Employee Engagement: A Human Resource Management Perspective 9781536197358, 1536197351

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BUSINESS ISSUES, COMPETITION AND ENTREPRENEURSHIP

EMPLOYEE ENGAGEMENT A HUMAN RESOURCE MANAGEMENT PERSPECTIVE

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BUSINESS ISSUES, COMPETITION AND ENTREPRENEURSHIP

EMPLOYEE ENGAGEMENT A HUMAN RESOURCE MANAGEMENT PERSPECTIVE

CAM CALDWELL AND

VERL ANDERSON

Copyright © 2021 by Nova Science Publishers, Inc. All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic, magnetic, tape, mechanical photocopying, recording or otherwise without the written permission of the Publisher. We have partnered with Copyright Clearance Center to make it easy for you to obtain permissions to reuse content from this publication. Simply navigate to this publication’s page on Nova’s website and locate the “Get Permission” button below the title description. This button is linked directly to the title’s permission page on copyright.com. Alternatively, you can visit copyright.com and search by title, ISBN, or ISSN. For further questions about using the service on copyright.com, please contact: Copyright Clearance Center Phone: +1-(978) 750-8400 Fax: +1-(978) 750-4470 E-mail: [email protected].

NOTICE TO THE READER The Publisher has taken reasonable care in the preparation of this book, but makes no expressed or implied warranty of any kind and assumes no responsibility for any errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of information contained in this book. The Publisher shall not be liable for any special, consequential, or exemplary damages resulting, in whole or in part, from the readers’ use of, or reliance upon, this material. Any parts of this book based on government reports are so indicated and copyright is claimed for those parts to the extent applicable to compilations of such works. Independent verification should be sought for any data, advice or recommendations contained in this book. In addition, no responsibility is assumed by the Publisher for any injury and/or damage to persons or property arising from any methods, products, instructions, ideas or otherwise contained in this publication. This publication is designed to provide accurate and authoritative information with regard to the subject matter covered herein. It is sold with the clear understanding that the Publisher is not engaged in rendering legal or any other professional services. If legal or any other expert assistance is required, the services of a competent person should be sought. FROM A DECLARATION OF PARTICIPANTS JOINTLY ADOPTED BY A COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND A COMMITTEE OF PUBLISHERS. Additional color graphics may be available in the e-book version of this book.

Library of Congress Cataloging-in-Publication Data ISBN: H%RRN

Published by Nova Science Publishers, Inc. † New York

CONTENTS Preface

vii

Chapter 1

Employee Engagement – Why It Matters

Chapter 2

Employee Engagement and Leaders’ Duties

21

Chapter 3

Breaking All the Rules – Employee Engagement for the 21st Century

51

Employee Engagement Is a Choice – Keys to Creating Trust and Commitment

71

Engagement and Generation Z – Culture Requirements for the Future

87

Chapter 4 Chapter 5

1

Chapter 6

Engagement, Empowerment, and Employee Trust 109

Chapter 7

Employee Engagement – A Transformative Approach

135

Human Resource Management and Employee Engagement

155

Chapter 8 References

173

About the Authors

185

Index

187

PREFACE Leaders continue to struggle to earn the followership of others – a challenge that leaders have faced literally for millennia. According to extensive research, the key to effective leadership lies in demonstrating the ability to achieve a worthy purpose while simultaneously helping employees to improve themselves. Lacking the capacity to demonstrate those two abilities, leaders consistently fail to engage, empower, and enable employees to contribute to their companies’ success. This book addresses the importance of employee engagement – the degree to which employees feel connected to their organizations, dedicated to its purposes, and able to utilize their talents to help organizations to succeed. The alarming findings of leadership research confirm that more employees currently feel negatively engaged than fully positively engaged in their relationships with leaders, managers, and supervisors. In addition to identifying the nature of engagement, we have explained why those who lead organizations are so often ineffective – and we offer suggestions throughout this book to help leaders, managers, supervisors, and those who work in Human Resource Management to create organizational relationships that build employee trust, commitment, and ownership. While reading this book, the reader will find well-documented information incorporating the findings of management experts, practitioners, and consultants – but also new ideas that we have refined from our past research about human relationships and leadership effectiveness.

