Focusing on the significance of the “people factor” in the statement discuss the critical role of Human Resource Management in driving employee engagement to increase the performance of an organization.
The quote above from successful businessman Jack Welch leads our discussion regarding the importance of the ‘people factor’ in any organization. Mr. Welch worked, and eventually went on to become the CEO for General Electrics in the US. Researching for this paper, his ideas and understanding of the ‘people factor’ was evident. He grew General Electrics from a company valued at $13 million to over a billion-dollar company (www.ge.com, 2018). His management skills and his ability to drive employees prove the link between people and business success. This assignment will mainly discuss Human Resource Management practices such as job design, recruitment, selection, training and development, and performance appraisals and how each function facilitates employee engagement. How management can measure, lever, enhance and make a culture of engagement within an organization. It will investigate motivation and how it can lead to employee engagement. Finally, it will discuss how HR functions enhancing employee engagement can play a critical role in increasing the performance of an organization in terms of cash flow and customer service.
Using the Human Resource functions, managers can drive employee engagement through a collective form of steps, which creates a culture through a shared vision. Engagement can be cultivated when “natural inclinations of the persons there are allowed to be reflected in their behaviors by the kinds of processes and structures that have evolved there” (Shrm. Org, 2018. pg. 2). We can analyse how HR functions can play a critical role in enhancing human capital of an organization, thus driving employee engagement for improved outcomes. Beer et al, cited in Armstrong, M. and Taylor, S, pg.4, that human resource management … ‘involves all management decisions and actions that affect the nature of the relationship between the organization and employees.’ HR Managers must ensure that the culture and decisions they create are in the best interests for both employees and the organization. Armstrong, M. and Taylor, S, 2017, pg.38 state the role of the human resource functions should ‘help to improve organizational capability’. Knowing an organizations mission and goals can create a platform for planning to engage people in the workplace. Using workforce planning and job design, an organization can begin harnessing engagement from the very beginning of an employee’s journey. Using Hackman and Oldham Model (Lecture Slides, week 2, slide 53), building a job that allows skill variety, task identity, task significance, autonomy, and feedback, can increase work-related results. The employee can be motivated by challenges, independence and the confidence placed in them by their employers. They are also aware of the outcomes from their work which they understand as the ‘why’ they do what they do. While having a well-designed job is a great start, more importantly recruiting the correct person for the role is crucial. Building a reciprocal relationship between a new employee and the business from the very start can lead to a strong connection that becomes greater and greater with time. Hiring the correct person for a job and ensuring the correct fit, can enhance engagement too as the person is being used to the best of their ability. Human capital…if used correctly, it grows. (Armin Trost, YouTube, 2018)
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It may be very difficult to encourage motivation or engagement in a person who is ill-suited for a role. Jim Collins uses a metaphor of a bus in his book ‘Good to Great’, explaining that the bus is the organization, the people on the bus are the employees, while the seats on the bus are the different jobs within the organization (YouTube, 2018). Filling each seat with a person will not create something greater for that organization but filling the seats with the correct people will enhance the people fulfilling the roles and in turn, add value to your business. It is important to point out that the bus and everyone on board must understand what direction they are led. HR managers must be knowledgeable in their organization’s vision or mission, so they can steer line managers and their employees toward a culture of engagement. Thus, the recruitment process should be a very carefully considered decision. If recruiting externally, it is important that the person selected fits in with the culture of the organization (engagement, H. (2018). Managers can leverage employee engagement and furthermore commitment by advancing people within the company for open positions. These people will already know the objectives of the organization and have a relationship with their employer. Commitment to the company and engagement can be increased by a promotion due to a sense of appreciation, pride and reward for hard work. Other employees will also observe that advancement is possible when working together with the organization and engaging with their work. (SHRM.org, 2018, pg.12)
Another HR Function that can increase employee engagement is training and developing. Training can be observed as an investment in an individual, building upon the foundations of the employee/employer relationship. From a new hire having a correct induction and orientation to the development of existing staff, training is an important investment in the people of a company and therefore the company itself. (Sinek, Simon, YouTube, 2018)Other rewards for employees can drive employee engagement. Jack Welch called it the ‘generosity gene’ (YouTube, 2018) and explained why building a culture of celebration with a company enhanced people’s productivity. In other words, appreciating your employees’ achievements no matter how small can build morale and the commitment to your company is returned. Being praised, feeling valued and recognition for hard work were the top priority of employees founded in a worldwide survey. (Strack, R., YouTube, 2018)
