Importance of Employee Engagement - Essay Example

ORGANIZATION, PEOPLE AND PERFORMANCE by Importance of Employee Engagement at Tesco Due to the increase in competition globally, firms and organisations have to develop their capabilities continually while simultaneously meeting the changing needs of today’s customers. This action will enable the firms to outperform or gain a competitive advantage. However, employee engagement is a fundamental aspect that has to be incorporated and adopted by all firms so as to satisfy the needs and wants of its customers. As such, employee engagement forms an essential aspect that determines the future success of an organisation. According to the research from Gallup (2013), only 13% of employees worldwide are engaged at their work while almost 63% of the employees are not. The rest of 24% employees are actively disengaged. Thus, employee engagement is very low in most companies worldwide according to the research. For instance, in places like China where staff turnover mostly happens in epidemic proportions, knowing how to build loyalty and engage employees is crucial to the success of Tesco. In light of this, employee engagement is significant to Tesco mainly because it improves employee satisfaction, productivity, retention and recruitment, innovation, and company profitability. First, employee engagement leads to employee satisfaction. According to Beardwell, I., Holden, L., & Claydon, T. (2001), employee’s job satisfaction tends to increase considerably if they are engaged by the company. Subsequently, satisfied employees develop a positive attitude towards the success and performance of the company. Tesco would gain by having satisfied employees since they are committed to the success of the firm. Additionally, their loyalty increases. On a broader perspective, satisfied employees act as ambassadors of the firm. Thus, they support and promote the firm’s brand, mission and strategy. Next, Tesco’s productivity would increase as a result of employee engagement. Robinson, D., Perryman, S., & Hayday, S. (2004) implied that since engaged employees go the extra mile, they lead to increased productivity. Thus, for employees to be top performers, they have to be engaged with the company. As they become more engaged, employee absenteeism reduces while motivation levels tend to increase resulting in increased productivity. In simple terms, the more a firm’s employee is engaged, the more efficient the employee becomes. Lockwood, N. (2007) argued that firms with engaged employees often have their productivity levels increase by more than 43%. Moreover, employee engagement will lead to a low employee turnover in Tesco. To succeed, Tesco has to retain the best employees. Engaged employees have a lower risk of leaving the firm since they are committed and more loyal to the company. On the other hand, firms who have engaged employees often attract qualified new employees. Additionally, employee engagement and innovation are closely related. An engaged workforce brings interest and passion to the workplace, which in most instances leads to creativity and innovation at the workplace. Since engaged employees feel that they are part of the organisation, they often strive to come up with new ideas or products, processes and services. Furthermore, collaboration between top management and employees leads to organizational growth. Lastly, since a business’s main goal is to make profit, employee engagement would be beneficial to Tesco. Firms who possess engaged employees mostly post better profitability rates than firms having a less engaged workforce. When the workforce is engaged, they become more efficient and productive hence impacting the organisation positively. A study undertaken by Harter, J., Schmidt, F., & Hayes, T. (2002) revealed that firms whose employees were engaged posted a 26% increase in revenue for every employee. Thus, engaged employees for Tesco will become more productive and efficient hence reducing operating costs and consequently the firm’s increasing revenue. Tesco’s Approach to Human Resource Management and How to Address Employee Engagement Primarily, employee engagement can be defined as the art of harnessing or enabling employees to immerse themselves into their work roles emotionally, physically and cognitively. The cognitive element focuses on employee beliefs about the firm, working conditions and its leaders. The emotional aspect concerns the feelings the employees have towards the organisation and its leaders. They may possess either positive or negative attitudes. Lastly, the physical aspect focuses on the physical energies and power put forth by employees to attain/ fulfil their roles. Therefore, according to Macey, W., & Schneider, B. (2008), employee engagement implies that they (employees) are both physically and psychologically present when performing a job or task. A good Human Resource strategy focussing on task and job design, selection, recruitment, compensation, training, career development and performance management influences employee engagement considerably. Due to increased competition worldwide, firms are increasingly recognising and acknowledging the significance of HR. Therefore, most organisations and firms including Tesco have commenced reviewing their HR strategies. Tesco, for instance, has commenced a program where it invests in its employees through training, consultation and effective communication and good compensation schemes. When done correctly, these practices impact employee engagement positively hence leading to a real value creation for the firm/ organisation. There are two ways a firm can implement the function of the HR department. First, a firm can undertake the soft approach, or it can decide to implement the hard approach. Whereas the soft approach to HRM mainly focuses on the outcomes of workers and business performance, the hard version is solely concerned with the performance of the business. As such, the hard version of HRM places little emphasis on the welfare and concerns of the workers.mSince knowledge, innovation and creativity give organisations a competitive advantage, they require new and up to date skills in order for them to survive in the current competitive