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Trust has often been called the most important ingredient in successful relationships. Ethics and leadership have been described as two sides of the same coin. Employee commitment is acknowledged to be the key to competitive advantage. Each of these factors is closely related to employee engagement and each enables leaders to develop relationships that build more effective organizations. Although there are no instant answers or magic wand solutions to restoring the lack of trust that enormous numbers of individuals have in organizations, leaders, and managers, we confidently proclaim to those who read this book that the information, recommendations, and observations contained herein are worthy of your close attention – and your application. Respectfully, Cam Caldwell Verl Anderson

Chapter 1

EMPLOYEE ENGAGEMENT – WHY IT MATTERS Employers everywhere are failing at motivating employees at an alarming rate1 and trust in leaders has universally declined2. Although employee commitment is widely recognized as a key factor in achieving a competitive advantage3, the findings of extensive research suggest that today’s managers and supervisors have largely been unsuccessful in earning the trust upon which employees’ extra efforts are based4. The willingness of employees to “go the extra mile” to serve their organizations has been frequently cited as a key requirement for companies’ competitive advantage and long-term profitability5.

Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Harrington, M. (2017). “Survey: People’s Trust has Declined in Business, Media, Government, and NGOs.” Harvard Business Review, January, 16, 2017 and found online on January 14, 2021 at For the First Time in 17 Years, People’s Trust Declined in Every Kind of Institution We Asked About (hbr.org). 3 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 4 Clifton & Harter, (2019), op. cit. 5 See, for example, Christensen, C. M., & Raynor, M. E., (2013). The Innovator’s Solution. Boston, MA: Harvard Business School Press. 1 2

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The focus of this book is on the decline in employee engagement in organizations virtually worldwide6. In this introductory chapter we define employee engagement and identify its importance in earning profits, improving product quality, increasing customer satisfaction, and enabling organizations to compete effectively in the global economy. We begin the chapter by citing extensive research about employee engagement and providing a working definition of the term that will be applied throughout the book. We then identify eight reasons why employee engagement matters so much for leaders and organizations.

Following that introduction, we provide a brief summary of each of the remaining chapters of this book to enable readers to be able to select elements of employee engagement in which they are most interested,

6

Ibid.

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3

should they choose to read the chapters out of order. Those summaries also provide an overview of the main themes that are found throughout this book, particularly with regard to helping leaders and organizations to more fully understand how they can reverse the disturbing trend in employees’ attitudes about work, the workplace, and their leaders. The chapter concludes with a challenge to readers to thoughtfully address the findings found herein and to incorporate the recommendations contained in this book to more effectively engage employees in the pursuit of organization success and personal achievement.

UNDERSTANDING EMPLOYEE ENGAGEMENT Although much has been written about employee engagement in the past several years, the definition of that term has been a subject of some disagreement by both scholars and practitioners7. In their landmark study of employee engagement across more than 150 different countries, Clifton and Harter of the Gallup group have viewed employee engagement as an employee’s self-assessment of her/his degree of personal investment in organization goals, largely as a result of interactions with managers and supervisors8.

Macey, W. H. & Schneider, B. (2008). “The Meaning of Employee Engagement.” Industrial and Organizational Psychology, Vol. 1, Iss. 1, pp. 3-30. 8 Clifton & Harter, (2019), op. cit. 7

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What appears to be consistent among the many perceptions of employee engagement is that employers recognize that employee ownership and commitment to an organization’s purpose adds value and is vital for success in today’s global marketplace9. Both the Gallup research project and an extensive study about employee engagement by the Human Resource Research Institute have emphasized the importance of dedicated employees as the sine qua non, or necessary quality, that differentiates between highly successful companies and their less profitable competition10.

The following are some of the recent ways in which employee engagement has been described by Human Resource Professionals11.      

9

An employee’s willingness to give his or her best at work. An employee’s emotional commitment to the organization and its objectives. An employee’s level of satisfaction with his or her work situation. An employee’s state when their personal values are aligned with the goals of an organization. An employee’s positive impact on business results. An employee’s degree of happiness while in the workplace.

Macey & Schneider, (2008), op. cit. HR Research Institute (2019). The State of Employee Engagement in 2019. Aurora, Canada: HR.com. 11 Ibid. p. 7. 10

Employee Engagement – Why It Matters

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Macey and Schneider have defined employee engagement as “a desirable condition, (that) has an organizational purpose, and connotes involvement, commitment, passion, enthusiasm, focused effort, and energy12.” Employee engagement results when employees demonstrate “extra-role behavior, the willingness to work hard, increased commitment, and employee creativity . . . (and) is correlated with high levels of employee satisfaction, greater morale, an interest in taking on new responsibilities, and higher rates of employee retention13.”

