Employee engagement is becoming valuable as the success comes from within the organization when transforming into the digital age and the modern world. It is crucial to take into consideration the level of engagement as competitive advantage and value proposition when talking about a successful and efficient organization. The concept of employee engagement is becoming popular around the world nowadays.These theses emphasize on investigating the current situation of employee engagement in educational institute. These thesis aims to explore the factors that are driving or hindering the development of engagement based on the case institute. By analyzing what is working and the existing difficulties, this thesis attempts to assist the case institute for better understanding and research in the near future. The first aim of the research is to find out the possible connection between retention and employee engagement based on a literature review. Secondly, the aim is to find out what the situation is in a case institution regarding employees’ engagement.Then, good practices in engaging and retaining employees are studying in order to meet the third aim that is providing the case institution guidelines on how to address the retention and engagement issues in the institution. In the theoretical part the concepts of employee engagement and retention are studied and the data used is gathered from literature written about the field. Furthermore, the drivers of employee engagement are presented, and the link between retention and engagement is studying. In the empirical part of the thesis, the engagement of the case institution’s employees is studied. The method of the data collection is a self-completed online questionnaire, which is send to all employees.
Organizations are created to provide a structure to support collaborative efforts of individuals working together toward a common purpose. Organizational performance is clearly a function of the cumulative performance of people associated with the organization. Each individual is expected to contribute to overall organizational performance. Collectively, the sum total of each individual employee’s performance determines overall organization performance and success.Harvard Business Review surveyed worldwide business leaders and found that people-oriented or “soft” skills were predominate factors contributing to organizational success. Highly engaged employees ranked among the top three factors contributing to organizational success in the HBR survey. Therefore, employee engagement was considered an essential element to produce desirable business outcomes; which may be the impetus for the emergence of employee engagement as an area of interest among researchers and practitioners. What does it mean to be engaged in ones’ work? Psychologist William Kahn first identified the concept of employee engagement in 1990. He defined employee engagement as ‘the harnessing of organization members’ selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performance .Although a consensus has not been reached on a single definition, most definitions include employee satisfaction, work involvement and enthusiasm for work. Other psychological factors have been identified as related to employee engagement. Factors include a heightened emotional connection that employees have towards their institution and/or a passion for work. Employee engagement has many benefits for an organization; the subject has links to benefits such as; delivering improved business performance, revenue growth, customer satisfaction, staff retention and efficiency. Torrington, Hall, Taylor and Atkinson, have reported how engaged employees enhance organizational performance. It therefore understood why an employer should wish for a more engaged workforce. The purpose of this dissertation was to develop an understanding of the effect of organizational change on employee engagement. In the literature review the researcher referred to academic relating to the subject of employee engagement. Employee engagement has become a major field of interest both for academics and in practice.
Employee Engagement and Retention
Engaged employees are less likely to leave their job. If an employee has no emotional Commitment to their job, there is a greater chance that they will leave to pursue a job that offers, for Example, higher remuneration or more flexible work conditions. Engagement lowers employees’ intention to leave. The Corporate Leadership Council found that the most engaged employees are 87% less likely to leave their organization. The same study found that the 100 best places to work had an average voluntary turnover rate of 13% as compared with the average of 28.5% of other businesses in the same industries. What’s more, other large scale research has found that 12% of disengaged employees have no intention to leave, while that proportion rises to 66% in engaged employees. Similarly, over half of disengaged employees would consider leaving their current job for another opportunity, while only 25%of highly engaged employees would consider leaving. Considering that replacing an employee can cost one and a half times their salary, retention has a significant impact on an organization’s bottom line. Not only can the costs of replacing employees be a drain on resources, but once new employees are in place they can take several years to generate the same revenue.
Definitions of Employee Engagement
“The emotional commitment the employee has to the organization and its goals.” Kevin Kruse, Forbes Contributor and NY Times Best Selling Author.
“The art of getting people to believe what you want them to believe.” Jim Whitehurst, CEO of Red Hat.
“Emotional connection an employee feels toward his or her employment organization, which tends to influence his or her behaviors and level of effort in work related activities.”
“A business management concept that describes the level of enthusiasm and dedication a worker feels toward his/her job. Engaged employees care about their work and about the performance of the company, and feel that their efforts make a difference”. “The illusive force that motivates employees to higher levels of performance.” “An emergent and working condition as a positive cognitive, emotional, and behavioral state directed toward organizational outcomes.”
3. Review of literature
3.1 History of Employee Engagement
Early 1800s – The Industrial Revolution moves great numbers of people off farms and into factories. The concept of a manager first enters collective thought.
1911 – Frederick W. Taylor publishes “The Principles of Scientific Management,” establishing the importance of effective management by linking management to increased productivity. The study of management is born.
