Employee Engagement in Contemporary Organizations: Maintaining High Productivity and Sustained Competitiveness

By Paul Turner

Although researchers have made great strides in clarifying the meaning of employee engagement, scholars are ambivalent as to whether employee engagement is distinct from other constructs related to the employee–organization relationship, and it is argued that there is a need for further scholarly examination and exploration, particularly within the context of  the rapidly changing work environment where twenty-first-century technology and behaviour meet twentieth-century organization, demanding innovative responses to the challenges of employee engagement.

Addressing this issue, this book reviews, analyses and presents evidence from academic researchers and supplements this with practice-based case studies from a range of international organizations. The author seeks to provide a coherent, consistent definition of employee engagement; clarity about  its benefits; identification of its key features and attributes, and an understanding of how these are translated into practice; and insight into the most effective ways of measuring employee engagement in a meaningful way.

• Language: English
• Publisher: Palgrave Macmillan
• Release date: Dec 30, 2019
• ISBN: 9783030363871

Book preview

© The Author(s) 2020

P. TurnerEmployee Engagement in Contemporary Organizationshttps://doi.org/10.1007/978-3-030-36387-1_1

1. Employee Engagement and the Employee Experience

Paul Turner¹  

(1)

Leeds Business School, Leeds Beckett University, Leeds, UK

Paul Turner

Email: [e-mail]

Keywords

EmployeeEngagementCompetitivenessStrategyTransformation

Employee Engagement Is a Source of Strategic Advantage

An engaged employee achieves above average levels of productivity and contributes significantly to team effectiveness; an engaged team is a source of unit or departmental efficiency; but an engaged workforce is a potential source of organisation wide competitiveness and strategic advantage. Engaged employees are enthusiastic about their work, are committed to the organisation’s mission and vision, and willing to go above and beyond their assigned duties to deliver it (IOSH 2015; Ulrich and Ulrich 2011; Kaplan et al. 2017; Lee et al. 2017b; Amah and Sese 2018; Hakanen et al. 2018; Singh et al. 2016, 831; Bakker 2017; Carrillo et al. 2017). Their collective output can have a disproportionate impact on the achievement of objectives, the strategies to do so and effective stewardship and policy in their delivery. The perceived benefits of employee engagement (from the work of inter alia Saks 2006, 2017; Bakker and Schaufeli 2008; Robertson-Smith and Marwick 2009; Albrecht 2010; Bersin 2015; CIPD 2017) explain why it has been such a compelling issue over the past thirty years.

There has been a good deal of practitioner-based fact finding to demonstrate its effectiveness and the resulting outputs have linked employee engagement to better shareholder returns and income; revenue growth and higher profit margins on the one hand; and lower absenteeism and job stress, better health and overall well-being on the other. Meta-analytic studies have shown that organisations with the highest sustainable engagement scores had above average one-year operating margins; and those with highly engaged workforces outperformed their peers significantly in earnings per share or improved performance outcomes in not for profit organisations. Consultancies and research firms argue that employee engagement is closely related to business outcomes because engaged employees ‘go the extra mile’ for their colleagues, their organisations and themselves (Schwarz 2012; Gallup 2018b; Willis Towers Watson 2018; Akingbola and van den Berg 2019). A nationwide study in the UK concluded that ‘it is our firm belief that it can be a triple win: for the individual at work, the enterprise or service, and for the country as a whole’ (MacLeod and Clarke 2009, 6). From a practitioner perspective there appears to be much to commend a greater understanding of the concept of employee engagement. A plethora of awards from professional organisations such as SHRM and the CIPD are testament to the value and importance attached to it and the diverse nature of the organisations to whom engagement is such a critical subject. (The leading companies of SHRM’s 2018 ‘When Work Works Awards’ ranged from the Navy’s Credentials Program Office/Naval Education and Training; through to the Autumn Group; from Take Flight Learning to iHire; organisation’s shortlisted for the CIPD’s 2019 Best Employee Experience Initiative ranged from Companies House to Heathrow Airport; from Network Homes; to the Northamptonshire Healthcare NHS Foundation Trust; and HR Asia’s recognition of China Mobile International and Hang Lung Properties Limited, Coach Asia Pacific and Haitong International, again reflect the diversity of interest in engagement.)

