For any business, employee engagement is fundamental for its growth. Any negative employee motivation can impact employee retention within a business organization. Employee motivation can be used for increasing organizational performance. This research essay’s main objective is to demonstrate how companies are employing employee motivation to enhance organizational performance by analyzing various real case studies.
Employee Motivation – How it enhances the Organisational Performance- an Analysis
The research report, focused on three years of research work by Roebuck and Co & Sears officials, was one of the first findings on employee involvement, thereby restoring the business around its consumers. The consequent facility, a profit chain replica, was footed upon then freshly developed evaluation mechanisms and found that “there exists a chain of cause end impact starting from the employee demeanor to the customer demeanor to revenues (Rucci, Kirn & Quinn 1998:34).
As per recent research, customer satisfaction and the resulting financial benefits from recurrence, loyal business emerges from emotional engagement within the employee-customer collaboration. Moreover, companies that emphasize High-performance and excellence will shift towards employee entanglement above employee participation. The critical factor that differentiates world-class from world-class is entanglement. Regular performance, offering an organizational capability that makes front-runners among peers (Thompson et al. 2012: 2).
Eneral Electric (GE) has recorded sales of more than $146,045 m in 2013 and $146,684 m in 2012, and is making a significant annual expenditure in the growth of its global workforce. It hires about 135,000 employees in the USA and 172,000 people in 2013 outside the USA. GE gives its staff a full variety of job development chances; it encourages its employees to acquire through formal learning and development educational courses and provides many means to accomplish a balance between professional and credit objectives. GE creates an opportunity for its workers to exercise their duty, dignity, and imagination when improving themselves and their professions. A new employee who entered GE would be educated at different departments to sharpen their expertise and skills. GE allocates vast amounts per year for the implementation of educational services, a massive contribution to engaging in the training and encouragement of its staff. A combination of class room seminars may have to be attended by recently hired administrators and job tasks will be given on a rotational basis. Mid-career managers can select from a long list of course in everyday business operations and acquire specific technical and specific non-technical skills. Experienced managers trained for executive positions are being given training in a high-level seminar at GE’s John F. Welch Leadership Development Centre. Further, for such training programs’ educational features, employees are motivated by their capability in retorting to new goals, accessing a larger pool of resources, and intertwining colleagues across different units. Thus, GE claims that its employee’s motivational programs helped it to achieve its excellent financial results (Pride, Hughes & Kapoor 2011:278)
A few major companies have introduced employee engagement teams or sustainability teams, and one of the best examples is Marks & Spencer, which is having an employee engagement team. Thus, if individuals or groups are recruited and offered the accountability, authority, access, and legality to spotlight engaging employees and developing a loyal, committed, responsible culture, this will result in the creation of a workforce involved in the sustainable business (Exter 38).
According to Kaye (2002), Infosys in an Indian information technology multinational company has a high reliance on its complete workforce since 2008. Employee’s strength has been included in the Infosys balance sheet in an equivalent term with other “intangibles” like other intellectual property assets. As per Gond et al., 2011, recent research studies have demonstrated the positive impact sustainable business has on their employees, like improving organization justice, social identity, commitment, trust, satisfaction in jobs, and actual demeanors (Exter 2013:44).
As per recent research findings by SHRM Foundation, employee engagement can be quantified in dollar terms and yield significant savings. For instance, in Molson Coors, a leading beverage company, it was revealed that engaged employees would encounter a safety incident less than five times as that of non-engaged employees and likely to have a lost-time safety incident in about less than seven times. Further, the average cost for the non-engaged employees was $393, whereas, for an engaged employee, it was only just £63. Due to this, solidifying employees’ engagement by the company resulted in a savings of $1,721,760 regarding safety costs in 2002 (Lockwood 2007:4).
As per a recent international workforce research study conducted by Towers Perrin, which took into account major success elements of employee engagement, high performance, and job satisfaction, it had a research study sample of more than 86000 employees worldwide at all stages of the business, both in big and mid-sized companies in about sixteen nations across four continents about demeanors, requirements, personal commitment, and work ethic of people to their employees and companies. The research findings exposed that employees are likely to stay with the business organizations that are regarded as “talent-friendly” and progressive, where business organizations have a major-edge work atmosphere and employee practices (Lockwood 2007:6).
As per Harter (2006), Gallup investigated about 24000 individual business units in 2006 and found that companies in the UK with top engagement scores indicated about 12% higher customer advocacy, higher productivity of 18%, and 12% profitability. Another research study conducted by Gallup revealed that the EPS (Earning per Share) growth rate of 89 organizations with the employee engagement scheme scored more than 2.6 times that of the business organizations with minimal engagement scores. As per Standard Chartered Bank report (2007), those branches with higher employee engagement reported 16% of higher profit margin growth than those with reduced employee engagement levels. Gallup’s research study also found that increased employee engagement levels are vibrantly associated with enhanced levels of innovation. As per Krueger & Killham (2007), 58% of engaged employees reported that their job passes out their most creative ideas, whereas just 3% of non-engaged employees reported creativity in their jobs. (MacLeod & Clarke 2011:11).
