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Can Job Engagement Remedy High Turnover In A

Company?
Solutions to Make You An Employer of Choice
Megan Wright
Keller Graduate School of Management

GM 591: Leadership and Organizational Behavior

Dr. Arnold Witchel
April 15, 2012

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Can Job Engagement Remedy Turnover in A Company?

A Review of the Literature

The organization that will be the topic of discussion in my final project is LP

APAC. Established in 1946, LP is one of the largest independent accounting and
business consulting firms in the region, with over 160 personnel employed.
As a full-service accounting and business consulting firm, LP continually
expands its core services to meet its clients changing needs. Their services include
accounting, audit and assurance, human resources consulting, estate and financial
planning, outsourced controllership, strategic planning, risk advisory consulting, tax
planning/compliance and profitability enhancement.
LP is recognized as a regional firm with national capabilities and also, it has
been voted Best Places to Work by its employees.
In December 2010, the company purchased a Houston based accounting firm
and the merger came complete with more than thirty staff members. Although
mergers have their pros they also have their cons such as dissatisfaction among
current staff as positions will be limited and management has to make decisions as
to which staff will hold what positions after the transaction is complete.
I joined LP in February 2011 and I was hired to be a Human Resources liaison
and Payroll Clerk in the Human Resources division of the company. When I came on
board we had roughly 220 employees, employee morale was really high, and it

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seemed that all employees were happy and the company was on its way. Since
February 2011 we have experienced high employee turnover and have lost 41
employees and of those 14 left for better employment opportunities in the
accounting industry.

Since the merger took place employee morale seems to have taken a major
turn and the once happy employees arent displaying the positive attitude anymore.
LP has many qualified hardworking professionals but these days its hard to
retain these employees. Employees with many years service and who have been
loyal to the company for years are making a decision to leave. Employee exit
interviews state every reason from trust to better job opportunities. Personally, I
feel LP is a wonderful company to work for and they do reward their employees
when it comes to performance reviews but Im afraid its going to take more.
Preliminary Problem Statement
LP currently has a major problem of low retention and high turnover. The
employees are not feeling as if they are an asset to the company; instead they are
having trust issues. With the help of the human resources department and directors
we can turn this negative into a positive. First I think we can promote internally and
then think about filling lower level positions externally if needed. Ultimately
employee engagement is an issue and employee turnover is a problem. Getting to
the essence of the matter will increase productivity, morale, absenteeism and also
improve retention. If this problem is not addressed Im afraid we are going to
continue to lose employees and the workload will only be greater as new business
continues to come through the doors.

Can Job Engagement Remedy Turnover? 4

I would like the topic of my research to be how to improve retention rates
that will have an impact on higher productivity and lower turnover. The TCO I will
address is given knowledge of group dynamics and decision making, apply
this knowledge to a case analysis to diagnose an organizational problem
and recommend solutions.
This literature review will consider whether job engagement is a promising
approach for solving high turnover in a company by responding to the following
questions:

1.

What is employee engagement?

2. What are disengaged employees?

3. What can be done to make a company an employer of choice?

Possible Solutions
I would like to see my company attempt these possible approaches:

Create good working relationships between employees and

managers-Bad bosses are the number one reason some employees resign.
Good communication and providing encouragement for a job well done.
Good bosses acknowledge the work of others and genuinely care about their
employees

Providing career development-Better career development and greater

challenges

Flexible Work Environment- Employees want to decide when/where they

work in order to balance both their personal/professional lives.