For managers to investigate what motivates their employees they can use the practice of communication or appraisals. HR managers can drive employee engagement by using a continuous relationship with line managers to effectively get across the organizational objective while also acquiring performance information on employees. (SHRM.org, 2018. Pg.17) To obtain this information, surveys online or in-house can be used to measure what motivates employees and how the employees view the organization’s commitment to them. Evaluations can also be used to gauge employee’s performance and in turn, contribute to the organization’s recognition of valued staff. Creating rewards such as day trip, dinners, or flexitime, to performing employees, show other employees the worth of engagement and commitment to an organization. By identifying the priorities that motivate employees, the organization can also set a plan to ensure line managers are doing their best to lead engagement in their teams. (Shrm.org. (2018), pg.4)
Employee Engagement & Motivation
As mentioned above, using surveys to find out what values employee’s respect from an employer is critical for HR managers to follow up on the results, thus improving motivation. Managers must take into consideration an employee’s physical, physiological and cognitive functions, to harness engagement effectively. There are many theories which analyze what motivates people, for example, power, financial gain or social standing. It seems regarded that humans are very individualistic making it extremely hard to motivate everyone under the same umbrella and that human resource managers role is to take each case as individual (Lecture Slides, Week 2, slide 71) While motivation can be viewed as a positive aspect of an employee, it is key that this motivation is driven by the correct factors. Driving motivation through fear or short-term gains will not achieve an increase in productivity or performance in the long run. If employees are working in fear or in uncomfortable conditions, it is likely that they will leave the organization. Studies such as Gallup & Delloite have shown that engagement in employees is not the standard norm, but rates tend to be lower than average (FT.com,2018) (Deloitte Insights, 2018)The disengaged employee will do the minimum that is required, have a poor working relationship with the organization and will not be committed to the vision the company.
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On the other hand, organizations can link positive motivation to engagement and commitment when employees are motivated by pride and satisfaction in their roles. (Richardson, B. (2018). They will work with their team and organization to bring innovation and the best of their skills to the company. An engaged employee is one who feels motivated every day by their job and is committed to the company they work for, moreover the people within the company they work for. Locke and Latham’s Goal Setting Theory (Lecture Slides, week 2, slide 50 & 51) states that to be successful motivating, goals should be ‘SMART’; specific, measurable, attainable, results orientated and timebound. This will allow the employee to understand how their role is beneficial for themselves and the company. Simon Sinek (YouTube. (2018) describes engagement between an employee and an employer as a mutual relationship built on human interaction. According to Sinek, small steps are of utmost importance to connect with your employees, such a face to face meetings or through physical encounters like a handshake can really make an impact on the relations in your organization. “Get out from behind your desk, bypass the hierarchy, and go and talk to people. That way you will unlock an enormous potential for improved performance.” (Armstrong, Michael, 2018, pg.8)It can create a culture based on the ‘people factor’, building positive relationships all the time. Positive motivation through the practice of excellent management can lead to engaged employees who will go out of their way to achieve goals, communicate well with their team and driving others to do the same.
Companies that have above average engaged workforce see an improvement in productivity, profitability loyalty, customer service, reduced workplace accidents, and absenteeism. (Lecture Slides, ‘Employee Engagement Master Copy’, week 2, slide 14) Employees who are engaged are present, mentally and physically at work every day and are not simply ‘going through the motions’. When one takes pride in their work, they will be fully engaged in the task they are performing. In turn, this can lead to better innovation, fewer workplace accidents, and improved customer service. By improving each of these and more, businesses can save financially every year. Leadership Development, Emotional Intelligence, and High-Performance Teamwork, Ireland, 2018, explain how employee engagement leads to improvements in employee turnover thus reducing recruitment costs. Engagement also decreases company complaints and in turn improves a company’s reputation through customer satisfaction. Having reduced absenteeism and improved safety standards impact massively on bottom-line results for an organization. The people factor in any organization driven by engagement can have a huge impact on a company’s performance. Studies from Caterpillar and Molson Coors Brewing Company cited in Shrm.org. 2018. show how engagement initiatives increased profit by $2 million for both.
Using multiple HRM practices and an employee engagement strategy over time can eventually create a culture of active and engaged employees. Engaged employees are viewed as employees that feel passionate about their jobs and are committed to an organization. (lecture slides, week 2, slide 5) Through communication of a shared vision, HRM must commit to a long-term engagement strategy to achieve the objectives. There must be a balance between the employee and employers by using survey data to leverage only the most significant values of employees. This way the business will not waste resources implementing engagement plans that may not have the greatest impact. As shown in the assignment above, HR management, through different functions can drive employee engagement at each stage. The results are improved performance, customer satisfaction and increasing cash flow.
Gallup, 2013 in Adeo consulting, Leadership Development, Emotional Intelligence and High-Performance Teamwork, Ireland, 2018 state “Engaged works are the lifeblood of their organizations.” By creating a strategic plan, continuing to implement positive motivation, engagement, and commitment, an organization can achieve its mission and objectives and thus a competitive advantage.
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