1. People engagement and performance
Unai Elorza
Mondragon Unibertsitatea
People engagement and performance

2. Who are we?

3. Who are we? Universities:
UPV/EHU; Deusto; Tecnun University; Mondragon Unibertsitatea; King’s College; Tilburg University, University of Central Lancashire.
Business associations:
Mondragon; Advanced Manufacturing Technologies Association (AFM).
Regional development agencies:
Urola coast Council Association; Uggasa; Beterri; Debegesa; Oarsoaldea.
Consultancies: LKS; OPE; Otalora
Administration: Provincial council of Gipuzkoa

4. What do we believe?

5. What do we believe? People engagement contributes to competitiveness.
This engagement depends to a large extent on the management of the organizations.
Evidence based management (instead of intuition, sensations, etc) to improve management.
Science is necessary for the everyday management practice:
“There is nothing more practical than a good theory” Lewin.

6. Which is our purpose? Mission

7. Which is our purpose? Mission
Accompany organizations…
… to “unleash” and “align” the potential of the people for the benefit of a common project …
… with the aim of making them more competitive and cooperative.
Note:
based on Empirical evidences
(Evidence Based Management)

8. What have we done so far?

9. What have we done so far?
Involve 485 organizations in this initiative (60% from Mondragon).
Gathered data from:
Managers, who tell us how they manage the organization (2.500 surveys / informants).
People, who tell us how they feel (engagement, emotions, etc) – surveys.
Archival data about performance figures (30 figures / organization).
How do we do it?
We offer knowledge and tools that help companies make decisions in the short term.
We take advantage of the data collected to make research.
Research enables us to improve the short term service for the companies.
It is a win-sin relationship (companies make better strategic decisions; universities research with the data gathered).

10. What are the questions we have been researching?

11. Research questions
How does the organizational context influence on people engagement?
To what extend people engagement is related to …
… absenteeism and turnover rates?
… customer service?
… productivity?
… economic performance?
Kaplan & Norton`s
Balanced Scorecard
Economic
performance
Customer
service
Internal
Efficiency
Absenteeism
Turnover
Organizational
context
People
Engagement

12. Some preliminary results …

13. Organizational context => Engagement
Relationship between WHAT PEOPLE FEEL and Engagement.
Same pattern on all sectors: industry, retailing, service, education, ...
SAMPLE 1: Industry
SAMPLE 2: Retailing
Perception of “enriched” working environment
Perception of “enriched” working environment
Note: graphs illustrate organization level averages.

14. Organizational context => Engagement
Relationship between WHAT MANAGERS SAY THEY DO and people Engagement.
From very low to non-significant relationship.
Conclusions:
If people perceive an “enriched” working
environment, they engage.
Engagement is not related to what managers
say they do, but to what people feel / perceive.
Commitment
“Enriched” working environment (informed by Managers)

15. Engagement => Absenteeism, Turnover
The higher the average Engagement of the people in the organization, the lower the % of total Absenteeism.
Same pattern of behaviour with Turnover rates.
Note: each bubble is an organization (Hypermarket)

16. Engagement => Customer service
The higher the average Engagement of the people in the organization, the lower the number of Customer Complaints.
We did not found a clear pattern with small retailing shops.
Note: each bubble is an organization (Hypermarket)

17. Engagement => Economic Performance
Negative relationships between Engagement and Productivity / Economic Performance figures. Consistency among different retailing businesses and between: small and big stores.

18. Engagement => Economic Performance
Different pattern of behaviour found in the industry sample.
Important note: results are still preliminary since a longitudinal perspective and higher sample is needed.
SAMPLE 2: Retailing
SAMPLE 1: Industry
Note: graphs illustrate organization level averages.

19. - - + + + Overall perspective
Kaplan & Norton`s
Balanced Scorecard
Organizational Context has an important effect on Engagement.
The higher the Engagement, the …
… better customer service (as expected: +)
… lower Absenteeism and Turnover (as expected +)
… lower productivity (not expected -)
… lower economic performance (not expected -)
Economic
performance -
Customer
service
Internal
Efficiency - + +
Absenteeism
Turnover
Organizational
context
People
Engagement +

20. Why these unexpected results with productivity and economic performance?

21. People engagement  Productivity
In some cases / sometimes:
People contributes to Productivity / Performance.
For example: when the job is flexible, challenging, variable, with value added, to be performed by skilled people.
The business needs high skilled good craftsmen. +
Productivity
Performance
People
Engagement

22. People engagement  Productivity
In other cases / other times:
Productivity / Performance influences People.
The job poor, simple, repetitive that can be performed by low skilled people.
The business need “semi-robots” to repeat, and repeat and repeat.
Productivity means “intensification” of the job.
Results in retailing showed this pattern.
Productivity
Performance -
People
Engagement

23. People engagement  Productivity
There seem to be a circular relationship between both:
The positive or negative relationship might depend on the nature of the business and / or the job:
Business: for example, cost sensitive, productivity dependant, labour intensive businesses…
Job: for example, shop floor people “tied” to a production performing repetitive and poor jobs, might “suffer“ productivity; whereas other people (logistics, customer service, etc) might contribute to productivity.
People
Engagement
Productivity
Performance - +
Moderating
the relationship
Strategy and /or
Nature of the business / job

24. What are the implications for the practice?

25. Implications for practice
It seems that some cost sensitive and people intensive businesses might present a TRADE-OFF between job intensification for organizational performance and People Engagement. That is, …
… the more the one, the less the other and vice-versa.
Job strain /
intensification
People Engagement /
Development

26. Implications for practice
The “people development and Engagement” challenge should not mean the same for business A in contrast to business B.
Business A:
high value added
dependent on craftsmen
Business B:
Cost sensitive,
productivity dependent, people intensive
Vs.

27. Limitations and future issues

28. Limitations and future issues
We still do not have the longitudinal perspective; so causality conclusions can not be taken.
Results are still preliminary.
Need to expand the initiative in other European regions:
UCLAN, King’s College or other local agent could provide you the service.
In the short term: you will get information to improve strategic decision making about people and strategy.
In the mid term: through the analysis of data universities will generate new useful knowledge for you.

29. Thank you very much for your attention
For any further information: