Employee engagement ‘ exploring its relationship with career development and employee retention
Employee engagement is the level of commitment and involvement an employee has towards his organization. It is a positive attitude in the mind of the employee towards the organization and its value. Engaged employees feel connected to their role in the company, to other team members, supervisor and to the organization’s objectives. It has been observed that engaged employees are more likely to be innovative and are highly effective in building and maintaining relationships. It was found that retention rate was lesser even in those organizations that provide higher incentive and other monetary rewards, simply because the employees were not feeling oneness with the organization. As an outcome of new series of HR interventions companies have started giving more emphasis on linking rewards system with career growth opportunities and sense of accomplishment. Employees who are satisfied with the opportunities given for growth will act as organizations brand ambassador and will put their heart and soul in achieving the organizations goal and will remain with the organization. Objective of the paper is to study about the growing relevance of employee engagement and to analyze its relationship with career development and retention.
Key words: employee engagement, career development, retention.
Introduction
A paradigm shift has happened in the viewpoints of management towards employees. Earlier employees were considered as those who are needed just to fulfill the needs and demands of customers. But new management school of thought perceives and practice the viewpoint of ’employees first and customers second’. Modern managers propagate that ‘our people are our most important asset’. Employee engagement is the strategy through which organizations want to implement this thought. Organizations have come to realize that in today’s constantly changing business scenario, the most valuable resource that needs to be leveraged is human resource. This means not just attracting the cr??me-de-la-cr??me and retaining them but keeping them motivated and committed to achieving the organization goals. Engagement is a combination of an attitude and behavior, the attitude is ‘commitment’ and behavior is ‘action to cooperate or going the extra mile’ (ACAS, 2010, Policy Decision Paper).
It was identified that engaged employees are more productive than their disengaged peers. Unengaged employees tend to concentrate on task rather than on the goals and outcomes they are expected to accomplish. They are concerned only about finishing their work and are not concerned about improvements. Unengaged employees are found to feel that their contributions are being overlooked and their potential is not being tapped. They see negativity at every opportunity and undermine the accomplishment of the engaged coworkers. In contrast an engaged employee is one who is fully involved in and enthusiastic about his or her work and thus will act in ways that fulfill the organization’s interest. Schmidt et al. (1993) has defined engagement as ‘an employee’s involvement with, commitment to and satisfaction with work’. The Hay Group defines engaged performance as ‘a result that is achieved by stimulating employees’ enthusiasm for their work and directing it toward organization success. This result can only be achieved when employers offer an implicit contract to their employees that elicits specific positive behaviours aligned with organization’s goals…’
Lanphear defines Employee Engagement as ‘the bond employees have with their organization’ Lanphear further espouses that ‘when employees really care about the business, they are more likely to go the extra mile.’
It was found that employees who are engaged show a positive attitude towards the organization and express an obligation to remain with the organization. Employee engagement determines the level of commitment and involvement an employee has towards his/ her organization and its values. Highly engaged employee’s works hand in hand with their colleagues to increase performance within the job, for the benefit of the organization. Employee engagement thus acts a barometer that measure extend of association and emotional bonding between employee and organization and determine job satisfaction and job contribution of the employee.
Today’s employees are more informed and showcase high willingness to work provided they are given learning opportunities. Personal growth, opportunities to learn and explore is becoming a primary driver. Catering to the changing needs to foster engaged employees is the need of the hour.
Review of Literature
Significant correlation was found between employee engagement and desirable business outcomes such as retention of talent, customer service, industrial performance, team performance, business unit productivity and even enterprise level financial performance (Rucci et al, 1998). Organizations with high employee engagement show higher revenues and profits than those with lower engagement levels (Neti, Vipparthi, Raulapati, 2011) . In 2005, Towers Perrin Survey found that companies with higher employee engagement had up to 19% higher operating margin, net profit margin, revenue growth and up to 25% greater earnings per share than companies with low employee engagement ((Neti, Vipparthi, Raulapati, 2011).
Full engagement represents an alignment of maximum job satisfaction with maximum job contribution. By observing engagement against these two factors allows organizations to ensure that productivity gains are sustainable in the long-term.
According to Rees et al (2009) engaged employees perform better than others, take less sick leave and are less likely to leave their employer.