As per Kieran Preston, director-general of Metro, the public transportation provider for West Yorkshire, employee engagement is vital to Metro as it drives innovation and challenges and puts Metro at the vanguard of the best practice the UK transportation sector(MacLeod & Clarke 2011:12).
O2 and Sainsbury are the two UK-based companies that have witnessed noteworthy recent successes, and they attributed their growth due to the existence of sophisticated employee engagement models in their companies. As per Justin King, CEO of Sainsbury, with an employee strength of 150,000 people, Sainsbury strongly considered its employee engagement as fundamental for its growth. Thus, he felt that one could not even get to take off with a business of that magnitude without employee engagement (MacLeod & Clarke 2011:12).
As per Towers Perrin (2007), UK’s Civil-Service sector offers indicative corroboration that Civil Service departments with high employee engagement levels, which is evaluated through staff surveys, also happens to perform satisfactorily well in capability review, which is a primary metric of departmental performance. Among the public sector staff, about 78% of them believe that employee motivation will have a direct effect on customer service or shared services’ delivery (MacLeod & Clarke 2011:15).
The recent research study in Canada about employee engagement also suggested a direct nexus between profitability, customer service, and employee engagement in the private sector, which could also translate into the public sector with public confidence and trust at the fag end of the chain instead of just profit. As per Professor Chris Bones, Dean of Henley Business School, it is tough to consider that many admired companies and blue-chip organizations and companies placing enormous initiatives and resources into evaluating and enhancing engagement like Rolls-Royce, first direct, Diageo, and many more companies would be carrying out the same if they were not satisfied with its significance to their bottom line. As per Gallup (2003), CBI reported that absence due to sickness had cost the UK economy about £13.4 billion per annum. Thus, engaged employees in the UK avail an average of 2.69 sick days per annum, and hence companies, which encourage employee motivation will have lesser sickness cost (MacLeod & Clarke 2011:14).
As per Right Management (2006), 70% of the engaged employees reported a fair knowledge of how to cater to the customer requirements. In contrast, only 17% of the non-engaged employees said they showed concern for the customer needs. As per the Corporate Leadership Council (2004), 87% of those engaged employees were less likely to desert the organization than disengaged employees. The incidence of high employee turnover among disengaged employees is noteworthy. Some research studies pointed out that the cost of substituting each employee so deserted would be equal to their annual salary (MacLeod & Clarke 2011:14).
As per Gallup (2003), about 67% of engaged employees advocate for their companies, whereas just 3% of disengaged employees will support their companies. Likewise, 78% of engaged employees would endorse their company’s products or services against 13% of disengaged employees. As per Ipsos MORI (2006), employees from the public sector are less likely to advocate for their organization than employees in the private sector (MacLeod & Clarke 2011:14).
A research study carried over by Ipsos Mori on Audit Commission data exposed that employees in councils, which are given a rating as “excellent” had much better outcomes as compared to those in low or weak boards when inquired about issues like being consulted and informed, having buoyancy in senior managers and comprehending the aggregate goals of their councils. Further, those employees of ‘excellent’ rated boards were likely to propagate for their commissions against employees in low managed or weak councils (MacLeod & Clarke 2011:14).
Babcock Marine Clyde, which offers engineering support services to the Royal Navy, Glasgow, in 2007 reported that it was able to attain huge cost savings to the tune of £76 m to its customers. The company did not have any fixed assets in its balance sheet, but it considered its workforce assets. (MacLeod & Clarke 2011:76).
Gallup (2008) indicated that the cost of disengagement to the UK’s economy was between £ 59.4 billion and £ 64.7 billion. As per Tamkin, Cowling & Hunt (2008), if a business organization enhanced its investment in a wide range of cordial workplace practices, which pertain to the engagement of just 10%, they could improve the revenues by £1,500 per employee per annum (MacLeod & Clarke 2011:17).
One among the UK’s leading defense and services companies, the VT Group employs more than 12,000 individuals in the US and the UK with an annual sales revenue of £ 1.6 billion. VTs top management emphasized values-driven employee engagement that resulted in enhanced teamwork, higher personal accountability, mutual support, collaboration, autonomy, and influence, which resulted in innovations. Due to employees’ engagement, the groups’ financial performance has prolonged to soar despite the recent economic recession (MacLeod & Clarke 2011:24).
Freshfields Bruckhaus Deringer is the primary international law firm that visualizes employee engagement as a foundation to drive outcomes in a great market scenario that has primarily affected their day-to-day work of mergers and acquisitions. Immediately after a year of introduction of employee engagement schemes in their business, the firm’s revenue skyrocketed despite prolonging international market volatility. Freshfields acknowledged these outcomes to the motivation, new skills, and commitment they deem that their employee engagement stratagem has started to yield results (MacLeod & Clarke 2011:28).
