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Employee engagement

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  2. TABLE OF CONTENTS  EXECUTIVE SUMMARY……………………………………………………………………Page 5.  INTRODUCTION………………………………………………………………………………Page 6.  OBJECTIVE……………………………………………………………………………………...Page 11.  RESEARCH METHODOLOGY…………………………………………………………….Page16.  DATA ANALYSIS & INTERPRETATION…………………………………………………Page 13.  RECOMMENDATION & CONCLUSION………………………………………………Page 31.  APPLIED VALUE……………………………………………………………………………….Page 33.  REFERENCES……………………………………………………………………………………Page 37. 2
  3. EXECUTIVE SUMMARY Employee engagement, also called work engagement or worker engagement, is a business management concept. An "engaged employee" is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers their organization's interests. According to Scarlett Surveys, "Employee Engagement is a measureable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn & perform at work". Thus engagement is distinctively different from satisfaction, motivation, culture, climate and opinion and very difficult to measure. 3
  4. INTRODUCTION Employee engagement was described in the academic literature by Schmidt et al. (1993). A modernized version of job satisfaction, Schmidt et al.'s influential definition of engagement was "an employee's involvement with, commitment to, and satisfaction with work." This integrates the classic constructs of job satisfaction (Smith et al., 1969), and organizational commitment (Meyer & Allen, 1991). Harter and Schmidt's (2003) most recent meta-analysis can be useful for understanding the impact of engagement. Linkage research (e.g., Treacy) received significant attention in the business community because of correlations between employee engagement and desirable business outcomes such as retention of talent, customer service, individual performance, team performance, business unit productivity, and even enterprise-level financial performance (e.g., Rucci at al, 1998 using data from Sears). Some of this work has been published in a diversity context (e.g., McKay, Avery, Morris et al., 2007). Directions of causality were discussed by Schneider and colleagues in 2003. 4
  5. Employee engagement is derived from studies of morale or a group's willingness to accomplish organizational objectives which began in the 1920s. The value of morale to organizations was matured by US Army researchers during WWII to predict unity of effort and attitudinal battle- readiness before combat. In the postwar mass production society that required unity of effort in execution, (group) morale scores were used as predictors of speed, quality and militancy. With the advent of the knowledge worker and emphasis on individual talent management (stars), a term was needed to describe an individual's emotional attachment to the organization, fellow associates and the job. Thus the birth of the term "employee engagement" which is an individual emotional phenomenon whereas morale is a group emotional phenomenon of similar characteristics. In other words, employee engagement is the raw material of morale composed of 15 attitudinal drivers (e.g. Scarlett 2001). 5
  6. Engagement - The New-Age Magic Wand “HR must strive to give people the new tools they need to thrive in The New Economy of Consciousness, specifically, techniques that expand creativity” It is believed that game-changing research is about to revolutionize HR, training and employee development. For decades, companies said, People are our most precious asset, and then treated people as anything BUT assets. Why? Because business enthusiastically (and quite erroneously) thought CEO’s strategy was the only road to success. Referring to the state-of-the-art research by Towers Perrin who studied 3, 60,000 employees from 41 firms in 18 countries and found that when people were engaged, companies were profitable. The study reported that highly engaged people grew profit by 19.2 per cent but profit fell by 32.7 per cent, when people were disengaged. “So is leadership irrelevant? Hardly! Only great leadership can inspire people to get engaged”. For those who see the link between people, values and profit, a new day is dawning 6 for HR.
