Significance of Employee Engagement

$483 billion to $605 billion – that’s how colossal the damage made by “actively disengaged” employees to the U.S. economy is, each year in productivity losses (Gallup, 2017). To put this in context, the cost of productivity losses from disengaged employees to the U.S economy per year, is more than 5 times the GDP of Sri Lanka in 2017, which was $87 billion (Sri Lanka Department of Census & Statistics, 2018).

Employee engagement is achieved when an employee’s enthusiasm for work is stimulated and directed towards the success of the organization (Armstrong, 2009). This means that there exits a definite correlation between employee engagement and organizational success. It can also be inferred that the employee disengagement is a factor that can contribute to the failure of an organization.

Its important to understand how engaged employees can benefit an organization and its even more important to be aware of the adverse effects actively disengaged employees can cause. Video 2 summarizes some of the key significances of employee engagement. Below are some of the key points: 

·         Engaged employees perform better than those who are disengaged

·         Engaged employees are 87% less likely to seek other employment opportunities

·         Engaged employees take fewer sick days off than disengaged employees

·         Engaged employees act as ambassadors of the organization, ensuring customer satisfaction by going above and beyond 

It’s vital to look at the flip-side of the above as well:

·         Disengaged employees perform below par, compared to those who are engaged

·         Disengaged employees are 87% more likely to seek other employment opportunities

·         Disengaged employees take more sick days off than engaged employees

·         Disengaged employees do not act as ambassadors of the organization, they will at most only do what they are “asked to do”

Video 2: Why employee engagement matters

 Source: (ENGAGE, 2016)

Though most organizations may chose to believe that their employees are engaged (or at least not actively disengaged), Gallup survey from 2018 summarized on Figure 07 shows a shocking 13% of the workforce in the U.S are actively disengaged while only 34% are engaged.   

Figure 07: Employee Engagement Trending in the U.S 

Source: (Harter, 2018)

At my current workplace, employee satisfaction surveys are used to measure engagement but the data gathered is not analyzed in ways that it can infer the percentage of engaged, disengaged and actively disengaged employees separately. However, it was interesting to note on the last survey, that most of the questions had about 10 to 20 responses falling in to “completely disagree” category (negative responses). Even more interestingly, upon closer examination it was found out that those 10 to 20 responses mostly came in from a common group of responders. This can be taken as an indicator of the presence of actively disengaged employees, though the number seems insignificant compared to the total employee population of 450. 

Over the last three years, the number of these “completely disagree” response has been increasing and symptoms of disengagement such as increase in employee turnover and drop in productivity have come to light. It would be fascinating to analyze the data further to find correlations between the negative responders and the key performance indicators of those teams & departments.

Having established the significance of employee engagement, it is critical for any organization to be aware of where it stands & what percentage of employees fall in to each of the categories, so that the necessary remedial action plans/strategies can be implemented before it’s too late – specially for fast growing organizations, this is a vital aspect of ensuring sustainable growth.

References:

Armstrong, M. (2009). Armstrong's handbook of human resource management practice. 11th ed. London: Kogan Page, pp 338-340.

Gallup (2017) State of the American Workplace. [Online] Available at: https://news.gallup.com/file/reports/199961/SOAW_Report_GEN_1216_WEB_FINAL_rj.pdf [Accessed 23 September 2019].

Harter, J. (2018) Employee Engagement on the Rise in the U.S. [Online] Available at: https://news.gallup.com/poll/241649/employee-engagement-rise.aspx [Accessed on 23 September 2019].

Sri Lanka Department of Census & Statistics (2018). ECONOMIC STATISTICS

OF SRI LANKA 2018 [Online] Available at: http://www.statistics.gov.lk/EconomicStat/EconomicStatistics2018.pdf [Accessed 15 September 2019].

Contemporary Challenges with Employee Engagement in Fast Growing Organizations

Size does matter! To elaborate further, there is a clear correlation between the size of the organization and the percentage of engaged employees, according to research by Gallup (2017). The larger the organization, the lesser the percentage of engaged employees is. Figure 08 makes this point very clear - there is a 12% drop in employee engagement level, as the size of the organization goes from less than 25 employees to 5,000 or more.

