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Retention And Employee Engagement

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Retention And Employee Engagement

Retention And Employee Engagement

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  • 1. RETENTION AND EMPLOYEE ENGAGEMENT BY ANKUSH YADUVANSHI [1]
  • 2. INTRODUCTION We’ve seen it happen many times. An organization that provides top wages and benefits loses a great employee to a competitor for no apparent reason. Of course, some employee turnover is to be expected, but the company is truly engaging its employees, there is no good reason for the unexpected loss of quality staff members. Many companies already know that wages and benefits are important to employees, but compensation alone is not enough to keep the highly skilled, motivated and experienced workforce your business needs to excel. Engagement at work was conceptualized by William A. Kahn (1990) as the ‘harnessing of organizational members’ selves to their work roles. In engagement, people employ and express themselves physically, cognitively, and emotionally during role performances. The second related construct to engagement in organizational behaviour is the notion of flow advanced by Csikszentmihalyi (1975, 1990). Csikzentmihalyi (1975) defines flow as the ‘holistic sensation’ that people feel when they act with total involvement. Flow is the state in which there is little distinction between the self and environment. When individuals are in Flow State little conscious control is necessary for their actions Employee Engagement as the extent to which workforce commitment, both emotional and intellectual, exists relative to accomplishing the work, mission, and vision of the organization. I see engagement as a heightened level of ownership where each employee wants to do whatever they can for the benefit of their internal and external customers, and for the success of the organization as a whole. Employee engagement was described in the academic literature by Schmidt et al (1993) using data from Gallup's Q12 engagement survey. A modernized version of job satisfaction, Schmidt et al's influential definition of engagement was "an employee's involvement with, commitment to, and satisfaction with work." 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 (e.g., Rucci at al, 1998 using data from Sears). Some of this work has been published in a diversity context (e.g., McKay, Avery, Morris et al, 2007). Directions of causality were discussed by Schneider and colleagues in 2003. [2]
  • 3. Defining Employee Engagement Employee engagement, also called work engagement or worker engagement, is a business management concept. An "engaged employee" is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers their organization's interests. The primary behaviours of engaged employees are speaking positively about the organization to co-workers, potential employees and customers, having a strong desire to be a member of the organization, and exerting extra effort to contribute to the organization’s success. Many smart organizations work to develop and nurture engagement. It is important to note, the employee engagement process does require a two-way relationship between employer and employee. Why is Employee Engagement Important? An organization’s capacity to manage employee engagement is closely related to its ability to achieve high performance levels and superior business results. Engaged employees will stay with the company, be an advocate of the company and its products and services, and contribute to bottom line business success. Engaged employees also normally perform better and are more motivated. There is a significant link between employee engagement and profitability. Employee engagement is critical to any organization that seeks not only to retain valued employees, but also increase its level of performance. [3]
  • 4. Factors of Engagement Many organizational factors influence employee engagement and retention such as: A culture of respect where outstanding work is valued Availability of constructive feedback and mentoring Opportunity for advancement and professional development Fair and appropriate reward, recognition and incentive systems Availability of effective leadership Clear job expectations Adequate tools to complete work responsibilities High levels of motivation Many other factors exist that might apply to your particular business and the importance of these factors will also vary within your organization. [4]
  • 5. [5]
  • 6. STUDIES BY CONSULTANTS Engaged employees care about the future of the company and are willing to invest the discretionary effort. Engaged employees feel a strong emotional bond to the organization that employs them. (Robinson) Emotional Attachment Only 29% of employees are actively engaged in their jobs. These employees work with passion and feel a profound connection to their company. People that are actively engaged help move the organization forward. 84% of highly engaged employees believe they can positively impact quality of their organization's products, compared with only 31% of the disengaged. 72% of highly engaged employees believe they can positively affect customer service, versus 27% of the disengaged. 68% of highly engaged employees believe they can positively impact costs in their job or unit, compared with just 19% of the disengaged. Involvement Eileen Appelbaum and her colleagues (2000) studied 15 steel mills, 17 apparel manufacturers, and 10 electronic instrument and imaging equipment producers. Their purpose was to compare traditional production systems with flexible high-performance production systems involving teams, training, and incentive pay systems. In all three industries, the plants utilizing high-involvement practices showed superior performance. In addition, workers in the high-involvement plants showed more positive attitudes, including trust, organizational commitment and intrinsic enjoyment of the work. Commitment It has been routinely found that employee engagement scores account for as much as half of the variance in customer satisfaction scores. This translates into millions of dollars for companies if they can improve their scores. Studies have statistically demonstrated that engaged employees are more productive, more profitable, more customer-focused, safer, and less likely to leave their employer. [6]
