Employee Engagement

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Employee Engagement
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Employee Engagement

• What is it?
• Why does it matter?
• What drives it?
• How can you measure it?
• Is it significant?

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What is it?

• Engaged employees are not just committed not
  just passionate or proud. They have line-of-sight
  on their own future and on the organizations
  mission and goals. They are enthused and in
  gear using their talents and discretionary
  effort to make a difference in their employers
  quest for sustainable business success.Blessing
  White, The State of Employee Engagement 2008
• A positive attitude held by the employee towards
  the organisation and its values. An engaged
  employee is aware of business context, and works
  with colleagues to improve performance within the
  job for the benefit of the organisation. It
  requires a two-way relationship between employer
  and employee.
• Institute for Employment Studies, Engagement
  The Continuing Story 2007
• Employee Engagement is a combination of
  commitment to the organisation and its values
  plus a willingness to help out colleagues.
• University of York

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What is it?

• It is inversely associated with stress. Hockey
  (2000) says that people adapt to the demands of
  work in three ways
• Effort without distress (Engagement)
• Working harder and deriving satisfaction
• Distress without effort (Disengagement)
• Giving up and feeling bad about it
• Effort with distress (Strain)
• Working harder but with fatigue and anxiety

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What is it?

• It is closely linked to Affective Commitment
• The employee's positive emotional attachment to
  the organization. An employee who is affectively
  committed strongly identifies with the goals of
  the organization and desires to remain a part of
  the organization.
• Meyer Allen (1990)
• The relationship exists because it is
  pleasurable. Employees are involved in
  occupational activities that they enjoy and that
  they are able to effectively pursue unfettered by
  unnecessary organisational constraints.
• OMalley (2000)

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What is it?

• Definitions may vary, but there is broad
  agreement on the basics
• a positive attitude towards, and pride in, the
  organisation
• belief in the organisations products/services
• a sense that the organisation enables the
  employee to perform well
• a wish to behave collaboratively and be a good
  team player
• a willingness to go beyond the requirements of
  the job.
• a desire to work to make things better
• an understanding of business context and bigger
  picture
• being respectful of, and helpful to, colleagues
• keeping up to date with developments in the field.

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Why does it matter?
Business Performance
Employee Engagement
Companies with HIGH employee engagement
saw 13.2 improvement in net income growth 19.2
improvement in operating income 27.8
improvement in Earnings per Share Companies with
LOW employee engagement saw 3.8 decline in net
income 32.7 decline in net income growth 11.2
decline in EPS (Source ISR. 664,000 employees
world wide, one-year study, 2006)
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Why does it matter?

• Engaged employees
• Perform up to 20 better than less-engaged
  employees
• Are 87 less likely to leave the organisation
  than employees with low levels of engagement
• Are more innovative
• Are more committed to customer satisfaction
• Contribute more to their organisation than their
  less engaged peers
• Consistently go the extra mile

(Source CLC. 50,000 employees world wide, 2004)
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What drives it?

• There have been innumerable studies looking for
  the common drivers of Engagement.
• Substantial differences have been found between
  nationalities and types of people.
• There seem to be four principle common themes in
  which the drivers lie

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What drives it?
Organisational Commitment The psychological
attachment of an employee to an organisation
Service Commitment The shared ethos of
meeting customer needs
Engagement
Work Career Commitment The importance an
individual places on the actual work they do and
the development of a career
Job Satisfaction The day to day impact of the
work done and the immediate context within
which it is set
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How can you measure it?

• Invite respondents to agree or disagree with a
  series of statements that comprehensively address
  the four key themes.
• We have identified a bank of 30 items. This list
  can be reduced to between 10 and 20 items when
  set in the context of a broader employee survey.

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How can you measure it?

• For each respondent we use an algorithm to
  calculate an Engagement score - based on the
  individual items - and express it as a score out
  of 100.

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Engagement Index
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How can you measure it?

• The index provides a reliable comparative single
  number measure for different groupings within
  the survey and on an historical basis
• External comparison of such a highly personalised
  measure is fraught with danger but, in general
• Below 50 - critical
• 50 to 60 - poor
• 60 to 70 - moderate
• 70 to 80 - good
• Over 80 - excellent

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How can you measure it?

• For each, and any, business unit or demographic
  group within the survey we can then calculate an
  overall index score and, if numbers permit, an
  histogram of the way in which Engagement is
  distributed.

Engagement Histogram
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How can you measure it?

• The histogram provides a powerful visual
  representation of something very complex. It
  allows us to identify the proportions that fall
  into the main engagement categories
• Engaged (70 engagement or higher)
• Enrolled (50 to 70 engagement)
• Disenchanted (30 to 50 engagement)
• Disengaged (30 engagement or less)

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Is it significant?

• Statistical Significance is based on Confidence
  Intervals, and depends on three things
• The degree of confidence is the biggest
  influence. We often set this at 95. 90 being
  much easier to prove, 99 harder.
• The number of respondents is next the CI for
  small groups can be enormous.
• The CI is widest for scores of 50 and gets
  easier to prove as scores increase or decrease.

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What is significant?

• At individual item level we can use the
  statistical Test for Proportions
• Pp1n1 p2n2 / n1 n2
• At index level we can use a t-test
• However, this is only relevant to very large
  groups.

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Is it significant?

• Let common sense prevail we are dealing with
  people not data. Significance addresses random
  variation whilst we are dealing with considered
  responses.
• If one figure is more than fractionally higher
  than another it probably means something. Even if
  it doesnt it is highly unlikely to mean the
  opposite!