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Employee Engagement
Alfredo V. Primicias III
Employee Engagement
INTRODUCTION ............................................................................................
Employee Engagement

aaa

INTRODUCTION
This reporter started to manage project teams that concentrated on employee engagem...
Employee Engagement
engagement was "an employee's involvement with, commitment to, and satisfaction with work.
Employee en...
Employee Engagement

THE NEED FOR EMPLOYEE ENGAGEMENT
The business climate nowadays has become more intricate. Competition...
Employee Engagement
reasonable working hours, and good benefits. Whatever the motivation is for joining the
company, the l...
Employee Engagement
engagement levels of its employees. With this reporter’s previous company, examples of
engagement driv...
Employee Engagement
planned as outcomes are appropriately calculated so that feedback, partnership and sense of
worth are ...
Employee Engagement

FRAMEWORKS OF EMPLOYEE ENGAGEMENT
Framework 1
Edward Mone and Manuel London, authors of the Employee ...
Employee Engagement
1.
2.
3.
4.

Focus on getting the job done
Feel part of a team
Feel sharp and have less pressure to ma...
Employee Engagement

Framework 3

Hewitt’s 3 S of Engagement: Say, Stay and Strive.21

The above diagram is the popular Th...
Employee Engagement
business results. Significantly, companies must now ensure that employees are actively working
toward ...
Employee Engagement
presentations, fielding help-desk scripts for possible questions, then waiting for several weeks
just ...
Employee Engagement
and teach the employees about what needs to change through the initiative’s feedback reports
and prese...
Employee Engagement
resources. This fundamentally challenges Douglas McGregor’s Theory X28, “Management
assumes employees ...
Employee Engagement

WHAT DO SURVEYS SHOW?

http://businessjournal.gallup.com/content/163130/employee-engagement-drives-gr...
Employee Engagement
likely to steal from their companies, negatively influence their coworkers, miss workdays, and
drive c...
Employee Engagement
2012,” the report states. “In contrast, those with an average of 2.6 engaged employees for every
activ...
Employee Engagement
At SAP, communication is core to the culture. Employees understand the “why” behind their
jobs – what ...
Employee Engagement

http://www.temkingroup.com/research-reports/the-five-is-of-employee-engagement/

In partial completio...
Employee Engagement

REFERENCES
1. EMPLOYEE ENGAGEMENT by Brad Federman; Jossey- Bass © 2003 by John Wiley
& Sons. Inc.
2....
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IR 201 Employee Engagement

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term paper for Dr Ofreneo's class in UP- SOLAIR

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Transcript of "IR 201 Employee Engagement"