  • 7. Productivity In a study of professional service firms, the Hay Group found that offices with engaged employees were up to 43% more productive. The most striking finding is the almost 52% gaps in operating incomes between companies with highly engaged employees and companies whose employees have low-engagement scores. High-engagement companies improved 19.2% while low-engagement companies declined 32.7% in operating income during the study period. Life Insurance Industry Two studies of employees in the life insurance industry examined the impact of employee perceptions that they had the power to make decisions, sufficient knowledge and information to do the job effectively, and rewards for high performance. In both studies, high-involvement management practices were positively associated with employee morale, employee retention, and firm financial performance. [7]
  • 8. MEASURING EMPLOYEE ENGAGEMENT Gallup research consistently confirms that engaged work places compared with least engaged are much more likely to have lower employee turnover, higher than average customer loyalty, above average productivity and earnings. These are all good things that Prove that engaging and involving employees make good business sense and building shareholder value. Negative workplace relationships may be a big part of why so many Employees are not engaged with their jobs. Step 1: Listen The employer must listen to his employees and remember that this is a continuous process. The information employee’s supply will provide direction. This is the only way to identify their specific concerns. When leaders listen, employees respond by becoming more engaged. This results in increased productivity and employee retention. Engaged employees are much more likely to be satisfied in their positions, remain with the company, be promoted, and strive for higher levels of performance. Step 2: Measure current level of employee engagement Employee engagement needs to be measured at regular intervals in order to track its contribution to the success of the organisation. But measuring the engagement (feedback through surveys) without planning how to handle the result can lead employees to disengage. It is therefore not enough to feel the pulse—the action plan is just as essential. Employee engagement satisfaction surveys determine the current level of employee engagement. A well-administered satisfaction survey will let us know at what level of engagement the employees are operating. Customizable employee surveys will provide with a starting point towards the efforts to optimize employee engagement. The key to successful employee satisfaction surveys is to pay close attention to the feedback from the staff. It is important that employee engagement is not viewed as a onetime action. Employee engagement should be a continuous process of measuring, analyzing, defining and implementing. The employee survey is a diagnostic tool of choice in the battle for the hearts of employees. Step 3: Identify the problem areas Identify the problem areas to see which are the exact areas, which lead to disengaged employees Step 4: Take action to improve employee engagement by acting upon the problem areas Nothing is more discouraging to employees than to be asked for their feedback and see no movement toward resolution of their issues. Even the smallest actions taken to address concerns will let the staff know how their input is valued. Feeling valued will boost morale, motivate and encourage future input. Taking action starts with listening to employee feedback and a definitive action plan will need to be put in place finally. [8]
  • 9. TECHNIQUES FOR EMPLOYEE ENGAGEMENT The four engagement techniques currently favoured by organizations are: Action teams (55%) – Employee teams created to work with leaders to identify engagement goals and develop strategies to achieve them. Storytelling (49%) – Distilling information about what the company is striving for and how it can get there, into more human and persuasive “stories” that involve employees on a more emotional level. Appreciative Inquiry (29%) – A communication approach that encourages employees to work with leaders to envision corporate goals and share ideas how to best achieve them. Message maps (19%) – A messaging approach demanding an in-depth understanding of the audience, their perceptions and attitudes. Melcrum’s new guide contains chapters by leading experts on each of the techniques, along with key findings from the global study into how organizations are currently approaching employee engagement. New techniques for more demanding audiences’ internal communicators have increasingly been looking to more interactive and emotive techniques to encourage employees to “go the extra mile”. Melcrum’s latest research suggests that 86% of organizations with employee engagement on the agenda are now using at least one of the four key techniques. “After so much research and honing of practice, good communication departments are skilled at producing clear messages, strong copy and straightforward mission statements and values,” says Tony Quinlan, Principal and Founder at Narrate and one of the expert authors of the new guide. “But neuroscience, psychology and related disciplines show us that people rarely make decisions on the basis of rational analysis of data at the best of times.” In addition, technological advances and socio-economic fluctuations have made audiences all the more demanding. “People have far greater access to information than ever before and more ways of expressing their own opinions,” Quinlan adds. “They’re no longer willing to take at face value what’s being told to them by the organization. They can be sceptical and cynical when it comes to the everyday volley of messages that leadership, managers and internal communicators send them.” Key findings from the global survey Other interesting findings to emerge from Melcrum’s latest global research into employee engagement include: Around 81% of organizations worldwide now have employee engagement on the agenda. A quarter of organizations address engagement through a formal engagement program, while 54% treat engagement as part of a general philosophy incorporated into overall people practices. Employee engagement programs in 40% of organizations worldwide are overseen primarily by HR, while for 27%, internal communication is the key function. [9]
