There are many factors affecting employee relations in any organization. Some critical elements are leadership style, communication strategies, diversity, conflict management, employee engagement, and other aspects. Read this article to discover the most crucial internal and external factors of employee relations and how a company can use its reputation to engage its workers better.
Impact of External Factors on Employment Relationships
External factors affecting employee relationships include influences that are independent of an organization. This paper identifies technological change and legal policies as the main external influences affecting employment relationships.
Legal and Economic Policies
Government policies on employment affect employer-employee relationships. For example, government policies that promote full employment limit the bargaining power of employers by requiring them to expand their employment programs to accommodate more employees (Lewin & Keefe 2012). Such policies create an unequal bargaining power between employers and employees because they increase employee power.
Adam Smith explored this inequality (between employers and employees) in his book, The Wealth of Nations (McCreadie & Smith 2009). He said it is important for governments to manage rogue employers because many employers often wield a lot of power in capitalistic economies (McCreadie & Smith 2009). From this power, they can easily force employees to comply with their terms. Smith also said employers often use the law to combine their powers and force employees to comply with their terms (Milward 2003). In such situations, the tragedy becomes the lack of enough legislative policies to protect workers from excessive “employer power” (Elfstrom 2012).
A practical depiction of Smith’s view stems from the fact that termination of an employment contract does not disrupt the life of an employer, as it does an employee (Milward 2003). For example, after the termination of a contract, an employer can easily survive for years with his accumulated earnings. However, employees can barely survive a month without employment. Government policies that support such employer actions often promote the unfair imbalance of power between employers and employees (usually in favor of employers) (McCreadie & Smith 2009).
Two researchers, Beatrice Webb, and Sydney Webb supported Smith’s view after reviewing the 19th-century labor market (Blyton & Jenkins 2007). They explained that government policies needed to check the excessive imbalance of power between employers and employees in the labor market (Blyton & Jenkins 2007). Particularly, they said employers had more power in the labor market because of the excessive supply of labor (Blyton & Jenkins 2007).
This imbalance creates a higher pressure for employees to offer their labor to employers, than the pressure for employers to seek employee services. Both researchers explained that most employers were highly likely to exert their influence/power in the labor market, through lower wages because this strategy enabled them to increase their financial reserves (Stone 2004). Broadly, the Webbers said this situation created an unfavorable competitive environment between employers and employees because employees supplied their labor by necessity, and not because the market needed it (Blyton & Jenkins 2007).
Government policies often intervene to correct these imbalances through the enactment of labor laws. For example, since excessive labor supply may lead to biased employment and exclusion, labor laws intervene to ensure employers provide equal employment opportunities to all citizens (LaFleur & Obsitnik 2013). For example, the United Kingdom (UK) labor laws strive to promote equality in the workplace by influencing how employers design their recruitment and training programs (LaFleur & Obsitnik 2013). Similarly, government policies that promote economic growth, through full employment, ensure that the employees also benefit from employment relationships.
For example, such policies may promote the inclusion of mandatory employee protection terms into contract law (Morris 2012). Such policies may protect employees against discrimination, low wages, hazardous work situations, and the likes (McCreadie & Smith 2009). Similarly, such government policies may lead to the non-enforcement of contracts between employers and employees, if employers contravene their provisions (Morris 2012).
The Equality Act 2010 is the most instrumental legislation that promotes equality between employers and employees (Turner 2013). This law ensures that no employer discriminates employees because of their gender, religion, creed, or any other social or political status. Instead, it ensures employers provide equal opportunities to all workers (Turner 2013). The US Civil rights Act of 1964 is among the first laws to promote equality in the workplace (Cihon & Castagnera 2013). It birthed different types of laws in the UK, including The Equality Act 2010, The National Minimum Wage Act 1998, and the Working Time Regulations Act 1998 (among other laws) (Cihon & Castagnera 2013; Turner 2013). Comprehensively, these pieces of legislation show how legal and economic policies affect employment relations.
Technological Change
Historically, technology has played an instrumental role in defining employer-employee relationships (Lewin & Keefe 2012). Particularly, it has played an instrumental role in improving employer bargaining power (LaFleur & Obsitnik 2013). For example, technology has substituted human resources in production processes, thereby contributing to unemployment and increased human resource supply. Similarly, technology has decreased the value of skilled human labor because it has given employers a higher accuracy in production processes (compared to the human factors of production) (LaFleur & Obsitnik 2013).