  7. The downturn shattered the illusion of the charismatic CEO, who is ironically known as the hero who parachutes into the company, waves the magic wand and saves the day with cost cuts, especially jobs and a high profile (but impossible to execute) merger. “Unfortunately, the magic wand does not work anymore. New research cited this year in the Wall Street Journal shows that large-scale job cuts shrink profit and stock returns, for as long as nine years after a recession.” The only way to sustain long-term success is through employee engagement. “Under growing pressure of finance, some trainers are getting back to the drawing board and innovating, considering the work of US-based Business Advisors Network. The new wealth and jobs are created primarily through the genius of human consciousness than manipulation of information. “Every great product that has ever hit the market (i.e. an Apple iPod, Herman Miller Aeron chair, a Tata Nano car), got there through the genius of human consciousness.” In the new economy of consciousness, companies that excel at innovation are most successful and that is where 7 Six Sigma fails. “As one expert puts it, Six Sigma is narrowly designed to fix an existing process, allowing little room for new ideas or an entirely different approach”.
  8. HR professionals must strive to give people new tools they need to thrive in The New Economy of Consciousness, specifically, techniques that expand creativity and innovation. Google engineers devote 20 per cent of their time to pet projects. Twice a week, it hosts employee meditation hours featuring brain scientists and Tibetan monks, among others. “How successful would India, the birthplace of mindful silence, become if its corporations were to activate the home-grown strength of meditation?” 8
  9. OBJECTIVE When employees are engaged they are emotionally attached to the vision of the organization. They believe in what they do, the organization’s vision and the direction the organization is going. Employees who are engaged put their heart and soul into their job and have the energy and excitement to give more than is required of the job. Engaged employees are committed and loyal to the organization. Here are some tips on how to foster employee engagement:  Have a well defined vision that all employees buy into. Organizational leadership is responsible for communicating the vision and keeping it in front of the employees. Employees should be able to recite the vision statement and why the organization does what it does.  Good communication within the organization can be one of the most important things an organization can do to foster employee engagement. Employees spend one third of their life in their job and have an interest in what is going on within the organization. They desire to know how the organization is doing financially, how corporate objectives are being 9 accomplished and how what they do contributes to achieving corporate objectives.
  10. Employees need to feel like they do meaningful work and that what they do makes a difference.  Employees want the opportunity to develop and grow professionally. Provide employees opportunities to develop and grow in their job and within the organization.  Create a strong team environment. Strong employee engagement is dependent on how well employees get along, interact with each other and participate in a team environment.  Create a culture of trust. Employees need to trust each other as well as their leadership. Employees are constantly watching leadership to see how their decisions affect the strategic direction of the organization and if their behaviors reflect what they say.  Employees need to know what is expected of them and need to be given the training, tools and resources to accomplish their goals. They need to be held accountable for achieving their goals. 10
  11. Employees need to feel validated and that they are a valued part of the organization. Leadership needs to show how much they care for their employees and show recognition for efforts.  Employees need to feel like they are part of the process, that their thoughts and ideas matter and that they have a voice in how their work is performed.  Employees need to feel like they belong to a community, a team, a family. For many employees, coworkers are the only family they have, so maintaining a work environment where all employees get along and work well together is very important.  There is a lot of research that supports the fact that employees leave organizations because of their direct supervisor. Strong employee engagement cultures foster manager and leadership development.  Competitive compensation, benefits and reasonable working conditions can also significantly impact employee engagement. 11
  12. Employee engagement activities Employee engagement activities / programs  Picnic at regular intervals  Movie at interval of 2 months  A daily column, written by CEO, on the intranet with company announcements / programs etc.  Update via an overhead paging system, which is used to recognize employees for significant business achievements.  Employee suggestion systems / quick responses.  Replay on the intranet about the president’s / CEO’s press conference.  Live version of internal house magazine.  CEO spending time in face to face communication with staff. 12  CEO based FAQ questions on company business.
