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EMPLOYEE ORGANIZATION COMMITMENT AND ENGAGEMENT


Am I committed to my organization?  This is a question many workers have probably asked themselves at some point during their employment.  Commitment to the work an employee performs and the organization s/he is employed with is a widely studied topic in I/O psychology (PSUWC, 2015).  There are several concepts involved with the idea of work commitment, including job involvement, work ethic, organization commitment, and job/career commitment (Morrow, 1993 as cited in PSUWC, 2015).  Many organizations throughout the world struggle with the commitment levels of their employees, and many still, lack the understanding that work commitment involves more than just a paycheck.  Employees are more likely to be fully engaged if they are committed to both the work they do and the organization they work for.  However, there are several organizations that have made a variety of changes and effort to positively affect their workers’ motivation through organizational commitment.    


The following is a case study of the variety challenges employers face around the world and some of the efforts that have been made by companies to positively influence employee engagement. Additionally, this work will make suggestions that can be used by many more organizations to help change any negative trends in employee commitment.


 ACTIVE ENGAGEMENT OF EMPLOYEES AROUND THE WORLD  

Deloitte LLP (2014) surveyed over 2,500 organizations in more than 90 countries and learned companies are struggling to engage today’s workforce.  Additionally, in a 2011-2012 Gallup study of 142 countries and around 180 million employees shows only 13% of employees are engaged at work worldwide.  This means 63% lack motivation and less likely to invest discretionary effort in organizational goals or outcomes (Crabtree, 2013).  Engagement levels among employees vary in different global regions and even in the countries within those regions (Crabtree, 2013). Further, being an economically developed region does not necessarily mean more will be engaged.  For example, across 19 Western European countries only 14% are engaged, whereas 33% are actively engaged in North Africa and 35% in the Middle East (Crabtree, 2013).  Below is a chart comparing the countries and regions in the Gallup study (Crabtree, 2013):

  


Additionally U.S. companies today are failing to engage their employees.  Studies have shown that disengaged employees can cost organizations approximately $3400 a year. This essentially affects the American economy with a loss up to 350 billion dollars annually (Entrepreneur).  William Kahn explains, “Engaged employees express themselves physically, cognitively and emotionally during role performances” (David, 2013).  An engaged employee works more efficiently, shares the same vision and goals and possesses a better overall attitude.

 

Without active engagement from employees, employers risk higher turnover and costs to their companies.  Employers need to understand what motivates and increases active engagement in their employees in order to gain the organizational commitment they want from employees. It is also important to note that those actively disengaged employees can act as poison in the well of a company. These are individuals that are unhappy at work, and are acting on this unhappiness in ways that can negatively impact their coworkers who might otherwise be engaged employees (Sterling, 2008).   


 ORGANIZATIONAL COMMITMENT

Organizational commitment is the “extent to which an employee develops an attachment and feels a sense of allegiance to his/her employer” (PSUWC, 2015).  Both require a certain amount of job involvement, or “the degree of daily absorption into everyday work experiences,” (PSUWC, 2015) along with commitment to successfully motivate an employee.  However, the level of commitment, such as affective, continuance, or normative, also plays a role.


The Three Component Model of Commitment (Meyer and Allen, 1991, as cited in Mind Tools, 2015) discusses the differences between the three types of commitment and how they can be applied in the work environment.  Affective commitment can be likened to how much affection one has for the job.  This is the highest level of work commitment because at this level, a person is attached to the work they do and the organization they work for.  When workers feel affection for their work they are likely to increase their engagement, and therefore, their organization commitment.  


Continuance commitment is experienced when an employee feels they cannot leave their jobs because they have no other options (PSUWC, 2015).  Meyer & Allen (1991, as cited in Mind Tools, 2015) refer to this as fear of loss.  In other words, an employee may weigh his/her options of staying in a position against leaving and determine that leaving would be a loss to them in some way (salary, benefits, seniority, etc.).  Because there is no benefit in leaving, the employee is committed to staying with the organization.


Finally, normative commitment is experienced when an employee feels obliged in some way to stay with the organization (PSUWC, 2015).  This “sense of obligation to stay” may come from several factors such as feeling required to remain loyal to a company due to personal upbringing, or because an employee may have received some financial benefit in advance (such as tuition support) (Meyer & Allen, 1991, as cited in Mind Tools, 2015).  The obligation may also stem from not wanting to disappoint employers or peers by leaving (PSUWC, 2015).  


One note of importance is that the three types of commitment are not exclusive; “you can experience all three, or two of the three, in varying degrees” (Mind Tools, 2015).  By understanding the three components of commitment and applying some changes to the organization, employers can increase employee engagement thereby promoting a positive environment and worker happiness.


