Employee engagement

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Does your business engage its employees?

EXCELLENT Answers

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GOOD Answers

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OKAY Answers

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The precise definition of engagement is hotly contested. Broadly, it refers to employees being focused on doing their best for the organisation, and being emotionally committed to their work and the organisation. An engaged employee uses discretionary effort - they’re the shop worker who picks up rubbish when the boss isn’t looking, the person who stays late to make sure a big project is completed on time, or the customer service worker who goes the extra mile. Engagement is a key issue for business, with 78% of business leaders rating engagement and retention urgent or important. It’s a responsibility issue because it impacts on the workforces’ health and happiness, but it’s also a way to improve a business’s performance by increasing productivity as well as retaining and developing talent.

A person’s level of engagement at work is dramatically affected by their work environment, meaning that if one employee is disengaged, their colleagues are likely to be too. According to Engage for Success, from the point of view of the employer ‘employee engagement’ refers to ‘the workplace approach resulting in the right conditions for all members of an organisation to give of their best each day, committed to their organisation’s goals and values, motivated to contribute to organisational success, with an enhanced sense of their own well-being.’ Therefore, whilst we think of engagement and motivation being down to the individual, it’s up to the business to create a workplace that enables employees to feel engaged and fulfill their potential.

Employee engagement matters for businesses because it leads to better performance and higher productivity. A study of 50,000 workers by The University of California found that engaged employees were 31% more motivated, had 37% higher sales and were 87% less likely to quit. Further, research by IPA Involve suggests that active, confident and vocal employees help organisations to achieve sustainable business success. Benefits may include increased staff retention and satisfaction, greater exchange of views/ideas, discussion and consideration of solutions and developments, stronger team spirit, employee empowerment, personal responsibility and a spirit of cooperation with due respect for each other.

There is also evidence that employee engagement increases the mental and physical wellbeing of employees, and that happiness at work leads to greater productivity. Increased engagement, then, is beneficial to employees and employers. According to Engage for Success, Gallup’s (2013) meta-analysis uncovered a correlation between employees’ engagement levels at work and their physical health. A company that takes care of employee wellbeing is likely to increase engagement. Moreover, increased wellbeing increases productivity - Nic Marks of the New Economic Foundation argues "people who are happier at work are more productive – they are more engaged, more creative, have better concentration. The difference in productivity between happy and unhappy people at work can range between 10-50%. That's 10% for non-complex repetitive tasks, or up to 40-50% in service and creative industries."

When it comes to measuring levels of engagement, CIPD looks at levels of motivation, the effort employees are willing to put into their work, how jobs use employees’ skills and the influence each employee has over their role. When these are high, employees are typically ‘engaged’. Barry Schwartz argues that what people need to be engaged at work is autonomy, mastery and purpose. Key questions businesses can ask themselves to figure out the extent of employee engagement in their workplace are how does the organisation:

  • Attract the right people, and retain them making the best use of their talents?
  • Involve its employees in defining purpose and day to day decision making?
  • Make sure the interests of employees are fairly included versus other stakeholders?
  • Make sure employees share fairly in the ups and downsides of organisational performance?

Businesses can also measure levels of engagement by surveying employees often, by monitoring levels of absenteeism and turnover, and by tracking ratings of the organisation on anonymous review sites such as Glassdoor.

Employee engagement can be increased through approaches to business governance, for example by:

  • Independent mechanisms such as employee surveys, advisory boards, works councils or partnership agreements with trade unions
  • Mechanisms that enable employees to share in the performance of the organisation
  • Enabling some form of profit share, employee ownership structure like cooperatives or widespread share ownership.

Employee engagement can also be increased through the development of appropriate culture, for example by:

  • Recruiting the right people for each team
  • Volunteering programmes which focus on issues relevant to the organisation and its stakeholders
  • Offering employee training programmes which align personal development with that of the organisation.

Engage for Success cites various sources which indicate that efforts to improve a company’s social responsibility also positively impact employee engagement. For example a survey, by Sirota Survey Intelligence, of 1.6 million employees in 70 companies found that employees who approved of their companies’ commitments to social responsibility were more engaged in their jobs and more inclined to believe their employers were interested in their wellbeing. A separate source found that 75% of millennials (born 1978 to 1998) want to work for a company that “cares how it impacts and contributes to society”.

