Address to 13th World Human Resources Congress, HR Without Limits

Montreal, Canada, 29 September 2010

Professor Ed Davis AM, FAHRIEmeritus Professor, Faculty of Economics and Business University of Sydney Australia

Contact: emjkdavis@hotmail.com

Employee Engagement: the Path to Superior Performance?

Employee Engagement

1. Definition and Approaches2. Lineage3. Links to Performance4. Strategy5. Conclusions

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.

what is engagement?• What do you think?

initiative

enjoyment

flow

contextual performanc

e

extra-role behaviour

job satisfaction

citizenship behaviours

work orientation

dedication

absorption

prideintensity of

effort vigour

empower-ment

organisation

commitment

job involvemen

t

activationproactive behaviour

adaptive behaviour

discretionary effort

persistence

intention to stay

energy

|Nick Vrisakis, Voice Project, nick.vrisakis@voiceproject.com.au

2. LineageIndustrial democracy

Employee and union rights Links to performanceAustralian 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.

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.

LeadershipRichard 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)

Benefits Costs

improved quality increased management effort

lower costs new skills

reduced work new relationships

increased efficiency higher levels of ambiguity and uncertainty

decreased turnover pain of changing

decreased absenteeism attitudes and habits

better change management

Walton, 1985, p.80.

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

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.

HIM / HPMHigh 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.

Australia 1990sBest 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.

3. Employee Engagement: Links to PerformanceIES, 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.

“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 / engagement

Contrast: Southwest and Ryanair

Any Yet ... Low Engagement LevelsUK 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.15

Echoes in other British (Brown et al) and Australian work (Gollan and Davis).

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)

RecruitmentSelection

Assessment

Leadership

Workplace Culture Performance

Management

Training

Development

Learning

The Managing People Chain

Ed Davis 2010

5. Conclusion

Employee Engagement Matters

Not new

Lessons from the past

Requires thoughtful leadership and comprehensive strategy.