  1. 1. Employee Engagement Alfredo V. Primicias III
  2. 2. Employee Engagement INTRODUCTION ..................................................................................................................... 3 The Concept of Engagement ............................................................................................................... 3 THE NEED FOR EMPLOYEE ENGAGEMENT .................................................................... 5 DRIVERS OF ENGAGEMENT................................................................................................ 6 FRAMEWORKS OF EMPLOYEE ENGAGEMENT .............................................................. 9 Framework 1 ....................................................................................................................................... 9 Framework 2 ....................................................................................................................................... 9 Framework 3 ..................................................................................................................................... 11 Framework 4 ..................................................................................................................................... 12 Framework 5 ..................................................................................................................................... 14 WHAT DO SURVEYS SHOW? ............................................................................................. 16 WHAT DO WE DO THEN? ................................................................................................... 18 Creating a Culture of Engagement .................................................................................................... 18 REFERENCES ........................................................................................................................ 21 In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 2
  3. 3. Employee Engagement aaa INTRODUCTION This reporter started to manage project teams that concentrated on employee engagement in the late 1990s. During that time, the organization this reporter was working for was trying to study the relationship between motivation (satisfaction, morale and happiness) and employee productivity. The very dictum of top management was, “if our employees are happy, they see the need to come to work each day.” In fact in the first call center- BPO company this reported worked for has a “Happiness Officer” whose only duty was to ensure that people programs (a) decrease attrition rate and (b) increase employee satisfaction rate each time the organization conducted the survey. So, a legitimate question to ask is, “What is Employee Engagement?” According to a US-based think-tank Scarlett Survey International, Employee Engagement “is a measurable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn and perform at work.”1 They further assert that, “Employee engagement is essential to succeed in business, yet few organizations successfully define measure or manage this leadership model.”2 The Concept of Engagement From the lectures in IR 201- Introduction to Industrial Relations, Scientific Management of Frederick Taylor was discussed wherein the following items were given importance3 1. 2. 3. 4. Plan and develop scientific methods for doing work Establish goals for productivity Establish systems of rewards for meeting the goals Train the personnel in how to use the methods and thereby meet the goals. Therefore, drawing from the perspective above, engagement to a certain degree “is the process of leading people by enabling them to want to do whatever is necessary to ensure the continuous high performance and success of the business.”4 From the employees' point of view, “engagement is their attitudinal and emotional state developed from experiences perceived to be controlled by management. These experiences or "drivers" determine engagement level. By managing these drivers to be positive experiences, leaders can stimulate an intrinsic desire for employees to consistently do their best work.”5 The emergence of ‘employee engagement’ was described in the academic literature by Schmidt et al. (1993). A contemporary version of job satisfaction, Schmidt's influential definition of 1 http://www.scarlettsurveys.com/papers-and-studies/white-papers Ibid 3 http://www.skymark.com/resources/leaders/taylor.asp 4 http://en.wikipedia.org/wiki/Employee_engagement 5 ibid 2 In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 3
  4. 4. Employee Engagement engagement was "an employee's involvement with, commitment to, and satisfaction with work. Employee engagement is a part of employee retention." This integrates the classic constructs of job satisfaction (Smith et al., 1969), and organizational commitment (Meyer & Allen, 1991). Harter and Schmidt's (2003) most recent meta-analysis can be useful for understanding the impact of engagement. Linkage research (e.g. Treacy) received significant attention in the business community because of correlations between employee engagement and desirable business outcomes such as retention of talent, customer service, individual performance, team performance, business unit productivity, and even enterprise-level financial performance. CIPD (Chartered Institute of Personnel Development) in its work with the Kingston Engagement Consortium, has defined employee engagement as “being positively present during the performance of work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to other.”6 This definition gives three dimensions to employee engagement: 1. 2. 3. Intellectual engagement – thinking hard about the job and how to do it better Affective engagement – feeling positively about doing a good job Social engagement – actively taking opportunities to discuss work-related improvements with others at work These three dimensions are meaningful to organizations when they design survey forms that will capture the very essence of employee engagement. Finally, Brad Federman, author of a 2009 book on Employee Engagement defines employee engagement as, “the degree to which a person commits to an organization and the impact that commitment has on how profound they perform and their length of tenure.”7 Therefore this term paper aims to provide answers to what is Employee Engagement and approximate its significance to business success. 6 7 http://www.cipd.co.uk/hr-resources/factsheets/employee-engagement.aspx Page 22, EMPLOYEE ENGAGEMENT by Brad Federman In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 4