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If todays managers take ten minutes to talk with employees, tell them they are
doing good jobs, and explore their career interests; organizations will be closer to
securing future performance rather than pursuing new employees (Gordon & Lowe,
2002, p).
Analysis of Employee Engagement
What is employee engagement? Employee engagement is personified by the
passion and energy employees have to give of their best to the organization to
serve the customer. It is all about the willingness and ability of employees to give
sustained discretionary effort to help their organization succeed. (Cook, 2008, p. 3)
An employee should be totally committed to the organization believing in what it
stands for and being prepared to go above and beyond what is expected of them to
deliver outstanding service to the customer. When employees feel unappreciated
and disengaged this is when senior management along with human resources
should come in and develop an employee engagement strategy. Allow the
employees the chance to feed their views and opinions upwards are the most
important driver of engagement for an organization. (Cook, 2008, p. 211) A great
idea would be to do Upward Evaluations (in the form of performance evaluations)
and allow all staff to evaluate any employee on the manager, senior manager, or
vice president level. This gives the employee the opportunity to voice their opinions
on what they see needs to be changed in the company and even to sing the
company praises.
The number one complaint at my firm is being thrown into the job with no
formal training or no career shadowing. According to one survey 89 percent of

Figure 1-1. Why people leave: what managers believe vs. the reality.
Source: Saratoga Institute research, 2003.
89% of managers believe employees leave for more money. 11% of managers
believe employees leave for other reasons. 12% of employees leave for more
money. 88% of employees leave for reasons other than money.

Can Job Engagement Remedy Turnover? 6

managers said that they believe that employees leave and stay mostly for the
money. (Branham, 2005, p. 3) However employees leave

other reasons not geared toward money but to the work environment, the job, or
the manager. (Figure 1-1)
Disengaged Employees
Disengaged employees aren't necessarily bad employees, but they just do
what's necessary to get their jobs done. They typically don't take part in offering
suggestions for improving the workplace. Disengaged workers employees are
destructive to morale and revenues for those are the employees who disrupt,
complain, have accidents, steal from the company, and occupy the time and
attention of managers that would be better spent dealing with other workers.
(Branham, 2005, p.4) Its important for companies to remember that some turnover
for their respective companies is good turnover. Its a very unwise idea to struggle
to reengage an actively disengaged worker. Its more courageous to terminate
employment and cut your losses. The main cause for voluntary employee turnover
and disengagement in any company is an economic one. Youll see higher profits,
better safety records, more success in lowering turnover, and much higher
customer ratings. Turnover is a serious problem for small or medium size
companies as certain employees carry broad responsibilities and have strong
personal relationships with key customers. This can sometimes mean losing big
clients because they want to follow that employee that left to their other employer.
Financial News, March 2001, as cited by Accord Management Systems (2004),
reveals that disengaged employees are more likely to cost their organization.
According to the report, Employees who are disengaged:

Miss an average of 3.5 more days per year

Are less productive

Cost the economy $292 to $355 billion per year

Engaged Employees

Employee Engagement is first and foremost a management philosophy based

on the idea of including the right people in the right decisions at the right time in
the right way. (Smythe, 2007, p.5) At work it is not just up to the boss or supervisor
to engage their people in the decision making process. An employee needs to take
risks by participating and using their own creativity and ideas. Its a two-way street
where both parties take risks to cross the boundary lines, but its the manager that
sets the stage to make it safe for workers to risk taking the initiative or contributing
their ideas.
Managers must do five things to create a highly engaged workforce. (Markos,
Sridevi, 2010, p.91) They are:

Align efforts with strategy

Empower

Promote and encourage teamwork and collaboration

Help employees grow and develop

Provide support and recognition where appropriate

The most engaged workers are: self-employed, bosses, artisans working their
own agenda, people in self-directed teams, employees with bosses who know when
to push and when to let people get on with it, taxi drivers, train engineers, and
pilots (Smythe, 2007, p.24)