Additionally, an upsurge of academic activity has meant that ‘the field has come a long way in understanding what engagement is, and what it is not, and identifying its drivers and consequences’ (Shantz 2017, 65). Building on ground-breaking work by Kahn (1990), insightful research by inter alia Harter et al. (2002), Schaufeli and Bakker (2004), Saks (2006), Macey and Schneider (2008), Bakker and Leiter (2010), Truss et al. (2013) and Albrecht et al. (2018) has contributed to a greater theoretical understanding of the subject. Throughout the research, employee engagement is consistently portrayed as something given by the employee which can benefit both the individual and the organisation through commitment, dedication and discretionary effort; as well as utilising talent to its fullest extent. It is argued that engagement occurs when people bring in or leave out their personal selves during their work and is characterised by physical, cognitive and emotional factors enabling engaged employees to contribute in a way that is psychologically beneficial leading to appreciation, affirmation, respect and greater meaningfulness in work (Truss et al. 2013; Geue 2018). When a member of the workforce is clear about what is expected of them, is confident in having the knowledge and skills for the chosen role and has a positive attitude and behaviour; when they work in an organisation where leaders communicate clearly a vision for the future and who recognise individual contribution towards it; when values are lived, creating a sense of trust and integrity; and where there is a channel for the workforce to voice their views and concerns, then the possibilities of engagement are high (Brown et al. 2015; ACAS 2018).

The passion surrounding the subject means that, for some, the study of employee engagement has become a ‘movement;’ or an ‘imperative’ because contemporarily the talent and commitment of employees is a primary source of competitiveness, framed in the link between people and performance at multiple organisational levels. As a result, some 85% of executives have identified engagement as a priority for their organisations (Samara 2016). It is important in both conceptualising and measuring ‘the impact of human capital in organisations and in the integration of many different aspects of HR – employee satisfaction, commitment, motivation, involvement and the psychological contract, as well as features such as job design and total rewards’ (McBain 2007, 16). The context within which organisations operate and the possible impact on the workforce is an important starting point for both its antecedents and outcomes.

Employee Engagement at a Time of Disruptive Innovation and Continuous Change

Employee engagement takes place in a contemporary environment that is being transformed at an exponential rate. In addition to intense competition, organisations are increasingly faced with disruptive innovation and continuous change in the social and economic context within which they operate or compete. As such, organisations seek new strategies ‘to make their service delivery more sustainable at the economic, environmental and psychological levels’ and the concept of engagement of is seen as both compelling and necessary in this quest (Graffigna 2017). For some, a convergence of forces, especially those embodied in the concept of the Fourth Industrial Revolution, has created boundless opportunity to engage in both traditional and innovative ways. For others, where twenty-first century reality butts up against twentieth century organisation; and where employment is an increasingly personalised affair, transformation and change are challenging and traumatic processes. But for all, best practice, best fit or best principles in how to structure the organisation, how to shape work- flow and patterns, how to lead and manage and how to engage the workforce in the face of the ultra-dynamic context have rarely been more important. In such an environment, the concept of ‘VUCA’ meaning volatility, unpredictability, complexity and ambiguity—influential in management thinking since being introduced from the annals of US military planners—explains part of the challenge. But additional powerful, disruptive, technological, social and economic forces and polarised political viewpoints have coalesced to shape a new direction for society and the workplace whilst creating contradictory points of view about their impact. At a macro level, consensus about the benefits to the world economy, from globalisation and multinationalism (previously seen as job and wealth creating developments) or the positive impact of technology on growth and prosperity, are no longer the only or dominant narratives. Positive perceptions about these and other recent phenomena are often shaded by a tone couched in the language of inequality and underdevelopment; of decline in traditional businesses and social disruption. And when this filters through to the organisational level it often means creating a new strategic narrative out of challenging strategic choices, primarily of transforming an existing business model with the expectation of maximising future potential.

The effect of these changes can be dramatic, as reflected in employee engagement levels. Gallup’s 2018a study, whilst finding that 34% of workers were engaged, also found 13% who were actively disengaged; and the remaining 53% were ‘not engaged’ i.e. they were generally satisfied but not cognitively and emotionally connected to their work and workplace. Aon Hewitt’s global survey found that 24% of all employees fell into the Highly Engaged category but that engagement levels could fluctuate (Hewitt 2018). It would appear that there is both a necessity and potential for building sustainable models for employee engagement. The challenge is how to do so.

