An employee engagement strategy is a powerful contributor to organizational effectiveness. In a global environment that is in a continuing and unpredictable state of flux, the understanding of what drives employee engagement needs constantly to be reviewed and renewed. The Right Management consulting group recently concluded a benchmark study into employee engagement in Australia and New Zealand with comparability to an earlier study completed in 2009. This study provides some valuable insights into changing trends.
The study analyzed data provided by 7,310 respondents: a representative sample across a range of predominantly private sector employers from ten key industrial sectors in both countries. The sample matched the workforce demographics on a range of factors, which includes age, gender and the nature of the industry and company size. The survey design provided for analysis of employee engagement factors in relation to leadership, organizational strategy, culture and communication; all as contributors to organizational effectiveness.
High performing and average organizations are positioned on either side of a gap that has widened in both countries since 2009, according to the study. There is an overall downward trend in employee engagement in New Zealand, with the size of the gap between high performers and the average having increased by 5% in the ensuing three years. Australia, however, shows a 5% upward trend in high performing organizations, whereas there has been a 2% decline for the average ones. The gap between high performing organizations and average ones in Australia has therefore also widened (by 7%).
The survey design is based on the premise that job engagement (the relationship between the employee and their work or career) and organizational engagement (the two-way relationship between the employee and the organization) are the two halves that complete the concept of "employee engagement". It is furthermore based on the belief that engaged employees are both mentally and psychologically aligned to both the job and the organization. The extent of such engagement is assessed by looking at the level of commitment, pride and satisfaction the employee admits to, as well as their propensity to promote the benefits of working for the organization to others.
By distinguishing between job and organizational engagement in this way, the study demonstrates that 47% of employees are "disconnected". These employees are neither engaged in the job nor with the organization and will underperform and leave when the opportunity presents itself. At the upper extreme are those workers who are fully engaged. One third (34%) of the respondents fell into this category, nick-named "the stars" - highly productive with a high propensity to stay. A third category of respondents (7% of them) are labeled "benchwarmers"; employees who will underperform and who will not leave. The final group (12%) are the employees who are engaged professionally, but not with their current organization. Job performance will be exceptional, but they have a high propensity to leave.
Such findings pose interesting policy challenges. Once managers have such a picture of surveyed organizations, they may ask the following probing questions. The first question is about how they retain their stars. Another may be about how they relieve their organization of the burden of employees not engaged. The thinking here is that if employee engagement and organizational effectiveness go hand-in-glove, no organization can afford to carry 47% of employees who are disengaged and probably also underperforming. As the single largest grouping in this picture, they must exert a tiresome and worrying drag not only on individual businesses, but on the entire economy.
Understandably, many business owners and managers will be rather glum about the negative connotations of this study. By taking a more positive approach, however, they can accept the current low levels of engagement as a phenomenal opportunity for organizational change and renewal. I encourage them to investigate what it is that they can do to turn this around. Some answers lie in the rest of the Right Management report.
What does the research tell us about the elements of a people-management strategy that are capable of driving such change? In the report, there are strong clues to how to not only engage the "disconnected" group, but even how we might turn some of the "benchwarmers" around.
It turns out that New Zealand and Australia share seven of the same ten top drivers, albeit in a somewhat different priority order. The table below shows the top ten employee engagement drivers in 2012, with the relative standing of each, in Australia and New Zealand. Respondents in both countries concurred on the first two; commitment to the organization's core values as the top driver and confidence that personal career goals can be achieved with the present employer as the second.
|Top Ten Employee Engagement Drivers||Aus||NZ|
|I am committed to my organization's core values.||1||1|
|I feel confident that I can reach my long term career goals in my organization.||2||2|
|Our customers think highly of our products and services.||3||5|
|I am encouraged to take ownership of my work.||4||9|
|I believe my current job is aligned with my strengths.||5||8|
|My organization allows me to maintain a reasonable balance between my family and work life.||6||7|
|Our work processes are generally well organized and efficient.||7||0|
|There is sufficient incentive for me to perform well at my organization.||8||3|
|I work in a safe and healthy environment.||9||4|
|My organization actively promotes health and wellbeing.||10||0|
|My immediate manager gives me the support I need to do my job well.||0||6|
|Communication is good in my work area.||0||10|
The report argues that not only are those employees who are satisfied with their employers' career management practices more engaged, they are also less inclined to leave. These employees also have a generally positive view of the organization's products and services and they rate their organizations higher than average, with a greater capacity to attract and retain high achievers.