  13. 10. ONLINE “asks the CEO” mailbox.  11. Monthly staff awards  12. Annual staff awards  13. Weekly blog related to serious business issues and staff to read / comments.  14. Appointment of disaster management team  15. Appointment of emergency management team  16. Problem solving committee.  17. Quality assurance committee.  18. Conducting soft skills training program as well as required training programs  19. Online real-time tracking of progress. Employees can view company progress towards targets / goals.  20. Provide long term strategic vision for business growth.  21. Indoor Games as well as Outdoor games, like Chess, Cricket, Badminton 13 etc..  22. Celebration of Employees Birthday
  14. RESEARCH METHODOLOGY Employee engagement, also called work engagement or worker engagement, is a business management concept. An "engaged employee" is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers their organization's interests. The assignment on an Employee Engagement required a detailed view of an employee. This requires a change in the methodology of the research. We carried out a live research on a company and its employees. The company Bhusan Steel is the crux of this research. The appointment of the manager of the company, Mr. Enabled us to deal with Mr.Manoj Sehgal, the factory supervisor of the company. His kind cooperation on the basis of his association with his fellow employees supported us to fetch the relevant datas which is noted later in this project. The minor part of this project, first complemented with the help of certain internet sites, delivering us with some important statistics and data related to Employee Engagement. With the concatenation of the live survey and the online research, the project has reached its heights. We have tried to despatch 14 the appropriate data collected from the field and thus, are successful in rendering our project.
  15. DATA ANALYSIS & INTERPRETATION DATA: To complement the project on Employee Engagement, we had to make a detailed research on a particular company. The company for our research is Bhushan Steel Ltd., located at Delhi road is the largest manufacturer of auto-grade steel in India and is spending Rs.260 billion to expand its capacity to 12 million tonnes annually, from the present installed capacity of around one million tonnes with Brij Bhushan Singhal, as its chairman and Neeraj Singhal, as its Managing Director. Its main products are Cold rolled, galvanized, Bhushan Galume, colour coated tiles, drawn tubes, strips, wire rods, alloy billets, sponge iron .The major part of this research was completed with the polite cooperation of Mr.Manoj Sehgal, Factory Supervisor of the company, who basically deals with the employees of the factory. Following are the datas fetched from him: 15
  17. Please tick mark the relevant answer as provided against each question. My Job Strongly Disagree Neutral Agree Strongly Disagree Agree 1. I have the right tools and resources to do my job well. 2. I have the training and skills I need to do an excellent job. 3. The amount of work I am expected to do is reasonable. 4. My talents and abilities are used well in my current position. 5. I feel that my work is important to the success of this company. 6. I am satisfied with the level of pay I receive. 17
  18. My Co-workers Strongly Disagree Neutral Agree Strongly Disagree Agree 7. The people I work with help each other when needed. 8. My co-workers and I share information and new ideas. 9. My co-workers do their best. 10. I enjoy working with my co-workers. 18
  19. My Superior Strongly Disagree Neutral Agree Strongly Disagree Agree 11. I clearly understand what my superior expects from me. 12. My superior has a friendly working relationship with all team members. 13. My superior gives me regular feedback on how I am doing. 14. My superior regularly recognizes me for doing a good job. 15. There is good communication 19 between me and my superior.
  20. My Department Strongly Disagree Neutral Agree Strongly Disagree Agree 16. My department always provides excellent service to the customers. 17. I have the authority I need to do my best work. 18. My department provides a safe and clean working environment. 19. People from other departments willingly 20 cooperate with our department.
  21. My Company Strongly Disagree Neutral Strongly Agree Disagree Agree 20. My company cares about its employees well - being. 21. My company provides attractive opportunities for growth and improvement. 22. I am proud to say that I work at this company Overall 21 23. I am fully engaged in doing my best work at this company.
  22. 24. What are the greatest strengths of your organization? A. Our company treats its employees as its family member and provides opportunities in the growth and development of its employees. “UNITY IN DIVERSITY” 25. What are the areas that need the most improvement in your organization? A. Right now , the management of our company is doing pretty well and our employees are fully satisfied with the working conditions. Thank You for your cooperation 22
  23. ANALYSIS & INTERPRETATION:  Emotional attachment Only 31% of employees are actively engaged in their jobs. These employees work with passion and feel a profound connection to their company. People that are actively engaged help move the organization forward. 88% of highly engaged employees believe they can positively impact quality of their organization's products, compared with only 38% of the disengaged.72% of highly engaged employees believes they can positively affect customer service, versus 27% of the disengaged. 68% of highly engaged employees believe they can positively impact costs in their job or unit, compared with just 19% of the disengaged. Engaged employees feel a strong emotional bond to the organization that employs them. This is associated with people demonstrating willingness to recommend the organization to others and commit time and effort to help the organization succeed. It suggests that people are motivated by intrinsic factors (e.g. personal growth, working to a 23 common purpose, being part of a larger process) rather than simply focusing on extrinsic factors (e.g., pay/reward).