Employee Engagement and the Future of Work

In all geographies, employee engagement is bound up in the future of work; the transformation in how people work, where they work, what they expect from work and what is expected from them at work. But interpretations about the implications of change vary considerably. On the one hand it is ‘regularly portrayed either as one of total novelty- the end of the post war pattern, the end of trade unions, the end of careers, the end of manufacturing, the end of male domination at work, the end of the working class, the end of the factory, the end of going to work.’ But on the other ‘one of untold possibilities; the end of drudgery…’ (Grint 2005, 355). Whatever point of view is taken, there is little doubt of significant and far reaching changes on the horizon, many of which have been grouped together under the catch all phrase of the ‘Fourth Industrial Revolution.’ This represents a combination of cyber-physical systems, the Internet of Things and the Internet of Systems into new ways of living and working, where technology becomes embedded in every aspect of work and life. In this scenario, new technologies combine the physical, digital and biological worlds impacting on economies and business sectors with knock on effects on identity, privacy, ownership and consumption patterns. The drivers of this revolution are often portrayed as a combination of high-speed mobile internet; artificial intelligence and other significant technological developments; socio-economic trends driving opportunity through the spread of new technologies, the expansion of education and the move towards a greener global economy through new energy technologies. Applications of artificial intelligence and cloud technology are expected to increase affluence, education and numbers in the middle classes and the potential for economic growth is high. However, one of the contradictions is that the very factors contributing to positive growth may also have an impact on negative outcomes such as increasing protectionism and limits on talent migration; the potential for more cyber threats by applying the same technology instrumental in economic growth; or the potentially deleterious effects of artificial intelligence on the traditional workplace (WEF 2018, 7). From one perspective, applications of new technology will create a revolution where intelligent technology meets ‘human ingenuity’ to shape the future workforce—in the USA it is forecast that in the next few years Artificial Intelligence will eliminate 1.8 million jobs; but it will create 2.3 million; and revolutionise not just job numbers but job content (Wright 2017; Shook and Knickrehm 2018). These positive outlooks are balanced by a view that the state of flux created by change ‘is causing considerable anxiety—and with good reason. There is growing polarisation of labour-market opportunities between high- and low-skill jobs, unemployment and underemployment especially among young people, stagnating incomes for a large proportion of households, and income inequality’ (Manyika 2017; Schwab, 2016; Yeoh 2017, 9; WEF 2018, vii). How to engage a workforce in these circumstances is a challenge, consisting of creating and delivering a model that on the one hand takes full advantage of new developments and on the other ensures that the workforce responsible for their successful delivery or implementation is fully committed to their success. And as the World Economic Forum has noted:

As technological breakthroughs rapidly shift the frontier between the work tasks performed by humans and those performed by machines and algorithms, global labour markets are undergoing major transformations. These transformations, if managed wisely, could lead to a new age of good work, good jobs and improved quality of life for all, but if managed poorly, pose the risk of widening skills gaps, greater inequality and broader polarization. (WEF 2018, vii)

Lessons or perceptions from experience in this context vary considerably and for many organisations the new environment presents largely uncharted territory. For the optimists, it has been interpreted as a period of growth and opportunity where companies harness new and emerging technologies to reach high levels of efficiency; access new markets and create new products. To do so, employers need workers with new skills to retain a competitive edge for their enterprises and to expand productivity (WEF 2018, 9). Because many jobs in advanced economies may be automated due to digitalisation and robotization—in logistics, accountancy, transport, manufacturing work and healthcare, amongst others—it is not difficult to agree with the conclusion that many of today’s jobs will disappear or change dramatically. For the less optimistic, therefore, large numbers of the workforce ‘are experiencing a rapidly declining outlook in a range of job roles traditionally considered safe bets and gateways to a lifetime career’ interpreted as a future of uncertainty and insecurity (CIPD 2016; Eberhard et al. 2017; WEF 2018). There is an existential challenge to achieve and maintain high levels of employee engagement and indeed the whole employee experience in such an environment.

