Impact of Employee Engagement on Organizational Performance - Literature review Example

Impact Of Employee Engagement On Organizational Performance

Introduction

The term employee engagement is utilized to refer to the degree to which an employee or a member of an organization is committed towards organization as well as its members’ aims and objectives (CLC, 2014). The term even entails the degree of hard work that individual employees invest in their jobs and tasks and the length of stay an employee experiences as result of their commitment towards the organization. There are several ways through which employers and organizations can attain a highly engaged workforce. These methods include but are not limited to the learning and development of an employee, the degree of involvement of an employee in their jobs, the degree of communication between employee and employer/managers and the extent of satisfaction employees attain from their job. There are several methods of attaining a highly engaged workforce but selecting one single method is quite difficult. Different employees feel engaged due to different factors and employers need to rely of different methods used in collaboration with each other to attain a highly engaged workforce.

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Methods Of Improving Employee Engagement

Training as well as learning and development of individual employees within the workforce are one of the factors that result in a highly engaged workforce. Employees find it easier to perform a task which they are well equipped to work on. Employees who lack the ability and knowledge for performing a task are more likely to give up and they may try to avoid those tasks. Learning is a key that help employees develop the right skill set to perform tasks that they have been assigned. When employees are able to perform a job in a better manner they are more engaged with the task and the jobs (Byrne, 2015). Furthermore, employees should be provided with developmental opportunities especially in the area of managing as well as leading team. These activities make the employees feel that the organization expects them to carry out leading and managing roles which makes them feel highly desired by the organization. In other words when employees are provided with developmental opportunities their need for belongingness is satisfied. They feel that they belong to the organization they are working for and as per Maslow’s theory of hierarchy of needs when employees’ need for belongingness is satisfied they tend to work hard and are more involved (Koontz et al., 2007, p.290). Due to this they become more engaged in order to prove to their employers that they are willing to take higher level positions. Rothmann et al. (2007) identifies that those employees who are not provided with developmental as well as advancement opportunities are more likely to experience cynicism (Rothmann et al., 2007, p.50). The term cynicism was used by researchers in order to refer to the act of withdrawing from work carried out by an employee as a result of failure to perform their jobs when they are not able to perform those jobs.

Another method through which employee engagement can be achieved and enhanced is by increasing an employee’s involvement in the tasks and jobs that have been assigned to them. Employees should not only be assigned with responsibilities, they should even be allotted the power and the authority to carry out these responsibilities. When employees are assigned the authority to decide how tasks should be completed, their involvement in the task increases as they try to identify creative ways to perform their jobs (Byrne, 2015). This is in compliance with John Adair’s leadership and motivation theory which states that when leaders are able to motivate employees to work hard when they allow employees to work on their own and take decisions and actions in relation to the tasks that they have been assigned (De Silva, 2013, p.237). Furthermore, this even makes the employee feels trusted and ultimately this leads to enhancement of an employee’s engagement in their tasks and organizations. Stander et al. (2010) conducted a study in order to identify the connection between perceived empowerment and employee engagement. In order to conduct this study the researchers surveyed a population of more than 440 employees belonging to a government based organization and a manufacturing concern. The researchers were able to identify that those employees who had a positive perception of being empowered by their employed scored positively on employee engagement (Stander et al., 2010).

The degree of communication as well as feedback that takes place between employee and their managers is a major driver of employee engagement. Employees feel that they are indulged in meaningful work when they are provided with continuous feedback by their managers. They perceive that the jobs they are performing are of high significance to the organization and that is why managers are providing them with feedback (Byrne, 2015). Furthermore, when managers need to critique the job that employees have performed in order to help employees understand how good or how bad they are performing and this even informs employees regarding any corrective measures that they need to take. This feedback enables employees to perform tasks as the management expects them to perform. Therefore, feedback received from managers helps in elevating employee engagement with their tasks and organizations. May et al., (2004) conducted a study in order to identify the impact of perceived meaningful work on the degree of an employee’s engagement with their work and organization. In order to conduct this study the researchers surveyed employees belonging to an insurance company (May et al., 2004). The researchers were able to conclude that employees who experienced a higher level of meaningfulness with their work were more indulged in engaged with their organizations.

