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Technical Whitepaper
IBM Software
The many contexts of
employee engagement
Exploring the contextual layers that directly or
indirectly influence employee engagement
The WorkTrends™
survey
Employee responses to the four Employee Engagement Index
questions presented in this report were gathered as part of the
WorkTrends™
survey by IBM which has been administered annually or
biannually since 1984. In 2012, the WorkTrends survey was taken
online by approximately 33,000 employees in 28 different countries
who work full-time for an organization of 100 staff members or more.1
The survey asks employees more than 200 employee opinion questions
about employee, manager and leadership behaviors, organizational
practices and processes, and demographic variables. WorkTrends data
are unique because they are a representative sample – a cross-section of
workers across the globe, which allows us to generalize our conclusions
to the broader working population. These data also allow us to examine
employee engagement across a number of different contexts.
Executive summary
In this report we reveal the state of engagement in the world today.
We will discuss how different contexts, from the macro- to the micro-
level, can effect employee engagement. Then we will show you the
levels of engagement attainable by highlighting contexts in which
employee engagement is the highest.
Key highlights:
•	 Global Employee Engagement Index scores rose slightly in 2012 to
57 percent, but remain below the peak of 60 percent reached in 2009
and 2010.
•	 India topped the global employee engagement ranking in 2012,
with the US, China, Canada and Australia all performing strongly. The
UK, Russia, Germany and France had low-to-moderate
Employee Engagement Index scores, while Japan was the lowest
of the 28 countries surveyed in 2012.
Contents:
1	Executive summary
2	Employee engagement
2	The many contexts of employee
engagement
3	The state of engagement
9	 The highs and lows of engagement
•	 All industries surveyed fall in a 9 percentage point range for
2012 Employee Engagement Index scores, with the public
sector (government) at the bottom and electronics and
computer manufacturing at the top.
•	 “Best practice” organizations have significantly higher
Employee Engagement Index scores at 82 percent, which is
25 percentage points above the global average.
•	 Senior leaders have a big impact on employee engagement:
employees who claim their senior leaders lack competence
report Employee Engagement Index scores of only
23 percent.
•	 Employee Engagement Index scores drop 40 percentage
points when a direct manager is unable to effectively tackle
work tasks or people problems.
•	 Teamwork is critical – employees are most engaged when
their coworkers try their hardest and do their best at work.
•	 The most engaged employees are senior leaders, those at the
top of the organization (76 percent).
•	 Millennials have slightly higher Employee Engagement
Index scores than baby boomers or Generation Xers.
For an in-depth review, refer to Table 7 at the end of
the report, for a summary of what makes the most and
least engaged employees.
Employee engagement
Employee engagement is defined as:
“The extent to which employees are motivated to contribute
to organizational success, and are willing to apply
discretionary effort to accomplishing tasks important to the
achievement of organizational goals.”
To help organizations use employee engagement to drive
organizational performance, IBM created the Employee
Engagement Index (EEI). In the EEI, employee engagement
is measured by asking employees the extent to which they
agree with the following four items:
•	 I am proud to tell people I work for my organization (Pride).
•	 Overall, I am extremely satisfied with my organization as a
place to work (Satisfaction).
•	 I would gladly refer a good friend or family member to my
organization for employment (Advocacy).
•	 I rarely think about looking for a new job with another
organization (Commitment).
Numerous studies have demonstrated that an engaged
workforce can have a profound effect on an organization’s
bottom line. Organizations with highly engaged employees
not only see higher customer satisfaction, they also
outperform organizations with low levels of employee
engagement on a whole range of financial metrics (for more
on linkage research refer to IBM’s white paper, “Beyond
Engagement: The Definitive Guide To Employee Surveys
And Organizational Performance”).2
The many contexts of employee
engagement
Employee engagement is complex. In this report, we have
presented it at the center of a system of factors that function
at nine different levels, and we will examine employee
engagement in the context of each level. While employee
engagement matters a great deal to organizational leaders and
human resources (HR) professionals, fundamentally, it is a
state that exists in the employee.3
The employee exists in a
multi-layered context: nested in jobs, the characteristics of
which impact the employee (and subsequently employee
engagement); jobs are nested in teams of coworkers, which are
nested under a direct manager; who is nested under a senior
leadership team; in an organization; in a certain industry; in a
specific country; at some point in time (see Figure 1).
An employee’s engagement is influenced, either directly or
indirectly, to some extent by all these contextual layers – like a
reverse ripple effect.
Technical Whitepaper
IBM Software
2
YEAR
ORGANIZATION
SENIOR LEADERS
DIRECT MANAGER
TEAM
JOB
EMPLOYE
E
COUNTRY
INDUSTRY
EE
Figure 1: The many contexts of employee engagement
Technical Whitepaper
IBM Software
3
It seems employee engagement is beginning
to rebound,though the climb is less steep
than before.
Country
As with differences over time, it is also natural to wonder how
employees differ across countries. We understand that
workers across the world tend to be different, and also
recognize different countries have different laws, policies and
social norms that may influence industry practices, how
business is done, manager and leader behavior, and ultimately,
an employee’s engagement.
The state of engagement
Employee engagement trends over time are of great interest
to organizational leaders and managers. People want to
know how their results compare to last year, and how things
have changed – it is how we assess whether we have improved
or worsened.
Globally, employee engagement fluctuates moderately over
time (see Figure 2). These fluctuations may be due to a
multitude of different social or economic factors. In 2008, the
Employee Engagement Index scores stood at 55 percent.
