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Employee Engagementin the Public Sector

A review of literature


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EMPLOYEE ENGAGEMENTIN THE PUBLIC SECTOR

A REVIEW OF LITERATURE

4-consulting15 Palmerston Road

EdinburghEH9 1TL

in association with

DTZ Consulting & ResearchOne Edinburgh Quay133 Fountainbridge

EdinburghEH3 9QG

Scottish Executive Social ResearchMay 2007


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This report is a web only publication. It is available on the ScottishExecutive Social Research website www.scotland.gov.uk/socialresearch.

Crown Copyright 2007Limited extracts from the text may be produced provided the source

is acknowledged. For more extensive reproduction, please write tothe Chief Researcher at Office of Chief Researcher,4th Floor West Rear, St Andrews House, Edinburgh EH1 3DG

The views expressed in this report are those of theresearcher and do not necessarily represent those of the

Department or

Scottish Ministers.


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CONTENTS

SUMMARY 1

Employee engagement 1

Drivers of engagement 1Variations in employee engagement 2

Modelling engagement 2 Impact of engagement 2 Measuring and monitoring engagement 3Conclusions on the literature 3

CHAPTER 1 INTRODUCTION 4

Objectives of literature review 4 Literature review methodology Report structure

CHAPTER 2 EVOLUTION AND DEFINITION OF

EMPLOYEE ENGAGEMENT 6 Introduction Evolution of the concept 6 Definitions of employee engagement 9 Summary and key findings 14

CHAPTER 3 UNDERSTANDING EMPLOYEE ENGAGEMENT IN THEPUBLIC SECTOR 15

Introduction Variations in employee engagement process 15 Variations in employee engagement outcomes 16

Summary and key findings 19

CHAPTER 4 INTERPRETATIVE MODELS OF EMPLOYEE ENGAGEMENT 20

Introduction Modelling engagement The role of engagement in organisational outcomes 27 Organisational variations 30

Employee variations Summary and key findings 33

CHAPTER 5 EMPLOYEE ENGAGEMENT IMPACT ASSESSMENT 36

Introduction Belief in engagement

Extent of engagement Cost of engagement 41 Summary and key findings 43

CHAPTER 6 MEASUREMENT AND MONITORING OF EMPLOYEE ENGAGEMENT 45

Introduction Measurement at the recruitment stage 45 Measurement among existing employees 46 Monitoring engagement Summary and key findings 52


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CHAPTER 7 CRITICAL ASSESSMENT OF THE LITERATURE ON EMPLOYEEENGAGEMENT 53

Introduction Key Findings in the literature 53 Gaps and shortcomings of the literature 55 Overall conclusions 56

ANNEX A BIBLIOGRAPHY 57

ANNEX B DETAILS OF LITERATURE SEARCH AND SCREENING 63

Literature search methodology Screening Process & Analysis 64

ANNEX C SCREENING FRAMEWORK 65


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SUMMARY

Early in 2007, 4-consulting in association with DTZ Consulting & Research wascommissioned to undertake research on the importance of employee engagement within the

public sector and how the Scottish Executive could improve the engagement of itsemployees. A staged approach was adopted as follows:

Stage 1 a literature review of employee engagement covering both the publicand private sectors

Stage 2 a review of the current status of employee engagement in the ScottishExecutive and ways this could be improved.

This summary provides an overview of the key findings from the Stage 1 literature review.

Employee engagementThe literature on employee engagement builds on earlier research and discussion on issues of commitment and Organisational Citizenship Behaviour (OCB), but means more than whatthese terms encapsulate. The defining distinction is that employee engagement is a two-wayinteraction between the employee and the employer, whereas the earlier focus tended to viewthe issues from only the employees point of view.

Definitions of engagement, or characteristics of an engaged workforce, focus on motivation,satisfaction, commitment, finding meaning at work, pride and advocacy of the organisation(in terms of advocating/recommending either the products or services of the organisation, or

as a place to work). Additionally, having some connection to the organisations overallstrategy and objectives and both wanting and being able to work to achieve them, are keyelements of engagement. A recurring theme in the literature is the idea that engagementinvolves workers going the extra mile, and exerting discretionary effort over and abovewhat is normally expected.

Drivers of engagement

It is clear that the organisation has a responsibility to lead engagement, and there are severalkey areas the organisation can address to encourage engagement among its employees.Leadership, effective management, open, two-way communication, pay and benefits, fair and

equal treatment, employing the right workforce, career development and training, workinghours, and health and safety are all aspects of the work environment that organisations cancontrol and influence and have been found to impact upon engagement levels. However,there is no one size fits all model of engagement, and different employees will placedifferent emphases on the extent to which they value each of these elements in return for going the extra mile.


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Variations in employee engagement

The findings of this literature review suggest that there is no discernable difference betweenthe dynamics of engagement within the public sector as opposed to the private sector. Rather differences in engagement levels result from organisational characteristics; in whichever

sector that organisation sits. However, findings suggest that the public sector performsweaker in areas relating to strategic vision and change management, both of which areimportant to employee engagement.

Engagement tends also to vary across individual and job characteristics, with minority ethnicemployees and females found in some studies to have higher rates of engagement than menor those with a disability or medical condition. In general, managers and professionals havegreater levels of engagement than their colleagues in supporting roles.

Modelling engagement

The models in the literature illustrate the factors that can affect engagement and howengagement impacts on the wider performance of the organisation. It is clear that there is noone-size fits all model of engagement. However, what can be concluded is that the primarydriving force behind engagement is the organisation, its view of engagement and how it actsto create an environment conducive to engaging employees. Important areas in which theorganisation can work to improve engagement include training and career development,effective management, promoting a clear strategic vision, communication, fair treatment, payand benefits, job satisfaction, cooperation and trust. These factors vary between those thattend to be taken as given, and written explicitly into the contract of employment (i.e. pay and

benefits) and those that are organisational-dependent, cannot be taken for granted and requirethe organisation to take an initiative (i.e. ensuring two-way communication, promoting astrategic vision and building trust).

Secondary to this are some variations in individual employees, with different groups or individuals responding differently to the environment in which they work, as discussedabove.

Impact of engagement

Regarding the impact of engagement, this study examined the general sentiment of theliterature, the evidence available and several case study examples of organisations across the

private and public sector. The impact of engagement (or disengagement) can manifest itself through productivity and organisational performance, outcomes for customers of theorganisation, employee retention rates, organisational culture, and advocacy of theorganisation and its external image. Whilst there are several caveats to some of the results(discussed below), it is clear that some of the major employers in the UK (Royal Bank of Scotland (RBS) and the NHS for example) are taking employee engagement seriously and areactively implementing measures to increase engagement levels.


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Measuring and monitoring engagement

Measuring the extent of engagement within an organisation is usually achieved through anemployee survey. However, the real value in such a survey lies in the extent to which theresults are used as a basis to identify the organisations strengths and weaknesses so that the

necessary corrective actions can be taken. Although none of the literature covered explicitlyreferenced a monitoring framework, several methods to continually observe and measureengagement level were noted and included recurring surveys, focus groups, onlinecommunication, and in the case of RBS, an extensive human capital model.

Conclusions on the literature

It is concluded that the literature reviewed is more or less consistent in its view of employeeengagement, in that the nature of engagement as a two-way interaction between employeeand employer is emphasised as is the growing importance and relevance of engagement toorganisational outcomes. However, it must be noted that these conclusions are drawn withinthe context of the type of literature available on the subject. Many of the authors in this fieldare either researching organisational experience and/or are responsible for the implementationof management consultancy solutions and therefore cannot be considered as strictlyindependent. There tends to be limited consideration of the costs of driving up employeeengagement, although considerable attention is given to quantifying the benefits.


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CHAPTER 1 INTRODUCTION

1.1 Early in 2007, 4-consulting in association with DTZ Consulting & Research wascommissioned to undertake research on the importance of employee engagement within the

public sector and how the Scottish Executive could improve the engagement of itsemployees. A staged approach was adopted as follows:

Stage 1 a literature review of employee engagement covering both the publicand private sectors

Stage 2 a review of the current status of employee engagement in the ScottishExecutive and ways this could be improved.

