This document provides an overview of employee engagement. It begins by discussing why economists may be interested in engagement and its potential benefits such as increased discretionary effort, alignment of interests, and gift exchange. It then examines the importance of employees to corporate reputation according to surveys. The document explores various definitions and conceptualizations of engagement as both an academic subject and a practical craft. It also analyzes measures of engagement over time from different surveys in the UK that show some variation but also stability. Finally, it discusses factors that can influence engagement levels such as leadership, employee voice, stress, and organizational commitment.

1. “If it looks like a duck …”
Employee engagement
in the UK
Mark Beatson
mark.beatson@hotmail.com
@MarkBeatson1
3 March 2015
The views expressed in this presentation are those of the author and do not
necessarily represent those of the CIPD.

2. Why might economists be
interested in employee
engagement?
• Incomplete labour contracts:
• Release of discretionary effort (hours, effort,
attention, imagination) – “going the extra mile”
• Alignment of interests allows delegation and
decentralisation (Dessen (2002))
• Gift exchange (Akerlof (1982))
• Employee insights and knowledge of
customers support innovation
• Effects on external reputation and brand affect
organisational performance
(c) Mark Beatson 2

3. The importance of employees to
corporate reputation
(% of global ‘informed publics’)
20%
36%
37%
39%
41%
52%
55%
57%
60%
64%
67%
Blogger
Board of Directors
Entrepreneur
CEO
Government official
Regular employee
A person like you
NGO representative
Financial or industry analyst
Technical expert in industry
Academic or outside expert
Credibility as a source of
information on a company
27%
29%
29%
30%
33%
40%
40%
43%
50%
52%
54%
55%
56%
58%
59%
61%
Consistent financial returns
Top global company
Innovator
Community benefits
Communicates often
High quality products
Transparent and open
Customers before profits
Importance of actions in
building trust in a company
(c) Mark Beatson 3Source: Edelman Trust Barometer 2014 and 2015.
Breaking news from 2015 Trust Barometer: employees more often seen as trusted source of information
than company CEO on all five dimensions affecting corporate reputation (engagement, integrity, products,
purpose, operations) and ranked first or joint first for engagement, integrity and operations

4. But what is employee
engagement?
An academic
subject of
study?
A craft or
practice?
Loose
Strategies
Behaviours
Oriented to practical
results
Precise
Supported by theory
Focused on the
individual and their
psychological state
Measurable
(c) Mark Beatson 4
“Employee
engagement can
be defined in an
emergent and
working condition
as a positive
cognitive,
emotional and
behavioural state
directed towards
organizational
outcomes” (Shuck
and Wollard
(2009))
“The art of getting
people to believe
what you want
them to believe”,
Jim Whitehurst,
CEO of Red Hat

5. Is it a bird, is it a plane … no,
it’s a duck!
• Is it a “movement”?
• Quasi-revivalist tone (“folk theory” according to Macey and Schneider)
• Protagonists view it as progressive
• Difficult to argue against (objectives, not means)
• Lack of precision/doctrine keeps the “movement” together?
• Is it an “industry”?
• Lots of people make a living from it
• “If we accept the idea that employee engagement is indeed an industry
(not just a simple construct)and that the ‘idea’ of employee engagement
is to find the thing about employees that improves firm performance ,
then we can get past worrying what employee engagement is and
redirect effort. With that goal in mind there appear to be two things
missing from discussion of employee engagement … 1) Engaged in what
behaviours? … 2) What do employees get in exchange for being more
engaged?” (Welbourne, 2011, pp90-91)
• Or do we just know it when we see it (the duck test)?
(c) Mark Beatson 5

6. What is employee
engagement practice?
Describe how a
duck swims!
(c) Mark Beatson 6

7. What is employee
engagement in practice?
• If no single definition, then no single model for
delivery
• “Anything that engages employees?”
• “Anything that gets the numbers up in next
year’s survey”?
• Overlays existing HRM/HIM/HPW working
practices
• Organisations will of course adapt to their own
culture
• What are the staples?
(c) Mark Beatson 7

8. What is employee
engagement in practice?
• MacLeod and Clarke suggest some building
blocks:
• Strategic narrative
• Engaging managers
• Employee voice
• Integrity
• They also suggested employee engagement
strategies operates at two levels:
• Level 1 – taken seriously but compartmentalised
• Level 2 – employees, value and culture at heart of
corporate strategy
(c) Mark Beatson 8

