Title: Employee Engagement – A Growing Concern (Study of Manufacturing

Industries)

By

Shulagna Sarkar

Asst. Prof,

Institute of Public Enterprise

Hyderabad

And

K. Divya

Student,

IBS - Bangalore

1
Profile:

Shulagna Sarkar is an Asst. Prof. at Institute of Public Enterprise, Hyderabad with

experience in research and consultancy for both public and private organizations.
Areas of specialization includes Competency Management, Recruitment and
Selection, Training and Development, Knowledge Management. Experience with a
number of organizations in the field of Training, Recruitment and Selection and
Research.

K Divya is a student at ICFAI Business School, Bangalore. She has completed her B-
Tech and has a keen interest in the field of HR. She has worked for various
manufacturing organizations for her Summer Internship Project.

Contact:

Shulagna Sarkar

Nigam, 29A, Siddharth Society, 8th mile,

Amravati Road

Nagpur – 440023

Ph: 09963764735, 09423107201

e-mail: shulagnasarkar@gmail.com, shulagnasarkar@ipeindia.org

2
Title: Employee Engagement – A Growing Concern (Study of Manufacturing

Industries)

Abstract

Human resources are the most significant assets to any organization. Having engaged

employees not only ensures incremental benefits during the upswing but also assures

innovative ideas, commitment and supports organizations in the low lying times. In

India, not only the service sector organizations are focusing on Employee

Engagement but manufacturing organizations have also realized the need to have

engaged employees. As there is increasingly high acceptance of the practice of

Employee Engagement among organizations, thus the paper elaborates the employee

engagement practices in various manufacturing organizations. The paper discusses the

factors contributing to the employee engagement and also studies the various

strategies implemented by HR professionals to enhance employee engagement in

manufacturing organizations.

3
Title: Employee Engagement – A Growing Concern (Study of Manufacturing

Industries)

Introduction

Globalization has surmounted the world and we as a part of the globalized world are

in the unavoidable clinches of it. In the era of globalization; competition has raised

high and due to which the challenge to survive as a global leader has made

organizations to build various strategies. The strategies adopted are not only focused

on increasing sales or service but are also related to retaining people assets in

organizations. Over the past several years an interest in engagement can be seen in

many subject areas within psychology and management, including motivation,

leadership, group processes, decision making, and organizational design.

Engaged employees are assets to organizations. Engaged employees show positive

attitude towards the organization and total commitment to stay, say and strive for the

organization in the upswing as well in the downtrend of the organization.

Organizations are striving hard to implement employee engagement strategies to

increase the engagement in the employees.

The paper mainly aims to get insight into the employee engagement practices. It is

also aimed to identify the factors affecting employee engagement in the

manufacturing industries and the strategies implemented in manufacturing industries.

The paper discusses the healthy practices to improve employee engagement and the

benefits of engaged employees.

4
Objectives of the study: The paper has three folded objectives which are as follows.

 To elaborate the employee engagement practices in various manufacturing

organizations.

 To discuss the factors contributing to the employee engagement

 To study the strategies implemented to enhance employee engagement in

manufacturing organization.

Scope: The paper helps to gain an understanding of employee engagement

tools/indicators to measure employee engagement, factors affecting employee

engagement, practices to improve employee engagement, and advantages of having

engaged employees.

A study of Manufacturing Industries has been carried out. This is done to gain more

insight into the employee engagement strategies implemented in manufacturing

industries. This study includes the procedure as:

 Visiting various manufacturing industries and discussing with HR

 Preparing an appropriate questionnaire for identifying employee engagement

strategies implemented by the organizations.

 Analyzing the filled in questionnaire that is obtained from the survey.

 Gaining insights on employee engagement strategies.

Concept: Employee Engagement

Employee engagement is the level of commitment and involvement an employee has

towards their organization and its values. An engaged employee is aware of business

5
context, and works with colleagues to improve performance within the job for the

benefit of the organization. It is a positive attitude held by the employees towards the

organization and its values. The organization must work to develop and nurture

engagement, which requires a two-way relationship between employer and employee.

Thus Employee engagement is a barometer that determines the association of a person

with the organization. Goddard, (1999) describe engagement with the organization

and engagement with the task, as associated with time use. Most often employee

engagement has been defined as emotional and intellectual commitment to the

organization (Baumruk 2004, Richman 2006 and Shaw 2005). It has also been defined

as the amount of discretionary effort exhibited by employees in their job (Frank et al

2004).