The focus of this report is to present the findings of the Stage 1 literature review.

Objectives of literature review1.2 Through discussion with representatives of the Office of the Chief Researcher (OCR),it was agreed that the research would focus on the following areas:

Setting the context of employee engagement in terms of its definition, historicaldevelopment and context within the private and public sectors

Understanding employee engagement in the public sector and the extent to whichit varies compared to the private and voluntary sectors 1

Reviewing interpretative models of employee engagement and their applicabilityto the public sector. The use of case studies should be used to give evidence of the practical application of employee engagement principles

Examining the impact that commitment to the employee engagement process hason outcomes such as efficiencies within the organisation

Establishing how employee engagement can be measured and monitored.

Literature review methodology

1.3 Our methodology was structured in three phases as follows: Search process the identification of potentially relevant literature this is the

development of the long list

Screening process the review of documentation on the long list to derive a shortlist of the most relevant and seminal publications

Analysis the process by which the literature was analysed

Each element in this methodology is described in more detail in Annex B.

1 It should be noted however that the literature did not explicitly reference the voluntary sector and the reportreflects this by drawing on the available evidence for the public and private sectors only.


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CHAPTER 2 EVOLUTION AND DEFINITION OF EMPLOYEEENGAGEMENT

Introduction

2.1 The purpose of this chapter is to review how employee engagement is defined in theliterature in order to identify if a clear and common idea of what engagement is can be drawnout. Firstly the evolution of employee engagement as an increasingly popular concept isdiscussed. This allows us to build a picture of engagement, and demonstrate how it meansmore than earlier concepts of commitment, motivation or organisational citizenship

behaviour (OCB). Next this chapter discusses the definitions of employee engagementthroughout the literature and highlights the key characteristics by which an engagedworkforce can be identified.

Evolution of the concept

2.2 Employee engagement is a relatively new term in HR literature and really started tocome to prominence from 2000 onwards. Melcrum Publishing (2005) found that from aglobal survey of over 1,000 communication and HR practitioners 74% began to formallyfocus on the issue between 2000 and 2004.

2.3 Having reviewed an extensive amount of literature, the commentary on the evolutionof employee engagement is summarised by the following points:

It builds upon and goes further than commitment and motivation in themanagement literature (Woodruffe, 2006 as cited in CIPD, 2006a)

A desk review undertaken by Rafferty et al (2005) indicates that it originated fromconsultancies and survey houses rather than academia

The level of interest it has generated indicates that it is more than a passingmanagement fad and a considerable amount of research and analysis has beenconducted in the last 10 years or so building up our understanding of the term.

2.4 As pointed out in Rafferty et al (2005), the concept of employee engagement has as itsfoundation, two well-researched precursors employee commitment and organisationalcitizenship behaviour.


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2.5 Commitment literature - Silverman (2004) (paper presented as Appendix 1 inRobinson et al 2004) discusses the different directions the study of employee organisationalcommitment (see definitions below) has taken over the previous decade, noting that morerecent research emphasises the multidimensional nature of commitment that impliescommitment cannot be realised through one single human resource (HR) policy. In other

words, people are motivated by a range of factors, and these differ from person to person.The earlier commitment literature, which discusses the various kinds of commitment and theimpacts of a committed workforce, lays the foundation for understanding of engagement andthe evolution of the concept. As is discussed later, commitment and engagement are notconsidered to be one and the same. Whilst commitment is an important element of engagement, engagement is considered to be more than just employee commitment.

2.6 Tamkin (2005) reviews commitment in the literature and highlights an early model byAllen and Meyer (1990), which defines three types of commitment:

Affective commitment employees feel an emotional attachment towards anorganisation;

Continuance commitment the recognition of the costs involved in leaving anorganisation; and

Normative commitment the moral obligation to remain with an organisation.

2.7 As noted by Tamkin (2005), not all of these forms of commitment are positivelyassociated with superior performance employees who feel high continuance commitmentfor whatever reason, but lower levels of affective and normative commitment are unlikely to

produce huge benefits for the organisation.

2.8 The closest relationship with engagement is affective commitment as explained bySilverman (2004) (paper presented as Appendix 1 in Robinson et al 2004). This type of commitment emphasises the satisfaction people get from their jobs and their colleagues, andthe willingness of employees to go beyond the call of duty for the good of the organisation.It also goes some way towards capturing the two-way nature of the engagement relationship,as employers are expected to provide a supportive working environment.

2.9 This point is expanded upon by Meere (2005), who highlights that organisations mustlook beyond commitment and strive to improve engagement, as it is engagement that defines

employees willingness to go above and beyond designated job responsibilities to promotethe organisations success.


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2.10 Organisational Citizenship Behaviour (OCB) literature this predates employeeengagement, but is highly relevant to it. The review of OCB literature by Barkworth (2004)(paper presented as Appendix 2 in Robinson et al 2004) defines its key characteristic as

behaviour that is discretionary or extra-role, so that the employee has a choice over whether they perform such behaviour. These behaviours include voluntarily helping of others, such as

assisting those who have fallen behind in their work, and identifying and stopping work-related problems in the first place. As these types of behaviour are not normally part of thereward system, absence of such behaviours is therefore not punishable by the organisation but

performance of them should lead to effective running of it.

2.11 Over 30 different forms of OCBs have been identified and defined and these have been classified by Podsakoff et al. (2000) in Barkworths paper (2004) (paper presented asAppendix 2 in Robinson et al) into seven themes:

Helping behaviour voluntarily helping others

Sportsmanship being able to carry on with a positive attitude in the face of adversity and being willing to set aside personal interests for the good of the group

Organisational loyalty promoting the organisation to the outside world, andstaying committed to it, even when doing so could involve a personal sacrifice

Organisational compliance following organisational rules even when not beingmonitored

Individual initiative demonstrating performance over and above what isexpected

Civic virtue macro-level interest in the organisation as a whole, such as a loyalcitizen would display towards their country

Self-development voluntarily improving ones own knowledge, skills andabilities in such a way as to be helpful to the organisation.

2.12 OCB links very strongly to employee engagement as it focuses on securingcommitment and involvement which lies outside contractual parameters often referred to asthe individual going the extra mile.

2.13 In terms of the impact of OCBs on organisational effectiveness, three behaviours:helping behaviour, sportsmanship and civic virtue, appear to lead to performance gains. Thefact that helping behaviour was not beneficial in all studies 2 raises the issue of the context inwhich the behaviours are to occur, as they will not be suitable in all situations.

2 As it may be the case that whilst it may improve the performance of those receiving help, it takes up the timeof the person helping, thus reducing their potential output.


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2.14 Further, Barksworth (2004) (paper presented as Appendix 2 in Robinson et al 2004)notes research by Organ and Ryan (1995), which found that attitudinal variables such as jobsatisfaction, organisational commitment, fairness and leader supportiveness all have a

positive relationship with OCB. Task-related variables are also identified in this literature asimportant antecedents to OCB. Barksworth (2004) (paper presented as Appendix 2 in

Robinson et al 2004) quotes Podsakoffs (2000) findings that such variables as feedback andsatisfying tasks are significantly correlated to altruism, courtesy, conscientiousness,sportsmanship and civic virtue.

2.15 Variables that have a negative relationship include breach of the psychologicalcontract 3, abusive supervision and task routinisation. All of these issues are, in some way,linked to leadership style and behaviour, either directly or more subtly. Therefore, theobvious starting point in trying to harness OCB should be from the top-down, as the impactmade by leaders and managers does seem to affect the demonstration of OCB. This findinglinks strongly to the role of management in securing engagement see later discussion.

