MODULE 4
EMPLOYEE ENGAGEMENT AND ATTRITION
EMPLOYEE ENGAGEMENT
Meaning & Definition
Employee engagement represents the degree to which employees feel invested in and motivated by their work.
Definitions of employee engagement range from the brief and concise to the descriptive and detailed. Many of
these definitions emphasize some aspect of an employee's commitment to the organization or the positive
behaviors an engaged employee exhibits. Some of employee engagement definitions include:
Aon Hewitt - Employee engagement is "the level of an employee's psychological investment in their
organization."
Willis Towers Watson – Engagement is employees' willingness and ability to contribute to company success.
There are three parts to employee engagement:
Physical: Employees exert high levels of energy to complete their work tasks.
Emotional: Employees put their heart into their job, have a strong involvement in their work and a sense of the
significance of it, and feel inspired and challenged.
Cognitive: Employees forget about everything else when doing their job and become fully engrossed in it.
When employees are engaged on each of these levels (physical, emotional and cognitive), they will invest
significant energy to complete their work and achieve positive organizational outcomes.
Importance
1. Improved employee satisfaction: While 80-90% of employees are somewhat to very satisfied at work, that
doesn’t mean they’re engaged. An employee can be totally satisfied and do minimal work. That person is happy,
but they certainly aren’t engaged. While satisfaction does not equal engagement, engagement does typically
lead to satisfaction. Engaged employees believe in the company and its mission, and they give their work
everything they have every day. That engagement naturally leads to improved satisfaction. It’s a win-win.
2. Higher retention rate : Engaged employees are less likely to leave their current employer while more than half
of disengaged employees would consider leaving their job for another offer.
3. Enhanced productivity and profitability: Companies with higher levels of employee engagement see increase
in productivity and a corresponding increase in profitability.
4. Lower absenteeism: Engaged employees are invested in their job and care about the success of their team. It
makes sense, then, that they would show up to work. Engaged employees are firmly committed to their
organization's mission, and they're going to arrive every day with the intention make sure it gets done.
5. Greater employee loyalty: Employees don't leave when they care about the success of the organization and
they are appropriately challenged by their work.
6. Better customer service : When employees are engaged, customers are more likely to be [Link]
employees care deeply about their jobs, and thus, the customers.
[Link] quality: Engaged employees are less likely to make mistakes and more likely to achieve excellence.
Strategies to improve employee engagement
Source (Forbes website)
The steps for improving engagement aren’t complex, they simply must be prioritized. Which means
engagement must be a core function of the manager’s role.
Step 1 – Put Everyone in the Right Role
Place the right people on the bus and make sure they are in the right roles. This means that all talent
acquisition and retention strategies have to be aligned with meeting company goals.
Step 2 – Give Them the Training
No manager or leader can expect to build a culture of trust and accountability — and much less improve
engagement — without setting the team up for success. This means providing the proper training and
development while removing obstacles.
Step 3 – Task Meaningful Work
Engaged employees are doing meaningful work and have a clear understanding of how they contribute
to the company’s mission, purpose and strategic objectives. Again, this is why they first have to be
placed in the right role. I’ve made the mistake of hiring great talent just to get them in the door – but
didn’t have a clear career path or role for them. If you don’t sort those details out quickly, they will
leave.
Step 4 – Check in Often
The days of simply relying on mid-year reviews for providing feedback are long gone. Today’s workforce
craves regular feedback — which of course leads to faster course correction and reduces waste. Use
both formal and informal check-in strategies — and use them every week.
Step 5 – Frequently Discuss Engagement
Successful managers are transparent in their approach to improving engagement — they talk about it
with their teams all the time. They hold “state of engagement” meetings and “engage” everyone in the
discussion — and solutions.
These principles are not complex, but must be prioritized. Companies that get this right will drive greater
financial returns, surpass their competitors and easily climb to the top of “the best places to work” lists.
Difference between employee engagement and employee satisfaction
ATTRITION
Attrition or employee turnover refers to the permanent departure of an employee from the organization. It
indicates the exit of present employees and entry of new employees. Employee attrition is one of the long
standing concerns of the managers due to its economic and psychological effects. High attrition rates create
adverse economic effects for the organization in terms of low productivity, increased recruitment and training
costs, increased customer complaints, quality and project continuity problems. It also creates psychological
effects on the existing employees in the form negative motivation, low employee morale, fear of future and lack
of confidence about the organization policies.
Employee attrition can happen due to retirements, resignations, dismissals, discharges, death, disability and
elimination of positions. Even though attrition has several negative aspects, it can surely help the managers in
bringing fresh talents to the organization, replacing the poor performers with effective performers and abolishing
positions as part of cost cutting measures.
Employee attrition is normally classified into four categories. These are
1. Functional vs. dysfunctional attritions: When poorly performing employees leave the organization, it is called
functional attrition. If HR policies of an organization support functional attrition, then the employees remaining
with the organization will usually be good performers. In contrast, when bright and best employees leave the
organization for some reasons, it is called dysfunctional attrition. This may prove to be costly to the organization
and its performance. This usually calls for immediate changes in the HR policy of the organization. Managers
should always encourage functional attritions and discourage dysfunctional attritions.
2. Voluntary vs. involuntary attritions: When employees seek to leave the organization in a predetermined
manner on their own request, it is called voluntary attrition. For instance, employee’s decision to leave the
present organization seeking jobs that offer improved salary, incentives, responsibilities or working hours is an
example of voluntary attrition. Alternatively, when employees are forced to leave the organization for the
reasons beyond their control, it is known as involuntary attrition. Retirement, death, disability, chronic illness or
serious family disturbances can cause involuntary attrition.