  5. 5. Employee Engagement THE NEED FOR EMPLOYEE ENGAGEMENT The business climate nowadays has become more intricate. Competition has become fiercer. Even the old titans would have become obsolete unless they try to either have a merger and acquisition (Nokia with Microsoft8) or totally diversify and change core business (IBM and Lenovo9). That’s why having a unique and high-performing business culture is a competitive advantage today. The relationship and expectations between employers and employees also have drastically changed. Companies expect each employee to maximize their daily production (be it in the form of product or service) because essentially, each employee brings with him his set of attitude, behavior, knowledge and skills which can then either build, transform and make the company’s business culture stronger or weaker. Consequently, the employees seek to find fulfillment and better meaning in what they do, to a point that brand equity10 is a major consideration. Brands like McKinsey, Accenture and Ericsson are able to attract applicants by virtue of their own corporate identify. As a result the employer needs the employee more than the other way around. As the world shifts from an industrial to a knowledge-based economy11, and as employees are increasingly valued for what they know as much as for what they produce, the employer's power of absolute control has been reduced. The question now is pretty clear, how do we manage people for success and harvest high levels of productivity in the new economy? In the past, several organizations have built several management models namely TQM12, Quality Circles13, and many more. The assumption is that managers have the power to control each aspect of the value chain in the company-- but that is no longer always the case. Business leaders and corporate architects now articulate the need for employee engagement, “as an engaged employee is involved, committed, passionate and empowered and demonstrates those feelings in work behavior.”14 To put it in another way, it is the ability to capture the heads, hearts, and souls of the employees to instill an intrinsic desire and passion for excellence. This reinforces the fact that engaged employees want their organization to succeed because they feel connected emotionally, socially, and even spiritually to its mission, vision, and purpose. Furthermore, engaged employees are a company's most productive and efficient workers. Reality is employees may choose to work for a company for several reasons -- the high-minded and the practical. They may be attracted to its mission and purpose and its stature in the marketplace or by a belief that by working there, they can make a difference in the world. They may also be attracted by the promise of a regular income, 8 http://news.yahoo.com/microsoft-acquire-nokias-handset-business-7-2-billion-031642910--finance.html;_ylt=AwrTWfw83kxS0nIAcVTQtDMD http://www.ibm.com/ibm/us/en/pcannouncement/ 10 http://en.wikipedia.org/wiki/Brand_equity 11 http://en.wikipedia.org/wiki/Knowledge_economy 12 http://asq.org/learn-about-quality/total-quality-management/overview/overview.html 13 http://www.economist.com/node/14301388 14 Preface, EMPLOYEE ENGAGEMENT, Edward Mone and Manuel London 9 In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 5
  6. 6. Employee Engagement reasonable working hours, and good benefits. Whatever the motivation is for joining the company, the local work environment either energizes and nourishes them and fosters their learning and growth or starves them and frustrates their development. When this happens, they will leave the company -- or worse – would hang around doing the minimum needed until it's time for retirement. Engaged employees, in contrast, are involved and enthusiastic about what is happening in their local work environment. DRIVERS OF ENGAGEMENT For companies who have started reading, measuring and making interventions to ensure high engagement rate, the journey would have been both a struggle and rewarding. The journey may be a struggle essentially because the very framework of engagement is not as decipherable as common alphabets, whereas, it is rewarding particularly when business goals are achieved by a workforce that is purely passionate, empowered and engaged. So, how then can managers drive employee engagement? Authors Edward Mone and Manuel London on their book Employee Engagement presented eleven approaches: 1. Establish a foundation of trust and empowerment with your employees. 2. Ensure your employees have challenging and meaningful work and that you clarify its importance to your organization. 3. Establish clear performance goals for your employees that are challenging and aligned with overall workgroup and organizational goals. 4. Establish clear development goals for your employees and help them understand the career growth opportunities available to them. 5. Communicate regularly with your employees about their goals and the organization’s goals to help ensure their work is aligned with corporate objectives and to help them recognize that their efforts are meaningful and valuable. 6. Provide ongoing coaching and feedback to your employees to ensure performance and development are on track. 7. Recognize and reward your employees for their achievements and successes. 8. Encourage your employees to be innovative and creative. 9. Conduct fair and effective performance appraisal discussions and write effective appraisals. 10. Foster team-level learning and development in support of group-level engagement and performance. 11. Monitor the overall climate and efforts of your employees and teams, ensuring that organization demands do not lead to burnout. The emphasis of Mone and London is that a robust performance management and learning and development systems are institutionalized in order for employee engagement to become successful. It is always possible to measure engagement drivers, especially if the organization knows what these are, through surveys; however a common mistake is that not all organizations are equipped to interpret the results most importantly on identifying areas for improvement within organizations. There are a range of factors, known as drivers that are thought to increase overall engagement. By managing the drivers, an organization can effectively manage In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 6
