees who are disengaged with their work are more likely to suffer from negative physical and mental health,
which can further decrease productivity and increase an organization’s costs. Employees who feel positive about
their jobs, on the other hand, are more likely to experience increased well-being and have energy for wellness-
promoting behaviors like exercise. Employee engagement is often transmitted from the top down

Stronger Recruiting Platform:

Highly engaged employees are great for attracting customers—but they’re also a powerful recruiting
tool. Happy employees are more likely to spread a positive message about their company among
their network.

It increases productivity of employees.

It increases revenue.

Better customer service.

How to measure engagement?

Employee Surveys

Surveys are the primary means to measure employee engagement. The initial, longer-form survey, as
well as quick follow-up pulse surveys and polls, allow you to probe specific issues over time and
across the entire organization without human bias.

Using a small number of open-ended questions in your surveys can reveal even deeper insights,
expressed through an employee’s own words, than strictly sticking to the Likert scale or something
similar. Assuming you’re using a capable analytics platform with integrated natural language
processing (NLP) and machine learning, you can then convert that open-ended feedback into
trackable, quantitative data.

One-on-Ones meetings

Conducting frequent one-on-one meetings with managers is a more productive and effective form of
the traditional annual review. It provides employees with a consistent forum to voice concerns,

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provide feedback, and, from the manager’s perspective, create a valuable touchstone with his or her
team members.

Small-Group Discussions & Focus Groups

These discussions provide many of the same benefits as one-on-ones but only from a broader point
of view. Managers can run a guided discussion on a specific topic or area of concern that might have
stemmed from survey results. It’s a way to drill further down into issues through an open forum
format.

Interviews Across the Employee Journey

Everyone has heard of exit interviews. They’re a mainstay with organizations that want honest
feedback on the employee experience from people that are no longer as concerned about retribution
or negative consequences on their career.

HR Consulting Providers

These are viable solutions for organizations that don’t feel comfortable conducting an in-house
engagement strategy, but they’re not without their limitations.

Employee Recognition

Recognition is a more indirect but still important barometer for overall engagement levels. Whether
you use a designated employee recognition platform or a more organic strategy, the frequency of
recognition, and who is both recognized or recognizing others can indicate where you fall in
engagement levels

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Metrics

Organizations already track a set of metrics to monitor their operations, revenue, profitability, and
other key measures. However, metrics go far beyond sales margins and break-even points. A few
specific metrics can also provide employers with at least a idea of engagement levels within the
enterprise. • Engagement ROI

• Diversity and inclusion

• eNPS
• Absenteeism
• Employee turnover
• Satisfaction

Social media and online platforms

Monitor employee sentiments and interactions on internal collaboration platforms, social media
channels, and online forums to gauge engagement levels and identify areas of concern.

Absenteeism and turnover rates

Monitor absenteeism and employee turnover rates as indicators of disengagement. High rates in
these areas may signify underlying issues with employee engagement.

How not to measure employee engagement?

Lack of confidentiality and anonymity

One-size-fits-all surveys

Single data point assessment

Ignoring qualitative insights

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Disregarding action planning and follow-up.

Psychological contract

The concept of a psychological contract emerged in the 1960s and was rooted in psychological and
organizational behaviour. It describes the human side of the relationship between employee and
employer.

A psychological contract encompasses the informal beliefs, ambitions, obligations, and expectations
the employee and the employer perceives. Essentially, it is how both parties understand
their relationship outside of the written and signed employment contract and what they expect the
other party to provide. It’s typically built on the actions of everyone in the organization, and it strongly
influences how employees behave, organizations respond, and how we manage the employee
experience.

A psychological contract refers to the unwritten, mutual expectations and obligations between an
employer and an employee. It is based on the perceptions of what each party owes the other in terms
of contributions, rewards, and overall employment experience. The psychological contract directly
impacts the level of trust and commitment between the employer and employee.

Examples: 1

An employee applies for an assistant position in a company, but the employer feels they would be
better suited to starting at the trainee level. The company may make an informal agreement that if the
employee completes a specific training and completes six months in the trainee role, they will be
promoted to assistant level. This is not written into their contract but is verbally agreed upon at the
interview. If the employee does not move into that position within six months a psychological contract
breach can occur as the employee held the expectation that, once they completed the required
training, they would be promoted.

2. The organization has always granted employees parental leave beyond the legal requirement and
allowed employees to return to the workforce in a reduced capacity in the first year. A new manager
has been appointed, and when he has an employee requesting additional time-off post parental
leave, they refuse based on the policy.

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The psychological contract in human resource management refers to the unwritten expectations,
perceptions, and beliefs that exist between employees and employers. It is a concept that reflects the
mutual obligations and commitments between the two parties, going beyond the formal employment
contract. The psychological contract is dynamic and can evolve over time based on experiences,
interactions, and changes in the work environment. Here are some key features of the psychological
contract:

Features

1. Subjectivity: The psychological contract is subjective and varies from individual to individual. It is
based on each employee's perceptions, beliefs, and interpretations of the employment relationship.

2. Mutuality: The psychological contract is a mutual agreement between the employee and the
employer. Both parties have expectations, obligations, and contributions to the relationship. It's not a
one-sided arrangement.

3. Unwritten: Unlike the formal employment contract, the psychological contract is mostly unwritten. It
consists of implicit promises, understandings, and expectations that are not explicitly stated but are
implied through communication, actions, and organizational culture.

4 .Impact on employee engagement : The strength and health of the psychological contract influence
employee engagement. When employees feel that their expectations are met, they are more likely to
be engaged, motivated, and satisfied in their roles.

5. Trust: Trust is a fundamental element of the psychological contract. Employees need to trust that
the employer will fulfill their promises, and employers need to trust that employees will meet their
commitments. A breach of trust can lead to a breakdown in the psychological contract.

6. Reciprocal Obligations: Both employers and employees have reciprocal obligations in the
psychological contract. Employers may provide opportunities for career development, a positive work
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environment, and fair compensation, while employees may contribute their skills, effort, and
commitment to achieving organizational goals.

7. Implicit nature: Unlike formal employment contracts, the psychological contract is implicit and often
unspoken. It consists of implied promises, perceptions, and beliefs about what is expected from both
the employee and the employer.

8. Cultural Influence: The organizational culture plays a significant role in shaping the psychological
contract. Cultural norms, values, and practices within an organization can influence employees'
expectations and perceptions of their employment relationship.

9. Communication: Open and transparent communication is crucial for managing the psychological
contract. Employers should communicate clearly about policies, expectations, and changes in the
organization, fostering a shared understanding between the parties.

10. Violation and Consequences: Violations of the psychological contract, such as unfulfilled promises
or perceived unfairness, can lead to negative consequences. These may include decreased
employee morale, increased turnover, and a decline in organizational commitment.

Understanding and managing the psychological contract is important for building positive and
productive employer-employee relationships, contributing to employee satisfaction, engagement, and
organizational success.

In conclusion, the psychological contract is a crucial concept in human resource management that
describes the unwritten expectations between employees and employers. Organizations that focus on
building a positive psychological contract can benefit from higher employee satisfaction, commitment,
and productivity. To establish and maintain a positive psychological contract, employers should clearly
communicate expectations, provide employees with opportunities to grow and develop, and recognize
and reward their efforts. On the other hand, employees should also understand their obligations and

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responsibilities and deliver on them. By doing this, both the employees and the employer can meet
their expectations and obligations, ultimately leading to a positive and healthy work environment

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