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The Path to Employee Engagement

Published by: The Forum for People Performance Management and Measurement

The Forum for People Performance Management and Measurement (a research unit affiliated with the Medill Integrated Marketing Communications graduate program at Northwestern University)

Overview

In 2004, the Forum for People Performance Management and Measurement conducted a study to assess the causes of employee satisfaction and engagement and the impact those two attitudes have on customers and financial performance. The research identified what was necessary to successfully create a satisfied and engaged workforce. To take the research one step further, the Forum recently undertook a second study to assess precisely how to create a satisfied and engaged workforce, based on the premise that employee satisfaction is an antecedent to employee engagement. Called The Road to an Engaged Workforce, it explores the methods that managers have available to them to engage their employees. Overall, the study identifies several methods managers can use to influence employee satisfaction and engagement, and these methods, or “levers,” are, in general, more tangible and accessible than the amorphous concepts of organizational culture and employee attitudes. This white paper examines the triggers of employee satisfaction and engagement, pulled from the overall study to provide managers with insight into how to deploy human resource systems for optimal results.

The Forum for People Performance Management and Measurement is a research unit affiliated with the Medill Integrated Marketing Communications (IMC) graduate program at Northwestern University. It is funded by associations and corporations interested in the issue of People Performance Management and Measurement. A central objective of the Forum is to develop and disseminate knowledge about communications, engagement, and management so that businesses can achieve their objectives through better-designed and managed people-based initiatives, both inside and outside an organization.

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Methodology

The 100 organizations selected for The Road to an Engaged Workforce are in the media industry in the U.S. The stratification procedure used to select these companies from an original pool of 1,500 organizations ensured that this sample of organizations would generalize to the industry level. A homogenous sample within a single industry provides a viable context for understanding the nature of the conceptual relationships studied. Data was obtained through employee surveys and matched to financial performance. At each of the 100 organizations, a project manager was identified as the key research contact whose responsibility was to identify the managerial teams and individual employees necessary for completing the survey instruments. The three sets of organizational characteristics examined were organizational culture, organizational climate, and human-resource systems.

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Results: The Eight Drivers of Employee Satisfaction and Engagement

The existing literature on organizational culture indicates that although managers do not directly affect an organization’s culture, they can influence it through human-resource procedures that affect employee satisfaction and engagement. The Road to an Engaged Workforce identified eight drivers of satisfaction and engagement. The key drivers impacting employee satisfaction include an employee’s intention to remain in the organization, the skill variety employees are able to exhibit in their job, the level of customer-service orientation achieved, and the degree of coordination between units of the organization. The key drivers of employee engagement include reduced role conflict, proper training, personal autonomy, and the effective utilization of expert, referent, and exchange power by managers.

Driver 1: Employee’s intention to remain in the organization
The more likely employees are to indicate their intention to stay, the more likely they are to be satisfied with the organization and their status as an employee.

Driver 2: Skill variety employees are able to exhibit in their job
The degree to which employees feel their job tasks require a wide range of personal skills and competencies influences the satisfaction of individual employees. Employees tend to feel more satisfied if given the opportunity to stretch their wings a bit.

Driver 3: Level of customer-service orientation achieved
Employees are more satisfied when they believe they are responsible for identifying and satisfying the needs of customers, and when they believe that the organization has the best interests of its customers in mind. It would appear that when employees are more satisfied, they have an inherent focus on making sure the customer is too.

Driver 4: Degree of coordination between units of the organization
The extent to which employees across organizational units cooperate to articulate inter-unit activities and minimize disruptions, delays, and interference appears as an indicator of satisfaction. Employees are more satisfied with the organization and their role within it when they feel that the organization coordinates activities well between subunits, that is, they feel more satisfied being a part of a well-structured and coordinated organization.

