RESEARCH REPORT: CREATING EMPLOYEE ENGAGEMENT

Transcription

1 RESEARCH REPORT: CREATING EMPLOYEE ENGAGEMENT CENTRE FOR EXCELLENCE IN PEOPLE PERFORMANCE EMMY DEFEVER PROF. DR. KOEN DEWETTINCK

2 Contents 1. Introduction Study sample The state of job satisfaction and employee engagement Drivers of work engagement Driver 1: the supervisor Supervisor s leadership behaviour... 6 Employees perceptions of their supervisor s leadership behaviour... 6 Relationship between leadership empowerment behaviour and engagement The performance management process... 8 Frequency and duration of formal PM meetings... 8 Frequency and duration of informal PM meetings... 9 Content of PM meetings... 9 Performance evaluation and link with (non-)financial rewards Perceived effectiveness of the PM meetings Perceived fairness of the PM meetings Relationship between the performance management process and employee engagement Driver 2: the team The team climate Relationship between the team climate and employee engagement Driver 3: the organisational culture Focus on performance and well-being Relationship between the organisational culture and engagement Which driver has the largest impact on engagement? Practical implications Conclusion Appendix List of Figures List of Tables References... 23

3 1. Introduction In recent years, it has become increasingly clear that employee engagement is important both for individual well-being and organizational success (see for a review: (1)). Engaged employees show high levels of energy and mental resilience (vigor), experience their work as significant and meaningful (dedication) and are fully concentrated and deeply engrossed by their work (absorption) (2). High levels of employee engagement have been linked to several positive outcomes, such as lower absenteeism and turnover rates (3,4), improved performance (5,6), greater business unit performance (7), proactive and innovative employee behaviour (8,9) and financial profit (10,11). Hence, organisations with engaged employees are best armed to thrive and to obtain competitive advantage, even in challenging times (1,12). Considering the benefits of employee engagement, the question how it can be enhanced is of great interest to organisations. In this light, we explored how contextual factors such as the supervisor s leadership behaviour, the supervisor s approach to the performance management process, the team climate and the culture of the organisation impact employee engagement. Data were collected through an online survey, in which respondents were asked to self-report on different statements regarding their work. In what follows, we start with a description of the study sample. Then, we zoom in on the level of employee engagement amongst the Belgian employees. Next, we present and elaborate on how the supervisor s leadership behaviour, the team climate and the organisational culture are related to employee engagement. To finish, we make some essential and summarising conclusions and discuss the implications of these findings. 1

4 2. Study sample The data of this survey was collected from May till June 2014, through the online Belgian jobsite Jobat and different social media channels. Only the data of the respondents who filled in the survey completely were analysed, which resulted in a total of 1746 employees. Table 1 shows the characteristics of the sample. More women (i.e., 57%) than men (i.e., 43%) participated in the study and the mean age of the respondents is years (SD = 11.31). About 23% of the respondents obtained maximum a degree of secondary education, 32,90% of the respondents obtained a bachelor degree and 44,50% of the respondents obtained a master s degree. Hence, the sample consists of a typical professional group since most of the respondents are higher educated. Table 1. Descriptive statistics of the respondents characteristics % of respondents Sex Female 57,0 Male 43,0 Age < 25 years 6,0 25 years - 34 years 31,4 35 years - 44 years 26,0 45 years - 54 years 24,0 > 55 years 12,6 Level of education Primary school 0,9 Secondary school 21,8 Higher education (bachelor) 32,9 Higher education (master) 9,6 University (master) 34,9 Job level Top management 3,6 Senior management 9,0 Middle management 23,7 Professional 33,1 Administrative 19,4 Technical 11,3 Table 2 shows the composition of the sample in function of the company characteristics. The majority of the respondents are employed in a private organisation: 62.1% versus 30.5% in a public company. Few respondents worked in the mixed sector (7.4%). About a quarter of the organisations were quoted on the stock exchange (24,9%). Most of the companies provided services (77,3%). All industries were represented but some more prominent than others: 11% of the organisations were active in telecommunication, 10,1% in education and 9,6% in transport, distribution and logistics. Organisations active in energy and water 2