Therefore, employers prefer to avoid human errors by using machines to substitute worker inputs. This way, technology reduces the cost of production and improves their profitability. To this extent of analysis, technology has played a significant role in improving employer bargaining power.
Comparatively, it is also important to appreciate the role of technology in creating new employment opportunities and improving employee bargaining power in the same regard. For example, today, the Information Communication Technology (ICT) sector employs millions of people, globally (Lewin & Keefe 2012). Some of the world’s biggest multinationals, such as Google and Facebook, also stem from technological growth.
Through the growth and development of this sector, technology has improved the bargaining power of employees. Particularly, it has increased the demand for skilled human resources because modern companies require tech-savvy employees. Overall, technology has played an important role in increasing and reducing the bargaining power of employers and employees using the same framework.
Internal Factors Affecting Employment Relationships
Internal factors affecting employment relationships refer to organization-specific factors that affect employers and employees. This section of the paper identifies, managerial commitment, power of labor unions, and organizational culture as the main internal factors affecting employment relationships.
Managerial Behaviour/Commitment
The behavior of an organization’s management has a significant impact on the determination of the nature of employment relations in an organization (Markos & Sridevi 2010). Different organizations have unique managerial attitudes that affect employment relations. For example, managers that adopt the authoritarian leadership style are likely to experience a “shallow relationship” between management and employees (Markos & Sridevi 2010).
However, managers that adopt the democratic leadership style are likely to enjoy a closer relationship with their employees because they support an open line of communication between them and their employees (Gennard & Judge 2010).
Furthermore, such groups of managers often exhibit a stronger commitment to better the relationship between management and employees. Comparatively, managers that exercise the authoritarian leadership style demonstrate a lesser commitment to improving employer-employee relations (Gennard & Judge 2010). Management behavior therefore greatly influences the relationship between employees and employers because it sets the tone of engagement in the organization. According to Gennard & Judge (2010), if employees trust their leaders, they are likely to have a positive attitude in the organization.
Similarly, Markos & Sridevi (2010) say, when employees perceive their leaders as honest and trustworthy, they are bound to reciprocate the same virtues with improved productivity. Specifically, leaders who demonstrate these traits are likely to influence other people in the organization to follow their example (Markos & Sridevi 2010).
Managerial attitudes towards employees also significantly affect how labor unions respond to managerial strategies. Although this paper explores the role of labor unions in the subsequent section of this report, it is crucial to highlight that managerial attitudes play a crucial role in determining the possibility that these unions and management would differ over organizational issues (Markos & Sridevi 2010). Some issues that have emerged in many organizations are the formulation of internal organizational procedures for communication, the enforcement of disciplinary actions against employees, and frameworks for resolving employee grievances (Gennard & Judge 2010).
Managers and workers have had trouble agreeing on a common framework for managing such organizational problems (Gennard & Judge 2010). Markos & Sridevi (2010) say when managers prefer to exercise absolute authority in such matters, they are likely to differ with workers, thereby creating tensions in the organization. This tension may affect the effectiveness of how managers and employees work, or how both parties would co-exist in the organization. Based on this background, managerial attitudes are critical in managing employment relations.
Power of Labour Unions
The strength and power of labor unions often influence the quality and nature of relations between employers and employees (Wright & Bastos 2012). Powerful labor unions often bargain for favorable terms and conditions for workers (Gennard & Judge 2005). Therefore, they are likely to push management boards to treat their workers more favorably than organizations that have weaker unions. The influence of labor unions is more significant in big organizations, like giant multinational companies (Aswathappa 2005). Such organizations have powerful labor unions that represent large employee populations. The large sizes of their memberships often exert a lot of influence on managerial boards (Wright & Bastos 2012).
The influence of labor unions affects employment relations because they shape the attitudes of employees towards their organizations (Aswathappa 2005). Indeed, since most of such unions represent the interests of their workers, they exert a lot of influence on them as well. Therefore, often, employees follow the direction of their union leaders (Wright & Bastos 2012). If they call for a strike, the employees are often likely to heed to their demands and paralyze organizational activities.
Similarly, if unions portray a negative image of an organization’s management (say, they portray them as unfriendly and insensitive to employee needs), the employees are likely to develop an equally negative image of management, thereby severing employment relations (Wright & Bastos 2012). For example, labor unions have been highly instrumental in influencing employment relations in the EU airline industry (Bercusson 2009).