Then the scores increased notably in 2009 to 60 percent,
holding that level in 2010. Then, possibly in response to
economic forces, scores dropped to a new low in 2011. It
seems employee engagement is beginning to rebound in 2012,
though the climb is less steep than before.
Note: Employee engagement trends are based on a six-country sample (i.e., US, UK, Germany, China, India and Brazil) across
five years (i.e., 2008-2012). Margin of error +/- 1.
70
60
50
40
30
20
PERCENTFAVORABLE
2008 2009 2010 2011 2012
PRIDE SATISFACTION ADVOCACY COMMITMENT EEI
55%
60% 60%
54%
57%
Figure 2: Five year global employee engagement trends
Technical Whitepaper
IBM Software
4
include, among others, three European stalwarts: the UK,
France and Germany. Finally, one country exhibited a
low-moderate score – Japan. Figure 3 presents a map of the
world, color-coded by engagement scores.
Country scores are presented in five groups in Table 1.
The highest Employee Engagement Index scores are found in
India, while high-moderate scores are found in Mexico and
Denmark. Moderate scores are found in the majority (17) of
countries, including the US. Low-moderate scoring countries
70 PERCENT (HIGH) India 77
60-69 PERCENT (HIGH-MODERATE) Denmark 67
Mexico 63
50-59 PERCENT (MODERATE) Netherlands 59
United States 59
Canada 58
Australia 57
China 57
Spain 55
New Zealand 55
Brazil 55
Turkey 54
Switzerland 54
South Africa 54
50-59 PERCENT (MODERATE) United Arab Emirates 53
Finland 52
Sweden 52
Argentina 52
Ireland 52
Italy 51
40-49 PERCENT (LOW-MODERATE) Indonesia 49
United Kingdom 49
Russia 48
Saudi Arabia 48
Germany 47
France 45
Korea 40
40 PERCENT (LOW) Japan 31
Table 1: Employee engagement by country
Figure 3: Employee engagement by country
70% 60-69% 50-59% 40-49% 40%
Note: WorkTrends 2012 international sample. Median margin of error across countries is +/- 3.
These data are drawn from a true representative sample of employees from these countries. Not all respondents work for organizations that regularly conduct employee surveys. Previous research
has shown that employees who do work for organizations that regularly conduct employee surveys score, on a global average, 15-20 percentage points higher on the Employee Engagement Index.
Technical Whitepaper
IBM Software
5
Organization
Not all organizations are run the same way, and not all
practices are uniformly implemented. Just as organizations are
influenced by the year and country in which they operate,
employee engagement is influenced by the organization in
which they work. Several organizational “best practices” have
been identified in the human capital management field.4
Organizations should:
•	 Publish a statement of the organization’s mission, vision,
values, or strategy.
•	 Conduct an employee opinion survey.
•	 Sponsor activity or training sessions aimed specifically at
quality improvement.
•	 Collect customers’ feedback about the organization’s products
or services and share it with employees.
•	 Conduct regular performance appraisals.
•	 Cross-train employees to perform other jobs in the
organization.
We found employees are more engaged when their
organizations implement these best practices, especially when
they are cross-trained. Further, when all of these practices have
been implemented, Employee Engagement Index levels are at
an astounding 82 percent. Conversely, when none of these
practices have been implemented, Employee Engagement
Index levels bottom out at 29 percent, a drastic difference of
53 percentage points.
Yes No
All Best Practices 82% 29%
– Mission Statement 62% 42%
– Employee Opinion Survey 62% 43%
– Quality Improvement Training 65% 41%
– Customer Feedback 62% 43%
– Performance Appraisal 62% 42%
– Cross-Trained 68% 45%
Margin of error for all best practice group is +/- 2, for no best practice group is +/- 3, and for all
other groups is +/- 1.”
Table 3: Global employee engagement by best practice
Industry
We often evaluate an organization’s performance in its own
industry. Similarly, we can examine industry-level Employee
Engagement Index scores. When examining these scores, a
story of the haves and the have-nots emerges. The high-tech
manufacturing sub-sector soars above the rest at 62 percent. It
even heartily outscores other sub-sectors in the manufacturing
industry (heavy and light score 4 and 10 percentage points
lower, respectively).
Another stark contrast is found in the healthcare profession.
In healthcare products, employees seem to be doing well,
scoring 5 percentage points above the global median.
However, healthcare services lags far behind, scoring a full 8
percentage points lower. Some of the lowest scores across
industries are found in the public sector. Again, we observe
substantial differences between sub-sectors: employees in
state-or county-level government score 6 percentage points
below those at the federal or national level.
Industry EEI
Margin
of error
Electronics and Computer Manufacturing 62% 3%
Heavy Manufacturing 58% 2%
Light Manufacturing 52% 3%
Health Care Products/Pharmaceuticals 59% 4%
Health Care Services 51% 2%
Banking Services 57% 3%
Financial Services 57% 4%
Food Industry Retail/Wholesale 54% 3%
Retail/Wholesale Trade 51% 3%
Education 54% 2%
Government/Public Administration 51% 2%
– Military or Armed Services 52% 5%
– Local or Municipal 51% 3%
– State or Province 47% 3%
– National or Federal, other than Military 53% 3%
Note: WorkTrends 2012 international sample. Global average EEI is 54 percent (+/- 1).