Employee Engagement; an Unparalleled Challenge; an Unparalleled Opportunity

In response, governments and organisations around the world have sought ways to harness potential to increase the efficiency of work and raise productivity. Public policy and private initiatives range from advanced manufacturing programmes in the USA, the quest for cutting edge technology in Germany; sector-based initiatives in France; to an action plan for accelerating informatisation and industrialisation in China. In the UK, Industrial and Digital Strategies cover infrastructure, skills, rules and ethics of big data use, cyber security, supporting the technology sector, the digitisation of industry, and digitisation of government (Hancock 2017; Białon and Werner 2018, Liao et al. 2018). India has recognised that the revolution has the potential to reduce poverty and improve lives with applications across sectors—ranging from medicine to criminal justice, to manufacturing , to finance … from cross-border data flows to the future provision of government services and natural resource management (Brende 2018). The objective for all of these initiatives is to maximise the potential of the Fourth Industrial Revolution as it impacts on national economies. At organisational level the challenge is to find a way through the maelstrom that is best fit to capability. For some, these forces present significant opportunity with new business models and new technologies providing the basis for strong competitive or market positions. For others they have been sources of trauma and deep reflection. Whilst Amazon becomes a trillion-dollar company for example, many of its bricks and mortar retail competitors struggle to cope; in turn reshaping the concept of traditional high streets in towns and cities. For most organisations, pace, agility and the ability to transform appear to have replaced continuity as desirable strategic objectives:

the emerging contours of the new world of work in the Fourth Industrial Revolution are rapidly becoming a lived reality for millions of workers and companies around the world. The inherent opportunities for economic prosperity, societal progress and individual flourishing in this new world of work are enormous yet depend crucially on the ability of all concerned stakeholders to instigate reform in education and training systems, labour market policies, business approaches to developing skills, employment arrangements and existing social contracts. (WEF 2018, v)

Not only do organisations face an economic and technological strategic challenge, but also one covering almost every aspect of how they engage with and manage their human workforces.

Sense Making of and Adapting to Complex Environmental Forces

As industrial and commercial transformation either filter through or smash into the workplace, both organisational outlook and their value systems are being reshaped; and dealing with these complex issues requires considerable and elevated ‘sense making’ on the part of leaders, sense making on the part of managers and sense making on the part of individual members of the workforce across all sectors. The questions to be addressed, in the absence of best practice guidelines, are how can organisations thrive in the face of often contradictory messages (for example job growth and job reduction simultaneously because of the application of artificial intelligence); and what is the impact on organisational design and development, workforce structure and workforce engagement? The answers vary across the globe. In China for example, a solution to complexity was seen as ‘organisational ambidexterity’ in one of three ways; sequential ambidexterity where an organisation ‘focuses on one of the competing objectives after another; structural or simultaneous ambidexterity implies that an organisation allocates different tasks to different sub-units of the organisation; and the contextual type of ambidexterity is defined as a situation where each member of the organisation can switch between the competing tasks of exploitation and exploration as the demand or opportunity arises’ (Du and Chen 2018, 44). In the USA, resiliency, or the ability to bounce back from a negative situation; and adaptability—the ability to change or correct course—were put forward as responses to the ‘VUCA Whiplash factor’ (Macarthur 2016). Whilst in India ‘dynamic capabilities’ were critical to leverage disruptive technology (Pandit et al. 2018). The similarity in these different geographic contexts is advocacy of the ability to respond, change or even transform in the face of discontinuity or disruption. Whilst such an approach makes strategic and economic sense, it is rarely a formula for stability in organisational design or dynamic and as such there are significant consequences for workforce management. The question is therefore, how do organisations engage their workforces in times of transformation, change and instability? On the one hand there are the conventional solutions envisaged by such national studies as the MacLeod review in the UK which advocated leadership that give a strong strategic narrative about the direction of the organisation; line managers who motivate, empower and support their employees; employee voice throughout the organisation that involves employees in decision making and organisational integrity with stated values embedded into culture (MacLeod and Clarke 2009). On the other, there are more radical ones involving ‘pivoting’ the workforce or upskilling; or creating new high-quality jobs and vastly improving the job quality and productivity of the existing work employees; (WEF 2018) or moving the spotlight from jobs to the nature of the work itself, prioritising new skills, reconfiguring work between machines and humans and creating new roles to break with tradition (Shook and Knickrehm 2018, 16). In these scenarios conventional solutions to employee engagement—leadership, employee voice, organisational integrity—coexist with radical, innovative ones—agility, reskilling, redefining work. This is important because of ‘fundamental human needs to create, to learn and develop skills, to apply strengths and capabilities, and to progress towards goals that we believe are valuable. The benefit of having this spans personal and organisational goals since meaningful work benefits workers in their well-being and benefits the businesses they work for, through increased employee motivation and effort and reduced staff turnover’ (CIPD 2018).

Case Study: Employee Engagement in Practice

Wojciech Zytkowiak-Wenzel, PhD

Employee engagement is a subject that is gaining in popularity and as such there is a need for more informed and evidence-based decisions regarding engagement among HR professionals. This approach could benefit from understanding more about what it is and what it isn’t and outlining the possible benefits from an engaged workforce. A starting point is to reach a definition of employee engagement as it works in practice.