I find it interesting that in 2009 the response, "I feel confident that I can reach my long term career goals in my organization", didn't feature in New Zealand's top ten drivers at all, and it was only seventh for the Australians at the time. Yet, less than half the respondents in 2012 are satisfied that this driver is being managed well. It suggests to me that there has been a shift in the expectations and perceptions of employees that has generally outstripped their employers' realization or understanding.
Ownership of one's work and the alignment of the current job to the respondent's strengths are closely correlated in both countries and must surely be influential in the importance given to personal career goals. Although the report doesn't comment on this relationship, I suggest that, particularly in the case of the New Zealand respondents' ranking, improvements in these two areas would trigger a strengthening of organizations' support for employees' career goals.
It would be interesting to probe more deeply into the socio-economic variables that are behind this shift. Is it a generational change as the baby boomers start retiring, or is it a response to global economic instability, triggering a renewal in interest in job and career stability? Whatever the answer might be, the organization that fails to heed the strength of this message is unlikely to move from being average to being a high performer.
Some of the other drivers also raise interesting questions that I have previously written about, such as the issue of incentives for performance. It is a matter that warrants close consideration and monitoring in order for it to truly serve as an engagement factor. The measurement of performance related to incentives and the nature and administration of incentives is also subject to changes in employee acceptability and desirability and thus impact on employee engagement.
The most important confirmation for me regarding employee engagement and organizational effectiveness is that there is no simple, static formulaic solution. The people-management factors that influence employee engagement shift with the times and vary from country to country. Although it is likely that in countries that share a similar socio-economic heritage and culture there would be some overlap in the key drivers of engagement, particularly with the closer ties created by the global economy, it is important to understand and track employee engagement at organizational and national levels before exploring international precedents and solutions.
Moreover, a smart strategy includes a bundle of people-management practices rather than singling out only one or two as areas of sharp focus. Research elsewhere has demonstrated that the impact of implementing "bundles" of people-practices has an effect that is greater than what is achievable when implemented singly.
I have promoted the view that improvements in an organization's competitive advantage depend upon strategies that include building employee engagement. I encourage managers to pay as close attention to this type of research as they do to the technical aspects of production processes and financial systems. In particular, read with a view to taking advantage of the multiplier effect of selecting the right combination of people-practices.
Organizations will always be made up of people working to a common purpose. So, there will always be the need to engage the hearts and minds of employees. That means knowing how our bundles of people-practices complement each other as well as keeping up with changing trends and patterns.
- Employee Engagement 2012 Benchmark Study,
http://www.rightmanagement.com.au/thought-leadership/research/employee-engagement-2012-benchmark-study.pdf, Right Management Group.
- MacDuffie, J. P. (1995). "Human Resources Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto industry", Industrial and Labor Relations Review, Vol 48(2), pp. 199-221.
Leslie Allan is Managing Director of Business Performance Pty Ltd; a management consulting firm specializing in people and process capability. He has been assisting organizations for over 20 years, contributing in various roles as project manager, consultant and trainer for organizations large and small. Mr. Allan is a prolific writer on business issues, with many journal and web articles to his credit. He is also the author of five books on employee capability, training and change management. Mr. Allan currently serves as Divisional Council Member for the Australian Institute of Training and Development and is a member of the Australian Institute of Management, the Graduate Management Association of Australia and the American Society for Quality. Leslie may be contacted by email at email@example.com
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