Introduction
Employee engagement is defined as “Employees are engaged when many different levels of employees are feeling fully involved and enthusiastic about their jobs and their organizations. It is the willingness and ability to contribute to company success to the extent to which employees put discretionary effort into their work, in the form of extra time, brainpower and energy” (Esty, 2008). The problem of having engaged employees has become very crucial to firms and according to a recent Gallup study on employee engagement, about 54 percent of employees in the United States are not engaged and 17 percent are disengaged and only 29 percent are engaged (Harris Interactive Inc. 21 January 2009). Employees who are not engaged also have to be paid salaries, benefits and other perks and non contributing employees only increases the burden on the firm. Besides, there is a colossal waste of resources as 54 percent of the employees are wasted.
Research Problem and Objectives
The research problem is “To understand why employees are disengaged and to research methods that can increase employee engagement and participation”.
Objectives of the research are:
- To understand the financial impacts of the issue, both positive and negative
- To examine the causes and precedents that makes employees to be disengaged
- To find ways and means on how the management and organisation can modify its internal processes to increase employee engagement.
Literature Review
Highly engaged employees outperform their disengaged colleagues by 20 to 28 percent. A 2005 study by Serota Consulting of 28 multinational companies found that the share prices of organizations with highly engaged employees rose by an average of 16 percent compared with an industry average of 6 percent. There are also costs associated with a disengaged workforce. Disengagement has been found to cost between 243 to 270 billion dollars due to low productivity of this group according to a 2003 Gallup poll. In one 2003 study by ISR, companies with low levels of employee engagement found that their net profit fell by 1.38 percent and operating margin fell by 2.01 percent over a three year period. Conversely, companies with high levels of engagement found that their operating margins rose by 3.74 percent over a three-year period (Etsy, 2008). Thus it can be seen that firms with engaged employees show better financial results and also offer cost reductions and increase in profits.
Seijts (2006) comments that the onus on increasing employee engagement is first on the management. Some of the main causes that reduce employee engagement are: mistrust in the management, vitiated and stressful environment, a management that cannot be trusted. According to the author, the management can increase employee engagement by following the ’10 C’s’ approach. The approach is: Connect – Leaders must show that they value employees; Career, Leaders should provide challenging and meaningful work with opportunities for career advancement; Clarity, Leaders must communicate a clear vision; Convey, Leaders clarify their expectations about employees and provide feedback on their functioning in the organization; Congratulate, Exceptional leaders give recognition, and they do so a lot; they coach and convey; Contribute, People want to know that their input matters and that they are contributing to the organization’s success in a meaningful way; Control, Employees value control over the flow and pace of their jobs and leaders can create opportunities for employees to exercise this control; Collaborate, Great leaders are team builders; they create an environment that fosters trust and collaboration; Credibility, Leaders should strive to maintain a company’s reputation and demonstrate high ethical standards and Confidence, Good leaders help create confidence in a company by being exemplars of high ethical and performance standards.
Conclusion
The paper has examined the meaning of employee engagement and the financial impacts of having disengaged employees. Obviously, there is a lot of potential in having employees who are engaged. The paper has also examined how to increase employee engagement and the steps that the management can undertake to increase employee engagement. It is recommended that the objectives mentioned in the paper should be further explored to find how employee engagement can be increased.
References
Esty Katharine, 2008. Creating a culture of employee engagement. NEHRA – The voice of HR.
Harris Interactive Inc. 2009. Problems at the Top – Apathy, Contempt for Managers, PR Newswire, New York.
Seijts Gerard H, Crim Dan. 2006. What engages employees the most or, The Ten C’s of employee engagement. Ivey Business Journal Online.