Employee Engagement has been reported to belong on the time continuum, as

measured by the time spent on a job (Goddard, 1999). Employee Engagement has also

been used interchangeably with commitment (McCashland, 1999). He also used

engagement and commitment interchangeably. Employee Engagement has also been

said to be a measure of job involvement (Harter, Schmidt & Hayes, 2002); and also as

a measure of the combination of an ‘individual’s involvement and satisfaction with as

well as enthusiasm for work’ (Harter, Schmidt & Hayes, 2002). Various authors use

definitions and continuums often interchangeably, within the same articles and even

in the same sentence. The ISR research firm also cites many examples of increased

profit after increasing EE for companies. The financial differences were found to be

substantial on comparing high-engagement to low-engagement companies over a

period of three-years (ISR, 2005).

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Measuring Employee Engagement

Employee Satisfaction Surveys (ESS) is used to be considered the most popular

method for measuring how happy an employee was in the organization. A happy

employee is not necessarily a productive employee. Even an employee who is doing

his or her best might not be fully productive or aligned with the organizational goals

or values.

Employee engagement can be revealed in several ways either by using tools or

indicators. However tools provide the realistic view of engagement. Halbesleben

(2003) examined a number of issues as to the measurement and process of burnout

and engagement. Indicators can be correlated to engagement but they are not better

than intelligent guesses. Some of the tools that are used to measure employee

engagement include:

 Customized Surveys

 Gallup’s 12Q survey

 Modified Gallup’s 12Q survey

 E3 Process

 Taking assistance of corporate HR

Some of the Indicators that are used to measure employee engagement are Employee

attrition rates, Absenteeism, Productivity and Employee referrals.

Trends in Employee Engagement

Today, society and business are witnessing unprecedented change in an increasingly

global marketplace, with many organizations competing for talent. As organizations

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move forward into a boundary less environment, the ability to attract, engage, develop

and retain talent will become increasingly important. In view of these changes, a

number of trends, as identified in the SHRM are likely to have a significant impact on

employee engagement. For example, the increased demand for work/life balance and

the changing relationship between employers and employees are driving the need for

HR professionals and their organizations to truly understand what employees need

and want and then determine how to meet those needs while at the same time

developing and leveraging workplace talents at all levels.

In addition, trends in workforce readiness highlight the importance of organizational

success. To ensure that new workforce entrants attain the essential skill levels needed

in today's workplace, business leaders have the responsibility to partner with schools

(e.g., high schools and two- and four-year colleges) and other organizations to provide

learning opportunities, such as internships, summer jobs or job shadowing. The

continued acceleration of change, both domestically and globally, places greater

emphasis on the role of HR to develop effective employee engagement strategies for

the current and future workforce.

Research Methodology

Population: All manufacturing units with distinguished operation of HR department

Sample: The sample was used to get insights of employee engagement strategies in

manufacturing industries. This was done to gain an insight on the factors affecting

employee engagement, benefits of engaged employees, and, healthy practices to

improve engagement in manufacturing industries.

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Sample size: The sample size for the survey was 10 manufacturing units. 18 HR

managers with minimum 3 years experience with the organization.

Sampling Procedure: The samples are chosen by taking prior appointments with the

HR Managers. Companies were approached based on the convenience and

availability. 22 HR Mangers were asked for the appointments out of which only 18

willing shared their time and supported to conduct the survey. Non probabilistic

sampling procedure - Convenience sampling and Snowball sampling technique was

used for the research.

Data Collection and Analysis

Sample organizations:

 Ispat Industries Ltd.

 PIX Transmissions Limited:

 Mahindra and Mahindra Limited

 Sanvijay rolling and Engg Ltd (SREL)

 Shree Baidyanath

 Morarjee textiles Limited

 Indo Rama Synthetics Limited

 Narayana Processed Food Private Limited

 Sharda Shree ISPAT Limited

 Raymond India Ltd.

Both primary and secondary data was collected. Questionnaire was administered to

collect the primary data (Refer Appendix I). Secondary data was collected from the

previous survey reports of the sample organizations.

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A questionnaire was designed for surveying the engagement strategies used in

manufacturing industries. Question type/ scales used: About 8 questions with 45

factors measured on 5 point Likert scale. The questionnaire includes both open ended

and close ended questions. The questionnaire has been designed to get an insight of

the tools of employee engagement in manufacturing industries. HR Managers of

sample organizations have responded to the questionnaire which identified the factors

affecting employee engagement, benefits of engaged employees, healthy practices to

improve employee engagement and the factors affecting employee engagement in the

organization. No statistical tests have been applied to the data. Percentages and mean

of responses were calculated.

