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“If it looks like a duck …”Employee engagement
in the UKMark Beatson
[email protected]@MarkBeatson1
3 March 2015
The views expressed in this presentation are those of the author and do not necessarily represent those of the CIPD.
(c) Mark Beatson
Why might economists be interested in employee engagement?
• Incomplete labour contracts:• Release of discretionary effort (hours, effort,
attention, imagination) – “going the extra mile”• Alignment of interests allows delegation and
decentralisation (Dessen (2002))• Gift exchange (Akerlof (1982))
• Employee insights and knowledge of customers support innovation
• Effects on external reputation and brand affect organisational performance
2
(c) Mark Beatson 3
The importance of employees to corporate reputation(% of global ‘informed publics’)
Blogger
Board of Directors
Entrepreneur
CEO
Government official
Regular employee
A person like you
NGO representative
Financial or industry analyst
Technical expert in industry
Academic or outside expert
20%36%37%39%41%
52%55%57%60%
64%67%
Credibility as a source of in-formation on a company
Consistent financial returns
Top global company
Innovator
Community benefits
Communicates often
High quality products
Transparent and open
Customers before profits
27%29%29%30%
33%40%40%
43%50%52%54%55%56%58%59%61%
Importance of actions in building trust in a company
Source: Edelman Trust Barometer 2014 and 2015.
Breaking news from 2015 Trust Barometer: employees more often seen as trusted source of information than company CEO on all five dimensions affecting corporate reputation (engagement, integrity, products, purpose, operations) and ranked first or joint first for engagement, integrity and operations
(c) Mark Beatson 4
But what is employee engagement?
An academic subject of
study?
A craft or practice?
Loose
Strategies
Behaviours
Oriented to practical results
Precise
Supported by theory
Focused on the individual and their psychological state
Measurable
“Employee engagement can be defined in an emergent and working condition as a positive cognitive, emotional and behavioural state directed towards organizational outcomes” (Shuck and Wollard (2009))
“The art of getting people to believe what you want them to believe”, Jim Whitehurst, CEO of Red Hat
(c) Mark Beatson 5
Is it a bird, is it a plane … no, it’s a duck!• Is it a “movement”?
• Quasi-revivalist tone (“folk theory” according to Macey and Schneider)• Protagonists view it as progressive• Difficult to argue against (objectives, not means)• Lack of precision/doctrine keeps the “movement” together?
• Is it an “industry”?• Lots of people make a living from it• “If we accept the idea that employee engagement is indeed an industry
(not just a simple construct)and that the ‘idea’ of employee engagement is to find the thing about employees that improves firm performance , then we can get past worrying what employee engagement is and redirect effort. With that goal in mind there appear to be two things missing from discussion of employee engagement … 1) Engaged in what behaviours? … 2) What do employees get in exchange for being more engaged?” (Welbourne, 2011, pp90-91)
• Or do we just know it when we see it (the duck test)?
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What is employee engagement practice?
Describe how a duck swims!
(c) Mark Beatson 7
What is employee engagement in practice?• If no single definition, then no single model for
delivery• “Anything that engages employees?”• “Anything that gets the numbers up in next year’s
survey”?• Overlays existing HRM/HIM/HPW working
practices• Organisations will of course adapt to their own
culture• What are the staples?
(c) Mark Beatson 8
What is employee engagement in practice?• MacLeod and Clarke suggest some building
blocks:• Strategic narrative• Engaging managers• Employee voice• Integrity
• They also suggested employee engagement strategies operates at two levels:
• Level 1 – taken seriously but compartmentalised• Level 2 – employees, value and culture at heart of
corporate strategy
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What’s the evidence on the impact of employee engagement?• ‘Nailing the evidence’ working
group found lots of studies … some more plausible than others
• Causality is an issue – does engagement lead to success or success mean businesses can afford engagement?
• What type of evidence would you like?
• “[Lack of] employee engagement costs $zillion to the economy” type statistics?
• Meta-analyses – tend to suggest causation more likely from job attitudes to performance but this is something difficult to nail down (if it matters)?
• Organisational case studies/stories?
One of best
Above average
Average Below average
Don't know
53%
41%
23%
8%
28%
Employee engagement by financial performance of
organization (% engaged)
“To the best of your knowledge how does your organization’s financial per-formance compare to others in its sec-
tor?”