Whilst many businesses focus on engagement, it has been noted that the problem may better be characterised as one of disengagement. Disengagement can happen for many reasons - sometimes employees simply aren’t the best fit for their role. However, unequal or ‘unfair’ workplaces promote disengagement. It’s been found that when the highest paid worker is paid over 24 times the lowest paid worker, the workplace is likely to see increased levels of absenteeism, higher staff turnover and lower levels of productivity which suggests a disengaged workforce.

Collective Bargaining

'Collective Bargaining' is a process by which employers and recognised trade unions seek to reach a negotiated agreement on issues such as pay and terms and conditions of employment. Both employer and trade union take responsibility for fulfilling the bargain.

Consultation

'Consultation' means the active exchange of views through dialogue between employees and/or their representatives and the employer. It involves managers actively seeking, and then taking account of, the views of employees before making a decision. The responsibility for decision making, however, remains with management. Consultation within businesses became a legal requirement in the UK when the 2002 EU Information and Consultation Directive was implemented through the Information and Consultation of Employees (ICE) Regulations 2004. Companies with more than 50 employees must consult on:

  • Economic, financial and strategic developments
  • Structure and foreseeable development of employment
  • Decisions likely leading to substantial changes.
Disengagement

An employee is 'disengaged' when they don’t feel a commitment to doing their best at work. These employees aren’t necessarily ineffective or unproductive, they can still get work done, but they do what is good enough and are unlikely to push themselves. When employees are actively disengaged, they act out their unhappiness at work. Problems may develop throughout the workplace when companies don't deal with actively disengaged employees. These are the workers who undermine their jobs and employers. Actively disengaged employees can sink employee morale and performance.

Engagement

An employee can be said to be engaged when they’re committed to doing their best at work. 'Engagement' is a contested term, but most agree that an engaged employee doesn’t just get tasks done, they push themselves to do them to the best of their ability. They’re driven to do a really good job for the sake of doing a really good job, rather than for financial incentives.

Representation

'Representation' is when representatives can work with management to create better systems of communication and facilitate collective bargaining. An external trade union (or labour union) may represent company employees, based on particular industrial sectors or work skills. Other options include:

  • Internal company bodies (permanent workers councils, worker representatives at Board level, temporary groups to address particular issue)
  • Professional associations/institutions (bodies with self-regulatory legal status).

Answering YES

All Businesses MUST

State their business and number of employees

Describe how they promote employee engagement

Describe how they tackle disengagement

State if and how often they measure employee engagement

All Businesses MAY

State any philosophies or values which influence their approach to engagement with the workforce

Describe any targets or goals on engagement and how these are monitored

Explain whether they have a written policy on employee engagement

State whether they recognise a trade union, or if any of their employees are members of a trade union

Reveal some or all issues which are subject to employee consultation

Explain how they encourage or promote staff participation in decision-making

Indicate how they assess and/or measure employee perceptions of their own individual contribution to the company

Indicate how they assess and/or measure employee perceptions of being listened to/involved in decision-making

Indicate if they offer training and advice to managers and employees on engagement

Offer an example of how meaningful communication and consultation has had an impact on the organisation and on decision-making

Describe if and how they influence others to improve their employee engagement

Provide any other relevant information

Large and Multinational Corporations (MNCs) MUST

Reveal whether their employee engagement practices differ from one country to another

Explain any differences if they exist

Answering NO

All Businesses MUST

Explain why they do not or cannot answer YES to this question and list the business reasons, any mitigating circumstance or any other reasons that apply

All Businesses MAY

List any practices that are relevant, but not sufficient to answer YES

Provide any other relevant information

Answering NOT APPLICABLE

All Businesses MUST

Confirm they have no employees

DON'T KNOW is not a permissible answer to this question

Version 1

To receive a score of 'Excellent'

A holistic approach to employee engagement is a key part of business strategy. The business provides high quality jobs and careers, meaning that employees are highly engaged.