  7. 7. Employee Engagement engagement levels of its employees. With this reporter’s previous company, examples of engagement drivers are:        Communication Job performance clarity and feedback Culture of the organization vis-à-vis living the core values Rewards and recognition Leadership Styles and relationships with managers and peers Career development opportunities Organization’s vision, mission and business goals vis-à-vis business or market performance *Employee perceptions of job importance. This reporter was working for a global telecommunications company when after one of its pulse surveys the result that came out as to why employees were not ‘highly engaged’ was because they don’t see what they do as an integral factor to the success of the organization. This showed that an employee's attitude toward job's importance and the company had the greatest impact on loyalty and customer service than all other employee factors combined. *Employee clarity of job expectations. Normally, expectations are skewed especially when interpretations are largely different by two different people (manager and employee) and worse between teams (manager and team members). That’s why during goal setting15, one of the most important steps in the performance management process, goals must be specific and measurable. If expectations are not clear and basic materials and equipment are not provided, negative emotions such as boredom or resentment may result, and the employee may then become focused on surviving more than thinking about how he can help the organization succeed. Performance Management is an “ongoing process that includes16 Goal Setting, Feedback, Development, Recognition, Coaching and Performance Appraisal as built on a foundation of trust and empowerment, with constant focus on communication. *Career advancement and or improvement opportunities. Innovation has become an operative word for most companies who are realizing that unless they change, they will become obsolete (e.g. Nike, Amazon, Samsung, Google, etc.)17. Mostly now that technology has opened several doors and just keeping to how things are would no longer be the best alternative. Plant supervisors and managers indicated that many shop improvements are made outside the suggestion box system. Employees initiate changes in order to reap the bonuses generated by the subsequent cost savings. *Regular feedback and dialogue with superiors. Communication is fundamentally a basic human need, hence when managers satisfy this, then common results are collaboration and teamwork. With this reporter’s previous company, communication is truly a way of life as manifested on several coaching sessions, town hall meetings, team meetings, etc. Each meeting is suitably 15 http://performanceappraisal.biz/performance-appraisal-process/ Preface, EMPLOYEE ENGAGEMENT, Edward Mone and Manuel London 17 http://www.fastcompany.com/section/most-innovative-companies-2013 16 In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 7
  8. 8. Employee Engagement planned as outcomes are appropriately calculated so that feedback, partnership and sense of worth are achieved. Feedback is key to giving employees a sense of where they’re going, unfortunately many organizations are remarkably bad at giving it. *Quality of working relationships with peers, superiors, and subordinates. There is no reason for managers to build walls with their team members. That’s why, with this reporter’s previous company, physical walls were taken down creating an open-space work environment. This somehow provided more avenues for managers and employees to talk and interact face-to-face, than by communicating through emails or SMS. This too have enriched the working relationship between and among team members. Basically, if the relationship of the employees with their managers is fractured, then no amount of perks will persuade the employees to perform at top levels. Employee engagement is a direct reflection of how employees feel about their relationship with the boss. *Perceptions of the ethos and values of the organization. This reporter’s previous company preaches the unique Pilipino value called Malasakit, and this value is particularly exhibited by almost all of the senior leaders of the organization. In fact, whenever a serious business decision is to be made, the final test is, “Will we honestly display the value of Malasakit if we do this?” This example in itself projects an awesome sense of inspiration and dedication to live the core values which in a way can truly make people engaged because the anchor is apparent. *Effective Internal Employee Communications. As earlier stated, communication is a basic human need, and in this particular point, conveys a comprehensible description of "what's going on". Organizations must accept the fact that employees want to be involved. Before implementing a new policy or procedure or work methodology, involve the employees at the very beginning. This trend is plain, if top management does not get the support of its workforce, it may only have to improve the process of internal communications. *Reward to engage - Look at employee benefits and acknowledge the role of incentives. "An incentive to reward good work is a tried and test way of boosting staff morale and enhancing engagement." There are a range of tactics you can employ to ensure your incentive scheme hits the mark with your workforce such as: Setting realistic targets, selecting the right rewards for your incentive program, communicating the scheme effectively and frequently, have lots of winners and reward all achievers, encouraging sustained effort, present awards publicly and evaluate the incentive scheme regularly. This further tends to improve the overall productivity. In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 8