Illustratively, in 2008, British Airways experienced the threat of a strike when more than 3,000 pilots, who work for the company, voted for a strike to protest an open-skies policy, which created a separate group of pilots to operate from Heathrow airport (Bercusson 2009). The company’s management responded by outlining unspecified actions against the union. This move created tensions between the company and its employees (Bercusson 2009). Particularly, it stalled negotiations between the company and employees (Bercusson 2009). Without delving further into the details of the case, this example shows how powerful unions can influence employment relations in different companies. This analysis also shows that labor unions influence employee relations in different organizations.
Organisational Culture
Stanford (2011) defines an organization’s culture as a set of intangible norms that define organizational practices. Every organization has a special organizational culture that sets it apart from other organizations. An internal organizational culture plays an instrumental role in influencing employment relations between employees and employers. For example, Moore (2006) says the organizational culture of Starbucks demands that its employees provide customers with friendly services, and in a welcoming atmosphere. The organization also promotes increased flexibility in the number of hours that an employee can work (Stanford 2011).
Comparatively, Starbuck’s organizational culture differs from the organizational culture of the police service. MacVean & Neyroud (2012) say the organizational culture of the police service focuses on “getting the job done.” Similarly, as opposed to being welcoming to people, the police service is more focused on protecting the citizens (MacVean & Neyroud 2012). Company cultures that focus on punishment as opposed to the reward are also likely to affect employee behaviors in the same manner. According to Redsteer (2014), such cultures instill fear among employees, thereby creating low morale in the organization.
Particularly, such cultures create a longer power distance between managers and employees (Redsteer 2014). However, organizational cultures that appreciate unique employee contributions in the organization foster a better relationship between managers and employees. Cultures that focus on rewards as opposed to punishment also provide the same outcome. Overall, it is pertinent to emphasize the influence of organizational culture on employment relationships.
Impact of Leadership and Subordinate Styles on Employee Relationships
Employee performance is crucial for the survival of many organizations. Mainly, service-oriented businesses and small businesses depend on employee performance for their success (Myrna 2012). However, employee performance depends on the effectiveness of leadership styles (Gennard & Judge 2010). Buisman (2009) says that poor leadership styles may negatively affect the relationship between employers and employees, thereby frustrating the process of realizing organizational goals. From this assessment, Buisman (2009) suggests that hiring effective leaders may provide enough impetus to help organizations realize their goals.
Leadership styles fall into four broad categories – charismatic leadership, transactional leadership, passive leadership, and authoritarian leadership (Markos & Sridevi 2010). As outlined below, these leadership styles have different influences on employment relations.
Charismatic Leadership
In a study meant to evaluate the effects of leadership styles on employee performance, Buisman (2009) reported a direct correlation between charismatic leadership styles and increased job satisfaction. Since there is a strong consensus regarding this relationship, Buisman (2009) affirms that improved employee relationships exist when leaders adopt the charismatic leadership style, as opposed to less participative leadership styles. This outcome is common in many organizations because charismatic leaders treat their employees with respect (Tumlin & Baldi 2013). The likelihood that both groups (employers and employees) develop mutual trust between themselves is also high.
Many research studies show that charismatic leadership styles instill a strong sense of confidence among employees because charismatic leaders respect the opinions of their employees (Myrna 2012; Tumlin & Baldi 2013). This harmony does not mean employees and employers do not have any disagreement. However, when they do, charismatic leaders make employees feel respected for their contributions to the organization (Tumlin & Baldi 2013). This leadership style ensures there is minimal tension between employers and employees.
Transactional Leadership
Buisman (2009) says transactional leadership contains two main components that influence employee-employer relationships – contingent reward and management by exception. The contingent reward strategy works by influencing employee behavior by rewarding positive behaviors (Roberts & Levine 2013). Management by exception refers to the establishment of a common benchmark for employee behavior and the comparison of these behaviors with the benchmarks. Management by exception may be active or passive, but in its active form, a manager prevents the occurrence of a mistake (Markos & Sridevi 2010).
However, in its passive form, the manager waits for mistakes to happen, and corrects them afterward. Research shows that rewarding positive employee behavior (through effective leadership) improves employee-employer relationships (Womack 2012).
Research also shows that active management has a positive impact on the same relationship (Buisman 2009). However, passive corrective actions hurt employee-employer relationships. Nonetheless, based on the positive effect of active management on transactional leadership, this leadership style is synonymous with positive employer-employee relationships. Researchers always expect that this leadership style will have a positive effect on employee satisfaction (Crail 2013). Furthermore, in situations where a conflict arises between employees and employers, the transactional leadership style often articulates how the two parties could solve the dispute. In other words, this leadership style clarifies the expectations of both parties, thereby leading to harmony in employment relationships.
