• Home• Index and downloads• Glossary ☎ Contact us

Print this page Find Download

 

Productivity and employee engagement

The pressure on the APS to increase its efficiency and effectiveness is well-documented. Some of the commonly understood drivers of productivity include the use of time and labour-saving technology and the use of agreement making to achieve greater productivity. However, there is a growing acceptance that a major driver of productivity— potentially more influential than financial rewards—is employee engagement. The definition of ‘employee engagement’, in the context of this chapter, is discussed in some detail below. Some of the research that is contributing to our understanding of the relationship between employee engagement and productivity is also outlined below.

Productivity

Although productivity is difficult to measure in the APS context, it is important that APS managers attempt to understand what drives individual productivity. With this in mind the 2005 employee survey introduced a new two-part question around the issue of productivity. Firstly, employees were asked whether they felt that their productivity had increased in their current job over the last 12 months.

Overall, 60% of APS employees felt that their productivity had increased over the last 12 months. Twenty-three per cent of employees felt that their productivity had increased markedly during the last 12 months, 37% of employees felt their productivity had increased somewhat over the period, and 21% felt that it had remained the same. Only 6% felt their productivity had declined. The remaining 12% responded that the question was not applicable to them (e.g. they had changed jobs in the last 12 months).

To identify what had led to this improved productivity, those employees who indicated that their productivity had increased in the last 12 months were then asked to select from a list of 16 factors, the five most important factors that had helped to increase their productivity over the last year. The results are presented in Table 8.6.

Table 8.6: Factors improving relevant employees’ productivity, 2004–05

Factor	Relevant employees that nominated factor as helping to increase their productivity (%)
Increased knowledge and/or experience in the job	76
Good working relationships with colleagues	60
Good working relationship with my manager	38
Access to the information, resources and/or technology I need to perform my job	37
Working to realistic performance expectations	35
Having a manager who encourages and manages innovation	35
Clear work plans and timetables	33
Receiving effective feedback from my manager	30
Understanding how my work contributes to my agency’s objectives	29
Access to effective learning and development	22
Effective formal and informal communication within my agency	19
Developing effective strategies to deal with an overall reduction in resources	16
Receiving effective mentoring	14
Developing or recruiting high performing staff under my management	10
Good working relationships with other APS agencies	7
Access to performance-related pay (e.g. bonus, advancement)	4

Source: Employee survey

Not surprisingly, increased knowledge and/or experience in the job stood out as the most important factor affecting productivity, with 76% of relevant employees rating it as one of the top five factors that helped them to improve their productivity. Good working relationships with their colleagues and their manager also figured prominently, with 60% and 38% of relevant employees, respectively, rating these in their top five. Interestingly, only 4% of relevant employees who felt their productivity had improved, rated access to performance-related pay as one of the top five factors that had helped them to improve their performance.

Employee engagement

Increased competition to recruit the best talent, retain productive workers and increase employee productivity in a tighter labour market lies at the heart of interest in employee engagement. In addressing workforce challenges and the changing demographics agencies require, not only a systematic and effective workforce plan, but they also need to focus on boosting workforce performance through enabling and engaging staff.

‘Employee engagement’ is a theoretical concept that has gained currency in areas of economics, psychology, communication, management and related disciplines and, more recently, in human resource management.

Slightly different definitions are used. Many draw on the characteristics of employees; the Institute for Employment Studies,¹⁶ for example, defines engagement as:

The CLC, a research body that conducts best practice research, develops decision support tools and provides executive education, defines engagement as:

Different literature uses slightly different terms to group employees into different levels of engagement. The CLC, for example, refers to ‘the highly uncommitted’, ‘neither fully committed or uncommitted’ and ‘highly committed employees’.¹⁹ The Gallup Organisation, a market research and consultancy company, describes similar groups of employees as ‘actively disengaged’, ‘not engaged’ and ‘engaged’.²⁰

Research undertaken by CLC in 2004, drawing on a number of large international organisations, including Centrelink, suggests that about one in ten employees is highly committed. Such an employee is nine times more likely to stay with the organisation than the highly uncommitted. A similar proportion of employees fell into the highly uncommitted category. The majority of employees, about seven in ten, were found to be in the neither fully committed or uncommitted category, but quite willing to commit for the right reasons. If agencies can engage this group they may benefit from increased employee productivity and improved employee retention.

