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Effective Practice Guidelines Employee Engagement and Commitment

By Bernard Bailey,2014-04-03 17:07
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Effective Practice Guidelines Employee Engagement and Commitment

    SHRM Foundation’s Effective Practice Guidelines

    Employee Engagement and Commitment A guide to understanding, measuring and increasing engagement in your

    organization

    By Robert J. Vance, Ph.D.

Table of Contents

Foreword………………………………………………………………………………...2

Acknowledgments…………………………………………………………………….. 3

About the Author……………………………………………………………………….. 4

Employee Engagement and Commitment……………………………………………… 5

     Employee Engagement: Key Ingredients

     The Link Between Employer Practices and Employee Engagement

     A Closer Look at Workforce Surveys

    Designing Engagement Initiatives: Guidelines to Consider

    Conclusion

References…………………………………………………………………………… 38

Sources and Suggested Readings……………………………………………………….41

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    ? 2006 SHRM Foundation. All rights reserved.

    Effective Practice Guidelines-Employee Engagement and Commitment

Foreword

    The SHRM Foundation Board of Directors appreciates how difficult it is for HR practitioners to keep abreast of current research findings and incorporate them into their own HR practices.

    Human resource professionals juggle multiple responsibilities and do not have time to read long research reports, no matter how beneficial. Realistically, most HR practitioners will seek guidance from research findings only if they are presented in a clear, concise, and usable format.

    To address this issue and make research more accessible, the SHRM Foundation created the Effective Practice Guidelines series in 2004. The Foundation publishes a new report

    annually on different HR topics. Past reports, available from the Foundation, include Performance Management and Selection Assessment Methods. You are now reading the

    third report in the series: Employee Engagement and Commitment.

    To create each report, a subject matter expert with both research and practitioner experience distills the research findings and expert opinion into specific advice on how to conduct effective HR practice. The report is then reviewed by a panel of academics and practitioners to ensure that the material is comprehensive and meets the needs of HR practitioners. An annotated bibliography is included with each report as a convenient reference tool.

    Our author is Robert J. Vance, a partner of Vance & Renz, LLC of State College, Penn. Dr. Vance has 25 years of consulting, research, and teaching experience. He is uniquely qualified to lead us through the topic of employee engagement.

    The newly created SHRM Foundation Research Applications Committee oversees production of the reports. Our goal is to present relevant research-based knowledge in an easy-to-use format. Please let us know if you think we’ve achieved that goal.

    The Foundation’s vision is ―The SHRM Foundation maximizes the impact of the HR profession on organizational decision-making and performance, by promoting innovation, education, research and the use of research-based knowledge.‖

    We are confident that the Effective Practice Guidelines series takes us one step closer to

    making that vision a reality.

    Frederick P. Morgeson, Ph.D. Maureen J. Fleming, Ph.D.

    Co-Chair, Research Applications Committee Co-Chair, Research Applications Committee Associate Professor of Management Professor of Management

    Michigan State University University of Montana

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    ? 2006 SHRM Foundation. All rights reserved.

    Effective Practice Guidelines-Employee Engagement and Commitment

Acknowledgments

    The SHRM Foundation is grateful for the assistance of the following individuals in

    producing this report:

    Editor

    Frederick P. Morgeson, Ph.D.

    Associate Professor of Management, Eli Broad College of Business Michigan State University

Reviewers

    Judith L. Clark, SPHR, CPC

    President, HR Answers, Inc.

JT Kostman, Ph.D.

    Director, People Equity Solutions, Metrus Group

William A. Schiemann, Ph.D.

    Chairman and CEO, Metrus Group

Project Manager

    Beth M. McFarland, CAE

    Manager, Special Projects, SHRM Foundation

    For permission to include engagement definitions, survey items, models, and business

    results in this report, sincere thanks to:

    ; Brian Gareau, Caterpillar Inc.

    ; Rachel Safferstone, Corporate Leadership Council

    ; Jennifer Kaufman, Dell Inc.

    ; Paul Bernthal, Development Dimensions International

    ; Ray Baumruk, Hewitt Associates LLC

    ; Craig Ramsay, Intuit Inc.

    ; Jack Wiley, Kenexa

    ; Carla Shull, Molson Coors Brewing Company

    ; Jim Harter, The Gallup Organization

    ; Tom Davenport, Towers Perrin

Major funding for the Effective Practice Guidelines series is provided by the Human

    Resource Certification Institute (HRCI) and the Society for Human Resource

    Management (SHRM).

