What drives employee engagement?
Dr Bruce Rayton
University of Bath School of Management
B.Rayton@bath.ac.uk
@BruceRayton
http://uk.linkedin.com/in/rayton
@BruceRayton
© Dr Bruce A Rayton (2013)
Outline
What is employee engagement?
How does employee engagement hit the bottom line?
Some recent research on these linkages
What can you do to encourage employee engagement?
Conclusion
@BruceRayton
© Dr Bruce A Rayton (2013)
Employee Engagement:
The Evidence
GDP growth
per year by better
engaging employees
at work.
Analysis of the evidence shows that:
Only around a third of UK employees say they are
actively engaged at work.
20 million workers are not delivering their full
capability or realising their potential at work.
of people said they have more to offer in
skills and talent than they are currently being asked
to demonstrate at work.
UK productivity was 20% lower than the rest of the
G7 in 2011
@BruceRayton
© Dr Bruce A Rayton (2013)
What is employee engagement?
Employee attitude?
Employee behaviour?
Organisational programme?
Typical practitioner definitions linked to academic concepts like:
• Work engagement
• Flow
• Job satisfaction
• Organisational commitment (esp. affective commitment)
• Organisational citizenship behaviour
• Employee voice
• Employee involvement
@BruceRayton
© Dr Bruce A Rayton (2013)
For my purposes now ….
Engagement is not …
>something you do to employees.
>something you do for employees.
>something employees do.
?
Employee
Engagement
Engagement is …
> “a positive, fulfilling, work-related state of mind.”
>Adopting this approach lets us to talk about linkages between
engagement and its antecedents/outcomes.
@BruceRayton
© Dr Bruce A Rayton (2013)
How does employee engagement hit the bottom line?
“The performance of every organisation is, to a greater or lesser
extent, influenced by the people within.”
Employee Engagement – The Evidence (2012, p. 2).
@BruceRayton
© Dr Bruce A Rayton (2013)
Companies with engagement scores in the top
quartile averaged 12% higher customer
advocacy than those in the bottom quartile.
7 percentage points difference in customer service scores
between top 10% and bottom 10% ranked by engagement.
70% of engaged employees indicated a good understanding of
customer needs. Only 17% of the non-engaged said the same.
Net Promoter Score
>A customer loyalty measure
>In principle, this can range from minus 100 to plus 100.
>Linked with performance.
> Reichheld, Frederick F. "The one number you need to grow." Harvard
business review 81.12 (2003): 46-55.
@BruceRayton
© Dr Bruce A Rayton (2013)
8
Net Promoter Score
Figure 3 from Engage for Success evidence report
2011 Net Promoter Score in Serco
40%
30%
20%
Under 30% of
employees
engaged
10%
30 – 44% of
employees
engaged
45 – 64% of
employees
engaged
0%
65% or more
of employees
engaged
-10%
-20%
-30%
9
Where do the benefits come from?
Most arise through the positive exercise of discretion by
employees.
Examples include:
> Excellent customer service. “Going the extra mile.”
> Suggestions for process improvements.
> New product innovations.
> The willingness to share.
> Not quitting.
Academics often talk about “Organisational Citizenship
Behaviours”
@BruceRayton
© Dr Bruce A Rayton (2013)
Some recent research
Work engagement, job satisfaction and organizational
commitment are not the same things.
Work engagement precedes performance
> Yalabik, Zeynep Y., P. Popaitoon, J. Chowne & B. Rayton. (2013) "Work
engagement as a mediator between employee attitudes and outcomes."
The International Journal of Human Resource Management.
@BruceRayton
© Dr Bruce A Rayton (2013)
Engagement precedes performance
The arrows imply direction of link.
The numbers suggest size and
‘direction’ of effect (+/-).
Note timing.
Yalabik, Zeynep Y., et al. "Work engagement as a mediator between employee attitudes and outcomes." The International Journal of Human Resource Management ahead-of-print (2013): 1-25.
@BruceRayton
© Dr Bruce A Rayton (2013)
Some recent research
Synergistic feedback loops:
> Riketta (2008)
> Hakanen et al. (2008)
Engagement
Performance
13
Engagement precedes performance
The links from engagement to performance are stronger and
longer lasting than the links from performance to engagement.
> Yalabik, Popaitoon, Chowne & Rayton (2013)
> Winkler et al. (2012).
0.7
0.6
1 year out
0.5
0.4
2 years out
0.3
0.2
3 years out
0.1
0
Engagement this
year and financial
performance
Engagement this
year and customer
satisfaction
Financial
performance this
year and
engagement
Customer
satisfaction this year
and engagement
14
So, engagement precedes performance
…. But remember
15
Engagement precedes performance
@BruceRayton
© Dr Bruce A Rayton (2013)
17
What can you do to encourage employee engagement?
• Visible, empowering leadership providing a strong strategic narrative
about the organisation, where it’s come from and where it’s going.
• Engaging managers who focus their people and give them scope,
treat their people as individuals and coach and stretch their
people.
• There is employee voice throughout the organisations, for
reinforcing and challenging views, between functions and
externally, employees are seen as central to the solution.
• There is organisational integrity – the values on the wall are
reflected in day to day behaviours. There is no ‘say –do’ gap.
On the importance of
Engaging Line Managers ….
Employee Work
Engagement
(time 1)
(+)
Employee Work
Engagement
(time 2)
(+)
nil
Line Manager
Work Engagement
(time 1)
(+)
Line Manager
Work Engagement
(time 2)
Preliminary results from some work in progress with Zeynep Yalabik and Patchara Popaitoon.
@BruceRayton
© Dr Bruce A Rayton (2013)
19
On the importance of
Organisation Integrity ….
Psychological
Contract Breach
(time 1)
Psychological contract breach is
The cognitive evaluation that one’s
organization has failed to fulfil its obligations
(-)
Job Satisfaction
(time 1)
(+)
Psychological contract breach
Leads to decreases in job satisfaction
Work Engagement
(time 2)
Which in turn decreases work engagement.
Preliminary results from some work in progress with Zeynep Yalabik
@BruceRayton
© Dr Bruce A Rayton (2013)
20
Conclusion
 Engagement lives between the ears of
employees.
 Employee engagement is linked to
performance.
 The gains from engagement arise
principally from the positive exercise
of employee discretion.
 Engagement precedes performance.
 Get your line managers on-board.
 Walk the talk.
@BruceRayton
Employee
Engagement
© Dr Bruce A Rayton (2013)
Thank you!
@BruceRayton
© Dr Bruce A Rayton (2013)