  24. Involvement Eileen Appelbaum and her colleagues (2000) studied 15 steel mills, 17 apparel manufacturers, and 10 electronic instrument and imaging equipment producers. Their purpose was to compare traditional production systems with flexible high-performance production systems involving teams, training, and incentive pay systems. In all three industries, the plants utilizing high-involvement practices showed superior performance. In addition, workers in the high-involvement plants showed more positive attitudes, including trust, organizational commitment and intrinsic enjoyment of the work. The concept has gained popularity as various studies have demonstrated links with productivity. It is often linked to the notion of employee voice and empowerment. 24
  25. Commitment It has been routinely found that employee engagement scores account for as much as half of the variance in customer satisfaction scores. This translates into millions of dollars for companies if they can improve their scores. Studies have statistically demonstrated that engaged employees are more productive, more profitable, more customer-focused, safer, and less likely to leave their employer. Employees with the highest level of commitment perform 20% better and are 87% less likely to leave the organization, which indicates that engagement is linked to organizational performance. For example, at the beverage company of Molson Coors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. In fact, the average cost of a safety incident for an engaged employee was $ 63, compared with an average of $392 for a non-engaged employee. Consequently, through strengthening employee engagement, the company saved $1,721,760 in safety costs in 2002. In addition, savings were found in sales performance teams through engagement. In 2005, for example, low- engagement teams were seen falling behind engaged teams, with a 25 difference in performance-related costs of low- versus high-engagement teams totaling $2,104,823.3 (Lockwood).
  26. Productivity In a study of professional service firms, the Hay Group found that offices with engaged employees were up to 43% more productive. The most striking finding is the almost 52% gaps in operating incomes between companies with highly engaged employees and companies whose employees have low-engagement scores. High-engagement companies improved 19.2% while low-engagement companies declined 32.7% in operating income during the study period. For example, New Century Financial Corporation, a U.S. specialty mortgage banking company, found that account executives in the wholesale division who were actively disengaged produced 28% less revenue than their colleagues who were engaged. Furthermore, those not engaged generated 23% less revenue than their engaged counterparts. Engaged employees also outperformed the not engaged and actively disengaged employees in other divisions. It comes as no surprise, then, that engaged employees have been statistically linked with innovation events and better problem 26 solving.
  27. Generating engagement Recent research has focused on developing a better understanding of how variables such as quality of work relationships and values of the organization interact and their link to important work outcomes.84% of highly engaged employees believe they can positively impact the quality of their organization's products, compared with only 31 percent of the disengaged. From the perspective of the employee, "outcomes" range from strong commitment to the isolation of oneself from the organization. The study done by the Gallup Management Journal has shown that only 29% of employees are actively engaged in their jobs. Those "engaged" employees work with passion and feel a strong connection to their company. About ⅔ of the business units scoring above the median on employee engagement also scored above the median on performance. Moreover, 54% of employees are not engaged meaning that they go through each workday putting time but no passion into their work. Only about ⅓ of companies below the median on employee engagement scored 27 above the median on performance.
  28. Access to a reliable model enables organizations to conduct validation studies to establish the relationship of employee engagement to productivity/performance and other measures linked to effectiveness. It is an important principle of industrial and organizational psychology (i.e. the application of psychological theories, research methods, and intervention strategies involving workplace issues) that validation studies should be anchored in reliable scales (i.e. organized and related groups of items) and not simply focus on individual elements in isolation. To understand how high levels of employee engagement affect organizational performance/productivity it is important to have an a priori model that demonstrates how the scales interact. There is also overlap between this concept and those relating to well- being at work and the psychological contract. As employee productivity is clearly connected with employee engagement, creating an environment that encourages employee engagement is 28 considered to be essential in the effective management of human capital.
