Running head: EMPLOYEE ENGAGEMENT 1

Relationship between Organisational Performance and Employee Engagement

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Institution Affiliation

EMPLOYEE ENGAGEMENT 2

Relationship between Organisational Performance and Employee Engagement

The primary objective of all profit-making organisations is to maximise value for their

shareholders. This involves maximising the profits that the company realises in any given

financial year. This aim has driven the management of different enterprises to take a keen

interest in the ideal means of attaining the business's objectives. Recent research has

sensitised the importance of employee engagement at the workplace (Schaufeli & Bakker,

2004). A direct relationship has been found to exist between organisational performance and

employee engagement. Employee engagement can best be defined from three different

aspects. It highlights members of staff willingness to speak about the good of the company to

both in-house and third parties, their desire to work for the organisation, and the effort they

put to achieve the objectives of the business. In a bid to understand the relationship between

organisational performance and employee engagement, its drivers must be understood.

To start with, as explained by Saks (2006), leadership stands out as one of the main

elements that inspire employee engagement. The leaders of a unit help their people to focus

on the goals to be achieved. They draw up a plan of action and guide the members in its

implementation. A leader should inspire trust in his or her team. All this can be achieved by

actively pursuing the objectives together with the team in a manner that allows them to learn.

Once trust has been established, employees have been found to fully commit to attaining the

goals as they aspire not to disappoint the leader.

The second driver of employee engagement is organisational justice. All staff

members have a perception of what is fair or not at the workplace. Organisational justice

revolves around the system of remuneration and the procedures guiding promotions. It could

include the punishments meted out in the event of wrongdoing (Salanova, Agut, & Peiro,

2005). Often, people have argued that organisational justice is subjective and cannot be

defined by particular standards. However, the common practices and policies implemented

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must be uniform to all employees to encourage feelings of just and fair treatment. As a result,

organisations that have reached this delicate balance have been known to inspire employee

engagement.

Another important element that facilitates employee engagement is the system of

compensation and reward. Compensation can be both monetary and non-monetary. Over the

years, numerous enterprises have adopted a raise in salaries and the issuance of bonuses as

the sole channel of motivating employees (Schaufeli & Bakker, 2004). Despite its success,

further research has proven that other ways exist that the management can utilise to build the

morale of the staff. These include allowing extra holidays, provision of travel discounts, and

establishment of on-site day care. All these methods make the workers feel valued leading to

high employee engagement.

In a similar manner, work policies and procedures are also key drivers of employee

engagement (Schaufeli & Bakker, 2004). Every organisation has put in place specific policies

and programs that ensure a smooth flow of operations. Such procedures evolve over time to

cater to the new needs and demands as the company grows. However, some remain constant

and are the foundation of the culture of the workplace. They include the reporting time, the

leaving time, the inclusion of a flexible schedule, and the health policies of the enterprise.

Work-life balance is fundamental to all individuals. It allows them time to cater to the needs

of the other aspects of their lives. As Schaufeli and Bakker (2004) report, policies and

procedures that are restrictive encourage loss of morale and lead to a decrease in employee

engagement.

Lastly, training and development have also been cited as a driver of employee

engagement. Workers require constant training to keep up with the evolving technological

requirements of the operations in which they deal. A constant training increases the

marketability of the skills of the workers and hence improving their efficiency (Salanova,

EMPLOYEE ENGAGEMENT 4

Agut, & Peiro, 2005). As such, employees feel that the business is concerned about their

growth and development. It can be argued that most individuals opt to prove the benefits of

the training received by undertaking tasks in a timely and efficient manner. The employees

are, therefore, dedicated towards the achievement of the company’s goals.

According to Schaufeli and Bakker (2004), one of the indicators of the existence of a

relationship between organisational performance and employee engagement is productivity.

A case study is given of Tesco Plc, a UK-based retailer. Over time, it has been cited as one of

the best companies regarding employee engagement. Its famous listen-and-fix system is used

in their numerous stores to get feedback from their workers on ways in which they can

improve. As such, there is high operational efficiency and their productivity is at peak. A

distinct correlation between productivity and employee engagement is drawn.

Another indicator is the reduction in employee turnover (Salanova, Agut & Peiro,

2005). Workers who are satisfied and motivated to work for their organisations opt to stay

and provide service for as long as possible. Drawing from Tesco Plc, the retailer is known to

have the UK’s largest private sector workforce. The statistics suggest that Tesco’s employees

are motivated to work and to continue being of service to the management. One of the

benefits of low turnover is that it saves on hiring costs. A company that is constantly hiring

incurs advertising costs and plenty of time is wasted on frequently conducting interviews.

Creativity and innovativeness also add to the indicators of the relationship between

organisational performance and employee engagement. Due to the existence of competition,

companies are forced to become creative to remain relevant to their clientele. Tastes and

preferences of consumers are rapidly changing and it is the obligation of the business to

change with them. Motivated employees are credited with the creativity and innovation of an

enterprise as Saks (2006) explains. A case study is given of John Lewis Partnership. Their

employees are responsible for some of the most creative advertisements in the UK that have

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encouraged customer loyalty. As such, the level of employee engagement is a direct cause of

the company’s creativity.

The profitability of a company has been found to be a direct result of employee

engagement (Saks, 2006). An organisation's profitability depends on the increase in revenue

or the decrease in expenses. The John Lewis Partnership was highlighted as the 2016 third

largest private company by sales in the Sunday Times. One of the policies of the company is

to refer to the employees as “partners” in the business. The word presents an inclusive aspect

that makes the employees feel responsible for the outcome in a given financial year. It

welcomes them to leave a mark as the company progresses to make a difference. As a result,

there is employee engagement and it influences the profitability of the enterprise.

Every organisation wishes to achieve its objectives. With regard to this, the

management is constantly seeking ways to make the operations more efficient and to

encourage employees to work hard. Focusing on employee engagement would ensure that all

the staff is self-motivated and requires minimal supervision to undertake their duties.

EMPLOYEE ENGAGEMENT 6

References

Saks, A. M. (2006). Antecedents and consequences of employee engagement. Journal of

Managerial Psychology, 600- 619.

Salanova, M., Agut, S., & Peiro, J. (2005). Linking organisational resources and work

engagement to employee performance and customer loyalty: The mediation of service

climate. Journal of Applied Psychology, 1217- 1227.

Schaufeli, W. B., & Bakker, A. B. (2004). Job demands, job resources, and their relationship

with burnout and engagement: a multi- sample study. Journal of Organizational

Behavior, 293- 315.