It is key to understand that engagement doesn’t mean happiness. And that it also doesn’t only mean job satisfaction. We can be satisfied with our jobs without really being engaged. Satisfaction is about contentedness regarding specific facets of one’s job and its context while engagement is all about emotional connection and commitment that impacts how we behave. Engagement is the driving force behind our discretionary effort, the desire to go the proverbial extra-mile to achieve company goals. The obvious implication is how we, HR professionals, approach the question of engagement surveys. It’s important to understand what we want to measure and not simply tune the old satisfaction survey while rebranding it as ‘the engagement survey.’

Gallup’s Q12 survey is a good example of a useful practice-based approach. It distils engagement into 12 questions that measure the most important elements of it. The questions convey the very essence of what drives engagement, or on the contrary, can create disengagement if not handled with care. They are powerful questions. While being very simple, they have a positive impact on the quality and direction of our thinking. For instance—At work, do we have the opportunity to do what we do best every day?—In the last seven days, have we received recognition or praise for doing good work? When confronted with these the person immediately starts to grasp the practical side of what engagement is. These can thus be used to not only to survey our workforce but also to explain the concept and define the critical touch points as a starting point to come up with not only organizational but also individual action-plans. Engagement may seem as an elusive concept, but on a daily basis, driving engagement comes down to several very simple things.

Having said that it must be observed that driving engagement is a very complex undertaking especially considering that recent research shows that despite the influence of contextual drivers of engagement, how we feel about our organisations may varies as a function of our character traits. In other words, two individuals may carry two dramatically different levels of engagement even if their job context is exactly the same. One meta‐analysis provides estimates of the relationship between eight personality traits and employee engagement. The results indicate that these personality traits explain nearly 50% of the variance in engagement. Positive affectivity is reported to be by far the strongest predictor of engagement, followed by proactive personality, conscientiousness, and extraversion (Young et al. 2018). The big question remains as to whether efforts to build an engaged workforce should be focused on using personality assessments to select more engageable candidates. Chamorro-Premuzic et al. (2018) reasonably argue that being positive indeed makes individuals being more resilient to flawed management. The authors observe, however, that while it may be helpful for individual employee engagement, it is also in position to damage the organisational performance in the long term. Frustrated employees can be a warning sign of broader managerial and leadership issues affecting well-being and engagement which the organisation must address. Consequently, if HR turns employee optimism into a key hiring criterion, over time it will find it much harder to spot (and fix) things that need fixing.

A further relevant point is how the concept of engagement is intertwined with that of generational differences. This is particularly important because by 2025, Millennials will comprise three-quarters of the global workforce. Is the organisational culture and the values that the organisation places at the centre of its DNA compatible with what Millennials want from work? Is the way of doing things sustainable or does the organisation need to evolve on a much profound level? These are just some of the questions HR leaders in charge of people & culture should ask themselves and their colleagues on different levels of their organisations. Finally, we should always try to capture the value of engagement. It translates into items such as increased productivity or improved retention, but also is said to have positive effects on candidate attraction.

To sum up. The professional domain is full of situations where decisions are taken based on opinions that could benefit from more evidence in hiring and operational management decisions. It is my view that talent and engagement management should be handled with due care. The value it can create or, on the contrary, the detrimental effect it may have on organizational performance is too high. We are living in times of war for talent. As such we don’t want to fray the fragile fabric of employee engagement just because we don’t know enough about what it is and what can or cannot be done to improve it. An evidence based approach, using data analytics is a possible direction for HR professionals. The importance of employee engagement justifies such a development.

Revolution in Work; Reevaluation of Employee Engagement

The impact of the Fourth Industrial Revolution on jobs continues to foster debate and speculation; and hence addressing employee engagement is treading unchartered waters; ‘while just over half of all employers acknowledge that getting human–machine collaboration right is critical to achieving their goals, few have adopted a systematic approach to unlock the value that lies at the intersection of people and intelligent machines’ (Shook and Knickrehm 2018, 16). Understanding the precepts of employee engagement is perhaps a useful starting point in how to unlock this value. Although conceptualizations of engagement vary (Patel et al. 2017), there is support for the assertion that ‘those who find meaning at work are more competent, committed and contributing; in turn competence, commitment and sense of contribution lead to increased customer commitment; in turn customer commitment