The Link Between Employee Engagement and Organization Performance - Literature review Example

?The Link between Employee Engagement and Organization Performance Literature Review: Employees Engagement is all about obtaining workers to ‘give ittheir all’. Employee engagement is a vast build that touches almost every areas of HRM. If all part of HR is not addressed in proper way, employees fail to completely engage themselves in their work in the reply to such kind of mismanagement. It is also stronger forecaster of positive organizational performance obviously demonstrating the two-way relationship among employer and worker compared to the three previous constructs: workers dedication, job satisfaction and organizational residency behavior. HRM is increasingly measured a contemporary expansion that carries on to reshape employment relations (Beardwell, Holden, and Claydon, 2004). An endeavor is made to believe it an instrument that may have successfully replaced other type’s management customs like Industrial Relations and Personnel Management. (Sisson, 1993). Another driver is to examine a bundle of most excellent practices (Purcell, 1999) for example high dedication management and their impact on employment relations. What ever the route HRM remains a current but evolving science coping with complex beings, and in complex companies and surroundings (Cusworth & Franks, 2003). “Within the HRM tradition, HRM is strategy-focused and central to the corporate plan in the planning perspective. In the people management perspective, HRM views people as social capital, capable of being developed and committed at work” (Farnham 2010, p. 6). Various Types of Issues in Contemporary HRM are: Research carried out by Duncan Brown of the CIPD (2003) recommends that organizations that adopt a strategy of social responsibility be inclined to fare enhanced in attracting novel recruits – a key concern for UK organizations in the present labour market. Various issues faced by the Contemporary HRM are, Job Stress: According to Elizabeth J. Clark in his article called, “STRESS AT WORK: HOW DO SOCIAL WORKERS COPE?” says that, it is the chronic disease of the employees in the organizations. It negatively influences the performance of the individual. Stressful work environment, whether caused by human being or situational features, can guide to health trouble and risk of wound. (Elizabeth 2008). “HRM us where by the management of people is read-off the broader objective of the organization” (Marchington & Wilkinson 2005. p. 5). Many contestants signified that they practice health-related struggle resulting from the stress they experience at job. The reasons behind the job stress of the employees in the organizations are conflict among work and family responsibilities, technical advance and regular interactions among the consumer and service industry. The symptoms of job stress are, physical illness, depression, family conflict, lack of mental concentration, anxiety, extreme anger, absenteeism, frustration, and stress. (Elizabeth 2008). Worker Burnout: It is emotional overtiredness and detachment from job. Pprofessionals as well as workers are affected by this phenomenon. Various causes that may lead to the worker burnout in the current HRM in organizations are, lack of family support and community support, lack of balance in work and life, lack of time for hobbies, and finally the workers are pushed to time limits by the company. (What Is Employee Burnout? 2009). “Burnout can be symptomatic of larger issues affecting staff morale, but there are simple ways to alleviate these realities that are cost-effective and sustainable. Keep in mind that there is no magic wand here and that material solutions are not always the best approach to addressing employee burnout” (Poland 2011). Safety: Safety deals with the condition of being safe in the organizations. It also consists of protection of people or possessions. Safety aspects of the individuals in the organizations are one of the major issues faced by the companies in the current HRM. Various ways to improve the safety in the organizations are, making safety atmosphere, and properly designing work and technology. (Workplace Health, Safety and Welfare, 1992). “The management of borderless human resource is a complex and difficult task but nevertheless a task that can be successfully and satisfying accomplished. The core challenged of IKRM is to operate in these seemingly borderless firms yet within the constraints of multiple national laws and culture” (Briscoe et al. 1995, p. 16). Bias and Diversity: Bias and diversity is another most important issue witnessed at work places. It leads to various problems in the smooth functioning of organisations. Discrimination leads to negative mental outcomes from the employees. A bias is an unbendable positive or negative predisposition on the subject of the character, nature, and abilities of a human being and is based on a comprehensive thought about the group to which the human being belongs. (Frank McCarthy, 2004). Diversity is a significant issue that contributes to the survival of any business. It consists of understanding, identifying, respecting and accepting every other person’s differences. So diversity leads to less communication among colleagues. Citizens no longer exist and work in a limited marketplace; they are at the present part of a global financial system with competition coming from almost every continent. (Green et al. 2009). Violence and Sexual Harassment: Violence and sexual harassment leads to mental distress and on the whole health issues to the employees. It leads to aggression from the consumers. So we can say that this is also one of the most significant issues faced by any company in the HRM. (Sanchez 2012) “The effect of international operation and activates on HRM is enormous; and the impact of effective global HRM can make a major contribution to the success of an organizations international operations” (Globalising HR: Executive Briefing 2002).All these issues negatively affect the organizational productivity of the company. Positive relationship among employee engagement and organizational performance offers following outcome to the company. Such as, worker retention, efficiency, productivity, customer faithfulness and protection. Study also point out that the more engaged workers are, the more expected their employer is to go beyond the business average in its growth of revenue. Employee engagement is establish to be higher in double-digit development organizations. It also points out that engagement is positively connected to consumer satisfaction (Coffman, 2000). Financial News, published in the year of March 2001, as quoted by Accord Management Systems (2004), discloses that disengaged workers are more likely to cost their company. According to the report, workers who are disengaged leads following: Miss almost and average of 3.5 more working days yearly. Are less prolific Cost the US financial system $292 to $355 billion yearly. 