2.16 How does employee engagement differ ? It appears that engagement, althoughsharing strong characteristics with each of these two concepts is about more thancommitment and/or OCB on their own. Rafferty et al (2005) draw the distinction on the basisthat engagement is a two-way mutual process between the employee and the organisation.Sharpley (2006) (as cited in Harrad 2006) also points out that it is important to distinguish

between motivation and engagement, as it is possible to be motivated in ones job withoutnecessarily feeling an attachment to the organisation. In Sharpleys (2006) (as cited inHarrad 2006) definition of engagement there must be a mutual feeling of support between theemployee and the organisation.

Definitions of employee engagement

2.17 As discussed above, it would seem that when engagement is talked about, it refers to amultidimensional concept that involves some kind of two-way interaction between theemployee and the organisation. As the literature notes, employees can be motivated andcommitted to their jobs, without necessarily engaging with the overall strategies andobjectives of the organisation, or without really feeling the wider impact of their efforts.

2.18 Most of the literature employs a multidimensional approach to defining employeeengagement, where the definition encapsulates several elements required in order to achievetrue engagement. For example, the CIPD (2007a) defines employee engagement as a

combination of commitment to the organisation and its values plus a willingness to help outcolleagues. According to this view, engagement is about more than job satisfaction and is amore complex concept than motivation. Similarly, Schmidt (2004) defines engagement as

bringing satisfaction and commitment together. Whilst satisfaction addresses more of anemotional or attitudinal element, commitment brings in the motivational and physicalelements. Schmidt (2004) contends that while satisfaction and commitment are the two keyelements of engagement, neither on their own is enough to guarantee engagement.

3 CIPD (2007b) The Psychological Contract, employs the definition of the psychological contract as produced by Guest and Conway (2002) whereby the contract refers to the perceptions of the two parties, employee andemployer, of what their mutual obligations are towards each other.


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2.19 Ellis and Sorenson (2007) point to the inconsistent way in which the term engagementhas been applied by business leaders and human resource (HR) professionals over the last 20years. They highlight the inconsistency of using the term to refer to attitudes or to employee

perceptions of specific elements of their work environment or benefits, which they feel havelittle to do with engagement. They endorse a two dimensional definition of engagement

that defines an engaged employee as one who 1) knows what to do at work and 2) wants todo the work. It is their strong view that engagement should always be defined and assessedwithin the context of productivity, and that the two elements of engagement noted above arenecessary for driving productivity.

2.20 Right Management (2006) defines true engagement as every person in theorganisation understanding and being committed to the success of the business strategy, andthat this goes beyond more than just simple job satisfaction and incorporates aspects of commitment, pride and advocacy about the organisations products and brand. Whilst theonus is on the organisation to manage communication effectively to involve employees andalign them with the organisation, this clearly requires input and feedback from employees aswell to make the process work.

2.21 The CIPD Annual Survey report (2006c) defines engagement in terms of threedimensions of employee engagement:

Emotional engagement being very involved emotionally in ones work; Cognitive engagement focusing very hard whilst at work; and Physical engagement being willing to go the extra mile for your employer.

2.22 The survey report states that the very engaged will go one step further and speak out

as advocates of their organisation, in what they describe as a win-win situation for theemployee and the employer.

2.23 Some authors discuss the varying degrees of engagement employees can experience.Meere (2005) describes three levels of engagement:

Engaged - employees who work with passion and feel a profound connection totheir organisation. They drive innovation and move the organisation forward;

Not engaged employees who attend and participate at work but are timeservingand put no passion or energy into their work; and

Disengaged employees who are unhappy at work and who act out their unhappiness at work. According to Meere (2005), these employees undermine thework of their engaged colleagues on a daily basis.


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2.24 Buchanan (2004) describes the difference between rational commitment andemotional commitment. Rational commitment results when a job serves employees financial,developmental or professional self-interest. In contrast, emotional commitment , which hasfour times the power to affect performance as its more pragmatic counterpart, arises whenworkers value, enjoy and believe in what they do. According to the figures of the Corporate

Leadership Council quoted by Buchanan (2004), about 11% of the workforce are classified astrue believers and demonstrate very high levels of both commitment types; another 13% atthe other end of the normal distribution curve demonstrate little commitment and areclassified as the disaffected.

2.25 In much of the literature, the definition of engagement is illustrated by the behaviour of good practice employers and the characteristics of engaged employees. Therefore, tosummarise, Table 2.1 highlights the following key elements that are common across much of the literature. These have been categorised in terms of what elements can be classified asdrivers of engagement and those that are the results of engagement and the characteristics of an engaged workforce.

2.26 The factors that determine engagement are primarily driven by the organisation, and itis the extent to which the organisation takes these issues on board and addresses them in aneffective manner than will influence engagement levels. Of course engagement is a two-way

process and whilst engagement is organisation-led, it requires inputs from the employee aswell. It is explored in later chapters how employees place different values on these factorsand also how these driving factors can potentially vary across demographic variables.

2.27 It was interesting to note that at no stage did the literature make any reference to howthese characteristics might vary between the public and private sectors. As discussed in thenext Chapter, on the occasions where the literature discussed sectoral applicability, itunanimously suggests that the key principles of employee engagement transcend allorganisations irrespective of sector.


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D e f i n

i t i o n

C h a r a c

t e r i s t

i c s

D e s c r

i p t i o n

S o u r c e s

c h a l l e n g e s y o u t o r a i s e t h e l e v e l a t w h i c h y o u c o m m u n i c a t e w i t h y o u r p e o p l e , m a k i n g t h e d i a l o g u e

i n c r e a s i n g l y t w o - w a y a n d g i v i n g p e o p l e a g r e a t e r s a y a n d s t a k e i n d e c i s i o n s w h i c h a f f e c t t h e m .

I I P U K ( 2 0 0 6 )

M a n a g e m e n

t

T h i s p o i n t s t o t h e p r i m a c y o f t h e q u a l i t y o f t h e r e l a t i o n s h i p b e t w e e n e m p l o y e e a n d s u p e r v i s o r ,

s o m e t i m e s c a l l e d l e a d e r - m e m b e r e x c h a n g e .

M a n a g e r s t h e m s e l v e s h a v e t o s h o w c o m m i t m e n t t o t h e o r g a n i s a t i o n , w h a t w e w o u l d c a l l c o m m i t t e d

l e a d e r s h i p .

e n g a g e m e n t , w h i c h i s i n f l u e n c e d b y . . m a n a g e m e n t c a p a b i l i t y r e f l e c t e d i n p r o f e s s i o n a l , f a i r a n d

i m p a r t i a l b e h a v i o u r .

I t i s p o s s i b l e t o b e

m o t i v a t e d i n o n e s j o b w i t h o u t n e c e s s a r i l y f e e l i n g a n

a t t a c h m e n t t o t h e o r g a n i s a t i o n o r t h e m a n a g e m e n t h o w e v e r , a f e e l i n g o f e n g a g e m e n t r e q u i r e s a

w i d e r s e n s e o f s u p p o r t i n g a n d b e i n g s u p p o r t e d b y t h e o r g a n i s a t i o n .

C I P D ( 2 0 0 6 a )

C I P D ( 2 0 0 6 a )

S h a r p l e y

( 2 0 0 6 ) ( a s c i

t e d i n

H a r r a

d 2 0 0 6 )

R e s u

l t s o f e n g a g e m e n

t / c h a r a c

t e r i s t

i c s o

f a n e n g a g e

d w o r

k f o r c e :

E m p

l o y e e

i d e n

t i f i c a t

i o n

w i t h t h e o r g a n i s a

t i o n

E m p l o y e e s n e e d t o b e l i e v e i n i t s [ o r g a n i s a t i o n s ] p r o d u c t s a n d s e r v i c e s , a n d p a r t i c u l a r l y i t s v a l u e s

R o b

i n s o n e

t a l ( 2 0 0 4 )

C o m m

i t m e n

t

W a n t i n g t o d o t h e w o r k o b t a i n i n g a s e n s e o f s a t i s f a c t i o n f r o m t h e j o b a n d w o r k c o n t e n t a n d b e i n g

i n s p i r e d

b y t h e o r g a n i s a t i o n t o p e r f o r m t h e w o r k .