5 Percentage industry, metal and mechanics, catering and chemistry each represented about 6-7%. The other 35,3% of organisations were distributed among sectors (see Appendix 1). characteristics Table 2. Composition of the sample according to characteristics of the organisation % of respondents Legal status public 30,5 private 62,1 mixed 7,4 Exchange-quoted Listed 24,9 Non-listed 75,1 Company size < 10 employees 9, employees 14, employees 19, employees 10, employees 8, employees 37,6 Main activity Services 77,3 Production 22,7 3. The state of job satisfaction and employee engagement Respondents were asked to indicate on a scale of 1 to 5 (1 = Strongly disagree ; 5 = Strongly agree ) how satisfied they are with their current job (see Figure 1). The average job satisfaction score was 3.6, showing that Belgian employees rather agree with being satisfied with their job. Job satisfaction however, is distinct from employee engagement. Engagement combines high work pleasure (dedication) with high activation (vigor, absorption), whereas job satisfaction is typically a more passive form of employee wellbeing (13). Engaged employees not only have positive affect about their job but they are also willing to go the extra mile to help the organisation achieve its goals and strategies. Figure 1. Job satisfaction amongst Belgian employees 50% 40% 41,6% 30% 20% 10% 6,1% 10,6% 20,3% 21,4% 0% Totally disagree Disagree Neutral Agree Totally agree Response distribution for the item: "Overall, I am satisfied with my job". 3

6 The level of employee engagement was assessed using the 9-item version of the Utrecht Work Engagement Scale (14). Respondents were asked to give their opinion about 9 statements measuring vigor, dedication and absorption. All items were scored on a 7-point likert scale ranging from 1 to 7 (1 = never ; 2 = Almost never/a few times a year or less ; 3 = Rarely/once a month or less ; 4 = sometimes/a few times a month ; 5 = Often/once a week ; 6 = Very often/a few times a week and 7 = always/every day ). Table 3 gives an overview of the average score for each statement. Table 3. Average scores on the employee engagement scale (Scale: 1 = Never; 7 = Always) Dimension Statements Average score Vigor At my work, I feel bursting with energy 4,99 At my work, I feel strong and vigorous 4,83 When I get up in the morning, I feel like going to work 4,59 Dedication I am enthousiastic about my job 4,84 My job inspires me 4,51 I am proud on the work that I do 5,19 Absorption I feel happy when I m working intensely 5,03 I am immersed in my work 5,01 I get carried away when I m working 4,08 Average scale 4,79 The average total score for engagement extent is 4,79 out of a possible 7. Belgian employees report feelings of engagement to occur between a few times a month and once a week. This shows that there is still considerable scope for organisations to raise levels of employee engagement. When we look at differences between engagement levels according to the job level of the respondents, we see some slight differences (see Figure 2). Respondents with a higher level position are slightly more engaged. This could be explained by the fact that employees with a higher position in the organisation experience more job control and autonomy. Indeed, several studies showed that job control, task variety and autonomy have a positive impact on engagement (15,16). 4

7 Mean engagement score Mean engagement score Figure 2. Mean score on the engagement scale in function of job level 7,0 6,0 5,0 4,0 3,0 2,0 1,0 Top management Senior management Middle management Job level Professional Administrative Technical Considering the age of the respondents we observed that the two youngest age groups are somewhat less engaged than the older age groups (Figure 3). This might indicate that younger employees experience their work as less interesting and involving than older employees. Possibly, organisations are failing to meet the needs of younger employees more than those of older employees. The statistical analysis showed no differences between public, private and mixed sectors in terms of engagement level, nor was there any difference for employees working in listed and non-listed companies. Figure 3. Mean score on the engagement scale in function of age category. 7,0 6,0 5,0 4,65 4,52 4,86 4,91 5,12 4,0 3,0 2,0 1,0 < 25 years 25 years - 34 years 35 years - 44 years 45 years - 54 years > 55 years Age category 5