A critical part of understanding employee engagement and an essential part of its definition lies in recognizing how trust, commitment, and employee ownership are created by employers. Engagement is a byproduct of the relationships established between employees and their managers, supervisors, and leaders. Failing to understand the significance of an organization’s culture, the nature of the environment in which employees work, and the importance of how employees are treated by and interact with their upline equates with the total failure to fully understand employee engagement14. In a world where only 15% of employees describe themselves as fully engaged at work worldwide, the clear evidence affirms that employee engagement is a derivative result of the actions of organizational leaders, managers, and supervisors15.

12

Macey, & Schneider, (2008), op. cit., p. 4. Page 1 of Caldwell, C., Anderson, V. & Ristic, M. R., (2021). “Employee Engagement and the Ethic of Friendship.” Paper submitted to Business and Management Research. 14 Macey & Schneider, (2008), op. cit. 15 Christensen& Raynor, 2013), op. cit. 13

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Employee engagement has been described at different times as an attitude, a psychological state, a combination of traits, a propensity to act, a motivation, and as a behavior16. Throughout this book, the working definition of employee engagement is a behavior reflecting the optimal level of employee trust, commitment, dedication, and ownership achieved when managers and leaders create personal relationships, aligned programs and systems, and organization cultures that empower, develop, and involve employees as partners in achieving their organizations’ purposes. Ultimately, it is through their actions that employees demonstrate the degree to which they trust their leaders and are committed to their organization17.

WHY ENGAGEMENT MATTERS

16 17

Macey & Schneider, (2008), op. cit. Caldwell, C. and Anderson, V., (Eds.). (2019). Trust, Trustworthiness, and Stewardship: A Transformative Approach. Hauppage, New York: NOVA Publishing.

Employee Engagement – Why It Matters

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Although engaging employees as committed workplace partners is advantageous to organizations, many leaders and managers have chosen not to treat employees as fully involved organizational participants18. The logic of those who have chosen not to engage and empower employees has typically been to avoid making long-term commitments to employees by creating transactional relationships that limit an employer’s financial commitments while creating management control systems that closely supervise employee work. The following, however, are eight advantages that employee engagement can contribute to organizations. 1) Engagement is reflected in better employee performance. Employees who are fully engaged are far more likely to take on tasks that benefit an organization and that help it to achieve its established purposes19. By developing relationships with employees based upon trust, organizations are also able to reduce the transaction costs that are commonly associated with monitoring employee performance, establishing and enforcing policies, and creating high-control management systems20. Engaged employees are committed to achieving an organization’s purpose and the contributions of employees who are highly committed are widely recognized as important in adding value and creating competitive advantage21.

18

Beer, (2009), op. cit. Clifton & Harter, (2019). 20 Williamson, O. E., (2013). The Transaction Cost Economics Project. The Theory and Practice of the Governance of Contractual Relations. Northampton, MA: Edward Elgar Publishing. 21 Hayes, L., Caldwell, C., Licona, B. & Meyer, T. E., (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. 19

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2) Engagement increases innovation and creativity. When individual employees are treated as “owners and partners22” and feel fully engaged, they are likely to be more willing to take risks, to be innovative, and to offer suggestions that demonstrate their creativity23. The willingness to risk and to feel confident that so doing will be positively perceived by organization leaders is more likely to occur when those leaders encourage and support innovation24. Innovation and creativity are the keys to generating a firm’s highest possible profits and enable companies to meet the needs of new customers and existing customers25.

3) Engagement makes the change process easier to achieve. The management of change is much more successful when team members understand the purpose of the change, its benefits, and their role in the change process26. Engaging employees as partners and empowered team members gives employees both a sense of ownership regarding the changes that will be occurring and a confidence that the change will be in their best interests27. Employee engagement’s positive impact on employee trust can help organizational leaders to build 22

Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass. 23 Cameron, K. S. & Spreitzer, G. M., (2012). The Oxford Handbook of Positive Organizational Scholarship. Oxford, UK: Oxford Uni9versity Press. 24 Collins, J. & Hansen, M. T., (2011). Great by Choice: Uncertainty, Chaos, and Luck --Why Some Succeed Despite Them All. New York: Harper Business. 25 Hayes, Op.Cit. 26 Kotter, J. P., (2012). Leading Change, With a New Preface by the Author. Boston, MA: Harvard Business Review Press. 27 Ibid.

Employee Engagement – Why It Matters

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support for change and create the shared commitment necessary to make a major change successful28.

