Employee Engagement helps to Organizational Performance




Why should companies invest in employee engagement?  The answer is because employee engagement is connecting significantly with important business outcomes. 

How employee engagement impacts organizational performance in the light of various research works done. Studies  have  found  positive  relationship  between  employee  engagement  and  organizational  performance  outcomes:  employee  retention,  productivity, profitability, customer loyalty  and  safety.  The local example of all leading organization  such as Singer Sri Lanka,  Commercial Bank, Dialog, Mobitel,   indicate  that  the  more  engaged  employees  are,  the  more  likely  their  employer  is  to  exceed  the  industry  average  in  its  revenue  growth.  Employee  engagement  is  found  to  be  higher  in  double-digit  growth  companies.  Employee engagement  indicates that engagement is positively related to customer satisfaction (Coffman, 2000; Ellis and Sorensen, 2007; Towers  Perrin  Talent  Report,  2003;  Hewitt  Associates,  2004;  Heintzman  and Marson,  2005;  Coffman  and  Gonzalez-Molina, 2002).   Engaged   employee   consistently   demonstrates   three   general   behaviors   which   improve   organizational   performance:

1.      Say-the employee advocates for the organization to co-workers, and refers potential employees and customers

2.      Stay-the employee has an intense desire to be a member of the organization despite opportunities to work elsewhere

3.      Strive-the employee exerts extra time, effort and initiative to contribute to the success of the business    ( Baumruk and Gorman, 2006) 
 

What will happen to an organization if its employees are disengaged? Employees who are not engaged are likely to be spinning (wasting their effort and talent on tasks that may not matter much), settling (certainly do not show full commitment, not dissatisfied enough to make a break) and splitting (they are not sticking around for things to  change  in  their  organization),  have  far  more  misgivings  about  their  organization  in  terms  of  performance  measures such as customer satisfaction (Blessing White, 2006; Perrin Report, 2003). Meere (2005) based on the survey  conducted  by  ISR  on  360000  employees  from  41  companies  in  the  world’s  10  economically  strong  countries    finds  that  both  operating  margin  and  net  profit  margins  reduced  over  a  three  year  period  in  companies  with  low  engagement,  while  these  measures  increased  over  the  specified  period  in  companies  with  high levels of engagement.
Financial  News,  March  2010,  as  cited  by  Accord  Management  Systems  (2014),  tells  that  disengaged  employees are more likely to cost their organization. According to the report, Employees who are disengaged:
  • ·         Miss an average of 3.5 more days per year
  • ·         Are less productive
  • ·         Cost the US economy $292 to $355 billion per year
In the current business context, all industries having stiff competition among their respective sectors, hence to keep good employees within the organization is great task for every organization. So organization needs to practice employee engagement building programs inside the organization. If the increase the number of engaged employees in the organization it will benefited to deliver organization objectives and increase the individual performance as well as organizational performance.

References
Accord Management  Systems. (2014). Employee Engagement Strategy: A Strategy of Analysis to Move from Employee Satisfaction to Engagement.

Meere M. (2005). High cost of disengaged employees Victoria: Swinburne University of
Technology. [Online] Available:http://www.swinburne.edu.au/corporate/industrysolutions/ee/reports/Employee%20Engagement%20industry%20Breifing%20Paper%20Dec%202005%20.pdf (October 30, 2008)

Melcrum publishing. (2005). Employee engagement: How to build a high-performance workforce. An  independent Melcrum Research Report Executive Summary

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.466.1591&rep=rep1&type (accessed  11th December 2017)

Comments

  1. UnknownDecember 12, 2017 at 8:44 AM

    LAST REFERENCE WAS WRONG RECORRECT IT ASAP.ALSO YOU ARE ONLY WROTE HERE POSTIVE THINGS OF EMPLOYEE ENGAGEMENT,CAN YOU EXTEND IT TO NEGATIVE.

    ReplyDelete
  2. Dasuni Sudeshi Fernando (Punchihewa)December 15, 2017 at 12:55 AM

    A great perspective on a much-discussed topic Malin!!

    Employee engagement should start off even before an employee is recruited into the organization. While signing a physical contract in agreement of certain conditions, a psychological contract should also be signed by the employer and employee. If this connection is successfully made, then the employee will be engaged with the organization. However, this engagement should be a two-way connection where both the employer and employee are in an understanding of their individual aspirations and goals, and where the same are aligned. This creates a win-win situation for both parties. Thus, it helps organizational performance as well as individual performance of the employee to be on a positive note.

    However as per discussed in the classroom employee engagement may take a negative impact on the work life balance of the employee.

    ReplyDelete
  3. NeoshineDecember 20, 2017 at 11:54 AM

    Whilst employee engagement is a critical factor for organizational performance, globally engagement percentage is reducing. As per the latest statistics it only 13% of the employees worldwide is engaged. (Gallup).
    Thus HR teams require to develop strategies towards increasing the engaged levels. These strategies will include ,
    1. Conducting proper engagement surveys and act on the outcome
    2. Encourage employee suggestions
    3. Develop training programs based on individual leaning styles
    4. Establishing an effective two way dialog between organization and emloyees

    ReplyDelete
  4. UnknownDecember 21, 2017 at 6:38 AM

    An engaged employee is a person who is fully involved, and enthusiastic about his or her work. As discussed above there are many benefits of employee engagement, such as employee satisfaction, productivity, retention, recruitment, innovation and profitability. And this enthusiasm and engagement of an employee can be boosted up be several factors like motivation, rewards and recognition from the management. The HR of the organization has to guide the employee in a positive and a challenging way in order to get the best outcome from the employees. This can be achieved effectively by conducting motivational programs every month and also by rewarding the employees depending on their quality of work.

    ReplyDelete

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