1Can Job Engagement Remedy High Turnover In A Company? Solutions to Make You An Employer of Choice Megan Wright Keller Graduate School of Management GM 591: Leadership and Organizational Behavior Dr. Arnold Witchel April 15, 2012 employee morale was really high. strategic planning. Established in 1946. it has been voted “Best Places to Work “by its employees. As a full-service accounting and business consulting firm. In December 2010. estate and financial planning. I joined LP in February 2011 and I was hired to be a Human Resources liaison and Payroll Clerk in the Human Resources division of the company. and it . Although mergers have their pros they also have their cons such as dissatisfaction among current staff as positions will be limited and management has to make decisions as to which staff will hold what positions after the transaction is complete. with over 160 personnel employed. human resources consulting. When I came on board we had roughly 220 employees. LP is recognized as a regional firm with national capabilities and also. outsourced controllership. risk advisory consulting. LP is one of the largest independent accounting and business consulting firms in the region. Their services include accounting. audit and assurance. tax planning/compliance and profitability enhancement.Can Job Engagement Remedy Turnover? 2 Can Job Engagement Remedy Turnover in A Company? A Review of the Literature The organization that will be the topic of discussion in my final project is LP APAC. LP continually expands its core services to meet its clients’ changing needs. the company purchased a Houston based accounting firm and the merger came complete with more than thirty staff members. instead they are having trust issues.3 seemed that all employees were happy and the company was on its way. LP has many qualified hardworking professionals but these days it’s hard to retain these employees. Getting to the essence of the matter will increase productivity. morale. Since the merger took place employee morale seems to have taken a major turn and the once happy employees aren’t displaying the positive attitude anymore. Ultimately employee engagement is an issue and employee turnover is a problem. Preliminary Problem Statement LP currently has a major problem of low retention and high turnover. absenteeism and also improve retention. The employees are not feeling as if they are an asset to the company. Personally. Employees with many years service and who have been loyal to the company for years are making a decision to leave. Employee exit interviews state every reason from trust to better job opportunities. I feel LP is a wonderful company to work for and they do reward their employees when it comes to performance reviews but I’m afraid it’s going to take more. If this problem is not addressed I’m afraid we are going to continue to lose employees and the workload will only be greater as new business continues to come through the doors. First I think we can promote internally and then think about filling lower level positions externally if needed. . Since February 2011 we have experienced high employee turnover and have lost 41 employees and of those 14 left for better employment opportunities in the accounting industry. With the help of the human resources department and directors we can turn this negative into a positive. Can Job Engagement Remedy Turnover? 4 I would like the topic of my research to be how to improve retention rates that will have an impact on higher productivity and lower turnover. This literature review will consider whether job engagement is a promising approach for solving high turnover in a company by responding to the following questions: 1. apply this knowledge to a case analysis to diagnose an organizational problem and recommend solutions. The TCO I will address is given knowledge of group dynamics and decision making. What are disengaged employees? 3. .Employees want to decide when/where they work in order to balance both their personal/professional lives. Good communication and providing encouragement for a job well done. What can be done to make a company “an employer of choice”? Possible Solutions I would like to see my company attempt these possible approaches: Create good working relationships between employees and managers-Bad bosses are the number one reason some employees resign. Good bosses acknowledge the work of others and genuinely care about their employees Providing career development-Better career development and greater challenges Flexible Work Environment. What is employee engagement? 2. the reality. When employees feel unappreciated and disengaged this is when senior management along with human resources should come in and develop an employee engagement strategy. 3) An employee should be totally committed to the organization believing in what it stands for and being prepared to go above and beyond what is expected of them to deliver outstanding service to the customer. organizations will be closer to securing future performance rather than pursuing new employees (Gordon & Lowe. p. Analysis of Employee Engagement What is employee engagement? Employee engagement is personified by the passion and energy employees have to give of their best to the organization to serve the customer. 12% of employees leave for more money. p. 211) A great idea would be to do Upward Evaluations (in the form of performance evaluations) and allow all staff to evaluate any employee on the manager. and explore their career interests. Allow the employees the chance to feed their views and opinions upwards are the most important driver of engagement for an organization. .5 If today’s managers take ten minutes to talk with employees. It is all about the willingness and ability of employees to give sustained discretionary effort to help their organization succeed. (Cook. senior manager. 2008. This gives the employee the opportunity to voice their opinions on what they see needs to be changed in the company and even to sing the company praises. 2002. tell them they are doing good jobs. 2003. or vice president level. The number one complaint at my firm is being thrown into the job with no formal training or no career shadowing. Why people leave: what managers believe vs. p). 88% of employees leave for reasons other than money. Source: Saratoga Institute research. According to one survey 89 percent of Figure 1-1. 2008. 89% of managers believe employees leave for more money. 11% of managers believe employees leave for other reasons. (Cook. The main cause for voluntary employee turnover and disengagement in any company is an economic one. Disengaged workers employees are destructive to morale and revenues for those are the employees who disrupt. or the manager. steal from the company. 