Other research shows a similar pattern of employee engagement; for example, in a survey conducted in Australia in December 2004, about two in ten employees were found to be ‘engaged’ or ‘actively disengaged’ and six in ten employees fell into the ‘not engaged’ category.²¹

The Institute for Employment Studies suggests that many factors influencing engagement will be common to all organisations, regardless of sector; however, some variability is likely, and the relative strength of the factors is also likely to be contingent upon the organisation. There also appear to be strong links between employees feeling valued and involved and engagement.

Table 8.7: Factors influencing employee engagement

	Institute for Employment Studies22	Corporate Leadership Council23	Gallup Organisation24
Learning and Development	Training and development Career management	Understanding how to complete work projects	Extent to which an employee receives encouragement of individual development Extent to which an employee had, in the last year, opportunities at work to learn and grow Extent to which the employee had someone talk to them about their progress in the last six months
Communication and input to decision-making	Communication	Internal Communication Employee understanding the connection between work and organisational strategy Manager clearly articulates organisational goals	Extent to which an employee knows what is expected of them at work Extent to which an employee thinks their opinions count
Role of Manager	Immediate management Performance management and appraisal	Manager adapts to changing circumstances Manager clearly articulates organisational goals Manager possesses job skills Manager puts the right people in the right roles at the right time Manager sets realistic performance expectations	Extent to which an employee has the opportunity to do what they do best Extent to which an employee has the materials and the equipment they need to do their work Extent to which an employee received recognition or praise in the last seven days
Integrity, Fairness, Equity and Diversity	Equal opportunities and fair treatment Pay and benefits	Manager demonstrating a strong commitment to diversity Manager demonstrates honesty and integrity Organisation has a reputation for integrity
Other	Job satisfaction Health and safety Cooperation Family friendliness	Importance of the employee’s job to the organisation’s success	Extent to which the employee has a supervisor or someone at work caring about them as a person Extent to which an employee has a best friend at work Extent to which an employee thinks the organisation’s mission makes their job feel important Extent to which an employee has fellow employees who are committed to doing quality work

Table 8.7 attempts to align some of the factors identified in the research discussed in this section with areas covered in the employee survey. It is not possible to analyse all possible factors identified by the various consultancies or research organisations in this report.

The State of the Service employee survey was not designed specifically with employee engagement issues in mind. However, after examining literature on employee engagement and considering this against the areas covered by the survey, areas that may usefully be considered as a proxy for some ‘levers’ of employee engagement have been identified and are discussed. While the area of serving the public, customer focus and service delivery is not included in this discussion, it is an area for exploration in future employee surveys.

In examining employee engagement, available data from State jurisdictions (WA, SA, Vic) was analysed to guage the views of APS employees compared to those in State public sectors. However, caution is required with these comparisons because of methodological differences. The WA data is only representative of the views of employees in two WA departments; the Victorian and SA surveys were conducted in 2004; and there was a difference in the wording of one particular question in the SA survey.²⁵ Over time, as the number of jurisdictions participating rises, and comparability of the data improves, it is envisaged that benchmarking will become more indicative.

Role of Managers

One of the distinctions made in the literature between the concepts of commitment and other forms of organisational behaviour and the concept of engagement is that the latter is a two-way relationship—organisations must expend effort to engage the employee, who then decides on the level of engagement offered to the employer.²⁶ For the majority of employees, the organisation is represented in this relationship by their immediate manager, which means that the role of ‘line’ managers is central in determining the extent of employee engagement.²⁷ The CLC research suggests that, as the key conduit for employee commitment, managers not only influence commitment but are a ‘force multiplier’—meaning that managers who develop employee commitment to the job, team, and organisation are one of the strongest drivers of engagement within the organisation.²⁸

An organisation with an engaged workforce increases its performance across a variety of indicators, one of which is increased employee productivity. As referred to earlier in this chapter, next in importance to the two most commonly identified reasons for increased productivity (i.e. ‘increased knowledge and experience’ and ‘good working relationships with colleagues’), are six factors directly related to the role of managers (bearing in mind that managers are also influential with regard to the two most common responses).