Passive Leadership
As opposed to the transactional and charismatic leadership styles, the passive leadership style negatively affects employer-employee relationships (Buisman 2009). Since passive leadership styles often avoid conflict between employers and employees, it fails to solve the problems that face them, thereby creating a negative influence on employment relationships (Ross 2012). In fact, according to Buisman (2009), the tendency for the passive leadership style to avoid conflict amounts to the absence of leadership. Unlike the transactional leadership style that identifies the expectations between employers and employees, the passive leadership style gives a lot of freedom to employees, thereby creating a lot of uncertainty regarding employee behavior because the employees do not understand what to expect if they exercise this freedom (Ross 2012).
Based on this outcome, Buisman (2009) suggests that clarity is important in shifting the focus from conflict to other issues that would improve the relationship between employers and employees. This is a weakness of the passive leadership style. Furthermore, unlike the charismatic leadership style, the passive leadership style does not respect employees because when employees seek to know the value of their contributions to the organization, they face an “avoidant” leader (passive leader) (Buisman 2009). Passive leaders increase tension with their employees, thereby creating a conflict between managers and employees (Gennard & Judge 2010).
Autocratic Leadership
The autocratic leadership style has the same effect on employer-employee relationships, as passive leadership styles do. Buisman (2009) conducted a meta-analysis to evaluate the effects of autocratic and charismatic leadership styles on employee job satisfaction and showed that charismatic leadership style was preferable to improve employee job satisfaction, as opposed to the autocratic leadership style. However, about a quarter of the cases analyzed showed that the autocratic leadership style did not have a significant impact on employee job satisfaction (Buisman 2009). This outcome meant that the autocratic leadership style either had a negative or neutral, impact on employee job satisfaction.
Concerning the existence of conflict between employees and employers, when autocratic leadership is active, Buisman (2009) found that, unlike the passive leadership style, the autocratic leadership style outlines a clear line of expectations between employers and employees. Therefore, it minimizes conflicts between employers and employees. However, Buisman (2009) cautions that this conflict minimization advantage does not reduce tensions between employers and employees. Therefore, he clarifies that this advantage is only limited to the minimization of uncertainty in employment relationships (Buisman 2009).
Overall, the autocratic leadership style creates tension between employers and employees (Runde 2013). This situation limits the possibility of cordial relations between employers and employees.
Impact of Employee Involvement on Employment Relationships
According to Moschetto (2013), employee involvement involves the formulation of key organizational decisions by incorporating employee inputs in decision-making processes. A broader perspective of the meaning of employee involvement shows that the concept involves two issues – the ability of employees to state their grievances to management and the ability of management to respond to these grievances by including employees in the decision-making process of the organization (Moschetto 2013).
Here, employee involvement is unrestricted to the inclusion of employees in the decision-making process (only) because it also involves the protection of employee welfare (Moschetto 2013). From this background, employee involvement has a significant impact on employment relationships. This impact has manifested in different ways. However, the scope of this analysis shows that it is constrained to influencing job satisfaction, worker productivity, and employee loyalty/commitment to the organization.
Job Satisfaction
Job satisfaction is an important indicator of the quality of employment relationships in an organization. However, job satisfaction greatly depends on employee involvement. For example, Markos & Sridevi (2010) say a high employee turnover often emerges from a high level of job satisfaction in an organization. Many scholars define job satisfaction as the gap between employee desires and the organizational terms and conditions of work (Markos & Sridevi 2010; Moschetto 2013).
Employee involvement affects job satisfaction because valued employees are often satisfied, employees. Certainly, when managers involve their employees in key decision-making processes, the employees can share their ideas, concerns, and opinions regarding job processes, thereby improving their sense of job satisfaction. However, when employee involvement in an organization is low, the level of job satisfaction is also bound to be low because employees would feel less respected and valued by their managers (Gennard & Judge 2010). This outcome is undesirable for an organization because dissatisfied employees cannot effectively use organizational resources for maximum productivity (Moschetto 2013).
However, by involving employees in organizational processes, they become more creative and committed to organizational tasks, thereby improving employment relations in the organization as well. According to Gennard & Judge (2010), many managers would benefit from increased employee involvement because many workers wish to do more than their normal organizational tasks. Therefore, involving them in the organizational process creates a motivation for stretching their limits beyond what the management directs them to do.