8 Mean score 4. Drivers of work engagement 4.1. Driver 1: the supervisor Supervisor s leadership behaviour Employees perceptions of their supervisor s leadership behaviour Respondents were asked to indicate on a 5 point scale, ranging from 1 (= never ) to 5 (= always ) to which extent they agreed on 6 different quotes concerning the leadership behaviour of their supervisor. The included items measured the 5 dimensions of leadership empowerment behaviour (17): 1. Leading by example; the extent to which the leader acts as an example for the team. 2. Participative decision-making; the extent to which the leader employees comments into account and involves team members in decision making. 3. Informing; the degree to which a leader informs employees about company rules and decisions. 4. Coaching; the degree to which a leader supports the employee development. 5. Showing concern; the degree to which the leader is genuinely concerned about the employees wellbeing. A previous study amongst Belgian employees conducted in 2008 also investigated employee perceptions of these leadership dimensions. For reasons of comparison, Figure 4 presents the mean scores on each dimension both for the 2008 study and the current study. 5 4,5 Figure 4. Mean score on the dimensions of empowering leadership. 4 3,5 3 2,5 2 3,56 3,27 3,27 3,42 3,35 3,04 2,95 2,83 3,15 3, ,5 1 Leading by example Participation Informing Coaching Caring Dimensions of empowering leadership 6

9 Mean score on leadership empowerment behaviour The Belgian supervisors score the highest for leading by example (3,56), followed by participative decision making (3,42), informing (3,35), showing concern (3,18) and finally coaching (2,83). With average scores between 2.83 and 3.56, respondents indicate that their supervisors could perform much better on these dimensions. Especially for coaching, for which the score even dropped from 2.95 in 2008 to 2.83 in the current study. The scores on the other 4 dimensions are slightly higher in the current study compared to the study of This suggests that in the last few years organisations have invested more in leadership development. Indeed, as shown by the recent Deloitte Global Human Capital Trends survey, organisations across industries acknowledge leadership development as one of the top priorities. Yet, most companies feel they are not meeting the challenge(18). Considering the age of the supervisors, there was a significant difference between younger and older supervisors. Younger supervisors received on average a higher score on empowering leadership than older supervisors (see Figure 5). The results for each dimension separately showed an identical pattern, except for the dimension leading by example, for which younger and older supervisors score similar. Both younger and older supervisors set high standards for performance and work hard to obtain their goals. Figure 5. Mean score on leadership empowerment behaviour in function of supervisor age 5,0 4,5 4,0 3,5 3,51 3,28 3,40 3,33 3,29 3,22 3,14 3,05 3,0 2,80 2,5 2,0 1,5 1, jaar jaar jaar jaar jaar jaar jaar jaar jaar Age of supervisor Relationship between leadership empowerment behaviour and engagement The statistical analysis reveal a significant positive correlation between the 5 dimensions of empowering leadership and employee engagement. In other words, the higher respondents perceive the performance of their supervisors on these 5 dimensions, the higher their engagement level. In order of their correlation with engagement, the 5 dimensions rank as follows: 1. Coaching 2. Showing concern 7

10 Number of respondents in % 3. Informing 4. Participative decision-making 5. Leading by example Clearly, the supervisor s leadership behaviour is associated with the engagement of employees. Interestingly, coaching and showing concern are the most important dimensions for employee engagement, whereas it are the dimensions on which supervisors are rated the lowest by employees The performance management process In this section we zoom in on the performance management (PM) process and how this influences the engagement of employees. For these analyses, only the data of respondents who worked at least one year with their current employer were taken into account. Frequency and duration of formal PM meetings Respondents were asked about how many times they formally discussed their performance with their supervisor in the past year. A distinction was made between: 1) setting objectives, 2) intermediate follow-up and 3) performance evaluation. Figure 6 presents a detailed picture of the frequency of the formal PM meetings. On average, a large group of respondents indicates that setting objectives (49,1%), diccussing progress (35,6%) and evaluating performance (57,2%) occurs once a year. Quite some respondents, however, don t have formal meetings at all (i.e., 23,1%, 37,4% and 27,5% for setting objectives, intermediate follow-up and evaluation respectively). For many of the employees there is no continuous, ongoing process of planning, monitoring and reviewing performance. In addition, respondents indicate that the duration of the formal performance meeting takes on average 30 minutes, which they find rather insufficient. Figure 6. frequency of formal performance management meetings ,1% 57,2% ,4% 35,6% 27,5% 23,1% 13,8% 5,5% 8,4% 11,7% 12,1% 8,8% 3,2% 1,6% 4,9% > > >3 Setting objectives Intermediate follow-up Performance evaluation Number of meetings 8

