There is a general belief that there is a connection between employee engagement and business results; a meta-analysis conducted by Harter et al (2002:272) confirms this connection. They concluded that, “…employee satisfaction and engagement are related to meaningful business outcomes at a magnitude that is important to many organisations”. However, engagement is an individual-level construct and if it does lead to business results, it must first impact individual-level outcomes.
Therefore, there is reason to 7 expect employee engagement is related to individuals’ attitudes, intentions, and behaviours. Although neither Kahn (1990) nor May et al (2004) included outcomes in their studies, Kahn (1992) proposed that high levels of engagement lead to both positive outcomes for individuals, (eg quality of people’s work and their own experiences of doing that work), as well as positive organisational-level outcomes (eg the growth and productivity of organisations). The Towers Perrin (2003) study of engagement identified both emotions and rationality as core components.
They found that emotional factors are linked to an individual’s personal satisfaction and the sense of inspiration and affirmation they get from their work and from being a part of their organisation. For example, a key element here is having a sense of personal accomplishment from one’s job. By contrast, the rational factors generally relate to the relationship between the individual and the broader corporation, for instance the extent to which employees understand their role and their unit’s role, relative to company objectives.
It was found that scores for key aspects of rational engagement (such as I ‘understand how my role relates to company goals and objectives’ and ‘I am willing to put in a great deal of effort beyond what is normally expected’) are generally higher than those for emotional engagement (such as, I ‘would say my company is a good place to work’ and ‘am proud to work for my company’). However, looking deeper into the more emotional aspects of working, a different picture emerges.
Just under two-thirds of the respondents to the Towers Perrin survey agreed their company is a good place to work, and even fewer (half of the respondents) agreed their company inspires them to do their best work. According to research, this is where the impact of employees’ dissatisfaction is found, with various aspects of their work experience, such as overwhelming workloads, distant and non-communicative senior leadership, and the lack of developmental opportunities (Towers Perrin 2003).
This shows the significance of management actions in determining levels of employee engagement. According to Towers Perrin (2003), building engagement is a process that never ends and it rests on the foundation of a meaningful and emotionally enriching work experience. Furthermore, it is not about making people happy, or even paying them more money. As important as pay and benefits are in attracting and retaining people, it was found they play a less important role in engaging people in their work.
The elements found to be fundamental for engagement were strong leadership, accountability, autonomy, a sense of control over one’s environment and opportunities for development; there are no substitutes for these fundamentals. The Gallup Organisation (2004) found critical links between employee engagement, customer loyalty, business growth and profitability. They compared the scores of these variables among a sample of stores scoring in the top 25 per cent on employee engagement and customer loyalty with those in the bottom 25 per cent.
Stores in the bottom 25 per cent significantly under-performed across three productivity measures: sales, customer complaints and turnover. Gallup cites numerous similar examples. The International Survey Research (ISR) team has similarly found encouraging evidence that organisations can only reach their full potential through emotionally engaging employees and customers (ISR 2005). In an extension of the Gallup findings, Ott (2007) cites Gallup research, which found that higher workplace engagement predicts higher earnings per share (EPS) among publicly-traded businesses.
When compared with industry competitors at the company level, organisations with more than four engaged employees for every one actively disengaged, experienced 2. 6 times more growth in EPS than did organisations with a ratio of slightly less than one engaged worker for every one actively disengaged employee. The findings can be considered as reliable as the variability in differing industries was controlled by comparing each company to its competition, and the patterns across time for EPS were explored due to a ‘bouncing’ increase or decrease which is common in EPS (Ott 2007).