In descending order, the six productivity enhancing factors directly linked to the role of the manager are: a good working relationship with my manager (38%); access to the information, resources and/or technology I need to perform my job (37%); working to realistic performance expectations (35%); having a manager who encourages and manages innovation (35%); clear work plans and timetables (33%); and receiving effective feedback from my manager (30%). When the literature on engagement is superimposed on these survey findings, several common components related to engagement emerge; for example, in considering what drives engagement, Robinson, Perryman and Hayday, identify issues associated with encouraging and managing innovation, realistic expectations and clear work plans, effective feedback from managers and overall strong communication.

The employee survey data provides broad support for the arguments advanced in the literature about the importance of the managerial role in increasing productivity by improving commitment and engagement. Agencies determined to increase employee engagement need to seriously consider the role of managers in their organisation.²⁹

Employees’ perception of communication and input into decision-making

Good communication, information-sharing and involvement in decision-making are commonly identified in the literature as promoting employee engagement.³⁰ Regular staff meetings, if well-run and focused, can be an effective mechanism through which these themes can be implemented at the workplace level.

This year’s survey results on workplace consultation were very similar to last year’s (for details, see Chapter 5). Sixty per cent of employees reported attending team and/or section level meetings fortnightly, or more often, and almost three-quarters of employees reported attending such meetings on a monthly or more frequent basis. However, this year employees reported being significantly less satisfied that the meetings they attended provided a forum in which to contribute their views on issues that impact on their work and with the overall say they have in decisions impacting on their work.

In this context it is useful to compare the views of APS employees with employees in other jurisdictions. Fifty-five per cent of APS employees either agreed or strongly agreed that their ‘input was adequately sought and considered about decisions that affect me’, which is comparable to WA (62% of respondents either agreed or strongly agreed) and SA (51% of respondents either agreed or strongly agreed).³¹

These results suggest that simply providing a consultation mechanism is insufficient in promoting employee engagement. If meetings are used then they need to deliver by providing good communication between management and employees and across the organisation, including information-sharing and genuine involvement in decision-making on issues that affect work life. The results of the employee survey suggest that agencies may need to consider enhancing the quality of workplace consultative mechanisms if improving employee engagement is seen as a desirable managerial objective. Chapter 5 canvases consultative issues in the APS in more depth.

Employees’ perceptions of integrity

International and Australian research links organisational ethics with high levels of employee performance and the capacity to attract and retain staff.³² This literature is explored in more detail in Chapter 6 of the Commission’s publication, Embedding the APS Values.³³ However, evidence of the link between ethics and efficiency is not new. Australian research conducted by the Independent Commission Against Crime in 1998 found that the ethical tone of an organisation impacts on efficiency and effectiveness, decision-making processes, employee commitment and job satisfaction, employee stress and employee turnover. On the basis of these findings it was argued that making ethical practices a priority was not just about functioning with integrity or being credible; it was also about optimising the efficient functioning of an organisation.

A proxy for a culture of integrity in the APS is the level of agreement of employees that other employees, immediate managers and senior managers act in accordance with the Values. This is explored in Chapter 7, ‘Embedding the APS Values and the Code of Conduct’.

Levels of agreement that both ‘colleagues’ and ‘immediate managers’ act in accordance with the Values continue to remain similar. However, employee responses continue to indicate lower levels of confidence that most senior managers act in accordance with the Values, although employee confidence on this issue has steadily increased over the past three years.

Compared with the limited WA data available, the APS seems to have a much lower proportion of employees who agreed that senior managers in their organisation lead by example in ethical behaviour (the result for WA was 71% compared to a result of 51% for the APS). However, both WA and the APS have about the same proportion of employees who agree that their organisations actively encourage ethical behaviour by all employees (81% and 82%, respectively). Unfortunately, when this report was being prepared, comparable data from other jurisdictions was not available. However, in the 2004 SA Workplace perspectives survey, employees were asked ‘Do the leaders or managers in your agency model the values and behaviours required by the Code of Conduct?’ In 2004, some 56% of employees responded ‘always’ or ‘usually’.

