Improving Employee Engagement and Experience

IMPROVING EMPLOYEE ENGAGEMENT AND EXPERIENCE

Abstract

This study sought to investigate the association between employee rewards and length of service for RQ1; and satisfaction with management policies/practices and quality of employee output for RQ2. It uses secondary data from the 2018 Federal Employees’ Viewpoint Survey and SPSS for analysis. The findings from the chi-square test of association show that a statistically significant association exists between rewards for innovation/creativity and length of service in the federal government. Employees who agree that creativity and innovation are effectively rewarded are likely to serve more years in the federal government. For the second research question, the Spearman Rho test study finds a moderately strong, positive correlation between employees’ satisfaction with management policies/practices and the overall quality of output from their work units. The findings of this study provide crucial insights for management and leadership teams within federal agencies on how to improve employee retention and increase the quality of output

Strategies for Enhancing Government Employees’ Engagement, Retention, and Performance

Research has shown that effective employee engagement and a positive work environment significantly contribute to improved customer outcomes and high performance (Deloitte Inc., 2021). A study by the Corporate Leadership Council (as cited in Deloitte Inc., 2021) found that less engaged employees were 22 percent less productive than their highly engaged peers, and that a unit increase in employee engagement in an organization increased the customer satisfaction index by 12 percent (Deloitte Inc., 2021).

Studies have also found a strong positive association between employee engagement and retention. According to Deloitte Inc. (2021), high levels of engagement increased an employee’s likelihood of staying with an organization by 40 percent. The Society of Human Resource Management (SHRM) holds that retention management remains a crucial factor for organizations even in a tight job market (SHRM, 2008). First, employee turnover costs an organization money, time, and other resources. Available estimates indicate that on average, turnover-related costs impose a burden of between 50 and 60 percent of an employee’s annual salary in replacement expenses and accrued paid time off (SHRM, 2008). At the same time, turnover affects employee morale, reducing sales growth and a firm’s bottom line (SHRM, 2008). Thus, it remains crucial that organizations attract and retain top talent through high levels of employee engagement.

Unfortunately, compared to the private sector, the federal government underperforms in ensuring high levels of employee engagement or offering a positive employee experience. The 2020 report on the Best Places to Work in the Federal Government showed that the private sector significantly outperformed the federal government in training opportunities, recognition of high performance, and effective use of talents (Deloitte Inc., 2021). 78 percent of private sector employees felt that their talents were used well, as compared to 58 percent of employees in the federal government (Deloitte Inc., 2021). Further, only 51 percent of employees in the federal government felt satisfied with the training and development opportunities offered at the workplace, as compared to 64 percent of their counterparts in the private sector (Deloitte Inc., 2021). In the area of employee recognition, only 48 percent of federal government employees mentioned that their agencies recognized high performance, as compared to 67 percent in the private sector (Deloitte Inc., 2021).

With the Baby Boomers retiring from the workforce, it is prudent that the federal agencies take steps to attract and retain younger employees to remain effective in their missions. It is worth noting that the government continues to struggle in this respect – for instance, in 2017, young people under 30 made up less than 6 percent of the total government workforce, as compared to 21 percent in the private sector (Deloitte Inc., 2017). Unfortunately, employees under 30 still account for the highest attrition rates in the federal government – figures from 2021 indicate an attrition rate of 8.5 percent among this group, relative to the government-wide attrition rate of 6.1 percent reported that year (Partnership for Public Service, 2021). Fortunately, data also shows that compared to older age groups, employees under 30 pay more attention to policies that foster employee engagement at the workplace (Partnership for Public Service, 2021). For this reason, improved employee engagement provides an invaluable opportunity for the federal government to attract and retain younger employees.

This study seeks to identify ways by which the government could increase employee engagement. It focuses on two aspects of employee management: rewards for creativity and innovation, and policies and practices of senior leaders. The findings will go a long way towards informing government policies and human resource practices. The research questions are stated below:

RQ1: Is there a significant relationship between the rewarding of creativity and innovation by employees and the employees’ length of service in the federal government?