Source: Right Management (2009).
(c) Mark Beatson 10
Some big claims are made …
Absen
teeism
Shrink
age
Safety
incide
nts
Quality
(defe
cts)
Custom
er sa
tisfac
tion
Produc
tivity
Profita
bility
-37%
-28%
-48%-41%
10%
21% 22%
% difference in performance between top and bottom quartiles of employee engagement
Source: Gallup 2012, based on data from about 1.4 million employees in 192 organisations across 49 industries and 34 countries using Q12 measure of employee engagement.
Engagement is high on employers’ near term priorities
Other
Improving digital literacy
Reviewing reward/recognition systems
Changing the skills mix of the workforce
Predicting future talent requirements
Employee retention
Recruiting to key vacanices
Business restructuring
Containing labour costs
High levels of employee engagement
Improving leadership skills/capabilities
3
9
18
19
22
23
28
28
33
44
50
Top three workforce priorities in the coming year (% of employers)
Source: ‘Growth for everyone’, CBI/Accenture employment trends survey 2014.
What do employers expect to gain?
Improved health and safety
Increase innovation
Income growth
Increase retention
Reduced absence/higher well-being
Increased client/customer satisfaction
Increased productivity/performance
8
15
22
42
45
65
80
Major benefits of higher levels of employee engagement (% of employers)
Source: ‘Growth for everyone’, CBI/Accenture employment trends survey 2014.
Engaged employees in demanding jobs find it easier to get through the day
Very true TRUE Somewhat true
Not at all true
Strongly agree
Agree Disagree Strongly disagree
0
10
20
30
40
50
60
70
80
90
% of employees who strongly agree that ‘my job requires that I work very hard’
Always/often come home from work exhausted Work under great deal of tension
‘My job allows me to take part in decisions that affect my work’
‘This organisation really inspires the very best of me in the way of job performance’
Source: Skills and Employment Survey 2012.
(c) Mark Beatson 14
CIPD’s overall measure is stable – but what is this telling us?
Wint
er 20
11/12
Spring
2012
Summer
2012
Autumn 2
012
Wint
er 20
12/13
Spring
2013
Summer
2013
Autumn 2
013
Wint
er 20
13/14
Spring
2014
Summer
2014
Autumn 2
014
36%38% 39% 38%
35%37% 36% 36%
42%39%
% engaged
Source: CIPD Employee Outlook surveys. Until Autumn 2013, whole sample estimates; since Spring 2014, employees only.
If there is no definition of employee engagement, can we have a single measure?Plenty of players in the game.CIPD’s based on cluster analysis of its Employee Outlook survey.
(c) Mark Beatson 15
WERS suggests employee engagement increased between 2004 and 2011?
Managers treat employees fairly
Managers deal with employees honestly
Managers can be relied upon to keep their promises
INTEGRITY
Satisfied with involvement in decisions
Managers good at allowing employees to influence decisions
Managers good at responding to employee suggestions
Managers good at seeking views of employees
EMPLOYEE VOICE
Satisfied with sense of achievement from work
Good relationship between managers and employees
ENGAGING MANAGERS
I am proud to tell people who I work for
I feel loyal to my organisation
I share many of the values of my organisation
STRATEGIC NARRATIVE
0% 10% 20% 30% 40% 50% 60% 70% 80%
2011 2004
Source: Workplace Employment Relations Studies 2004 and 2011, surveys of employees, GB, workplaces with 5+ employees. Unless stated otherwise, %s are those strongly agreeing/agreeing with the statement.
(c) Mark Beatson 16
With the biggest gains in customer-facing roles
Managers treat employees fairlyManagers deal with employees honestly
Managers can be relied upon to keep their promisesINTEGRITY
Satisfied with involvement in decisionsManagers good at allowing employees to influence decisions
Managers good at responding to employee suggestionsManagers good at seeking views of employees
EMPLOYEE VOICESatisfied with sense of achievement from work
Good relationship between managers and employeesENGAGING MANAGERS
I am proud to tell people who I work forI feel loyal to my organisation
I share many of the values of my organisationSTRATEGIC NARRATIVE
0% 2% 4% 6% 8% 10%12%14%16%18%20%
Sales and customer services All employees
Change 2004-11 (%)
Source: Workplace Employment Relations Studies 2004 and 2011, surveys of employees, GB, workplaces with 5+ employees. Unless stated otherwise, %s are those strongly agreeing/agreeing with the statement. ‘Sales and customer services’ are major group 7 of the SOC2000.