  9. 9. Employee Engagement FRAMEWORKS OF EMPLOYEE ENGAGEMENT Framework 1 Edward Mone and Manuel London, authors of the Employee Engagement views this as “a construct that is relatively complex.”18 To which these authors created a model to measure engagement: 1. Involvement (for example, by feeling engaged, challenged by the work, energized to perform at your best and feeling good about the future) 2. Commitment (for example, to a long-term career at the company, to the company’s success and to consistently working with a high level of focus and energy) 3. Meaningfulness (for example, by finding your work meaningful and understanding how you contribute to the success of your company) 4. Empowerment (for example, by feeling empowered to do your job, having the necessary resources to do your job effectively and holding a well-structured job) 5. Manager Support (for example, for your career development efforts, for job-related training and recognition for a good job and for feeling valued for your contributions) 6. Loyalty (for example, by intending to remain with your company, being proud to work for your company and recommending your company as a place to work) Framework 2 Similarly, Brad Federman, author of the book Employee Engagement, presented a similar model19: 18 19 Page 4, EMPLOYEE ENGAGEMENT, Edward Mone and Manuel London Pages 21 and 22, EMPLOYEE ENGAGEMENT by Brad Federman In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 9
  10. 10. Employee Engagement 1. 2. 3. 4. Focus on getting the job done Feel part of a team Feel sharp and have less pressure to make employment jumps Work through change and approach fear in a mature manner Federman continued to assert that in understanding employee engagement, designers and architects of survey questionnaires must categorize all of the engagement drivers into two distinct factors (Federman gives tribute to Herzberg’s two-factor model), to which he calls as20: 1. Core Factor- primary or essential factors in engagement; basic necessities that must exist for employees to be productive in the work environment; reflect the idea that my manager, team and organization provide me what I need to be successful a. Information and training b. Tools c. Supplies d. Policies and procedures e. Capable managers f. Reasonable benefits g. Compensation 2. Enriching Factor- highly motivational and are value driven a. Believing in what I do b. Believing in whom I work for c. Feeling that I make a difference d. Having a sense of trust e. Participating in customer centric culture f. Enjoying an innovative environment g. Experiencing a long-term career opportunities 20 Pages 55 and 56, EMPLOYEE ENGAGEMENT by Brad Federman In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 10
  11. 11. Employee Engagement Framework 3 Hewitt’s 3 S of Engagement: Say, Stay and Strive.21 The above diagram is the popular Three S of Hewitt (now called as Aon Hewitt), a US-based consulting firm. This consulting firm has challenged several global organizations by asking22     Why do employees stay with organizations and why do they leave? Why do some employees give significantly greater effort in support of their company's or team's success than others? Can employees' behavior be predicted and influenced? What allows organizations to create a competitive advantage through their people? Business leaders are consciously concerned on how to rightfully and strategically motivate and engage their employees. In effect, consulting firm Hewitt has pioneered the measurement of Employee Engagement—shifting the focus from “employee satisfaction” to “employee engagement” back in 1994. They have defined engagement as the energy and passion employees have for what their employer is achieving in the market that has a much stronger connection to 21 22 http://sustainabilityadvantage.com/wp-content/uploads/2010/10/Employee-Engagement-Defined.png http://www.hewitt.com.cy/english/Consulting/TalentManagement/engagement.html In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 11
  12. 12. Employee Engagement business results. Significantly, companies must now ensure that employees are actively working toward company goals. The “Say” behavior helps to attract top talent to the organization through word-of-mouth. The “Stay” behavior mitigates attrition of top talent who are already working in the company. The “Strive” behavior augments engagement and productivity as employees “strive to achieve above and beyond what is expected in their daily lives.” It’s the “Strive” engagement behavior that interests us today.23 In 2010 Hewitt Associates partnered with Canadian Business for Social Responsibility (CBSR) to understand the relationships between employees’ perceptions of their companies’ CSR efforts, their engagement, and other work-environment factors. Building on data from Hewitt Associates Best Employers in Canada studies, Hewitt and CBSR gathered opinions from over 100,000 employees and 2,000 leaders from more than 230 workplaces. The study reinforces the connection between the “Engage employees in CSR programs” strategy and how it energizes the “Employee Engagement, Productivity, and Innovation” link. Framework 4 Bersin’s Engagement process24 typically surrenders to the drudgery of enforcing engagement surveys. As experienced by this reporter, it takes a long deal of planning and hard work just to get a decent number of employees to answer the questionnaire. In fact, in my previous company with hundreds of local employees, we and my team have spent months in designing the correct survey form, doing a beta-test on the survey instrument, adapting this to potential multiple media 23 24 Ibid http://www.bersin.com/News/Details.aspx?id=15511 In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 12