These are clear indicators that improving employees’ perceptions about the extent to which senior management act in accordance with the APS Values and lead by example in ethical behaviour should continue to be a high priority.

Employees’ perceptions of fairness and equity

In examining employee engagement, the literature discusses the importance of employee perceptions of fairness and equity in fostering commitment among employees. The employee survey asked a series of questions around the application of merit in agencies’ employment decisions, the operation of agencies’ performance pay systems and the management of underperformance. While not the ideal, these questions are a reasonable proxy for employee perceptions on fairness and equity.

The only employment decision where more than 50% of staff were confident that merit is routinely applied was for ‘engagement and promotion’ which is the only employment decision category requiring a competitive selection process. Moreover, employee perceptions of whether merit was applied in employment decisions have declined at statistically significant rates across all four decision types compared to last year.

When asked if recruitment and promotion decisions in their organisation were fair, 35% of APS employees compared to 53% of the limited sample of WA government employees surveyed agreed or strongly agreed with the statement. When asked if they have confidence in the processes used by their organisation to resolve employee grievances, 34% of APS employees compared to 46% of WA employees agreed or strongly agreed.

In the APS, employees with the highest level of job satisfaction were more likely to report higher confidence in the application of merit. Similarly, APS employees who agree that their immediate manager and senior managers act in accordance with the APS Values are more likely to agree that merit is applied than those who don’t agree.

The operation of an agency’s performance pay system provides another indicator of fairness and equity. APS employees with the highest level of job satisfaction were considerably more likely to agree that the performance pay system operated fairly and consistently. These findings in relation to performance pay also provide some support for the links made in the literature between employee engagement and perceptions of fairness and equity, as fully engaged employees are more likely to enjoy high levels of job satisfaction and hold positive views about their managers.

Conversely, when examining the concept of engagement, in the context of employee perceptions of fairness and equity, it is not only important to consider those issues which promote engagement but also those that inhibit or reduce employee engagement. One such issue is the management of underperformance which was examined in the employee survey. The survey found that, overall, only 16% of relevant APS employees were satisfied with the way underperformance was dealt with in their agency. An examination of open-ended comments assists in situating this statistic within the engagement discussion as many employees feel that inadequate management of underperformance was a serious demotivating factor to other staff.

In general, APS employees’ perceptions around some of the indicators of fairness and equity, in particular the application of merit in employment decisions and the operation of performance pay systems are less favourable compared to last year. These findings suggest a range of issues will need to be considered by agencies wishing to promote employee engagement.

Chapter 5 examines merit in more detail, including the effect that employee knowledge and training have on employees’ perceptions of merit, while the operation of agencies’ performance pay systems and management of underperformance are considered earlier in this chapter.

Employees’ perceptions of diversity

Employees’ perceptions of whether their organisation is diverse and values diversity was identified by CLC as a potential driver of employee effort. Out of the top 50 potential levers it identified, CLC placed the management characteristic of a strong commitment to diversity amongst the top five levers of discretionary effort and the top five levers of employee intent to stay in their organisation.

This year the employee survey asked respondents about their organisation’s commitment to creating a diverse workforce. Sixty-one per cent of employees agreed that their agency was committed to building a diverse workforce. Of the EEO groups, women were the only group significantly more positive about their agency’s commitment to creating a diverse workforce.

Although this was a relatively positive result, it is not as high as in other jurisdictions. Results for the WA Public Service were higher: 78% of public servants who responded to a 2004–05 public sector climate survey agreed that their organisation was committed to creating a diverse workforce.³⁴ Results for the Victorian Public Service were even higher, with 80% of employees who participated in their People Matter Survey agreeing that their agencies were committed to creating a diverse workforce.³⁵

Access to learning and development

Learning and development is commonly reported as significantly influencing the engagement of employees. Learning and development generally, along with leadership development in particular, is examined in more detail in Chapter 10, ‘Leadership, Learning and Development in the APS’.