4) Engagement empowers and enriches the quality of life of employees. Engagement and empowerment are closely correlated concepts and often achieve similar goals29. Job satisfaction and positive attitudes toward work increase substantially when employees are engaged and involved30. The obligation of employers to demonstrate the authentic commitment to employees’ best interests is advocated by a growing number of scholars and practitioners because treating employees well is not only a responsibility of leaders but increases the ability of organizations to also accomplish their objectives31. Employee satisfaction and quality of life are widely recognized as correlated with successful organizations32.

28

Ibid. Caldwell C. & Anderson, V., (Eds.). (2020). Empowerment is a Choice. Hauppage, New York: NOVA Publishing. 30 HRResearch Institute, (2019), op. cit. 31 See, for example, Burns, J. M., (2010). Leadership. New York: Harper Perennial and Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 32 Bin Shmailin, A. S., (2016). “The Relationship between Job Satisfaction, Job Performance, and Employee Engagement: An Exploratory Study.” Issues in Business Management and Economics, Vol. 4, Iss. 1, pp. 1-8. 29

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5) Engagement generates profitability and competitive advantage. The importance of creating a culture that recognizes and rewards employee innovation and creativity is critical to the strategic success of companies that are seeking to establish and maintain a competitive advantage33. Employee engagement and involving employees as fully involved participants are classic qualities that help companies to create high-trust and high-performance work systems34. The evidence is clear that when organizations establish such systems they also provide better customer service, have less employee turnover, and achieve higher levels of profitability35.

33

Christensen, & Raynor, (2013), op. cit. Beer, (20090, op. cit. 35 Ibid. 34

Employee Engagement – Why It Matters

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6) Engagement achieves long-term value for society. Although harvesting the “low-hanging fruit” is advocated for companies seeking to implement an organizational change36, business organizations have also been widely criticized for a short-term approach to measuring business success when those decisions hurt long-term value creation37. Engaging employees as partners in achieving an organization’s goals may not be an “instant pudding” approach to better outcomes38, but it has also been demonstrated to be a critical element in creating long-term value for organizations39. That benefit also honors the obligation of companies to add long-term value for society – an obligation owed by businesses in today’s difficult world40.

7) Engagement reverses psychological barriers present. The psychological relationship between employees and their supervisors associated is well recognized and includes rules and policies; the nature of an organization’s culture; the leadership style of supervisors, managers, and leaders; and is closely associated with employee engagement41. Psychological barriers created by dysfunctional leadership can significantly impact job satisfaction and 36

Kotter, (2012), op. cit. Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 38 Deming, W. E., (2000). Out of the Crisis. Cambridge, MA: MIT Press. 39 HR Research Institute, (2019), op. cit. and Clifton & Harter, (2019), op. cit. 40 Friedman, T. L., (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How it Can Renew America, Release 2.0. New York: Picador Press. 41 Lockwood, N. R., (2007). Leveraging Employee Engagement for Competitive Advantage: HRs Strategic Role. Alexandria, VA: SHRM Research Quarterly found online on February 5, 2021 at 1592302_2_lockwood-2007.pdf. 37

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decrease the level of employee engagement42. Effective leadership increases job meaningfulness and promotes engagement, while dysfunctional leadership creates or increases psychological barriers in the employer-employee relationship43.

8) Engagement promotes achieving ethical behaviors. Employee engagement honors ethical principles and values when leaders and organizations model those same standards for behavior44. The best evidence about high-performance work systems affirms that organizations are most successful when their leaders honor the duties that they owe to their employees45. Treating employees well is advocated as a “covenantal” obligation46 and is described as a moral obligation for employers – although that obligation is frequently not honored. When leaders model ethical conduct, their employees are also more likely to adopt those same behaviors47.

Al Mehrzi, N. & Singh, S. K., “Competing through Employee Engagement: A Proposed Framework.” International Journal of Productivity and Performance, Vol. 65, Iss. 6, pp. 831-843. 43 Sundaray, B. K. & Vihar, C., (2011). “Employee Engagement: A Driver of Organizational Effectiveness.” European Journal of Business and Management, Vol. 8, No. 3, pp. 53-59. 44 Clifton & Harter, (2019), op, cit.., 45 Beer, (2009), op. cit. 46 See, for example, Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press, Covey, (2004), op. cit., and DePree, (2004), op. cit. 47 Kluzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (7th ed.). San Francisco, CA: JosseyBass. 42

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The evidence from extensive research confirms that creating a work environment that results in engaged employees achieves goal-oriented or instrumentally valuable outcomes. Those outcomes include greater productivity, better customer service, increased innovation and creativity, sustainable competitive advantage, and higher profitability48. We add that leaders and organizations that promote and support employee engagement also achieve normatively significant outcomes as well. Those outcomes include honoring the employer’s obligation to help employees to develop, higher employee satisfaction, and organizations that are more ethical49.