Analysis of the questionnaire: Mean was calculated for each item. Now according to

the means obtained the factors are classified as below:

Mean Value

Classification

1  2 Low impact

2  3 Moderate impact

3  4 Significant impact

4 ≥ 5 High impact

Analyzing the tools/indicators used:

Based on the responses, the percent of industries using tools and indicators for

measurement of employee engagement are obtained. The tools, indicators are

classified based on the frequency of usage. The factors affecting Employee

Engagement are analyzed based on the response received the HR Managers. The

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agreement with Say, Stay, and Strive framework to measure engagement is based on

the response percentage of yes/no of HR Managers agreeing to the framework.

Measuring the advantages of engaged employees

The mean for each advantage is obtained same as the mean for each factor discussed

above. The advantages are classified into different categories as follows:

Mean Value

Classification

1  2 Least possible advantage

2  3 Possible advantage

3  4 Most likely advantage

4 ≥ 5 Definite advantage

Findings

A comparative study of usage of various engagement tools with respect to employee

engagement has been done. The 2007 Survey and 2010 survey of the sample

organizations have been considered for the comparison. The secondary data has been

collected from the previous surveys reports produced by the sample organizations.

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Chart 1: Comparative study of usage of engagement tools and employee

engagement for the year of 2007 and 2010.

Comparatively, the engagement score has gone down in 2010 to 52% from 55% in

2007. There was a significant improvement in the satisfaction score with respect to

Recognition and benefits. A significant dip in the satisfaction score was observed in

Intrinsic Motivation, Career Opportunities, Pay and Quality of Work Life and hence

the factors are classified into dissatisfaction, satisfaction scale as follows

Dissatisfaction Satisfaction

 Pay  Resources  Top Management

 Physical Work  Manager/Supervisor  Benefits

Environment  Training and Development  Recognition

 Career Opportunities  HR Policies  Co workers

 Intrinsic Motivation

Figure 1: Satisfaction/Dissatisfaction factors

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In chart 1 we can see a great improvement in recognition. The reason being that few

organizations used different strategies to improve satisfaction in recognition like:

 Competitions for “Best Performance – Operations Departments" & "Best

Performance – Service Departments"

 Competition for “Best Maintained Pulpit”

 Employee Of The Month

A significant decrease in the satisfaction with respect to ‘Pay’ and ‘Training and

Development’ was also observed. This can be attributed to the recessionary period

and due to which there was salary cuts and decrease in the budget of Training and

Development as a part of cost cutting.

Factors affecting Employee Engagement

Based on the information collected through the survey on HR Managers the factors

that have high impact on employee engagement are: Top Management, Managers, Co

workers, Intrinsic Motivation, Resources, Career Opportunities and Training and

Development. The other factors which have significant impact on employee

engagement are: Co Workers, Benefits, HR Policies, Recognition and Physical Work

Environment. The HR Managers also feel that making employee’s involved in day to

day activities and decision making, as well as providing them an environment without

interference affects the employee engagement.

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Chart 2: Factors affecting Employee Engagement

Tools/Indicators used for measuring Employee Engagement

Only 55.5% of the industries use specific tools to measure the employee engagement

and 80% of the industries which use tools to measure the employee engagement take

the assistance of corporate HR. Customized surveys and Gallup’s 12Q survey are the

other tools which are preferred by the sample organizations to measure the employee

engagement.

All the sample organizations use one or more indicators to relate employee

engagement in the organization. 80% of sample organizations relate growth in

productivity to increase in employee engagement. The other tools which are used in

relating with employee engagement are in the number of employee referrals and

absenteeism. In Baidyanath most of the recruitment is done through employee

referrals only. 77.7% of the respondents agree with the framework Say, Stay and

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Strive i.e., if an employee says about the organization, strives for the organization and

wants to stay in the organization then the employee is said to be engaged

Benefits of engaged employees

The definite benefits of having engaged employees in an organization are high

productivity and high customer satisfaction. The most likely benefits of having

engaged employees in an organization are, decreased attrition rates, employees

support in downtrend of the business also decreased absenteeism and employees

become brand ambassadors of the organization.

Chart 3: Benefits of having engaged employees

Engagement strategies and employee categories

88.8% of the HR Managers say that they implement different strategies for different

employee categories.

