Leadership and Employee Engagement

What is employee engagement?

Employee engagement is defined as the level of commitment and involvement an employee has towards their organization and its values. It refers to the degree in which an employee displays motivation, passion and emotional commitment to his work and to his company. Employee engagement is a concept that is generally viewed in terms of employees feeling a strong emotional bond to the organization that employs them. This is associated with people demonstrating a willingness to recommend the organization to others and commit time and effort to help the organization succeed.

Components of engagement :

Rational Engagement: the involvement, understanding and motivation an employee has in his/her job

Emotional Engagement: the attitudinal attachment an employee has to his/her company; source of pride

Why do we need engaged employees?

In a research survey of more than 50,000 employees at 59 member organizations in 27 countries and 10 industries, done by Corporate Leadership Council, has demonstrated the real bottom-line impact of employee engagement. Highly committed employees perform up to 20 percentile points better and are 87% less likely to leave the organization than employees with low levels of commitment.

The “10:6:2” Rule

· Every 10% improvement in commitment can increase an employee’s effort level by 6%.

· Every 6% improvement in commitment can improve an employee’s performance by 2 percentile points.

The “10:9” Rule

· Every 10% improvement in commitment can decrease an employee’s probability of departure by 9%.

While Hewitt Associates, has just released new data showing the strongest link yet between engaged employees and business success. Their analysis of 1,500 companies over a four-year period showed that companies with higher engagement levels had markedly higher total shareholder return. Companies with between 60 per cent and 100 per cent engagement achieved an average return of 24.2 per cent, whereas those with lower engagement (49 per cent to 60 per cent) had lower return at 9.1 per cent. When engagement is below 25 per cent, those companies suffer a negative total shareholder return.

What are the factors that lead to employee engagement?

· Employee perceptions of job importance

· Employee clarity of job expectations

· Career advancement/improvement opportunities

· Regular feedback and dialogue with superiors

· Quality of working relationships with peers, superiors, and subordinates

· Perceptions of the ethos and values of the organisation

Research indicates that 20% of employee engagement is directly due to the employee’s emotional health. The remaining 80% of emotional engagement is affected by organizational elements – which in turn are impacted by Leadership behavior.

How can leadership contribute to engagement?

Leadership is generally exercised on three different levels. At the individual level, leaders mentor, coach, and motivate; at the group level, they build teams and resolve conflicts; at the organizational level, leaders build culture.

Leadership and Goals

Clear job expectations, constructive feedback and opportunity for professional development have been identified as factors that can influence an employee’s level of engagement. Employees do well when they are know what’s expected from them and how to go about achieving it – thus being motivated towards their goal. A good leader ensures communication of clear goals and direction. In addition, good leaders help employees develop personal accountability for their goals and help achieve them. Not only that leaders also ensure that constructive feedback, which can help the employees do better is provided to them in a continuous and timely manner.

Leadership and Culture

Corporate culture is developed by its leaders either when the organization starts up or reinvented via a change in strategy. The un-doubtable reason why an organization becomes successful is through developing a real and meaningful culture and a set of values that reinforce this culture. But perhaps the most important aspect of culture and values is the organization’s ability, through its leadership team, to live and breathe those values. It is this culture and value system, which engages employees. Tata group of companies is an example in this direction. Where not only the new employees are trained in the Tata approach and history, those moving up the scale receive continuous training on the Tata way.

Leadership and Motivation

Motivation is internal; each employee has unique motivational needs. A good leader understands what motivates his/her team members thus helping them realize their full potential. They continuously communicate with their team, listen to them and find ways to enrich the job of their employees thus motivating them.

Role of leaders in employee engagement

All the people managers need to understand the importance of employee engagement. They need to know that if employees are not kept engaged, not only the retention becomes a problem but also actively disengaged employees are less productive, less profitable, less loyal, less likely to provide excellent customer service. Not only that a disengaged employee shares his/her unhappiness with the colleagues thus spreading the disgruntled-ness.
19th September 2006 From India, Mumbai
Hi Pranati,
Wishing you a very Happy Diwali!!! Very informative article. I am Final year student of MHRDM, currently I am working on a Project 'Linkage of leadership with employee engagement ..Could you please help me with the Methodology in which it could be measured..and what are the possible questions that could be asked in Questionnaire.
Thanks & Regards,
Divya K
17th October 2009 From India, Mumbai
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