CHAPTER 7 CRITICAL ASSESSMENT OF THE LITERATURE ON EMPLOYEE ENGAGEMENT
7.1 This chapter critically examines the literature surveyed in Chapters 2 - 6. It goes beyond a simple summary of the findings which has been provided at the conclusion of each Chapter. Rather, it attempts to dig deeper and to provide an objective assessment of the evidence.
7.2 To provide such an objective overview is difficult in a field such as employee engagement. The vast majority of the authors in this field are either researching organisational experience and/or are responsible for the implementation of management consultancy solutions for organisations, and therefore cannot be considered as strictly independent. The focus of some of the literature is on convincing employers about adopting practices, which encourage employee engagement rather than providing an independent assessment.
7.3 Even those authors not directly involved in the delivery of such management consultancy tend to come from a field which emphasises strongly the worth and importance of happy employees to their employers, for example being involved in the Human Resources field. This indicates that potentially there are some underlying assumptions, for example about the relative importance of human capital to company success, which might influence the findings of the studies.
7.4 In addition, research in the field has not focused on identifying factors that have a direct causal effect on employee engagement. This limits the extent to which these findings can objectively demonstrate the value of employee engagement. In addition, there tends to be limited consideration of the costs of driving up employee engagement, although considerable attention has been devoted to quantifying the benefits.
Key Findings in the literature
7.5 The key findings of the literature review should be considered within this context. However, there are still a number of strong messages that emerge clearly. These are noted below with a critical assessment of the reliability of these findings concluding this chapter. The key findings, as noted in the literature, are:
- Employee engagement matters as it impacts on companies' bottom lines, both through HR related impacts (such as recruitment and retention) and through wider impacts on productivity, profit and achieving the aims and objectives of the organisation;
- The evidence from large-scale quantitative surveys suggests that the majority of employees are neither engaged nor disengaged, with only around 10 to 30 per cent of employees fully engaged with their work;
- There is no evidence in the literature of significant differences between how the concept of employee engagement can be applied to private and public sector organisations. Rather, there are significant differences between organisations within each sector ;
- The models of employee engagement that have been developed can be applied equally to the public and private sectors;
- A range of themes emerge as factors that influence employee engagement. These include factors that have a direct influence on employees working conditions (such as the number of hours worked and the work life balance) and also wider influences linked to the organisation (such as the importance and value of what the organisation does). A common theme emerging from all studies is the importance of leadership and two-way communication, and the need for management to drive forward employee engagement;
- There are differences in how developed these factors are in the public and private sector. While the private sector tends to perform less well on the direct influences on employees (with public sector workers found to be happier with job security, being paid fairly, and training and development for example) the public sector seems to have more difficulties around effective leadership;
- In terms of impact, studies tend to emphasise the positive impact of employee engagement but few quantify this impact reliably. Where an attempt at quantification is made, the magnitude of the positive impact tends to be very significant ( e.g. 20% increases in productivity);
- Notwithstanding these measurement issues, there has been widespread recognition and endorsement of employee engagement by some of the 'big names' in the public and private sectors. Clearly, if the likes of the Royal Bank of Scotland and Microsoft are committing significant resources to employee engagement, then they are being motivated by the drive to secure hard business benefits;
- It is clear that 'employee engagement' has moved beyond HR discussion papers and concepts into the mainstream strategic and operational management. It is not a fad - it is reality for many organisations who view it as having benefits and are using it as a tool to further the organisation's objectives. The next challenge is to quantify robustly the cost-effectiveness of organisational commitment to employee engagement. In this area the literature has less to say and the jury is still out; and
- There is general agreement that staff surveys can be designed to effectively measure employee engagement and there are a number of good practice examples which can be drawn on to design such surveys.
Gaps and shortcomings of the literature
7.6 In light of the comments made in the introduction to this chapter, there are a number of shortcomings associated with the literature, as well as gaps not currently covered. These are charted below:
- There is an inherent positive bias in the literature as noted above;
- The literature tends to emphasise that improvements to employee engagement is always positive. There is no consideration that a certain level of employee engagement might be optimal which might differ between different organisations;
- Related to this, further work is required to determine where the focus of the intervention should be. The literature seems to steer us towards addressing the disenfranchised majority, but says little relating to the minority of seriously 'disaffected'. Arguably, if there are significant parts of the workforce disengaged, this will have negative impacts, meaning that employers will need to think carefully about how they identify this portion of the workforce and address the problem ( i.e. through further engagement measures or letting this section of the workforce go);
- There is also the related issue of how organisations go about recruiting staff that are likely to have a higher engagement propensity. Several articles were identified which discuss this issue, but it is suggested that this area would benefit from more bespoke research related to employee engagement;
- The importance of the different factors underpinning employee engagement have not really been tested. For example, pay and conditions are not emphasised but a number of empirical studies outwith this study field show that pay and conditions are critical in job satisfaction for particular individuals and organisational types. More detailed disaggregation of employee surveys by organisational and employee type as drivers of engagement would be really useful to assess whether employee engagement is dependent on the factors stipulated in the literature ;
- The degree to which effective implementation of any new initiative depends on the readiness of staff to engage with the change. This is especially critical within the public sector as surveys show more resistance to change;
- There is no real consideration of the cost of achieving higher levels of employee engagement;
- The small number of studies attempting to quantify impact rely on identifying relationships between factors ( e.g. current employee engagement and future profitability). This correlation data cannot determine cause and effect issues ( e.g. the extent to which employment engagement can directly influence future profitability); and
- There is no evidence which shows that the models for employee engagement are equally applicable across all types of work. Arguably, jobs which are very unpleasant or jobs which are very monetary focused ( e.g. stock market dealing) are more easily incentivised by monetary rewards. In addition, it is likely that different individuals will be more or less motivated by different factors, which is not reflected in the current models for employee engagement.
7.7 In light of these shortcomings and gaps, can conclusions reliably be drawn from the literature? This is not necessarily an easy question to answer. The absence of more critical appraisals of the concept and impact of employee engagement must be highlighted in the interpretation of the literature reviewed.
7.8 However, there are sufficient indications in the literature to draw some broad conclusions even if these are not necessarily strongly underpinned by objective evidence. The key conclusions drawn from the literature are as follows:
- Employee engagement matters, but the extent to which it can lead to a step-change in organisational performance is uncertain. In particular, even where there is a clear vision and understanding of what needs to be done, there can be significant barriers to effecting 'change on the ground', for example if staff are generally opposed to change or if the capacity to implement change is limited by resource constraints;
- Some of the approaches aimed at improving employee engagement can significantly increase employee engagement (as measured by staff surveys) and, in turn, this can have a measurable impact on HR variables such as retention and staff sickness. The links to wider impacts in areas such as client service, satisfaction levels and for private sector business - turnover and profitability - tend to be more tenuous; and
- Increasing employee engagement is highly dependent on leadership and establishing two-way communication where people's work and views are valued and respected. There are thus ways in which any organisation can work towards better employee engagement without incurring high costs as long as there is the organisational determination to focus on this issue. Even in the absence of robust impact data, the principle of employee engagement is to be endorsed in terms of good practice in people management and the softer benefits this confers to organisations.