Figure 08: Percentage of Engaged Employees by Company Size

Source: (Gallup, 2017)

Another way to interpret Figure 08 is, in organizations with less than 25 employees, about 51% are disengaged or actively disengaged while for organizations with 5000+ employees, this percentage rises to 71%. This becomes even more alarming when the percentages are converted to numbers – the 71% totals to 3,550 disengaged or actively disengaged employees for an organization with a workforce of 5,000 people. 

Though these numbers are concerning, the reason why larger organizations have a lesser percentage of engaged employees is not so difficult to understand. In a small sized company, the chances are that most of the employees would know each other, the leaders of the organization would know each of the employees. Further, the employees would have a clear understanding of the organizational mission & vision as well as how the role they play within the organization fits into the big picture – according to Armstrong (2009), the employees’ understanding of their role and how it fits in the holistic view, is one of the two key elements that must be present for engagement to exist. If the employees have questions, they have the privilege of being able to reach out to the leaders (Gallup, 2017). According to Northouse (2007), leadership has a strong influence on the level of engagement of an employee. As the number of employees increase, the employees and the leaders would grow apart and the organizational leaderships ability to stop an employee feeling like just another brick in the wall, would decline hence the higher rate of disengagement.

At the organization I am currently employed at, the size of the workforce has grown from 50 employees in 2013 to 450 in 2019. According to an employee satisfaction survey from 2015 when the company size was 109 employees, only 03 responses (3%) have been received as “strongly disagree” or “disagree” to the statement “I would recommend a friend to work here” whereas the same question had 14 such responses (5%) in 2018 when the company size was 285. Similar patterns have been seen over the years on the other underlying questions on the surveys. This indicates a slight increase in probable disengaged/actively disengaged number of employees, as the size of the company grew.

For instance, think of a lemonade stand run by three happy little kindergartens – how much energy & passion each of the three little “employees” would bring to the table, in their business. Now imagine, if just a fraction of that engagement can be replicated in an organization with 5,000 employees – how the business would thrive!

References:

Armstrong, M. (2009). Armstrong's handbook of human resource management practice. 11th ed. London: Kogan Page, pp 338-340.

Northouse, P. G. (2007). Leadership Theory and Practice. 7th ed. California: SAGE Publications, pp.170-172.

Gallup (2017) State of the American Workplace. [Online] Available at: https://news.gallup.com/file/reports/199961/SOAW_Report_GEN_1216_WEB_FINAL_rj.pdf [Accessed 16 September 2019].

Video: Why Most of the Employees are Not Engaged at Work

From a TEDx event in 2015, Video 03 is a presentation by Jeff Havens where he uses his clever presentation skills to brings forth some of the key reasons as to why most of the employees today are not engaged in their work. The speaker clearly distinguishes between “Satisfied” and “Engaged” employees. He also stresses on the significance of leaders (the leadership style) on employee engagement with examples of popular leaders Steve Jobs and President George Washington. The speaker also elaborates on the “sandwich” technique which leaders can use when providing negative feedback to employees in a more effective way. 

                                                   Video 03: Why aren't more of us engaged at work?

                                                Source: (Havens, 2015)

References:

Havens, J. (2015) Why aren't more of us engaged at work?. [Online]. Available at: https://www.youtube.com/watch?v=xR7Z_3aE5cE [Accessed on 08 September 2019].

Strategies for Increasing Employee Engagement Level in Fast-Growing Organizations

Driving an “Engagement Culture” is the essential foundation to build an organizations employee engagement initiative. Organizations must use the findings from their engagement surveys in order to identify the key factors that drive engagement & organizational KPIs in their context and then pick the ones that are of the highest importance to the business, in order to design engagement initiatives around those specific items (Vance, 2006). In today’s highly competitive business world, more and more organizations are becoming aware of the importance of employee engagement and are taking up initiatives to increase the employee’s engagement levels. As evident on Gallup surveys from 2018, the percentage of engaged employees is on an increasing trend in the U.S. (increased from 30% in 2012 to 34% in 2018) and this is by no mere coincidence but through organizations investing on building a culture of engagement (Harter, 2018).

A variety of different approaches are discussed in literature, in terms of the techniques/strategies an organization should exploit in order to increase employee engagement. According to Armstrong (2009), a strategy for enhancing employee engagement must consider the below 05 key areas, which will be discussed in detail with relation to a fast-growing organization.