As per Tower Perrin-ISR global study on employee engagement, which evaluated business organizations’ financial performance with the higher number of engaged employees as that those employees with lesser attention over of phase of one year, the research data consisted of 664,000 employees from more than fifty companies, of all magnitudes, around the globe, symbolizing a range of varied industries, employees engaged was quantified alongside more customary business performance initiatives like net income, operating income, and earnings per share. The significant findings of Tower-Perrin-ISR’s research finding included the following:
- Those business organizations with a highly engaged workforce enhanced the operating income by about 19.2% over a phase of one year. Those business organizations with lesser employee engagement witnessed a decline in their operating revenue by 32.7 % over the analogs’ period. Over one year, those business organizations with high employee engagement scores validated a 13.7% enhancement in net income growth, while those with lesser engagement scores witnessed net income growth fell by about 3.8%.
- Being an FTSE250 company in the defense and aerospace sector, Ultra Electronics Holdings Plc is employing more than 4000 employees in its 24 business divisions, predominantly in the US, UK, UAE & Canada. Due to its employee engagement policies, sales of Ultra have soared from £ 227m in 2000 to £515 m in the year 2008. Ultra’s operating profit also soared to £ 77 m from £ 30m over the analogs’ period, with a continued annual growth rate of twelve percent. Ultra’s management is of the view that its outstanding employees are vital to the Group’s attainment, and the employee engagement is a meaningful manner of evaluating the magnitude of employees’ commitment and enthusiasm (MacLeod & Clarke 2011:43).
Amey is the primary service provider company engaging more than 11000 employees. Amey’s top management is of the firm view that there is a compelling reason for enhancing employee engagement to accomplish business goals acknowledging it as an outgoing journey instead of treating it as a quick fix. The employee is a decisive issue for Amey as it has to enhance their services to their clients continually and finally to the general consumers. To improve employee engagement, line managers are key players, so Amey has to support them in engaging with their teams, which is a priority for Amey. As of now, Amey acknowledges that they have to travel a lot in the field of employee engagement and significant confronts they face, which include recognizing the ambit of employment and engaging at an individual employee level in what is an intricate and diverse organization, with substantial numbers of employees are employed at the outside of familiar office atmosphere (MacLeod & Clarke 2011:44).
HansenGlass is the unit of HansenGroup, which embraced the employee engagement scheme by changing focus from direct supervision of employees to self-managing teams. HansenGlass also implemented change initiation, enhanced communication, intensive training on leadership, acknowledgment, team spirit, and continuous enhancement to fix their objectives. Due to this, HansenGlass started to reap the benefits like its on-time delivery enhanced to 98%, thereby fulfilling the world-class benchmark. Productivity soared by 250 with 67% less wastage and a 73% fall in complaints from customers; inventory was minimized by 50%. Its profits also remained more than three times ahead of the industry average, resulting in further investment in new plants for £ 4m (MacLeod & Clarke 2011:51).
A Cheshire-based SME, namely Chess Plc, made some small fine-tunings in their employee welfare schemes, which resulted in significant advantages to the company. Chess Plc implemented various well-being and health initiatives, including supporting healthy eating, introducing government bike schemes, free flu jabs, and active control over the absence due to sickness. Due to these employee engagement initiatives, the mean number of sick leave per employee has come down to 1.73 per annum, which is well under the national average (Health Work Being 2007).
Employees are likely to stay with the business organizations that are regarded as “talent-friendly” and progressive, where business organizations have a major-edge work atmosphere and employee practices. Standard Chartered Bank report (2007), those branches with higher employee engagement reported 16% of higher profit margin growth than those with reduced employee engagement levels. Gallup’s research study also found that increased employee engagement levels are vibrantly associated with enhanced levels of innovation. Employee engagement is vital to Metro, the UK-based Transport Company. It drives innovation and challenges and puts Metro at the vanguard of the best practice in the UK transportation sector. Sainsbury, a leading supermarket chain, is strongly considering its employee engagement as fundamental for its growth.
Understanding the employees’ need is the crucial element in employee motivation. Progressively, employees now anticipate that they should be treated as human beings with accountabilities and rights and for instance , the implementation of the right to request for flexible working hours for those with kids or with the caring responsibilities. One of the best ways to understand the employee’s concern is through annual survey or through annual feedback where employees’ responses can be acted upon. It has become apparent that most CEOs are not aware of the notion of employee engagement and the advantages that it could bring to their business. According to Accor, about three-fourths of CEOs have no engagement strategy or plan, even though 90% of CEOs believe that employee engagement has a direct effect on the success of the business (Accor 2009). The lack of appreciation about the employee engagement at the top-most management level and failure to appreciate the contribution by the employees is buttressed by the research findings of Accenture was more than 50% of CFO who were interviewed have not even a minimal comprehension about the return on investments in human capital (Accenture 2008).
Thus, unless the business organization recognizes human capital’s potentialities, it cannot achieve organic growth. Companies that have realized this have encouraged employee engagement as they are well aware without employees’ active engagement. The success of a business organization can only remain a hallucination.