Employee Productivity
Many managers value-productive employees (Gennard & Judge 2010). Often, productive employees share a good relationship with managers. The reason for the existence of this positive relationship is the ability of productive employees to provide innovative solutions to organizational problems. According to Gennard & Judge (2010), people should understand the concept of employee productivity, based on how effective and efficient employees are.
Effectiveness and efficiency often exist in organizations that understand and practice employee involvement. Based on the above analysis, it is imperative to say, employee involvement symbolizes a modern style of participatory management that increased employee productivity (WMP 2013). Furthermore, through the influence of employee involvement on job satisfaction, organizations experience increased productivity by having a satisfied workforce. Marescaux & DeWinne (2013) adds that a participatory organizational environment allows employees to develop their skills and sharpen their contributions to the organizational decision-making process. Overall, through this assessment, employee involvement not only improves employee productivity but also improves the quality of their contributions to the organization.
Employee Commitment/Loyalty
Many researchers argue that employee commitment is critical to the success of any business. According to Gilbert (2012) employee commitment refers to the congruence between organizational and employee goals. Based on this definition, Webster (2012) says many employees show high levels of commitment to organizational strategies that they have participated in formulating. This analysis shows the link between employee commitment and employee involvement because employee involvement provides the platform for employees to participate in organizational decision-making processes (Buckingham & Coffman 2005).
These processes lead to the formulation of organizational strategies that the employees understand (Gilbert 2012). By associating with these strategies, employees became committed to ensuring their success. Consequently, they demonstrate a high sense of commitment to the organization (Buckingham & Coffman 2005).
According to a British study conducted by Crail (2013), employee involvement in organizational decision-making processes improves their commitment to the organization. The same study showed that most companies, which did not involve their employees in the decision-making process made it difficult for their employees to relate to their organizational goals (Crail 2013). This study shows that employee involvement has a significant impact on how successful organizations develop.
Based on this analysis, Moschetto (2013) warns that the failure to have a mechanism where employees could be involved in an organization’s decision-making process may prevent the possibility of organizations meeting their targets. Similarly, this statement shows that employee commitment has an equally significant impact on determining organizational performances (Crail 2013). This outcome improves employment relations in the workplace because the fulfillment of organizational tasks is a key management goal (Moschetto 2013). The commonality in fulfillment of organizational tasks converges the interests of managers and employees, thereby improving employment relations in the same regard.
After taking into account the issues highlighted in this paper, it is imperative to say employee involvement improves employment relations by creating the right environment for employees to share ideas and innovation. According to, Markos & Sridevi (2010) managers that do not involve their employees in organizational tasks are likely to suffer from increased employee turnovers and a high absenteeism level in the organization. To support this view, a study conducted by Buisman (2009) to evaluate the impact of employee involvement in employment relationships in British firms showed that employee involvement shared a positive correlation with job satisfaction. Thus, the failure to include employees in key decision-making processes demoralizes them and limits the extent of employee innovation in the organization.
Key Drivers for Engendering Employee Engagement Strategies
Markos & Sridevi (2010) say many scholars have varying definitions of employee engagement. However, common definitions of the concept propose that employee engagement involves the establishment of a positive emotional connection with an employee’s work (Corporate Leadership Council 2004). The CIPD says engaged employees are workers “who do their best” (Gennard & Judge 2005).
CIPD also defines engaged employees as those who strive to identify with organizational decisions and values (Gennard & Judge 2005). A broader analysis of the CIPD’s understanding of the concept shows that employee engagement comprises of three elements – cognitive engagement, physical engagement, and emotional engagement (Corporate Leadership Council 2004). Through this definition, the emotional connection is affective and normative.
Analysts expect organizations that have effective employee engagement strategies to benefit from improved employee productivity because engaged employees often go beyond their prescribed duties to complete organizational tasks (Corporate Leadership Council 2004). However, this section of the paper focuses on the structure and effectiveness of employee engagement by identifying its key drivers. They include leadership, voice and participation, employee rewards, communication, and organizational reputation. They outline below
Leadership
Within the context of identifying the key drivers of employee engagement, Markos & Sridevi (2010) proposes the need to ignore the distinction between leadership and management. He says people could use both concepts interchangeably to introduce and guide employee engagement in an organization. However, leadership has a stronger influence on employee engagement than management. According to a 2013 report on global engagement, Hewitt (2013) says that, averagely, more than half of the global employee population views their leaders positively. A deeper analysis of this report shows that many of the employees surveyed in the study came from organizations where company CEOs showed interest in employee welfare (Hewitt 2013). They mainly championed employee engagement efforts in the organization and received recognition because of this fact.
