Building Great Organisations

JRA (NZ) Ltd

What is Employee Engagement?

In general terms, JRA uses a three-component model of employee engagement to
describe the active use of emotions, cognitions and behaviours that together help
describe the level of ‘connectedness’ that employees may experience with their
organisation and the level of contribution an employee makes to the organisation’s
success as a result of that connectedness.

More specifically, JRA defines employee engagement as the extent to which an

employee feels emotionally attached to their organisation, the cognitions that
underpin that sense of attachment, and the resultant willingness of the employee
to go the extra mile in order to help the organisation succeed. The JRA model is
based upon the academic literature and specific models of engagement provided by
Kahn (1990) and May, Gilson & Harter (2004).

In essence, tripartite models of engagement suggest that it is important to

understand and assess the rational-emotional-behavioural components that
combine to characterise an engaged employee.

Three Components of Employee Engagement

The first component of the JRA model of employee engagement refers to the
cognitions that underpin employees’ rational sense-making in the workplace.
Employees actively perceive their work environment and it is through this
interpretive sense-making process that employees develop an appraisal of what
their organisation is like to work in. More positive appraisals of important
workplace features like leadership, communication, job design, supervision, and
support contribute to more a favourable summary belief that they work for a great
organisation. It is this summary belief or underlying cognition that affects peoples’
attitudinal responses to the organisation, or the second component of the JRA
model of employee engagement.

The second component of the JRA model of employee engagement refers to the
emotions employees feel in response to their perceptions of the workplace. When
employees actively perceive their organisation in a favourable manner (e.g., the
organisation has good communication processes, positive leadership, provides
rewarding jobs, etc.) then they respond affectively with greater job satisfaction
and emotional attachment (commitment) to the organisation.

The third component of the JRA model of employee engagement refers to the
behaviours that employees display when cognitively and emotionally engaged with
the organisation. The behavioural action that JRA considers most important to an
engaged employee is their discretionary work effort, or willingness to go beyond
simple contractual requirements in order to help the organisation reach its
objectives.

In sum, employee engagement reflects three overlapping dimensions – thinking (the

perception that this is a great workplace), feeling (affective responses such as job
satisfaction and organisational commitment), and acting (going the extra mile to
help the organisation succeed). Employee engagement has clear overlap with
constructs that have been exhaustively researched in the past (i.e., job
satisfaction, organisational commitment and organisational citizenship behaviour),
but there are some strong differences.

Affective Cognitive
• Job satisfaction “Is this a great
place to work?”
• Commitment

Discretionary Effort

An engaged Behavioural
employee

How we Measure Employee Engagement…

JRA measures the rational-emotional-behavioural components of engagement using
six items in its standard workplace questionnaire. These six items are part of our
standardised 60-item workplace questionnaire, which is also used in the annual
unlimited/JRA Best Places to Work in New Zealand Survey – the largest employee
engagement survey in New Zealand.

Our measurement approach combines two standard approaches for assessing

engagement and the key drivers of engagement – a short employee engagement
index coupled with a broader climate survey, both presented within a single, 60-
item questionnaire.

The Engagement Index:

The first measurement tool is our six item engagement index. This is a simple and
focused tool that uses six items to assess the rational-emotional-behavioural
components of employee engagement. The six questionnaire items are:

1. I look for ways to do my job more effectively

2. Overall, I'm satisfied with my job
3. I take an active interest in what happens in this organisation
4. I feel inspired to go the extra mile to help this organisation succeed
5. I feel a sense of commitment to this organisation
6. Overall, I would recommend this organisation as a great place to work

The JRA employee engagement index has been validated across many thousands of
New Zealand employees since its first use in 2000. In a more recent validation
study using the unlimited/JRA Best Places to Work in New Zealand Survey 2005
(24,000 employees across 185 public and private sector organisations), a factor
analysis revealed the presence of a single factor which explained 78% of variance in
the engagement measure (the presence of the single hypothesised engagement
factor discounts the presence of any other non-engagement type factor within the
measure). Similarly, a more advanced confirmatory factor analysis (CFA) approach
to factor validation (using structural equation modelling) also confirms the validity
of the engagement index. In the confirmatory factor analysis, a single factor
solution was found to fit the data better than a multi-factor solution, supporting
the hypothesis that there exists in the data a single engagement factor as opposed
to some other multi-factor solution (which may or may not include ‘employee
engagement’ as a discrete factor). In both factor analysis approaches, all items had
good loadings on the single engagement factor above convention levels
(statistically speaking, all survey items had factor loadings above .40, which is the
minimum criteria for determining whether a given item is associated with a given
factor).