Driver 5: Reduced role conflict
The extent to which members receive inconsistent expectations from the organization and are expected to do things that conflict with what they believe to be correct is identified as a factor negatively impacting engagement. The organization must provide clear and consistent information to employees and must take into consideration the ramifications of that information. Employees are unlikely to be motivated to blindly follow instructions merely because they are given. They may follow such instructions or bow to expectations, but if they are counter to what the employee feels to be appropriate, engagement will not occur.

Driver 6: Proper training
The extent to which employees, both new and existing, are provided with the type of orientation and training that promotes their personal development as well as their contributions to the organization. This is not just training for the sake of training, but rather the development of skills that improve the contribution of each individual employee.

Driver 7: Personal autonomy
“Autonomy” is defined as the degree to which the job provides freedom and discretion to the employee with respect to scheduling and work procedures. The employee is not only given freedom and independence in their work, but is provided with the resources, information, and training to execute their role in the organization optimally.

Driver 8: Effective utilization of expert, referent, and exchange power by managers
Effective utilization of power by managers can be described as the extent to which employees are influenced by their supervisors’ technical expertise or managerial competence (that is, expert power), the respect that they have for their supervisors (that is, referent power), or their supervisors’ willingness to be influenced by them (that is, exchange power).

All of these factors are related to feelings on the part of the employee regarding personal value, respect, and freedom. Thus, engagement is largely driven by the employee’s feeling that the organization values his or her contribution, and that the organization will do its best to remove barriers from getting the job done.

The Road to an Engaged Workforce proves a fundamental People Performance Management tenet: Regardless of job description or level, employees want to feel that what they do is relevant to the customer.

Variables to Create an Optimally Functioning Organization

 
Empowerment
Cooperation
Goal emphasis
Task identity
Task signif
Interdependence
Role clarity
Training
Intention to stay in a job
X
X
 
 
 
 
 
 
Inter-unit coordination
 
X
X
 
 
 
 
 
Skill variety
 
 
 
X
X
X
 
 
Customer service
 
 
 
 
X
 
 
X
Less role conflict
 
X
 
 
 
 
X
 
Appropriate training
X
 
X
 
 
X
 
 
Autonomy
 
 
 
X
X
 
X
 
Personal power
 
 
X
 
 
X
X
 

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Conclusion

Achieving an engaged workforce may take some time, but managers do have many tools to help them get there. Employees are more satisfied when they believe they are responsible for identifying and satisfying the needs of the customers, and when they believe the organization has the best interests of its customers in mind. This ties in very closely with the finding from the earlier study that employee satisfaction is directly related to customer satisfaction. Once employee satisfaction is achieved, managers will find comfort knowing employee engagement is close at hand. Both satisfaction and engagement have direct effects on customer behavior and, hence, both indirectly influence an organization’s financial performance. The Road to an Engaged Workforce identified the key drivers of employee satisfaction: intention to stay, inter-unit coordination, skill variety and customer-service orientation. The key drivers of employee engagement are reduced role conflict, training, autonomy, and personal power. Armed with this knowledge, each organization must identify the most relevant and task-oriented tools to specifically address role conflict, training, and more. Managers can now move one step closer to closing the gap between employee engagement and financial success.

Employees are more satisfied when they believe they are responsible for identifying and satisfying the needs of the customers, and when they believe the organization has the best interests of its customers in mind.

The Road to an Engaged Workforce reveals several important management dynamics:

  • Employee selection processes do not significantly influence an organization’s culture. Rather, it would appear that employees could be socialized into the organization’s culture through the effective use of HR systems.
  • For a cooperative cultural style, personal development and a constructive appraisal process are critical. When utilized strategically, the appraisal process can engender a healthy mix of a cooperative and competitive culture.
  • Promoting personal development is also a key to suppressing negative passive and/or aggressive cultural styles.
  • The common pay-for-performance incentive tactic enhances an aggressive cultural style and negatively relates to creating an engaged workforce. Pay-for-performance would appear to be a “use at your own risk” management tool.
  • Employee satisfaction has been identified as a key antecedent to employee engagement, with both attitudes having direct effects on customer response, and both indirectly influencing an organization’s financial performance through their impact on the customer.

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