E m p l o y e e e n g a g e m e n t , o r p a s s i o n f o r w o r k , i n v o l v e s f e e l i n g p o s i t i v e a b o u t y o u r j o b , a s w e l l a s

b e i n g p r e p a r e d t o g o t h e e x t r a m i l e t o m a k e s u r e y o u d o t h e j o b t o t h e b e s t o f y o u r a b i l i t y .

S e g a

l / S i b s o n

( 2 0 0 6 )

C I P D ( 2 0 0 6 b )

P r i d e

& A d v o c a c y

p e o p l e s c o m m i t m e n t , p r i d e a n d a d v o c a c y ( w h a t e m p l o y e e s s a y a b o u t c o m p a n y p r o d u c t s , s e r v i c e s

a n d b r a n d ) .

W e b e l i e v e t h a t t h e p r i d e t a k e n i n w o r k i n g f o r t h e i r e m p l o y e r , a n d t h e i r w i l l i n g n e s s t o r e c o m m e n d

t h e i r e m p l o y e r a s a p l a c e t o w o r k t o f r i e n d s , a r e e x c e l l e n t b a r o m e t e r s o f e n g a g e m e n t a n d m e a n i n g

E n g a g e d e m p l o y e e s w i l l h e l p p r o m o t e t h e b r a n d a n d p r o t e c t t h e e m p l o y e r f r o m t h e r i s k s a s s o c i a t e d

w i t h p o o r l e v e l s o f s e r v i c e . . s

i m i l a r l y , a s t r o n g e m p l o y e r b r a n d w i l l h e l p i n a t t r a c t i n g a n d r e t a i n i n g

e m p l o y e e s

R i g h t M a n a g e m e n

t ( 2 0 0 6 )

P e n n a

( 2 0 0 7 )

C I P D ( 2 0 0 7 a )


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Summary and key findings

The evolution of employee engagement lies in work on employee organisationalcommitment and organisational citizenship behaviour.

Although elements of these ideas are important to engagement, engagement isviewed in the literature to mean more than either implies. Going the extra mile, providing discretionary effort, being aligned to the organisations objectives, beingcapable of delivering the results and wanting to deliver results for the good of theorganisation are defining characteristics of the engaged employee. Reflecting thetwo-way dynamic of engagement, capability arises from the employees ownabilities but must also be supplemented by the employer providing an environmentconducive to allowing the employee to work at their potential level.

The key elements that underpin a definition of employee engagement include:

Drivers of engagement

- A two-way relationship between the employer and employee

- The importance of the individual being able to align themselves to the products,services and values of the organisation

- The ability of the organisation to communicate its vision, strategy, objectivesand values to its staff so that they are clearly understood

- Management give staff sufficient elbow room and autonomy to let them fulfil

their potential

- The employer is highly effective at engaging in two-way communication withits staff, in particular encouraging upward communication

- Lastly, that management from the top to the bottom of the organisation arecommitted leaders and that the key role of the immediate linemanager/supervisor is recognised as one of the most important conduits toachieving effective employee engagement.

Outcomes of engagement

- Staff are able to get involved in the organisation and feel that they aregenuinely participating and contributing to its performance

- Staff have a pride in their organisation and endorse it as a place to work and do business with to people outside the organisation

- Staff demonstrate real commitment to their job and the organisation and are prepared to go the extra mile.


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CHAPTER 3 UNDERSTANDING EMPLOYEE ENGAGEMENT INTHE PUBLIC SECTOR

Introduction

3.1 The objective of this Chapter is to review the extent to which employee engagementvaries between the public and private sectors. This was examined on two levels:

Are there any fundamental differences in how employee engagement operates between the public and private sectors that would impact on interpretativemodels? In particular, do the drivers of employee engagement vary between thetwo sectors? And

What evidence, if any, is there on the effectiveness of employee engagement between the public and private sectors? Are there any marked differences between the sectors in terms of how engaged staff are?

Variations in employee engagement process

3.2 From our analysis of the models presented in Chapter 4, the differences between the public and private sectors have no impact whatsoever on how employee engagement works.This reflects the fact that the positive factors impacting on employee engagement apply withequal weight to the public and private sectors. In particular this includes:

The importance of providing high quality management, especially at supervisoryand immediate line management level

The importance of having a strong organisational vision and clarity in goals that areclearly articulated and communicated to staff at all levels

The importance of engaging in effective two-way communication between theorganisation and its staff

3.3 No interpretative model (see Chapter 4 for details) of the employee engagementprocess assessed as part of the literature review has drawn any sectoral distinction: they aregeneric across all organisational types in the public and private sectors. This is a key findingof the literature review.

3.4 However, the employee engagement outcomes do vary according to a range of factorsreflecting organisational and employee characteristics. The aspiration to find a one size fitsall model does not apply, either to all individual employees or to all organisations. Thesevariations are discussed below.


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Variations in employee engagement outcomes

3.5 There is a surprisingly limited amount of research commenting on variances inemployee engagement between the public and private sectors. This may relate to the fact thatthere is more in common between the sectors than there is variation and the principles of

engagement tend to be generic across both sectors. The literature reviewed tends to highlightthe relatively strong performance of the public sector in terms of job specific parameters (i.e.

public sector workers are more likely to receive compensation for working extra hours, andfind their work more worthwhile and personally meaningful) but its weaker performance inthe critical employee engagement drivers such as strategic vision and management. For example, CIPD (2006c) in a national survey of 2,000 UK employees found the following:

Hours worked there are no differences between the public and private sectorsin terms of hours worked. However, public sector workers are more likely toreceive some compensation for working extra hours than those in the privatesector;

Work-life balance one would have expected that public sector workers would be receiving more help from their employer to achieve a good work-life balance, but actually there is no difference;

Employer negatives public sector employees are more negative about their employers than their private sector counterparts, reporting that:

- They experience more bullying and harassment than those in the privatesector

- They are less satisfied with the opportunities they have to use their abilities

- They are more stressed and under more pressure

- They are more critical of their organisation

- They are less likely to feel their senior managers have a clear vision for theorganisation

- They have less trust and confidence in their senior managers; and

-

They are also less likely to believe organisational communication. Job positives however, the public sector ethos is reflected in the fact that more

public sector workers find their work worthwhile and personally meaningful.This is an important finding, as it is discussed later in Chapter 4, that Penna(2007) presents a model whereby meaning at work is at the apex of the model,and one of the most important factors in driving engagement.

Individual/employee performance outcomes public sector workers rate their own performance lower than private sector employees and are more likely tohave taken more sick leave in the last year.


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3.6 Ipsos MORI (2006) has highlighted the need for public sector organisations toimprove the way in which they manage change and develop leadership capability. It isdiscussed later how engagement can help organisations manage change (see theCambridgeshire County Council case study which highlights how engagement was brought into assist a large and difficult change in the Council). Drawing upon research data from over

200 of the UKs leading organisations, an analysis by sector shows that in many areas there istypically little difference in employee attitudes. However, in core aspects of working life(ref. job positives above), public sector staff tend to be happier with:

Job security

Being paid fairly and their pay reflecting level of performance

Training and development opportunities

The feedback they receive from line managers

Working hours.

3.7 As a result of the research, Ipsos MORI (2006) conclude that public sector employeesare more likely to feel that the work they do is interesting and, in general, perceive a greater feeling of morale where they work.

3.8 In contrast, the public sector usually trails the private sector in two key areas: changemanagement and leadership capability (this is despite the fact that public sector employeesreport a greater level of contact with senior management). The Ipsos MORI (2006) researchfound that whilst around three-quarters of employees in both sectors understand the need for change, there is a large disparity in terms of those who support the need for change with 75

per cent of employees in the private sector supporting the need for change, compared to 65 per cent in the public sector. Moreover, public sector employees are significantly more likelyto feel that some of the changes being implemented are unnecessary: they believe that thereis too much change for changes sake . Thus it is imperative that managers fully engage staff in understanding the rationale for change, rather than just communicating the change to them,and support employees through the change process.