The strategies that are usually implemented at worker level are:

 Medical Support

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  Idea collection schemes

 Training and Development

 Rewards like operative allowance

 Cultural and social programs

 Basic incentives

Apart from these in Indo Rama synthetics, they also give spouse training at the

worker level so that the worker families also feel that they are being cared for and

involved. In Baidynath Industies Ltd. they do not have the strategies written on paper

but they have a full monitoring assistance system i.e., whenever any worker or

employee requires support they provide them. Mahindra and Mahindra has a long

term union agreement

The strategies that are generally implemented at manger/supervisor level are:

 Activities like 6 Sigma and Quality control

 Performance appraisal

 Job enrichment and elevations

 Provident Fund

In Raymonds they specially provide KRA’s (Key Resultant Areas) at the managerial

level so that they keep them involved. Career opportunities are also a main factor

affecting the engagement at this level. At the top management level 55.5% of the HR

managers feel that remuneration has a significant impact on the employee

engagement. However, all the HR Managers feel that the top management ought to be

engaged by themselves. In Raymonds they feel that giving them challenging work and

16
opportunities will have a good impact on the engagement. The director of Sanvijay

Rolling and Engineering Limited, being a part of top management believes that ego

satisfaction is yet another significant factor that is to be look after at this level.

The strategies for new entrants are:

 Induction

 Classroom as well as on job training

77.7% of the industries give training to their new entrants. The HR manager of

Mahindra and Mahindra feels that having career planning for new entrants will have a

good impact on engagement. In Indorama Synthetics apart from induction and

training they also have the procedure of job rotation to the new entrants so that the

skill and interest of the employee will be identified and maintained.

The general strategies that are implemented on high performers are:

 Recognition and rewards

 Performance appraisals

 Job elevation

 Salary increment

The HR Manager of PIX transmission Limited feels that talent management of the

high performers is necessary for the individual as well as organizational growth. In

Raymonds Ltd. more challenges are given to the high performers.

Practices to improve employee engagement

The practices that would definitely have a good impact on employee engagement are:

 Rigorous training and development

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  Idea collection schemes

 Monthly update on corporate goals and directions

 Providing growth opportunities

 Showing employees that you care about them

However, the HR Manager at PIX Transmission Limited feels that only collecting the

ideas and suggestions will not have good impact. He believes that the ideas and

suggestions given should be implemented if worthy or feedback should be given to

employees about the ideas and suggestions. He also said that the employees whose

ideas or suggestions are implemented must be recognized and rewarded. The HR

Manager of Baidyanath feels that showing employees that you care about them is a

very significant practice to improve employee engagement.

Apart from the above practices the practices that are most likely to improve employee

engagement are:

 Regular feedback from people

 Developing a safe, clean and inspiring work environment

 Intranet forums and blogging for interaction with top management directly

 Choosing the right person and giving the realistic job purview

 Strong induction and orientation program

 Giving employees challenging work

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Chart 4: Practices to improve employee engagement

Factors affecting employee engagement in manufacturing industries

The factors that are affecting the employee engagement in manufacturing industries to

a higher degree are Intrinsic Motivation and Training and Development.

The factors that are having a significant impact apart from the above factors are Top

Management, Manager/Supervisor, Co Workers, Pay, Benefits, HR Policies,

Resources, Career Opportunities, Recognition and Physical Work Environment.

Chart 5: Factors affecting employee engagement in manufacturing industries

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We have discussed the views of HR Managers initially. As a part of the objectives it

is intended to compare the HR Manager views with the current scenario in the

manufacturing industries. However there are no any factors that are affecting the

manufacturing industries to a higher degree based on the HR Managers view. The

physical work environment should be kept in view by the HR Managers as this factor

is affecting to a slightly higher level than HR Managers perception. In this study there

was no significant gap obtained between the HR Managers view and the actual

scenario. But if there was gap then the factors needed to be further analyzed to get

insight of why the HR actions were not being effective to improve engagement.

Chart 6: Comparative view of factors effecting employee engagement

Therefore, measurement of employee engagement is the first step to design to

implement engagement strategies. The organization would be benefited if it works on

the areas in which it really needs improvement

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Limitations of the study

 The employee engagement strategies of only manufacturing industries are studied

 The information gained in the Survey may not be authentic and there might be

some deviations because of respondent errors like biased and non-response errors.

 Statistical tests have not been performed. Statistical tests may have revealed finer

interpretations and reveled more integral facts.

 Only 10 manufacturing industries in and around Nagpur are being studied because

of the time limit.

Conclusion:

Employee Engagement is an effective tool for organizations. Though most of the

organizations follow different practices for engaging employees yet there is a lack of

clarity in defining practices under the engagement strategies. In most of the

organizations the HR managers had a clear understanding of the need for employee

engagement as a tool yet numerous factors acted as constraints for them to bring

employee engagement strategies into practice. A great scope lies for the HR managers

to bridge the gap between the need for implementing employee engagement strategies

to what is actually practiced in the organization.

References

Baumruk, R. (2004). ‘The missing link: the role of employee engagement in business

success’, Workspan, 47, 48-52.