Table 2: Employee engagement by industry
Technical Whitepaper
IBM Software
6
Direct manager
Often, the most influential person in our work life is our
direct manager. This person is responsible for the day-to-day
administrative tasks such as approving timecards, as well as
weightier duties like providing performance feedback. We
assessed two facets of direct manager performance: work
management, which refers to managing tasks and people
management, which refers to the softer side of leadership.
We used these two items in our survey:
•	 My manager does a good job at “managing the work” that is,
making appropriate work assignments, setting priorities,
scheduling, etc.
•	 My manager does a good job at “people management,” that
is, dealing with the people who work for him/her.
Both facets of manager performance are crucial for employee
engagement. Employee Engagement Index scores drop about
40 percentage points when a manager is unable to effectively
tackle work tasks or people problems. When neither can be
done well, the combined effect is even greater than the effect
of each alone – dropping almost 50 percentage points.
Yes No
Effective Direct Manager 73% 24%
– Task Management 69% 28%
– People Management 70% 28%
Margin of error is +/- 1.
Table 5: Employee engagement by direct manager effectiveness
Senior leadership
Senior leaders are the captains of your organizational ship –
they lead the way through both the calm and the storm.
Employees look to their organization’s leaders for guidance
and reassurance. However, for senior leaders to effectively
guide and reassure, their employees must trust them.
According to organizational scientists, what makes employees
trust (or distrust) people is largely a combination of three core
determinants: benevolence (do they care about me?),
competence (can they do the job?) and integrity (are they
honest?). Untrustworthy senior leaders can cause doubt and
dampen employee engagement. We measured senior leader
trustworthiness with three items:
•	 Senior management shows concern for the well-being and
morale of employees (Benevolence).
•	 Senior management, at my organization, has the ability to
deal with the challenges we face (Competence).
•	 When my organization’s senior management says something,
you can believe it is true (Integrity).
The effect of untrustworthy senior leadership is devastating
on employees’ engagement. Employees seem particularly
troubled by senior leaders who do not exude competence and
know-how (Employee Engagement Index of just 23 percent).
On the other hand, senior leaders who seem to genuinely care
about their employees’ welfare cause workers’ Employee
Engagement Index scores to soar (79 percent).
Yes No
Trustworthy Senior Leaders 86% 17%
– Benevolence 79% 26%
– Competence 69% 23%
– Integrity 78% 26%
Margin of error is +/- 1.
Table 4: Employee engagement by senior leader trustworthiness
Technical Whitepaper
IBM Software
7
An uncooperative and toxic team
environment will likely affect an employee’s
engagement,no matter how positive other
factors are.
Job
When most employees (73 percent) report that they simply
enjoy the work they do – it is no wonder the job itself can
affect employee engagement levels. Figure 4 presents
Employee Engagement Index scores by level in the
organization and by job type. The most engaged employees
are those at the top of the organization (76 percent), and
scores seem to decrease as we move down the organizational
hierarchy. Perhaps individual contributors simply have less
invested in the company and are therefore, less engaged.
Among the most engaged job types are professionals, while
laborers are among the least engaged. This trend highlights
the importance of challenging and stimulating work to
employee engagement, a finding supported by the academic
literature.5
It is no coincidence that professional jobs such as
teachers, accountants, physicians, nurses, dentists, attorneys,
engineers, artists, researchers and scientists typically enjoy
greater job autonomy, which is an important predictor of
motivation in the Job Characteristics Model. In fact,
according to WorkTrends data,6
professionals have the
greatest job autonomy (70 percent), while laborers have the
lowest (44 percent). This differential may also highlight
the value placed on highly educated workers in the
information age.
Team and coworkers
Even the best employee can fail, without the right team.
A team is a group of people who cannot function better
individually; working together as a group is what makes them
more effective. At their best, coworkers can cover for one
another, help pick up the slack and raise the bar through hard
work. At their worst, coworkers can cause conflict and shirk
their duties, leaving more work for each employee. An
uncooperative and toxic team environment will likely affect an
employee’s engagement, no matter how positive other factors
are. We assessed coworker quality with three items:
•	 The people I work with cooperate to get the job done.
•	 The people I work with do their very best for my
organization.
•	 I feel that I am part of a team.
Employees are likely to be most engaged when their
coworkers try their hardest and do their best at work. Not
only are these coworkers helping the team achieve its goals,
but they are setting a shining example for others and rallying
the troops. Employees tend to be least engaged when they do
not feel like they belong to a team. Teams can provide
employees tactical and emotional support, both of which can
be valuable resources when deadlines loom.
Yes No
Good Coworkers 74% 12%
– Cooperative 62% 23%
– Do their Best 67% 21%
– Feel Like a Team 66% 20%
Margin of error ranges between +/- 1 and 3.
Table 6: Employee engagement by coworker quality
Technical Whitepaper
IBM Software
8
Figure 5: Employee engagement by healthcare job level and type
Employee
Certain types of employees may simply be more engaged than
others. A great deal of speculation surrounds the millennial
generation, but, despite being characterized as spoiled and
high-maintenance, millennials actually exhibit higher
Employee Engagement Index scores than both Gen Xers and
boomers. Interestingly, the one exception to this trend is
commitment; millennials are about as committed as Gen Xers
and only slightly less committed than boomers. Millennials
came of age in a milieu of down-sizing, outsourcing and
offshoring. Despite more positive attitudes, it seems that they
do not expect the same cradle-to-grave employment contract
of their parents’ era.