11 % of respondents Frequency and duration of informal PM meetings Respondents were asked how often they received informal feedback from their supervisor in the past year (for instance during coaching, before or after meetings, etc.). As depicted in Figure 7, more than 79,8% of the employees receives informal feedback monthly or less often. Strikingly, 27,9% of the respondents even report receiving informal feedback only once a year. Figure 7. Frequency of informal feedback 30% 27,9% 25% 20% 15% 10% 6,8% 17,7% 11,6% 15,8% 7,1% 8,5% 5% 2,1% 2,3% 0% Frequency of informal feedback Content of PM meetings Respondents were asked to indicate on a scale of 1 to 5 (1 = not discussed at all ; 5 = very thoroughly discussed ) to which extent 6 different topics were addressed in their PM meetings. As shown in Table 4, the top 3 of discussed topics in PM meetings consists of 1) performance feedback, 2) the way the job is done and 3) individual targets. Less attention is given to organisational values, expectations regarding professional development and career expectations. Table 4. The extent to which different topics are discussed during PM meetings. Topic in performance meeting Average sample Performance feedback 3,15 The way the job is done (behaviour) 3,13 Individual targets 2,83 Organisational values 2,59 Expectations regarding professional development 2,51 Career expectations 2,32 9

12 Performance evaluation and link with (non-)financial rewards Respondents had to indicate whether their performance evaluations are being linked to salary adjustments, bonus systems or non-financial incentives (i.e., tangible rewards without a direct monetary benefit such as responsibilities, recognition, career opportunities, etc.). As shown in Table 5, about one third of the respondents reported that their performance evaluation is being linked to a possible salary increase or bonus. About 15% of the respondents indicate their performance evaluation is being linked to non-financial incentives. Table 5. Link between performance evaluation and rewards Performance evaluation is linked to No (% respondents) Yes (% respondents) Salary 65,4% 34,6% Bonus 66,3% 33,7% Non-financial incentives 84,9% 15,1% Perceived effectiveness of the PM meetings The perceived effectiveness of the PM meetings was investigated by asking the respondents 1) whether the PM meetings motivate them and 2) whether the PM meetings lead to enhanced performance. As shown in Figure 8, 38,5% of the respondents agree to strongly agree with the statement that the PM meetings have a motivating impact. This leaves the majority of respondents either disagreeing (i.e., 32%) or being inconclusive (neither agree nor disagree, i.e., 29,5%). A similar response distribution was found when asked if the PM conversations enhances performance. This allows us to conclude that for the majority of the Belgian employees, the PM process does not immediately have a positive impact on their performance. Figure 8. Perceived effectiveness of the PM meetings 35% 30% 25% 20% 15% 10% 5% 0% The PM meetings motivate me 22,0% Strongly disagree 10,0% 29,5% 26,0% 12,5% Disagree Neutral Agree Strongly agree 35% 30% 25% 20% 15% 10% 5% 0% The PM conversations enhance my performance 21,5% Strongly disagree 11,4% 30,6% 26,3% 10,3% Disagree Neutral Agree Strongly agree 10

