It is a well-researched fact that when workers receive rewards and recognition from their organisation, they feel obliged to respond with higher levels of involvement
As management consultant Peter Drucker once said, “If you can’t measure it, you can’t manage it.” So organisations have to measure the performance of employees to effectively manage them and continuously improve productivity. Output appraisal and feedback provide the foundation for any organisation to focus on further improvements. Although highly important, it is considered the “Achilles Heel” of managers involved in supervising human capital. Approximately one-third of the workforce does not give credit to the firms for improving their performance and ranks the process of performance management lowest in employee satisfaction surveys.
However, the current challenging times have put the spotlight on performance management systems of institutions and how to improve employee motivation and therefore, output. Performance management is an integrated process that is comprehensive and encompasses all organisational policies, practices and design features and their interplay to generate employee output. It is important to note that it is a part of strategic human resources management, which is an integration of a number of HR practices, rather than separate activities. Although improved output is the eventual aim, it is achieved in a staggered manner, by developing motivation and commitment in the first stage, followed by improved performance management.
According to Gallup Consulting, institutions are made up of three kinds of employees: Engaged workers, who are organisation builders and continuously aim to achieve excellence, employees who are not engaged and are mostly task-oriented and do not align organisational goals with the work they do, and actively disengaged employees, who are the most dangerous for the company as they demotivate the performers in addition to their own poor performance. Quite understandably, staff engagement has emerged as one of the most important ways of augmenting the performance management process, fostering of which can lead to higher output levels and lead to the success of a firm. It is the opposite of burnout and involves high energy levels of employees, their expression of preferred selves along with identification with one’s work (self-in-role) and working to fulfil role requisites, as they are focussed, engaged, alert and assimilated in their roles. Therefore, employee engagement has become all the more important in the current dynamic and volatile business environment, where organisations face many challenges.
Several studies have shown a positive relationship between employee engagement and task performance, productivity, retention, financial performance, shareholder return, organisational citizenship behaviour, productivity, commitment levels of staff, psychological well-being of workers and improved customer service. According to an article in Quantum Workplace, although employee engagement is critical in nature, there is nearly a seven per cent decline in it after the first year at a firm. From 82 per cent to 75 per cent and it further goes down to 74 per cent in years three to five. So, these disengaged employees are less productive than their engaged peers and this phenomenon known as engagement gap or disengagement costs US organisations $450-500 billion each year.
But what factors determine the engagement level of an employee in an company? One of the factors is a supportive work environment with inter-personal harmony, where workers are appreciated, given feedback for their work with opportunities for career enhancement. A supportive work environment also allows the staff to experiment without the fear of failure, leading to an innovative culture in a company. An apt leader, another important driver of employee engagement, makes all the difference in an organisation by inspiring employees who are not doing well to perform and inspiring staff who are faring well to do even better. Employee engagement occurs naturally and effortlessly if the leaders are inspiring and have the ability to communicate to the staff their value and importance to the firm. This in turn leads to their increased interest and motivation in their work.
Teamwork is at the heart of any great achievement and is also very important in keeping an employee engaged. A worker with a good team, inter-personal harmony and a great co-worker relationship provides high engagement at work. Training is another important determinant of employee engagement as it builds self-confidence and improves motivational levels. Career development is an equally important dimension as an opportunity to grow is considered equivalent to reward and recognition by the staff. Therefore, timely growth prospects through training and development will instinctively raise the level of engagement.
Employee compensation, including both financial and non-financial rewards, of course, is a very crucial aspect of staff engagement since it helps them satisfy their personal goals and in turn improves their focus on organisational goals. It is a well-researched fact that when employees receive rewards and recognition from their organisation, they feel obliged to respond with higher levels of engagement. A staff-friendly organisational structure with its policies and procedures, like flexi-working hours, equal employment and promotion opportunities and policies to balance work-life, lead to enhanced engagement and subsequent accomplishment of organisational goals, as such policies lead to workplace well-being of the staff.
Considering its importance and the financial implications of disengaged employees, companies can consider following some sequential steps to promote performance management through enhanced staff engagement, like output concurrence, performance supervision, appraisal and feedback, leading to improved work.
Performance concurrence: This is a process that sets the tone of the expectations from the employees, their associated goals and output indicators. Goal setting is an important step in initiating the employee engagement process because targets stimulate energy, focus and intensity or the feeling of engagement. It should also be noted that for any worker to be engaged, there should be an alignment of personal goals with individual goals. So organisations have to adhere to the following steps to ensure proper goal settings: Encourage staff to discuss openly about their values, expectations and goals. Create a mutual agreement assuring employees means to fulfil their goals. And finally supervise and monitor the goals and alter or amend them and the means to fulfil the targets. In this way, by focussing on personal goals as a function of organisational ones, as opposed to only company targets, firms can ensure an improved employee engagement and overall organisational effectiveness. Staff disengagement is a result of disappointment of employees with organisations and their failure to align individual goals with organisational targets.
Performance supervision: This is a process of providing the resources required by employees to perform effectively and monitor their progress. The main activities at this stage involve job design, coaching, social support, leadership and training. Job design is a crucial part of employee engagement as it integrates responsibilities, assignments and functions that a worker undertakes to complete a job effectively, dependably and cost-effectively. This also ensures a good fit between employee skills, needs and values. Continuous coaching of employees and helping them schedule and plan their work, emphasising potential problems, providing solutions and giving guidance and emotional comfort help in promoting staff engagement. It is an important process to inculcate confidence or self-reliance among workers.
As mentioned earlier, leadership is an important driver of employee engagement, as leaders have an impact, either good or bad, on the staff due to their working styles, which can affect individual engagement. They should have the ability to identify the reasons for both employee engagement and disengagement. A strong and articulate leader can help boost staff engagement through open communication, clear goals and explicit expectations. Training and development are extremely important in improving employee engagement as they feel valued and respected if organisations focus on their career enhancement.
Performance appraisal: In the form of feedback, it is the final and vital foundation of employee engagement. Research shows that almost all workers prefer to receive management feedback on a consistent basis. Receiving as well as providing feedback make them feel cherished, respected, less stressed out and confident.
Employee engagement has several benefits. Organisations with engaged employees show high productivity, increased customer satisfaction, improved operational efficiency and profitability, low absenteeism and reduced turnover.
In these difficult times, it is essential for firms to keep employees motivated and engaged, to help both organisations and workers tide over this period of turmoil. When people are financially invested, they need a return, and when people are emotionally invested, they contribute.
(The writer is Associate Professor, Amity University, Noida)