Low level of engagement was found to be more among those employees who perceived unfairness in rewards and who believed that they are stuck in their job with no growth opportunities (John, 2010, Acas Policy, Discussion paper)
The highly productive companies across the world have understood the fact that it was employee engagement that made them different from other companies. Different companies had taken different initiatives to enhance the level of engagement among employees towards their jobs and the organization.
As it is an established fact that there is a clear link between organizational performance and employee engagement, every organization seeking sustenance need to design and implement a customized process to increase the levels of employee engagement. The following are a few basic steps in this process based on the best industry practices.
Process of Employee Engagement (K .Sirisha, 2013)
1. Prepare and Design: The first step in the process is about discovering the specific requirements of your organization and deciding the priorities. After that a customized design of carrying the whole process can be designed. It is recommended to seek advice of expert management consultant in order to increase the chances of getting it done right at the first attempt.
2. Employee Engagement Survey: Design the questions of the employee engagement survey depending upon the comfort and understanding level of the employees.
3. Result Analysis: analyze the data to find out what exactly motivates employees to perform their best and what actually disengages them and finally compels them to leave the organization. The results and information can then be delivered through presentations.
4. Action Planning: ‘How to turn the results of the survey in to an action’ is a challenging question that organizations need to deal with the utmost care. Coaching of line managers as well as HR professionals is very important in order to tell them how to take appropriate actions to engage employees. They should also be told about dos and don’ts so that they can successfully implement the changes.
5. Action Follow-up: Action follow up is necessary in order to find out if the action has been taken in the right direction or not and if it is producing the desired results.
Career development and Employee engagement
Organizations with high levels of engagement provide employees with opportunities to develop their abilities, learn new skills, acquire new knowledge and realize their potential. When companies plan for the career paths of their employees and invest in tem employees in turn will contribute back with high productivity and organization commitment. Career development influences engagement for employees and retaining the most talented employees and providing opportunities for personal development.
Employee engagement and retention
Retention
If was found that engaged employees are less likely to leave their job. If an employee has no emotional commitment to their job, there is a greater chance that they will leave to pursue a job that offers, for example, higher remuneration or more flexible work conditions (Haid & Sims, 2009; Schaufeli & Bakker, 2004).
Research confirms that engagement lowers employees’ intention to leave. The Corporate Leadership Council (2004) found that the most engaged employees are 87% less likely to leave their organization. The same study found that the 100 best places to work (according to their research) had an average voluntary turnover rate of 13% as compared with the average of 28.5% of other businesses in the same industries. What’s more, other large scale research has found that 12% of disengaged employees have no intention to leave, while that proportion rises to 66% in engaged employees. Similarly, over half of disengaged employees would consider leaving their current job for another opportunity, while only 25% of highly engaged employees would consider leaving. (Towers Perrin, 2003). Corporate Leadership Council report (2008) the highly engaged organizations have the potential to reduce the staff turnover by 87%, the disengaged are four times more likely leave organization than average employees. It was observed that the employee retention can be improved by improving employee engagement.
Considering that replacing an employee can cost one and a half times their salary, retention has a significant impact on an organization’s overall profit. Not only can the costs of replacing employees be a trench on resources, but once new employees are in place they can take several years to generate the same revenue.
Methodology
Objective of the study was to find out the relationship between employee engagement and employee retention and career development.
From the literature review is was found that career development was found to be factor improving employee engement and employee engagement in turn increases employee retention. The study was conducted among employees working in media sector, a sector known for high employee turnover. The study was conducted among the employees of one of the leading Indian daily newspaper which has introduced employee engagement activities to motivate the employees and hence increasing their commitment towards the organization. The data was collected from 276employees working across different departments of the company. Gallup 12 questionnaire was used for collecting the data.
The data analysis shows that the Employees working with the company was found to be have high employee engagement level.
One sample’t’ test was conducted on the responses (with test value ‘4’ assigned to the response ‘agree’) given by respondents. t value 2.346 which is not significant at 0.05 level shows that the mean (4.0439) of the responses did not differ significantly from the test value. High significance value (typically above 0.05) indicates that there is no significant difference between the test value and the observed mean. Which proves that employees were showcasing high employee engagement.