1924-32 – Elton Mayo and Fritz Roethlisberger’s Hawthorne Studies transform management theory. Instead of focusing on an individual and his or her innate abilities, Mayo and Roethlisberger focus on social context. The Hawthorne Studies show than an employee’s surroundings influence how he or she performs.
1980s – As manufacturing and production jobs are automated or sent overseas, service companies take their place. “Employees are your greatest asset” becomes “employees are your only asset.” The idea of a lifelong employer dies, pension programs are slashed, and employee retention comes to the forefront of management’s mind.
1990 – The Academy of Management Journal publishes William A. Kahn’s “Psychological Conditions of Personal Engagement and Disengagement at Work,” considered by many to be the cornerstone of employee engagement. Kahn examines the extent to which people are able to express themselves in their workplace, leading to “attachment.”
1999 – New York Times’ bestseller First, Break All the Rules by Marcus Buckingham and Curt Coffman coins the term “employee engagement.” The book summarizes Gallup survey results on employee workplace perceptions. Gallup would go on to refine and develop their Q12 survey, the first widely known engagement survey.
Late 1990s, early 2000s – The positive psychology movement gains traction. Positive psychology examines the optimal human functioning and “aims to discover and promote the factors that allow individuals, organizations, and communities to thrive.”
2001 – “Job Burnout,” by Christina Maslach, Wilmar B. Schaufeli, and Michael P. Leiter proposes employee engagement as a solution to job burnout. This application to the working world creates more interest in further employee engagement research.
2006 – The Society for Human Resource Management enters the employee engagement realm by publishing their “Employee Engagement and Commitment” guide. This is the first nonacademic organization to establish best practices surrounding employee engagement. SHRM takes engagement from the classroom to the boardroom. Taking the framework in consideration, review of literature for various facets of employee engagement, antecedents and consequences of employee engagement, working environment and talent retention has been done and gaps in the existing literature were identified. Various models of employee engagement have been developed by many researchers and consulting groups till date. These researches revealed that there are no fixed all-purpose list of engagement drivers. A brief discussion of some of these models is discussed below:
The concept of work engagement and its relationship with other factors was theoretically studied through JD-R Model. Specifically JD-R Model has been used to study the antecedents and consequences of employee engagement in academic context. The model given by shown below representing the relationships between job demands and job resources. A study done by Schaufeli & Bakker, found that job resources were positively related to work engagement. JD-R Model categorized job related factors into two groups i.e. job demands and job resources and its study is restricted to personal & organizational resources. According to this model job demands are those aspects which require physical and psychological skills, for example Job insecurity, unfavorable organizational climate. Job demand is something which reduces energy and reduces dedication. On the other hand job resources are psychological, physical and organizational aspects of job that help employees to achieve goals. For example pay, career etc. According to JD-R Model various aspects of job demands and job resources are related with engagement and its dimensions i.e. vigor, dedication and absorption.
Gallup Hierarchy Model
Gallup organization is an international organizational research and consulting firm. It conducted the most influential surveys on employee engagement. It also developed employee engagement scale based on its studies from 1985. In 1988, Gallup had patent on its 12-item measure of employment engagement which is now known to be Q12 scale. Gallup Organization found the links between employee engagement, customer loyalty and business growth. Gallup organization helped many companies worldwide to improve the performance through employee engagement. Gallup developed a model to examine the relationship of management and organization. It believes that combination of employee job fit with manager will lead to have engaged employee. Model reinforced the theory and emphasized that engaged employee impact business performance.
Robinson’s Model of the drivers of Employee Engagement
Robinson et al stressed his focus on “feeling valued and involved” as a driver of engagement. Within this particular dimension there are so many elements that have varying influence on the feeling of valued and involvement. These elements are performance appraisal, communication, pay & benefits, co-operation, health & safety and many more. Findings of the study of Robinson et al suggest that many of the drivers of engagement are common to all organizations irrespective of sector with some variation in the strength of each driver.
Penna’s Model on Hierarchy of Engagement
Penna in his study presented a hierarchy of engagement factor which shows the impact of each factor has on engagement and retention of talent. In the hierarchy “meaning at work” is defined as the situation where the employee is being valued, appreciated, have sense of belonging with the organization and also they feel they are contributing to organization. From the model below, it is clear that the factors like leadership, trust, respect, development, learning etc are making contribution towards increasing engagement. As the factor in the hierarchy ascends, the organization becomes more engaging to its engaging staff.
Many research have established relationship between working environment and employee engagement as mentioned above but now the question arises is that whether working environment makes impact on retention rate or not and so research papers showing relationships between working environment and talent retention were reviewed. Zhou Ying and James Fredericks Volkwein found compensation as the second strongest predictor of intention to leave. Study indicated that the faculties who have higher compensation are more satisfied and likely to stay in the organization. Moreover, study also found the seniority and rank as the predictor of intention to stay.
