How Employee Engagement Affects Business and Employee Performances?

(Empxtrack, 2016)

Employee Engagement is a new concept attracting more importance in recent years. It considers employees as the key to the organization’s success. Employees engagement with organization can depends on many drivers. Today, employee engagement is seen as a powerful tool of competitive advantage. It is management’s responsibility to ensure that employees perform at work rather than just they come to work. In other words, employees must come to work not only by physically but also by mentally and emotionally (Bedarkar, 2014).

Many researches have tried to identify drivers leading to employee engagement. According to Mani (2011), employee welfare, empowerment, employee growth and interpersonal relationships are the main drivers. Penna (2007) researchers defined a new model “Hierarchy of engagement” which is like Maslow’s need hierarchy model. Pay and working conditions are the basic needs of an employee. Once satisfied, then the employee looks for learning and development opportunities. Then possibility for promotion and then for leadership and respect. Finally, employee looks to an alignment of value-meaning, which is related to a true sense of connection, a common purpose and a shared sense of meaning at work.

(Vaughn, 2018)

Most drivers that lead to employee engagement are non-financial. Therefore, organizations can easily reach the desired level of engagement with less cost. Financial factor can be a motivator. Therefore, it is important to not to forget financial aspect which can be easily linked with performance of the employee (Markos, 2010). It is also identified that employee engagement results in employee performance which can further lead to organizational performance. Therefore, true employee engagement leads to better financial performance of the organization.

If an employee engages to work, he or she will feel an ownership, and come work to perform. Job will not be a burden and produce a greater result in more efficient manner (Robertson-Smith and Markwick, 2009). Engagement also provides mindfulness, motivation, creativity, authenticity, non-defensive communication, ethical behavior (Kahn 1990). Employees would become advocacy of organization and retain with organization. In other words, organization will enjoy a better employee retention, employee productivity, and ultimately business success (Robertson-Smith and Markwick, 2009). Similar research by Harter et al. (2002) reveals that employee engagement will result in better customer satisfaction, productivity, profit and employee turnover, which would pave the path to business success.

References

Bedarkar, M. and Pandita, D. (2014) ‘A study on the drivers of employee engagement impacting employee performance’, Procedia - Social and Behavioral Sciences, 133(2014), pp. 106-115.

Empxtrack (2016) Did you notice changes in employee engagement in 2015?. Available at: https://empxtrack.com/blog/did-you-notice-changes-in-employee-engagement-in-2015/ (Accessed: 31 December 2019).

Harter, J.K., Schmidt, F.L. and Hayes, T.L. (2002) 'Business unit level relationship between employee satisfaction, employee engagement, and business outcomes: a meta analysis', Journal of Applied Psychology, 87(2), pp. 268-279.

Kahn, W.A. (1990) ‘Psychological Conditions of Personal Engagement and Disengagement at Work’, Academy of Management Journal. 33(4), pp. 692-724.

Mani, V. (2011) ‘Analysis of Employee Engagement and its predictors’, International Journal of Human Resource Studies’, 1(2). Pp. 15-26.

Markos, S. and Sridevi, M. (2010) ‘Employee Engagement: The Key to Improving Performance’, International Journal of Business and Management, 5(12), pp. 89-96.

Penna (2007) Meaning at Work Research Report. Available: https://www.ciodevelopment.com/wp-content/uploads/2011/10/2006-10-08-08-36-31_Penna-Meaning-at-Work-Report.pdf (Accessed: 31 December 2019).

Robertson-Smith, G. and Markwick, C. (2009) ‘Employee Engagement: A Review of Current Thinking’, Institute for Employment Studies.

Vaughn, G. (2018) How to Measure Employee Engagement for a Better Workplace. Available at: https://medium.com/@zef.fi/how-to-measure-employee-engagement-for-a-better-workplace-9daca615f64d (Accessed: 31 December 2019).

Performance Management at my organization

(Marr, 2019)

It is important to identify the difference between performance management and performance appraisal. Aguinis (2013) defines the Performance management as a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization. Performance appraisal means evaluating the employee once a year. Neither it provides a feedback about employee’s performance nor any training or coaching to increase the performance of the employee (Daoanis, 2012). Simply, performance appraisal is an important step in performance management system.

Performance Management at my Organization….

Each year April, we identify number of goals which need to be accomplished during that fiscal year. At least one development goal and five operational goals needs to be identified, and weightage must be assigned for each goal, and total should be 100% for both development and operational goals. Then these goals are reviewed by the manager and approved.

In November, we perform the mid-year review my analysing the completion percentage of each goal. Then this completion percentage is reviewed. By end of the fiscal year, we perform the final performance appraisal and, final completion percentage or rating is given by us.  Manager then gives his/her rating.