48 49

Clifton & Harter, (2019), op. cit. Caldwell & Anderson, (2020).

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SUMMARY OF REMAINING CHAPTERS

This chapter has introduced and defined employee engagement and identified some of the important ways that engaging employees can contribute to a leader’s personal credibility and an organization’s success. Each of the remaining chapters in this book focuses on different facets of employee engagement and its importance. We encourage the reader to explore each of these chapters but provide a summary that will allow readers to focus their interest on topics associated with employee engagement in which they are most interested as well.

Chapter 2 – Employee Engagement and the Leader The focus of this chapter is on the relationship between leaders’ duties owed to stakeholders and the importance of honoring those duties to generate the trust and commitment upon which employee engagement is so dependent. We begin the chapter by identifying five important stakeholders and briefly reviewing the struggles that leaders and organizations have had in retaining stakeholder trust. We identify how earning stakeholder trust can positively influence the degree to which employees are likely to be positively engaged – emphasizing the specific duties owed by organization leaders to the stakeholders whom they serve and identifying six basic principles which today’s leaders must address to increase employee engagement and commitment. We conclude the chapter by identifying four contributions that this chapter makes for practitioners and academicians interested in the role of leaders to increase employee engagement.

Employee Engagement – Why It Matters

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Chapter 3 – Breaking All the Rules – Employee Engagement for the 21st Century The purpose of this chapter is to propose a new set of guidelines for leaders in the 21st Century – literally breaking all the rules associated with the current assumptions of many leaders and organizations. The chapter begins by documenting what seem to be growing trends adopted by many organizations and their leaders. After identifying those trends, we propose a new set of rules for building relationships between employers and employees. We identify why these new rules make practical sense for business leaders in a world where increasing global competition has made it difficult for many once-great organizations to survive. We conclude the chapter with a challenge to today’s leaders to thoughtfully reflect on the assumptions which guide their actions in today’s very difficult business environ.

Chapter 4 – Employee Engagement is a Choice—Keys to Creating Trust and Commitment The focus of this chapter is on emphasizing that employee engagement, with its accompanying benefits in employee commitment and trust, is a leadership choice. Moreover, that choice requires a clear understanding of the factors that contribute to that engagement combined with the willingness to take the steps necessary to create the systems, processes, and practices that keep employees engaged.

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The chapter begins by briefly reviewing key insights about employee engagement from recent research about the topic. We then identify ten important ways that leaders can create a culture of engagement that can strengthen employee commitment and increase the likelihood of success in their organizations. We conclude the chapter with a challenge to leaders, managers, and supervisors to reassess their actions, revise their outdated assumptions about leading their employees, and making the choice to change their companies’ cultures.

Chapter 5 – Engagement and Generation Z—Culture Requirements for the Future The focus of this chapter is on understanding the unique qualities of the Generation Z age group and to identify the most effective way to engage them as company employees by creating a culture that resonates with their unique perspectives. We begin the chapter by identifying and describing the values and perspectives of the Generation Z cohort group – noting its common characteristics, identifying factors that distinguish this generation from other age groups, and explaining the significance of those factors in forming the values and priorities of Gen Zers.

We then identify the role of organizational culture in affecting employee engagement. Following that explanation, we suggest eight culturally-related management practices that can effectively address the

Employee Engagement – Why It Matters

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distinctive characteristics of Generation Z employees and clarify how those management practices can assist organization leaders to encourage, empower, and engage with Generation Z workers. We identify four contributions that this chapter makes in helping practitioners to be effective in interacting with this employee group and challenge those who will be leaders of these employees to thoughtfully consider how they can increase the level of engagement, commitment, and ownership of the Generation Z cohort.

Chapter 6 – Enggement, Empowerment, and Employee Trust The purpose of this chapter is to identify the critical behaviors that leaders must demonstrate in order to unlock the great potential that employees possess. We begin the chapter by identifying the importance of engagement and empowerment as strategies that leaders often employ to involve employees in their organizations. We identify six zones which describe a compliance-commitment continuum and reflect the degree of employee commitment to organizations. We clarify why employee engagement and empowerment ultimately depend upon the ability of leaders to prove that they can be trusted by those whom they lead and suggest five reasons why creating a high-trust leader-follower relationship is so critical to organizations. We close the chapter with a challenge to leaders to examine their personal commitment to their employees by incorporating key elements of trust in building relationships.