From the pivotal role played by organizational leaders in steering employee engagement programs, Russell & Russell (2010) suggest that the success of employee engagement mainly depends on the willingness of leaders to embrace the same process because if they do not drive employee engagement efforts, no other person will do it. Therefore, Russell & Russell (2010) believe that the first step for developing an effective employee engagement strategy is securing managerial support. They also say that although this process is time-consuming, it is the first step in identifying the key drivers for engendering an effective employee engagement strategy (Russell & Russell 2010).
Securing top-level management support is important in gathering relevant information that would be useful in developing the employee engagement strategy. Furthermore, managerial support would be useful in ensuring an organization acts on these findings by including them in the design of the employee engagement strategy (Russell & Russell 2010). Through this initiative, the top-level management should understand the importance of having an effective employee engagement strategy and the possible consequences of not having it. This way, they would be part of the solution for formulating action strategies that would strengthen the employee engagement strategy.
Addison & Demet (2012) say that a good place to start securing managerial support is highlighting how the employee engagement strategy would affect the key performance metrics of the organization. For example, showing how the employee engagement strategy would improve the financial performance of the organization is a key step in convincing management to support the initiative.
Illustratively, employee engagement reduces the rate of employee turnover, thereby reducing the costs of hiring and training new employees (Russell & Russell 2010). Similarly, an organization can benefit from improved financial performance of satisfied employees because engaged employees often provide high-quality services to customers (Addison & Demet 2012). The satisfied employees would improve the financial performance of the organization by improving the sales level. Finally, an organization can benefit financially from increased shareholder value when it has engaged employees (Russell & Russell 2010).
Nonetheless, Russell & Russell (2010) say highlighting the financial benefits of employee engagement is one strategy that many leaders could use to secure managerial support. Other strategies could equally yield the same result. Overall, it is pertinent to secure management and leadership support in employee engagement strategies, as a key driver of the same.
Employee Rewards
Career Growth
Research shows that many employees are disappointed with the limited levels of opportunity for career growth in their organizations (Addison & Demet 2012). In fact, according to Hewitt (2013), only about 47% of employees believe they can benefit from existing career growth opportunities in their organizations. From a talent management perspective, analysts highlight the difficulty of sharing career growth opportunities among all employees (especially for big companies) (Addison & Demet 2012). Gennard & Judge (2005) say, ideally, managers should give these opportunities for career growth to highly trained and motivated employees.
Providing employees with an opportunity to grow ensures they operate in an environment where they encounter new challenges and can develop from them. Frequent interactions between employers and employees are important prerequisites for the provision of this supportive atmosphere for growth (Addison & Demet 2012).
The opportunity for growth also closely intertwines with the creation of meaning from work. Hewitt (2013) believes that many employees want to derive meaning from their work. She says when managers create meaning for employee work; they help to bring employers and employees together. Particularly, she says employees need to feel a sense of community in the organization, where they can contribute to the organization and find meaning in their work (Hewitt 2013). From this model, researchers have formulated a hierarchy of engagement where managers engage their employees by satisfying different needs in their lives (Gennard & Judge 2005).
This model resembles Maslow’s hierarchy of needs, which explains that many employees are motivated to work by meeting different levels of needs (Hewitt 2013). At the bottom of this pyramid is pay and benefit needs (Hewitt 2013). The second level of needs is development opportunities for the employees (Hewitt 2013). Mainly, employees look for opportunities to advance their careers when they meet this level of need (Gennard & Judge 2005). After satisfying this level of need, the employees look for meaning in their work. At this stage, the employees look for a strong sense of connection between their purpose in life and the work they do (Hewitt 2013). A common purpose to work informs this stage.
An independent British study showed that more than 60% of employees would want to work in an organization that provides them with the opportunity to grow (Addison & Demet 2012). The provision of opportunities for growth is one among five factors identified by Hewitt (2013) as crucial in the development of employee engagement programs. The other four factors include aligning employee efforts with organizational strategy, empowering employees, encouraging teamwork, helping and providing support to employees, and recognizing employee contributions (Hewitt 2013).
Finally, Hewitt (2013) says management support is not only limited to supporting employee engagement programs; it also stretches to the improvement of employee welfare. In this discussion, Hewitt (2013) focuses on highlighting the importance of involving employees in an organization’s decision-making process. Here, he says, the initiative for management to make their employees feel valued and involved is a key driver of employee engagement (Hewitt (2013) developed this view after sampling the views of more than 10,000 NHS employees in the UK).