WORLD HAPPINESS REPORT

The World Happiness Report (Helliwell, Layard & Sachs, 2013) measured the happiness and well-being of members of different countries to help guide public policies.  “Happiness is an aspiration of every human being, and can also be a measure of social progress” (Helliwell, Layard & Sachs, 2013).  The idea is that the benefits of happiness affects a person’s well-being and “these benefits in turn flow more broadly to their families, workplaces, and communities, to the advantage of all” (Helliwell, Layard & Sachs, 2013).  Happiness benefits the workplace because it fosters workplace productivity, creativity, and cooperation (Helliwell, Layard & Sachs, 2013), which in turn can promote employees’ engagement and commitment to work and organizations.


Additionally, the World Happiness Report (Helliwell, Layard & Sachs, 2013) shows that the happiest countries are the countries with the best reputations in regard to work/life balance. Countries like Denmark, Norway, Switzerland and Sweden have found a way to build successful businesses that have environments that allow people to think freely and thrive. This ability to become deeply involved in their work, leads employees to have greater organizational commitment. 40% of men in the U.S. work more than 50 hours a week, and are constantly distracted by work as it is pumped directly into their handheld devices. The issue here is that employees have poor work life balance, and this is a top contributing factor to the happiness that is seen in country like Switzerland and Sweden.


Image courtesy of Forbes

When employees are engaged and committed, they are happy.  Happier employees at work also leads to healthy work/life balance.  Employers who put the needs of the employees first can see higher levels of productivity.  Employers “should work on ways to ensure that team members become happy and enjoy their work, without making them feel uncomfortable during the process” (Mind Tools, 2015).


SOLUTIONS

In order for companies to have happy employees, companies must be willing to listen to their employees (Smith, 2013).  Bersin (2014) remarks that companies rated as “Best Places to Work” do not only provide special perks, but they have a ‘soul’ which makes work exciting and energizing.”  Employees do not simply want the simple perks of free lunches, they want to work for a company that understands their unique needs - be it professional or personal.  QualComm, a telecommunications company in San Diego, CA, understands this need.  They have not only made employee engagement a high priority, but because of their interest in their employees, their voluntary turnover rate has dropped from 5% to 3.9% in one year (Southgate, 2002).  QualComm’s most important engagement topic is  treating its employees well.  They have implemented excellent benefits packages, as well as on-campus fitness centers (some with Olympic-sized pools) (Southgate, 2002).  But in addition, there are several events orchestrated throughout the year for employee socialization, and QualComm stresses the importance of internal communication and staff development (Southgate, 2002).  Flexible work hours are appealing to many employees as well, as on employee is quoted as saying he takes two hours every Tuesday to take a figure skating class (Southgate, 2002).  


There are also simple ways to impact organizational commitment in a retail environment. Retail turnover is now around 5% per month, which if extended out over a year could mean some large retailers, such as Wal-Mart, could lose up to 60% of their workforce in a year (Lariviere, 2015). Employers who spend more on labor (staff their stores with more employees) rather than keeping staff thinned out, generally turn a higher profit, possibly as high as a 4.2% increase if properly executed (Fisher, 2010).  This is because shelves are stocked, employees are better able to serve their customers, and are much less overwhelmed at work. This also leads to a better work life balance, as employees aren’t stretched thin, which contributes to better organizational commitment and lower turnover.


Companies and organizations want to set goals in order to ignite their workforces towards engagement.   According to the Gallup poll (Gallup, 2014), when organizations focused on working towards lowering turnover, minimizing safety issues, shrinkage (theft) and absenteeism, it helped to provide the framework for change in the right direction.  Surveys are a good tool to help organizations gauge employees’ levels of engagement.  Of course organizations should be willing to work on the issues that employees are wanting attention paid.  Once a plan is designed it should be implemented at all levels of the organization.  The selection of managers within the organization is an important key, they empower employees and set the tone for leadership.  Most importantly developing realistic goals for organizations should be the number one concern (Gallup, 2014).  

 Start and finish line on athletics track

Image by digitalista via BigStock


Moving into the future, organizations globally should push for more engagement and organizational commitment from their employees.  Two companies that have successfully executed an engagement and organizational commitment plan amongst their employees include:  Caterpillar construction-equipment maker and Molson Coors Brewing Company.

 

Vance (2006) discusses how Caterpillar, the construction-equipment maker, has garnered impressive results from its employee engagement and commitment initiatives, including:

    • $8.8 million annual savings from decreased attrition, absenteeism and overtime (European plant);  

    • a 70% increase in output in less than four months (Asia Pacific plant); and

    • a $2 million increase in profit and a 34% increase in highly satisfied customers (start-up plant).