Consistent with results from 2002–03, when the specific issue of employee satisfaction with personal leadership development opportunities was examined, only around one- quarter of employees were satisfied. This is clearly an area where the APS could be doing better. Satisfaction was related to a variety of factors, including age, length of service and classification (these are discussed in more detail in Chapter 10).

Learning and development indicators were also included in the questions relating to job satisfaction and increasing individual productivity. While the job satisfaction factors of ‘opportunities to develop my skills’ and ‘opportunities for career development’ are outside the top five job satisfaction factors for all APS employees, over one-third of employees selected each factor as one of their five most important. Of the employees who selected ‘opportunities to develop my skills’ as one of their most important factors, only 54% were satisfied with this factor (this is down from the 58% of relevant employees who were satisfied with this factor in 2003–04). The proportion of relevant employees satisfied with ‘opportunities for career development’ has remained consistently low for the last two years at 32%, dropping from the high of 43% in 2002–03.

In terms of increasing individual productivity, 22% of relevant employees rated ‘access to effective learning and development’ as one of the five most important factors that had helped them to increase their individual productivity. While this factor was ranked outside the top five factors overall by all APS employees, ‘access to effective learning and development’ still appears to be important in improving employee productivity.

While much of the learning and development data seems to be relatively stable, it is concerning that relevant employee satisfaction with the two job satisfaction indicators related to learning and development has fallen over time.

---

16 An independent HR research and consultancy centre, based at the University of Sussex, UK.

17 D. Robinson, S. Perryman & S. Hayday 2004, The Drivers of Employee Engagement, the Institute for Employment Studies, Sussex, UK, <http://www.employment-studies.co.uk>

18 Corporate Leadership Council 2004, Driving Employee Performance and Retention through Engagement: A Quantitative Analysis of the Effectiveness of Employee Engagement Strategies, CLC, Washington DC.

19 ibid.

20 J. Sasaki & M. Norquist, ‘Grim News for Japan’s Managers’, Gallup Management Journal, 14 July 2005, <http://gmj.gallup.com>

21 ibid.

22 Robinson, Perryman and Hayday, The Drivers of Employee Engagement.

23 Corporate Leadership Council, Driving Employee Performance and Retention through Engagement. The CLC research has identified a large number of factors that would have the greatest impact on employees’ discretionary effort. The 12 most influential factors are listed in Table 8.7.

24 J. Thackray, ‘Feedback for Real’, Gallup Management Journal,15 March 2001, <http://gmj.gallup.com>

25 The data for WA for 2004–05 represents two non-metropolitan Departments of Education and two non-metropolitan Departments of Health. This is not representative of the WA jurisdiction for comparative purposes. The South Australian survey was conducted in September 2004 across public sector agencies employing staff under the Public Sector Management Act 1995. The SA data is reported as a percentage of respondents who answered the questions with the exception of responses to questions where respondents were given multiple options to respond to and allowed to make more than one response.

26 Robinson, Perryman and Hayday, The Drivers of Employee Engagement.

27 Gallup Organisation, 2005 ‘The Gallup Path to Business Performance’, <http://consulting.gallup.com>

28 Corporate Leadership Council, Driving Employee Performance and Retention through Engagement.

29 Gallup Organisation, ‘The Gallup Path to Business Performance’.

30 CLC research showed that communication was estimated to have the greatest impact on discretionary employee effort when 14 cultural traits of organisations were compared.

31 In SA, respondents were asked if their ‘input was sought and considered about decisions that affect my job’ (not ‘affect me’).

32 F. Vogl, ‘Corporate Integrity and Globalisation—The Dawning of a New Era of Accountability and Transparency’ (lecture delivered at the Pennsylvania State University, 23 March 2001) quoted in Australian Public Service Commission, Embedding the APS Values, August 2003, <http://www.apsc.gov.au/values>

33 Australian Public Service Commission, Embedding the APS Values, August 2003, <http://www.apsc.gov.au/values>

34 Office of the Public Sector Standards Commissioner, Western Australia, Public Sector Climate Survey, 2004–05.

35 Office for the Commissioner for Public Employment, People Matter Survey 2004, <http://www.ope.vic.gov.au>

go to top of the page