RQ2: Is there a significant relationship between the level of satisfaction with the policies and practices of senior leaders and the overall quality of work done by the employee’s work unit?

Literature Review

Theoretical Review

Herzberg’s Two-Factor Theory of Motivation

Herzberg’s two-factor motivation theory postulates that two sets of factors influence an employee’s level of job satisfaction. The first set are referred to as motivational factors or satisfiers (Alrawahi et al., 2020). These positively influence job satisfaction by addressing the need for self-actualization and self-growth. They include work advancement, responsibility, recognition, and achievements (Alrawahi et al., 2020). Advancement is the positive or upward change in one’s status in the organization, such as opportunities for promotion and personal growth. Responsibility has to do with having the autonomy to make decisions in one’s position (Alrawahi et al., 2020). An employee is likely to be satisfied if they have the power to make and execute decisions in their position. Recognition has to do with receiving rewards or praise for high performance (Alrawahi et al., 2020). Achievement is about realizing progress at work, finding adequate solutions to problems, and completing complex tasks (Alrawahi et al., 2020).

The second set of factors are referred to as hygiene factors, the lack of which lowers the level of job satisfaction (Alrawahi et al., 2020). Hygiene factors are extrinsic and include interpersonal relationships, quality of supervision, organizational policies, salaries, and working conditions (Alrawahi et al., 2020). Unfulfilled salary expectations, poor social interactions at the workplace, unclear and ineffective policies/guidelines, poor leadership, and poor physical working conditions could all cause job dissatisfaction (Alrawahi et al., 2020). According to the theory, the motivation and hygiene factors occur on a continuum, implying that one can be satisfied and dissatisfied concurrently. However, if the motivation factors outweigh the hygiene factors, employees feel satisfied with their jobs and are likely to stay longer (Alrawahi et al., 2020). Thus, employers must find a way to harmonize both sets of factors to bring about job satisfaction among employees (Alrawahi et al., 2020).

Empirical Review

i) The Relationship between Rewards, Job Satisfaction, and Retention

The relationship between rewards, job satisfaction, and retention has attracted immense interest from researchers. Mgedezi et al. (2014) sought to determine the effect of intrinsic motivation and job involvement on the loyalty of employees. Using a sample of 160 government employees drawn from different departments across the UK, the study administered a questionnaire measuring an individual’s level of intrinsic motivation, their job involvement, and employee retention. The self-developed questionnaire was adopted from the Michigan Organizational-Assessment Questionnaire, which measures retention, and the Kanungo’s and Intrinsic Motivation Rating scales, which measure job involvement and intrinsic motivation respectively. The results of Pearson and multiple regression analyses showed a significant association between employee loyalty and both intrinsic motivation and job involvement. However, intrinsic motivation emerged as a stronger predictor of job retention than job involvement among government employees (Mgedezi et al., 2014).

The primary shortcoming of the Mgedezi et al. (2014) study is that it ignores the relationship between rewards and intrinsic motivation. Terera and Ngirande (2014) partly address this shortcoming in their study that involved 180 nurses drawn from different South African hospitals, and which measured the impact of rewards on job satisfaction and employee loyalty. A cross-tabulation of rewards and employee loyalty using the chi-square test of association found a positive association, implying that employees were more loyal if they were rewarded more. Chi-square tests also found a positive association between rewards and job satisfaction. Correlation tests found a strong, positive relationship between job satisfaction and employee retention. The study concluded that rewards positively influence job satisfaction, which, in turn, drives employee loyalty (Terera and Ngirande, 2014).

Other studies have adopted an expanded scope to assess the impact of different types of rewards on employee behaviour. A 2015 study by Lee et al., for instance, compared the effect of social and economic rewards on loyalty among 334 hotel staff recruited via an online survey. The study identified economic rewards as monetary rewards such as prizes and money advanced for good performance. Social rewards included personal recognition from management and access to certain special services (Lee et al., 2015). Correlation test results showed a strong association between loyalty and both types of rewards. However, social rewards yielded a stronger correlation coefficient than economic rewards. The study concluded that social rewards were more effective drivers of employee retention than economic rewards because they fostered intrinsic rather than extrinsic motivation (Lee et al., 2015).