13 We examined which factors influence the perceived effectiveness of the PM process. Our analysis showed a strong positive relationship between the supervisor s leadership behaviour and the perceived effectiveness of the PM process. The higher a supervisor scores on empowering leadership (e.g., coaching, showing concern, participative-decision making, ), the more effective the PM process is perceived by employees. This shows the crucial role of the supervisor in the performance management process. In line with this finding, the perceived effectiveness of the PM process also depends on the frequency of informal feedback. Respondents who have more informal conversations with their supervisor, consider the PM process as more effective. The duration of the formal meetings and the frequency of the formal intermediate follow-up meetings had an impact on the perceived effectiveness as well, but this was significantly smaller than the impact of the supervisor s leadership behaviour and the informal feedback conversations. Interestingly, the number of formal meetings to set objectives and the number of formal meetings to evaluate performance showed no significant association with the perceived effectiveness of the PM process. We also observed that employees who s evaluations are being linked to non-financial incentives consider the PM meetings as more effective. This shows that for employees it s important to feel whether their work is valued. Interestingly, however, we did not observe a direct relationship between financial rewards and the perceived effectiveness of the PM meetings. Sequential tree analyses showed that only for the respondents who s performance evaluations are not linked to non-financial incentives, a link with salary adjustments has a positive impact on the perceived effectiveness. Perceived fairness of the PM meetings We asked respondents to indicate on a scale of 1 to 5 (1 = Strongly disagree ; 5 = strongly agree ) whether they perceived the PM meetings as fair. Employee perceptions of fairness are essential for the effectiveness of PM systems (20). About 47% of the respondents agree to strongly agree with the statement that the PM meetings are conducted in a fair manner. The other half of the respondents either disagrees to strongly disagrees (16%) or feels inconclusive (26,7%). The analyses showed a strong positive correlation between the perceived fairness and empowering leadership (r =.66) and between perceived fairness and frequency of informal feedback (r =.36). Hence, providing regular feedback stimulates feelings of fairness amongst employees regarding their PM meetings. 11

14 % of respondents Figure 9. Perceived fairness of the PM meetings 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 15,3 Strongly disagree 11,0 26,7 29,8 17,2 Disagree Neutral Agree Strongly Agree Response distribution for the item: "The PM meetings are conducted in a fair manner" Relationship between the performance management process and employee engagement Formal PM meetings. No significant relationship was found between the frequency of formal PM meetings and the engagement of employees. Though, a significant positive relationship between the duration of the formal meetings and employee engagement was observed. The more time a supervisors spends on the formal meetings, the higher the employee engagement. Building in sufficient time for the formal meetings is thus more important for employee engagement than the frequency of those meetings. Informal meetings. A significant positive association was observed between the frequency of informal feedback and employee engagement. Respondents receiving more informal feedback from their supervisor are more engaged than the ones who receive less informal feedback. Topics discussed. Our analyses revealed that the extent to which all 6 topics (see below) are discussed during PM meetings is significantly related to the level of engagement. The more these topics are addressed during PM meetings, the higher the level of employee engagement. In order of their correlation with engagement, the topics rank as follows: 1. Expectations regarding professional development 2. Career expectations 3. Organisation values 4. Individual targets 5. Performance feedback 6. The way the job is done The extent to which expectations regarding professional development is discussed, reveals to be most important for engagement. Nonetheless, as shown above, this is the topic which respondents report to be least discussed during the PM process. More attention should be 12

15 given to the development of employees in order to increase engagement levels. Employees clearly value learning and development opportunities in order to advance their skills and career Driver 2: the team The team climate To assess the team climate, respondents were asked to indicate on a scale of 1 to 5 (1 = Strongly disagree ; 5 = Strongly agree, to which extent their team showed the following 5 team dimensions: 1. Team goal orientation: the extent to which team objectives are clear and team members are clearly committed to achieve team objectives. 2. Reflexivity: the extent to which team members critically reflect on how they do their job. 3. Respect: the extent to which team members respect each other. 4. Team spirit: the extent to which there is a pleasant atmosphere within the team. 5. Pride: the extent to which team members feel proud about being part of the team. Figure 10. Average score on the different team dimensions Pride 3,2 Goal orientation 5 4,5 4 3,5 3,32 3 2,5 2 1,5 1 3,17 Reflexivity Teamspirit 3,27 3,62 Respect On average, respondents indicate that they feel rather inconclusive (i.e., neither disagree nor agree) about their team showing goal orientation, pride, reflexivity and team spirit. Considering the team dimension respect, respondents rather agree that the team members respect each other. 13

