UNIVERSITY OF WESTMINSTER MANAGING HUMAN RESOURCES A LITERATURE REVIEW BY MARIE SOSSEH STUDENT NO: 13711872

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The relationship between employee engagement and organisational performance In the 1990 the concept of engagement emerged and more recently started to draw broader academic and organisations attention. As (Macey et al, 2009) stated, an engaged workforce is the best asset and organisation should have to gain competitive advantage from its existing competitors. Various organisations, academics and researches have defined the term differently these definitions are altered to what the organisations or researches think are vital to them. According to (Vance, 2006) there are correlated issues that appear in the literature. These issues includes; are employees satisfied with their work, do they have pride for their employer, and do they appreciate and have confidence in the work they do. This relates to the sense that their employer beliefs the value they can add to the organisation. Numerous numbers of researchers have established a positive relationship between employee engagement and organisational performance. In fact, a study executed by (Corporate Leadership Council, 2004 cited in Vance, 2006) discloses that employees who are engaged are 20% better and 87% less expected to quit their job. This study has somehow demonstrated the importance of employee engagement to organizational performance. The key theme will be discussed in the literature review however; little attention must be given to the arguments in the employee engagement literature first. Employee engagement review Academics like (Khan, 1990) defined engagement as a psychological state where employees are bind to their work role. Khan pointed out that when the workforce is engaged they show themselves physically, cognitively, and emotionally when fulfilling their roles at work. Khan further added engaged employees are willing to give considerable amount of time and energy to complete their duties effectively he further highlighted that engagement is at its utmost when the workforce is determine to put personal efforts into physical, cognitive and emotional labours. This is what Khan refers to as self-employment Kahns definition has attracted a lot of attention and was adapted by (Maslach et al, 2001 cited in Maslach& Leiter, 2008) they also defined engagement as a psychological and emotional state, a determined, positive emotionalmotivational state of fulfilment and (Hallberg &Schaufeli, 2006) define it as being charged with energy and wholly devoted to ones work.

( Lockwood, 2007, Robinson et al, 2004, Towers-Perrin, 2003, Frank et al, 2004 Hewitt, 2005) have a different view of engagement they argues that engagement is a behavioural outcome or discretionary effort to which an employee prolongs to meet the organisational requirement beyond preserving the status quo, takes acumens, foster change, innovate, strengthen and supports the organisations culture and values, stay dedicated and believes a positive outcome will arise (Macey, 2006 cited in Kaufman et al, 2007). Both academics (Kahn, 1992) and (Macey et al, 2009) has agreed that; employee engagement has a state and behavioural element, the state of engagement precedes and leads to engagement behaviours, and engagement behaviours have a direct linked to performance outcomes. Consultancy and research institution has a similar definition to employee engagement as academics. CIPD suggested that an employee that is engaged is committed to the organisation and its values plus willingness to assist co-workers if they need help. This they called organisational citizenship. (CIPD, 2012) Engagement is not all about motivation and it is beyond job satisfaction, (Robinson et al, 2004 Frank et al, 2004) argues. Engagement is something an employee has to give to the organisation outside the employment contract because it cannot be required. (CIPD, 2012). It is clear from the above review that there is no single way of defining engagement therefore we leave organisations to have their own interpretation of the term engagement as stated by (Vance, 2006). The review of the theme (CIPD, 2006) surveyed 2000 participants across Britain followed with a detailed research produced by a team of researchers (Truss et al, 2006 cited in CIPD, 2006). They adapted (Khan, 1990 May et al, 2004 & Maslach et al, 2008) theory defined engagement as a psychological state passion for work. The survey results reveal that employees, who are committed, satisfy; loyal to the organisation are more engaged and are more likely to stay because of that commitment. Engagement (CIPD, 2006) refers to cognitive emotional and physical has a reciprocal link to employee attitudes at work and organisational performance. (Robinson et al, 2004) similarly adapted to the CIPD model and found a positive link between employee engagement and organisational performance. They argue the positive attitude that employees possess towards the organisation and their awareness of the business environment adds value to the organisation. They bring up (Harter et al, 2002) quotations of (Kahns, 1990) work on engagement that emphasize the two way approach (employer employee) of engagement and stress the need for organisations to develop and communicate with employees.