Chapter 7 – Employee Engagement—A Transformative Approach The focus of this chapter is on understanding a “transformative” approach to leadership that is based upon an integrated model of leadership that combines six other leadership perspectives and honors the ethical duties owed by leaders to the employees with whom they work. We begin the chapter by briefly explaining why many employees

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are disengaged or under committed to their leaders and organizations. We then introduce Transformative Leadership (TL) and clarify how that leadership model reflects key qualities of the six leadership perspectives upon which it is based.

We explain how the contributions of each of those six perspectives promote employee engagement and explain why creating commitment is viewed by employees as an ethical obligation owed by those who lead them. The chapter concludes by encouraging leaders to rethink their assumptions about the ethical duties that they owe to their employees and recognize how those ethical duties relate to employee engagement and TL in their own leadership approach.

Chapter 8 – Human Resource Management and Employee Engagement In this chapter we examine the struggles of TMTs and organization leaders specifically associated with their inability to understand, establish guidelines for, and oversee their HRM systems in establishing aligned programs and policies that engage employees. We introduce ten current deficiencies occurring in many 21st century corporations in creating effective HRM systems, explaining how those shortcomings undermine employee engagement, commitment, and trust. Following that introduction, we cite recommendations from highly regarded experts who have identified changes necessary in addressing the problems that so many organizations have failed to adequately address. We conclude

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with encouragement to TMTs, organization leaders, and Human Resource Professionals (HRPs) to incorporate these recommendations.

CONCLUSION The struggle facing organizations and their leaders has become more difficult in the face of the global pandemic that has paralyzed the economy and financially affected the entire world. In response to that pandemic, the increase in global competition, and the aftermath of the worldwide economic crisis of 2008-2009, organizations of all types and their leaders have changed the way that they have managed. Downsizing organizations and hiring part-time and temporary employees for nearly all of the new jobs created, organizations have changed the workplace culture and overhauled and redefined the employer-employee relationship.

The evidence suggests that this new relationship has been accompanied by decreased trust in leaders, lower employee engagement, and a work world in which the prospects for greater employee ownership and commitment have plateaued or declined. That same evidence confirms that organizations that create work cultures that promote employee engagement are much more successful than their competitors50 – yet many leaders seem to have chosen not to establish

50

Beer, (2009), op. cit.

20 organizations that engagement51.

Cam Caldwell and Verl Anderson encourage

employee

empowerment

and

The message of this book – and the growing body of evidence about the employer-employee relationship – clearly indicate that organizations and their leaders worldwide need to immediately rethink their assumptions about leadership and human relations. The challenges facing organizations will continue to exist – and are likely to actually worsen, given current trends in organizations. Only by rethinking assumptions about managing organizations and leading people can tomorrow’s leaders increase the employee trust and commitment so vital to healthier organizations, more satisfied employees, and a better society52.

51 52

Clifton & Harter, (2019), op. cit. Beer, (2009), op. cit.

Chapter 2

EMPLOYEE ENGAGEMENT AND LEADERS’ DUTIES Because today’s leaders have been so unsuccessful in their struggle to keep the trust of so many of those whom they lead53, that loss of trust has resulted in 15% of employees worldwide reporting that they are not fully engaged at work54. Employee engagement and employee commitment have often been cited as the keys to organizations’ successes and the critical factors in differentiating highly successful organizations from their competitors55.

Edelman, (2021). “Edelman Trust Barometer 2021” found online on March 26, 2021 at 2021 Edelman Trust Barometer.pdf. 54 Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. 55 HR.Research Institute, (2019). The State of Employee Engagement in 2019. Found online on March 26, 2021 at The_State_of_Employee_Engagement_ 2019_ResearchReport_hrdotcom_Glint.pdf (glintinc.com). 53

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For decades, experts in academia and in organizational research have reported that the key to effective organizations is tied to those who lead – but the track record of those leaders has often been notably disappointing56. The ineffectiveness of many in leadership positions has also been identified as the critical cause of what has so often undermined employee commitment57. At issue, according to many researchers, is the limited effectiveness of leaders in honoring what are perceived to be the duties owed by leaders and organizations to their stakeholders58.