16 % respondenten % respondenten Relationship between the team climate and employee engagement Statistical analyses show that only pride and team goal orientation were significantly associated with employee engagement. The higher the team is rated on these dimensions, the more engaged the respondent is. In line with previous studies, we found that engaged employees take pride of being part of a bigger team (21). Nonetheless, as shown in Figure 11, less than half (i.e., 41,2%) of the respondents indicate that the team members in their team feel proud. Considering the team goal orientation, half of the respondents (i.e., 49,7%) agree to strongly agree that their team has a clear direction, whereas the other half (i.e., 50,3%) disagrees or feels inconclusive (neither agrees nor disagrees) (see Figure 12). Figure 11. Pride of the team 40% 35% 30% 25% 20% 15% 10% 5% 0% 10,9% Strongly disagree 14,5% 33,4% 27,4% 13,8% Disagree Neutral Agree Strongly agree Answer distribution of the item: "Team members are proud to tell in which team they work" Figure 12. Goal orientation of the team 35% 30% 25% 20% 15% 10% 5% 0% 12,8% Strongly disagree 15,8% 21,7% 33,0% 16,7% Disagree Neutral Agree Strongle agree Answer distribution of the item: "our team objectives are clear for all team members" 14

17 Number of respondents in % The supervisor plays an important role in establishing performance expectations and setting team goals(22). Hence, we asked respondents how many times their supervisor discussed the collaboration, functioning and the performance of the team together with the team members. As depicted in Figure 13, for 43,2% of the respondents this occurred less than half-yearly. This might explain why a large number of respondents indicate that their team does not have a clear goal orientation. Figure 13. Frequency of team meetings 40% 35% 30% 25% 20% 15% 10% 5% 0% 36,90% 6,30% 18,50% 10,30% 16,50% 3,90% 6,20% 0,50% 0,90% Frequency of team meeting 4.3. Driver 3: the organisational culture Focus on performance and well-being Finally, we investigated the effect of the organisational culture on employee engagement. To this end, respondents were asked to rate 7 statements on a 5 point scale (1 = strongly disagree ; 5 = strongly agree ). Some statements measured to which extent the organisation is focused on performance/obtaining results, for example: Our organisation is very result driven. Employees are competitive and focussed on attaining results. Other items assessed to which extent the organisation promotes (physical, social and mental) well-being, for instance: My organisation considers the well-being of employees as an important issue. The analyses showed that the focus on performance within both private and public organisations is larger than the focus on the well-being of employees (see Figure 14). In the mixed sector, equal attention seems to be paid to performance and well-being. The focus on performance is significantly larger in the private sector than in the public or mixed sector. A significant difference is also observed between the non-listed and listed companies, with the latter showing a larger focus on performance. 15

18 Considering the focus on well-being, no significant difference is present between sectors. There was also no difference between listed and non-listed companies regarding the focus on well-being. In general, respondents indicated that their organisation does not have a strong focus on the well-being of the employees. 5 Figure 14. Organisational culture 4 3 3,45 2,94 2,95 2,89 2,68 2,72 3,71 2,8 3,11 2, Private Public Mixed Listed Non-listed Focus on performance Focus on wellbeing Relationship between the organisational culture and engagement Both the focus on performance and the focus on well-being have an impact on the engagement of employees. The stronger the focus of an organisation on results/performance and on well-being, the more engaged employees are. Interestingly, a general concern for employee well-being showed to be much stronger related to employee engagement than a focus on performance. Employees become much more engaged when they feel their organisation cares about their physical, social and mental wellbeing Which driver has the largest impact on engagement? The abovementioned results show that both the supervisor s leadership behaviour and approach to the PM process, the team climate (i.e., pride and goal orientation of the team) and the organisational culture play a role in creating an engaged workforce. To verify which of these drivers best predict employee engagement, we conducted a linear regression analysis with all drivers as predictor variables and the level of employee engagement as dependent variable. Each driver showed to uniquely contribute to the engagement of employees. In order of their correlation with engagement, the drivers rank as follow: 16