Table 1. One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
Employee engagement 276 4.0439 .31058 .01869
Table 2. One-Sample Test
Test Value = 4
t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference
Lower Upper
Employee engagement 2.346 275 .020 .04386 .0071 .0807
Then the relationship was analyzed between career development opportunities provided by the organization and the level of engagement that the employees are feeling with company.
Table 3. Descriptive Statistics
Mean Std. Deviation N
Employee engagement 4.0439 .31058 276
Opportunity for career development 4.3225 .87032 276
Table 4. Correlation between employee engagement and career development
Employee engagement Opportunity for career development
Employee engagement Pearson Correlation 1 .634**
Sig. (2-tailed) .000
N 276 276
Opportunity for career development Pearson Correlation .634** 1
Sig. (2-tailed) .000
N 276 276
**. Correlation is significant at the 0.01 level (2-tailed).
From Table 4. It can be inferred that there is high correlation between career development opportunities provided by the organization and employee engagement. Correlation value was found to be .634 which was highly significant at 0.01 significance level. It was also observed that the level of support provided by the immediate supervisor for employee development also enhances overall employee engagement.
Second objective of the study was to find out the relationship between employee engagement level and their intention to remain with the organization. The relationship was found using Pearson correlation
Table 5. Descriptive Statistics
Mean Std. Deviation N
Employee retention 3.9674 .24648 276
Employee engagement 4.0439 .31058 276
Table 6. Correlation between employee retention and employee engagement
Employee retention Employee engagement
Employee retention Pearson Correlation 1 .379**
Sig. (2-tailed) .000
N 276 276
Employee engagement Pearson Correlation .379** 1
Sig. (2-tailed) .000
N 276 276
**. Correlation is significant at the 0.01 level (2-tailed).
Table 6 shows that there is high correlation between employee retention and employee engagement. Correlation value .379 was found to be highly significant at 0.01 significance level. The can be inferred that career development opportunities and employee engagement activities provided by the organaotion is motivating the employees to remain with the organization for a longer tenure and employees were also found to be seeing their growth with organization.
Conclusion
When most of the organizations are focusing on growth and profitability the essential element that they miss out is the need to retain the existing talent pool. It was observed that employees were leaving the organization irrespective of the financial compensation that was offered to them. Diagnosis was done to find out the reason for the same using exit interview and expert advice of change agents and as a part of organization reengineering the company came up with different employee engagement and career development activities. The study result shows that the new human resource strategy adopted by the company was effective to develop a positive intention in the mind of the employees to remain with the organization. The study gives the inference that the organaotion should carry forward with their effort to develop the feeling of oneness in the mind of the employees about the company, which will increase not only their productivity but the organaotion will be able to retain its talented and trained employees with the organization.
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References
Corporate Leadership Council, Improving employee performance in economic downtime, 2007, (Corporate Executive board, Washington, DC). Deovsek,D., Creating highly engaged and committed employees starts at the top and ends at the bottom line, Credit union national Association inc, May2008.
Haid, M. & Sims, J. (2009). Employee Engagement: Maximising Organisational Performance. Right Management. Retrieved 15 June 2011, from http://www.right.com/thought-leadership/research
John Purcell,(2010) Acas Policy Discussion paper, Acas Strategy Unit www.acas.org.uk/index.aspx?articleid=2390
K .Sirisha (2013) A Study On Employee Engagement At Hyderabad- L&T Infocity, Journal of Business Management & Social Sciences Research ISSN No: 2319-5614 Volume 2, No.9, September 2013
Rees, C., Alfers, K., Gatenby, M., Soane, E. and Truss, K. (2009) ‘Work organisation, employee voice and engagement: exploring connections’. Paper given at the British Universities Industrial Relations Association Annual Conference, Cardiff July 2009
Rucci, Quinn, Kim (1998). The employee-customer profit chain. Harvard Business Review, pp. 83’97.
Schaufeli, W.B. and Bakker, A.B. (2004). Job demands, job resources, and their relationship with burnout and engagement: a multi-sample study. Journal of Organizational Behavior, 25, 293-315.
Towers Perrin (2003). Working Today: Understanding What Drives Employee Engagement. The 2003 Towers Perrin Talent Report. Retrieved 15 June 2011, from http://www.towersperrin.com/tp/getwebcachedoc?webc=hrs/usa/2003/200309/talent_2003.pdf