Drawbacks in existing Performance Management system:

1. I also look after Engineering and design issues that arise time to time. Sometimes we get several issues during the day and, most of time, we don’t get anything. Some issues need several days to solve, but most can be solved in few hours. Issues are always not homogeneous; therefore, existing performance management system does not capture these variations.
2. Individual goals are not directly related to organization’s goals. There are no internal mechanisms to capture some of the tasks we do. Therefore, goals which can only be measured are identified as goals in the performance management system.
3. We believe that current performance management system is an utter waste of money and time and does not capture the true performance.
4. HR dept has developed some scales (eg: excellent, very good etc) and advised managers to limit the number of employees in each scale to predefined percentages. Therefore, every employee can’t reach the top level and manager can favour individual employees by giving higher rating.
5. No feedback system available regarding employee’s performance.
6. No coaching is available to improve the performance.
7. Final appraisal rating is linked to following year’s salary increment. Since this increment is very small, employees do not bother about rating they get. 

Conclusion:

Holland (2006) argues that only 3 in 10 employees believe that their performance was improved by organization’s performance review systems. I believe that performance management system at my company is poorly implemented. It does not make any positive contribution to employee performance and leads to several negative outcomes such as increased turnover, wasted time and money, decreased motivation to perform, varying and unfair standards and ratings etc (Aguinis, 2013).

References:

Aguinis, H. (2013) Performance Management. 3^rd Edition. New Jersey: Pearson.

Daoanis, L. (2012) ‘PERFORMANCE APPRAISAL SYSTEM: It’s Implication To Employee Performance’, International Journal of Economics and Management Sciences, 2(3), pp. 55-62.

Holland, K. (2006) Performance reviews: Many need improvement. Available at: https://www.nytimes.com/2006/09/10/business/yourmoney/10mgmt.html (Accessed: 23 December 2019).

Marr, B. (2019) What Is Performance Management? A Super Simple Explanation For Everyone. Available at: https://www.bernardmarr.com/default.asp?contentID=770 (Accessed: 23 December 2019)

What is Lean Manufacturing?

(Tiwari and Wanjari, 2010)

As per Kilpatrick (1997), lean manufacturing increases capacity, quality, and productivity while reducing inventory and lead time(s). Several features of Lean techniques were first introduced at the Ford production plants in the 1920s. This was mentioned in the books ‘My life and work’ and ‘Today and tomorrow’, written by Henry Ford himself. According to Ford, focus on functions which add value to customer while reducing material, time and motion wastages.

The book “The Machine that Changed the World” describes about the Toyota Production System and the term “Lean production” was firstly appeared. Lean approach allowed Japanese companies to reduce the cost and increase the quality (Korchagin, Deniskina, and Fateeva , 2019).

Korchagin et al. (2018) stated that the efficiency of lean process is based on the eliminating unnecessary activities or in other words wastes in the manufacturing process. This would save cost and optimize the production cost and resources.

Korchagin, Deniskina, and Fateeva (2019) identifies following types of Wastes

1. Wastes due to overproduction (Eg: Manufacturing more than the demand or what is required for the next stage of the process)
2. Time waste due to waiting (Eg: short breaks in between working hours; waiting for people, materials, equipment etc)
3. Wastes due to excessive processing (Eg: due to tool’s poor quality, design mistakes etc.)
4. Wastes due to unnecessary movements (Eg: movement of people, tools or equipment that does not add value to the final product)
5. Wastes due to inventory (Eg: high stock level of raw materials or finished product)
6. Wastes during transportation (Eg: Unnecessary long distance transportation of materials etc.)
7. Wastes due to the release of defective products (Eg: Additional inspection, replacement etc.)

Following Lean manufacturing techniques, which could be used to reduce or eliminate wastages.

1. Cellular manufacturing

Organizes the entire process into a group (or “cell”), including all the necessary machines, equipment and operators to facilitate small lot, continuous flow production.

(AMIA systems, 2017) 

2. Just-in-time (JIT)

JIT is an inventory system that minimizes inventory by aligning raw-material orders directly with production schedules.

3. Kanbans: A signalling system or scheduling system for JIT production.

4. Total preventive maintenance (TPM): Preventing breakdowns rather than fixing.

5. Setup time reduction: Continuously reducing the machine setup time.

6. Total quality management (TQM): TQM is a continual process of detecting and reducing or eliminating errors in manufacturing. Key components are employee involvement and training, problem-solving etc.

References;
Ford H. (1922) My life and work. New York: Garden City.

Ford, H. (1926) Today and tomorrow. New York: Doubleday.

Kilpatrick, A. (1997) Lean manufacturing principles: a comprehensive framework for improving production efficiency. MSc Thesis. Massachusetts Institute of Technology.

Korchagin, A., Deniskina, A. and Fateeva, I. (2019) ‘Lean and energy efficient production based on internet of things (IOT) in aviation industry’, E3S Web of Conferences, 110, pp. 1-13.

AMIA systems (2017), What is Cellular Manufacturing?. Available at: https://www.amia-systems.com/what-is-cellular-manufacturing/ (Accessed 15 Dec. 2019).

Tiwari, A. and Wanjari, S. (2010), Lean Manufacturing In Apparel Industry. Available at: https://www.fibre2fashion.com/industry-article/5159/lean-manufacturing-in-apparel-industr (Accessed 15 Dec. 2019).