9. What’s the evidence on the
impact of employee engagement?
• ‘Nailing the evidence’ working
group found lots of studies …
some more plausible than
others
• Causality is an issue – does
engagement lead to success
or success mean businesses
can afford engagement?
• What type of evidence would
you like?
• “[Lack of] employee
engagement costs $zillion to
the economy” type statistics?
• Meta-analyses – tend to
suggest causation more likely
from job attitudes to
performance but this is
something difficult to nail down
(if it matters)?
• Organisational case
studies/stories?
53%
41%
23%
8%
28%
One of
best
Above
average
Average Below
average
Don't
know
“To the best of your knowledge how
does your organization’s financial
performance compare to others in its
sector?”
Employee engagement by
financial performance of
organization (% engaged)
(c) Mark Beatson 9
Source: Right Management (2009).

10. Some big claims are made …
-37%
-28%
-48%
-41%
10%
21% 22%
Absenteeism Shrinkage Safety incidents Quality
(defects)
Customer
satisfaction
Productivity Profitability
% difference in performance between top and bottom
quartiles of employee engagement
(c) Mark Beatson 10
Source: Gallup 2012, based on data from about 1.4 million employees in 192
organisations across 49 industries and 34 countries using Q12 measure of employee
engagement.

11. Engagement is high on
employers’ near term priorities
3
9
18
19
22
23
28
28
33
44
50
Other
Improving digital literacy
Reviewing reward/recognition systems
Changing the skills mix of the workforce
Predicting future talent requirements
Employee retention
Recruiting to key vacanices
Business restructuring
Containing labour costs
High levels of employee engagement
Improving leadership skills/capabilities
Top three workforce priorities in the coming year (% of
employers)
Source: ‘Growth for everyone’, CBI/Accenture employment trends survey 2014.

12. What do employers expect to
gain?
8
15
22
42
45
65
80
Improved health and safety
Increase innovation
Income growth
Increase retention
Reduced absence/higher well-being
Increased client/customer satisfaction
Increased productivity/performance
Major benefits of higher levels of employee engagement
(% of employers)
Source: ‘Growth for everyone’, CBI/Accenture employment trends survey 2014.

13. Engaged employees in demanding jobs
find it easier to get through the day
0
10
20
30
40
50
60
70
80
90
Very true TRUE Somewhat
true
Not at all
true
Strongly
agree
Agree Disagree Strongly
disagree
% of employees who strongly agree that ‘my job requires
that I work very hard’
Always/often come home from work exhausted Work under great deal of tension
‘My job allows me to take part in
decisions that affect my work’
‘This organisation really inspires
the very best of me in the way of
job performance’
Source: Skills and Employment Survey 2012.

14. CIPD’s overall measure is stable
– but what is this telling us?
36%
38% 39% 38%
35%
37% 36% 36%
42%
39%
% engaged
(c) Mark Beatson 14
Source: CIPD Employee Outlook surveys. Until Autumn 2013, whole sample estimates; since Spring 2014,
employees only.
If there is no definition
of employee
engagement, can we
have a single
measure?
Plenty of players in
the game.
CIPD’s based on
cluster analysis of its
Employee Outlook
survey.

15. WERS suggests employee engagement
increased between 2004 and 2011?
0% 10% 20% 30% 40% 50% 60% 70% 80%
Managers treat employees fairly
Managers deal with employees honestly
Managers can be relied upon to keep their promises
INTEGRITY
Satisfied with involvement in decisions
Managers good at allowing employees to influence decisions
Managers good at responding to employee suggestions
Managers good at seeking views of employees
EMPLOYEE VOICE
Satisfied with sense of achievement from work
Good relationship between managers and employees
ENGAGING MANAGERS
I am proud to tell people who I work for
I feel loyal to my organisation
I share many of the values of my organisation
STRATEGIC NARRATIVE
2011 2004
(c) Mark Beatson 15
Source: Workplace Employment Relations Studies 2004 and 2011, surveys of employees, GB, workplaces
with 5+ employees. Unless stated otherwise, %s are those strongly agreeing/agreeing with the statement.

16. With the biggest gains in customer-
facing roles
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Managers treat employees fairly
Managers deal with employees honestly
Managers can be relied upon to keep their promises
INTEGRITY
Satisfied with involvement in decisions
Managers good at allowing employees to influence…
Managers good at responding to employee…
Managers good at seeking views of employees
EMPLOYEE VOICE
Satisfied with sense of achievement from work
Good relationship between managers and employees
ENGAGING MANAGERS
I am proud to tell people who I work for
I feel loyal to my organisation
I share many of the values of my organisation
STRATEGIC NARRATIVE
Change 2004-11 (%)
Sales and customer services All employees
(c) Mark Beatson 16
Source: Workplace Employment Relations Studies 2004 and 2011, surveys of employees, GB, workplaces
with 5+ employees. Unless stated otherwise, %s are those strongly agreeing/agreeing with the statement.
‘Sales and customer services’ are major group 7 of the SOC2000.

