Employee Engagement: the Path to Superior Performance?

1. Employee Engagement: the Path to Superior Performance? Address to 13th World Human Resources Congress, HR Without LimitsMontreal, Canada, 29 September 2010 Professor Ed Davis AM, FAHRIEmeritus Professor, Faculty of Economics and Business University of Sydney Australia Contact: emjkdavis@hotmail.com

2. Employee Engagement • Definition and Approaches • Lineage • Links to Performance • Strategy • Conclusions

3. 1. Definition and Approaches ‘A positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organisation. The organisation must work to develop and nurture engagement, which requires a two-way relationship between employer and employees.’Dilys Robinson, Employee Engagement, www.employment-studies.co.uk p. 1.

4. what is engagement? • What do you think? adaptive behaviour enjoyment job satisfaction citizenship behaviours work orientation flow discretionary effort absorption extra-role behaviour job involvement contextual performance intention to stay persistence intensity of effort pride vigour initiative organisation commitment energy empower-ment dedication proactive behaviour activation |Nick Vrisakis, Voice Project, nick.vrisakis@voiceproject.com.au

5. 2. Lineage Industrial democracy • Employee and union rights • Links to performance Australian discussion from 1970s.“The parties have acknowledged that the adoption of a co-operative and participative approach is vital in achieving the structural changes and workplace reforms necessary to meet the economic challenge.”Confederation of Australian Industry and Australian Council of Trade Unions, ‘Joint Statement on Participative Practices’, April 1988, p.viii, reproduced in E. M. Davis and R. D. Lansbury (eds), Managing Together, Melbourne, Longman, 1996, pp.245-259.

6. Focus: employee participation in decision-making • importance of decisions • degree of influence • proportion of staff involved.Davis and Lansbury, 1996, p.2.Employee engagement: consensual and adversarial.

7. Leadership Richard Walton, “From Control to Commitment in the Workplace”, HBR, March 1985, pp. 193-200.Contrast ‘control’ / scientific management with commitment approach. • flatter hierarchy • job redesign • team responsibilities • training “At the center of this philosophy is a belief that eliciting employee commitment will lead to enhanced performance” (p. 80)

8. Walton, 1985, p.80.

9. Peter Senge, “the Leader’s New Work: Building Learning Organizations”, Sloan Management Review, Vol. 7, 1990, pp.397-413.Challenge, to “harness the collective genius of the people” at work. New leadership required: • build shared vision • challenge prevailing attitudes • encourage learning • coaches, guides, facilitators

10. Chris Argyris, “Empowerment: The Emperor’s New Clothes”, HBR, May 1998, pp.219-228.“Managers love empowerment in theory, but the command-and-control model is what they trust and know best. For their part, employees are often ambivalent about empowerment – it is great as long as they are not held personally accountable” (p.219).Key: internal employee commitment.Requires: managers involvement of employees in work targets and methods.Obstacles: conventional management thought focus on numbers.

11. HIM / HPM High Involvement Management (from 1980s) High Performance Management. workers involvementteamsjob flexibilityidea capturing schemestraining(stimulus of Japanese quality circles)“The purpose of HIM is to encourage workers to participate in ... Continuous improvement culture, the aim being to induce higher performance ...”Stephen Wood and Alex Bryson, “High Involvement Management”, in W. Brown et al (eds), The Evolution of the Modern Workplace, Cambridge, CUP, 2009, Chapter 7.

12. Australia 1990s Best practice program.Federal government grants for ‘model’ organisations • plans for world class performance • benchmarking world’s best practice • ‘full participation and commitment by management, unions and the workforce in the change process’.Davis and Lansbury, 1996, p.14. End 1990s, impression: islands of excellence, widespread resistance to change. P.G. Gollan and E.M. Davis, “High Involvement Management and Organisational Change”, Asia Pacific Journal of Human Resources, 37, 3, 69-91.

13. 3. Employee Engagement: Links to Performance IES, Engaged employees:lower turnoverhigher levels of performanceadvocates of the businessbetter change managementG. Robertson-Smith and C. Mackerick, Employee Engagement: a review of current thinking, IES report no. 469, 2009. “Improving engagement correlates with improving performance ....”D. MacLeod and N. Clarke, Engaging For Success: Enhancing Performance through Employee Engagement, London, Department of Business, Innovations and Skills, 2009.

14. “And you thought the passengers were mad .... Airline employees are fed up, too – with pay cuts, increased workloads and management’s miserly ways, which leave workers to explain to often-enraged passengers why flying has become such a miserable experience” (New York Times, 22 December 2007, p.1; quoted in G.J. Bamber et al, Up in the Air: How Airlines can Improve their Performance by Engaging their Employees, Ithaca, Cornell University Press, 2009, p.1).Strategic choice: control or commitment / engagementContrast: Southwest and Ryanair

15. Any Yet ... Low Engagement Levels UK evidence: • Corporate Leadership Council report, highest scoring companies, 23.8% staff, ‘highly engaged’;lowest scoring companies, 2.9% • 20% ‘disengaged’ • Public sector, 12% ‘highly engaged’Macleod and Clarke, 2009, p.15Echoes in other British (Brown et al) and Australian work (Gollan and Davis).

16. 4. Strategy Identify the obstacles: • Conventional management wisdom, preference for control • Employees as cost • short-run focus • engagement, ‘soft and fluffy’ • poor leadership and management – lack of knowledge and / or implementation skills(Walton, Argyris, MacLeod and Clarke)

17. Recruitment Selection Assessment The Managing People Chain Leadership Training Development Learning Workplace Culture Performance Management Ed Davis 2010

18. 5. Conclusion Employee Engagement Matters Not new Lessons from the past Requires thoughtful leadership and comprehensive strategy.