(c) Mark Beatson 17
SES implies a more measured picture
Completely/very satisfied with communications between management and employees
My job allows me to take part in decisions that affect my work (very true/true)
EMPLOYEE VOICE
Satisfaction with relationship with line manager/supervisor (completely/very)
ENGAGING MANAGERS
I would turn down another job with more pay to keep working for this organisation
I would take almost any job to keep working for this organisation
Proud to be working for this organisation
Organisation inspires very best job performance
My values and organisation's are very similar
I feel very little loyalty to this organisation (disagree)
I am willing to work harder than I have to in order for this organisation to succeed
STRATEGIC NARRATIVE
0% 20% 40% 60% 80% 100%
2012 2006 2001
Source: Skills and Employment Surveys.Unless stated otherwise, %s are those strongly agreeing/agreeing with the statement.
(c) Mark Beatson 18
There is some variation in engagement across the workforce
Total
Male
Female
Private
secto
r
Public
secto
r
Volunta
ry se
ctor
Micro (
<10 e
mploye
es)
Small (1
0-49)
Medium
(50-2
49)
Large
(250
+)
Top m
anag
ers
Senior
man
agers
Middle
manag
ers
Junio
r man
agers
/supe
rviso
rs
Non-m
anag
erial
emplo
yees
39%36%
42% 40%
30%
55%52%
47%43%
35%
60%55%
43%
36% 35%
% engaged
Source: CIPD Employee Outlook survey, autumn 2014, employees only.
(c) Mark Beatson 19
But you have to open up the black box …
Overall job satisfaction
I don't think my employer treats me fairly*
Likely to recommend organisation as an employer
I trust senior managers of organisation
Satisfaction with line manager
I am satisfied with my job role
Organisation gives me opportunities to learn and grow
Job is as challenging as I would like it to be
I have positive relationships with my colleagues
How often under excessive pressure in your job?**
Achieve right balance between work and home lives
Highly motivated by organisation's core purpose
Knows very clearly core purpose of my organisation
I will often work more hours than contracted
I will often take on more work to relieve colleagues' workloads
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Positive Neutral Negative
‘Positive’ responses are strongly agree/agree, ‘neutral’ are neither agree nor disagree and ‘negative’ are disagree/strongly disagree except for * where scales are reversed (disagreement is positive) and ** where ‘positive’ is feeling under excessive pressure less than once a month or never, ‘neutral’ is 1-2 times a month and ‘negative’ 1-2 times a week or every single day.Source: CIPD Employee Outlook survey, autumn 2014, employees only.
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What are the common barriers?
• If it’s all one-way• Work-life balance• Development and progression
• Lack of job control• Leadership behaviour• Line managers
• Lack people skills• Ineffective implementation of organisational HR policies
• HR practices• Lack of trust• Lack of effective voice
• Mechanisms• Confidence to use them
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What undermines organisational commitment?(% of employees highly motivated by core purpose of organisation)
Never
Very ra
re
Rarely
Someti
mes
Very of
ten
Alway
s
70% 68%
59%52%
36%
27%
Secretiveness
“Important information is only shared with a select few”
Source: CIPD Employee Outlook survey, spring 2014, employees only.
Strongly agree
Agree Neither agree nor disgree
Disagree Strongly disagree
72%
57%
38%32%
24%
Poor managers
“My working relationship with my su-pervisor would be described as very ef-
fective”
(c) Mark Beatson 22
Do appraisals help or hinder engagement?
• NHS Staff Survey 2010: overall engagement score = 3.9 for ‘good-quality’* appraisals, 3.5 for ‘poorer quality’ appraisals and no appraisals (West and Dawson, 2012)
• *‘good-quality’ = employee felt it useful in understanding how to do job, clear objectives set, employee left appraisal feeling valued by employer.
Very fa
ir
Somew
hat fa
ir
Neutra
l
Somew
hat u
nfair
Very un
fair
Don’t k
now
Not ap
plica
ble
93%
58%
25%11%
4%
29% 29%
Engagement by perceived fair-ness of performance management
Fairness of performance management process
Source: CIPD Employee Outlook survey, spring 2014, employees only.
