Rotman Executive Summary

Do you care about your employees? Prove it.

Episode Summary

What are the dos and don'ts of improving employee engagement in 2022? Professor Alan Saks, a human resources expert from the University of Toronto Scarborough/Rotman School, explains why it's time for a different approach to HR management.

Episode Notes

What are the dos and don'ts of improving employee engagement in 2022? Professor Alan Saks, a human resources expert from the University of Toronto Scarborough/Rotman School, explains why it's time for a different approach to HR management.


Show notes

[0:00]: "When you don't care about your employees, they will not care about the organization, they will not be engaged, and they may quit." Professor Alan Saks has studied  the shifts in human resource management for the past three decades. He even co-wrote a book on employee engagement. With the pandemic changing the way we work, it's time to reflect on whether your employees are engaged with their jobs, and how you - as a company - can show you actually care about them.

[1:04]: A definition of employee engagement. 

[3:35]: The business risk of employee burnout and how to help employees avoid it.

[5:09]: What exactly is a caring Human Resource Management system, and how does it benefit companies and employees?

[6:58]: What is Klick Health, and how are they proving they care?

[8:35]: The first step is really listening to what your employees need.

[9:33]: Compromise may be key. 

[10:22]: Wading into the WFH debate.

[11:36]: What is organization engagement? And why does it matter for employee satisfaction?

[13:06]: Why organizational engagement may be more effective at decreasing turnover than job engagement.

[14:01]: Take note: employee perceptions really matter.

[14:41]: The case of Goldman Sachs and unlimited vacation days.

[15:30]: In argument against performance-based pay.

[16:08]: The cost of being an uncaring company.

[16:40]: Be prepared: Proving you care takes time.

[18:12]: "If you want employees to care about their job and the organization, you need to care about them. And you need to demonstrate that care with tangible actions that address employees needs and well-being."

For more reading (subscriptions may be required)

Saks, A. M. (2022). Caring Human Resources Management and Employee Engagement. Human Resource Management Review, 32(3), 100835. 

Saks, A. M., Gruman, J. A., & Zhang, Q. (2022). Organization Engagement: A Review and Comparison to Job Engagement. Journal of Organizational Effectiveness: People and Performance, 9, 20-49.  

Saks, A. M. (2006). Antecedents and Consequences of Employee Engagement. Journal of Managerial Psychology, 21 (7), 600-619. 

Episode Transcription

Alan Saks: When you don't care about your employees, they will not care about the organization, they will not be engaged. And they may quit. The need for greater care for employees is now here to stay. In fact, a recent study found that nine out of 10 working Canadians are more likely to work for an employer that cares about them, and their overall health and well-being.

Jessie Park: You just heard from Alan Saks, a Professor of Organizational Behavior and HR Management at the University of Toronto Scarborough, with a cross-appointment to the Rotman School. 

For more than three decades, Alan has studied the shifts in human resource management. He even co-wrote a book on employee engagement - which was released in 2021 during the height of the COVID-19 pandemic.

With the pandemic changing the way we work, it’s a good time to reflect on whether your employees are engaged with their jobs or the company. How do you show employees you care about them? How does that affect their performance? And what does employee engagement even mean?

AS: That's the million dollar question because it has been defined in many different ways. And very often, it's been defined incorrectly. 

AS: For example, we often see definitions of employee engagement that sound  really like organizational commitment, or job satisfaction. It is not those things.

JP: Welcome to the Executive Summary, a new podcast from the Rotman School of Management bringing you a quick digest of research, insights and innovative thinking from our faculty.   I’m Jessie Park.

Music fade in

JP:  In Alan’s view, the best definition of employee engagement comes from the first major research on the topic by William Khan at Boston University’s Questrom School of Business. The paper came out in 1990, but it wasn't until the 2000s that people started to pay attention.

AS: According to Khan, engagement refers to the extent to which people employ and express themselves physically, cognitively and emotionally when performing a task or job. 

 So we often say that when people are engaged, they bring all aspects of themselves into the performance of whatever it is they’re doing. 

Overall, what we're talking about is a multi-dimensional motivational state. 

JP: But people and organizations are complex, and even when everything’s going well, it can be difficult to stay engaged. 

A recent study by Flexjobs in March 2022 found that one in three respondents were actively considering quitting their jobs. The top five reasons why?  A toxic company culture, low salary, poor management, lack of healthy work-life boundaries and not allowing remote work.

Navigating the world of work comes with a new set of challenges following years of disruption from the pandemic. 

For those who worked remotely, there’s the shift back to in-person work. People are reevaluating their values, goals and careers. 

For others, they’ve been on the frontlines this entire time, and they’re simply tapped out. 

AS: The opposite of engagement is burnout. 

Now burnout and disengagement usually result from high job demands, and limited resources. Work engagement, job performance and well being — they result from having high job resources and fewer job demands.

JP: Job demands are features of a role that can have physiological or psychological costs to the employee. Like work overload, job insecurity, role ambiguity, time pressure and role conflict. 

