Employee Engagement and Organizational Performance

Basic Premise

Research has shown that certain management practices foster employee involvement and engagement. To paraphrase Jim Collins, in his book Good to Great, this involves putting the "right" person in the "right" position and providing them with the "right" resources so that they can do the "right" thing at the "right" time. An engaged employee will in all likelihood perform their work at a superior level all of the time.

For this premise to thrive, the organizational systems have to be integrated, management practices have to be aligned, and the work climate has to be supportive so as to maximize worker engagement. Organizational effectiveness scholars have identified four elements in the work environment that foster high worker involvement: power, information, knowledge, and recognition.

The "power" element of involvement means the organization truly and effectively empowers the workers to participate in decision-making regarding their work. To a lesser extent, it might mean management has to adopt a democratic style of leadership, which encourages workers to voice their opinion and concerns before decisions are made. For this to work, the worker's suggestions have to be discussed, their applicability evaluated, and some of the useful worker's suggestions have to be implemented. To achieve greater involvement requires giving the workforce greater input and control.

In construction, the toolbox talk creates a forum for this exchange to occur. For this to function optimally, the time involved has to be expanded somewhat or they have to be done a few times a week or as needed, rather than once every 10 working days as established by the Occupational Safety and Health Administration or the industry prevailing practice of once a week.

For workers to be effective in their work, they need "information." This becomes the basis for decision-making, problem-solving, and proper execution of the work. The challenge for management is to set up a process by which the worker gets the right information at the right time. Another important aspect that sustains involvement is when the worker sees a direct link between what they do on a daily basis and the organizational or project goals and objectives on the whole. This sort of vertical alignment has been proven to be highly effective in engaging workers and its resulting positive impact on organizational superior performance and outcomes.

Knowledge, in general, refers to the worker's capability and skill to perform the work. To realize this element, the organization must implement a robust hiring and promotion function so as to hire and promote capable workers. They must then provide them with the right training and, more importantly, the right education to enhance their competence and abilities. The enhanced knowledge will be ineffective unless they are provided with the right resources and information to enable them to perform the work at a superior level. And they have to be effectively empowered so that they are better able to assess risk and exposure, when it comes to safety, so that they may make the right decisions. When workers are knowledgeable and engaged, the operation becomes efficient, effective, and safe.

To enhance the effectiveness of power, information, and knowledge, the organization must secure the active involvement of managers and supervisors in providing necessary constructive feedback as well as positive feedback, encouragement, and recognition (See Figure 1). This is not only critical to achieving engagement but more importantly to sustain it over time. This will lead the workers to clearly understand the importance of their self-improvement not only to themselves and their career but its importance and value to the organization.

Obviously, recognition can take many forms. Research has shown that some of the critical factors are in its direct linkage to the behavior or the immediate outcome. It has to be given as soon as possible to heighten its effectiveness, and the worker has to believe that whatever form the recognition comes in that it will be meaningful to them.

Figure 1: Work Environment Factors Effect on Employee Performance

By implementing these four elements of effectiveness, the organization will more than likely gain some level of improvement in their operational outcomes. The importance of these four elements in the work environment will, in fact, positively influence the workforce's engagement in their tasks, immerse them into cooperative teamwork, and solidify their commitment to operational efficiency, which will translate into organizational success.

Work Practice Effectiveness

Given the current state of the business environment, employee engagement can be critical to business success. In a study of 35 large business organizations with a large number of divisions, a positive correlation was found between employee engagement and overall business success. In construction, this would translate to employee engagement affecting the vital metrics of the project delivery process that covers production, productivity, quality, safety, and the customer, as well as partner (satisfaction) relationship.

For employees to be engaged, they have to generally be satisfied at work. Astute organizations understand that happy employees are also more productive, loyal, enthusiastic, and are committed to staying at that company. So, most organizations try in one way or another to accomplish this through hiring practices, having worker-friendly policies, promoting based on merit, etc. But many find that, in spite of their best efforts, their employees are generally dissatisfied. This leads to their supervisors having to motivate indifferent, uncooperative, frustrated, and unproductive employees. The common interventions utilized by management include close supervision, motivational talks, possibly coaching, some form of incentives, or punishment. These traditional management interventions have proven to be ineffective in the long run.

Unfortunately, this is a rather common outcome, as shown in a research study that looked at about 4 million employees worldwide. This study found that workers start out enthusiastic about their job, they want to succeed, and they understand that to accomplish this, they have to work hard and contribute to the success of their organization. But, over time, these same employees lose their enthusiasm, motivation, and goodwill toward their employer. Research has found that the company is responsible for demoralizing its employees without realizing it. Management has generally implemented some of the big-ticket items but has failed to address the smaller, seemingly inconsequential things.