Pay
According to Hewitt (2013), employee pay is a key driver in developing employee engagement strategies. In fact, according to his ranking, the pay is among the top three key drivers of employee engagement (Hewitt 2013). Particularly, the trend by today’s companies to hire employees on a contract basis has elevated the importance of salaries in employee engagement because employees (with a short-term loyalty to an organization) value their salaries more than employees with long-term contracts do. According to Hewitt (2013), about 40% of the global workforce believe that their employers pay them properly for their work.
This percentage is a significant improvement from previous years because previous studies showed that the percentage of employees who were dissatisfied with their pay was more than 50% (Addison & Demet 2012; Hewitt 2013). Therefore, there has been a global improvement in employee pay. The need for skilled talent and the growing influence of inflation and economic pressures seem to have increased the need for employers to increase the pay package of their employees (Addison & Demet 2012; Hewitt 2013).
Studies that have evaluated key performance indicators around the world show that some sections of the globe value salary more than others do (Addison & Demet 2012; Hewitt 2013). For example, Hewitt (2013) says workers in the Asia Pacific and Latin America regions value their salaries more than other benefits of employment. Therefore, many organizations in these regions use improved salaries to attract and retain employees.
The same study shows that many employees do not believe their employers appreciate the value of salaries to their employment relationships (Hewitt 2013). This realization forced Addison & Demet (2012) to suggest that most managers should redesign their employee engagement strategies to reflect this concern. Overall, it is also important to accept the limits of employee pay because Buckingham & Coffman (2005) say salaries only help to build the foundation of employee engagement, but it does not guarantee the success of the engagement.
Employee Recognition
Employee recognition is important in improving employee engagement strategies. However, unlike financial rewards, it is less costly for management. The design of employee recognition programs is the duty of managers and leaders (Hewitt 2013). Krats & Brown (2013) say many employees do not only want recognition for their contribution to the organization because they also need an appreciation for the difficult nature of the jobs that they do.
A global survey index reported that only about 48% of the global workforce receives this recognition (Hewitt 2013). The same survey shows that although many businesses experience increased business competition, the global rate of employee recognition has increased (Hewitt 2013). Conversely, more employees express the willingness to be to their employers (Krats & Brown 2013).
Metaphorically, Watson (2009) compares the contribution that employee recognition offers companies to the additional power that turbo-charging provides car engines. Both measures help to improve performance. A deeper analysis of this finding shows that employee engagement helps to increase the level of engagement by close to 60% (Watson 2009). An assessment of employee engagement from an employee view also shows that when employee engagement occurs, the percentage of employees who give a favorable score of employee engagement increases from 33% to 52% (Watson 2009).
Organizations that have inculcated a culture of equal opportunity and support positive employee wellbeing report a less dramatic effect of employee recognition (although, they report a rise in employee engagement) (Krats & Brown 2013). Compared to organizations that do not provide equal opportunity for growth, these organizations report a 20% increase in employee engagement (Watson 2009). Since these organizations already have a culture of positive employee treatment, the effect of employee recognition is, therefore, less dramatic.
When Watson (2009) further assessed the organizational contexts of employee recognition, he found out that most employees felt more recognized in team or group settings. Therefore, he established that most employees felt most respected in situations where their peers witnessed their recognition (Watson 2009). Broadly, this analysis shows that the effect of employee recognition was less dramatic when an employee from an unfamiliar department gained recognition for impressive organizational performance.
Therefore, effective employee recognition practices work more effectively in departmental contexts. Overall, it is pertinent to mention that improved employee recognition increases the level of employee engagement. Overall, based on an understanding of employee recognition, pay, and career growth, we see that employee reward is a key driver in employee engagement.
Communication
According to a survey of more than 2000 employees in the UK, Vance (2006) established that communication was a key driver in employee engagement strategies. This view conveys different antecedents of engagement because Vance (2006) shows that communication should include different players in an organization. For example, he says informing employees about the different activities of the organization is crucial in formulating an effective engagement strategy (Vance 2006).
Based on this understanding, Clifton (2008) mentions the important role played by managers in maintaining an engaged workforce. The Chief Executive Officer (CEO) of a UK company, Gallup Organisation, says that it is highly important for managers to maintain an engaged workforce because he believes employees who share close relationships at work are more engaged (both with their colleagues and the management) (Vance 2006).