These findings mirror those of another study Alhmoud and Rjoub (2019), which tested the effect of intrinsic, extrinsic, and social rewards on loyalty among 500 employees of different Jordanian banks. The extrinsic rewards construct was assessed using five items: supervised career development, promotion opportunities, opportunities for training and development, financial rewards, and reasonable workload (Alhmoud & Rjoub, 2019). The intrinsic rewards construct was assessed using co-worker support, supervisor support, meaning of job tasks, and input into job tasks (Alhmoud & Rjoub, 2019). Multiple regression results showed a significant positive relationship between all three forms of rewards and employee retention, with social rewards emerging as the strongest predictor of the three (Alhmoud & Rjoub, 2019).

Two other studies by Kyndt et al. (2008) and Malik et al. (2014) similarly found a significant, positive association between rewards and employee retention among a sample of 349 and 181 employees respectively. Interestingly, both studies found that retention was also dependent on individual differences between employees. Kyndt et al. (2008) found that the effect of rewards depended on an employee’s leadership skills, their level of seniority in the organization, and their attitude towards learning. Higher levels of retention were reported among employees in senior leadership positions and those with a positive attitude towards learning (Kyndt et al., 2008). Similarly, Malik et al. (2014) found that rewards positively drove job satisfaction and retention if an employee regarded the rewards as important, had an internal locus of control, and has high self-efficacy.

ii) The Relationship between Organizational Policies, Human Resource Management and Employee Performance

Chang et al. (2013) conducted a study to determine the effect of five total quality management (TQM) practices on employee loyalty and satisfaction. The five TQM practices included: employee compensation, teamwork, employee empowerment, employee training, and effective leadership (Chang et al., 2013). Using a sample of 200 administrative employees selected through stratified sampling from various departments in Taiwan’s Taipei City Government, results of partial least squares regression showed a significant positive association between employee satisfaction and four TQM practices: compensation, teamwork, empowerment, and management leadership. The study found that employee training was an insignificant predictor, a trend that they attribute to inappropriate training sessions that the employees may not consider relevant to their jobs. The study concluded that employees feel more satisfied if they feel that the leadership offers the support and guidance needed to succeed at work (Cheng et al., 2013).

This finding mirrors that of another study by Alagaraja et al. (2014), which sought to determine the effect of people management practices and leadership on organizational performance. The study measured the effectiveness of people management practices by how well an organization promoted employee morale and productivity, as well as the efforts by leadership to integrate initiatives, systems, and processes for improved firm performance. Path analysis carried out on the responses of 138 professionals drawn from 241 small business organizations showed that the combined effect of people management and leadership significantly improved organizational performance.

The two studies above focus on leadership in general without considering the effect of different leadership styles. Asrar-ul-Haq and Kuchinke (2016) address this weakness in their study, which compared the effects of three leadership styles (transactional, transformational, and laissez-faire) on the attitudes and performance of 224 employees from five Pakistani banks. Leadership style was measured using a self-developed questionnaire based on Bass’ theory of transactional and transformational leadership, while employee outcomes were measured by three constructs: job effectiveness, satisfaction with leadership, and willingness to put in extra effort to realize goals at work. Multiple regression results showed a significant, positive relationship between transformational leadership and both employee effectiveness and satisfaction. The association between laissez-faire leadership and both effectiveness and satisfaction was negative though significant. Only transformational leadership yielded a significant relationship with employees’ willingness to put in extra effort. Thus, the study concluded that leadership is a significant predictor of organizational performance and employee satisfaction. Transformational leadership emerged as a stronger predictor of performance than laissez-faire and transactional leadership approaches (Asrar-ul-Haq and Kuchinke, 2016).