Job resources are features of a role that help people to achieve their work goals. 

They reduce job demands and encourage growth and learning – things like having autonomy over how you perform your job, receiving timely feedback, and having social support and task variety. 

AS: If you look at what we're seeing today, many areas of work in particular, nursing and healthcare, what we're seeing are extremely high job demands, limited resources, and the result of that being high levels of exhaustion, exhaustion, stress, burnout, and turnover.

JP: While the nursing crisis in Ontario, for example, is compounded by salary disputes and a strained healthcare system, research shows there’s something all leaders can do to boost morale and engagement in a meaningful way. They just need to show they care.

AS: I think the tables are turning somewhat, in that organizations now realize that they have to pay more attention to their employees if they want to be able to attract and retain them. What that means is they have to do more to try to get them engaged, and they may have to do things that they have not done in the past.

JP: Simply put, Alan says employers should adopt a more caring approach to human resource management. That means paying more attention to tangible resources that support an employee's basic psychological needs, their growth and development, and their health. For example...

AS: …providing training and development opportunities for employees, offering flexible work arrangements, work life balance programs, health and wellness programs, as well as career development just to name a few. With this caring HRM system, you have these bundle of practices and as a group, they signal to employees that the organization cares about them and is providing them with resources to satisfy their needs and improve their well being.

JP: Right now, this culture of care is more important than ever.

AS: We know that care and engagement are both important. And we know that they're both related to many work outcomes, such as job satisfaction, organizational commitment, job performance, and turnover. And they're also related to organizational outcomes such as organizational performance.

JP: The case for caring more is clear. But it’s one thing to say you care, and another to actually show it. 

Musical interlude

JP: Let's talk about Klick Health, a Toronto-based marketing company that specializes in healthcare and life sciences. It's been named a best managed company for 13 consecutive years. Alan says they’re one of his favourite examples of a company that really walks the walk when it comes to caring about employees.

AS: At the beginning of the pandemic, they took their in office flu shot clinic on the road, as part of its commitment to keep team members and their families healthy. They actually transformed two vans into a mobile flu shot clinic with registered nurses, and they went to the homes of team members. They did this because safety and the well being of their employees is considered paramount. 

JP: They also had other initiatives in place, like relaying safety measures to customers, donating thousands of masks to hospitals and long-term care facilities, and making sure employees had access to complimentary fitness programs, mental health resources, and more. 

AS: Klick Health is a great example of what I would call a caring organization. Because they care about all of the major stakeholders that they have relationships with, they care about their employees, they care about their customers, and they care about the community as well.

JP: Now think back to how your organization supported staff during a crisis. Did they offer more days off? Send a company branded gift basket? Maybe offer new health and wellness programs to inject some mindfulness and movement into the work week.

All these things are great in the moment, but looking long-term, Alan says it’s more important how they got there rather than what they’re choosing to implement.

AS: You have to really start by being aware of employees needs and interests. And this requires frequent communication with employees. 

Once there is a clear understanding of employees' needs, it's then possible to consider how the organization can meet and satisfy those needs, which typically will involve reducing job demands, or providing more job resources.  Providing employees something they don't want, such as more vacation days, is not going to be very beneficial to the organization or to employees.  What is fundamental here is employee input, and involvement for identifying what are their needs? And what is the best way to meet those needs

JP: But what if employees ask for something, and for whatever reason, you're unable to provide it?

AS: I think at that point, what you really have to do is have a discussion about how you can make things work. In some cases, the answer isn't necessarily “No, we can't do that.” It's, “Well, let's talk about it and let's see if we can come up with a way to make this work to some degree.” And what we're seeing a lot today in organizations is, “Well, we need you in the office a couple of days, you know, for these different reasons, perhaps because we have customers coming in, and they're going to want to talk to you. But how about if you work at home two days? And maybe once in a while we can even make it three days? Will that work for you? Will that make you happy? Will that satisfy your needs?” So, you know, at least trying to come up with some solution, some compromise that will work  for everybody concerned.

JP: And building on that example, he stresses there is no one-size-fits-all solution for this era of hybrid work.

AS: It’s actually interesting to see how employees have responded to working at home, there are some who could not wait to get out of their house and back into the office. And there are others who don’t ever want to go back to the office. Of course, many employees now realize that there are benefits to being at the office and being home as well. And of course, organizations are realizing this as well. Ultimately, what this means is that there has to be a certain degree of flexibility around telecommuting. And what this means is giving employees some choice about where they want to work. 

JP: It's a win-win for both sides. New research on telecommuting found that employees who work in organizations that offered it are more engaged.

AS: Clearly offering some opportunity to work at home is going to be really the most beneficial thing for organizations, especially when it comes to attracting new employees, retaining the employees you have and actually engaging employees.

JP: When an employee feels that the company is invested in their preferences and their well-being, they’re likely to reciprocate and care more about the organization’s success. This is known as the organizational support theory.

