Organizational Culture and Employee Engagement

Introduction

Organizational culture represents what an organisation is and not necessarily what an organisation should have or what it has. It is more sublime and differs from the hype created by terms such as corporate social responsibility. It is made up of the experiences, values, attitudes and beliefs and is defined as “the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization” (Scott, 2004). It is difficult to quantify and measure and has often been referred to as the sum of all beliefs and shared norms in an organisation (Scott, 1987).

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Employee engagement goes much beyond doing the job a person is hired to do or ‘I have followed my instructions’ mentality (Zucker, 1987). Rather it enforces employees when they have a choice to go think beyond what is asked for, being highly motivated and enthusiastic about their work and showing a high level of commitment (Barbara, 2004). This paper explores the relation between organisational culture and employee engagement and the positive effect that one has on the other.

Organisation Culture, Employee Engagement and Motivation

Employee engagement and their levels of motivation are closely related and a motivated employee is an engaged employee (Wells, 2001). Mcshane, (Mcshane, 2005) has explained that the three most popular organisational culture theories of motivation are expectancy theory, equity theory and goal setting. The expectancy theory suggests that there are two components that determine the outcomes and valences and these are the effort to performance expectancy and performance to outcome expectancy (Robinson, 2004).

The equity theory explains how people develop perceptions of fairness in the distribution and exchange of resources (Powell, 1991). Goal setting theory is the process of motivating employees and clarifying their perceptions by establishing performance objectives (Osteraker, 1999). Given below is an illustration of different theories.

Content Theories of Motivation.
Figure 1. Content Theories of Motivation (Mcshane, 2005).

The research done by Osteraker (Osteraker, 1999) has concluded that in an organisation, after due course of time, when the employees have assumed that their basic physiological needs are assured, the unfulfilled need of growth becomes very dominant and can be a major de-motivator. Osteraker has argued that when employees face a stagnant future with no appreciable gains or changes in the work profile and designation, they lose motivation and the desire to work more. In other words the employees are not motivated and hence the amount of engagement reduces till it is gone and the organisational culture has to step in and provide the required support.

Nigel (Nigel, 2005) has performed research to answer the question if Herzberg’s theory still holds true in the modern world. The research concludes that repetitive work produces frustration and alienation and if the organisation culture is such that there are no means to address these issues by means of job rotation or change in the work profile, the amount of engagement towards the work reduces and employees do not feel motivated to produce more, be creative and productivity remains at a standstill and may even come down.

According to Reis (Reis et all, 2001) when employees realize that when a certain pattern of high performance does not produce the desired results, the performance to outcome expectancy achieves a negative value and people begin to realize that no matter how much effort they put in, the outcome will not change. In this case, the outcomes are the frustrated needs of the employees who have wage disparity and a routine boring job ahead of them. This considerably reduces their levels of engagement and motivation to work and the organisation culture has failed the employees. King (King, 2004) has suggested that when suggestions made by skilled employees are rejected without consideration, the valence turns negative and employees tend to lose interest in their work and there is loss in motivation.

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The section has examined how organisation culture is linked with employee engagement and how the former needs to support the latter and keep the employees engaged and motivated.

Industry Best Practices and Case Studies

Some examples of how employee engagement is maintained by leading organisations is presented in this section.

Employee Engagement in Japanese Companies

Japanese companies have risen ‘from the ashes of WWII’ and have in many cases overtaken US and European companies in fields such as automobiles, electronics and many others. The Japanese management believe in directly speaking to employees and presenting them with a problem and then asking them to come up with the best possible solution (Womack. 1990).

So what has made Japanese companies be so successful in a wide variety of industries ranging from automotive to electronics? What is the secret to the competitive advantage that these companies have? What kind of organisation culture do they have that keeps employees engaged, makes employees highly motivated and makes these companies the best in the world?

Drucker (1981, 1999) tried to provide answers to these questions first by discarding the concepts of oriental philosophy and Zen that were supposed to explain the Japanese resilience. The author suggested that the main secret lay in engaging employees to their full by sharing best practices in the form of implicit and tacit knowledge and information among the employees and diffusing it to the people who need it. A rigorous mindset, good knowledge of mechanical and electrical engineering that existed from the pre war days and the insight to apply it effectively helped the country to go forward. By extensively reading the works of the author, it is obvious that he is explaining a culture where employees are taught to think and innovate and more important, create a knowledge body that is continuously being recycled and redistributed.

