Workforce engagement: What it is, what drives it, and why it matters for organizational performance

• DOI: http://doi.org/10.1002/job.2244
• Date: 01 May 2018
• Published date: 01 May 2018

RESEARCH ARTICLE

Workforce engagement: What it is, what drives it, and why it

matters for organizational performance

Benjamin Schneider

1,2

*|Allison B. Yost

1

|Andrea Kropp

1

|Cory Kind

1

|Holly Lam

1

*

1

Gartner, Stamford, Connecticut, U.S.A.

2

University of Maryland (Emeritus) and Center

for Effective Organizations, Marshall School of

Business, University of Southern California,

Los Angeles, California, U.S.A.

Correspondence

Benjamin Schneider, 1001 Genter St., Suite

2C, La Jolla, California 92037, U.S.A.

Email: benj262@outlook.com

Summary

Based on a review of the history of the employee engagement construct and its measurement, we

define workforce engagement as the aggregate of the work engagementexperiences of individual

employees in an organization. In contrast to most research on employee engagement, we study

companies rather than individuals and the companies represent a diverse set of industries. We

hypothesize and demonstrate on a sample of (up to) 102 publicly traded companies that

workforce engagement significantly predicts organizational financial (adjusting for industry:

Return on Assets, Net Margin but not Tobin's q) and customer metrics (the American Customer

Satisfaction Index and the Harris Reputation Quotient) 1 and 2 years after the workforce engage-

ment data were collected. In addition, using a split‐sample approach to avoid method bias, we

hypothesize and show that (a) company organizational practices (the strongest correlate),

supervisory support, and work attributes are significant correlates of workforce engagement

and (b) that workforce engagement mediates the relationship between these correlates of

engagement and the organizational performance metrics. Implications of the findings for research

and practice are discussed.

KEYWORDS

aggregate engagement, employee engagement, engagement, organizational performance,work

engagement

1|INTRODUCTION

Kahn (1990) achieved a breakthrough in thinking about people at work

when he elevated the idea of working to include the whole of the

person in doing immediate work tasks. In later writings (2010), he

explained what he meant by the whole person being engaged at work

by saying: “We believe that people are engaged when we see them

working hard, putting in effort, staying involved. They truly show up

for work. They remain focused on what they are doing. They strive

to move their work ahead”(2010, p. 21). It is the aggregate of these

indicants of work engagement with which we are concerned in this

study. In particular, we are interested in people's psychological experi-

ences of engagement (i.e., their state engagement; Macey & Schneider,

2008) in alignment with studies of engagement as reported in the

research literature (e.g., Saks & Gruman, 2014). In addition, we study

the organizational level consequences of workforce engagement, the

hypothesized contextual correlates or drivers of workforce engage-

ment, and workforce engagement as a mediator of the relationships

between these hypothesized drivers of it (organizational practices,

supervisory support, and work attributes) and the organizational per-

formance metrics.

Considerable progress has been made in establishing the link

between individual level experiences of work engagement and individ-

ual task performance and related issues such as individual turnover

intentions (Bakker, Albrecht, & Leiter, 2011; Christian, Garza, &

Slaughter, 2011; Saks & Gruman, 2014; Schaufeli & Salanova, 2011),

but there is relatively less evidence surrounding the organizational

consequences of employee engagement. Thus, the major question

we raise here concerns the organization‐level performance conse-

quences of having high individual employees' average levels of work-

force engagement and what drives such workforce engagement. Our

focus is on the aggregate engagement experiences of employees in

their immediate task or job, and our outcome of interest is the compet-

itive advantage companies may achieve as the result of such aggregate

*

Now at U.S. Foods

Received: 16 January 2017 Revised: 19 September 2017 Accepted: 20 September 2017

DOI: 10.1002/job.2244

462 Copyright © 2017 John Wiley & Sons, Ltd. J Organ Behav. 2018;39:462–480.wileyonlinelibrary.com/journal/job

engagement (Albrecht, Bakker, Gruman, Macey, & Saks, 2015).