Engagement and commitment has paid off for  Molson Coors Brewing Company.  Their initiatives have produced:

    • engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost time safety incident;

    • Molson Coors Brewing Company has saved $1,721,760 in safety costs in one year alone (2002); and

    • the difference in performance-related costs of low-vs-high engagement teams totaled $2,104,823 (Vance, 2006, p.1)


www.co2partners.com


SOLUTIONS REVIEW

Companies can increase employee commitment and engagement by ensuring the following:

  • Listen to Employees

  • Make work energizing and exciting

  • Help balance work and personal life

  • Employee safety

  • Encourage employee socialization

  • Treat employees well overall


CONCLUSION

As we see from the information presented above, it pays for companies to have committed and engaged employees. It can cut down on work related accidents and improve employee motivation. This is something every company should want! Overall, companies produce more money when they have employees that are committed to the company and want to be there. It really is a much bigger deal than most employers probably realize. As stated previously, in order for companies to have happy employees, companies must be willing to listen to their employees (Smith, 2013), it is imperative for companies to realize that the employees are people with lives outside of work who have needs very different from one another. Once a company realizes this, their chance of having committed and engaged employees greatly increases. We have seen many examples of how beneficial it is for companies to listen to their employees, care about them on a personal level, take their personal life into consideration and to be sure to take the time to make work energizing and exciting. If an employee experiences these things in a workplace they will be more productive, as we see from all of the cases mentioned before. In conclusion, commitment and engagement is directly related to how the employers motivate their employees. 



REFERENCES

Bersin, J. (2014, Mar 3). Why companies fail to engage today’s workforce:  The overwhelmed employee.  Forbes. Retrieved April 8, 2015, from http://www.forbes.com/sites/joshbersin/2014/03/15/why-companies-fail-to-engage-todays-workforce-the-overwhelmed-employee/.


Crabtree, S. (2013). Worldwide, 13% of employees are engaged at work:  Low workplace engagement offers opportunities to improve business outcomes.  Gallup. Retrieved April 9, 2015, from, http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx.


David, S. (2013). A Study of Engagement at Work: What drives Employee Engagement? European Journal of Commerce and Management Research (EJCMR).  Retrieved April 11, 2015, from http://www.academia.edu/4362436/A_Study_of_Engagement_at_Work_What_drives_Employee_Engagement.


Deloitte LLP (2014). Global Human Capital Trends 2014. Bersin by Deloitte. Retrieved April 9, 2015, from http://marketing.bersin.com/deloitte-global-human-capital-trends-2014.html.


Fisher, M., Krishnan, J., & Netessine, S. (2010, February 23). Are Your Staffing Levels Correct? Retrieved April 10, 2015, from http://www.whu.edu/fileadmin/_migrated/content_uploads/ICR082_4B_website.pdf


Five Ways to Improve Employee Engagement Now. (2014, January 7). Retrieved April 12, 2015, from http://www.gallup.com/businessjournal/166667/five-ways-improve-employee-engagement.aspx


Helliwell, J.F., Layard, R. & Sachs, J.D. (2013). World Happiness Report 2013. Sustainable Development Solutions Network. Retrieved April 9, 2015, from http://unsdsn.org/wp-content/uploads/2014/02/WorldHappinessReport2013_online.pdf.


Lariviere, M. (2015, March 19). Higher Wages and Employee Turnover. Retrieved April 10, 2015, from https://operationsroom.wordpress.com/2015/03/19/higher-wages-and-turnover/


Mind Tools. (2015). The Three Component Model of Commitment: Improving Commitment and Engagement.  Retrieved April 10, 2015 from:

http://www.mindtools.com/pages/article/three-component-model-commitment.htm


Pennsylvania State University World Campus (PSUWC) (2015). Lesson 12:  Work and Organizational Commitment:  Am I attached to the organization?  PSYCH484:  Work Attitudes and Motivation. Retrieved April 10, 2015, from https://courses.worldcampus.psu.edu/sp15/psych484/001/content/lesson12/lesson12_01.html.


Smith, J. (2013). The 10 companies with the biggest jumps in employee happiness. Forbes.  Retrieved from:

http://www.forbes.com/sites/jacquelynsmith/2013/08/22/the-10-companies-with-the-biggest-jumps-in-employee-happiness/.


Southgate, D. (2002). A best-of-breed in staff retention. TechRepublic.  Retrieved from: http://www.techrepublic.com/article/a-best-of-breed-in-staff-retention/


Stephens, J. (2015, January 16). Engaging Employees, One Step at a Time. Retrieved April 11, 2015, from http://www.entrepreneur.com/article/241865.


Stirling, J. (2008, March 22). Cultivate commitment. Weekend Australian, 9.


Vance, Ph.D., R. (2006, January 1). Employee Engagement and Commitment. Retrieved April 12, 2015, from https://www.shrm.org/about/foundation/research/Documents/1006EmployeeEngagementOnlineReport.pdf

 

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