Employee Engagement And Organizational Performance Commerce Essay


The relationship between employee engagement and organizational performance can be described as a direct one. Productivity increases when employees get work satisfaction, appreciated. This happens when there is clear open communication, right structures are in place for performance management. Managers play a vital role employee engagement and increasing the overall performance by developing talent, mentoring and career planning and development of employees. This is very crucial because when individual employee goals are in sync with organizational goals, the performance escalate to exceedingly high levels.

Table of Contents

Executive Summary 2

Table of Contents 3

1. Introduction 4

1.1 Meaning of Employee Engagement 4

2. High performance work organization 8

4. Employee engagement enhances organizational performance 11

5. Role of Manager 15

6.Conclusion 18

7.References 18

1. Introduction

The industry landscape has gone through a radical change in the last decade, and continues to do so with each passing year.

In recent times, recession played its part and changed the face of organizational work culture forever. With financial sector being a mess, staff on strikes sporadically and cost of living soaring high have added to the plight of airline industry. Company bankruptcies and shakeup of tourism industry as a result of recession set the foundations for rise in acquisitions, mergers and collaborations.

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"Resilience promises to be the distinguishing feature of the companies that will prosper from the current economic crises", Ravi Vekatesan, Vice chairman, Microsoft India.

Despite these challenges, the outlook for organizations is strong growth. The market and times look ripe for companies which continue to tackle their costs and improve products thereby securing a strong presence globally.

1.1 Meaning of Employee Engagement

Employee engagement is about employee commitment believing in organizational goals, being prepared to go beyond company expectations and delivering outstanding service to the customer.

Employee engagement is the extent to which a person is committed to an organization and the impact that commitment has profoundly describes how they will perform and their tenure with the company.

Engagement can be summed up by how positively the employees feels about the company and proactively relates to achieving organizational goals. So why has employee engagement become so important globally now? Well this is due to increasing power not only of the customer but also of the employee.

Due to increasing competition, globalization and ever growing use of internet, customers today have more choice.In today's busy life the value for time and money is at same level. Infact if any business wants to succeed, then it needs to engage with the customer at emotional level. Virgin Atlantic as a best practice organization recognises that a customer experiences is directly related to the person who provides the service. A customer perceives an organization the way its employees' willingly help, provide prompt service, empathy they demonstrate towards customers and trust and confidence they generate.

Employees are at their discretion about their behaviour and the extent to which they are engaged. So each and every employee is actually a brand ambassador of the organization they work for. Behaviour of the employee is key to developing long term relationship with customers.

Challenges: The major challenge faced today is to attract and engage client centric employees who are willing to consistently meet empowered customer's needs. Through employee engagement an organization can ensure customer loyalty. Having said that, human capital is what gives an organization competitive edge over and above technology and finance.

The traditional thought process of having a job for life is now disappearing. Employees today are armed with specialized qualifications, portfolio of skills and competencies to help them choose jobs of their liking. Also, globalization, competition, growing power of consumers, demanding stake holders have all resulted in more choices for employees. There is a shift in emphasis from collective bargaining and trade union approach to more focussed individual relationship between employers and employees. Job security and loyalty to employer are challenged by external market pressures and constantly changing social norms. Earlier managers could achieve results based on 'carrot and stick approach'. But today without guaranteed stability, organizations have to find new ways to motivate their employees and make them perform to their best.

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A critical aspect of the way organizations work results in relationships overload. Usually the deadlines are so stringent that team building seems to be an effort. People feel secure if they get the work done using their own skill sets and not being dependent on a collaborative approach. Even managers mainly focus on achieving organizational quarterly and yearly targets. Individual growth plans and needs take a back seat rendering no feeling of being appreciated. Such individuals feel immense pressure and constantly think if their efforts are worth it? Where else can they work?


Employees defined as stars are fully engaged with the organization as they have high motivation, view change as challenge and opportunity and always look out for expanding their personal zone. Due to their high energy levels they are able to deliver the wow factor to the customer. This in turn helps to create a high degree of customer engagement which means healthier relationship with the client resulting in greater financial success.