3.9 In terms of the more practical aspects of change management, again public sector employees are more critical. A quarter of private sector employees, compared to just 15 per cent of public sector employees, believe that change is well managed in their organisation:see Figure 3.1.


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Figure 3.1 Perceptions of Change Management by Sector

Source: Ipsos MORI (2006)

3.10 The Ipsos MORI (2006) research highlights other areas in which public sector staff are usually more critical than their private sector counterparts:

Receiving recognition for good performance and providing opportunities for employees to let the organisation know how they feel about things that affect themin their work

Having adequate /sufficient facilities or resources to do their work effectively

The belief that their organisation puts customers first

Confidence that they are working for a successful organisation.

3.11 As a consequence, the public sector tends to trail the private sector in core areas thatcan lead to enhanced employee engagement, such as clarity of direction, effectivecommunication and management. The conclusion of this research is that the public sector needs to concentrate more on how it manages change and develops leadership capability, to

contribute to delivering the Public Sector Reform Agenda effectively.


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CHAPTER 4 INTERPRETATIVE MODELS OF EMPLOYEEENGAGEMENT

Introduction

4.1 This chapter looks at the models of engagement as found throughout the literature. Itwas highlighted in Chapter 2 that from an employers point of view, engagement is oftenabout employees going the extra mile or exerting discretionary effort. It was alsodiscussed that many of the factors that drive engagement are under the control of theorganisation. However, employees will place different emphasis on the extent to which theyvalue each of these factors in exchange for their discretionary effort. This chapter thereforeexamines the models of engagement in the literature to determine what the key drivers of engagement are, and the extent to which employees value these, and what employees findconnects them to the organisation, motivates them to perform above and beyond expectationsand compels them to actively promote the interests and objectives of the organisation.

4.2 Although the organisation has primary responsibility for leading engagement, thereare also secondary employee and job specific factors which can affect levels of engagement.These are also discussed in this chapter to provide a more comprehensive picture of thefactors that determine engagement. The findings are presented under the following headings:

Modelling Engagement a series of the most relevant interpretative engagementmodels are presented.

Role of Engagement in Organisational Outcomes this section illustrates themechanisms through which engagement can impact on organisational outcomes.

Organisational Variations an analysis of the extent to which engagement varies between organisations.

Employee Variations an analysis of the extent to which engagement varies between employees.

Modelling engagement

4.3 As highlighted by CIPD (2007a) there is no definitive all-purpose list of engagementdrivers. There are many individual and organisational factors that determine whether

employees become engaged, and to what extent they become engaged. This sectionhighlights the models that illustrate these factors and the importance that employees place onthem in becoming engaged.

4.4 The approach to employee engagement, discussed by Robinson et al (2004), stressesthe importance of feeling valued and involved as a key driver of engagement. Within thisumbrella of feeling valued and involved there are a number of elements that have a varyinginfluence on the extent to which the employee will feel valued and involved and henceengaged. Figure 4.1, which is based on a diagnostic model in Robinson et al (2004),illustrates the drivers of engagement suggested through a survey of over 10,000 NHSemployees. Robinson et al (2004) state that this can be a useful pointer to organisations

towards those aspects of working life that require serious attention if engagement levels are to be maintained or improved.


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Figure 4.1 Robinson et al (2004) model of the drivers of employee engagement

Source: Robinson et al (2004)

4.5 Although tested within the NHS, the authors suggest that many of the drivers of engagement will be common to all organisations, regardless of sector. However as isdiscussed later in this chapter, engagement levels can vary according to demographic and jobrelated factors. What is noted from the model above is that some of these factors are whatwould be fundamental or contractual requirements for the organisation (the hygienefactors), such as pay and benefits and health and safety, whereas others are the areas wherethe organisation must go the extra mile to ensure effective communication, managementand cooperation.

4.6 Penna (2007) presents a hierarchical model of engagement factors (see figure 4.2),which illustrates the impact each level will have on the attraction, engagement and retentionof talent. They propose a model with meaning at work at the apex, which they maintain is

borne out by the research carried out into meaning at work. In this context, Penna (2007)defines meaning at work as the situation where a job brings fulfilment for the employee,through the employee being valued, appreciated, having a sense of belonging and congruencewith the organisation and feel like they are making a contribution. In this model, as thehierarchy ascends and the organisation successfully meets each of these engagement factors,the organisation becomes more attractive to new potential employees and becomes moreengaging to its existing staff.


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Figure 4.2 Penna (2007) model of hierarchy of engagement

Source: Penna (2007)

4.7 Interestingly in this model the hygiene factors appear at the foundation of the model,indicating the nature of these factors as a necessary, but not sufficient, building block uponwhich the organisation must further develop in order to engage staff.

4.8 Work by Schmidt (2004) (see figure 4.3) frames engagement within the context of organisational health and Workplace Well-Being 4 (WWB). As discussed in Chapter 2,engagement is defined by Schmidt (2004) as the overarching label that brings employeesatisfaction and commitment together. This model highlights the importance of commitmentto the job as driven by job satisfaction, and also notes the importance of the supportiveorganisation. By creating the right conditions to generate high levels of employeeengagement, the organisation can drive high performance with high performance beingdefined as the achievement of the overarching public sector goal of advancing the publicgood. The model depicts the flow of organisational dynamics that begins with recruitmentand moves through support for work, to workplace well-being, to engagement and finally tohigh levels of organisational performance.

4 Note that the author (Schmidt 2004) defines WWB as a holistic approach to creating high performanceorganisations through establishing the right conditions to generate high levels of employee engagement. Thisapproach assumes that achieving high levels of organisational performance depends on employees who are

strongly committed to achieving the goals of the organisation, and who show this through their actions. Thisbehavioural objective is influenced in turn by levels of employee satisfaction, and by supportive, respectful and healthy work environments.

Meaning

Leadership TrustRespect

OpportunityPromotion

Development

Learning and Development

Pay Working Hours Benefits

Increasing engagement


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Figure 4.3 Schmidt (2004) model of organisational dynamics in the public sector

Source: Schmidt (2004)

4.9 This model implies that the foundations of engagement lie in policies to recruit andretain the right workforce (i.e. in terms of employing specific competences, knowledge andexperiences required for success as well as diversity) and to promote health, safety, and well-

being. Schmidt (2004) bases the model on a variety of studies and writings, implicit in whichis the notion that it is WWB that drives engagement. CIPD (2007a) concurs with this view of the importance of well being, stating that engagement is wholly consistent with an emphasison employee well-being.

4.10 In Schmidts (2004) discussion, WWB itself is driven by commitment and jobsatisfaction, which in turn are determined by a number of factors. It is a similar idea to themodel presented by Robinson et al (2004) where feeling valued and involved was the keydriver of engagement, but in turn was influenced to a varying degree by a range of factors.As is the case throughout much of the literature, Schmidt (2004) does not present a definitivelist of the drivers of commitment and satisfaction (as the drivers of engagement) but reviewsseveral studies and reports. Concentrating here on the studies presented by Schmidt (2004)that appear to be based on a more robust approach (e.g. regression analysis as opposed totheorising) the following results are of interest:

HighLevels of

OrganisationalPerformance

Employee Engagement

WorkplaceWell Being

Physical Health, Safety andWellness and Work Supports

Recruiting and Retainingthe Right Workforce

Advancing the greater

public good


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4.11 WorkUSA (2000) - This survey used regression analysis to identify the key factorsaffecting employee commitment:

Trust in senior leadership

Chance to use skills

Competitiveness of rewards

Job security

Quality of companys products and services

Absence of workplace stress

Honesty and integrity of companys business conduct

4.12 ERIN Research - The Region of Peel (a large municipality in Ontario, Canada)carried out an employee survey in 2002. Schmidt (2004) advocates the robustness of theresults, from the Canadian public sector, due to the use of advanced statistical techniquesand excellent return rates on the survey of 72%. The survey identified job satisfaction andcommitment as the drivers for the engagement model, with the following factors found to beimportant to each:

Job satisfaction:

A career path that offers opportunities for advancement;

Fair pay and benefits;

The perception that the municipality offers good value to customers;

A satisfactory work environment, as defined by:

- A reasonable workload;- Good relations with immediate supervisor;

- Smoothly functioning organisational dynamics;- Good relationships with colleagues; and- Effective internal communication.


