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Maximising Employee Engagement

Why should HR be at the centre of your business strategy?

By Fleur Blanford

Fleur is Oakwood's Head of International Studies and works in our UK Office
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There are many organisational examples that  clearly show the positive correlationship between engagement and market place innovation, as well as job satisfaction and  absenteeism. 

According to Deloitte: 

  • More than 70% of Millennials expect their employers to focus on societal or mission-driven problems
  • 70% want to be creative at work
  • More than two-thirds believe it is management’s job to provide them with accelerated development opportunities in order for them to stay

Many studies show how engagement correlates to decreases in absenteeism, turnover, accidents, and defects, while it also correlates to increase customer service, productivity, sales, and profits. The key element here is that engagement—the emotional commitment one has to their organization and its goals—drives higher levels of discretionary effort. 

The benefits of increased employee engagement

In an APQC study conducted on linking employee engagement to positive business outcomes, an Infosys example highlights the efforts to measure the link between employee engagement and customer satisfaction. This demonstrates that there is a link between customer satisfaction data and employee engagement statistics, and the organization found that the business units with the highest profitability consistently have the most engaged work force. 

 A Shlumberger example, where monthly statistics of service quality was organized by client, geography and type of service showed that an increase in quality of service indicates well managed operations, better trained employees and higher engagement and a deterioration of these factors can be traced back to a drop in management engagement. 

Boost profit through employee engagement

These points are illustrated through a simplified diagram (figure 1.) showing the link between more engaged workforce and key business results. When employees are engaged and happy, they care more, they are more productive, give better service, and even innovate in their jobs. All of that leads to happier customers, who buy more and refer more often, which drives sales and profitability. The key outcomes mentioned relate to the element of competitiveness in the marketplace, which will deliver greater results to both internal and external stakeholders.
Alternatively Purcell and Hutchison in 2007 in their article “Front-line managers as agents in the HRM-performance causal chain, theory, analysis and evidence" (Human Resource Management Journal in 2007 (volume 17.1, pages 3-20), talk about ‘the black box’ problem. Looking inside the black box requires specifying the HR causal chain.
The HRM performance causal chain (Fig 2.) illustrates that HR policies and practices need to be supported by actual practices involving actual implementation of the policies and procedures. Perceptions of employees in terms of fairness and justice, employee attitudes in terms of job satisfaction, morale and involvement, all have an impact on employee discretionary behaviour which results in profit, market share and market value growth.

If we don’t have teams committed to our mission, passionate about their work, and willing and ready to work together, we cannot possibly succeed over time.

Failan Saleem, FCIM
Director of Marketing at Oakwood International