Figure 6: Employee engagement by generation
Figure 4: Employee engagement by job level and type
As previously discussed, the healthcare services industry
exhibits one of the lowest Employee Engagement Index
scores (51 percent). Interestingly, this could be partly
explained by job-level factors. Figure 5 presents Employee
Engagement Index scores in the healthcare services industry
by job type and level. Note how the most engaged among
them (administrators/managers and physicians) demonstrate
scores that are actually higher than the global average
(54 percent). Perhaps not surprisingly, at the bottom of the list
and tugging the overall industry score down, are individual
contributors, nurses and health aides. Interestingly, 46 percent
of nurses and health aides report unreasonable work stress,
while only 38 percent of healthcare administrators and
physicians report the same.
Margin of error for Upper/Middle Management is +/- 3, Supervisors is +/- 3, Professional/Technical
Workers is +/- 2, Service/Production Workers is +/- 3 to 4, Sales is +/- 5, and Clerical is +/- 3.
Margin of error is +/- 2-4.
Healthcare Services
Management
Individual Contributor
Administrators and
Physicians
Nurses and
Heatlh Aides
10 20 30 40 50 60
PERCENT FAVORABLE
51
54
49
54
50
Executive/Senior Manager
Mid-Level Manager
Front-Line Supervisor
Individual Contributor
Sales
Professional
Clerical
Other
Technical
Operative
Service
Laborers
Crafts/Skilled Trades
30 40 50 60 70 80
PERCENT FAVORABLE
58
55
55
54
53
52
50
49
47
49
53
58
76
Margin of error is +/- 1. Baby boomers were born from 1943 through 1960, Gen Xers were born 1961 through
1981, and millennials were born 1982 through 2003.
70
60
50
40
30
20
EEI Pride Satisfaction Advocacy Commitment
BOOMERSERS GEN XERS MILLENNIALS
GLOBALEEISCORE
53
56
60
56
61
65
53
56
61
51
56
62
53
50 50
PERCENT FAVORABLE
Technical Whitepaper
IBM Software
9
For more information
To learn how to build a smarter workforce, visit:
ibm.com/social-business
The highs and lows of engagement
By examining the many contexts of employee engagement, we
have established an extensive view of a complex construct. It is
safe to say employee engagement is determined by a number
of different things. In this report we have explored influential
factors from very broad (time period) to the very specific
(individual employee), and at each layer we observed a
substantial impact on Employee Engagement Index scores.
We have summarized all of these findings, to highlight the
most and least engaged of 2012 (Table 7).
Most engaged Least engaged
Year 2009  2010 2011
Country India Japan
Industry
High-Tech
Manufacturing
Healthcare, Retail,
Government
Organization Cross-train employees
Do not conduct quality
improvement training
Senior
Leadership
Benevolence Incompetence
Direct Manager
Effective at both
people and task skills
Ineffective at both
people and task skills
Coworkers
Feel like a team
member
Coworkers who do not
do their best
Job Senior Manager, Sales
Individual Contributor,
Craft/Skilled Trades
Employee Millennials Baby Boomers
Table 7: The most and least engagement employees by context
LOW14168-USEN-01
Please Recycle
1 Except for UAE, KSA and Ireland, which required only 25 staff members.
2 Wiley, J. W. (2012). Beyond engagement: The definitive guide to employee
surveys and organizational performance. Kenexa High Performance Institute.
http://www.ibm.com/common/ssi/cgi-bin/ssialias?subtype=WHinfotype=S
Aappname=SWGE_LO_PT_USENhtmlfid=LOW14043USENattach
ment=LOW14043 USEN.PDF
3 Macey, W. H.,  Schneider, B. (2008). The meaning of employee engagement.
Industrial and Organizational Psychology, 1, 3-30. http://onlinelibrary.wiley.
com/doi/10.1111/j.1754-9434.2007.0002.x/abstract?deniedAccessCustomise
dMessage=userIsAuthenticated=false
4 Becker, B.,  Gerhart, B. (1996). The impact of human resource management on
organizational performance: Progress and prospects. Academy of Management
Journal, 39, 779-801. http://www.jstor.org/stable/256712
5 Wiley, J. W. (2012). Beyond engagement: The definitive guide to employee surveys
and organizational performance. Kenexa High Performance Institute. http://
www.ibm.com/common/ssi/cgi-bin/ssialias?subtype=WHinfotype=SAap
pname=SWGE_LO_PT_USENhtmlfid=LOW14043USENattachment
=LOW14043USEN.PDF
6 Kenexa WorkTrends Survey. 2012. In its current form WorkTrends is a
multi-topic survey completed online by a sample of employees representative
of a country’s working population in terms of industry mix, job type, gender,
age and other key organizational and demographic variables. In most
countries, survey takers must be adults who work full-time for an
organization of 100 employees or more; this threshold drops to 25 employees
or more in countries with smaller economies or hard-to-reach populations.
The survey has over 200 items that cover a wide range of workplace issues,
including senior leader and direct manager effectiveness, recognition, growth
and development, employee engagement, customer orientation, quality
emphasis, innovation, corporate social responsibility, workplace safety, work
stress and performance confidence. In 2012, over 33,000 employees were
surveyed, representing 28 countries.