17. SES implies a more measured
picture
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Completely/very satisfied with communications between
management and employees
My job allows me to take part in decisions that affect my work
(very true/true)
EMPLOYEE VOICE
Satisfaction with relationship with line manager/supervisor
(completely/very)
ENGAGING MANAGERS
I would turn down another job with more pay to keep working for
this organisation
I would take almost any job to keep working for this organisation
Proud to be working for this organisation
Organisation inspires very best job performance
My values and organisation's are very similar
I feel very little loyalty to this organisation (disagree)
I am willing to work harder than I have to in order for this
organisation to succeed
STRATEGIC NARRATIVE
2012 2006 2001
(c) Mark Beatson 17
Source: Skills and Employment Surveys.
Unless stated otherwise, %s are those strongly agreeing/agreeing with the statement.

18. There is some variation in
engagement across the workforce
39%
36%
42% 40%
30%
55%
52%
47%
43%
35%
60%
55%
43%
36% 35%
% engaged
(c) Mark Beatson 18
Source: CIPD Employee Outlook survey, autumn 2014, employees only.

19. But you have to open up the black box …
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Overall job satisfaction
I don't think my employer treats me fairly*
Likely to recommend organisation as an employer
I trust senior managers of organisation
Satisfaction with line manager
I am satisfied with my job role
Organisation gives me opportunities to learn and…
Job is as challenging as I would like it to be
I have positive relationships with my colleagues
How often under excessive pressure in your job?**
Achieve right balance between work and home lives
Highly motivated by organisation's core purpose
Knows very clearly core purpose of my organisation
I will often work more hours than contracted
I will often take on more work to relieve colleagues'…
Positive Neutral Negative
(c) Mark Beatson 19
‘Positive’ responses are strongly agree/agree, ‘neutral’ are neither agree nor disagree and ‘negative’ are
disagree/strongly disagree except for * where scales are reversed (disagreement is positive) and ** where
‘positive’ is feeling under excessive pressure less than once a month or never, ‘neutral’ is 1-2 times a month
and ‘negative’ 1-2 times a week or every single day.
Source: CIPD Employee Outlook survey, autumn 2014, employees only.

20. What are the common barriers?
• If it’s all one-way
• Work-life balance
• Development and progression
• Lack of job control
• Leadership behaviour
• Line managers
• Lack people skills
• Ineffective implementation of organisational HR policies
• HR practices
• Lack of trust
• Lack of effective voice
• Mechanisms
• Confidence to use them
(c) Mark Beatson 20

21. What undermines organisational
commitment?
(% of employees highly motivated by core purpose of organisation)
(c) Mark Beatson 21
70% 68%
59%
52%
36%
27%
“Important information is only shared
with a select few”
Secretiveness
Source: CIPD Employee Outlook survey, spring 2014, employees only.
72%
57%
38%
32%
24%
Strongly
agree
Agree Neither
agree nor
disgree
Disagree Strongly
disagree
“My working relationship with my
supervisor would be described as very
effective”
Poor managers

22. Do appraisals help or hinder
engagement?
• NHS Staff Survey 2010:
overall engagement
score = 3.9 for ‘good-
quality’* appraisals, 3.5
for ‘poorer quality’
appraisals and no
appraisals (West and
Dawson, 2012)
• *‘good-quality’ =
employee felt it useful in
understanding how to do
job, clear objectives set,
employee left appraisal
feeling valued by
employer.
93%
58%
25%
11%
4%
29% 29%
Fairness of performance management process
Engagement by perceived fairness
of performance management
(c) Mark Beatson 22
Source: CIPD Employee Outlook survey, spring 2014,
employees only.

23. Can you have too much
employee engagement?
• Pierce and Aguinis (2013) discuss the Too Much of a
Good Thing Effect
• “The authors posit that, due to the TMGT effect, all
seemingly monotonic positive relations reach context-
specific inflection points after which the relations turn
asymptotic and often negative, resulting in an overall
pattern of curvilinearity.” pg. 313
• They argue it appears to explain many puzzling results
in management science.
• NB. It may also have a little sister, the Too Little of a
Good Thing Effect (see White and Bryson (2011) which
suggests both incremental and threshold effects from
implementation of HRM practices).
(c) Mark Beatson 23

24. Can you have too much
employee engagement?
11%
5%
12%
36%
15%
33%
Regardless of their level of authority,
my supervisor will use whatever
power they have to support me
Regardless of their level of authority,
my supervisor will "bail me out" at
his/her expense
I have enough confidence in my
supervisor that I would defend and
justify his/her decisions
In love with the boss?
Strongly agree Agree
(c) Mark Beatson 24
Source: CIPD Employee Outlook survey, spring 2014, employees only.