AS: Now, in a similar manner, I've suggested that when employees believe that the organization cares about  employees will reciprocate by caring about the organization which they will enact and demonstrate through higher levels of engagement. 

They will reciprocate that care and concern by helping the organization achieve its goals and objectives.

JP: This can look like employees caring more about their company’s targets and goals. They might go above and beyond to contribute to that goal. This is an example of strong organization engagement, and it’s different from job engagement.

A person can be engaged with their da y to day work and not give much thought to the broader organization, or even think negatively towards it. 

The reverse could also be true — perhaps an employee thrives being part of a particular company, but their interests and skills don’t align with their current job.

AS:  The distinction is important, because the drivers and the consequences of job and organization engagement, they're not the same. So you can be engaged in your job, but you may be disengaged when it comes to doing things for your organization, or vice versa. 

In my own research, I found that both job engagement and organization engagement are positively related to work outcomes, such as job satisfaction, organizational commitment, and organizational citizenship behavior, and negatively related to intention to quit. However, all these  relationships were somewhat stronger for organization engagement.

JP: It’s an interesting relationship leaders should take note of if they’re facing lots of turnover. Both job and organization engagement are important for a strong talent base, but it may be more crucial for staff to feel a sense of commitment to their organization, and then their job.

Musical interlude

JP: As Alan says, it’s not just about having good policies that make sense for employees. So much of the success of HR teams rides on the employee’s perception of that policy.

AS: Now, employees are smart and employees know when organizations are doing things to get more out of them and to try to increase their performance. 

Employees form attributions about their organization. And that is trying to understand why their organization is doing something.. And if they don't believe that the actions are authentic, or sincere, or that they are non discretionary, they will not form caring related attributions.

JP: Take for instance Goldman Sachs, which introduced an unlimited vacation day policy in May 2022. While it sounds fantastic at face value, it didn’t land so well with some employees familiar with the company’s deep-rooted culture of being available to clients any time, any place. They say many staff rarely used their allotted vacation times to begin with. 

Goldman Sachs is a textbook example of a high-performance work system — a term that describes a bundle of HR practices designed to promote employees' skills, motivation and involvement to help the firm gain a competitive advantage. It’s commonly seen in client-facing industries like finance, consulting and law. 

However, Alan says there’s evidence that high-performance work systems have likely had their day, and it’s time for a change in approach.

AS: There's actually one study that was recently published that looked at performance-based pay and the effect it has on employees. And they found that performance-based pay can result in an increase in mental health problems for employees, especially for lower performing and older workers. So the thing is about high performance work systems is that they focus mostly on improving performance, rather than caring about employees health and well being.

JP:  Being known as an uncaring company has its costs – more turnover means more resources spent towards recruiting and training, all the while the employees who stay are left to pick up the pieces and more likely to burn themselves out. Not to mention the reputational damage – and when it comes to trust, we know just how easy it is to lose and how hard it is to gain.

So what's the best path forward when you have a skeptical and distrusting employee base?

AS: When we see these, papers and presentations about the drivers of engagement, because if you just go ahead and do A, B, C, and D, and voila, you're going to have an engaged workforce. And what that really ignores is the history. If you have years and years and years of employees being disengaged you can't simply flick a switch and say, “Okay, be engaged today. Because, guess what, we're giving you more vacation time.” It just doesn't work that way. It's really a matter of how long have things been going the way they have that have resulted in levels of disengagement or engagement. If you've got a relatively positive climate, and an organization has done things over the years that have demonstrated, they have care and concern for employees, and then they make a mistake . I think it's  easier for them to come out and say, “Look, we made a mistake, apologize for and reverse course.” But if you've got a history of bad behavior and bad treatment towards employees. It's probably going to take a lot of time, maybe even a change in management, before you can see real meaningful change.

Musical interlude

JP: The message is loud and clear — for many people, an attractive job description and pay might not cut it anymore, especially in high-performance and high-stress work environments. 

Show employees you care, and that might go a long way in enticing them to stick around. 

AS:  If you want employees to care about their job and the organization, you need to care about them. And you need to demonstrate that care with tangible actions that address employees needs and well-being. If employees believe that the organization cares about them, then they will return that care with higher levels of engagement and greater participation in the organization. You can't really expect employees to care about the organization and to be highly engaged if you don't care about them

Music fade out

JP: This has been the Rotman Executive Summary , a podcast bringing you the latest insights and innovative thinking from Canada's leading business school.   

Special thanks to Professor Alan Saks. We’ll be back in a few weeks with Professor Andreas Park to talk about cryptocurrency’s collapse and what that means for businesses. 

This episode was written and produced by Jessie Park and Megan Haynes. It was recorded by Dan Mazzotta, and edited by Avery Moore-Kloss. 

For more innovative thinking, head over to the Rotman Insights Hub, and subscribe to this podcast on Spotify, Apple Podcasts, Google podcasts, or Soundcloud.  

Thanks for tuning in.