04. Impact of Employee Engagement

Bakker and Leiter (2010) state that actively engage workforce gives positive organizational outcomes on following areas,

4.1. Employee productivity

High level of engagement helps employee to improve his/her innovative thinking. According to the Lockwood (1997) high level of engagement helps employees in taking initiative and pursuing learning goals. Engaged employees develop new ways and means to improve the organization’s performance levels and go extra mile. Main reason for this behavior is engaged employees are motivated with their job and are more committed to the organization (Schaufeli and Salanova, 2007). They always go beyond the job description and very enthusiastic at work. Highly engage employees are hunger for   achieving challenging goals, and the urge to succeed therefore such employees are ready to change and arrange their job according to the changing work environment (Bakker and Leiter, 2010). 

      Figure 1.0: Employee engagement and employee productivity

                                              (Source: Insync Surveys, 2012)
4.2. Employee Retention

Employee engagement leads high employee retention within the organization mainly due to two reasons those are high level of motivation and Low level of working stress. Perrin (2003) has found that around 66% of highly engaged employees had no plans to leave their job.

Figure 2.0: Employee Engagement and employee retention

                                                 (Source: Insync Surveys, 2012)
4.3. Customer loyalty

The study by Salanova et al. (2005) has identified positive influence of employee engagement over service climate. As per Saks (2006) Engaged Employee is having positive feelings toward his work, find their work to be personally meaningful and manageable, and he has the confidence about the future of his work (Saks, 2006) this attitude influences the quality of their work and the satisfaction and loyalty of their customers.

Figure 3.0: Employee Engagement and Customer Loyalty

(Source: Insync Surveys, 2012)

4.4. Organizational performance

Studies have observed correlation between employee engagement and organizational performance outcomes. Highly engaged employees are always cause to increase the revenue and profitability of the company.  Gallup research found that higher employee engagement results higher earnings per share of publicly-traded businesses. (Gallup, 2004 cited in Ott, 2007)

Report of Hewitt Associates (2004) discussed about three general behaviors of engaged employee which improve organizational performance regularly.

·         Say - the employee advocates for the organization to co-workers, and refers potential employees and customers

·         Stay - the employee has an intense desire to be a member of the organization despite opportunities to work elsewhere

·         Strive - the employee exerts extra time, effort and initiative to contribute to the success of the business

 Figure 4.0: Employee Engagement and Organizational Performance

               (Source: Insync Surveys, 2012)