How organizations deal with star employees may guide the overall culture of an organization as other employees look up to the stars and feel that if they exhibit similar attributes, they too will be appreciated.

Job enrichment can be done when management selects employees who naturally develop, mentors and rewards employees, anticipate restlessness and motivates employees and constantly provide challenges to build the excitement of doing something innovative.

Due to pace of work, people feel considerable amount of stress and anxiety in the workplace which they carry home. This stress is generated from the pressure to constantly perform and excel, competition and meeting clients' expectations. Anxiety is also caused by layoffs. Also choices made by Senior management to serve their greedy motives seem to make employees feel betrayed. Also, it seems that productive and knowledgeable employees are ignored and unproven workers are compensated well. Further Employees have significant challenges due to global schedules and 24/7 work environment blurring the line between personal and professional line.

Multitasking is today an unsaid prerequisite for any job.An employee has just eleven minutes to focus on a project before he gets interrupted but the amount of time and energy needed to readjust the focus of the current issue cannot be measured.Today instant gratification is the way of the world. Quick solutions and prompt replies resulting in multitasking but unfortunately multitasking results in slowing of the individual and limiting of the focus.

2. High performance work organization

In today's world of fast moving economic climate, global competition and ever increasing choice of customers, organizations in every sector are evolving constantly. They compete amongst themselves on the basis of speed, quality, innovation, flexibility and customer responsiveness.Managing change is a critical challenge that every organization faces. It is a process which requires employees to cooperate and commit to the effort of change.

High performance work systems are complex and require consistently good inter dependence between various departments and employees.Integrating employee concerns and business requirements is rare but once a high performance organization is created, it is difficult to replicate. Organizations like Google, southwest airlines are examples of high performance organizations and therefore enjoy competitive advantage.


According to Vecchio and Appelbaum (1995), believe that high performance organizations always try to find solutions to problems, enable empowerment and accountability at right levels.Gallup survey of trust (2002) has suggested that trust amongst employees, teams and in management keeps the high performance going. Leaders or managers have a key role to play in building organizational symbiosis.

The question is how an organization can work towards changing norms, principles and style of working so that employees are engaged to their advantage.

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High performance work organizations thrives upon the organizational goals and environment of the organization.

A leader of such organization tries to accomplish open communication and information, increase cross functional interaction, cultivate professionalism, provide technical training and development for employees so that organization grows, employees develop and there is overall achievement of goals.

Along with this, Management should also encourage constructive feedback to redirect behaviour towards productivity, increasing synergy by replacing competition with teamwork, creating a fun environment and aligning rewards and recognition with organizational expectations. In such organizations employees are treated like partners.

An organization can get exponential results if and when it gives its employees best work environment. When employees feel that they are getting the right work life balance, development and growth in a company, it becomes one of the best place to work. A lot has been written abut work life balance but seems looking at current trends, it should be life work balance.Engagement can be successful once the company realises and treats each employee as an individual brand , needs and expectations.Stressing work as the starting point compketely disconnects an employee as it is a concept that is totally contrary to his lifestyle and beliefs. Hardwork and company goals are important but employee considerations need to be kept in mind-what makes them tick, what personal commitments they have and flexible working to support their lifestyle.Infact, people tend to value work flexibility over pay. Employers usually face this challenge that flexibility in work would result in inefficiency in the long run. But if contractual obligations are in place then there is little to worry on that front.


Also, a fast emerging trend is people going on sabbaticals. People are today adventurous to take some time off to persue their life long aspirations of travelling or following some sport or perhaps going to university.This has also resulted in interim assignments being created. People can be hired on contracts to deliver specific assignments.

Another emerging trend is of exchanging salary for time.For instance the employee will forego 10 percent if his salary for a certain number of days of vacation. This is especially successful in in European countries, for instance Belgium which is a high taxed country .Letting go some part of the salary is not hard as it is getting slashed away in tax.