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Commitment:

Job satisfaction;

A career path that offers opportunities for advancement;

A positive perception of senior management; and

The perception that the municipality offers good value to customers.

4.13 The analysis of the survey found a correlation between satisfaction and commitmentof 0.57 suggesting that the two concepts are related but deserve separate analysis. Further,what also emerges from these results is that satisfaction is a driver of commitment, but notvice versa, as commitment does not appear as a key factor in the analysis of what drivessatisfaction.

Management and communication

4.14 The importance of good management and effective communication has beenhighlighted as key vehicles through which employee engagement can be implemented. AsRobinson et al (2004) highlight, organisations must work to engage employees and establisha two-way relationship between the employer and employee. Michelman (2004) notes thatthe defining contribution of great managers is that they boost the engagement levels of the

people who work for them. Michelman (2004) suggests that they achieve this throughconcentrating on four core areas of managing people:

Selection;

Expectation setting;

Motivation; and

Development

4.15 Michelman (2004) points out that in leading engagement, great managers will seek the right fit for a persons talent, they work to see that employees are rewarded for their

performance and they endeavour to ensure that talent is developed through progressively

more challenging and meaningful assignments.

4.16 A research report into employee engagement by Melcrum Publishing (2005) based ona global survey of over 1,000 multinationals concluded that from an organisations point of view it is the senior executives that set the tone of engagement in an organisation, whatever the size. There are a number of actions and strategies that senior management can make useof to inspire engagement among employees and motivate them to go the extra mile. The sixtop drivers of engagement from the senior management perspective were found to be:


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Communicating a clear vision of the future

Building trust in the organisation

Involving employees in decision making that will affect them

Demonstrating commitment to the organisations values

Being seen to respond to feedback

Demonstrating genuine commitment to employees well being

4.17 The same Melcrum Publishing (2005) report also examined the role of line managersin encouraging engagement. In this regard, the survey results imply that creating a climate

of open communication is the single most important action for line managers in affectinglevels of employee engagement, with 60% of those surveyed claiming it is the most importantelement.

4.18 Regarding the importance of communication, Moorcroft (2006) discusses therestructuring that took place at the Royal Bank of Canada (RBC) in 2004. It was noted at thattime that there was a need to engage rather than inform employees and thus better align their

performance with the organisations vision and business goals. Formerly, communicationstrategies had focused on informing employees and creating awareness. However a newstrategy was designed by the company in order to engage employees (and thus generatedesired behaviours) that would help create outcomes (measurable effects) in support of the

organisations objectives.

4.19 The strategy has four key objectives:

i) Help employees develop a better understanding of how what they do relates tothe organisations vision, strategies and goals;

ii) Create a more dynamic and interactive communication environment thatinvolves employees in thinking about and understanding how they caninfluence business results;

iii) Ensure employees are getting the information they need to help frame andguide their day-to-day decisions; and

iv) Promote and recognise the desired behaviours and outcomes incommunication.


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4.20 This strategy is illustrated by RBC in the following model:

Figure 4.4 RBCs new model of employee communication

Source: Moorcroft (2006)

4.21 Moorcroft (2006) notes that the old model was focused on developing tactics andmethods by which to inform employees, or create awareness, of company news andobjectives. However, the new model (see figure 4.4 above) is based on engaging employeesin the communication process in order to achieve the desired outcomes and thus build the

business value. This is achieved by helping employees have a better idea of how what theydo impacts upon the organisation and by promoting behaviours that help achieveorganisational objectives. Moorcroft (2006) reports that the changes to employeecommunications are beginning to show solid results, with employee alignment andengagement scores improving. Interestingly, the communication budget has actually beenreduced at the same time, illustrating that a more focused and thought through strategy canresult in better value for money.

The role of engagement in organisational outcomes

4.22 This section discusses the models that illustrate the place of engagement in the wider

operations of the organisation and the mechanisms through which engagement can impact onthe wider context.

4.23 Although a review of the quantitative evidence is provided in Chapter 5, this chapter brings together the elements of various models that illustrate the nature in which engagementcan have an impact upon the organisation. Heintzman and Marson (2006) use the privatesector service-profit chain model as a basis for producing a public sector equivalent (seefigure 4.5). They base the model on research carried out in Canada on what the top publicsector challenges are, namely;

Human resource modernisation;

Service improvement; and

BusinessValue

Outcome

TacticsProcesses

ENGAGE

INFORM


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4.28 The model, which illustrates the linkages and important factors in each of theseelements, is provided below, with arrows indicating directions of influence:

Figure 4.6: The CIPD (2006c) model of employee engagement model

Source: CIPD (2006c)

4.29 Individual factors are those such as gender, age, ethnicity and disability (discussed inmore detail later in this chapter). Working life describes factors such as occupation, hours of work and pay, as well as important issues such as bullying or workplace harassment.

4.30 Management, leadership and communication refers to how employees view their managers and leaders, how much opportunity they have to participate in organisationaldecision making and levels of trust. As CIPD (2006c) highlights, these factors have beenfound in research to be very important in determining levels of engagement. This is also thearea where managers can have an important influence.

4.31 Attitudes to work refers to employees perceptions of their jobs and includes levels of well-being, satisfaction, enthusiasm, commitment and loyalty. It is important to note herethe two-way interaction in this model between attitudes to work and engagement. Whilstsatisfaction, commitment, stress and loyalty factors feed into levels of engagement, it followsfrom the model that organisations that successfully engage their employees will engender greater levels of job satisfaction and loyalty, for example.

4.32 The engagement box itself refers to the CIPDs (2006c) three types of engagement (asdiscussed in section 2.21 above) cognitive, emotional and physical. Finally, in the modelabove, engagement and attitudes to work lead to outcomes for the organisation, in terms of individual performance, intent to quit and absence levels. The model was used by CIPD intheir annual attitude and engagement survey, with the finding that there is in fact a lot thatmanagers and leaders can do to drive up engagement. Levels of trust and confidence insenior management and line managers were found to be disappointingly low in the survey,however CIPD (2006c) cites this as an opportunity for managers to evaluate how their ownorganisation compares with the national sample and to consider how best to harness theengagement levels of their own workforce.

MANAGEMENT,LEADERSHIP ANDCOMMUNICATION

WORKINGLIFE

OUTCOMES

ATTITUDESTO WORK

ENGAGEMENT

INDIVIDUALFACTORS


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Organisational variations

4.33 The literature has highlighted that the primary responsibility for leading engagement,and influence over the factors that determine engagement, lies with the organisation. Whilstno evidence of difference has been found between the dynamics of engagement between the

private and public sectors, what the literature does reveal is that the variations within sectorsare in fact far more significant. In short, it appears that there is a clear distinction betweenleading edge organisations that are strong in employee engagement and the majority that areeither ignorant of the subject or which are failing to address the matter effectively,irrespective of whether they are in the public or private sector. This section highlights someexamples of this through case study evidence.

4.34 The literature identified a number of case studies of good practice in both the public and private sectors that were being held up as exemplars for others to follow. Examples, whichdemonstrate what can be achieved in the public sector, include Cambridgeshire CountyCouncil and Rotherham Metropolitan Borough Council see case study profiles below.

Cambridgeshire County Council Good Practice Case Study 5 Profile : 18,000 staff & turnover of 550m

Approach : it has had a formal people strategy since 2001 it is clear about developing the organisation,having a single culture, employee development and creative ways to reward good performance. In 2005 theInstitute for Employment Studies (IES) ran a culture audit out of which the Inspire Project was born theobjective being to change the way people work and communicate. A new framework defining 17 behaviourswas rolled out with the assistance of the Hay Group. The project included work on leadership development,with managers including the Chief Executive receiving 360-degree appraisals and team-buildingworkshops.It has also led to a new customer service charter and employee charter. The latter outlines not only what theCouncil can expect from its employees, but also what they can expect in return it is the psychological contract made explicit .