© Copyright IBM Corporation 2014
IBM Corporation
Software Group
Route 100
Somers, NY 10589
Produced in the United States of America
February 2014
IBM, the IBM logo and ibm.com are trademarks of International
Business Machines Corporation in the United States, other countries or
both. If these and other IBM trademarked terms are marked on their
first occurrence in this information with a trademark symbol (® or
TM), these symbols indicate U.S. registered or common law trademarks
owned by IBM at the time this information was published. Such
trademarks may also be registered or common law trademarks in other
countries. Other product, company or service names may be trademarks
or service marks of others. A current list of IBM trademarks is available
at “Copyright and trademark information” at:
ibm.com/legal/copytrade.shtml
The content in this document (including currency OR pricing
references which exclude applicable taxes) is current as of the initial date
of publication and may be changed by IBM at any time. Not all
offerings are available in every country in which IBM operates.
The performance data discussed herein is presented as derived under
specific operating conditions. Actual results may vary. THE
INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS”
WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED,
INCLUDING WITHOUT ANY WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND ANY WARRANTY OR CONDITION OF
NONINFRINGEMENT. IBM products are warranted according to
the terms and conditions of the agreements under which they are
provided.

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Context of-Employee-Engagement - InspireOne

  • 1. Technical Whitepaper IBM Software The many contexts of employee engagement Exploring the contextual layers that directly or indirectly influence employee engagement The WorkTrends™ survey Employee responses to the four Employee Engagement Index questions presented in this report were gathered as part of the WorkTrends™ survey by IBM which has been administered annually or biannually since 1984. In 2012, the WorkTrends survey was taken online by approximately 33,000 employees in 28 different countries who work full-time for an organization of 100 staff members or more.1 The survey asks employees more than 200 employee opinion questions about employee, manager and leadership behaviors, organizational practices and processes, and demographic variables. WorkTrends data are unique because they are a representative sample – a cross-section of workers across the globe, which allows us to generalize our conclusions to the broader working population. These data also allow us to examine employee engagement across a number of different contexts. Executive summary In this report we reveal the state of engagement in the world today. We will discuss how different contexts, from the macro- to the micro- level, can effect employee engagement. Then we will show you the levels of engagement attainable by highlighting contexts in which employee engagement is the highest. Key highlights: • Global Employee Engagement Index scores rose slightly in 2012 to 57 percent, but remain below the peak of 60 percent reached in 2009 and 2010. • India topped the global employee engagement ranking in 2012, with the US, China, Canada and Australia all performing strongly. The UK, Russia, Germany and France had low-to-moderate Employee Engagement Index scores, while Japan was the lowest of the 28 countries surveyed in 2012. Contents: 1 Executive summary 2 Employee engagement 2 The many contexts of employee engagement 3 The state of engagement 9 The highs and lows of engagement
  • 2. • All industries surveyed fall in a 9 percentage point range for 2012 Employee Engagement Index scores, with the public sector (government) at the bottom and electronics and computer manufacturing at the top. • “Best practice” organizations have significantly higher Employee Engagement Index scores at 82 percent, which is 25 percentage points above the global average. • Senior leaders have a big impact on employee engagement: employees who claim their senior leaders lack competence report Employee Engagement Index scores of only 23 percent. • Employee Engagement Index scores drop 40 percentage points when a direct manager is unable to effectively tackle work tasks or people problems. • Teamwork is critical – employees are most engaged when their coworkers try their hardest and do their best at work. • The most engaged employees are senior leaders, those at the top of the organization (76 percent). • Millennials have slightly higher Employee Engagement Index scores than baby boomers or Generation Xers. For an in-depth review, refer to Table 7 at the end of the report, for a summary of what makes the most and least engaged employees. Employee engagement Employee engagement is defined as: “The extent to which employees are motivated to contribute to organizational success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organizational goals.” To help organizations use employee engagement to drive organizational performance, IBM created the Employee Engagement Index (EEI). In the EEI, employee engagement is measured by asking employees the extent to which they agree with the following four items: • I am proud to tell people I work for my organization (Pride). • Overall, I am extremely satisfied with my organization as a place to work (Satisfaction). • I would gladly refer a good friend or family member to my organization for employment (Advocacy). • I rarely think about looking for a new job with another organization (Commitment). Numerous studies have demonstrated that an engaged workforce can have a profound effect on an organization’s bottom line. Organizations with highly engaged employees not only see higher customer satisfaction, they also outperform organizations with low levels of employee engagement on a whole range of financial metrics (for more on linkage research refer to IBM’s white paper, “Beyond Engagement: The Definitive Guide To Employee Surveys And Organizational Performance”).2 The many contexts of employee engagement Employee engagement is complex. In this report, we have presented it at the center of a system of factors that function at nine different levels, and we will examine employee engagement in the context of each level. While employee engagement matters a great deal to organizational leaders and human resources (HR) professionals, fundamentally, it is a state that exists in the employee.3 The employee exists in a multi-layered context: nested in jobs, the characteristics of which impact the employee (and subsequently employee engagement); jobs are nested in teams of coworkers, which are nested under a direct manager; who is nested under a senior leadership team; in an organization; in a certain industry; in a specific country; at some point in time (see Figure 1). An employee’s engagement is influenced, either directly or indirectly, to some extent by all these contextual layers – like a reverse ripple effect. Technical Whitepaper IBM Software 2 YEAR ORGANIZATION SENIOR LEADERS DIRECT MANAGER TEAM JOB EMPLOYE E COUNTRY INDUSTRY EE Figure 1: The many contexts of employee engagement