To engage employees effectively, one needs to understand that Age of the employee is a crucial factor. For instance, people in 25-35 age group will have different needs as compared to people in late forties or fifties. Each age group needs to be engaged with a different approach. If an effort is made to track employee's changing requirements and expectations they can be truly engaged.

Location too is a big consideration for employees' true commitment. For example, a firm made swanky offices in a remote location leaving behind its offices in central London, making its employees choose between their lifestyle or resigning from the job. To company's surprise, many employees choose to resign. This is because change in location meant a whole extra hour to reach back home with no social or family life after a long day. But this does not mean that companies will stop relocating to newer areas as they need to optimize costs to the maximum. Sometimes consideration towards employees when changing locations can go a long way. For instance, employees can get time off to settle in a new place along with team lunch or dinner. Possibly they could be allocated a small personal budget to personalise their workplace so as to give them a feeling of belongingness and appreciation in the organization.


//The best method for creating teams is by having high quality team performance, ensure team success

The level of employee engagement can be gauged by their enthusiasm, energy levels and degree of positivity displayed at work.

Organizational focus is shifting away from 'slash and burn' to a more sustainable approach

based on organizational culture. They tend to magnetize highly skilled talent to their organizations thus making them a success. For instance, companies like IBM, GE, Microsoft the company values are cult like. Instead of focussing only on the bottom line, these companies recognise talent development through effective training. Visionaries in such companies tend to concentrate on implementing policies on core purposes and constantly works towards modifying non core activities. The give due consideration to diversity, corporate social responsibility and other ethical considerations to support multicultural workforce. High performance companies give lot of weightage to innovation. They constantly outperform their competitors by constant innovation. For instance, Apple an epitome of innovation, has built a major footing in the market by constantly launching products that are ahead of time catering to the needs of young mindsets.

Quality is given prime importance. These companies are not under any pressure to sacrifice quality for cost. The product cycle may be a bit longer than their competitors but the end product delivered is of high standards.

In Good to Great (2001), Jim Collins suggests that greatness is not a function of circumstance but a conscious choice even though luck is still a variable. It is a cumulative process which requires consistently moving towards a direction objectively. Leaders of such organizations tend to keep the right people on board as it helps in focusing on strategy and future growth.


4. Employee engagement enhances organizational performance

When questions on organizational performance are raised, main thought rests around how many employees would really care to do anything more than the bare requirement. How to ensure that they stay even on being offered another job? Another thought process runs on the fact that why should an organization worry about such employees who want to leave or how to engage the employees? This is because highly engaged employees are six times less likely to resign from their current organization than the disengaged ones.


Engaged employees enhance organizational performance therefore engagement of employees matters. In organizations with high performance, employees have considerable amount of decision making power. To support this kind of decentralized philosophy, employees get extensive training in problem solving techniques, policies and framework of the company. Rewards are tied with achievement of targets or on exceedingly

In order to effectively manage the organizational performance, a company must align the strategic objectives, establish interdependence between various departments, measure historical data, do employee performance reporting and conduct analysis to track its impact on key metrics and optimise strategy changes, if needed. It also requires continuous company wise communication and finally employee services o maximise productivity.


An effective employee engagement is a roadmap for optimizing performance, increasing loyalty and ultimately creating profits.


People who are partially engaged are usually ones who put time but no passion or energy in a given assignment. They most likely do not go the extra mile. Employees who are completely disengaged are ones with no loyalty for the company, influence the organizational culture negatively, dent coworkers' achievements and sabotage company's initiatives.

Employee engagement is based on human relationships, trust and confidence. People believe in organizational goals when they start working in a company. It is up to the company to keep up the faith and synchronise individual goals with organizational aims.

Turnover and engagement are interrelated. For example Fortune 100 best places to work list are considering companies with high employee engagement levels. An interesting point in the performance point survey is that 50% of employees felt 60% underutilized in their current job which leaves one to ponder on the millions wasted in payroll for these people.


Emloyees are productive but are they making a difference? Are they engaged in the right tasks per their capabilities? Are they contributing in such a way that they are driving the organization forward?