Deepti Sinha‟s, Sachin Sinha‟s Study on talent retention revealed that high performance organization give more importance to talent and goes all out to grow its talent pool. They found that most of institutes are experiencing recruitment difficulties followed by people leave their managers not their job. They concluded that in order to keep efficient people for a longer period institutes pay a higher price and a successful retention practice helps in developing a network of experience & talented employees in the institution. N. Sylvia Naris and I.Wilfred Ukpere found effective retention strategies as a predictor of motivation of staff members & improved work performance, which in turn results in attracting & retaining qualified people for the Institution. They identified various factors which were responsible for leaving the jobs through conducting the interview with top management, Registrar and staff members and challenging job content, opportunities to self-development along with money were found to be an effective motivator to retain employees. Study also recommended the institution to develop strategy like personal and professional development, flexible working hours, time for research activities. A study on Talent in emerging economies, Harvard Business Review, May 2010, concluded that to attract and keep talented women the organizations have to find talent early, mainly in Universities. Second was to build networks to fight isolation & gain visibility while achieving their business goals. Third was to give international exposure, and fourth was to build ties outside the organizations- to clients, customers & communities.
It was found that if employees feel supported and valued are likely to reflect organisation commitment which in turn impacts employee retention. Consistent with this finding the research of Stinglhamber & Vnaderberghe, 2004 found that if employees feel that they are competent and get opportunities to grow they feel responsible for their organization. Also relationships play a very important role in developing such feeling which leads to high retention. Empirical evidence shows that there are well researched axioms regarding the presence of employee engagement in organizations that is driven by various working environmental factors. Also studies reveals that employee engagement level towards the organisation makes impact on their intention to leave and retention. On the basis of literature reviewed the paper proposes that working environment and employee engagement has a significance influence on talent retention and developed the model keeping in view the same. The researcher has taken the idea to develop the frameworks from framework of Schaufeli et al.‟s work engagement and from the conceptual framework of Shirom‟s Vigor which later on explored by Remo, Neli.
Research is an investigation of finding solutions to scientific and social problems through objective and systematic analysis. It is a search for knowledge, that is, a discovery of hidden truths. Here knowledge means information about matters. The information might be collected from different sources like experience, human beings, books, journals, nature, etc. A research can lead to new contributions to the existing knowledge. Only through research is it possible to make progress in a field. Research is indeed civilization and determines the economic, social and political development of a nation. The results of scientific research very often force a change in the philosophical view of problems which extend far beyond the restricted domain of science itself. Research is not confined to science and technology only. There are vast areas of research in other disciplines such as languages, literature, history and sociology. Whatever might be the subject, research has to be an active, diligent and systematic process of inquiry in order to discover, interpret or revise facts, events, behaviors and theories. Applying the outcome of research for the refinement of knowledge in other subjects, or in enhancing the quality of human life also becomes a kind of research and development.
Objective of Study
This study focuses on the phenomenon of employee retention using employee engagement and examines what attributes are characterizing employee turnover. The purpose of this study was to identify root causes for resulting voluntary turnover and thus, point out tools for improving employee retention. This study will approach the research purpose by identifying the most common attributes causing turnover and reveal means to enhance employee retention by engagement. Thesis is conducted by studying an educational institute operating in Gwalior. Qualitative study is conducted by analyzing exit interviews of employees of the institute in order to understand the reasons initially resulting turnover. In addition, based on these reasons, means for improving retention are suggested.
Theoretical part of this study is formulated by focusing on two different parts. The first part focuses employee turnover. Based on the theories, the most common attributes causing voluntary turnover are decreased job satisfaction and shocks which initiate turnover intentions due to decreased attachment towards the current organization. Second part, employee retention is approached by studying employee embeddedness, employee engagement and supportive working environment which all have been noted to play an important role in repealing turnover intentions and increasing employee retention. Research purpose is answered based on theoretical framework and exit interviews. The results from both theoretical framework and empirical part suggests that competitive remuneration, career advancement possibilities, exciting job and opportunity for personal development improves employee retention whereas, lack of these attributes are seen to entail turnover.
Below are five objectives engagement studies must deliver to effectively guide engagement and retention in organization:
To understand the emliloyee engagement.
Understand attitudes around worklilace conditions that drive engagement.
Identify oliliortunities to imlirove worklilace conditions that drive engagement.
Uncover insights to develoli highly targeted engagement strategies.
Assess intent to stay and turnover risks.
Discover liotential comliliance issues.
To assess the relation between emliloyee engagement and lierformance.
To offer the conclusions.