Importance of Employee Engagement

Research Paper By Kotaro Takahashi, Business Coach, UNITED KINGDOM

Literature Review Of Employee Engagement And Coaching Application

It has been nearly 30 years since the concept of employee engagement was advocated. Kahn (1990) described “engagement” in terms of the workforce setting and illustrated three psychological conditions − meaningfulness, safety, and availability −. Since then, many further studies have been conducted, and a bunch of articles has been published. Nowadays, employee engagement is widely recognized by corporate management and HRs.

This literature review will discuss the importance of employee engagement, how to measure and access its ROI. It will also discuss conditions required for high-performing employees, a sense of purpose at work, and what leaders can do to engage at work.

Review of Literature

Importance of Employee Engagement

Employee engagement has become a high priority for organizations; even traditionally, companies prioritize customers and shareholders (Peters, 2019, p4). The business environment has been more global and complexing. Customers access a wide range of information using the internet quickly, which made them more demanding. New competitors and technologies suddenly change and disrupt existing industries. In such a challenging business environment, it is realized that engaged employees bring good service to customers. In other words, a good customer experience results from engaged employees throughout the value chain (p5). Research (Gallup, 2012) revealed that there is a well-established connection between employee engagement and nine performance outcomes: Customer Rating, Profitability, Productivity, Turnover, Safety incidents, Shrinkage (theft), Absenteeism, Patient safety incidents, and quality (defects). It indicates that there are many benefits to be expected by improving employee engagement.

Measuring Impact and Calculating ROI

Once an organization starts to enhance employee engagement, it is crucial to have a precise measurement process of its impact and its ROI to explain to stakeholders. Phillips & Ray (2016) demonstrated that the practitioner, called change agent, plays a significant role in leading the change effort or collaborating with the team to initiate the engagement process and build a measurement culture. The measurement process begins with communicating and reinforcing what is essential to the organization. There are an activity-based approach and a result-based approach for the measurement, and a result-based method is easier to measure and support.

Once setting measurable objectives, it is essential to formalize the ROI calculating process. Phillips & Ray (2016) introduced the ROI Methodology. It is a data-driven approach that includes the ten steps from data collecting to reporting. There are six data categories along with the evaluation levels. The most important data set is the impact, which is the consequence of application and is often expressed in business terms as output, quality, costs, and time. ROI Methodology is an entirely logical approach, and it works well if the change agent well implements each process.

The Conditions Required for Engaged Employees

One of the most required conditions for engaging employees is psychological safety, which is the feeling that one can act as oneself without the fear of negative ramifications (Kahn, 1990, as cited in Walters & Dalia, 2016). Google conducted internal research for years, which indicated that psychological safety brings employees a belief in risk-taking safety, making employees confident, dynamic, and engaged in the organization. People become more open-minded, resilient, motivated, and persistent when they feel safe (Delizonna, 2017).

One way to access the required conditions is called The Energy Matrix (Peters, 2019, p33). It explained that creating high energy requires a compelling vision or an exciting challenge. Building positive energy requires people to work together to create psychological safety. To sum up, employees would feel more engaged by creating positive energy and a psychologically safe environment.

Sense of Purpose at Work

Besides the conditions above, Peters (2019, p83) mentioned that when employees feel a sense of purpose, meaning, and contribution at work, they feel engaged. How can employees find and gain a sense of them at work? Dik & Duffy (2012) described particular aspects of the work content − the nature of one’s job tasks, the organizational mission, and the quality of one’s workplace relationships − that make some jobs simply easier to experience as meaningful than others. Weiss (2018) stated that by shifting our perspective, we could achieve a greater sense of purpose without changing what we’re doing. For example, reflect on how we approach the task when we think of it as a duty for a job or something we do as part of a calling.

From an organizational perspective, establishing the company’s mission/vision would attract employees’ passion and generate a commitment to organizations. The right employees must be driven not by money but by the organization’s mission (Collins & Porras, 2000, as cited in Bagley, 2013).