Things that drive employee engagement:

Trust in leadership

Pride in workplace and work

Positive work environment

Recognition and Reward

Future prospective growth

Some people do not devote themselves wholeheartedly into work but tend to satisfy themselves through the hobbies or community service.

A major component of high performance and employee involvement is training on a continuous basis to address employees' knowledge enhancement needs.

5. Role of Manager

Prime role of a manager in an organization is to lead, strategise and manage workflow processes. Their role is to create powerful vision, policies and resources that influence performances and have an overall growth.


A good manager does four things: hires the right people for the right job, defines clear expectations, gives recognition and show their team members that they care.

The most well designed employee engagement plans can fall flat, if the managers do not execute them well. Many companies focus on monetary benefits which can satiate employees' tangible needs. Employees' intangible needs like progression in career, job design, development path can be met by management role play resulting in effective employee engagement.

If one compares Starbucks or Dunkin' Donuts , a number of areas would differ like environment, work culture, strategies, goal setting, senior leadership, innovation, Knowledge management, communication mechanisms and recognition. In every setting, role of manager is very crucial.

Knowledge from subject matter experts can be taken in form of documentation of particular projects or assignments and shared via Intranet.

Managers can create a 360 degrees work climate to have a positive impact on the employee's commitment levels and productivity. Employees can stay longer in a company which says it cares about its people really does something about it.

Managers must orchestrate team performance sometimes, guiding, sometimes communicating and sometimes by delegating tasks to them and making them accountable.They should be a mentor and train people to perform to their best.They need to understand the broader perspective of business as well as reporting employees as indivuals so as to maximize performance from them. They need to meet the daily challenge of working through reports so as to see organizational goals are met.

Managers need to encourage continuous feedback activities like self appraisal components to judge progress consistently. They need to share knowledge, new ideas, news and concepts constantly with their team members through emails or company newsletters, blogs or website.They should collect testimonials with permission and share wins with other managers since success propagates success.


Another important attribute of a manager is to inculcate team spirit creating ethical work environment thereby resulting in individual productivity and organizational goals.

In today's multicultural environment because of expanding horizons, a manager needs to see that all individuals are given fair chance to grow and develop. They need to see that there is equality in workplace diversity.

Work culture defines the setting and general feeling around the workplace.Culture is derived from the latin word 'Colere' meaning 'to cultivate'.The bigger the variance between advocated and actual culture the more negatively impacted the employee engagement is going to be. Culture describes the unwritten rules of doing something in an organization.It can be multifaceted but requires employees to imbibe it completely. As Edgar Schein (1993) puts it culture is a basic patterns assumption discovered and developed by a few, followed by all which helps to cope with peripheral adaptation and internal assimilation.

What kind of culture should be there?

How can culture impact or improve relationships with employees and clients?

How can people began to trust an organization?

How can culture impact success positively?

Each employee is an individual therefore not always can they conform to generalizations. Employees usually get tired of being taken for granted and do not feel respected and granted.


Also managers should encourage a participative approach, involving employees to think through options recommend actions and achieve desired goals. Employees see themselves as advising on business through participation and experience ownership of business and a commitment to see to its success.They encourage people to ask questions, experiment with new ideas, approaches, learn from mistakes and take responsibilities for bring about changes positively.

High performance organizations have leaders who religiously pursue performance. Commitment and focussed leadership is clearly evident.hey promote an energised team which is constantly learning, adapting and self motivated towards organizational goals.

Whether employee engagement triggers success in business or vice versa the point is that process of employee engagement should start the moment opportunity is presented.Infact right employee engagement can go beyond the health of business to indicate well being of an economy.


It is about designing organizational structures and climate and defining roles in such a way that supports high performance. Deserving Employees need to be empowered and performance should be managed in such a way that complete employee capabilities are unleashed. The wisdom of teams is within teams themselves. High performance organizations can be created by managing transformational changes, implementing work ethics and bringing new leaderships to fore but the core of the matter usually lies in a small group of people who are committed extensively to organizational purpose.