The same finding is reported by Ascensio (2016), who used data from the 2010 Federal Employee Viewpoint Survey to measure the impact of transactional and transformational leadership on the job satisfaction of federal employees in the US. Using ordinary least squares regression, the study found that both transformational and transactional leadership have a significant positive effect on job satisfaction. However, transformational leadership yielded a bigger impact on job satisfaction than transactional leadership.

In conclusion, literature on rewards and management practices is rich and readily available. However, literature focused specifically on federal employees in the US is limited, leading to a knowledge dearth in this area. This study seeks to address this concern by investigating i) the extent to which rewards influence length of service and ii) the extent to which satisfaction with management/leadership policies influences performance among federal employees in the US.

Research Methods

Data

The study used secondary data from the 2018 Federal Employees Viewpoint Survey to answer the research questions. The survey allowed federal employees to share their opinions about eight topic areas, including job satisfaction, work-life programs, leadership, supervisors, agency, their work units, and personal work experiences (Office of Personnel Management Report (OPM), 2018). The survey questions sought to determine the extent to which certain features of successful organizations were present in federal agencies. The survey comprised of a total of 94 questions, 78 of which measured employees’ perceptions on the above topic areas, while 16 were demographic questions (OPM, 2018).

The target population was the 1.4 million federal government employees, all of whom were invited to participate. The sampling frame for the survey was workers’ lists at the participating agencies. A total of 598,003 employees responded, translating to a 40.6 percent response rate for the web survey (OPM, 2018). A total of 82 agencies across the federal government were represented in the study, with participants ranging from non-seasonal, permanent, part-time, and full-time employees (OPM, 2018). Data was collected using a cross-sectional research design, implying that collection occurred at a single point in time.

Weights were assigned to the collected data as follows: ‘Strongly Agree’ was assigned a weight of 5, ‘Agree’ was assigned a weight of 4, ‘Neither Agree nor Disagree’ a weight of 3, ‘Disagree’ a weight of 2, and ‘Strongly Disagree’ a weight of 1. Males made up 56 percent (314, 127) of the sample of 598,003, while females made up 44 percent (247,741). Further, 39 percent of participants (219,145) worked at the headquarters of their agency, while 61 percent (349,679) worked in field offices. In regard to federal tenure, 12 percent of participants (66,935) had worked in the federal service for less than 3 years, 29 percent (168,053) had served for between 4 and 10 years, 31 percent (177,089) had served in the federal service for 11 to 20 years, and 27 percent (155,702) had served for more than 20 years (OPM, 2018).

Variables

It may be prudent to restate the research questions and hypotheses at this point:

RQ 1: Is there a significant relationship between the rewarding of creativity and innovation by employees and the employees’ length of service in the federal government?

• H01: There is no statistically significant relationship between the rewarding of creativity and innovation by employees and the employees’ length of service in the federal government.

• Ha1: There is a statistically significant relationship between the rewarding of creativity and innovation by employees and the employees’ length of service in the federal government.

RQ 2: Is there a significant relationship between the level of satisfaction with the policies and practices of senior leaders and the overall quality of work done by the employee’s work unit?

• H02: There is no statistically significant relationship between the level of satisfaction with the policies and practices of senior leaders and the overall quality of work done by the employee’s work unit.

• Ha2: There is a statistically significant relationship between the level of satisfaction with the policies and practices of senior leaders and the overall quality of work done by the employee’s work unit.

The dependent variable in RQ1 is length of service in the federal government, which is one of the sixteen dependent variables in the survey, coded as DFEDTEN. It is a categorical variable with levels A to C, where A represents lesser years of service, and C represents over 20 years of service. For RQ2, the dependent variable is the quality of work done by an employee’s work unit, measured as an ordinal variable by survey item 28, ‘How would you rate the overall quality of work done by your unit?’, with five categories, where 5 represents Very good and 1 represents Very poor.

