Trends In Employee Engagement

How are organisations engaging employees?

Today, “employee engagement” is a commonly-used buzzword by many employers and employees in Malaysia. Employers claim they are doing their part in driving employee engagement, while many employees continue to grumble about not being engaged at work.

What is employee engagement? Is it a measure of happiness and satisfaction at work? Is it the emotional connection employers make with their employees?

Aon Hewitt’s 2014 Trends in Global Employee Engagement annual study, which represents the perspectives of seven million employees across more than 6,000 companies in 155 countries, indicates that the average employee engagement level globally increased to 61% in 2013.

In the Asia-Pacific region, employee engagement has increased for the first time in two years (up by three percentage points) equalling the global average of 61% in 2013.

When compared across countries within Apac, we find that Indonesia (71%), China (66%) and Taiwan (64%) had relatively higher engagement levels compared with Hong Kong (54%), South Korea (55%) and Malaysia (56%).

In Malaysia, the engagement levels have been on a steady, but minimal rise in the past few years, from 53% in 2005 up to 59% in 2011, but then dipped in 2013 to 56%.

In our observations, many local and multinational organisations here have been emphasising employee engagement, but the trend in engagement levels doesn’t seem to reflect the extent of efforts being made.

What is employee engagement?

Aon Hewitt defines employee engagement as the “state of emotional and intellectual commitment to an organisation or group; the extent to which an organisation ‘wins the hearts and minds’ of its employees”.

Based on Aon Hewitt’s global engagement methodology, engaged employees tend to display three key behaviours at work:

1 Say
The extent to which an employee is willing to say positive things about the organisation, and recommend that others come to work with them.

2 Stay
The extent to which someone is willing to be part of the organisation, and does not often think about leaving.

3 Strive
The extent to which someone is willing to go the extra mile and make additional efforts for the organisation’s success.

When an employee actively displays these three behaviours, we consider this person to be engaged.

What drives employee engagement?

While organisations work towards creating an engaged workforce, these “say, stay and strive” behaviours are outcomes that cannot be forced on employee. This is because what drives each employee can be very different.

Through engagement research and the Aon Hewitt Best Employers 2.0 – Malaysia 2013 programme, six drivers were identified as creating the most impact on employee engagement in Malaysia.

Engagement drivers

1 Career Opportunities
Career Opportunities emerged as the top driver of engagement in 2013; this has remained consistent since 2011. While it was only the fifth lowest scoring driver (50% satisfaction score), it had the highest correlation with engagement improvement.

Employees are looking for more clarity in terms of career growth and are expecting managers to support them.

While many tend to relate career opportunities with promotions, it is important to note that lateral movements such as job rotations and international exposure are also means of creating more career opportunities and growth.

2 Recognition
Recognition (41%) has also remained consistent as the second most important driver in the last two studies, as employees want to feel appreciated for their contributions.

Apart from pay and benefits elements, employees are expecting more gratitude from employers when they go the extra mile to deliver results.

3 Brand Alignment
It is important for employers to deliver on the promises it makes to employees. For newbies, Brand Alignment (46%) is about the actual experience they get upon joining the organisation.

For existing employees, it is about the management delivering on the promises made to employees, especially those impacting their work environment. Their trust and confidence in the employer brand and sense of pride in their employer will create a positive impact on engagement.

4 Pay
Being the lowest scoring driver (40%) in the Best Employers 2013 programme, is Pay truly a driver of engagement or merely a “hygiene factor”?

Throughout Aon Hewitt’s studies with organisations in Malaysia, Pay is frequently amongst the lowest scoring drivers, yet it is also one of the top reasons for leaving.

Findings show that for organisations paying at market levels, Pay rarely emerges in the top three drivers of engagement, despite it having one of the lowest scores.

Addressing the Pay driver starts with identifying where the organisation stands in line with industry benchmarks.

The ability of managers to explain pay components to their employees versus directing everything to human resources (HR) creates an impact on engagement as well.

5 Senior Leadership
Engaged leaders drive engaged organisations. Senior Leadership (49%) plays an important role in exemplifying engagement behaviours and driving these as a culture throughout the organisation.

Employees have unspoken expectations of leaders – on their ability to set clear directions and cascade them, to be honest in communication and approachable, and able to drive the organisation’s desired values.

They are role models and must be able to instil trust and confidence in employees. An effective leadership culture is one where employees strive to work “with” their leaders to achieve a common goal, instead of working “for” their leaders.

6 Managing Performance
A clearly articulated and fair performance management process (55%) is important in creating an engaged workforce.

While most organisations in Malaysia today have a performance management system (PMS) in place, many do not get the support needed.

Many managers and employees consider it a chore and only complete the process after multiple reminders from HR.

Employees want to know how they are performing, and managers have a role to share feedback with them regularly.

High performers want to see differentiation of rewards, and have managers who actively manage poor performance and drive a high performance culture. Other than just measuring KPIs, a good PMS process also helps employees identify their strengths, weaknesses, and development areas.

When analysed by employee demographics, female employees, Gen-Y, and junior management share three of the six drivers identified, yet each group displays additional drivers and their order of drivers varies:

• Gen-Y employees are seeking more meaningful tasks in the workplace. Brand alignment and benefits are in the top six drivers for Gen-Y, highlighting their interest in working in organisations that deliver on their promises and those that offer competitive benefits.
• For female employees, pay and benefits rank third and fourth, with work tasks also included among their top six. In planning strategies to increase female engagement, organisations in Malaysia should take note of these.
• Junior management display the same six drivers to improve engagement as the market average. However, recognition is ranked first, instead of career opportunities, as in the other demographic groups. To improve engagement levels among junior managers, programmes that focus on recognition in the workplace should be considered.

The Best Employers 2.0 – Malaysia 2013 study also found that Best Employers were better able to leverage employee engagement than other participating organisations. The research showed:

• 100% of Best Employers link their engagement results with their business metrics (as opposed to 73% reported by participating organisations).
• 75% of Best Employers include engagement scores in their manager KPIs (as opposed to 61% for the participating organisations).
• Best Employers do not hold HR solely responsible for engagement action plan implementation. Rather, it should be driven from the top leadership team, and regarded as a shared accountability between HR and leaders in the business.

Overall, it is important to measure employee engagement as organisations should have an informed view of the current levels of engagement among its employees.

It is only through a measurement process that organisations will be able to derive useful insights, identify key areas for improvement, and develop action plans toward becoming a Best Employer.

The Aon Hewitt Best Employers Malaysia 2015 programme, in partnership with TalentCorp Malaysia and myStarjob.com, is an on-going service designed to measure and improve employee engagement, leadership effectiveness, employer brand, and culture to drive high performance.

Best practices in talent management are shared with participating organisations, and results are benchmarked against other aspiring or recognised Best Employers in Malaysia and Asia. More information about this programme is available at www.bestemployersasia.com.