How Employee Motivation Enhances the Organisational Performance - Assignment Example

Employee Motivation – A Vital Element for Success of any Organisation Introduction For any business, employee engagement is the fundamental for its growth. Any negative employee motivation can impact employee retention within business organisation. Employee motivation can be used for increasing the organisational performance. The main objective of this research essay is to demonstrate how companies are employing the employee motivation to enhance the organisational performance by analysing various real case studies. Employee Motivation – How it enhances the Organisational Performance- an Analysis. One of the earliest studies on employee engagement was the research study footed upon three years of research work by officials at Roebuck and Co & Sears thereby reconstructing the company around its clients. The resulting service which was 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 demeanour to the customer demeanour to revenues (Rucci, Kirn & Quinn 1998:34). As per recent research, satisfaction of the customers and the resulting financial benefits from recurrence, loyal business emerges from emotional engagement within employee-customer collaboration. Moreover, businesses that show more emphasis on high-performance and excellence will travel beyond employee engagement to employee entanglement. Entanglement is the critical element that distinct world-class from ordinary performance, offering an organizational capability that makes front-runners among peers (Thompson et al 2012: 2). General Electric (GE) has posted more than $146,045 m in 2013 and $146,684 m in 2012 as revenues, and it is making substantial investment on the yearly basis in developing its global workforce. It employs about 135,000 persons in USA and 172,000 persons outside USA in 2013. GE offers a broad range of career advancement’s chances to its employees , it encourages its employees to acquire through formal learning and development educational courses, and offers many means to accomplish a balance between professional and balance objectives. GE offers an environment to their employees to exercise their accountability, integrity and creativity while developing themselves and their careers. A new employee who joined GE will be given an opportunity to be trained at various divisions to sharpen their experience and skills. Every year, GE earmarks huge sums for imparting training programs, a notable commitment to investing in the educating and motivation of its employees. Newly recruited managers will have to attend a mixture of class room seminars and will be provided with work assignments on a rotational basis. Mid-career managers, employee can select from a long list of course in normal business operations and can acquire specific technical and specific non-technical skills. Experienced managers who are trained for executive positions are being given training in a high-level seminar at GE’s John F. Welch Leadership Development Centre. Further, for the educational features of such training programs, 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 amazing 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 the Marks & Spencer, which is having an employee engagement team. Thus, if individual or teams are recruited and offered the accountability, authority, access and legality to spotlight on engaging employees and developing a loyal, engaged, responsible culture, then, this will result in the creation of workforce involved in sustainable business (Exter 38). As per Kaye (2002), Infosys in an Indian information technology multinational company and has 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 about the positive impact sustainable business has on their employees like improving organisation justice, social identify, commitment, trust, satisfaction in jobs, and actual demeanours (Exter 2013:44). As per recent research findings by SHRM Foundation, employee engagement can be quantified in dollar term and can yield noteworthy 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 at $393 whereas for an engaged employee, it was only just £63. Due to this, by solidification of employees’ engagement by the company was resulted in the savings of $1,721,760 as regards to safety costs in 2002 (Lockwood 2007:4). As per 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 all across the globe at all stages of the business both in big and mid-sized companies in about sixteen nations across four continents about demeanours, requirements, personal commitment, the work ethic of people to their employment and companies. The research findings exposed that employees likely to stay with the business organizations which regarded as “talent-friendly” and progressive, where business organisations that have 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 UK with top engagement scores indicated about 12% higher customer advocacy , higher productivity of 18% and higher profitability of 12%. Another research study conducted by Gallup revealed that EPS (Earning per Share) growth rate of 89 organisations with the employee engagement scheme scored more than 2.6 times that of the business organisations with minimal engagement scores. As per Standard Chartered Bank report (2007), those branches with the higher employment engagement reported 16% of higher profit margin growth than those bank branches with reduced levels of employee engagement. Gallup research study also found that increased levels of employee engagement 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 the creativity in their jobs. (MacLeod & Clarke 2011:11). As per Kieran Preston, director general of Metro, which is the public transportation provider for West Yorkshire that employee engagement is vital to Metro as it drives innovation and challenges and makes Metro at the vanguard of the best practice in 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 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 the fundamental for its growth. Thus, he felt that with the business of that magnitude, one cannot even get to take off 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 major 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 public services’ delivery (MacLeod & Clarke 2011:15). The recent research study in Canada about the employee engagement also suggested that there is 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 really hard to consider that many admired companies and blue-chip organisations 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 of its significance to their bottom line. As per Gallup (2003), CBI reported that absence due to sickness has 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 that they had a fair knowledge of how to cater the customer requirements whereas only 17% of the non-engaged employees reported that they showed concern to the customer needs. As per Corporate Leadership Council (2004), 87% of those engaged employees were less probable to desert the organisation as compared to disengaged employees. The incidence of high employee turnover among disengaged employees is noteworthy. Some research study 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 advocate for their companies. Likewise, 78% of engaged employees