Causes of Employee Attritions
Employees can leave the organizations for variety of reasons. The important ones among them are as follows:
1. Absence of adequate compensation for work done by the employees. Employees may perceive a mismatch
between their job efforts and organizational rewards. Ineffective HR policies concerning wages, salary and
incentive administrations can be the causes of such employee attritions.
2. Lack of proper work environment: When the employees perceive the prevailing work environment as negative
and hostile, they may tend to leave the organization.
3. Strain in human relations: Employees may quit the organization when there is strain in their relations with the
superior or subordinates. Similarly, poor industrial relations can also cause high employee attrition rates.
4. Lack of motivation, recognition, and appreciations: It is natural for the people to seek recognition and
appreciation for the good work done by them. When it is not available or denied, they may quit the organization.
5. Mismatch between the job and the job holders: Choosing the right person for the right job is the core of HR
management. When there is an incompatibility between job requirements and job holders suitability, it may lead
to employee attrition.
6. Work-life imbalances: When employees face difficulties in balancing their personal and organizational
commitments, they may resort to attrition.
7. Absence of scope for growth: Employees seek to grow in competence. When their growth needs are not
fulfilled by the organization through periodic training and other career development programmes, they may
leave the organization.
Merits and De-merits of Attrition
When employees leave the organization it is a loss to the company, the team and the individuals. Employees are
the backbone of any organization and their departing may lead to lot of various losses to company on different
aspects.
The disadvantages can be
1. Decreased overall performance: The whole business process is affected when an employee leave the
organization. It is even more risky when this happen all of a sudden. There is no time to train the new employee
who is to take over the job and the whole team gets affected. It can directly be seen in an overall decrease of
performance of the team. Sometimes this may even lead to drastic change in customer relationship. Customers
connect with employees in an organization and those leaving all of a sudden may lead to doubts in customer’s
minds as well.
2. Daily task management: Sudden attrition may lead to difficulty in managing daily tasks. Even large
organization struggle to manage their task when employees leave jobs, getting small information and managing
daily tasks become difficult as they cannot be managed by small current team which is left behind. Organization
generally have notice period to ensure there is a smooth transition but attrition states otherwise, employees
who leave suddenly leads to unmanageable daily routines.
3. Increased cost: This has to be the highest disadvantage to a company when employees leave their jobs. There
is increased cost associated with every level of the process – losing and paying the previous employee, hiring a
new one, training cost for the new employee. Research shows that these costs are way more than the losses
incurred in managing and missing out on work.
4. Lack of knowledgeable employees: This goes without saying when employees leave an organization they take
with them the experience they have gained overtime. With organizations which has high attrition rate the
average years of experience of employees is really low. This result in low performance, lack of loyalty and
cluelessness on what company has been through. Older employees with their years of experience can take over
critical matters which can never be trusted with these new employees. Even with employees who have
experience are hired they may suffer at taking care of critical business matter as they are new to company’s
policies, culture and current employees.
5. Create a Negative image: It is not just that employees are looking for job, even organizations are on the
outlook of qualified professionals. When any company has high attrition rate it negatively impact the brand of
the organization. Recruiters’ state that they find it difficult to map qualified candidates to the organization, as
candidates opts out fearing the attrition rate. The reasons may vary but a negative image work against the
organization.
6. Employee development: Many organizations have various employee development plans and higher attrition
rate means losing out on it. Employee development plans takes time and huge investments. When there is
disturbance within the organization due to employees leaving the organization it affects the development
process for all. The money invested on the employee who leave is wasted; also it affects others who have to
jump in to fill in for the lost employee affecting their career plan and growth. These plans are structured and
require dedication and time to reach the goals. A change mid way mostly means loss of the past work done
which benefits none.
Advantages of Employee Attrition:
Not all turnovers are negative, we generally feel that an employee leaving the organization is detrimental to the
organization, but there is a flip side to it. Employees leaving an organization may lead to benefits. This type of job
attrition is called ‘healthy attrition’ and is needed for growth and development of an organization
1. Higher manpower costs: There are times when employees stay with the organization for long, which might
mean that they are getting top of their pay scale. This means that these employees are being paid a lot more
than others who are doing similar job but are comparatively new in the process. This excessive manpower costs
leads to financial burden which is generally not identified on a regular run of the companies.
2. Negative effect of people: There are some employees in an organization who work against the culture of the
organization and even affect the working environment. Such employees even go to an extent to impact the
loyalty of others and their outlook towards the organization. This could mean they are working against the
organization from inside. When such employees leave the organization they lead to more profit than loss.
3. New idea: Many a time when some people leave an organization they open gates for new talent and new
ideas. Mostly employees who are in the organization get used to the working atmosphere and get complacent.
This means lack of risk and definitely no new ideas. When they leave there is space for people who have high risk
taking calibre and stop the firm from becoming stagnant.
4. Higher performance: There are employees who just have been working on a slow pace for years within an
organization. They are reasons for poor performance and slow growth. When they leave the organization the
team becomes fast paced and the turnover time is decreased considerably. This means reduced cost and
satisfied clients.
5. Setting the culture right: There are times that employees do not care for a lot of organization’s policies which
creates a brand for the organization. When strong actions are taken against such employees like asking them to
leave because they were affecting the brand name in a negative way would lead to a strong message and create
a professional culture in an organization.
LINKS
SEPARATION
LINK - [Link]
disrupted-by-ai-7f6454836ec7