Frank, F.D., Finnegan, R.P. & Taylor, C.R. (2004). ‘The race for talent: retaining and

engaging workers in the 21st century’, Human Resource Planning, 27( 3), 12-

25.

21
Goddard, R. G. (1999). In-time, out-time: A qualitative exploration of time use by

managers in an organization. Dissertation Abstracts International US: Univ

Microfilms International. 60 (6-A).

Halbesleben, J. R. B. (2003). Burnout and engagement: Correlates and measurement.

Dissertation Abstracts International: Section B: the Sciences & Engineering,

US: 64(1-B), 451Univ Microfilms International, 64(1-B), 451

Harter, J. K., Schmidt, F.L., & Hayes, T. L. (2002). Business- unit-level relationship

between employee satisfaction, employee engagement, and business

outcomes: A meta-analysis. Journal of Applied Psychology, 87(2), 268-279.

ISR. (2005). Available at www.isrsurveys.com[Accessed on 24th July, 2010]

McCashland, C. R. (1999). Core Components of the service climate: Linkages to

customer satisfaction and profitability. Dissertation Abstracts International

US Univ Microfilms International. 60 (12-A), 89.

Richman, A. (2006). ‘Everyone wants an engaged workforce how can you create it?’

Workspan, 49, 36-39.

Shaw, K. (2005). ‘An engagement strategy process for communicators’, Strategic

Communication Management, 9( 3), 26-29.

22
Appendix I

Questionnaire for HR Mangers of Manufacturing Units

NOTE– ALL THE INFORMATION PROVIDED WILL BE USED ONLY FOR RESEARCH
PURPOSES AND WILL NOT BE USED ELSEWHERE.

Respondent Name: ____________________________________Date- ____________

Company’s name: ____________________________________________________
No. of Years working with the organization: ________________________________
Designation and Department: ____________________________________________

Q.1 Rate the following factors affecting employee engagement (YOUR VIEW)

(1=has the least effect 5=has the most effect)

Factors 1 2 3 4 5
Top Management
Managers
Coworkers
Pay
Benefits
HR Policies
Intrinsic Motivation
Resources (tools and tackles, technology, drinking
water, manpower, canteen facility, transportation)
Career Opportunities
Training and Development
Recognition
Physical Work Environment
Others, If any (Please
specify)______________________________________

Q.2 What tools/indicators do you use for measuring employee engagement in your
organization? (You may tick more than 1 option if applicable)

a. Customized Surveys f. By observing changing employee attrition

b. Gallup’s 12Q survey
c. Modified Gallup’s 12Q survey
d. E3 Process
e. Taking assistance of corporate HR
rates
g. Increased absenteeism
h. By observing growth in productivity
i. Increase in number of employee referrals
j. Others (if any please specify)

-------------------------------------------------------------

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Q.3 If an employee “says about the organization, strives for the organization, and
wants to stay in the organization”, then is that employee said to be engaged?

a. Yes b. No

If No,
why?---------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

Q.4 Rate the advantages of having engaged employees in an organization

(1=Least Advantageous 5=Most Advantageous)

Factors 1 2 3 4 5
Boosts productivity
Decreases attrition rate
Supports business in downturn (recession)
Reduces absenteeism
Your employees become brand
ambassadors for your company
Improves customer satisfaction
Others, if any (Please
specify)_______________

Q.5 What are the different engagement strategies implemented in your

organization for the following employee categories?

Employee Category Strategies

Workers
Managers/Supervisors
Top Management
New Entrants
High Performers

Q.6 Rate the practices that are effective in improving employee engagement

(1= Least Effective 5= Most Effective)

Factors 1 2 3 4 5
Choosing the right person and giving realistic job
preview
Strong induction and orientation program
Rigorous training and development from technical to
soft skills to leadership development programs
Regular feedback from people
Developing a safe, clean and inspiring work
environment
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 Intranet forums and blogging for interaction with top
management directly
Monthly updates on corporate goals and directions
Idea collection schemes
Providing growth opportunities
Showing employees that you care about them
Giving employees challenging work
Others, if any (Please
specify)______________________________________

Q.7 What is the current percentage of employees engaged in your organization?

-----------------------------------------------------------------------------------------------------------------

Q.8 Rate the following factors affecting the employee engagement in your
organization

(1=has the least effect, 5=has the most effect)

Factors 1 2 3 4 5
Top Management
Managers
Coworkers
Pay
Benefits
HR Policies
Intrinsic Motivation
Resources (tools and tackles, technology, drinking
water, manpower, canteen facility, transportation)
Career Opportunities
Training and Development
Recognition
Physical Work Environment
Others, if any (Please
specify)______________________________________

25