Drucker (1999) again speaks of a national culture that drifted down to organisations and infused the employees to keep them engaged. motivated and filled with a zeal to outdo themselves. Implicit knowledge helps to complete a task such as tightening a screw or repairing the car and the problems and solutions are of fixed type.

Tacit knowledge on the other hand provides an insight into what a customer wants and feels, how the functionality of a product can be made more appealing and so on and the Japanese excel at this form of organisational culture. Nonaka (et all, 1995) have elaborated more deeply on tacit and explicit forms of knowledge and they suggest that Japanese companies give more attention for tacit knowledge creation processes. The organisational culture bring about continuous innovation by creating a link between the outside world and their internal world.

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The success story of Sony Corporation and the innovative Sony Walkman is a best example of employee engagement at work (Takeuchi (2004). Akito Morita, the visionary head of Sony realized the need for a compact and portable cassette player after observing people carrying huge stereo players but micro miniature circuits had not advanced to a high level and diodes were the norm in those days.

Takeuchi suggests that Akito San, called in people from design, production and development and gave then the problem of designing a music system that people could carry in their pockets. The team used techniques like reengineering, brainstorming and Ishikawa diagrams and their cumulative knowledge to create the Sony Walkman, which provided Sony with a tremendous competitive advantage over formidable rivals such as Philips and BPL.

Womack (1990) has written about the famed Toyota Production System that many western companies have attempted to copy and few have succeeded in replicating it. The author has pointed out that this system was not the work of a single person or a single team but teams of a large number of people and in fact ‘an army of employees engaged themselves to improve the system’ and it represented an organisation culture in which employees were engaged to the fullest and this created the world famous system.

Fang (2003) speaks of the training and knowledge transfer process to workers that engages them and imbibes in them with a spirit of innovation so that a trained worker not only follows processes but thinks of continuous ways in improving the existing process and this is tacit knowledge. Awazu (2005) says that the concept of quality becomes a part of the organisation culture and imbibes all employees whether he works in Japan, India, Brazil or Mexico. Liker (2003) speaks of knowledge networks in the Toyota Company where informal employee tacit knowledge networks have been created with the express intention of providing ready solutions to people.

This is the organisational culture of the Japanese that has kept employees engaged, keeps them motivated and has made the Japanese to excel at whatever they do.

Employee Engagement in Indian IT companies

Indian Information Technology companies are the leading companies as far as IT services are concerned and Indian companies such as Infosys, Wipro, Patni and others have risen up from nothing till they have managed to capture the global IT development market.

Kadapa (2006) has written about the practice of knowledge management that is practiced in these companies and he has defined it as a ‘cooperative practice that is fully employee driven and has the main goal of knowledge sharing to reduce lead time of delivery’. Fox (2001) says that such companies have fostered an organisation culture where employees are engaged not only in their work and project deliveries but a culture is created where they are encouraged to share what they have learnt. Since programming and creating applications is a new field, each customer and client that places an order asks for a made to order application.

This field is different from say MS Office that is packaged and sold as a product. What the Indian IT companies do is to build new application, write new code for each client. Many problems are encountered during the coding and the testing process as defects and bugs are fixed and new workarounds are devised. Heskett (1994) points out that the organisational culture in such organisations is such that it allows each employee to participate in knowledge sharing and relive and relate the experiences. The companies have created a KM portal where their learning’s are hosted and indexed according to the taxonomy and can be searched with keywords.

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Almost all employees voluntarily participate in this movement and upload their experience and details of what they faced in a project and how they solved it. These contributions are not anonymous but carry contact details of the employee who has contributed and thus these employees gain recognition and they are given rewards and gifts when their works receive maximum ‘hits’.

Schlesinger (1991) points out that such practices help employees some relief from the tedious and stressful work and increases their engagement. Such employees remain highly motivated and their contribution to the projects and work keeps pace with the demand.

Converging Organisation CULTURE AND Employee Engagement

Other than the individuals personality, the organisation culture plays a very important role in creating engaged employees (Schlesinger, 1991). Engaged employee display some typical behaviours and they are: belief in the organisation; desire to work to make things better; understand the business context and the getting the bigger picture; respectful of, and helpful to, colleagues; willingness to ‘go the extra mile’ and keeping up to date with developments in the field (Rowley, 2004). The main issue then is what are the drivers to converge organisation culture and to increase employee engagement?

There are some building blocks in the organisation culture that act as drivers to build and increase employee engagement and they are: good quality line management; two-way communication; effective internal co-operation; a development focus; commitment to employee well being and clear, accessible HR policies and practices, to which managers at all levels are committed. Please refer to the following illustration that shows the drivers (Robinson, 200).