  • 3. Technical Whitepaper IBM Software 3 It seems employee engagement is beginning to rebound,though the climb is less steep than before. Country As with differences over time, it is also natural to wonder how employees differ across countries. We understand that workers across the world tend to be different, and also recognize different countries have different laws, policies and social norms that may influence industry practices, how business is done, manager and leader behavior, and ultimately, an employee’s engagement. The state of engagement Employee engagement trends over time are of great interest to organizational leaders and managers. People want to know how their results compare to last year, and how things have changed – it is how we assess whether we have improved or worsened. Globally, employee engagement fluctuates moderately over time (see Figure 2). These fluctuations may be due to a multitude of different social or economic factors. In 2008, the Employee Engagement Index scores stood at 55 percent. Then the scores increased notably in 2009 to 60 percent, holding that level in 2010. Then, possibly in response to economic forces, scores dropped to a new low in 2011. It seems employee engagement is beginning to rebound in 2012, though the climb is less steep than before. Note: Employee engagement trends are based on a six-country sample (i.e., US, UK, Germany, China, India and Brazil) across five years (i.e., 2008-2012). Margin of error +/- 1. 70 60 50 40 30 20 PERCENTFAVORABLE 2008 2009 2010 2011 2012 PRIDE SATISFACTION ADVOCACY COMMITMENT EEI 55% 60% 60% 54% 57% Figure 2: Five year global employee engagement trends
  • 4. Technical Whitepaper IBM Software 4 include, among others, three European stalwarts: the UK, France and Germany. Finally, one country exhibited a low-moderate score – Japan. Figure 3 presents a map of the world, color-coded by engagement scores. Country scores are presented in five groups in Table 1. The highest Employee Engagement Index scores are found in India, while high-moderate scores are found in Mexico and Denmark. Moderate scores are found in the majority (17) of countries, including the US. Low-moderate scoring countries 70 PERCENT (HIGH) India 77 60-69 PERCENT (HIGH-MODERATE) Denmark 67 Mexico 63 50-59 PERCENT (MODERATE) Netherlands 59 United States 59 Canada 58 Australia 57 China 57 Spain 55 New Zealand 55 Brazil 55 Turkey 54 Switzerland 54 South Africa 54 50-59 PERCENT (MODERATE) United Arab Emirates 53 Finland 52 Sweden 52 Argentina 52 Ireland 52 Italy 51 40-49 PERCENT (LOW-MODERATE) Indonesia 49 United Kingdom 49 Russia 48 Saudi Arabia 48 Germany 47 France 45 Korea 40 40 PERCENT (LOW) Japan 31 Table 1: Employee engagement by country Figure 3: Employee engagement by country 70% 60-69% 50-59% 40-49% 40% Note: WorkTrends 2012 international sample. Median margin of error across countries is +/- 3. These data are drawn from a true representative sample of employees from these countries. Not all respondents work for organizations that regularly conduct employee surveys. Previous research has shown that employees who do work for organizations that regularly conduct employee surveys score, on a global average, 15-20 percentage points higher on the Employee Engagement Index.
  • 5. Technical Whitepaper IBM Software 5 Organization Not all organizations are run the same way, and not all practices are uniformly implemented. Just as organizations are influenced by the year and country in which they operate, employee engagement is influenced by the organization in which they work. Several organizational “best practices” have been identified in the human capital management field.4 Organizations should: • Publish a statement of the organization’s mission, vision, values, or strategy. • Conduct an employee opinion survey. • Sponsor activity or training sessions aimed specifically at quality improvement. • Collect customers’ feedback about the organization’s products or services and share it with employees. • Conduct regular performance appraisals. • Cross-train employees to perform other jobs in the organization. We found employees are more engaged when their organizations implement these best practices, especially when they are cross-trained. Further, when all of these practices have been implemented, Employee Engagement Index levels are at an astounding 82 percent. Conversely, when none of these practices have been implemented, Employee Engagement Index levels bottom out at 29 percent, a drastic difference of 53 percentage points. Yes No All Best Practices 82% 29% – Mission Statement 62% 42% – Employee Opinion Survey 62% 43% – Quality Improvement Training 65% 41% – Customer Feedback 62% 43% – Performance Appraisal 62% 42% – Cross-Trained 68% 45% Margin of error for all best practice group is +/- 2, for no best practice group is +/- 3, and for all other groups is +/- 1.” Table 3: Global employee engagement by best practice Industry We often evaluate an organization’s performance in its own industry. Similarly, we can examine industry-level Employee Engagement Index scores. When examining these scores, a story of the haves and the have-nots emerges. The high-tech manufacturing sub-sector soars above the rest at 62 percent. It even heartily outscores other sub-sectors in the manufacturing industry (heavy and light score 4 and 10 percentage points lower, respectively). Another stark contrast is found in the healthcare profession. In healthcare products, employees seem to be doing well, scoring 5 percentage points above the global median. However, healthcare services lags far behind, scoring a full 8 percentage points lower. Some of the lowest scores across industries are found in the public sector. Again, we observe substantial differences between sub-sectors: employees in state-or county-level government score 6 percentage points below those at the federal or national level. Industry EEI Margin of error Electronics and Computer Manufacturing 62% 3% Heavy Manufacturing 58% 2% Light Manufacturing 52% 3% Health Care Products/Pharmaceuticals 59% 4% Health Care Services 51% 2% Banking Services 57% 3% Financial Services 57% 4% Food Industry Retail/Wholesale 54% 3% Retail/Wholesale Trade 51% 3% Education 54% 2% Government/Public Administration 51% 2% – Military or Armed Services 52% 5% – Local or Municipal 51% 3% – State or Province 47% 3% – National or Federal, other than Military 53% 3% Note: WorkTrends 2012 international sample. Global average EEI is 54 percent (+/- 1). Table 2: Employee engagement by industry