  • 10. FINDINGS OF ALPHAMEASURE SURVEY AlphaMeasure is a US company that designs custom employee surveys tailored to target the organizational topics and challenges facing the staff, and offer exceptional customer support to assist the organization at every step of the way. It defines employee engagement as the level of commitment and involvement an employee has towards their organization and its values. Engagement Essentials How will we know to what degree our employees are engaged? The first step is to determine the current level of employee engagement. The best tool to determine this base line is a comprehensive employee satisfaction survey. A well administered satisfaction survey will let us know at what level of engagement our employees are operating. Customizable satisfaction surveys will provide us with a starting point towards our efforts to optimize employee engagement. The key to successful employee satisfaction surveys is to pay close attention to the feedback from our staff. This is the only way to identify their specific concerns. When leaders listen, employees respond by becoming more engaged. This results in increased productivity and employee retention. Engaged employees are much more likely to be satisfied in their positions, remain with the company, be promoted, and strive for higher levels of performance. Listening to employee ideas, acting on employee contributions and actively involving employees in decision making are essential to employee engagement. Taking Action to Improve Employee Engagement Nothing is more discouraging to employees than to be asked for their feedback and see no movement toward resolution of their issues. Even the smallest actions taken to address concerns will let your staff know that their input is valued. Feeling valued will boost morale, motivate and encourage future input. Taking action starts with listening to employee feedback. Then the data needs to be analyzed. Next, a definitive action plan will need to be put in place and finally, change will be implemented. It is important that employee engagement is not viewed as a onetime action. Employee engagement should be a continuous process of measuring, analyzing, defining and implementing. [10]
  • 11. What is the Alternative to Employee Engagement? Conditions that prevent employee engagement seldom alleviate themselves. They should be assessed and addressed as soon as possible. Left to multiply, negative employee satisfaction issues can result in: Higher employee turnover Employees leave, taking their reservoir of knowledge and experience to another workplace Diminished performance Competency of the workforce is reduced, at least short term, until new employees are trained Lost training dollars Time and money invested in training and development programs for departing workers is wasted Lower morale Remaining employees can be overburdened with new duties, in addition to the unresolved issues that already prevent their full engagement. How Can We Attain Employee Engagement? Listen to the employees and remember that this is a continuous process. The information our employees supply will provide direction. Insist upon increased engagement at the managerial level, and create and deploy a customized employee satisfaction survey from AlphaMeasure to assess your current level of employee engagement. Identify problem areas, make a plan and take action towards improvement. [11]
  • 12. PEOPLESTREME EMPLOYEE ENGAGEMENT SURVEY REPORTS PeopleStreme has offices in 6 Countries including India. PeopleStreme specialises in all facets of Human Capital Management systems. Its client list reads like a who's who of Australian, national and global organizations, including Government and Not-For-Profit. Our clients include McDonald's, Mercedes Benz, Fuji Xerox, Mater Hospital, Warringay City Council, Astra Zeneca, Olympus Newcrest Mining, Fairfax Digital and many others. They have experience in and work across all industry sectors. PeopleStreme Employee Engagement (PS-EE) is a series of online diagnostic tools designed to accelerate improvements in Employee Engagement and retention. Competing employee engagement tools were developed based on Industrial Age thinking. Instead, PS-EE includes a new talent management Knowledgebase which provides recommended remedies for each factor and employee retention. In addition to remedies, the online software tool recommends the top employee engagement priorities requiring urgent attention in order to reduce unplanned turnover and improve retention for talented employees. PeopleStreme Employee Engagement builds benchmarks as the survey is conducted, immediately, not after delays of weeks or months. This enables you to immediately compare and prioritize each Department or Division with organizational and industry benchmarks. You can easily compare to internal benchmarks such as : • Absenteeism rate • Lost time injury rate • Employee turnover rate • Previous restructures Standard reporting includes: • Department/ Division comparison with the Organisation Benchmark • Gender Comparison • Location Comparison (State or other Location information) • Custom Fields provide additional demographics for reporting • All data can be exported for reporting purposes. [12]
  • 13. [13]
  • 14. Included with the system, online recommendations are provided for each question that has an effect on Employee Engagement. Recommended remedies are backed up by an explanation and research. This helps the HR manager visualize where a particular department has issues and the HR manager then has ammunition to suggest and discuss recommended remedies with the department manager. By using this Closed Loop methodology, the Employee Engagement survey is turned into individual action plans to improve Employee Engagement for every employee. Action Planning (how to improve Employee Engagement) can also be fully facilitated by PeopleStreme organization psychologists. [14]
  • 15. Advantage: We Own the Data Many existing vendors have a much smaller subset of survey questions and those questions were first contemplated during the 1980’s! The world has since moved on. Technology now allows us to ask more questions and provide reporting online and in real time. PeopleStreme facilitates engagement remedies and provides online Remedy planning as part of the Survey tool. Engagement Remedies are suggested by our Knowledge Base tool. [15]
  • 16. CONCLUSION Employee Engagement is the buzz word term for employee communication. It is a positive attitude held by the employees towards the organization and its values. It is rapidly gaining popularity, use and importance in the workplace and impacts organizations in many ways. Employee engagement emphasizes the importance of employee communication on the success of a business. An organization should thus recognize employees, more than any other variable, as powerful contributors to a company's competitive position. Therefore employee engagement should be a continuous process of learning, improvement, measurement and action. I would hence conclude that raising and maintaining employee engagement lies in the hands of an organization and requires a perfect blend of time, effort, commitment and investment to craft a successful endeavour. [16]