     1.    The work itself: The nature of the work the employees are assigned to do, can intrinsically trigger their engagement to increase. Employees today prefer work that is intellectually challenging and interesting which also gives them a sense of accomplishment while making themselves feel significant in the organizational big picture (Armstrong, 2009). In fast-growing organizations, the job roles are usually very specific (narrow job scope) & can often be monotonous because the roles are designed mainly with efficiency in mind. At my current workplace, certain roles where these drawbacks exist, are handled carefully by using methods such as periodic job rotation. For example, a job role for a specific sub-function where the team members were required to do quite a lot of monotonous data entry work, was combined with a less monotonous sub-functional role to create a “hybrid” role for the combined team.

      2.    The work environment: This has to do with cultivating a culture of positive attitude towards work, encouraging interest and excitement in the work while reducing work pressure. The organizational talent management practices should be clearly defined. The employees should feel that their workplace is a psychologically safe place to work. Ensuring the employees have appropriate physical working conditions (example: chairs, desks, computers, air conditioning, internet connections) also play a role in employee engagement. From my experience, the managers of a growing organization play a vital role in making the work place a psychologically safe place to work. On the other hand, today’s employees demand good physical working conditions – this is one aspect where my current organization has gotten very positive feedback on employee satisfaction surveys from the employees.   

      3.    Leadership: Here, Armstrong (2009) focuses mainly on the very important role played by line managers in increasing employee engagement levels. Also, the author emphasizes on the training of line managers and prospective managers to equip them with the skills and knowledge required to play this role. My current organization has invested in this area greatly and there are a few training programs that are mandatory for different levels of leaders. Ongoing performance management is done through a human resource management system and there are periodic trainings & refreshers conducted for the managers on performance management techniques.  

     4.    Opportunities for personal growth: Creating a learning culture is an important aspect in nurturing employee engagement. Discretionary learning instead of obligatory (often unproductive) training programs should be encouraged – this process takes place when employees truly are interested in acquiring the skills and knowledge that are needed to support the organization’s mission (Sloman, 2003 Cited in Armstrong, 2009). An essential aspect of this strategy is that the employees should have an enough amount of flexibility for them to be able to expand on their roles and contribute in areas that they are talented in.

However, this can be challenging unless the guidelines are clearly defined, specially in fast-growing organizations. The primary role an employee is expected to play, should not get significantly affected due to him/her focusing on other areas they wish to contribute in. Career development related guidance and support should also be covered in the strategy. At my current workplace, the employees are encouraged to contribute to a suggestions scheme, the suggestions necessarily do not have to be related to their job role – they are recognized on the evaluations for their contributions and there are monetary rewards and Non monetary rewards/awards (recognition from the top) based on the value addition the suggestion brings in. From a career guidance standpoint, each team member who joins the organization is assigned an experienced team member (a team lead or a manager) as their “mentor” & the mentor acts as a “career counselor” among other things, sharing their wisdom with the new comers. All these things combined, has created a strong cultural foundation of learning and continuous improvement. However, it must be said that as the organization continues to grow, the focus on these initiatives seem to have slightly diluted.

5.    Opportunities to contribute: The opportunities for the employees to contribute with their opinions and ideas is a critical aspect of making sure that the employee feels that they are an important part of the organization. Open communications must be encouraged, and hierarchical organizational structure shouldn’t be allowed to limit the bottom layers of employees communicating with the top. At my current organization, formal employee satisfaction surveys are sent out quarterly and it consists of a few open-ended questions where the employees can share their honest opinion. The organization has an “open-door” policy, across the board. As the organization continues to grow, the manager to team members ratio has increased to about 1 to 40, this was about 1 to 25 a few years ago – nifty changes in organizational structure has helped keep the communications open despite the increase in the ratio. Any growing organization should consciously make changes to its organizational structure to make sure there are no roadblocks to open communication. 

References:

Armstrong, M. (2009). Armstrong's handbook of human resource management practice. 11th ed. London: Kogan Page, pp 338-340.

Harter, J. (2018) Employee Engagement on the Rise in the U.S. [Online] Available at: https://news.gallup.com/poll/241649/employee-engagement-rise.aspx [Accessed on 04 September 2019].

Vance, R. J. (2006) Employee Engagement and Commitment. [Online] Available at: https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/Documents/Employee-Engagement-Commitment.pdf [Accessed 04 September 2019].