Employee Engagement, Employee Effectiveness or Employee Productivity?
Author: Eric Thompson
Eric Thompson discusses where the employer should focus to generate the businesses benefits that they are searching for through better employee performance.
Search the literature around improving employee performance in the workplace and you will find references to employee effectiveness, employee engagement and employee productivity. Are these the same thing? Are they different? Which does the manager actually want?
In this article I will aim to identify the differences between these concepts and help you to decide which will be the most appropriate for you to use.
What is the Employer Looking For?
“…we are trying to facilitate our employees to do more at less cost.”
We need to start this discussion by reminding ourselves what the goal is. When we are discussing employee effectiveness, employee engagement or employee productivity what are we really try to achieve? Well ultimately we are on the trail of getting the employee to achieve more in the time that they have available. Generating business benefits is our goal. Those benefits might be in the shape of business profit if you are a commercial operation or they might be in the shape of cost effectiveness if, for example, you are in a government department. But ultimately, irrespective of the nature of the organisation, you are trying to facilitate your employees to do more at less cost.
Now let's look at how our three concepts relate to this goal.
Employee Engagement
A consensus of the definitions that have been used suggests that employee engagement can best be described as the commitment that the employee can offer to the organisation when that employee perceives that the organisation's values, culture, identity and direction (as perceived by them) are aligned with their own. This is not something tangible that the employer can require in the employment contract. It is something conditional that the employee can offer when they perceive that it is warranted. For that reason, employee engagement is sometimes described as the psychological contract between the employee and their employer.
In summary, employee engagement is an expression of the willingness of the employee to perform at their best for the organisation.
Employee Effectiveness
We discover that employee effectiveness is the product of the relationship between the employee's capability and commitment and the organisation's identity, direction, values, culture, leadership and systems of work. If you would like to understand precisely what these terms mean and how they interact you can read my article "Understanding Employee Effectiveness" where I discuss this in more detail.
For our purposes here, we can simply observe that this group of factors can be split into two. Those which are external to the employee, are tangible and in most cases are independently verifiable. In this group we can place employee capability and organisation leadership and systems of work. In fact we can summarise the group as the capability of both the individual and the organisation.
The second group is focused on the internal perceptions of the employee and are intangible. The employee becomes committed to perform for the organisation based on their perception of what the organisation stands for. We recognise this again as employee engagement.
In simple terms employee effectiveness is the product of employee engagement and the capability of the employee and the organisation.
Employee Productivity
In my article "Increased Employee Productivity – The Contribution of Employee Effectiveness" I traced the relationship between employee productivity and employee effectiveness. You can explore the detail by following the link.
We showed there that the actual productivity that the employee delivers can be derived from the ideal (or theoretical) productivity that is possible for that employee by taking account of the employee's availability (the hours that they actually spend doing work) and employee effectiveness.
The Three Way Relationship and its Value
We have shown that employee engagement is part of employee effectiveness and that employee effectiveness is in turn part of employee productivity. All three are therefore related and describe different aspects of the business benefit that we are trying to achieve.
"We have shown that employee engagement is part of employee effectiveness and that employee effectiveness is in turn part of employee productivity.”
Employee productivity is probably the closest we can get to what the employer is actually looking for, but the problem is that although it is relatively easy to measure, the measurement gives us very little insight as to what we need to do to improve it. The value therefore of defining employee engagement and employee effectiveness is that they enable us to generate greater insight and help us to decide what we need to do to improve.
It is also worth considering the time windows over which these factors operate. Employee productivity, whilst it may be the goal is made up of factors which have a very short time horizon (availability), a medium term horizon (engagement) and a long term horizon (capability). Try as we may we won't make much impact on capability (employee or organisational) in a time scale of weeks or months. Capability takes years to grow. Engagement we know from observation can change in weeks and months, whilst the quickest impact on productivity can be made by focusing on employee availability.
We can see therefore that our definitions help us to focus on different aspects of employee performance which are controllable in different time horizons.
Over to You
We have shown that employee engagement, employee effectiveness and employee productivity are all related and in fact help managers to focus on different time horizons when seeking to generate business benefit through employee performance.
• To generate short term improvement, focus on employee availability.
• To generate medium term improvement, focus on employee engagement.
• To generate long term improvement, focus on employee and organisational capability.