Impact : in HR benchmarks the Council has top quartile performance including absence management, and bottom quartile costs for HR service delivery. HR even sells its best practice to other public-sector organisations to generate revenue. The staff survey results are very strong:85% of employees thought they were doing a worthwhile job84% said that managers listened to their ideas90% felt they had the chance to give feedback during appraisals; and71% said they had enough opportunities to raise issues of importance

We are not a traditional authority we seem to have more ways to get messages out and actively listen to people than you see in most organisations . If you dont start with your workforce, how can you reach the public ?18,000 ambassadors are better than 18,000 assassins .

5 Johnson (2006)


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Rotherham Metropolitan Borough Council Good Practice Case Study 6 Profile: 13,500 staff

Historic Performance: in 2002 the Council was in the doldrums, with 1 star and rated as weak in theComprehensive Performance Assessment. Only 24% of staff rated morale as high.

Approach: Rotherhams Exchange Programme was runner up in the Improving Business PerformanceThrough Engaging Staff category of the CIPD People Management Awards. A representative Reach-in

panel that gives detailed feedback and quarterly focus groups to handle hot topics supplemented conventionalmethods such as staff surveys and an employee suggestion scheme. Through effective promotion the number of employee suggestions increased six fold from 50 per year to 300. Letting people know the outcomes of their suggestions was the most important part of the process .

The Councils wider mission to motivate and inspire is encapsulated in their HEART approach:

Help each other learn and develop Empower through open communication Appreciate and respect others Recognise and acknowledge contributions Try new ideas and initiatives.

Impact:Staff turnover is down from 18% to 9%Average absence is down from 13.8 days to 9.2 daysRotherham is now a three star council and rated as strongly improving.65% of staff responded that they are happy at work. Happy employees are more likely to come to work.We know staff feel valued, and confident that they are having an input into our success as a council.The culture has changed from one that was progressing slowly to one that wants to achieve, and is

achieving results .

Employee variations

4.35 The final variable impacting on employee engagement relates to employeesthemselves. A number of studies have produced quantitative research findings thatdemonstrate the impact that biographical and job characteristics can have on employeeengagement. One of the most in-depth was conducted by the Institute for EmploymentStudies (IES) (as analysed by Robinson et al 2004) which analysed attitude survey data for 2003 from 14 organisations in the NHS (>10,000 completed questionnaires). The keyfindings were:

Biographical characteristics

Gender the difference in engagement scores between men and women was notsignificant (although note that some surveys (see CIPD 2006c discussed below)find that females are generally more engaged than males this difference may bedue to the fact that the NHS study surveys across employees within the sameorganisation, whilst the CIPD survey cuts across a wide variety of industries andorganisations).

6 Brockett (2006)


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Ethnicity minority ethnic employees have higher engagement levels than their White colleagues. Black, Chinese and Asian employees have higher scores thanthose in Mixed and White groups.

Age engagement levels go down slightly as employees get older until theyreach the oldest group, 60 and over, where the highest engagement levels of all aredisplayed. The high level of engagement levels expressed by experiencedemployees, who may be considered to be approaching the end of their workinglives, suggests an untapped source of potential in many organisations.

Work-life balance those in their 40s and 50s have the highest levels of workplace stress and are likely to find it difficult to balance work and home life.Robinson et al (2004) therefore suggest that attention to family friendly policiescould increase the engagement levels for this group.

Caring responsibilities the need for a family-friendly approach and greater emphasis on work-life balance is further underlined by the fact that employeeswith caring responsibilities for children have significantly lower engagementlevels than those who have no caring responsibilities.

Medical those with a disability/medical condition have lower engagement levelsthan those who do not have such a condition.

4.36 CIPD (2006c) in their national survey of 2,000 employees across a wide spectrum of public and private sector employers found broadly similar findings to the NHS survey,although several disparities are noted:

Gender women were found, in general, to be more engaged than men, but they alsotend to be doing different kinds of jobs. Women are more satisfied with their work and hold more positive views of their senior management team than do men. They aremore loyal to their organisation as an employer and report higher levels of loyalty totheir customers and clients than men. This is in contrast to the NHS survey resultconducted by IES and analysed by Robinson et al (2004), where it was found thatthere was no discernable difference between engagement levels between men andwomen. As discussed above this may be due to the fact that the NHS study surveyedemployees across the same organisation whilst CIPD (2006c) cut across a range of different industries and organisations. This may suggest that males and females areresponding in a similar fashion to the same NHS environment but that in generaldifferences in male/female engagement may be due to participation in differentoccupations and industries.

Age workers aged 55+ are more engaged with their work than younger employees,and they are also happier with their work-life balance, working shorter hours thanothers. Employees aged under 35 are significantly less engaged with their work thanolder workers. Again this is contrast to the NHS results where it was found thatengagement levels go down as age increases, although both surveys find that workersin the 55+ or 60+ bracket are more engaged.


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Disability employees with a disability are less engaged due to a range of negativefactors including: bullying and harassment, not being listened to, the stress of work, afeeling of less control over their work, and higher levels of anxiety.

Managers they find their work more important and more meaningful than non-managers do. Their responses on communication and involvement are much more

positive than those of non-managers, and managers feel that they have more supportand recognition and are listened to more than non-managers are.

Flexible contracts some surprisingly strong differences were found between thoseworking on a flexible contract (e.g. flexible hours, term time contracts, homeworkingetc.) and other workers. Those on flexible contracts tend to be more emotionallyengaged, more satisfied with their work, more likely to speak positively about their organisation and least likely to quit than those not employed on flexible contracts.

4.37 However, it is particularly important to point out that demographic variables shouldnot be seen in isolation as predictors of performance or engagement. CIPD (2006c) stressesthe following:

what we have found is that good management practice and a conduciveworking environment can lead to high levels of engagement and performanceamongst all groups of workers.

4.38 CIPD (2006c) also note the following regarding job characteristics:

Job group the nature of the job makes a big difference to engagement levels. Ingeneral, managers and professionals have higher levels of engagement than dotheir colleagues in supporting roles.

Working pattern/hours full-timers are significantly more engaged than part-timers, while employees who work days are more engaged than their colleagueson shifts or on a rota. This suggests that employers need to work harder with

people who are not necessarily at work during standard working times toensure that they receive communications, are managed effectively and haveopportunities to grow and develop in their jobs.

Length of service engagement levels go down as length of service increases an indication to employers that they need to ensure that longer-serving employeescontinue to be exposed to new and interesting challenges.

Summary and key findings

4.39 This chapter provided a discussion of the key models that emerged from the literature.As discussed in Chapter 3, there is nothing in the literature to suggest that the models relevantto the private sector do not have a direct applicability to the public sector also. Althoughsome survey results found subtle differences between the sectors, in general the differences inengagement across demographic factors apply across the board to both sectors. The key

points that emerge from an examination of the models of engagement are:


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There is no one-size fits all definitive explanation of what drives engagement. Eachof the models and research studies discussed presented a range of different factorsand placed varying importance on each. What can be concluded is that theorganisation first and foremost has the power of influence over a range of factors(contractual and extra-contractual) and employees place a varying degree of

importance on these.

Feeling valued and involved is the key to the Robinson et al (2004) model of engagement, although other factors such as training and development,communication and job satisfaction are important in determining the extent to whichemployees feel valued and hence engaged.

The Penna (2007) model of engagement noted that pay and benefits were at thefoundation of the model but ranked lowest on the extent to which they would retainstaff if other factors were lacking. In that model value and meaning at work are atthe apex, with leadership and learning and development also cited as importantfactors in driving engagement from the employees point of view.

The RBC model of communication was also highlighted, and it was noted that itsucceeded as it strived to engage employees rather than just inform . Theorganisation realised that the previous model of informing employees, rather thanengaging them, was not helping to promote the line of sight from employee actionsto the overall objectives and outcomes for the organisation. This model highlightsan important element of engagement that communication is more effective as atwo-way process that involves the employee, as opposed to merely presenting themwith information.