A reliability analysis (which determines the internal consistency of the items in

assessing engagement, or the quality of the scale) revealed a high level of
reliability of the measure (with an alpha coefficient of .91; note that a reliability
coefficient closer to 1.00 denotes a more reliable measurement instrument.
Conventional levels of reliability suggest measurement scales (or measures) with
reliability coefficients less than .69 are poor, between .70 and .79 are acceptable,
and above .80 are good).

The 56 climate items are clustered into seven sections. Example items and the
underlying constructs that the items assessed are provided below. A complete
listing of the questionnaire items are available on the JRA website
www.jra.co.nz/nzwps/questionnaire

1. Culture and Values (e.g., ‘This organisation delivers on the promises it

makes to customers’)
2. Common Purpose (e.g., ‘This organisation has a clear vision of where it’s
going and how it’s going to get there’)
3. Communication & Cooperation (e.g., ‘Communication in this organisation is
open and honest’)
4. My Team (e.g., ‘Rules and responsibilities are clearly defined in my team’)
5. My Job (e.g., ‘I have the tools and resources I need to do my job
effectively’)
6. Learning & Development (e.g., ‘This organisation ensures I am adequately
trained for the work I do’)
7. Performance & Recognition (e.g., ‘Poor performance is not tolerated in this
organisation’)

In summary, the 60 item JRA engagement-climate measure is relatively simple,

reliable, and, in most cases, takes no more than 10 to 15 minutes per employee to
complete. To date, over 50,000 New Zealanders complete the JRA engagement
questionnaire each year, giving rise to the largest database of engagement and
climate information in the country. This database provides a rich source of
knowledge and insight into employee engagement within the region and its effect
on important organisational outcomes.
What do People Think?

Fletcher Easysteel: A good example of how our survey, measures and processes
have improved organisational performance is Fletcher Easysteel. John Beveridge,
GM at the time the organisation began their journey to become a ‘best place to
work’, quantified the effect on the bottom line of the organisation of having an
engaged workforce.

His estimate was $1.4 million for the year end 2005. The particular areas of saving
he quantified were:
Reduced absenteeism – down by 40.7% from the previous year among waged
employees (approx saving of $35,000)
Staff retention – reduced to 13% from 2001 (15 fewer hires, approximate
saving of $220,000 per year)
Previous staff applying and getting jobs after hearing good things about the
company, 15 of the new hires in 2005 (approximate saving of $175,000)
Health and safety – averaging 40-50 fewer lost time injuries than five years
ago, direct savings of approximately $28,000 – does not include savings in
productivity
Work related stress - survey results show 7% decrease in reported stress
between 2004 and 2005, calculated as a productivity saving of 3% across the
workforce equals $300,000
Management of poor performance – survey results show a 4% improvement
in perceived management of poor performance in the organisation which is
valued at $45,000
Levels of commitment to the organisation – survey results show an increase
in reported level of commitment of 6%, an estimated productivity gain of 4%
across the workforce calculated as $396,900

Fletcher Easysteel is New Zealand’s leading steel merchant, employing more than
200 employees across 13 offices nationwide. In 2002 the company was emerging
out of the old Fletcher Challenge empire to become a Fletcher Building subsidiary.
It was struggling financially, staff were demoralised and it couldn’t attract new
employees.

In 2003 the organisation participated in the unlimited/JRA Best Places to Work in

New Zealand Survey to establish benchmarks on its culture (“You can’t change a
culture if you don’t know what your people think about you”, says Julie Gould,
Fletcher Easysteel HR Manager). Using the benchmark performance scores that
accompany each year’s Best Places to Work Survey and their own survey results,
Fletcher Easysteel made changes targeted at improving employee engagement
(specific change programs implemented as a direct result of the JRA engagement-
climate survey included a recognition program, a wellness program, and an
individualised development program).

As a result of their post-2003 survey results and activities, Fletcher Easysteel

became a finalist in the unlimited/JRA Best Places to Work Survey 2004, 2005, and
2006.

phone:+64 9 378 2003 fax: +64 9 378 2002

JRA (NZ) Ltd
email: info@jra.co.nz website:
Specialists in Stakeholder Survey & Analysis
www.jra.co.nz