The focus of this chapter is on the relationship between leaders’ duties owed to stakeholders and the importance of honoring those duties to generate the trust and commitment upon which employee engagement is so dependent. We begin the chapter by identifying five important stakeholders and briefly reviewing the struggles that leaders and organizations have had in retaining stakeholder trust. We identify how earning stakeholder trust can positively influence the degree to which employees are likely to be positively engaged – emphasizing the specific duties owed by organization leaders to the stakeholders whom they serve and identifying six basic principles which today’s leaders must address to increase employee engagement and commitment. We 56

See, for example, Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press, Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press, and Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 57 HR.Research Institute, (2019), op. cit. 58 Carroll, A. C., Brown, J. & Buchholtz, A. K., (2017). Business & Society: Ethics, Sustainability, and Stakeholder Management (10th ed.). Boston, MA: Cengage Learning.

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conclude the chapter by identifying four contributions that this chapter makes for practitioners and academicians interested in the role of leaders to increase employee engagement.

STAKEHOLDERS AND EMPLOYEE ENGAGEMENT Employee engagement efforts primarily involve the direct personal relationship that exists between each employee and her/his direct supervisor59. That relationship is based upon obligations and responsibilities that are part of the express or implied psychological contract that exists in virtually every interpersonal relationship within a work world context60. In addition to the supervisor and the employee, however, there are three other important stakeholders that impact and are impacted by the employee engagement relationship. The following is a brief summary of the nature of employee engagement and the duties implicit in the engagement responsibility.

Top Management Team One of the most important stakeholders in any organization is its Top Management Team (TMT) which is responsible for creating and 59 60

Clifton & Harter, (2019), op. cit. Rousseau, D. M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Oakland, CA: SAGE Publishing.

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maintaining an organization’s culture61. Organizations and their leaders owe a series of highly important duties to themselves – as well as to the organization’s other stakeholders affected by their actions. Because the ultimate responsibility of a TMT is to create the culture and work climate in which employees work, examining the duties of those leaders associated with creating that culture is the best place to begin in attempting to understand the ethical and moral obligations associated with employee engagement62.

According to many ethical scholars, the obligation of every organization’s top leadership group is to strive to optimize long-term value creation for their firm and its stakeholders. Working for a common good, meeting the needs of all stakeholders, seeking to optimize wealth creation for society, and building as sustainable business are all viewed as stewardship responsibilities associated with duties owed to stakeholders63. Honoring the ethical obligations owed to stakeholders in creating value is the ultimate responsibility of TMT members – a responsibility that TMTs also owe to themselves. Unfortunately, many organizational leaders view their responsibility as simply creating

61

Schein, E. H. & Schein, P. A., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. 62 Schein & Schein, (2016), op. cit. 63 See Carroll, Brown, & Buchholtz, (2017), op. cit., Kokemuller, N., (2019). “Responsibilities a Business Owner Owes to Its Stakeholder Groups.” AZCentral, August 1, 2019 and found online at Responsibilities a Business Owner Has to Its Stakeholder Groups (azcentral.com) on March 29, 2021, and Hernandez, M., (2012). “Toward an Understanding of the Psychology of Stewardship.” Academy of Management Review, Vol. 37, Iss. 2, pp. 173-192.

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shareholder wealth by seeking short-term profitability – a result of the commonly held viewpoint of the capital asset pricing model64. Although there are many advocates of the larger ethical obligations of the modern organization and the duties owed by business to society-at-large65, the narrow perspective of “I got mine. . . You get yours” is commonly held by many who take a short-term and limited view of business duties owed to society66.

The short-term focus of many TMTs has been to downsize their organizations, cut labor costs by hiring part-time and temporary employees, and create relationships that treat employees more like commodities than like people67. This new employment relationship over the past two decades has systematically undermined employee trust – leading to the decline in employee commitment that is so critical in companies to generate long-term value creation68. Ironically, this redefining of the unwritten obligation to treat employees as valued 64

See, for example, Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press and Hayes, L., Caldwell, C., Licona, B. & Meyer, T. E., (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. 65 Solomon, R. C., (1992). Ethics and Excellence: Cooperation and Integrity in Business. Oxford, UK: Oxford University Press. 66 Friedman, T. L., (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution and How It Will Renew America, Release 2.0. New York: Picador Press. 67 See, for example, Pfeffer, (1998), op. cit., Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press, and Caldwell, C. & Anderson, V., (2020). Leadership – Touching Lives. Hauppage, NY: NOVA Publishing. 68 Ibid.