  • 6. Technical Whitepaper IBM Software 6 Direct manager Often, the most influential person in our work life is our direct manager. This person is responsible for the day-to-day administrative tasks such as approving timecards, as well as weightier duties like providing performance feedback. We assessed two facets of direct manager performance: work management, which refers to managing tasks and people management, which refers to the softer side of leadership. We used these two items in our survey: • My manager does a good job at “managing the work” that is, making appropriate work assignments, setting priorities, scheduling, etc. • My manager does a good job at “people management,” that is, dealing with the people who work for him/her. Both facets of manager performance are crucial for employee engagement. Employee Engagement Index scores drop about 40 percentage points when a manager is unable to effectively tackle work tasks or people problems. When neither can be done well, the combined effect is even greater than the effect of each alone – dropping almost 50 percentage points. Yes No Effective Direct Manager 73% 24% – Task Management 69% 28% – People Management 70% 28% Margin of error is +/- 1. Table 5: Employee engagement by direct manager effectiveness Senior leadership Senior leaders are the captains of your organizational ship – they lead the way through both the calm and the storm. Employees look to their organization’s leaders for guidance and reassurance. However, for senior leaders to effectively guide and reassure, their employees must trust them. According to organizational scientists, what makes employees trust (or distrust) people is largely a combination of three core determinants: benevolence (do they care about me?), competence (can they do the job?) and integrity (are they honest?). Untrustworthy senior leaders can cause doubt and dampen employee engagement. We measured senior leader trustworthiness with three items: • Senior management shows concern for the well-being and morale of employees (Benevolence). • Senior management, at my organization, has the ability to deal with the challenges we face (Competence). • When my organization’s senior management says something, you can believe it is true (Integrity). The effect of untrustworthy senior leadership is devastating on employees’ engagement. Employees seem particularly troubled by senior leaders who do not exude competence and know-how (Employee Engagement Index of just 23 percent). On the other hand, senior leaders who seem to genuinely care about their employees’ welfare cause workers’ Employee Engagement Index scores to soar (79 percent). Yes No Trustworthy Senior Leaders 86% 17% – Benevolence 79% 26% – Competence 69% 23% – Integrity 78% 26% Margin of error is +/- 1. Table 4: Employee engagement by senior leader trustworthiness
  • 7. Technical Whitepaper IBM Software 7 An uncooperative and toxic team environment will likely affect an employee’s engagement,no matter how positive other factors are. Job When most employees (73 percent) report that they simply enjoy the work they do – it is no wonder the job itself can affect employee engagement levels. Figure 4 presents Employee Engagement Index scores by level in the organization and by job type. The most engaged employees are those at the top of the organization (76 percent), and scores seem to decrease as we move down the organizational hierarchy. Perhaps individual contributors simply have less invested in the company and are therefore, less engaged. Among the most engaged job types are professionals, while laborers are among the least engaged. This trend highlights the importance of challenging and stimulating work to employee engagement, a finding supported by the academic literature.5 It is no coincidence that professional jobs such as teachers, accountants, physicians, nurses, dentists, attorneys, engineers, artists, researchers and scientists typically enjoy greater job autonomy, which is an important predictor of motivation in the Job Characteristics Model. In fact, according to WorkTrends data,6 professionals have the greatest job autonomy (70 percent), while laborers have the lowest (44 percent). This differential may also highlight the value placed on highly educated workers in the information age. Team and coworkers Even the best employee can fail, without the right team. A team is a group of people who cannot function better individually; working together as a group is what makes them more effective. At their best, coworkers can cover for one another, help pick up the slack and raise the bar through hard work. At their worst, coworkers can cause conflict and shirk their duties, leaving more work for each employee. An uncooperative and toxic team environment will likely affect an employee’s engagement, no matter how positive other factors are. We assessed coworker quality with three items: • The people I work with cooperate to get the job done. • The people I work with do their very best for my organization. • I feel that I am part of a team. Employees are likely to be most engaged when their coworkers try their hardest and do their best at work. Not only are these coworkers helping the team achieve its goals, but they are setting a shining example for others and rallying the troops. Employees tend to be least engaged when they do not feel like they belong to a team. Teams can provide employees tactical and emotional support, both of which can be valuable resources when deadlines loom. Yes No Good Coworkers 74% 12% – Cooperative 62% 23% – Do their Best 67% 21% – Feel Like a Team 66% 20% Margin of error ranges between +/- 1 and 3. Table 6: Employee engagement by coworker quality