  13. 13. Employee Engagement presentations, fielding help-desk scripts for possible questions, then waiting for several weeks just to collate results, then spend another month in survey reporting and communicating the results. The initiative is often expensive, time consuming, and for HR truly exhausting. This reporter has experienced where engagement initiatives have become bi-annual events. When the survey is completed and results have been communicated, then the next level realization-to-analysis comes in where each people program is reviewed and weighed if the impact has truly been manifested in making the workforce truly engaged. Determining if there are changes in behavior that raised engagement scores. Understanding the diagram above, the green box at the bottom of the cycle calls out the foundational nature of learning and continuous improvement cultures for engagement programs.25 The cycle demonstrates the importance of having a strong culture of learning and continuous improvement. The efforts become futile if an organization deliberately implements an engagement survey/ program but does not try to realize the importance of the results drawn thereafter. The organization, in starting the engagement process, assumes that something needs to be fixed. In the case of a learning culture, employees seek to close a developmental gap in order to improve job performance. In a continuous improvement culture, the organization seeks to fix quality issues and improve efficiencies of work processes. Similarly, to improve performance and work processes, and as the organization measures engagement then the organization must accept that work practices and cultures must be changed order to raise engagement levels. Next, as the organization emphasizes the importance of performance feedback (be it through formal performance meetings, coaching sessions or mentoring schedules) employees within a learning culture readily accept these on regular basis and incrementally adjust the way they work, as employees do with work processes and systems within continuous improvement cultures. Similarly, as the organization endeavors to improve employee engagement, the organization chooses the engagement drivers that will have direct impact to business growth. In other words, when organization has built a culture that is open and transparent in communicating performance then this organization, by leveraging this culture, can achieve better results in employee engagement since a supportive behavior has already been imbedded at the very core of business. The top of the cycle, as explained, features the relevance of strategy and values as threads to weave a high-impact engagement initiative. This further illustrates a visual that “engagement is fuel – the fuel that will propel the organization to reach its business objectives.”26 The vital achievement of making engagement as a fuel happens when business strategy and values are used by business leaders to motivate the workforce that results to mobilizing the workforce more towards the various functions and tasks that are most critical to strategy execution. After formulating a well-aligned engagement program strategy, an organization starts to move around the engagement program cycle. The organization will eventually measure engagement 25 26 Ibid Ibid In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 13
  14. 14. Employee Engagement and teach the employees about what needs to change through the initiative’s feedback reports and presentations. Finally, the organization must try to look for opportunities to integrate engagement-supportive behaviors into people programs, practices, managerial styles, and work processes and systems. The regular performance appraisal tool must be re-wired to reflect the very gains of the employee engagement process. Framework 5 Four Dimensions of Employee Engagement27 Work units that meet these conditions of engagement perform at a higher level than work units that fail to meet them. Primary within these conditions are emotional elements that reveal our basic human needs: to be recognized as individuals and to contribute. At a local level, managers can influence employees' most basic needs by setting clear expectations and providing needed 27 http://media.gallup.com/DataViz/GMJ/images/4_dimensions.gif In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 14
  15. 15. Employee Engagement resources. This fundamentally challenges Douglas McGregor’s Theory X28, “Management assumes employees are inherently lazy and will avoid work if they can and that they inherently dislike work. As a result of this, management believes that workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level.” However, bottom line is that management has the ability to energize their employees by showing them that they care -- personally and professionally:   28 Personally, managers can create meaningful relationships within workgroups and position employees so that they can do what they do best. Professionally, managers can provide challenging work and opportunities to learn, grow, and make significant contributions. http://en.wikipedia.org/wiki/Theory_X_and_theory_Y In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 15
  16. 16. Employee Engagement WHAT DO SURVEYS SHOW? http://businessjournal.gallup.com/content/163130/employee-engagement-drives-growth.aspx The big picture – Entirely consistent with other employee engagement surveys. Gallup’s data shows    30% of employees Engaged 52% Disengaged 18% Actively Disengaged These latest findings indicate that 70% of American workers are ‘not engaged’ or ‘actively disengaged’ and are emotionally disconnected from their workplaces and less likely to be productive,” states the report. “Gallup estimates that these actively disengaged employees cost the U.S. between $450 billion and $550 billion each year in lost productivity. They are more In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 16