Their approach was supported by two major studies to prove engaged workers increase productivity and are less likely to leave the organisation. The first study was perform by (Gallup, 2010) that estimates the cost of disengage workers is between $270 and $343 billion per year due to low productivity. With the support of the CIPD model they confirm engagement has a statistical relationship with employee retention, productivity, profitability and customer satisfaction. An engaged workforce will regularly produce satisfactory results and deliver beyond expectations and contribute more financially to the organisation when they have the impression that they are involved in, and are loyal and less likely to willingly leave the organisation. (Gallup, 2010) The second study was perform by (Corporate Leadership Council, 2004 cited in Vance,2006) their study of 50,000 employees reveals that a devoted and engaged worker does 20% better than their co-workers and 87% are less likely to leave the organization. They confirm that engaged workers are committed to their employer and their colleagues and they stay are more likely to stay because of their commitment which increase their performance at work and adds value to the organisation. Similarly (Harter et al, 2002 and Lockwood, 2007 cited in Welch, 2011) argues that the effect of a highly engaged or disengagement workforce can be visible through productivity and organisational performance, produce results for customers of the organisation, organisational culture and employee retention rates . Hewitt (2005) have a different view of employee engagement they defined engagement in a behavioural terms (Towers Perrin, 2007 Robinson et al, 2004 Shaw, and 2005 Frank et al, 2004). They gauge engagement with an 18 item scale and argue that engagement is not all about delighted or loyal employees (CIPD, 2006) engagement is about assessing the state of emotional and intellectual participation or commitment of the employee they defined engagement as a multi-faceted construct represented by several behaviours. They argue that these are behaviours that contribute to the performance of the organisation. (Hewitt, 2005) Similarly (Harter et al, 2002) concluded that is a mixture of emotional and cognitive antecedents variables in the organisation. They decided to omit (Kahns 1990) physical component of engagement. They came up with a three behavioural model the first behaviour Say, the organisation evaluate the pride that employee feels whenever they talk about their organisation and whether they will recommend friends and relatives to work with the organisation. (May et al, 2004)Stay refers to employee commitment to stay in the organisation (Shaw, 2005) and Strive is the enthusiastic behaviour of the employee to do the job, the effort and willingness to go the extra mile to see the organisation successful. (Frank et al, 2004 CIPD, 2006).

Similarly (Wellins & Concelman, cited in Welch, 2011 Towers-Perrin, 2007) argues that when employees are engaged they are above satisfaction and loyalty with their organisation. Engaged workers shows passion and lay out discretionary effort to add value to the organisation. Erickson believes that for engagement to be link with organisational performance employee should be ready to engage in roles that goes beyond their job descriptions. (Wellins and Concelman, 2005 cited in Welch, 2011) broke engagement down to a number of employee components: Interpersonal support (teamwork and collaboration) Dedicated work (with strategy, empowerment), and Individual value (support and recognition) when employers fulfil these requirements it results to high level of performance. Furthermore, (Gallup, 2007) conducted a research using their 12 core element they developed to determine the relationship between employee engagement and organisational performance. The participant amounted to 105,000 employees in 2500 work units and the result reveals that employees who answered positively to the 12Q achieve high levels of productivity, customer satisfaction, profits and are less likely to leave the organisation.(CIPD 2006) These results have demonstrated a link between engagement and performance in different organisations driving performance and results. They further highlighted that the best performing organisation communicates with their workforce to upkeep their commitments. (Welch, 2011) (Harter et al., 2002) adapted (Gallup, 2007) research and conducted meta-analysis of 7939 business units in 36 firms has revealed a positive link between customer satisfaction, productivity, employee engagement and profit. They came to a conclusion that growing employee engagement levels and structuring the right atmosphere to help this can result in a high level of organisational performance Simarly (Wellins & Concelman 2005 cited in Macey & Schneider, 2008) propose that engagement is an illusive force that persuades employees to accomplish higher points of performance Likewise (Sonnentag, 2003) conducted a survey from six public service institutes and reveal that high levels of engagement at work upkeep employees in captivating initiative and chasing learning goals which will led them to perform better in their work roles. Similarly, (Watson Wyatts, 2007 cited in Welch 2011) survey of 946 establishments across 22 countries and reveal that employees who are highly engaged are more likely to attain high level of performance than other employees. In addition to that, a row study was conducted by (Sibson, 2006) using qualitative and quantitative analytical approach to further develop his definition of engagement in the context of performance and productivity. The qualitative study involves several discussions with business managers, employees and researchers over a set period of time.