Organisational Culture Drivers for Employee Engagement.
Figure 2. Organisational Culture Drivers for Employee Engagement (Robinson, 2004).

As shown in the above figure, all the factors lead to one common theme and that is ‘feeling valued and involved’. So the management needs to treat the employees with respect that is due to them and ensure that they feel valued. This is the major driver for employee engagement (Robinson, 2004). These are briefly explained as below:

Opportunities for Personal Development: Organizations with high levels of engagement provide employees with opportunities to develop their abilities, learn new skills, acquire new knowledge and realise their potential. When companies plan for the career paths of their employees and invest in them in this way their people invest in them (Porter, 1998).

Effective Management of Talent: Career development influences engagement for employees and retaining the most talented employees and providing opportunities for personal development (Watson, 2002).

Clarity of Company Values: Employees need to feel that the core values for which their companies stand are unambiguous and clear (Watson, 2002).

Respectful Treatment of Employees: Successful organizations show respect for each employee’s qualities and contribution regardless of their job level (Robinson, 2004).

Company’s Standards of Ethical Behaviour: A company’s ethical standards also lead to engagement of an individual (Heskett, 1994)

Empowerment: Employees want to be involved in decisions that affect their work. The leaders of high engagement workplaces create a trustful and challenging environment, in which employees are encouraged to dissent from the prevailing orthodoxy and to input and innovate to move the organization forward (Gremler, 2000).

Image: How much employees are prepared to endorse the products and services, which their company provides its customers depends largely on their perceptions of the quality of those goods and services. High levels of employee engagement are inextricably linked with high levels of customer engagement (Gremler, 2000).

Equal Opportunities and Fair Treatment: The employee engagement levels would be high if their bosses (superiors) provide equal opportunities for growth and advancement to all the employees (Rowley, 2004)

Performance appraisal: Fair evaluation of an employee’s performance is an important criterion for determining the level of employee engagement. The company that follows an appropriate performance appraisal technique (which is transparent and not biased) will have high levels of employee engagement (Rowley, 2004).

Other Factors

Pay and Benefits: The company should have a proper pay system so that the employees are motivated to work in the organization. In order to boost his engagement levels the employees should also be provided with certain benefits and compensations.

Health and Safety: Engagement levels are low if the employee does not feel secure while working. Therefore every organization should adopt appropriate methods and systems for the health and safety of their employees (Watson, 2002).

Job Satisfaction: Only a satisfied employee can become an engaged employee. Therefore it is very essential for an organization to see to it that the job given to the employee matches his career goals which will make him enjoy his work and he would ultimately be satisfied with his job (Watson, 2002).

Communication: The company should follow the open door policy. There should be both upward and downward communication with the use of appropriate communication channels in the organization. If the employee is given a say in the decision making and has the right to be heard by his boss than the engagement levels are likely to be high.

Family Friendliness: A person’s family life influences his wok life. When an employee realizes that the organization is considering his family’s benefits also, he will have an emotional attachment with the organization which leads to engagement (Watson, 2002).

Co-operation: If the entire organization works together by helping each other i.e. all the employees as well as the supervisors co-ordinate well than the employees will be engaged (Watson, 2002).

Measuring Organisation Culture & Employee Engagement

Assuming that the management has brought in the required organisation culture to foster employee engagement and even assuming that employee are engaged, the question that arises is how employee engagement can be measured?

Barbara (2004) points out that organisation and employee engagement cannot be quantified in number of units, weight or volume. Organisations use survey instruments such as Gallup polls with questionnaires that employees are required to fill. These instruments have 12 questions for which employees are required to give replies ranging from strongly agree to strongly disagree. Schlesinger (1991) comments that the instruments confirms that engaged organisations compared with least engaged are much more likely to have lower employee turnover, higher than average customer loyalty, above average productivity and earnings.

These are all good things that prove that engaging and involving employees make good business sense and building shareholder value. Harrison (1985) argues that negative workplace relationships may be a big part of why so many employees are not engaged with their jobs.

Some of the questions that are asked include “Do you know what is expected of you at work?”; “Does your supervisor, or someone at work, seems to care about you as a person?”; “At work, do your opinions seem to count?” and so on. Organisations collect all the instruments and analyse the answers to obtain an understanding of the organisation culture and its effect on employee engagement. A sample analysis is shown as below:

Sample results from Gallup Survey.
Figure 3. Sample results from Gallup Survey(Harrison, 1985).

HR experts in the organisation assess the responses and patterns to understand what can be done to improve the organisation culture and improve employee engagement

References

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