business world. This type of thought is advocated by the chaos and complexity theory. The chaos theory became prominent in the 1980s. The theory concerns itself with systems that tend to adhere to the normal laws and rules of physical systems. However, they do so unpredictably. Similarly, complexity theory focuses on systems that are complex in nature. The theories view firms and organisations as being open and self regulating systems. Through the options development program, Tesco has introduced learning and training as a strategic advantage. The options development program equips staff with skills and knowledge that they want. Employees choose to study their area of choice. HRM determines the level of employee engagement in organisations. Due to this, HR has to adopt a proactive role in the firm. HR strategies tend to create value for the organisation through the process of intellectual development and support for learning. Value created by the HRM is vital to the success of the organisation in the future. Best HR practices will mould the employees into a skilled workforce. The retail sector has a very competitive business environment. To gain competitive advantage over its competitors, Tesco has to adopt a business strategy that is based on the human resource aspect. A human resource based business strategy will enable the firm to be the industry leader. However, the firm has to monitor the progress and actions of its competitors so as to continue being the industry leader. Through HRM, an organisation can exploit and use its knowledge to the maximum. Therefore, the HRM department should have a leading role in guiding Tesco’s business strategy. As previously stated in the text, the primary aim and objective of any organisation is to generate and increase revenue. To achieve this, organisations have to use the available limited resources efficiently. Gold, J. (2010) argued that through the process of training and learning, employees become more efficient leading to increased profits. In today’s economy, employers do not offer long term jobs where pension acts as the reward for the employee’s compliance and reward. Also, this is as a result of increased employee mobility where they (employees) look for promotions and job satisfaction. To reduce the employee turnover, Tesco has to create environments where their employees have a chance or space for growth. The traditional psychological contract which existed between employees and employers has shifted over time. Today, employees do not offer pension as a reward. This implies that job security is on the decline. Nonetheless, through training and employee development, Tesco equips its employees with transferable skills. In fact, this is a better reward than pension for employees. During employee turnover, the skills acquired at Tesco could be shifted to its competitors. Therefore, Tesco should strive to value their employees highly by offering them a good working environment to minimise employee turnover. Organisations have to integrate learning and skill development into their strategic plans. The options development program by Tesco offers employees extended and basic training which improves their efficiency. Thus, unlike before, training within the organisation has tremendously increased. This might be attributed to the fact that the HRM department is undertaking a strategic role within the organisation. The top management and HRM department both unanimously acknowledged that future growth of the firm will only be guaranteed if its employees are trained and equipped with the relevant skills. Further, an efficient and trained workforce leads to cost minimization. To achieve the business goal of Tesco, the human resource element should be viewed through various models. The human resource aspect of an organisation is comprised of employees with diverse characteristics and qualifications. Also, employee personality differs from one person to another. Thus, specific and relevant approaches should be adopted to bring harmony and good relations into the organization. Frameworks such as the commitment based model are frequently adopted by organisations to improve efficiency and foster employee engagement. Goal achievement is analysed and evaluated while the tenets of respect are taken into consideration. In addition, psychological approach should be included in the HR strategy. Positive reinforcement and motivation from Tesco management is thus recommended. The HR department in most organisations handles the payment procedure. The payments submitted by organisations have to adhere to the minimum wage act. Good payment procedures coupled with salary increment act as an employee motivator. Nevertheless, pay increments should only be applied after a rigorous evaluation of employee performance. The HRM in any organisation should be included in the business strategy. HR is a prerequisite for goal and objective achievement in any organisation. Good HR practices promote employee engagement which subsequently leads to increased revenue and a reduction in overall company costs. Thus, for Tesco to succeed, its HR department should be involved in the decision making process. Additionally, the organisation should adopt the soft approach to HRM. When company employees receive training, their performance and expertise increases. Furthermore, they tend to feel like being part of the firm’s overall strategy. References Beardwell, I., Holden, L., & Claydon, T. (2001). Human Resources Management. Financial Times, Prentice Hall, Pearson Publications: Harlow, Essex. Gold, J., Holden, R., Griggs, V., & Kyriakidou, N. (2010). Workplace learning and knowledge management. Human Resource Development, Palgrave, London, 193-215. Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis. Journal of applied psychology, 87(2), 268. Lockwood, N. R. (2007). Leveraging employee engagement for competitive advantage. Society for Human Resource Management Research Quarterly, 1, 1-12. Macey, W. H., & Schneider, B. (2008). The meaning of employee engagement. Industrial and organizational psychology, 1(1), 3-30. Robinson, D., Perryman, S., & Hayday, S. (2004). The drivers of employee engagement. Report-Institute for Employment Studies. Read More