25. Can you have too much
employee engagement?
12%
6%
11% 10%
29%
22%
32%
29%
I would be very happy to
spend the rest of my life
with this organisation
I feel as if this
organisation's problems are
my own
I feel a strong sense of
"belonging" to my
organisation
I feel "emotionally attached"
to this organisation
In love with the company?
Strongly agree Agree
(c) Mark Beatson 25
Source: CIPD Employee Outlook survey, spring 2014, employees only.

26. Does organisational commitment
reduce stress?
24% 25%
15% 14%
6% 5%
31%
32%
28%
14%
23%
18%
I will often take on
more work to
relieve my
colleagues'
workloads
I will often work for
more hours than
contracted to
relieve my
colleagues'
workloads
I know very clearly
what the core
purpose of my
organisation is
I am highly
motivated by my
organisations core
purpose
My organisation
gives me the
opportunities to
learn and grow
I am satisfied with
content of job role
Excessive pressure every day Excessive pressure 1-2 times per week
(c) Mark Beatson 26
Source: CIPD Employee Outlook autumn, spring 2014, employees only.

27. What are the consequences of
“too much” engagement?
• Burnout?
• Misallocation of
time –
forgetting the
day job?
• Insufficient
challenge?
• Disappointment
– what
happens if
leaders have
feet of clay?
• Implications for
future jobs –
“once bitten,
twice shy”?
(c) Mark Beatson 27

28. Concluding thoughts
• What does employee engagement mean for the
psychological contract?
• To what extent are there national or cultural
differences in the practice of employee
engagement or its effects (or how it should be
measured?)
• If organisations think they aren’t getting the
benefits they expected, will this be seen as
another management fad? But how do you turn off
employee engagement?
• Many (but not all) indicators of employee well-
being have remained steady or even increased
since the mid 2000s in many (but not all) surveys –
very much evident in WERS – despite what’s been
happening to the economy – does this have
anything to do with employee engagement?
(c) Mark Beatson 28

29. References
• Akerlof, G. (1982), “Labor contracts as partial gift exchange”, Quarterly Journal of Economics, Vol. 97, No.
4, November,
• Dessen, W (2002), “Authority and communication in organizations”, Review of Economic Studies, Vol. 69
pp811-838.
• Dromey, J. (2014), “MacLeod and Clarke’s concept of employee engagement: an analysis based on the
Workplace Employment Relations Study”, ACAS Research Paper 08/14.
• Edelman Trust Barometer (2014) and (2015).
• Gallup (2013), “Engagement at work: its effect on performance continues in tough economic times”.
• MacLeod, D. and Clarke, N. (2009), “Engaging for success: enriching performance through employee
engagement”, report to government.
• Pierce, J. and Aguinis, H. (2013), “The Too-Much-of-a-Good-Thing Effect in management”, Journal of
Management, Vol.39, No. 2, February, pp313-338.
• Ray, R. (2013), “Employee engagement in a VUCA world: a review of current research and its implications”,
The Conference Board Research Report R-1480-11-RR [useful annotated bibliography].
• Rayton, B, Dodge, T. and D’Analeze, G. (2012), “The Evidence”, report of the “nailing the evidence”
workgroup of the Employee Engagement Task Force.
• Right Management (2009), “Employee engagement: maximizing organizational performance”.
• Shuck, M. and Wollard, K. (2009), “A historical perspective of employee engagement: an merging
definition”, in Plakhotnik, Neilsen and Pane (eds) “Proceedings of the eighth annual college of education
and GSN research conference” (pp133-139). Miami: Florida International University.
• Welbourne, T. (2011), “Engaged in what? So what? A role-based perspective for the future of employee
engagement” in Wilkinson, A. and Townsend, K. (eds), “The future of employment relations: New
paradigms, new developments”, Palgrave.
• West, M. and Dawson, J. (2012), “Employee engagement and NHS performance”, Kings Fund.
• White, M. and Bryson, A. (2011), “HRM and workplace motivation: incremental and threshold effects”, CEP
Discussion Paper No. 1097.
(c) Mark Beatson 29