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    ? 2006 SHRM Foundation. All rights reserved.

    Effective Practice Guidelines-Employee Engagement and Commitment

About the Author

Robert J. Vance, Ph.D.

    Robert J. Vance is a partner of Vance & Renz, LLC, of State College, Pa., a provider of customer-focused solutions to problems in human resource management and organizational development. Dr. Vance has 25 years of consulting, research and teaching experience. He has directed projects in many private and public sector organizations in the areas of personnel selection, training, performance management, safety, employee and customer surveys, organizational development, innovation implementation and workforce development.

    A member of the Society for Industrial and Organizational Psychology (SIOP), the American Psychological Association (APA), the Academy of Management, and the American Association for the Advancement of Science, his work has appeared in such publications as the Journal of Applied Psychology, Personnel Psychology, Leadership

    Quarterly, Group and Organization Management, and Human Performance. Recent

    publications include a chapter in Customer Service Delivery: Research and Best

    Practices (edited by L. Fogli), and ―Organizational Cynicism,‖ a contribution to the forthcoming Encyclopedia of Industrial and Organizational Psychology (edited by S.

    Rogelberg).

    Dr. Vance served on a National Research Council committee examining future directions for occupational analysis and classification systems, and on an APA task force on workforce analysis. He is a corecipient of the SIOP’s 1998 M. Scott Meyers Award for Applied Research in the Workplace, and the national University Continuing Education Association’s 1994 Programming Award. He received his Ph.D. in industrial and organizational psychology from Pennsylvania State University.

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    ? 2006 SHRM Foundation. All rights reserved.

    Effective Practice Guidelines-Employee Engagement and Commitment

Employee Engagement and Commitment

    Employee engagement first. [No] company, small or large, can win over the

    long run without energized employees who believe in the [firm’s] mission and understand how to achieve it. That’s why you need to take the measure of employee engagement at least once a year through anonymous surveys in which

    people feel completely safe to speak their minds.

    Jack and Suzy Welch

    Employees who are engaged in their work and committed to their organizations give companies crucial competitive advantagesincluding higher productivity and lower

    employee turnover. Thus, it is not surprising that organizations of all sizes and types have invested substantially in policies and practices that foster engagement and commitment in their workforces. Indeed, in identifying the three best measures of a company’s health, business consultant and former General Electric CEO Jack Welch recently cited employee engagement first, with customer satisfaction and free cash flow coming in 1 ―Reaping Business Results at Caterpillar‖ and second and third, respectively.

    ―Engagement Pays Off at Molson Coors Brewing Company‖ show two examples of

    companies that benefited from enhancing engagement and commitment.

    Reaping Business Results at Caterpillar

    Construction-equipment maker Caterpillar has garnered impressive results from its employee engagement and commitment initiatives, including:

    ; $8.8 million annual savings from decreased attrition, absenteeism and overtime

    (European plant)

    ; a 70% increase in output in less than 4 months (Asia Pacific plant)

    ; a decrease in the break-even point by almost 50% in units/day, and a decrease in

    grievances by 80% (unionized plant)

    ; a $2 million increase in profit and a 34% increase in highly satisfied customers

    (start-up plant)

    Engagement Pays Off at Molson Coors Brewing Company

    At beverage giant Molson Coors, engaged employees were 5 times less likely than nonengaged employees to have a safety incident and 7 times less likely to have a lost-

    time safety incident. Moreover, the average cost of a safety incident for engaged

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    ? 2006 SHRM Foundation. All rights reserved.

    Effective Practice Guidelines-Employee Engagement and Commitment

    employees was $63, compared with an average of $392 for nonengaged employees. By strengthening employee engagement, the company saved $1,721,760 in safety costs

    during 2002. Engagement also improved sales performance at Molson Coors: Low-

    engagement teams fell far behind engaged teams in 2005 sales volumes. In addition, the difference in performance-related costs of low- vs. high-engagement teams totaled

    $2,104,823.

    But what are employee engagement and commitment, exactly? This report examines the ways in which employers and corporate consultants define these terms today, and offers ideas for strengthening employee engagement. Though different organizations define engagement differently, some common themes emerge. These themes include employees’ satisfaction with their work and pride in their employer, the extent to which people enjoy and believe in what they do for work and the perception that their employer values what they bring to the table. The greater an employee’s engagement, the more likely he or she is to ―go the extra mile‖ and deliver excellent on-the-job performance. In addition,

    engaged employees may be more likely to commit to staying with their current

    2organization. Software giant Intuit, for example, found that highl