Employee Engagement: A foundation for organizational performance
by Faye Schmidt and Brian Marson
Improving organizational health and employee engagement is one of the ten top
challenges facing Deputy Ministers and municipal CAOs, according to a recent survey by
IPAC. This article tries to answer three questions about this key management issue:
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What is employee engagement?
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What factors drive employee engagement?
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How can managers use these “drivers” of employee engagement to improve staff
satisfaction and organizational performance in the face of the current “retirement
tsunami” and the resulting “generational shift”?
The impending demographic crisis and the retirement tsunami are now receiving a lot of
attention (see http://www.networkedgovernment.ca/OrganizationalAlzheimersMarson for
an overview). But it is not the only challenge. The public sector faces high levels of client
expectations for services, evolving service delivery models that require new skill sets and
higher levels of knowledge for frontline workers, and financial constraints. Just when
organizations most need a strong, dedicated workforce to meet service and fiscal
demands, the workforce is shifting and decades of knowledge and experience are starting
to head out the door. The challenge is how to attract, retain and engage employees to
achieve high levels of organizational performance.
The good news is that many organizations are making a start through a variety of
innovative management approaches. Staffing and benefits solutions are being used to
address employee attraction and retention. Better knowledge management systems are
being created to stem the exodus of information. Training and development is gearing up
to build new skills and knowledge. Marketing and branding are being used to build a
positive image, and so on. All of this is needed. But none of this is going to be enough if
employees do not see public organizations as good, satisfying places that they want to
join, stay with, and contribute to in ways that help achieve organizational goals.
What is employee engagement?
Employee engagement means many things to many people. Without a clear definition it
is hard to know what to focus on, how to measure it, and what drives it – essential
features that shape improvement strategies.
A literature review we conducted for the Government of Canada found a broad range of
labels applied and measured in many differing ways – employee satisfaction, loyalty,
morale, commitment, productivity, engagement, pride, organizational health, passion, and
the list goes on.
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Based on this review, a definition of employee engagement was developed:
“Employee Engagement has two distinct yet related main factors:
1. Employee Satisfaction: The level of contentment or happiness a person assigns to:
• attributes of their job/position,
• their organization, and
• the general or overall way they feel about their employment.
2. Employee Commitment: The pride people feel for their organization as well as the
degree to which they:
• intend to remain with the organization,
• desire to serve or to perform at high levels,
• positively recommend their organization to others, and
• strive to improve the organization’s results.”
The multi-dimensional nature of this definition reflects the complexities of organizational
life and of careers – neither satisfaction nor commitment on their own capture the full
scope of employee engagement. Happy employees who are about to leave and unhappy
employees who are determined to stay are both common but neither can support high
levels of organizational performance.
Given that this definition embraces two distinct but related constructs it is interesting to
consider how they might interact. Schmidt’s literature review for TBS suggested that
satisfaction and commitment be mapped jointly to identify the different kinds of
engagement situations found in many workplaces.
What drives employee engagement?
When the employee engagement literature review was completed in 2004 there were a
few surveys that reported satisfaction and commitment as the main variables. However, at
that time the definition and model (discussed above) that emerged from the review were
still largely conceptually based. Since then several public jurisdictions have started to do
more robust employee engagement surveys based on this definition of engagement. As
some of these surveys have used structural equation modelling to identify the key drivers
of engagement, we are starting to get a clearer understanding of what drives employee
engagement. Not only is this positioning public organizations to develop stronger, more
effective improvement plans, the early survey results are encouraging in that they support
both the definition of engagement as a combination of satisfaction and commitment as
well as this 2X2 matrix.
A good example comes from British Columbia. After two rounds of testing a new
employee engagement survey tool, BC Stats designed and administered a system-wide
employee engagement survey in early 2006 for the BC Public Service Agency (Getting
Started with Employee Engagement: the B.C. Public Service, 2006). The main outcome
variables identified through this study – commitment and satisfaction – are in keeping
with the above definition of employee engagement. Given the multi-dimensional nature
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of the definition, it was not surprising that the BC surveys found that satisfaction took
two distinct forms – job satisfaction and organization satisfaction.
The BC research also identified the drivers of employee engagement. Their model starts
with a leadership foundation where both the executive and immediate supervisory levels
are identified as important drivers. From this foundation several workplace drivers
operate: pay and benefits; staffing practices; respectful environment; recognition;
professional development; vision/mission/goals; teamwork; physical environment and
tools; empowerment; stress and workload. All of these drive the three organizational
outcomes of commitment, job satisfaction and organization satisfaction.
There is a circular relationship among the three outcomes with commitment driving job
satisfaction, job satisfaction driving organization satisfaction, and organization
satisfaction driving commitment. As the model presented in Figure 2 shows, all of this
ultimately comes together as employee engagement.
The BC model confirms the definition of employee engagement and its illustration of key
drivers, but goes beyond that to demonstrate how the constructs of satisfaction and
commitment can be used together to help create a picture of employee engagement.
BCStats produced a 2X2 matrix of satisfaction by commitment to help managers and
leaders understand how engaged their employees are. This kind of diagnostic information
provides comprehensive insight into the organization.
While presented here at a very high level, these findings are a powerful demonstration of
what employee engagement is and how a well designed and reported survey can
contribute rich employee engagement driver information that identifies where to
strengthen workplaces and build organizational performance. The challenge for managers
and leaders is to try to create the workplace conditions where most of the employees fall
into the top right hand box – staff who are satisfied with their jobs as well as highly
committed to helping the organization achieve its goals.
There are other excellent examples of employee engagement research from several
jurisdictions. ERIN Research completed a review of four studies for the Treasury Board
of Canada Secretariat (Finding Common Ground, 2006) – the BC work, the Municipal
Region of Peel, the Province of Manitoba, and two areas within the Government of
Canada – the Treasury Board Secretariat and the Public Service Human Resource
Management Agency of Canada.
Common findings emerged from these studies even though each used a unique employee
engagement survey tool. First, the outcome variables found in each study were
satisfaction and commitment. And, while there were differences in the labels used, the
most common drivers of employee engagement were:
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management effectiveness
colleagues/work unit
understanding of and support for the organization’s vision, goals, mandate
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career progress and development
quality of supervision
autonomy: having the authority to make needed work-related decisions
workload.
Improving staff satisfaction and organizational performance
These common drivers suggest areas where improvements may increase employee
engagement and, in turn, organizational performance. Public organizations can use this
list as a starting point, but the most effective approach is to regularly gather organizationspecific information on what drives engagement and how levels of satisfaction and
commitment are changing.
Organizations that understand what their drivers are and which ones need priority
attention are well positioned to create better workplaces and increase employee
engagement. If we take the results from the BC survey, it is clear that the top priorities to
be addressed to improve engagement are: effective and timely executive decisions;
executives providing clear direction for the future; pay and benefits; staffing practices;
recognition; stress and workload. By working to improve these areas, managers will be
able to make a real difference in employee engagement.
Similarly, if we look at the example of a federal agency (in this case only looking at staff
commitment) in Figure 4, we see that the most important priorities for this agency are to
improve the quality of management, and improve communications with staff. Both of
these are areas where survey scores are low and they also are ones that have a strong
impact on engagement.
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.
The model is a logic chain that captures the engagement–organizational performance link
discussed here and also presents a more complete picture of organizational dynamics and
how they are related.
This model reminds us that in order to achieve the levels of employee engagement
needed for organizational success and the advancement of the greater public good it is
necessary to start with the right workforce and provide them with the right kind of work
environment. However, as important as these foundational areas are, they are not enough.
It is clear from the studies discussed here that the things that drive employee engagement
are mainly human and social in nature. This is where it is useful to include the concept of
“workplace well-being” and to view it as a main avenue or strategy for advancing
employee engagement.
Workplace well-being has been defined as “a holistic approach to creating high
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performance organizations through establishing the right conditions to generate high
levels of employee engagement. This approach assumes that achieving high levels of
organizational performance depends on employees who are strongly committed to
achieving the goals of the organization, and who show this through their actions. This
behavioural objective is influenced in turn by levels of employee satisfaction, and by
supportive, respectful and healthy work environments. WWB is connected to physical
health and wellness but primarily emphasizes the social and psychological dimensions of
three inter-related elements – workplace, workforce, and the work people do.”
The reward, for organizations that take on the challenge of making improvements across
all of the layers in this model, will be the kind of workplace that attracts and retains
individuals with the knowledge and skills needed for high levels of organizational
performance. This means that effectively responding to the triple challenge of
demographics, citizen expectations and fiscal pressures is not beyond the reach of public
sector organizations.
The good news in this: our knowledge of what is most important to today’s workers and
the kind of workplace they need is growing and there is solid evidence that tells us where
to focus our attention.
Dr. Faye Schmidt is an independent management consultant working in the areas of
service improvement and organizational development (SchmidtConsulting@telus.net);
Brian Marson is Senior Advisor, Policy and Service Transformation, Treasury Board of
Canada Secretariat, and Senior Advisor, Office of Public Service Values and Ethics
(marson.brian@tbs-sct.gc.ca).
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