19 1. Pride of the team 2. Empowering leadership behaviour 3. Organisational culture focused on well-being 4. Goal orientation of the team 5. Practical implications The results of our survey allow us to draw some conclusions on how to stimulate a highperforming, engaged workforce: First, the supervisor s leadership style and approach to the PM process showed to be strongly related with levels of employee engagement. Supervisors who score better on empowering leadership have more engaged employees. Especially coaching (i.e., helping employees in their professional development), providing regular informal feedback and a general concern for the employees well-being positively influences the engagement of employees. Compared to the data of 2008, the results of the current study suggest that in the past years organisations made some progress considering leadership development. Though, there is still considerable scope for organisations to enhance leadership skills. Especially strengthening supervisors in their ability to coach seems one of the major challenges faced by organisations. Research has shown that organisations who have a strong coaching culture deliver nearly 13% stronger business results and are nearly 33% more effective at engaging employees(23). For coaching to be successfully integrated in an organisation, senior leaders, supervisors and HR all have unique, yet reinforcing roles(24): Senior leaders should support coaching by setting the tone themselves. This includes talking about coaching, modelling how to coach and holding their direct reports accountable for coaching. Supervisors have an important role to actively participate in coaching. The following three coaching skills are especially relevant: listening actively, reinforcing positive behaviour and asking open-ended questions. HR should provide supervisors with relevant tools and resources to learn more about coaching. Our findings clearly show that, in order to be effective, coaching and professional development of employees should be the central focus of PM systems. This entails that PM should be an on-going process and not be limited to quarterly or yearly performance evaluations. Today, quite some companies already changed their annual performance management system in order to give more attention to coaching and employee development (25) (see Box 2 for some examples). 17

20 Box 2. Continuous performance management 360 degree reviews at Netflix Netflix eliminated formal performance reviews because they were too ritualistic and too infrequent. Instead, they instituted informal 360-degree reviews. These 360-degree reviews are kept fairly simple: employees and managers are asked to identify things that colleagues should stop, start, or continue. In the beginning an anonymous software system was used, but over time a shift was made to signed feedback, and many teams held their 360s face-to-face. The idea is that if you talk simply and honestly about performance on a regular basis, you can get good results probably better ones than a company that grades everyone on a five-point scale. Source: Patty McCord (2014) How Netflix reinvented HR, Harvard Business Review Adobe s Check-In Framework In response to major changes in business and the widespread dissatisfaction among employees and managers, Adobe completely eliminated their annual performance review process. Prior to reforming the performance management system, Adobe s managers spent over working hours per year on the review process, which they considered as cumbersome and time-consuming. Moreover, the forced ranking system showed to discourage people from working in teams. By pitting individual against individual, an environment of competition rather than collaboration was created. In 2012, Adobe introduced a simpler and more efficient performance management framework called The Check-In. Made up of three main components (Setting Expectations, Giving and receiving feedback and Growth), the Check-in was designed to ensure employees and managers were having a continuous, fruitful conversation about performance and growth throughout the year. Rather than dwelling on workers' shortcomings, managers are asked to focus on goals, objectives, career development and strategies for improvement. Employees are evaluated on the basis of what they achieved against their goals, rather than how they compare to their peers. Since implementing the Check-in Framework, Adobe has witnessed some positive outcomes including a dramatic increase in voluntary attrition and a corresponding increase in employee engagement. Source: How Adobe's New Performance Management Framework Drives Engagement and Retention. Published: November 15, 2013 Second, at the level of the team, a sense of pride showed to contribute to the engagement of employees. In addition, a clear goal orientation fosters the engagement of employees as well. Teams with well-defined goals perform better than those without (26). Moreover, a 18