  17. 17. Employee Engagement likely to steal from their companies, negatively influence their coworkers, miss workdays, and drive customers away.”29 More educated, but not more engaged – Though higher education generally leads to higher earnings, it by no means guarantees higher engagement. Consider the data: College graduates in the survey were    28% Engaged 55% Not Engaged 17% Actively Disengaged High school graduates were    32% Engaged 49% Not Engaged 19% Actively Disengaged Reasons weren’t explored in the study, but a hypothesis is that higher education levels bring with them higher expectations – which are often not being met when one is underemployed in a weak job market. Women are more engaged than men – A surprising finding, in light of well-known “gender equality” issues involving pay and glass ceilings. Women were    33% Engaged 50% Not Engaged 17% Actively Disengaged    28% Engaged 53% Not Engaged 19% Actively Disengaged Men were For this survey, 33% versus 28% is a statistically significant difference. Employee engagement’s overall effect on the bottom line – Gallup’s research notes that work units in the top 25% of their engagement database have considerably higher productivity and profitability ratings, for example, combined with less turnover and absenteeism. “Organizations with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147% higher earnings per share (EPS) compared with their competition in 201129 Ibid In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 17
  18. 18. Employee Engagement 2012,” the report states. “In contrast, those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower EPS compared with their competition during that same time period.” aaa WHAT DO WE DO THEN? Creating a Culture of Engagement What then must organizations do? How can organizations actually unearth and understand employee engagement? The challenge is for organizations to create a system by realizing that engagement drivers are different from one industry to the next, from one location to the next, and so on. Moreover, organizations are now fairly educated to discern that employee engagement is largely about social connections happening in organizations and aligning work experiences with employees’ cultural needs. For example, research shows North American and Eastern European workers place high priority on financial rewards in relation to how satisfied they are at work30, but elsewhere it’s about simple connections and involvement, meeting the more altruistic and basic human needs of feeling connected and being an important part in something bigger. Following below are some best practices made by global brands: Google has created an environment for employees to thrive that goes beyond stocking its kitchens with free gourmet food and on-site laundry service. Its corporate culture is one of the reasons it is consistently ranked a great place to work. Google GOOG +1.23% values the opinions of employees and hires new associates by committee. It communicates an environment of playfulness from whimsical doodles to April Fool’s Day jokes. DHL Express takes employee engagement seriously in the office, on the roads and in the air. It has an incredible culture of thanking employees, whether that’s through monetary rewards, honoring top performers at its annual Hollywood-style black-tie event or pinning notes of appreciation on the company corkboard. 30 http://search.yahoo.com/search?p=different+regions+employee+engagement&ei=UTF-8&fr=moz2 In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 18
  19. 19. Employee Engagement At SAP, communication is core to the culture. Employees understand the “why” behind their jobs – what they’re expected to achieve and why it’s important to the greater good of the organization. Collaboration is valued and teams communicate globally to get projects accomplished. Leaders listen to employee feedback and encourage it. Southwest Airlines has a reputation for outstanding employment branding. Being fast, fun and friendly is part of their DNA. Even those who don’t work for the organization have the perception that it’s an innovative, fun and cool place to work. A strong employment brand that offers clarity on the organization culture and what it stands for ensures that the right people are attracted to the organization and the wrong people apply elsewhere.31 These examples only reinforces that it can be done. Organizations who are serious on taking it to the next level can rightfully understand the drivers most meaningful to employees that can result to a more motivated and high-performing workforce. Organizations that commit to an intentional culture that is open, transparent, and enable employees to thrive is crucial to retain top performers. Whether it’s participating in community events, celebrating coworkers or fostering more open communication, organizations that build a culture where employee involvement matters can simply engage employees engagement and create a great place to work. 31 http://www.forbes.com/sites/sylviavorhausersmith/2013/08/14/how-the-best-places-to-work-are-nailing-employee-engagement/ In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 19
  20. 20. Employee Engagement http://www.temkingroup.com/research-reports/the-five-is-of-employee-engagement/ In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 20
  21. 21. Employee Engagement REFERENCES 1. EMPLOYEE ENGAGEMENT by Brad Federman; Jossey- Bass © 2003 by John Wiley & Sons. Inc. 2. EMPLOYEE ENGAGEMENT by Edward Mone and Manuel London; © 2010 by Taylor and Francis Group 3. MANAGING EMPLOYEE RETENTION by Jack Phillips, Ph.D. and Adelle Connell, Ph.D.; Society for HR Management © 2003 by Franklin Covey 4. MOTIVATION by John Houston; © 1985 by Macmillan Publishing Company 5. THE THREE LAWS OF PERFORMANCE by Steve Zaffron and Dave Logan; © 2009 by Jossey- Bass In partial completion of IR 201: Introduction to IR by Alfredo V. Primicias III for Dr OFRENEO Page 21

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