Leader’s Role in Employee Engagement

One of the essential roles for leaders is to support finding an employee’s sense of purpose, meaning, and contribution at work. Coetzer (2020) said that servant leadership leaders empower and activate individual talent and potentially achieve a higher purpose vision. They create organizational cultures that enhance the work engagement levels of employees. For a corporate executive, their role is to inspire and enable employees to do their best work and ensure the business is successful in the long run (Peters, 2019, p147). State of Workplace Empathy Study (Businesssolver, 2020) showed that 91% of CEOs say their own company is empathetic, but only 68% agree. It indicates a massive room for CEOs to improve empathic skills − which is part of EQ − for employees. Leaders need to show empathy to understand the employee’s feelings (Eterrett, 2000).

Conclusion of the literature review

The above five topics in the literature review would interact and be related. Without the organizational top’s empathy and effort, or if leaders don’t understand the knowledge and purpose of employee engagement, it would be challenging to support employees in finding their sense of purpose. Without any measurement process, companies would not be sustainable in investing and support employee engagement activities. It is time for every organization to carefully review each essential element and take proper measures to create more employee-engaged organizations.

Since I am willing to coach more leaders and managers at an organization, it is essential to understand how employee engagement works, what are key elements to engage people at work. Not every leader/managers understand the importance of those elements, so it is practical to apply them to coaching sessions.

There are some critical benefits to applying employee engagement essences to coaching:

The client will get a chance to review his/her belief as an organizational leader/manager
The client will get an opportunity to create an awareness to moving forward
The client will be able to explore some important aspects to lead an organization
The client will get a chance to have more emotional intelligence

Case Study

Tony is a director of sales at one of the promising software companies. He dedicated most of his time and outperformed as a corporate sales manager since he joined the organization four years ago and then promoted sales manager to director. Everyone admits his excellent sales and management skill to his team. However, due to the higher sales target and super-positive and aggressive corporate culture, he was worried about the organization’s high turnover rate, also its difficulty of hitting the target constantly as a director. He came to me for coaching sessions two months later of his promotion.

His goal is to find out the way how to keep hitting the organizational target sustainably. He is aware that the playing management style is no more applicable to his director role. He needs to understand how to lead an organization and motivate employees to improve the current retention rate. I asked the following several questions to make sure of his current thinking, knowledge, and beliefs.

What are some of the essential things to lead an organization for you?
What is important for you to take measures to improve employee engagement?
What do you believe about the benefits of engaging your employees well?

By applying those key questions, he realized that he needs to understand more about the power of employee engagement to lead the organization and keep performing well. He also noticed that it is not sustainable to hire only sales-commission-driven people even it is effective for the short run in his organization. Alternatively, he started thinking about attracting new people who can feel a sense of purpose at work. He was aware that it is necessary to apply employee engagement strategy and measures at an organizational level, not rely on managers to handle by communicating with their fellow employees. Especially after Covid-19 happened, people started switching to the work-from-home style, which made them difficult to meet up in person, socialize, over coffee or drinks. He realized that people’s sense of purpose at work had been slightly declined, but I couldn’t figure out how to overcome it. But those coaching sessions helped him to realize the importance of employee engagement. Considering his director position, it may not be challenging to involve executive levels to take this issue seriously. Then after the several sessions conducted, he started applying employee engagement surveys and preparing for a customized program to improve the organization’s employee engagement. Now he believes that this project will bring a positive impact to his organization toward sustainable growth.

As a coach for clients at organization leaders/managers, it is important to have leadership/management-related knowledge and frameworks to ask clients meaningful questions. Having some extent of management experience may work too. However, leaders have different philosophies and management styles, and sometimes it may not be applicable nor acceptable. By having proper knowledge about leadership, organizational psychology could be efficient to adopt many different types of clients, this is much more controllable by themselves to spend time to learn in a short amount of time.