Two features of high performing and productive employee appeared: First wanting to do the work (e.g. gaining satisfaction from the job and being motivated by the organisation to perform or commitment) echo by (Frank et al, 2004) and secondly knowing what to do (e.g. having a clear picture of the organisation vision of achievement and how they can add value to accomplish that vision by performance and productivity). (Harter et al, 2002) These employees effectively help to achieve the organisation goals. (Sibson,2006) further argues that the two features he discovered are both essential to drive organisational productivity and performance and it is necessary to be defining and measuring engagement in the context of productivity (Kahn 2010) further projected that an increase in levels of engagement will result to encouraging results for employees, (e.g. the excellence of their work and their individual capabilities of undertaking that work), as well as inspiring organisational-level results (e.g. the expansion and efficiency of organisations). Equally, (Schmidt, 2004) carried out a research and found out that the basis of engagement start from recruiting and retaining the right workforce. This is consistent with (Gallups Buckingham & Coffman, 1999) who argues that when employees are engaged they are drive towards achieving the organisational objectives and that; the right people in the right role with the right managers drive employee engagement. (Schmidt, 2004 CIPD, 2006) suggested that creating the right environments for workplace wellbeing could result to an increase employee engagement. This indicates high level of productivity and increase in organisational performance which aids to develop the public interest (customers). Schmidt added that workplace wellbeing is driven by job satisfaction and commitment which in turn are determined by a number of factors. (Robinson et al, 2004) proposed a similar model where feeling valued and involved was the key driver of engagement but in turn was influenced to a varying degree by a range of factors (Macey &Schneider, 2008) argues that engagement is complex and consists of trait, state and behavioural concept. They review the arguments on the literature and construct their view of engagement that blends with the characteristics of one self (trait, state and behaviour) with situation aspects (organisational settings) that will lead to organisational performance. (Khan, 2010) compare his idea of dynamic engagement with steady-state trait view of motivation. He argues that conscious and un conscious efforts which employee put in their work effect the degree of physical, cognitive and emotional energy is been ignored by motivational theories they expend. (Khan, 2010) view has revealed a combination of attitudinal state and steady-state predisposition traits.

The combination of these two thoughts highlights a need for employee internal communication to enable engagement that led to organisational effectiveness. (Khan, 2010 Macey & Schneider, 2008 cited Macey et al, 2009 Welch, 2011) (Welch, 2011 Robinson et al, 2004) argues that employee engagement cannot be linked to organisational performance if there is no continuous internal communication they believe engagement requires a two way relationship between the employer and employee. (Welch, 2011) proposed an engagement model that highlights the relationship between employee engagement, internal communication and organisational effectiveness.

Source: Welch 2011 (Welch 2011) has incorporated almost all the arguments in the engagement literature in her engagement model presented above. (Khan 1990) recognised engagement as a three construct of engagement which is guided by three psychological states adapted by (CIPD, 2006) connected with devotion, absorption and vigour (Schaufeli et al 2002 cited in Schaufeli & Salanova, 2007). The three psychological environments required for engagement are combined into the model. (Meyer et al., 2010 cited in Welch, 2011) argues that communication is necessary for employee engagement but always affected by leadership communication, the model above have incorporated commitment as an antecedent of engagement.

It has been seen from the model that communication is a crucial factor in employee engagement that organisations have to come across to support and improve employee engagement. Internal communication promotes commitment, loyalty sense of belonging, passion for work and satisfaction which led to the willingness to go the extra mile and perform beyond job requirements with employees not having the intention to leave the organisation. (Hewitt, 2005 Sibson, 2006 Robinson et al, 2004). This results in high competitive advantage and organisational effectiveness. (Welch, 2011).