Examples of policies and practices which may support an EXCELLENT statement:

  1. Consistently reports high levels of employee engagement
  2. Consistently reports low levels of disengagement
  3. High retention rate relative to other firms in the sector
  4. Employees enjoy a good work life balance
  5. The company actively and effectively seeks to improve staff wellbeing
  6. The company does not have a large pay differential between the highest and lowest paid members of staff relative to other organisations in the sector
  7. Recruitment is sensitive to the needs of each team and the organisation
  8. Senior leaders are seen to lead by example - employees have no sense of being told ‘do as I say, not as I do’
  9. The company receives good ratings on anonymous review sites, such as Glassdoor
  10. Measuring employee engagement is a continuous process, rather than just an annual survey
  11. Line managers are trained on how to better engage their teams
  12. Levels of engagement amongst teams are part of line managers’ KPIs
  13. Company adds new benefits in line with employee feedback
  14. Company offers bespoke training and learning opportunities to further employees’ careers
  15. Good performance is acknowledged and rewarded
  16. Employees have the opportunity to influence the company through work councils and focus groups, and by reporting to their managers
  17. The company recognises a trade union which is able to positively influence pay and conditions
  18. The company’s approach to corporate social responsibility increases employees commitment and enables employees to make a positive social contribution
  19. Levels of engagement are measured against ambitious goals
  20. Actions on employee engagement are clearly communicated to all staff
  21. Business campaigns on efforts to improve employee engagement at a sector and/or national level
  22. Clear procedures in place to deal with disengagement and related issues, such as bullying, low job satisfaction, etc
To receive a score of 'Good'

The business consistently promotes engagement, and provides decent jobs.

Examples of policies and practices which may support a GOOD statement:

  1. High levels of employee engagement evident
  2. Low levels of disengagement are evident
  3. Line managers monitor levels of engagement and work to engage their teams
  4. Higher retention rate than other comparable organisations
  5. The company seeks to improve overall levels of staff wellbeing
  6. Good performance is acknowledged and rewarded
  7. Measuring employee engagement goes beyond annual surveys
  8. Employee representation schemes are in place (internal or union)
  9. Leaders work to engage employees, and generally lead by example
  10. Healthy work life balance is promoted
  11. Grievances and bullying in the workplace are well handled
  12. Levels of engagement are monitored, and clear goals are in place
  13. Recruitment seeks to look at the person’s ‘fit’ as well as their ability to do the job
  14. Employees are offered the opportunity to progress their careers through learning and training
  15. Actions on engagement are widely communicated
To receive a score of 'Okay'

Action to increase engagement is ad hoc, however, the company does provide decent jobs and workplaces, so conditions do not lead to disengagement on a wide scale OR The company answers not applicable

Examples of policies and practices which may support an OKAY statement:

  1. Average levels of employee engagement are evident compared to sector
  2. Average levels of disengagement are evident - not so high that it’s evidence there’s a significant environmental problem
  3. Employee engagement is measured on an ad hoc or infrequent basis
  4. There are opportunities for promotion, but career progression is not easily accessible to all staff
  5. Staff turnover is in line with comparable organisations
  6. Company has some commitment to staff wellbeing, but it is not a priority for HR or managers
  7. Employees are sometimes left unsure of what they need to do as part of their roles
  8. Work life balance is as standard for comparable organisations
  9. Staff are able to bring grievances if necessary
  10. Good performance is sometimes acknowledge and rewarded, but this is down to individual managers, not systematic
  11. Bullying in the workplace is not tolerated
  12. Leadership attempts to encourage engagement are ad hoc
  13. Actions on engagement are communicated
  14. Recruitment considers fit as well as ability to do the job
To receive a score of 'Poor'

Little to no action on engagement. Jobs and workplaces are poor quality, leading to high levels of disengagement.

Examples of policies and practices which may support a POOR statement:

  1. No effort to provide engaging work
  2. No commitment from leadership on engagement or providing meaningful work
  3. Rewards within organisation are not seen to be equally or fairly distributed
  4. Commitment to publicly stated values and philosophies are not evident within the company
  5. Double standards perceived or evident - one rule for leadership and another for general staff
  6. High levels of pay inequality evident, or perceived unfairness in remuneration policies
  7. Little to no opportunities for promotion
  8. High staff turnover
  9. Career development is not promoted, with little or no training or learning opportunities
  10. Work life balance is not a priority, and poor policies in place to support this
  11. Bullying in the workplace is not tackled - poor procedures in place to address or prevent bullying
  12. No effort to align employees’ roles with their strengths
  13. Employees are nervous about losing their jobs
  14. High levels of active disengagement
  15. Staff are paid less than the living wage
  16. Workplace is understaffed and workloads for existing staff are excessive
  17. Lack of values or purpose, or the values or purpose stated are not reflected in the organisational culture
  18. Disciplinary action is perceived to be disproportionate or inconsistent
  19. Business campaigns to have employee benefits and rights reduced at government level