Management and communication were highlighted in particular in several models(i.e. Robinson et al (2004) and Penna (2007)) as being key organisational drivers of engagement. Here it was found that promoting a clear vision of the future, beingseen to respond to feedback and demonstrating a genuine commitment to theemployees well-being are all important actions at an organisational/manageriallevel.

Several models that illustrate the overall impact of engagement and the mechanismsthrough which factors feed into engagement and how in turn engagement affects theoverall organisational outcomes were also presented. What Schmidt (2004) pointsout as the overarching goal of public organisations advancing the greater publicgood can be affected by engagement levels through an overall mechanism thatinvolves various elements from the right workforce through workplace well-being,engagement, organisational performance and finally advancing the public good.

Finally the CIPD (2006c) model of engagement was presented, which presents anoverall picture of the place of engagement within a wider scope of individualfactors, aspects of working life, management, attitudes to work and outcomes for theorganisation. This demonstrates that engagement should not be considered inisolation, and these other factors should be taken on board when measuringengagement and considering engagement strategies.


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The effect of the models was not found in the literature to vary across public and private sectors, rather it is organisational characteristics within either sector thatdetermines engagement.

Secondary to the organisational lead in driving engagement are several demographicand job-related factors that highlight variations in engagement. It was noted fromseveral studies that those in their 40s and 50s have the highest levels of workplacestress and are most likely to find it difficult to achieve a work/home life balance.Further, those with caring responsibilities for children are less likely to be engaged.These results tie in with the Robinson et al (2004) model which highlighted familyfriendly policies as an important organisational driver of engagement.


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CHAPTER 5 EMPLOYEE ENGAGEMENT IMPACT ASSESSMENT

Introduction

5.1 This chapter looks at the impacts of employee engagement, and is presented under thefollowing headings:

Belief in Engagement the extent to which the literature supports the contributionof employee engagement to improved organisational performance.

Extent of Engagement the extent to which employees are engaged based on surveyevidence.

Impact of Engagement a review of the impact evidence relating to positiveoutcomes in the following areas: productivity, customer outcomes, employeeretention, meaning at work, advocacy and organisational climate.

Cost of Engagement the extent to which the literature assesses the costs associatedwith employee engagement.

Importance of Engagement the Chapter concludes with a review of case studyevidence which highlights the importance of employee engagement to employers.

5.2 From the literature it appears that the impacts of engagement, and of disengagementare wide-ranging and can have effects at all levels, from individual employees, to the climateof the team or department through to organisational performance. Far from being an abstractconcept, the literature finds very real and measurable impacts upon organisational

performance of the effects of employee engagement and disengagement. However, therobustness of the evidence base must be considered before drawing firm conclusions. Thesubject of engagement is still relatively new in the literature and is not a well-studiedacademic research field; in particular, many of the studies have been carried out bymanagement consultancies and research houses who may in part be biased towards positiveresults. Further, there is very little consideration in the literature regarding the cost of engagement schemes and how these compare to any benefits received.

5.3 However, notwithstanding these caveats, the literature does provide sufficientindicators and consensus for some broad conclusions to be drawn out, as discussed below.

Belief in engagement

5.4 From the literature review it is clear that the overriding sentiment throughout theleading texts is very positive with regard to the impact employee engagement has onorganisational performance. This is illustrated by some of the key statements that emergedfrom the literature: see Table 5.1.


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5.6 The CIPD (2006c) Employee Attitude and Engagement Survey 2006 finds slightlyhigher results than suggested by the statistics above. Covering 2,000 workers across the

public and private sectors in the UK, the survey finds that 35% of employees are activelyengaged with their work. However, care needs to be taken when discussing what workers areengaged to. Robinson et al (2004) highlights that an interesting finding in the NHS survey

was that the professionals surveyed often felt a higher level of loyalty to their work (or totheir patients) than to the organisation as such. Robinson et al notes that to some extent thismay not matter to the organisation if these individuals perform in a manner that achieves theobjectives of the organisation anyway. However, where engagement with the organisationwill clearly be important is in regards to organisational level changes in strategy for example.In these instances organisations seek to have employees aligned with the overall strategy and

perform their work to that end.

Impact of engagement

5.7 The models presented in Chapter 4 illustrated the mechanism by which employeeengagement can feed into overall organisational performance. It follows that if employeesare not engaged with the overall strategies and objectives of an organisation then their day-to-day activities will not be focused on achieving these objectives. This section reviewsevidence in the literature to determine the extent to which these effects can be described andquantified.

Productivity and organisational performance

5.8 The Corporate Leadership Council (CLC) (2004) completed a study of engagementlevels of over 50,000 employees across the globe and found that those employees who aremost committed:

Perform 20% better, which CLC (2004) claims infers that moving from low to highengagement levels will induce an increase in employee performance of 20 percentile

points; and

Are 87% less likely to leave the organisation, which CLC (2004) states indicates thesignificance of engagement to organisational performance.

5.9 On the other hand, in reporting on the costs of employee disengagement , Meere(2005) discusses a survey carried out by ISR on 360,000 employees from 41 companies in theworlds 10 largest economies and finds that in companies with low engagement bothoperating margin and net profit margins reduced over a three year period, whilst incompanies with high levels of engagement both these measures increased over the same time

period.

5.10 Although this survey was based on private sector companies and measuredorganisational performance through financial indicators, the implications for an organisation,

private or public are the same the difference between low and high engagement can be realand substantial. The models discussed in Chapter 4 demonstrated the mechanisms throughwhich low engagement can impact upon organisational performance, however that

performance is defined and measured.


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Meaning at work

5.15 Penna (2007) presents the results of research carried out in 2005 on 1,765 Britishemployees to identify what creates meaning at work for UK employees, the effectiveness of employers in creating meaning and what an employer who creates meaning can reasonable

expect in return. Although not explicitly referencing engagement many of the elementsexamined in this research are important components of the definitions of engagementdiscussed in Chapter 2. Meaning at work as referred to by Penna (2007) (discussed insection 4.6) is the vehicle through which employers and employees can be brought closer together to the benefit of both.

5.16 The headline result is that organisations that devote resources towards creatingmeaning at work can anticipate increased motivation, loyalty, pride, and productivity. On theother hand, a proportion of respondents did not experience meaning at work and as a result15% of employees surveyed would not recommend their organisation as a place to work and7% would actively discourage others from joining. As the report highlights, pride taken inworking for an employer, and willingness of employees to recommend their employer as a

place to work to friends, are excellent barometers of engagement.

Advocacy of the organisation

5.17 As mentioned in Chapter 2, CIPD (2006c) classifies three types of engagement(cognitive, emotional and physical) but states that engaged employees may also go one stepfurther and act as advocates of their organisation. Advocacy can be in terms of recommending the organisation as a place to work, or in terms of believing in andrecommending the products and services of the organisation. An interesting result that cameout of the CIPDs annual employee attitudes and engagement survey (CIPD 2006c) is that

public sector workers are more critical of their organisation than their private sector counterparts. The survey concludes that employees who are more engaged are more likely to

be advocates of the organisation. In the survey 37% of employees could be described asChampions who willingly promote the organisation as an employer (potentially reducingrecruitment costs by recommending/introducing key personnel) and its products/services,which in effect is free marketing and enhances the public image of the organisation.

5.18 Melcrum Publishing (2005) reports similar results and from their survey finds thatonly 3% of disengaged employees would advocate the organisation as a place to work,compared to 67% of engaged employees. Penna (2007) included similar measures in its

meaning at work research report, and finds that nearly a quarter of those surveyed wouldnot recommend their organisation as a place to work. The report also notes a small hardcoreof corporate terrorists the most disengaged - would actively discourage friends from

joining their current organisation.


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Organisational climate

5.19 CIPD (2006a) discusses the impact that engagement has on the sense of communitywithin an organisatio

ee in public sector-scotish

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