2. Going beyond Descriptive Account of Processes and Procedures: According to Katie Truss, Emma Soane, Christine Yvonne L Edwards, Karen Wisdom, Andrew Croll, Jamie Burnett in his book called Working Life: Employee Attitudes and Engagement 2006 say that employer’s desire engaged employees for the reason that they deliver enhanced business performance. CIPD research has repeatedly verified the links among the method people are managed, organization performance and employee attitudes: When managers distribute on their commitments, this reinforces workers sense of trust and fairness in the organization and makes a positive mental contract between employee and employer. The high performance formed by Bath University builds on the psychosomatic contract but highlights the role of line managers in making circumstances under which workers will offer ‘discretionary behavior’. The model distinguishes that workers have choices and can decide what level of engagement to offer the employer. “Employee engagement is a business management concept.” An engaged employee is someone who: 1. Has a belief in the business organization 2. Does the right things to make the business prosper 3. Understands the business concepts and gets the bigger picture 4. Is respectful towards colleagues 5. Is willing to go the extra mile for the sake of the organization” (Employee Engagement Activities – Take Care of Your Employees and Boost Your Profits n.d.). Employers are making an engaged labor force in many steps. The first step is to calculate employee attitudes. Most great employers in both public and private sectors now conduct normal employee attitude analysis. The consequences classically show what workers feel regarding their work on a range of aspects including, for instance, communications, pay and benefits, learning and development, work-life balance and line management. There is no maintaining “employee engagement” (Employee Engagement Consortium 2012) and short-cut to building, other than the effort, time and resource essential will be amply repaid by the performance benefits. There is no perfect all-purpose list of engagement ‘drivers’. Nevertheless, CIPD research into worker approaches found that the major drivers of employee engagement were: Having chances to feed our views upwards Feeling knowledgeable regarding what is happening in the organization. Consider that the director is committed to the organization. Perceived managerial fairness in dealing with troubles also influences considerably on individual performance, even though it is not considerably connected to engagement. Likewise the “Institute of Employment Studies (IES)” (Institute of Employment Studies n.d.) has fulfilled that the main driver of engagement is a sense of feeling involved and valued. The major components of this are said to be: Participation in decision-making Freedom to voice thoughts, to which managers listen Feeling allowed to perform well Having chances to expand the job Feeling the business is concerned for workers health and well-being. “Engagement levels are influenced by employees’ personal characteristics: a minority of an employee is likely to resist becoming engaged in their work. But people are also influenced by the jobs they do and the experiences they have at work. The way in which both senior management and line managers behave towards, and communicate with, employees, plus the way in which work is organized and jobs defined, contribute significantly towards making work meaningful and engaging” (Employee Engagement 2007). CIPD states that employers have to pay more attention to making an engaged workforce. This is a business issue. The employment connection needs usual attention and maintenance other than, if not carefully handled, HR business partnering can guide to neglect of the ‘employee advocacy’ function with damaging possessions on engagement. Adopting an efficient engagement strategy can give chances for HR practitioners to obtain new work and skills alongside experts in extra parts of the business, containing those liable for corporate and marketing social responsibility. The growth of a robust employer ‘brand’ or employee proposition can also maintain a positive Psychological contract among employees and employer. Literature Review: One of the primary problems confronted in accessibility to literature is the deficiency in the universal description of employee engagement. Kahn (1990:694) describe employee engagement as “the connecting of association members’ self to the work responsibility; in engagement, people spend and articulate themselves bodily, cognitively, and expressively throughout responsibility performances” (Khan). The cognitive feature of employee engagement, anxiety of employees’ attitude to the organization, its privileges and the working situation. The emotional feature concerns how employees feel every time, and whether they have constructive or depressing attitude toward the organization and its leaders. The physical characteristics of employee appointment concern the physical energies applied by individuals to achieve the roles. Thus, according to Kahn (1990), engagement finds to be psychologically as well as physically significant as it necessitates taking up and performing an organizational position. The survival of diverse definition makes the situation of being informed of employee engagement hard to decide, as every study scrutinizes employee engagement, under a dissimilar protocol. In addition, unless worker appointment can be universally definite and calculated, it cannot be controlled, nor can it be identified if efforts to develop it are working (Ferguson 2007). This understands the troubles of comparability based on divergence in description whilst it is recognized that employee engagement has been distinct in many diverse ways, it also disagrees with the definitions frequently found alike to other enhanced, known and recognized terms as ‘organizational commitment’ and ‘organizational behaviour’ (Robinson et al. 2004). Thus Robinson et al. (2004) defines engagement as ‘one step up from description’. As an effect, employee engagement has the emergence of being an additional development, or what some may describe “old wine in the new bottle”. “Organizational instability has been shown to have a high degree of high turnover. Indications are that, employees are more likely to stay when there is a predictable work environment and vice versa (Zuber 2001). In organizations