Through this assessment, Vance (2006) believes that employment practices are important in steering employee engagement practices. To explain further the relationship between employer practices and employee engagement, Clifton (2008) says employee engagement is a function of a job performance model. Within this model, employee engagement is a function of “personal attributes, such as knowledge, skills, abilities, temperament, attitudes and personality, and organizational context which includes leadership, physical setting, and social setting and HR practices that directly affect the person, process and context components of job performance” (p. 92).
Overall, Clifton (2008) says most of the drivers that lead to employee engagement are non-financial and therefore most organizations can achieve a high level of engagement without using many financial resources. Clifton (2008) suggests that effective leadership can easily help to achieve this purpose. However, this analogy does not suggest that financial resources are useless in improving employee engagement. However, it is important to understand the relevance of the age-old saying, which suggests that since people are social beings, finances cannot solely meet our needs.
Organizational Reputation
Different organizations have unique reputations that communicate business purposes and values. Stated differently, Jappy (2013) understands a business’s reputation as the image it projects to the market. Jappy (2013) says few employees can answer what their organizations stand for. According to his analogy, the greatest failure of managers, when they want to formulate successful employee engagement strategies, is the inability to identify what organizations stand for is (Jappy 2013). Palmer (2013) concurs with this idea by saying that many organizations need to communicate a common message with their employees, which they can use to attract and retain their workers.
From the above assessment, it is correct to emphasize the importance of organizational reputation on a business’s success. Particularly, it is more important to emphasize the role played by organizational reputations in improving employee engagement because Gennard & Judge (2010) say employee engagement lowers employee turnovers, helps to recruit better employees, and creates a bigger pool of loyal customers.
By extension, Gennard & Judge (2010) suggest that organizational reputations also help organizations to create partnerships that are more fruitful with external stakeholders. In turn, there is a high likelihood that the same stakeholders would support the organization whenever there is a controversy in the organization (Palmer 2013). Experts estimate that an organization’s reputation accounts for more than 59% of its corporate value (Gennard & Judge 2010). For example, Palmer (2013) says about 50% of a company’s reputation depends on the reputation of its CEO. However, the main message underlying this statistic is the role played by organizational reputations in building employee engagement platforms.
Many successful organizations around the world understand the importance of having a strong reputation. For example, Google, Disneyworld, and Amazon are a few companies that have a strong reputation for engaging their employees. Gennard & Judge (2005) advise companies that do not have this strong business reputation to understand their business performances, social responsibilities, and general impressions as the main factors informing their business reputations. Particularly, it is important to incorporate these three factors in conveying the business reputation to the public because employee views play a pivotal role in informing their approach and engagement with the organization (Gennard & Judge 2005).
Overall, organizational reputations depend highly on the trust that most employees put on the organization and its management. Therefore, employee engagement and the alignment of employee needs with organizational needs is a critical aspect of building successful organizations. Moore (2006) advises that if this happens, companies should ensure they “communicate their way” to improve their reputations. Companies should especially refrain from engaging in corporate misconduct, or producing poor quality products because research shows that (mainly) these reasons account for reputational damage.
In an article aimed at exploring the relationship between employee well-being and company reputation, Palmer (2013) says that the importance of organizational reputation (on employee engagement) stems from the interrelationship that both factors share. Illustratively, Palmer (2013) says there has been a proliferation in the number of channels that many employees use to air their views regarding a company.
For example, social media channels outline one platform that is commonly used by customers and employees to share their views regarding a company. Consequently, these views shape organizational reputations. A new study has found out that because of the openness of the relationship between employers and employees, employee wellbeing intertwines with company reputations (Palmer 2013).
For example, if a company gains the reputation of being a fraudulent company, its employees would gain the same reputation, possibly by association. A study conducted by France’s Neoma business school shows that employee well-being has significantly influenced the social media presence and reputations of modern companies (Palmer 2013).
Researchers Katariina Karlsson and Janne Tienari (cited in Palmer 2013) say the closeness of employee well-being and organizational reputations stem from the strong influence of word-of-mouth communications in employer-employee relationships. Particularly, both researchers stress that many organizations need to focus on the freedom they give to employees to balance their work and private lives because it significantly affects their reputation and the quality of employer-employee relationships (Gennard & Judge 2005).
Therefore, based on the above findings and the close relationship between organizational productivity and employee welfare, it is pertinent to say organizational reputation plays a pivotal role in employee engagement. Organizations, therefore, attract employees who share their reputation, or who would like to be associated with the organization’s reputation. This way, organizational reputations provide companies with a platform for engaging their employees.
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