Solid Evidence that HRM and Engagement can Work

As HR academics and practitioners we are consistently looking for good evidence that HRM actually works - that the adoption of high performance work practices pays off in terms of ley measures of performance, such as productivity, quality, customer service, etc. We need such evidence to build our respective cases, and there has been quite a bit of it around for the last twenty years beginning the Mark Huselid's large-scale statistical studies in the 1990s. Often, however, the academics have have failed to look at this issue over long periods of time, so demonstrating consistent and long terms effects of the use of high performance work practices and related engagement strategies, which, if done well, would represent something of a gold standard of proof that investment in HRM actually works.

This morning I and quite a few of my HRM academic colleagues were sent the results of a paper that goes some way to delivering such proof, though they are more modest and, like good academics, highlight their study's shortcomings. The work comes out of the Institute of Work Psychology stable at Sheffield University, run by Stephen Wood. Here's his summary of the paper and its contribution in the email he sent out.

'My colleague, Lilian de Menezes, and I examined the integrated use in British manufacturing of a set of lean management practices in which employee empowerment was a major component over 22 years. We found in all 22 years that those firms that used the integrated lean approach (my emphasis) has higher levels of productivity (measured by value-added). In addition, we found that the pioneers of the high lean approach continued to outperform even those that subsequently adopted it. These later adopters gained the performance advantages associated with the integrated approach, but their productivity growth was not sufficient to catch up with those which had adopted it earlier. This shows that the employee engagement, so central to lean production, achieves its aim of continuous improvement.

The practices included in the study are: empowerment, intensive training and development, team work, TQM, Just-in-time, integrated computer-based technology, and supply-chain partnering

The study was financed by the ESRC and will appear in: L. de Menezes, S. Wood and G. Gelade, ‘A longitudinal study of the latent class clusters of modern management practices and their
association with organizational performance in British manufacturing’, Journal of Operations Management'.

Lilian, Steve and Gerry acknowledge the limitations of their study, suggesting that gold standard proof would need to consider not only productivity data but also evidence on quality and lead times in manufacturing. Nevertheless, this study represents an important step forward and substantial argument for integrating engagement strategies - team working and empowerment - with lean techniques. Given the widespread adoption of the latter in healthcare in the UK, maybe its time to puut in place a similar study to test the impact of these large scale and somewhat controversial initiatives.

Back in the Frame and Following up on Engagement

I’ve had a (partly enforced) break over the holiday period (and beyond), due to some many writing deadlines, being overseas and being laid low for a few weeks (first time for me), so I'm likely to be a little ring rusty in the blogging sense. Anyway I would like to follow on with the post from November regarding engagement. In that post I was critical of the Macleod report’s discussion on the subject because it lacked the necessary rigour to make engagement a useful practitioner tool that would stand real scrutiny. Susan Hetrick and I first raised this issue of engagement in our 2006 book on corporate reputations and HR, suggesting it was little more than consultancy re-packaging of old ideas designed to refresh their HR product portfolio. Since then, I’ve come around to the idea of engagement, in part because it is so big in practice. So I’ve been working on developing a model of how leadership and high performance HR work systems influence different components of engagement to produce critical business and public sector outcomes. This model will be published in a forthcoming chapter on employer branding (with Saskia Dyke from Switzerland) and another in an article on leadership branding (with Julie Hodges from Durham). Susan and I will also be using it as the basis for a forthcoming financial services presentation.
Co-incidentally, two prominent HR academic colleagues of mine, Elaine Farndale from Tilburg and Paul Sparrow from Lancaster have been working on engagement, both of whom have made major contributions to the literature on the topic and have influenced my thinking significantly.
I’ve mentioned Paul’s work before and his Centre for Performance-led HR at Lancaster University. Along with Shashi Balain, he produced a really insightful contribution to the notion of engagement in a white paper. As part of that contribution, Paul and his colleagues have also made a series of short videos summarising their work. These are really worth looking at.
However, to my mind Elaine’s work on engagement with colleagues from Tilberg, represents a major breakthrough in bringing some rigour and evidence to the topic and anyone seriously interested in engagement should contact Elaine to get a hold of this paper by Bejier, Farndale and Van Veldhoven . For me , the most important contribution has been to define two different foci of engagement – work engagement, which I’ve already written about on this blog, and organizational engagement, which is what most consultants typically refer to as employee engagement. It also makes a key distinction between state engagement (attitudes and emotions which people hold to work and their organization) and behavioural engagement (actions that employees report taking to display engagement with their work and the organization). For example, many professionals are engaged in their work but not the organization, often to the point of over-engagement or burnout. Conversely, managers can become over-engaged (or over-identified) with the organization, which can lead to a form of collective blindness, intolerance of others who are not ‘organization men’ and a failure to privilege professional and moral values in decision-making. This is a topic that Elaine, Japp Paauwe and I hope to be discussing at a forthcoming symposium on HR’s contribution to corporate governance at the Academy of Management in August – the ‘darkside of engagement’ – something most of us can recognise but which has rarely featured in the practitioner literature..
Currently, we’re working on expanding the range of engagement foci – what people at work engage with – to show how they are distinct but related. For example, in healthcare and financial services, it is clear that people are engaged or can become disengaged with the industry, which is very important in explaining recruitment and retention. It is also clear that people can be more or less engaged with each other in the performance of their work, which is related to team-working and distributed leadership, both critical drivers of effective performance.