Employee engagement is one of the key drivers of satisfaction that employees experience with their work and organization. Several times job satisfaction has been considered as an alternative term for employee engagement. The reality is that both the constructs are independent to each other. But there is a strong connection between job satisfaction and employee engagement (Byrne, 2015). An individual who may be getting highly paid for performing a particular job may be experiencing higher level of job satisfaction but it is not necessary that the individual is highly engaged with his her work. On the contrary there is a positive correlation between job satisfaction and job engagement. Employees who might be highly satisfied from their workplaces as well as jobs may be experiencing higher level of job engagement. This is mainly because when employees are more engaged in their work they are able to attain positive feedback from employers, higher pay grades, meaningful work and are able to exercise authority which ultimately leads to employee satisfaction. Byrne (2015) cites a study that was conducted by Saks during the period of 2006 and states that Saks was able to identify a lower correlation (.53) between satisfaction and engagement (Byrne, 2015). This depicts that moderate level of job satisfaction is experienced by employees who are highly engaged with their work.

Employee Engagement & Organizational Performance

Employee engagement is a leading phenomenon that assists in enhancing an organizations performance in a direct as well as an indirect manner. There are various outcomes associated with employee engagement that have been found to help an organization become successful in terms of increasing organizational productivity, revenue as well as profitability and reducing various operational costs experienced by an organization.

Every organizations success is majorly dependent on how satisfied their customers are. Furthermore, organization’s success is even dependent on the degree of customer loyalty. An organization can easily attain increased customer satisfaction as well as customer loyalty if the organization creates and sustains a highly engaged workforce. When employees are engaged with organization and their work they take extra measures and invest higher degree of hard work in ensuring that the customers of their organization are satisfied. For example when employees are trained and developed they are more likely to develop goods and services that are highly desirable for the customers. Furthermore, when employees are empowered they use their customer interaction as a tool to identify what customers want and based on this information they develop goods and services which are of high quality as per the customers perception. Gov.scot (2016) has cited a research which identified that 70% of those employees who were highly engaged with their organization were in a better position to satisfy the needs of the customers as compared to the 17% of those individuals who were experiencing disengagement (Gov.scot, 2016).

A major cost experienced by organizations is the rate of employee turnover. When employees do not feel engaged with their organizations, they tend to quit the organization. Due to this the organization experiences various human resource related costs. These costs include training and development, recruitment and selection costs that organizations experience as a result of replacing employees who are disengaged with their organizations. Furthermore, new employees take time to understand organizational cultures and work they are assigned. As a result of this the likelihood of a new employee quitting an organization is quite high. Furthermore, organizations even experience loss of productivity when their employees quit. All these costs are reduced when organizations are able to attain a highly engaged workforce. Gov.scot (2016) has cited a research that has identified that 75% of those employees who are highly engaged with their organizations are more likely to stay with the organization for nearly 5 years as compared to the 44% of the employees who experience disengagement (Gov.scot, 2016).

Increased productivity is a major benefit that organizations experience as a result of attaining a highly engaged workforce. Organizations comprising of engaged workforce tend to have employees who try to identify ways of completing their tasks in creative manner. This enables the employees to reduce the time consumed to produce goods and services and even reduce the use of resources used for production. As a result of this organization experienced increased productivity as well as economies of scale. Increased productivity with minimum usage of resource and time enables an organization to reduce the cost of the goods and services they produce and this translates into increased revenue and profits for the organization. Baldoni (2013) has cited a research which has helped in identifying that organizations that have an aggressively engaged workforce experience 22% increase in their productivity levels (Baldoni, 2013).

Conclusion

Employee engagement is a phenomenon that helps an organization succeed and perform better than their competitors. Employee engagement is a term used to refer to the degree of which an employee is emotionally connected with his/her organization. Employee engagement can be attained through training and development of employees for present tasks and future leading and managing positions. Furthermore, employees who are highly empowered are more engaged with their workplaces and their work. Employee engagement even increases as a response to the feedback and communication that takes place between the employer as well as the employee. Employee engagement is a tool that can be used to increase employee satisfaction. Employee engagement is a key through which employee retention, productivity, commitment and involvement can be elevated. Furthermore, it is a tool that can help organizations attain higher level of productivity and reduced cost of production.