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Today what people want from work is the space to think things through for
themselves and add a little bit of their own creativity and their own insight to their
daily work, to the new brand, the customer experience, and to the continuous
change and major transformation processes (Smythe, 2007, p.14)
Job related burnout rose from 39 percent in 1993 to 53 percent in 1998. In 1998
absenteeism rates, an early warning sign of turnover hit a seven-year high, up a
whopping 25 percent from 1997. The reason cited: burnout and work-family
conflicts have increased the # of unscheduled absences. (Branham, 2000, p. 24)
The Employer of Choice
Now the question many employers are asking at this point is what it will take
to become an employer of choice. The first thing I think of when this comes to
mind is lets research other companies in my industry and see what they are
offering or what they are doing differently. The correct answer would not be to
follow the blueprint of another company. The strategies of one company may or
may not fit the culture of your company.
What makes a company attractive is asking new applicants what they desire,
having a committee to track new hires through their first few weeks of work, fixing
small instances before they become big problems and last allowing managers to
figure out the best way to motivate their workers. As children learn differently
employees do as well. A teacher must address all three learning styles: tactile
(touch)/kinesthetic (movement), visual (seeing), and auditory (hearing) during a
lesson. A manager must be able to have different approaches to motivating their
employees. Motivation is the key to the employees happiness; being generous with
praise every chance you get counts.

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Are people a companys most important asset? There are companies that
treat their employees like family and with respect, with an attitude and philosophy
of nurturing and caring.
Mort Meyerson, chairman and CEO of Dallas based Perot Systems; he wrote an
article for Fast Company magazine, Everything I thought I knew about leadership is
wrong, he confessed that he spent years at EDS bullying his people into eighty
hour workweeks, emphasizing profit-and-loss to the exclusion of other values and
creating a culture of destructive contention. (Branham, 2000, p.24) Some
companies see their employees as factors of production which entails costs:
salaries, benefits, and overhead instead of investments. Many companies become
successful industry leaders by investing time and also money into their people.
Employees ultimately want employability to grow, opportunities to participate in
decision which affect them or to which they add value, and last ethics and values
they can identify with.
What employers can do is invest in team building and interpersonal skill training
classes to help workers get along with each other. Offering a small monetary bonus
($15) for when teams receive compliments from clients (either verbally or written).
Another good idea if monetary bonuses are too cumbersome is to give a Starbucks
gift card, gas gift card, or even a half day off on the company certificate.
In my office every employee could use an ergonomic chair as all of our work is
conducted at the desk and more flex time and the option to telecommute might
make believers out of our staff.
Organizational Commitment
Organizational commitment is most commonly defined in terms of an individuals
identification with the organizations goals and values, willingness to exert effort for

Can Job Engagement Remedy Turnover? 10

the organization and desire to continue as part of the organization. (Roberts and
Davenport, 2002, p.21) Job engagement is closely related to organizational
commitment but they have important differences.
Those who are high in organizational commitment say that:

They would recommend the company to a close friend as a good place to

work;

They are proud to work for the company; and

They think the company is doing what it takes to be a leader in the industry.

In fact, in many organizations, job engagement and organizational commitment are

closely related often enough that it makes sense to talk about a more general
outcome-------organizational engagement------that combines key elements of job
engagement and organizational commitment. (Roberts and Davenport, 2002, p.22)
A company can also increase employee loyalty and decrease turnover through clear
and frequent communication. When a companys employees know what is going
on, they feel more included and trusted.
Offering continuous training (CPEs) and tuition reimbursement is a big plus for any
company. Providing training is very important as it is an investment in employees,
which they see as money in the bank. When you invest in your workers, they are
more apt to invest in your company.
Loyalty to your company mission doesn't come easily. You must build it one
employee at a time. And building loyalty is much like building trust: It's easy to tear
down; the challenge is to build it up and keep it maintained. Determine your

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company's higher purpose. Don't think of crunching numbers and completing audit
engagements; instead think of providing accuracy, reliability and peace of mind to
the clients. Once you understand your company's higher purpose, share it with
employees and applicants. Post company values in your employee manual, vacancy
notices, brochures, and on intranet and Web sites.