Leadership's Role in Engagement

According to a study conducted by Gallup, State of the Global Workplace, only 15 percent of employees worldwide are engaged in their jobs. This means that they are emotionally invested in committing their time, talent, and energy in adding value to their work, their team, as well as advancing the organization's goals and objectives. Gallop research of the cost of employee disengagement in the United States found that it costs industry approximately $550 billion a year in lost productivity. This has a significant impact on organizational profitability and well-being.

This not only highlights the seriousness of the problems but the challenge faced by leaders and managers when dealing with the organization's workforce. Astute organizational leadership sees this as a significant opportunity for their managers and supervisors to learn and master the art of engagement to motivate the workforce to become fully involved in advancing the organization's goals and objectives.

This becomes more and more important in the current business environment, both locally and regionally as well as globally, because the pace of doing business is accelerating and competition is increasing. Most organizations are faced with doing more in less time with fewer resources in an almost constantly changing and challenging business environment. Perspicacious leaders understand that this can only be achieved with a fully engaged workforce, which highlights the fact that the employees are in fact the organization's most important asset. But sadly, this is only true when the employees are fully engaged, and Gallup's research found that only 15 percent are.

If that is the case, then what is the status of the rest? Research indicates that, generally, organizational employees fall into three categories: fully engaged, not engaged, and actively disengaged. The engaged group, which constitutes about 15 percent of the workforce, are cognitively, emotionally, and physically committed to the organization and its leadership. These employees are motivated, satisfied, and enjoy their work. Their supervisors find them cooperative, easy to deal with, and require minimal supervision as they tend to take on the responsibility of not only meeting but exceeding expectations.

The larger group of not-engaged employees constitutes about two-thirds (67 percent) of all the employees employed by the organization. These are the ones who are not satisfied or are mildly dissatisfied with their situation at work. Their efforts fall within the lower regions of acceptability. The effort of the mildly dissatisfied employees are the ones who do just enough to get by. These employees do not feel obligated or motivated to exceed expectations. The organization's performance, success, or profitability is not their focus or concern.

These are the employees who require more attention from their supervisors to ensure that they meet requirements. Supervisors also spend time trying to "push" these employees to be more productive. This takes time away from management doing productive work to having to motivate indifferent, uncooperative, frustrated, and unproductive employees. This is the group that presents an opportunity for managers and supervisors—to exert effort in working with this group to find ways to spark interest in engagement.

The remaining 18 percent makes up the third group, which are the actively disengaged employees. These are the ones who are dissatisfied with the work, their supervisor, and the organization as a whole. In many cases, these are the employees who have been with the organization for some time and know both the formal as well as the informal means, methods, policies, procedures, practices, etc, allowing them to hang on to the detriment of operations. Due to their longevity, they tend to be looked up to as well as emulated by newer employees. This can translate into the spread of disengagement among a larger segment of the workforce, resulting in greater challenges for management.

Line management in organizations is made up of executives, managers, and supervisors. Depending on the industry and organizational structure, managers and supervisors tend to be directly involved with the workforce, though supervisors are the ones who directly interface with the workers. It generally is those people who have the greatest impact on the worker's perceptions of the work, operations, and the organization in general. This is sometimes referred to as the leader-member exchange. It is these people who have a significant impact on the degree and quality of the workforce's engagement.

Leadership Compared to Management

Management and leadership share some similarities but are effectively different. To manage, you do not need to necessarily be a leader, and to lead, you do not necessarily have to be a manager, as they each entail different and unique skills as well as activities. While managers maintain a smoothly functioning workplace, leaders look to change and improve operating systems, work practices, and management procedures so as to enhance output and outcomes (see Figure 2). Managers generally have a short-term focus, while leaders have a long-term focus. In today's challenging business environment, organizations need efficient management as well as effective leadership.

Figure 2: Leadership—Management Influence Model

Leadership's Role in Engagement

Great leaders foster engagement by articulating a compelling vision to all of the members of the organization. They hire and promote people who have innate values, skills, and attributes that "fit" into the organizational culture and align with its vision. They actively develop managers and supervisors as well as provide them with technology and resources. They truly empower them and also make sure that they put the "right" people in the "right" positions, provide them with the "right" resources, and enable them to do the "right" things.

Manager's Role in Engagement

Great managers make sure that they procure and develop superior talent. Similar to leaders, they try to get their people to effectively and efficiently perform their assignments. They also work on workforce engagement. Managers also ensure the workforce is fully aligned with the organization's mission.

Conclusion

Both management and leadership play the following important roles in employee engagement.

• Hire the right people
• Create an open and supportive work environment
• Provide career opportunities
• Promote engaged, motivated, and emotionally intelligent people
• Facilitate 360-degree communication
• Actively listen
• Encourage the sharing of information, ideas, and opinions
• Build a trusting relationship
• Provide recognition
• Celebrate success

All of this fosters employee engagement, which plays an important role in the organization's overall success.