where there were high levels of inefficiency there was also a high level of staff turnover” (Alexander et al.1994, p. 050). There are obvious associations connecting employee engagement and efficiency, which, in turn, involve efficiency. Employee appointment goes to the heart of managerial ability issue. “There appears to be a general willingness to accept the findings underpinned- the higher the level of employee commitment, the better the business outcome. If employee engagement is indeed one-step beyond commitment, the reward should be even greater” (Robinson et al. 2004, p. 37). The research conclusions suggest that only a small quantity of employees can be explained as occupied, with a far greater quantity of respondents to surveys supposedly either not engaged or disconnected. Meere (2005). “The confusion, contradiction and interchange of terms for engagement raise the question as to whether employee engagement is a valid and reliable construct at all. What- ever might be the engagement, the longer employees stay with an organization, the less engaged they become unfortunately, according to the Gallup Organization. ‘So it is important to continually understand and foster EE in the workplace” (Lanphear 2004, p. 1). The council made big developments in employee turnover, satisfaction and non attendance levels, subsequent to employee engagement proposal. The announcement among the council officers, the neighborhood, the union and the congress members was excellent. A good illustration of how to compel through transform quickly, in partnership with stakeholders. Brockett (2006). Organizational Performance: “For many managers there is a question about how and where employee engagement fits within the array of organizational approaches that have emerged. Turning once again to research done for the Government of Canada, a model that considers a range of organizational relationships and describes the main areas to be considered was developed” (Schmidt & Marson 2006). The citizens who get in, have a transportation vehicle, systems and processes that replicate what they desire in conditions of the boss brand and what it stand for. Of course, when you have the correct people, you have the problem of generating customs of leasing them, identify what is available in the company and where they fit in – in consideration to business goal and objectives Employment evaluation (24 March 2006). “An alternative model of engagement comes from the ‘burnout’ literature, which describes job engagement as the positive antithesis of burnout, noting that burnout involves the erosion of engagement with one’s job (Maslach et al. 2001). According to Maslach et al. six areas of work-life lead to either burnout or engagement: workload, control, rewards and recognition, community and social support, perceived fairness and values” (Kular et al. 2008, p. 5). The obligation of a quantitative advance to supervising the employees to dissatisfaction of employees and therefore it lead to labor turnover. Therefore organization must not use quantitative move towards in administering its employees. Accept a cost leaning advance to service costs amplify labor turnover Simon et al. (2007). “Newman et al. (2001) outlined how these interrelated issues affect one another, based on a review of literature on nurse recruitment and retention, service quality, and human resource management. Newman shows a chain of connectivity such that (a) internal conditions and environment affects (b) the service capability of staff which influences” (Peltier & Dahl 2009, p. 5). Wagner (2006) said that a main aspect in employee’s satisfaction and devotion to that company is the employee’s association with his or her direct supervisor. This judgment further displays the requirement for health care manager to be worried with employee satisfaction as the organization faces shortages. Employee satisfaction also come out to have a well-built relationship with the value of care distribution and associated costs. When human resources are more pleased, it helps decrease stress, proceeds, non attendance, and junior work-related disability and aggression claim (Harmon, et al. 2003; Joiner and Bartram, 2004). “Ryan, Schmitt, and Johnson (1996) investigated similar relationships between aggregated employee attitudes, firm productivity, and customer satisfaction. The authors measured these relationships at two points in time, from 142 branches of an auto finance company. Results indicated, employee morale was related to subsequent business performance indicators, customer satisfaction sentiments, and turnover ratios. These researchers attempted to study the causal relations among the variables; however, their attempts led to inconclusive findings mostly” (Cole n.d., p. 4). Schneider et al. (2003) statement analyses employee approach survey data, combined to the organizational height of analysis. These authors discover the relationships connecting numerous facets of worker satisfaction and managerial, financial matters (return on assets) and promote performance (earnings per share; EPS) from the statistics of 35 organizations over a phase of eight years. Thus, in difference to earlier studies, Schneiders’ analysis in combination with his colleagues was proficient to build some conclusion about directional causality. “Engagement affects employee performance (Kahn, 1990). ‘Engaged employees work harder, are more loyal, and are more likely to go the “extra mile, for the corporation” (Lockwood, 2007, p. 3). Wellins and Concelman (2005 p. 1, cited in Macey and Schneider, 2008a) suggest that engagement is an ‘illusive force’ that motivates an individual to achieve higher levels of performance” (Smith & Markwick 2009, p. 17). Organizational dedication is an emotional answer to the whole organization, and the degree of connection or devotion employees experience towards the organization. Job connection symbolizes the degree to which employees are engrossed in or worried with their job and the amount to which a human being identifies with the job (Brooke et al. 1988). Conclusion: The conclusion in the literature, reviews approximately from employee engagement point, of that engagement can be enhanced through accepting exacting behaviors. The vocation to improve working circumstances can be maintained by deciding accurate human resource performed to support appointment, which may comprise constructive supervisory style, efficient communication, and work-life equilibrium. All these can be underpinned by corporate culture and management approach from top administration to accomplish higher employee engagement, and thus enlarge optional behavior and eventually, efficiency and profit. 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