  • 8. Technical Whitepaper IBM Software 8 Figure 5: Employee engagement by healthcare job level and type Employee Certain types of employees may simply be more engaged than others. A great deal of speculation surrounds the millennial generation, but, despite being characterized as spoiled and high-maintenance, millennials actually exhibit higher Employee Engagement Index scores than both Gen Xers and boomers. Interestingly, the one exception to this trend is commitment; millennials are about as committed as Gen Xers and only slightly less committed than boomers. Millennials came of age in a milieu of down-sizing, outsourcing and offshoring. Despite more positive attitudes, it seems that they do not expect the same cradle-to-grave employment contract of their parents’ era. Figure 6: Employee engagement by generation Figure 4: Employee engagement by job level and type As previously discussed, the healthcare services industry exhibits one of the lowest Employee Engagement Index scores (51 percent). Interestingly, this could be partly explained by job-level factors. Figure 5 presents Employee Engagement Index scores in the healthcare services industry by job type and level. Note how the most engaged among them (administrators/managers and physicians) demonstrate scores that are actually higher than the global average (54 percent). Perhaps not surprisingly, at the bottom of the list and tugging the overall industry score down, are individual contributors, nurses and health aides. Interestingly, 46 percent of nurses and health aides report unreasonable work stress, while only 38 percent of healthcare administrators and physicians report the same. Margin of error for Upper/Middle Management is +/- 3, Supervisors is +/- 3, Professional/Technical Workers is +/- 2, Service/Production Workers is +/- 3 to 4, Sales is +/- 5, and Clerical is +/- 3. Margin of error is +/- 2-4. Healthcare Services Management Individual Contributor Administrators and Physicians Nurses and Heatlh Aides 10 20 30 40 50 60 PERCENT FAVORABLE 51 54 49 54 50 Executive/Senior Manager Mid-Level Manager Front-Line Supervisor Individual Contributor Sales Professional Clerical Other Technical Operative Service Laborers Crafts/Skilled Trades 30 40 50 60 70 80 PERCENT FAVORABLE 58 55 55 54 53 52 50 49 47 49 53 58 76 Margin of error is +/- 1. Baby boomers were born from 1943 through 1960, Gen Xers were born 1961 through 1981, and millennials were born 1982 through 2003. 70 60 50 40 30 20 EEI Pride Satisfaction Advocacy Commitment BOOMERSERS GEN XERS MILLENNIALS GLOBALEEISCORE 53 56 60 56 61 65 53 56 61 51 56 62 53 50 50 PERCENT FAVORABLE
  • 9. Technical Whitepaper IBM Software 9 For more information To learn how to build a smarter workforce, visit: ibm.com/social-business The highs and lows of engagement By examining the many contexts of employee engagement, we have established an extensive view of a complex construct. It is safe to say employee engagement is determined by a number of different things. In this report we have explored influential factors from very broad (time period) to the very specific (individual employee), and at each layer we observed a substantial impact on Employee Engagement Index scores. We have summarized all of these findings, to highlight the most and least engaged of 2012 (Table 7). Most engaged Least engaged Year 2009 2010 2011 Country India Japan Industry High-Tech Manufacturing Healthcare, Retail, Government Organization Cross-train employees Do not conduct quality improvement training Senior Leadership Benevolence Incompetence Direct Manager Effective at both people and task skills Ineffective at both people and task skills Coworkers Feel like a team member Coworkers who do not do their best Job Senior Manager, Sales Individual Contributor, Craft/Skilled Trades Employee Millennials Baby Boomers Table 7: The most and least engagement employees by context
  • 10. LOW14168-USEN-01 Please Recycle 1 Except for UAE, KSA and Ireland, which required only 25 staff members. 2 Wiley, J. W. (2012). Beyond engagement: The definitive guide to employee surveys and organizational performance. Kenexa High Performance Institute. http://www.ibm.com/common/ssi/cgi-bin/ssialias?subtype=WHinfotype=S Aappname=SWGE_LO_PT_USENhtmlfid=LOW14043USENattach ment=LOW14043 USEN.PDF 3 Macey, W. H., Schneider, B. (2008). The meaning of employee engagement. Industrial and Organizational Psychology, 1, 3-30. http://onlinelibrary.wiley. com/doi/10.1111/j.1754-9434.2007.0002.x/abstract?deniedAccessCustomise dMessage=userIsAuthenticated=false 4 Becker, B., Gerhart, B. (1996). The impact of human resource management on organizational performance: Progress and prospects. Academy of Management Journal, 39, 779-801. http://www.jstor.org/stable/256712 5 Wiley, J. W. (2012). Beyond engagement: The definitive guide to employee surveys and organizational performance. Kenexa High Performance Institute. http:// www.ibm.com/common/ssi/cgi-bin/ssialias?subtype=WHinfotype=SAap pname=SWGE_LO_PT_USENhtmlfid=LOW14043USENattachment =LOW14043USEN.PDF 6 Kenexa WorkTrends Survey. 2012. In its current form WorkTrends is a multi-topic survey completed online by a sample of employees representative of a country’s working population in terms of industry mix, job type, gender, age and other key organizational and demographic variables. In most countries, survey takers must be adults who work full-time for an organization of 100 employees or more; this threshold drops to 25 employees or more in countries with smaller economies or hard-to-reach populations. The survey has over 200 items that cover a wide range of workplace issues, including senior leader and direct manager effectiveness, recognition, growth and development, employee engagement, customer orientation, quality emphasis, innovation, corporate social responsibility, workplace safety, work stress and performance confidence. In 2012, over 33,000 employees were surveyed, representing 28 countries. © Copyright IBM Corporation 2014 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America February 2014 IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation in the United States, other countries or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or TM), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. Other product, company or service names may be trademarks or service marks of others. A current list of IBM trademarks is available at “Copyright and trademark information” at: ibm.com/legal/copytrade.shtml The content in this document (including currency OR pricing references which exclude applicable taxes) is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data discussed herein is presented as derived under specific operating conditions. Actual results may vary. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NONINFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.