Although there is considerable evidence at the individual level of

analysis on the performance and turnover consequences of employee

engagement (e.g., Saks & Gruman, 2014), there is scant evidence that

such engagement in the aggregate actually yields competitive advan-

tage. That is, whereas an individual company may use engagement

survey data as a basis for improving the average results it obtains in

the future, such individual company improvements reveal nothing

about the comparative or competitive advantages achieved in terms

of organizational performance. This study answers the question about

comparative competitive advantage because we have little evidence

about such consequences of engagement. In addition, there is a

shortage of research concerning the antecedents or drivers of

company‐level engagement, so we explore three likely drivers of such

engagement, namely, organizational practices, supervisory support,

and attributes of the work itself.

The paper makes four contributions to the employee engagement

literature. First, the survey measure of employee engagement used

here focuses on the experiences of engagement in keeping with Kahn's

(2010) construct as shown in our opening quote about focus on work,

energy from work, and truly “showing up”for work. The survey

measure is also modeled after the Christian et al. (2011, p. 95) concep-

tualization of work engagement as a relatively enduring state of mind

about the investment of personal energies in the experience and

performance of work. Second, the research is accomplished at the

organizational level of analysis across a sample of (up to 102) publicly

traded U.S. companies, and the outcomes of interest are a variety of

financial and customer effectiveness metrics. Thus, in contrast to other

studies of organizational‐level engagement in which the units came

from a single industry (credit unions in Barrick, Thurgood, Smith, &

Courtright, 2015) or company (restaurants and hotels from a chain of

hotels in Salanova, Agut, & Peiró, 2005), the sample we studied

includes organizations from diverse industries. Third, the study is a

predictive study with the employee engagement data being gathered

1 and 2 years before the performance metrics permitting 1 and 2‐year

predictive validities to be examined. Fourth, the paper presents

evidence regarding a set of potential drivers of workforce engagement

at the organizational level of analysis using a split sample procedure as

recommended by Ostroff, Kinicki, and Clark (2002) and Podsakoff,

MacKenzie, Lee and Podsakoff (2002) to reduce the ubiquitous

response contamination in survey data with a potential same‐source

bias (cf. Cucina, Walmsley, Gast, Martin, & Curtin, In Press). Finally,

we explore workforce engagement as a mediator of the relationships

between the contextual correlates of it and the organizational

performance metrics. Figure 1 presents the overall framework that

guided the research.

The article begins with a brief review of the engagement construct

and measures, brief because there have been numerous recent reviews

of these in the form of journal articles (Saks & Gruman, 2014; Schaufeli

& Salanova, 2011) and books (Bakker & Leiter, 2010; Albrecht, 2010).

Next, we discuss the importance of studying the relationship between

workforce employee engagement and outcomes at the organizational

level of analysis. Here, we focus on an understanding of engagement

as an organizational resource that has the potential to enable compet-

itive advantage (Albrecht et al., 2015; Ployhart, 2015). This is an

important part of the introduction because there are very few studies

at the company level of analysis that examine engagement and its

organizational performance consequences despite the implicit

assumption that such relationships exist. A third major section of the

introduction then raises issues having to do with the potential

antecedents or drivers of workforce engagement. It is one thing to

establish relationships between workforce engagement and important

organizational performance outcomes but another to provide evidence

on the likely antecedents (drivers) of such workforce engagement. We

generate a series of hypotheses in this section regarding the relation-

ships to be studied. The last section of the introduction explores the

issue of workforce engagement as a potential mediator of the relation-

ships between the antecedents and the performance outcomes and

presents a series of hypotheses to serve as a conceptual foundation

for the research effort that follows.

The complex set of methods used to carry out the study are then

presented in detail, followed of course by the results of a study of 102

publicly traded companies from diverse industries. There, we reveal

the significant predictive validity of workforce employee engagement

of two corporate financial metrics and two customer satisfaction

metrics. We also explore the hypothesized relationships between

workforce engagement and organizational practices, supervisory

support, and work attributes. Finally, we present evidence, again at

FIGURE 1 The general framework guiding the workforce engagement research effort

SCHNEIDER ET AL.463