2005. This can sometimes mean losing big clients because they want to follow that employee that left to their other employer. 3) However employees leave other reasons not geared toward money but to the work environment. 2005. but they just do what's necessary to get their jobs done.Can Job Engagement Remedy Turnover? 6 managers said that they believe that employees leave and stay mostly for the money. It’s more courageous to terminate employment and cut your losses. According to the report. and occupy the time and attention of managers that would be better spent dealing with other workers. It’s a very unwise idea to struggle to reengage an actively disengaged worker. more success in lowering turnover. and much higher customer ratings. as cited by Accord Management Systems (2004).5 more days per year . March 2001. (Branham. the job. have accidents. complain. They typically don't take part in offering suggestions for improving the workplace. (Branham. reveals that disengaged employees are more likely to cost their organization. Financial News. You’ll see higher profits. Employees who are disengaged: Miss an average of 3. (Figure 1-1) Disengaged Employees Disengaged employees aren't necessarily bad employees. better safety records.4) It’s important for companies to remember that some turnover for their respective companies is good turnover. Turnover is a serious problem for small or medium size companies as certain employees carry broad responsibilities and have strong personal relationships with key customers. p. p. people in self-directed teams. 2007. Sridevi. 2007. but it’s the manager that sets the stage to make it safe for workers to risk taking the initiative or contributing their ideas. and pilots (Smythe. p. p.7 Are less productive Cost the economy $292 to $355 billion per year Engaged Employees Employee Engagement is first and foremost a management philosophy based on the idea of including the right people in the right decisions at the right time in the right way.24) . employees with bosses who know when to push and when to let people get on with it. Managers must do five things to create a highly engaged workforce. p. (Smythe. bosses. 2010. artisans working their own agenda. An employee needs to take risks by participating and using their own creativity and ideas.91) They are: Align efforts with strategy Empower Promote and encourage teamwork and collaboration Help employees grow and develop Provide support and recognition where appropriate The most engaged workers are: self-employed. It’s a two-way street where both parties take risks to cross the boundary lines. train engineers.5) At work it is not just up to the boss or supervisor to engage their people in the decision making process. (Markos. taxi drivers. to the new brand. p. The strategies of one company may or may not fit the culture of your company. and auditory (hearing) during a lesson. 24) The Employer of Choice Now the question many employers are asking at this point is what it will take to become an “employer of choice”. What makes a company attractive is asking new applicants what they desire. In 1998 absenteeism rates. fixing small instances before they become big problems and last allowing managers to figure out the best way to motivate their workers. 2007. (Branham. being generous with praise every chance you get counts. Motivation is the key to the employee’s happiness. visual (seeing). an early warning sign of turnover hit a seven-year high.14) Job related burnout rose from 39 percent in 1993 to 53 percent in 1998. A teacher must address all three learning styles: tactile (touch)/kinesthetic (movement). A manager must be able to have different approaches to motivating their employees. . The correct answer would not be to follow the blueprint of another company. having a committee to track new hires through their first few weeks of work. The reason cited: burnout and work-family conflicts have increased the # of unscheduled absences. the customer experience. and to the continuous change and major transformation processes (Smythe.Can Job Engagement Remedy Turnover? 8 Today what people want from work is the space to think things through for themselves and add a little bit of their own creativity and their own insight to their daily work. As children learn differently employees do as well. 2000. The first thing I think of when this comes to mind is let’s research other companies in my industry and see what they are offering or what they are doing differently. up a whopping 25 percent from 1997. p. “Everything I thought I knew about leadership is wrong. opportunities to participate in decision which affect them or to which they add value.” he confessed that he spent years at EDS bullying his people into eighty hour workweeks. chairman and CEO of Dallas based Perot Systems. 2000. Another good idea if monetary bonuses are too cumbersome is to give a Starbucks gift card. p. gas gift card. Employees ultimately want employability to grow. Organizational Commitment Organizational commitment is most commonly defined in terms of an individual’s identification with the organization’s goals and values. Many companies become successful industry leaders by investing time and also money into their people. and last ethics and values they can identify with. with an attitude and philosophy of nurturing and caring. and overhead instead of investments. emphasizing profit-and-loss “to the exclusion of other values” and creating a culture of “destructive contention”.9 “Are people a company’s most important asset?” There are companies that treat their employees like family and with respect. Mort Meyerson. What employers can do is invest in team building and interpersonal skill training classes to help workers get along with each other. In my office every employee could use an ergonomic chair as all of our work is conducted at the desk and more flex time and the option to telecommute might make believers out of our staff.24) Some companies see their employees as factors of production which entails costs: salaries. willingness to exert effort for . benefits. (Branham. Offering a small monetary bonus ($15) for when teams receive compliments from clients (either verbally or written). he wrote an article for Fast Company magazine. or even a half day off on the company certificate. job engagement and organizational commitment are closely related often enough that it makes sense to talk about a more general outcome-------organizational engagement------that combines key