01
Employee Engagement
(Extracts from Holbeche, L.S. and Matthews, G. (2012: Engaged: unleashing
your organisation’s potential through employee engagement, Jossey Bass)
High-performance theory places employee engagement, or ‘the intellectual and emotional attachment that an
employee has for his or her work’ (Heger, 2007), at the heart of performance – especially among knowledge
workers. The relationship between the individual and the organization provides the context in which employee
engagement is created.
The state of employee engagement is characterized as a feeling of commitment, passion and energy that translates
into high levels of persistence with even the most difficult tasks, exceeding expectations and taking the initiative.
At its best, it is what Csikszentmihalyi (1992) describes as ‘flow’ – that focused and happy psychological state when
people are so pleasurably immersed in their work that they don’t notice time passing. In a state of ‘flow’, people
freely release their ‘discretionary effort’. In such a state, it is argued, people are more productive, more serviceoriented, less wasteful, more inclined to come up with good ideas, take the initiative and generally do more to help
organizations achieve their goals than people who are disengaged.
Employee engagement has been linked in various studies with high performance and improved key business
indicators such as higher earnings per share, improved sickness absence, higher productivity and innovation –
the potential business benefits go on and on. For instance, a Corporate Leadership Council (CLC) study found
that companies with highly engaged employees grow twice as fast as peer companies. A three-year study of
41 multinational organizations by Towers Watson found those with high engagement levels had 2–4 per cent
improvement in operating margin and net profit margin, whereas those with low engagement showed a decline of
about 1.5–2 per cent.
A public sector equivalent of the private sector service-profit chain model has been produced by Heintzman and
Marson (2006) based on research carried out in Canada. In public sector organisations the bottom-line results of
private sector value chains are replaced by trust and confidence in public institutions. They based their model on the
top public sector challenges, namely;
•
•
•
Human resource modernisation;
Service improvement; and
Improving the public’s trust in public institutions.
02
So interested was the UK Government in how employee engagement affects productivity that in 2007 the Department
for Business (BIS) commissioned a review to investigate the links. Business leaders from all sectors of the UK
economy, HR professionals, academics, union leaders, trade bodies and other interested parties took part. As
David MacLeod, one of the authors of the resulting report Engaging for Success: Enhancing Performance through
Employee Engagement (MacLeod and Clarke, 2009) put it, ‘the job is to shine a light on those doing it well so that
more employers understand the benefits of working in that way and really embrace it’. MacLeod concluded that:
“Engagement matters because people matter – they are your only competitive edge. It is people, not machines
that will make the difference and drive the business”.
Yet most of the major employee engagement surveys carried out by consultancies/providers, as well as Workplace
Employment Relations Surveys have fairly consistently suggested that employee engagement levels in the UK, even
at the best of times, are low relative to other countries, and are generally very low currently. HR consultancy Aon
Hewitt reported in June 2010 that 46 per cent of the companies they surveyed had seen a drop in engagement levels
– a 15-year record. Similarly, research in 2010 from the professional body for HR professionals in the UK and Ireland,
the Chartered Institute of Personnel and Development (CIPD), found that only three in ten employees were engaged
with their work (Alfes et al., 2010). It also discovered that:
•
•
•
•
Only half of people say their work is personally meaningful to them and that they are satisfied with their job
Fewer than one in ten employees look forward to coming to work all of the time, and just over a quarter rarely
or never look forward to coming to work
Just under half of all employees say they see their work as ‘just a job’ or are interested but not looking
to be more involved
Approximately half of all employees feel they achieve the correct work/life balance.
Today’s tough times are likely to create even greater engagement challenges, with potentially serious consequences
for organizations and the economy.
Employee engagement is symptomatic of the state of the psychological contract and employment relationship,
reflecting social exchange theory. Thus it concerns the reciprocal nature of the employment relationship – what
employers want from employees and vice versa. If those expectations are not met, or cease to be met, for instance
if the employer changes the terms on which the employee is employed, it is unlikely that the individual will remain
‘engaged’ for long.
i Heintzman, R. and Marson, B. (2006): People, service and trust: links in the public sector service value chain, Canadian Government Executive
ii Gilby, M. and Wood, N. (2004): The Workplace Employment Relations Survey (WERS), London: Department of Business, Innovation and Skills