New Perspectives on Engagement

Last week I had a very productive time doing some work with a large multinational company based in Zurich which is doing some really interesting work on employer branding and HR strategy – hello Saskia, Paulo and team. Like all organizations operating in a multinational context, they are struggling with the integration-responsiveness problem discussed in the last blog, which, in part, turns on the need to have employees identify and ‘engage’ with the organization globally and locally. Engagement has become one of the hot topics among HR practitioners, driven mostly by the management consulting industry’s desire to re-invent, re-package and re-fresh tired old ideas that have been around for many years in the academic community such as satisfaction, commitment, organizational citizenship and identity, and psychological contracting, and link them statistically to appealing notions such as share price increases, financial performance and a range of other outcomes.
In a chapter of a book we wrote on corporate reputations and HR in 2006, we criticised this arguably naive and perhaps even cynical attempt by consulting firms to re-invent the wheel and to do so in a with a lack of rigour that hardly justified the huge amounts of money being spent on this new ‘industry’. We examined a number of such approaches and found little or no agreement on what the meant by engagement, a significant problem in its own right; nor was the evidence particularly compelling since it was based on a lack of identifiable and sound logic connecting the precursors of engagement to engagement itself and onwards to the outcomes claimed for it. Our argument in the form of a question in that chapter was: why not use some of the more rigorous work on psychological contracting, citizenship etc., that has been around for a number of years and build in some of the newer ideas of the engagement industry to improve their utility? In part, we were basing our arguments on a book produced by Paul Sparrow and Cary Cooper in 2003, so it is with great interest we read a new working paper by Paul and one of his colleagues, Shashi Balain to be found on the website of Lancaster University’s Centre for Performance-led HR.
In this paper they begin with a section on why engagement is becoming so important to practitioners, arguing that it has served three functions: as an internal marketing process to sell complex change to the workforce; as a means of linking employee motivations and committed behaviour to process improvement; and as a predictor of service and organizational performance, usually in the form of a variation on the well known ‘service-profit’ chain. Like our own chapter, they proceed to evaluate the consultancy attempts to develop ‘theories’ of engagement, claiming that the research designs used do not allow them to infer that their own versions of engagement cause performance improvements, that there is little construct validity in what they choose to define and measure as engagement, and that they all use different items to measure what they describe as engagement. Though some promising work in proving useful statistical relationships has been produced by some of the consulting firms, it lacks strong logical basis and argument as why their versions of engagement should be linked to individual and organizational outcomes, and is thus unlikely to be helpful to HR practitioner seeking to manage the process.
Balain and Sparrow suggest an extremely useful way forward to make the concept more useful. They argue that HR directors in specific companies need to reverse engineer the type of performance that an organization is trying to create, in much the same way as the book previously reviewed by Becker et al does. What is it that we are asking employees to engage with at an individual level and organizational level? In answering these questions they produce a model of antecedents of engagements (job characteristics, perceived organizational support, leadership, reward and recognitions, procedural fairness and trust), which leads to strong performance bonds (individual and organizational identification, internalisation of company values, psychological ownership, etc), leading to conditions of engagement (i.e. job engagement and organizational engagement) , which result in important individual and group level outcomes (e.g. motivation, discretionary effort, commitment, improved group and organizational morale, organizational citizenship, etc). One of the key points of this model is that it makes use of well-known and validated scales. Another is that it is necessarily more complicated than most of the overly-simplified consulting models.
A further, extremely important point they make is that there is no single organizational performance recipe. The potential contribution that employee engagement makes in different organizations is likely to differ, so why should engagement have the same performance impact across different service models? To reinforce this point, they identify four different service models from the marketing literature - personal v non personal service, encounter v relationships, collaborative v single service relationship and B2B and B2C interactions – all of which are likely to make different demands on what and who employees need to be engaged with . Their claim is that HR directors have a ‘fantastic opportunity’ to really get under the skin of engagement in their own organizations by developing more complex understandings and models of engagement that apply to their specific circumstances. Two key questions they need to address is: what are they asking their employees to engage with, and what beliefs, attitudes, intentions and behaviours do we require of them to engage. To make the construct more useful to practitioners, HRDs need to identify the performance belief – ‘a shared belief of a team that it has the required ability, resources, goal clarity and leadership attributes to achieve the desired performance outcomes’ (p 38). The performance belief is the cause, while being engaged to perform is the effect. Answering these questions allows HRDs to manage engagement more effectively, but this requires them to measure different things from the standard attitude or engagement survey, which Balain and Sparrow begin to describe. Here they need to do a little more work. Overall, however, the general arguments in the paper are excellent and take us a lot further in understanding engagement than anything else I’ve read so far. There is still a need to do some tight editing and crisping up of the arguments to make them more accessible to most practitioners, but this paper is certainly the best place to begin for serious work in this burgeoning field.

In visiting this excellent site you will find other papers of interest and also a survey on HR in tough times that Paul would like you to help him out with.