21 clear goal orientation helps teams to form a common identity among individual members and enhances the team s commitment to achieving targets (22). Also here, the supervisor plays an important role in establishing performance expectations and setting clear team goals(22). Frequent team meetings about performance and work progress contribute to a clear goal orientation of the team. Taken together, our results show that a strong performance orientation at the team level combined with a strong focus on the professional development at the individual level stimulates engagement. This calls for a multi-level approach to performance management, in which steering employees at the team level (by creating clarity and stretch towards common objectives) and the individual level (more focused on employee development and support towards reaching team objectives) get integrated into a continuous cycle. Finally, at the level of the organisation, promoting well-being has a positive impact on employee engagement. Well-being is a holistic concept including both social, mental and physical well-being of employees. Organisations implementing well-being programmes effectively (see Box 3 for an example), can expect to see an upturn in engagement and performance(27). Box 3. Wellbeing culture at Ferrari The Italian car manufacturer Ferrari has taken a very holistic approach to achieve wellbeing at work, which is considered as an inseparable component of the business performance overall. The company has redesigned and constructed new facilities with the aim of creating an environment that is pleasant, but also one in which safety and environmental awareness are priorities. The working environment was also redesigned to facilitate a social and friendly atmosphere by providing good natural lighting and ventilation and a central restaurant and piazza for socialising. Alongside these physical improvements, the company also invested in safety and health training, and in the selfdevelopment of employees. Source: European Agency for Safety and Health at Work. See: See: for other case studies. Creating a well-being culture is a shared responsibility. On the one hand, organisations have to create an optimal working environment. This can be done by closely monitoring the job requirements (e.g., workload, emotional conflicts, work demands and resources) imposed on employees throughout regular conversations and by increasing the support that employees receive from their working environment. Specifically, the support that employees receive from their supervisors is crucial. A supervisor who discusses and promotes well-being encourages employees to get involved in wellbeing activities(28, 29). 19

22 On the other hand, the choices employees make themselves determine the level of wellbeing. Therefore, it is important to proactively empower employees to take care of their own well-being. This can be done by fostering self-insight by coaching or by stimulating them to take (small) actions considering their physical (e.g., having walk en talk meetings), social (e.g., random acts of kindness) and mental (e.g., expressing appreciation) well-being (28). Conclusion Employee engagement is a key driver for organisational success and individual wellbeing. This study investigated how organisations can foster employee engagement at different levels. We found that both the supervisor s leadership style and approach to the PM process, the team climate and the organisational culture uniquely contribute to employee engagement levels. We hope that the insights reported in this study and the practical implications we presented will help you to foster engagement levels within your team, department or organisation! 20

23 Appendix 1 % of respondents per industry Telecommunication 11,9 Other 1,8 Education 10,1 Packaging 1,6 Transport, distribution and logistics 9,6 Consulting, R&D 1,4 Energy & Water 7,4 Welfare, social services 1,3 Catering 7,2 Tourism & leisure 1,3 Chemistry 6,5 Personnel services 1,1 Metal, mechanics 5,9 other services (e.g., cleaning),8 ICT 5,0 Social-cultural sector,8 Food, drinks, tobacco 4,6 International government,7 Bank, finances, insurances 4,0 Media and communication,5 Textile, shoes, clothing 2,6 Pharma,2 health care 2,5 Agriculture,2 other converting industries 2,5 Retail, wholesale,2 central and local government 2,1 Federal government,1 21

24 List of Figures Figure 1. Job satisfaction amongst Belgian employees... 3 Figure 2. Mean score on the engagement scale in function of job level... 5 Figure 3. Mean score on the engagement scale in function of age category Figure 4. Mean score on the dimensions of empowering leadership Figure 5. Mean score on leadership empowerment behaviour in function of supervisor age... 7 Figure 6. frequency of formal performance management meetings... 8 Figure 7. Frequency of informal feedback... 9 Figure 8. Perceived effectiveness of the PM meetings Figure 9. Perceived fairness of the PM meetings Figure 10. Average score on the different team dimensions Figure 11. Pride of the team Figure 12. Goal orientation of the team Figure 13. Frequency of team meetings Figure 14. Organisational culture List of Tables Table 1. Descriptive statistics of the respondents... 2 Table 2. Composition of the sample according to characteristics of the organisation... 3 Table 3. Average scores on the employee engagement scale (Scale: 1 = Never; 7 = Always)... 4 Table 4. The extent to which different topics are discussed during PM meetings Table 5. Link between performance evaluation and rewards

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