Research/Results
As workload increases employee morale tends to go down. As employee morale
goes down, employee turnover goes up. The snowball effect (reinforcing loop) has
started rolling. Please see loop R1 (see Figure below). Anger, fear and anxiety
levels rise (Am I next?). This further reduces morale and leads to additional
turnover and increased workload for remaining employees (loops R2 and R3).
People voluntarily leaving the workforce the organization to start replacing
employees. Time and energy needs to be put into the hiring process and the
training of new employees. You ask why? Because the new employees did not
come in ready to work and will not be as productive as the employees that left. This
in turns gives more work to employees as the managers push their work to other
employees. Increasing workload and adding more momentum to the snowball
which may now resemble an avalanche (loop R4). As word gets around many
recruiters find organizations where this is happening and target the employees and
entice them to leave.

Can Job Engagement Remedy Turnover? 12

You cant just ask employees to do more with less and expect morale to stay high.
The first key is to have a structured approach to improvement that will lead to
higher levels of performance. A second key that will help the organization is to
create a shared vision so people understand an organizations direction and role in
the journey. (Gibbons, 2000, p. 22)
Summary and Conclusions

This final project began with an overview of some of the debates about the
nature and
effectiveness of employee engagement. It put forward the proposal that
there is a

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great deal of pessimism about the impact of job engagement because of the
varying degrees of success in implementing engagement initiatives in the
workplace. Some critics have raised questions about whether employee
engagement or employee loyalty is a matter for serious thought. Moreover,
some critics have argued that employee engagement initiatives do work and
it does in fact reduce turnover. Using data from several different sources, this
paper offered a thorough examination of the relationship between the
presence of employee engagement and organizational commitment in
business organizations and assessments the increase of employee
performance, employees being more productive, and willing to initiate
change.
These results from my findings suggest that even after taking other factors
into consideration, job engagement is associated with such positive
outcomes as enhanced business performance and greater customer service.
Such results go a long way toward dispelling the notion that job engagement
does not matter.
My findings in my paper shows that implementation of job engagement can
lead to very positive outcomes.
They may increase productivity because they bring diverse people together
who differ in
the talents that they bring to the workplace. Job engagement does enable
such employees
to work more effectively and productively. Training programs may also lead

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employees to appreciate the efforts of their co-workers who make different
kinds of
contributions to the organization. Such efforts may also help employees
better
understand how and why various contributions to an organizational effort
such as employee engagement initiatives are to be rewarded and, therefore,
to have a better sense of how a more positive work environment in the
company will work and why they are very much needed and it will be a
positive for both the employees and the organization. Future research will
need to examine the dynamics that lead employee engagement programs to
generate such positive outcomes as enhanced employee performance and
greater customer service. New research will also need to explore other
outcomes that grow out of employee engagement initiatives.

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References
Branham, Leigh F. (2005). 7 Hidden Reasons Employees Leave: How to Recognize
the Subtle Signs

and Act Before Its Too Late

Branham, Leigh F. (2000). Keeping the People Who Keep You in the Business:
Twenty Four Ways to

Hang on To Your Most Valuable Talent

Cook, Sarah (2008). Essential Guide to Employee Engagement: Better Business

Performance

Through Staff Satisfaction

Gibbons, Steve. (2000, March/April). Down To A System: Keeping Employee Morale

and Retention

High. The Journal for Quality and Participation, 23, 2, 20-22

Markos, Solomon and Sridevi, M. Sandhya (2010, December). Employee

Engagement: The Key To Improving Performance. International Journal of Business
and Management, 5, 12, 89-96

Roberts, Darryl and Davenport, Thomas O. (2002). Job Engagement: Why It Is

Important And How

To Improve It. Employee Relations Today, 21-29

Can Job Engagement Remedy Turnover? 16

Sheridan, John E. (1992, December). Organizational Culture and Employee
Retention. Academy of

Management Journal, 5, 1036-1056

Smythe, John (2007). CEO: Chief Engagement Officer: Turning Hierarchy Upside
Down to Drive

Performance