elements of job engagement and organizational commitment. When a company’s employees know what is going on. in many organizations.21) Job engagement is closely related to organizational commitment but they have important differences. (Roberts and Davenport. which they see as money in the bank. (Roberts and Davenport. Those who are high in organizational commitment say that: They would recommend the company to a close friend as a good place to work. 2002. Offering continuous training (CPEs) and tuition reimbursement is a big plus for any company. When you invest in your workers. and They think the company is doing what it takes to be a leader in the industry. Determine your . Loyalty to your company mission doesn't come easily. p. 2002. In fact.22) A company can also increase employee loyalty and decrease turnover through clear and frequent communication. the challenge is to build it up and keep it maintained. You must build it one employee at a time. Providing training is very important as it is an investment in employees. They are proud to work for the company. they feel more included and trusted. And building loyalty is much like building trust: It's easy to tear down. p. they are more apt to invest in your company.Can Job Engagement Remedy Turnover? 10 the organization and desire to continue as part of the organization. Anger. and on intranet and Web sites. Once you understand your company's higher purpose. As word gets around many recruiters find organizations where this is happening and target the employees and entice them to leave. Time and energy needs to be put into the hiring process and the training of new employees. The snowball effect (reinforcing loop) has started rolling. Research/Results As workload increases employee morale tends to go down. As employee morale goes down. brochures. share it with employees and applicants. Increasing workload and adding more momentum to the “snowball” which may now resemble an avalanche (loop R4). People voluntarily leaving the workforce the organization to start replacing employees. Please see loop R1 (see Figure below). This in turns gives more work to employees as the managers push their work to other employees. You ask why? Because the new employees did not come in ready to work and will not be as productive as the employees that left. instead think of providing accuracy. Don't think of crunching numbers and completing audit engagements.11 company's higher purpose. employee turnover goes up. . vacancy notices. fear and anxiety levels rise (Am I next?). This further reduces morale and leads to additional turnover and increased workload for remaining employees (loops R2 and R3). Post company values in your employee manual. reliability and peace of mind to the clients. A second key that will help the organization is to create a shared vision so people understand an organization’s direction and role in the journey. (Gibbons. The first key is to have a structured approach to improvement that will lead to higher levels of performance. p. 2000. 22) Summary and Conclusions This final project began with an overview of some of the debates about the nature and effectiveness of employee engagement. It put forward the proposal that there is a .Can Job Engagement Remedy Turnover? 12 You can’t just ask employees to do more with less and expect morale to stay high. My findings in my paper shows that implementation of job engagement can lead to very positive outcomes. These results from my findings suggest that even after taking other factors into consideration. Job engagement does enable such employees to work more effectively and productively. some critics have argued that employee engagement initiatives do work and it does in fact reduce turnover.13 great deal of pessimism about the impact of job engagement because of the varying degrees of success in implementing engagement initiatives in the workplace. Using data from several different sources. Such results go a long way toward dispelling the notion that job engagement does not matter. employees being more productive. and willing to initiate change. job engagement is associated with such positive outcomes as enhanced business performance and greater customer service. Some critics have raised questions about whether employee engagement or employee loyalty is a matter for serious thought. this paper offered a thorough examination of the relationship between the presence of employee engagement and organizational commitment in business organizations and assessments the increase of employee performance. Training programs may also lead . They may increase productivity because they bring diverse people together who differ in the talents that they bring to the workplace. Moreover. . Future research will need to examine the dynamics that lead employee engagement programs to generate such positive outcomes as enhanced employee performance and greater customer service.Can Job Engagement Remedy Turnover? 14 employees to appreciate the efforts of their co-workers who make different kinds of contributions to the organization. New research will also need to explore other outcomes that grow out of employee engagement initiatives. therefore. to have a better sense of how a more positive work environment in the company will work and why they are very much needed and it will be a positive for both the employees and the organization. Such efforts may also help employees better understand how and why various contributions to an organizational effort such as employee engagement initiatives are to be rewarded and. 89-96 Roberts. Steve. 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late Branham. Essential Guide to Employee Engagement: Better Business Performance Through Staff Satisfaction Gibbons. The Journal for Quality and Participation. 5. International Journal of Business and Management. Thomas O. Employee Engagement: The Key To Improving Performance. 23. Job Engagement: Why It Is Important And How To Improve It. (2002). Sandhya (2010. 20-22 Markos. Down To A System: Keeping Employee Morale and Retention High. December). M. 21-29 . Darryl and Davenport. Employee Relations Today. Sarah (2008). March/April). (2005). (2000). (2000. Leigh F.15 References Branham. Keeping the People Who Keep You in the Business: Twenty Four Ways to Hang on To Your Most Valuable Talent Cook. 2. Leigh F. Solomon and Sridevi. 12. CEO: Chief Engagement Officer: Turning Hierarchy Upside Down to Drive Performance . Academy of Management Journal. 5. Organizational Culture and Employee Retention. December). 1036-1056 Smythe. (1992. John (2007).Can Job Engagement Remedy Turnover? 16 Sheridan. John E.