The independent variable in RQ1 is rewarding of creativity and innovation, which is measured as an ordinal variable by survey item 32 ‘Creativity and innovation are rewarded’ with 5 categories, where 5 represents ‘Strongly Agree’ and 1 represents ‘Strongly Disagree’. Similarly, the independent variable in RQ2 is the level of satisfaction with the policies and practices of senior leaders, which is measured as an ordinal variable by survey item 66, ‘How satisfied are you with the policies and practices of senior leaders?’ with 5 categories, where 5 represents ‘very satisfied’ and 1 represents ‘very dissatisfied’.

Data Analysis Techniques

The data was analyzed using the Statistical Package for the Social Sciences (SPSS). To test the hypotheses associated with RQ1, the study used the chi-square test of independence, which tests for the presence of significant associations between two categorical variables. The hypotheses under RQ2 were tested using the Spearman Correlation test. The Spearman correlation was selected as it provides a means to test for relationships between two variables with rank-ordered categories.

Results

Research Question 1 (RQ1)

Table 1. Chi-Square Tests

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

40441.593a

Likelihood Ratio

N of Valid Cases

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 1570.76.

Table 2. Cross Tabulation Results

DFEDTEN * Q32 Crosstabulation

Q32

Total

X

DFEDTEN

Count

Expected Count

A

Count

Expected Count

B

Count

Expected Count

C

Count

Expected Count

Total

Count

Expected Count

As table 1 indicates, the relationship between reward for creativity and innovation and length of service in the federal service is significant at the 95 percent confidence level (?2 (18, 598003) = 40441.593, p=.00). Table 2 gives the nature of the association between the two variables. The actual count of those who have served longest in the federal service (represented by C) and strongly disagree that creativity and innovation are rewarded (12652) is lower than the expected count (14464). At the same time, the actual count of those in this category who strongly agree (18209) is more than the expected count (17211). Further, those who have served the shortest tenures in federal service have the highest counts of employees who strongly disagree that creativity and innovation are rewarded. This leads to the conclusion that employees who have served in the federal service longer mostly agree/strongly agree that creativity is rewarded as compared to those who have served less years.

Given that the association is significant as shown in table 1, we reject the null hypothesis and conclude that there is a statistically significant relationship between the rewarding of creativity and innovation and the employees’ length of service in the federal government.

Research Question 2 (RQ2)

Table 3.

Correlations

Q28

Q66

Q28

Correlation coefficient

Sig. (2-tailed)

N

Q66

Correlation coefficient

Sig. (2-tailed)

N

**. Correlation is significant at the 0.01 level (2-tailed).

The correlation coefficient (r =.399, p = .00) is equal to 0.399 and is significant at the 95 percent confidence level (p=.05). This points to a moderately strong linear association between the dependent and independent variables. The positive coefficient indicates the direction of the relationship – that the line of best fit has a positive slope, such that a unit increase in the level of employee satisfaction increases the quality of output in the work unit by 0.399 units or 39.9 percent. Based on the correlation results, the study rejects the null hypothesis and concludes that there is a statistically significant relationship between the level of satisfaction with the policies and practices of senior leaders and the overall quality of work done by the employee’s work unit.

Discussion

This empirical study sought to determine the strength of the association between employee rewards and length of service for RQ1; and satisfaction with management policies/practices and quality of employee output for RQ2. The findings from the analytical tests carried out show that a statistically significant association exists between rewards for innovation/creativity and length of service in the federal government. Employees who agree that creativity and innovation are effectively rewarded are more likely to serve more years in the federal government. This finding is consistent with the findings by Alhmoud and Rjoub (2019), Kyndt et al. (2008) and Malik et al. (2014), all of whom found that rewards significantly improved employee retention. Alhmoud and Rjoub (2019) explain that rewards increase job satisfaction for employees, which, in turn, increases their loyalty to the organization or agency. Thus, human resource divisions within federal agencies could improve retention rates among employees across the lifespan by strengthening their systems of rewarding employees who demonstrate high levels of creativity and innovation. Studies have shown that while all forms of rewards improved employee rewards, social rewards have a stronger effect on both job satisfaction and employee retention than monetary rewards ((Alhmoud & Rjoub, 2019).