Employee Engagement What, Why and How Employee Engagement - What? “Engagement is about creating opportunities for employees to connect with their colleagues, managers and wider organisation. It is also about creating an environment where employees are motivated to want to connect with their work and really care about doing a good job…It is a concept that places flexibility, change and continuous improvement at the heart of what it means to be an employee and an employer in a twenty- first century workplace.” (Professor Katie Truss 1 ) “A positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of the 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 employee and employer.” (Institute of Employment Studies 2 ) “A set of positive attitudes and behaviours enabling high job performance of a kind which are in tune with the organisation’s mission.” (Professor John Storey 3 ) Reference the MacLeod report, the Corporate leadership Council, and Gallop. Brett Rouse 2010 ‘…we talk about engaging the hearts and minds of our employees… rational commitment is about engaging the mind, while emotional engagement is about engaging the heart.’ CLC

Employee Engagement Why? It correlates with performance Levels of engagement matter because employee engagement can correlate with performance. Even more significantly, there is evidence that improving engagement correlates with improving performance – and this is at the heart of our argument why employee engagement matters to the UK. Evidence: Gallup x2, Tower Perrins-ISR 10, Standard Chartered Bank It correlates with innovation Gallup indicate that higher levels of engagement are strongly related to higher levels of innovation. Fifty-nine per cent of engaged employees say that their job brings out their most creative ideas against only three per cent of disengaged employees. 11 This finding was echoed in research for the Chartered Management Institute in 2007 which found a significant association and influence between employee engagement and innovation. Based on survey findings from approximately 1,500 managers throughout the UK, where respondents identified the prevailing management style of their organisation as innovative, 92 per cent of managers felt proud to work there. 12 As Professor Julian Birkinshaw of the London Business School told us: “employee engagement is the sine qua non of innovation. In my experience you can have engaged employees who invest their time in multiple directions (such as servicing clients, creating quality products) but you cannot foster true innovation without engaged employees.” Other outcomes Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take The CBI reports that sickness absence costs the UK economy £13.4bn a year. 16 Seventy per cent of engaged employees indicate they have a good understanding of how to meet customer needs; only 17 per cent of non- engaged employees say the same. 17 Engaged employees are 87 per cent less likely to leave the organisation than the disengaged. 18 The cost of high turnover among disengaged employees is significant; some estimates put the cost of replacing each employee at equal to annual salary. Engaged employees advocate their company or organisation – 67 per cent against only three per cent of the disengaged. Seventy-eight per cent would recommend their company’s products of services, against 13 per cent of the disengaged (Gallup 2003). 19 Public sector employees are less likely to be advocates for their organisation than private sector staff. 20

Employee Engagement how? Macleod Report LEADERSHIP provides a strong strategic narrative which has widespread ownership and commitment from managers and employees at all levels. The narrative is a clearly expressed story about what the purpose of an organisation is, why it has the broad vision it has, and how an individual contributes to that purpose. Employees have a clear line of sight between their job and the narrative, and understand where their work fits in. These aims and values are reflected in a strong, transparent and explicit organisational culture and way of working. The late Professor Sumantra Ghoshal, formerly of the London Business School, believed that organisations which were successful in the long haul were characterised by stretch, discipline, trust and support; they were ‘both tough and tender’. ENGAGING MANAGERS are at the heart of this organisational culture– they facilitate and empower rather than control or restrict their staff; they treat their staff with appreciation and respect and show commitment to developing, increasing and rewarding the capabilities of those they manage. As Chris Bones told us, “the line manager is the lens through which I see the company and the company sees me.” VOICE An effective and empowered employee voice – employees’ views are sought out; they are listened to and see that their opinions count and make a difference. They speak out and challenge when appropriate. A strong sense of listening and of responsiveness permeates the organisation, enabled by effective communication. INTEGRITY Behaviour throughout the organisation is consistent with stated values, leading to trust and a sense of integrity. Corporate Leadership Council – Levers of high Performance 1.Provide Fair and Accurate Informal Feedback 2.Clarify Performance Expectations. 3.Ensure communication & information sharing. 4.Provide a credible commitment to employee development 5.Connect employees with the organisation and its success 6.Amplify the good, filter the bad 7.Instill a ‘Performance culture’: Communication, flexibility, innovation and risk taking

Reflection. 1) Are your Leaders communicating specific, outcome focused expectations to their teams, including what poor, acceptable and outstanding looks like? 2) Do your Leaders give their teams regular informal and accurate feedback on how they are doing against these expectations? 3)How good are they at communicating and sharing information? 4) Have your team members got motivating development plans, which they demonstrate their commitment to? 5) Does everyone in your organisation understand their connection to the company’s success? “Wherever you work, your job as a manager is to make your people be the best they can be – and usually they don’t know just how good they could be. It’s individuals that make the difference” Alan Jones, Chairman Emeritus of Toyota UK In the words of David Yeandle of the EEF, the manufacturers’ organisation: “It will be hard to get through the recession without engaging your workforce.’