PEOPLE FOCUS - CIPD

CIPD RESEARCH PEOPLE FOCUS
Employee Engagement – and the
impact on competitive advantage
It comes as no surprise that employee engagement is a mainstay on the HR agenda
when you consider that recent research carried out by Towers Perrin (2004) showed
that companies with high engagement levels achieved a 17% operating margin
advantage over their industry competitors. Another well known study with a sample
of over 16,000 employees across 16 diverse organisations showed that 25% of the
variance in productivity was accounted for employees level of wellbeing and the
perceived commitment of the organisation to the employee group.
What is engagement? Researchers in
the Gallup Organisation define
employee engagement as ‘the
individual’s involvement and
satisfaction with as well as
enthusiasm for work’ (Harter et al.
2002) Qualitative research carried out by
Schaufeli and Bakker (2003) reports that
the engaged employee is actively
interested in their work, uses their
initiative to develop solutions and
generates their own feedback.
Furthermore, they describe themselves as
having similar value-sets as their
organisation, feeling a sense of
accomplishment when the work is done
and even go so far as to describe work
as ‘fun’!
The aim of creating an ‘engaged work
environment’ where employees
experience high levels of well-being and
are highly productive is of course a key
objective for work place researchers and
practitioners. In recent years there has
been an impressive body of research
generated from the fields of Human
Resource Management, Organisational
Development and Positive Psychology.
John Purcell and his team of
researchers from the University of
Bath (and funded by the CIPD) have
produced a seminal paper on linking
employee engagement to
productivity and aptly christened this
concept ‘the black box’.
Based on research carried out across 18
organisations , the clear message from
this research is that once organisations
(and in particulars HR and OD
practitioners) can fully understand the
nature and complexity of these links and
why, how and when they occur, we are
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some way towards creating and
implementing meaningful and efficient
engagement polices and initiatives, and
producing a win-win scenarios for
organisations and their employees.
Purcell and his team place a great
deal of emphasis on the
psychological contract; the notion of
Discretionary Behaviour (the choices
employees make about how to do a job
in term of speed, efficiency and quality);
organisation citizenship behavior (OCB -
what is it that induces an employee to
‘go the extra mile’) and the concept of
Ability, Motivation and Opportunity
(AMO – the key building block of any
engagement strategy). The role of
frontline management and
organisational commitment is also
highlighted (see figure below) Clearly,
incentivising people to enjoy their work
more and to perform better is the key
challenge for any company, big or small
and Purcell outlines the following
requirements;
For people to perform better - beyond
the minimal requirements of the job -
they must:
• Have the ability to do so because
they possess the necessary
knowledge and skills, including how
to work with other people.
• Be motivated to do the work, and do
it well.
• Be given the opportunity to deploy
their skills, both on the job and more
broadly by contributing to workgroup
and organisational success.
What convinces employees to use their
discretion in ‘going the extra mile’. Not
surprisingly, the researchers found that
this extra effort on the employees was
motivated by their sense of commitment
to the organisation—if they were proud
to tell people where they worked and
wanted to work for the firm for the
foreseeable c—they were more likely
Source: CIPD Research