(c) Mark Beatson 23
Can you have too much employee engagement?• Pierce and Aguinis (2013) discuss the Too Much of a Good
Thing Effect• “The authors posit that, due to the TMGT effect, all
seemingly monotonic positive relations reach context-specific inflection points after which the relations turn asymptotic and often negative, resulting in an overall pattern of curvilinearity.” pg. 313
• They argue it appears to explain many puzzling results in management science.
• NB. It may also have a little sister, the Too Little of a Good Thing Effect (see White and Bryson (2011) which suggests both incremental and threshold effects from implementation of HRM practices).
(c) Mark Beatson 24
Can you have too much employee engagement?
11% 5% 12%
36%
15%
33%
In love with the boss?
Strongly agree Agree
Source: CIPD Employee Outlook survey, spring 2014, employees only.
(c) Mark Beatson 25
Can you have too much employee engagement?
12% 6% 11% 10%
29%22%
32% 29%
In love with the company?
Strongly agree Agree
Source: CIPD Employee Outlook survey, spring 2014, employees only.
(c) Mark Beatson 26
Does organisational commitment reduce stress?
24% 25%15% 14% 6% 5%
31% 32%
28%14% 23% 18%
Excessive pressure every day Excessive pressure 1-2 times per week
Source: CIPD Employee Outlook autumn, spring 2014, employees only.
(c) Mark Beatson 27
What are the consequences of “too much” engagement?• Burnout?• Misallocation of
time – forgetting the day job?
• Insufficient challenge?
• Disappointment – what happens if leaders have feet of clay?
• Implications for future jobs – “once bitten, twice shy”?
(c) Mark Beatson 28
Concluding thoughts• What does employee engagement mean for the
psychological contract?• To what extent are there national or cultural differences in
the practice of employee engagement or its effects (or how it should be measured?)
• If organisations think they aren’t getting the benefits they expected, will this be seen as another management fad? But how do you turn off employee engagement?
• Many (but not all) indicators of employee well-being have remained steady or even increased since the mid 2000s in many (but not all) surveys – very much evident in WERS – despite what’s been happening to the economy – does this have anything to do with employee engagement?
(c) Mark Beatson 29
References• Akerlof, G. (1982), “Labor contracts as partial gift exchange”, Quarterly Journal of Economics, Vol. 97, No.
4, November, • Dessen, W (2002), “Authority and communication in organizations”, Review of Economic Studies, Vol. 69
pp811-838.• Dromey, J. (2014), “MacLeod and Clarke’s concept of employee engagement: an analysis based on the
Workplace Employment Relations Study”, ACAS Research Paper 08/14.• Edelman Trust Barometer (2014) and (2015).• Gallup (2013), “Engagement at work: its effect on performance continues in tough economic times”.• MacLeod, D. and Clarke, N. (2009), “Engaging for success: enriching performance through employee
engagement”, report to government.• Pierce, J. and Aguinis, H. (2013), “The Too-Much-of-a-Good-Thing Effect in management”, Journal of
Management, Vol.39, No. 2, February, pp313-338.• Ray, R. (2013), “Employee engagement in a VUCA world: a review of current research and its
implications”, The Conference Board Research Report R-1480-11-RR [useful annotated bibliography].• Rayton, B, Dodge, T. and D’Analeze, G. (2012), “The Evidence”, report of the “nailing the evidence”
workgroup of the Employee Engagement Task Force.• Right Management (2009), “Employee engagement: maximizing organizational performance”.• Shuck, M. and Wollard, K. (2009), “A historical perspective of employee engagement: an merging
definition”, in Plakhotnik, Neilsen and Pane (eds) “Proceedings of the eighth annual college of education and GSN research conference” (pp133-139). Miami: Florida International University.
• Welbourne, T. (2011), “Engaged in what? So what? A role-based perspective for the future of employee engagement” in Wilkinson, A. and Townsend, K. (eds), “The future of employment relations: New paradigms, new developments”, Palgrave.
• West, M. and Dawson, J. (2012), “Employee engagement and NHS performance”, Kings Fund.• White, M. and Bryson, A. (2011), “HRM and workplace motivation: incremental and threshold effects”, CEP
Discussion Paper No. 1097.