  29. RECOMMENDATION & CONCLUSION Engaged employees care about the future of the company and are willing to invest the discretionary effort. Engaged employees feel a strong emotional bond to the organization that employs them.  Employer engagement.  Employee perceptions of job importance.  Employee clarity of job expectations.  Career advancement/improvement opportunities.  Regular feedback and dialogue with superiors.  Quality of working relationships with peers, superiors, and subordinates.  Perceptions of the ethos and values of the organization.  Effective Internal Employee Communications.  Reward to engage. 29
  30. Employee Engagement is a measureable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn & perform at work". Thus engagement is distinctively different from satisfaction, motivation, culture, climate and opinion and very difficult to measure. 30
  31. APPLIED VALUE These are my perceptions which might be effective in the organizations, which are as follows:  Employer engagement A company's "commitment to improving the partnership between employees and employer." Employers can stay engaged with their employees by actively seeking to understand and act on behalf of the expectations and preferences of their employees.  Employee perceptions of job importance According to a 2006 study by Gerard Seijts and Dan Crim, " employee’s attitude toward the job ['s importance] and the company had the greatest impact on loyalty and customer service then all other employee factors combined." 31
  32. Employee clarity of job expectations "If expectations are not clear and basic materials and equipment not provided, negative emotions such as boredom or resentment may result, and the employee may then become focused on surviving more than thinking about how he can help the organization succeed."  Career advancement/improvement opportunities "Plant supervisors and managers indicated that many plant improvements were being made outside the suggestion system, where employees initiated changes in order to reap the bonuses generated by the subsequent cost savings."  Regular feedback and dialogue with superiors "Feedback is the key to giving employees a sense of where they’re going, but many organizations are remarkably bad at giving it. ‘What I really wanted to hear was 'Thanks. You did a good job.' But all my boss did was hand me a check.' 32
  33. Quality of working relationships with peers, superiors, and subordinates "If employees' relationship with their managers is fractured, then no amount of perks will persuade the employees to perform at top levels. Employee engagement is a direct reflection of how employees feel about their relationship with the boss."  Perceptions of the ethos and values of the organization 'Inspiration and values' is the most important of the six drivers in our Engaged Performance model. Inspirational leadership is the ultimate perk. In its absence, [it] is unlikely to engage employees.“  Reward to engage Look at employee benefits and acknowledge the role of incentives. "An incentive to reward good work is a tried and test way of boosting staff morale and enhancing engagement." There are a range of tactics you can employ to ensure your incentive scheme hits the mark with your workforce such as: Setting realistic targets, selecting the right rewards for your incentive programme, communicating the scheme effectively and frequently, have lots of winners and reward all achievers, encouraging 33 sustained effort, present awards publicly and evaluate the incentive scheme regularly
  34. Effective Internal Employee Communications Which convey a clear description of "what's going on". "'If you accept that employees want to be involved in what they are doing then this trend is clear (from small businesses to large global organizations). The effect of poor internal communications is seen as its most destructive in global organizations which suffer from employee annexation - where the head office in one country is buoyant (since they are closest to the action, know what is going on, and are heavily engaged) but its annexes (who are furthest away from the action and know little about what is happening) are dis-engaged. In the worst case, employee annexation can be very destructive when the head office attributes the annex's low engagement to its poor performance… when its poor performance is really due to its poor communications. 34
  35. REFERENCES  Dr. Senjuti Go swami, Prof.HR, IIPM Kolkata.  Ms. Patricia Aburdene, AUTHOR OF MEGATRENDS.   Mr. Manoj Sehgal, Factory Supervisor, Bhushan Steel. 35