would advocate their company’s products or services as against 13% of disengaged employees. As per Ipsos MORI (2006), employees from public sector are less probable to advocate about their organisation as compared to employees in the private sector (MacLeod & Clarke 2011:14). Research study carried over by Ipsos Mori on Audit Commission data exposed that employees in councils, which are given rating as “ excellent” had much better outcomes as compared to those in poor or weak councils 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 councils were likely to propagate for their councils as against to employees in poor managed or weak councils (MacLeod & Clarke 2011:14). Bobcock 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 their balance sheet, but it considered its workforce as its 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 business organisation enhanced its investment in a wide range of cordial workplace practices, which pertain to engagement of just 10%, they could enhance the revenues by £1,500 per employee per annum (MacLeod & Clarke 2011:17). One among the UKs leading defence and services companies, the VT Group employs more than 12,000 individuals both in the US and in UK with an annual sales revenue of £ 1.6 billion. VTs top management put more emphasis on values-driven employee engagement that resulted in the enhanced team working, higher personal accountability, mutual support, collaboration, autonomy and influencing, which resulted in new innovations. Due to employees’ engagement, the groups’ financial performance has prolonged to soar in spite of recent economic recession (MacLeod & Clarke 2011:24). Freshfields Bruckhaus Deringer is the major international law firm which visualises employee engagement as a foundation to drive outcomes in an extraordinary market scenario which have largely affected of their customary 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 the financial performance of business organisations with the higher number of engaged employees as that those employees with lesser engagement 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, symbolising 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 major findings of Tower-Perrin-ISR’s research finding included the following: Those business organisations with a highly engaged workforce enhanced the operating income by about 19.2% over a phase of one year while those business organisations with lesser employee engagement witnessed a decline in their operating revenue by 32.7 % over the analogues’ period. Over the period of one year, those business organisations with high incidence of 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 a FTSE250 company which is in the defence and aerospace sector, Ultra Electronics Holdings Plc is employing more than 4000 employees in its 24 business divisions, predominantly in 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 analogues’ 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 major service provider company engaging more than 11000 employees. Amey’s top management is of the strong view that there is a compelling reason for enhancing employee engagement to accomplish business goals acknowledging it as an outgoing journey instead of a treating it as a quick fix. Employee is a decisive issue for Amey as it has to continually enhance their services to their clients and finally to the general consumers. In enhancing the employee engagement, line managers are key players thereby Amey has to support them to engage with their teams which is a priority goal for Amey now. As of now, Amey acknowledges that they have to travel a lot in the field of employee engagement, and major confronts they face, which include recognising the ambit of engagement and engaging at an individual employee level in what is an intricate and diverse organisation, with noteworthy numbers of employees are employed at the outside of customary office atmosphere (MacLeod & Clarke 2011:44). HansenGlass is the unit of HansenGroup, which embraced the employee engagement scheme by changing the area of focus from direct supervision of employees to self-managing teams. HansenGlass also implemented change initiation, enhanced communication, intensive training on leadership, acknowledgement, team spirit and continuous enhancement paved to team fixing their own 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 minimised by 50%. It profits also remained more than three times ahead of the industry average which resulted in the 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 great advantages to the company. Chess Plc implemented a variety of well-being and health initiatives, which include supporting healthy eating, introduced government bike schemes, fee 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). Conclusion Employees likely to stay with the business organizations which regarded as “talent-friendly” and progressive, where business organisations that have major-edge work atmosphere and employee practices. Standard Chartered Bank report (2007), those branches with the higher employment engagement reported 16% of higher profit margin growth than those bank branches with reduced levels of employee engagement. Gallup research study also found that increased levels of employee engagement are vibrantly associated with enhanced levels of innovation. Employee engagement is vital to Metro, UK based Transport Company, as it drives innovation and challenges and makes 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 the 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 the majority of CEOs not aware of the notion of employee engagement and the advantages that could bring to their business. As per Accor, about three-fourths of CEOs have no engagement strategy or plan despite the fact that even though 90% of CEO is of the view that employee engagement has 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 where 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 organisation recognise the potentialities of human capital, it cannot achieve an organic growth. Companies which have realised this have encouraged the employee engagement as they are well aware without active engagement of employees, the success of a business organisation can only remain as a hallucination. List of References Accenture. (2008) An Accenture Point of View on Employees Engagement- What it is. Why it matters. How you can Change it. MacLeod Review 1 (12) Accor. (2013).Reward to Engage: Rewards, Benefits and Employee Engagement in Today’s Organisations. [online] available from [accessed 8 August 2014] Rucci A J, Kirn SP & Quinn R T. (1998) The Employee –Customer Profit Chain at Sears. Harvard Business Review Jan-Feb Thompson K R, Benedetto RL, Walter TJ & Meyer M. (2012). It is My Company Too: How Entangled Companies Move beyond Employee. New York: Greenleaf Book Group Exter, N. (2013). Employee Engagement with Sustainable Business. New York: Routledge Lockwood, N. R. (2007). Leveraging employee engagement for competitive advantage. 2007 SHRM Research Quarterly 52(3), 1-12 MacLeod, D., & Clarke, N. (2011). Engaging for success: enhancing performance through employee engagement, a report to UK Government Pride W, Hughes R & Kapoor J. (2011) Business. New York: Cengage Learning Read More