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partners is also in conflict with TMTs’ own self-interests as shareholders – based upon the impact of this new “arms-length” approach to the employer-employee partnership69. If TMT members were to act in their self-interest, the evidence from recent research suggests that they would create high-trust partnerships in which they empowered employees, invested in their training, delegated responsibility to employees, and informed them regarding important organizational issues70. According to the late Harvard University scholar, Clayton M. Christensen, treating employees as valued partners enables organizations to strengthen employee commitment, increase personal ownership of company objectives, and enhance the creativity so vital for innovation and competitive advantage71.

Despite the importance of this evidence about creating organizations that engage and empower their employees, the disturbing reality is that many TMTs adopt a strategy of micromanagement and high control that undermines employee commitment and erodes organizational Caldwell, C., Atwijuka, S., & Okpala, C. O., (2018). “Compassionate Leadership in an Arms-Length World.” Journal of Business and Management, pp. 1-8. 70 See, for example, Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass and Caldwell, C., and Floyd, L. A., (2014). “High Performance Work Systems: Building Commitment to Increase Profitability.” Graziadio Business Review, Vol. 17, Iss. 3, found online at http://gbr.pepperdine.edu/2014/12/high-performance-worksystems/. 71 Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Publishing. 69

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performance72. The unfortunate trend of the last two decades is that many TMT stakeholders have proceeded to transform the workplace into a low-trust work environment by failing to understand the importance of building organizations in which other stakeholders are confident of their integrity. The result has been a work environment in which employees feel uncertain about the commitment of their leaders toward their best interests and are likely to be looking for new opportunities elsewhere.

For example, according to a 2018 Workplace Health Survey of 17,00 employees in 19 industries reported by Inc. magazine, 70 percent of those responding “were either ‘actively looking for new job opportunities’ or were thinking about it ‘always, often, or sometimes73.’’’ TMTs responsible for creating the culture of their organizations whose employees respond with an unwillingness to be invested in their companies’ futures are failing themselves and their companies’ ability to optimize profitability – in addition to undermining their responsibility to other stakeholders.

72

73

Bevoc, L., (2016). Leadership Style, Toxic Leadership, Micromanagement, and Organizational Culture: 4 Topics in 1 Book. Seattle, WA: CreateSpace Independent Publishing Platform. Schwantes, M., (2018). “A New Study Reveals 70 Percent of Workers Say They Are Actively Looking for a New Job. Here’s the Reason in Five Words.” Inc.com, Dec. 4, 2018 and found online on March 29, 2021 at A New Study Reveals 70 Percent of Workers Say They Are Actively Looking for a New Job. Here's the Reason in 5 Words | Inc.com.

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Society-at-Large Society-at-large, or individuals and community customers who are aware of a company and its actions, are another group of stakeholders affected by an organization and its leaders’ actions. An organization’s values, beliefs, and actions reflect a company’s culture and those actions send a significant message to the communities where a company does business74. Each of the policies, actions, and activities of a company convey the commitment of a company and its leaders to being good corporate citizens.

According to a survey reported in a 2017 Harvard Business Review article, trust in business and in its leaders has unfortunately declined in the minds of the general public75. The article specifically declared that “(e) ach institution must find its own ways to address societal concerns by working to improve the long-term economic and social conditions of communities; by creating public forums that educate about and advocate for policies; and by directly communicating the benefits of economic growth that is driven by industry76.”

74

Schein & Schein, (2016), op. cit. Harrington, M., (2017). “Survey: People’s Trust has Declined in Business, Media, Government, and NGOs.” Harvard Business Review, January 16, 2017 and found online on March 29, 2021 at For the First Time in 17 Years, People’s Trust Declined in Every Kind of Institution We Asked About (hbr.org). 76 Ibid. 75

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The role which a company plays in providing jobs for a community, the salaries that it pays, the community projects in which it participates, the environmental footprint made on the community, and its commitment to societal and community priorities are all part of the “corporate social responsibility” role of a company77. Company policies in the way it hires, trains, retains, and lays off employees also establish its reputation and demonstrate its commitment to doing what it claims it will do as a corporate citizen78. Leaders communicate their values to customers by how they treat their employees and earn the trust of those customers and their neighbors by the quality of their customer service, their roles within their communities where they do business, and the commitment which they demonstrate to address community needs and societal problems79. Increasingly, the reputation of companies and their leaders is affected by their willingness to be partners within their communities with other organizations and with community groups to address community and societal issues80.

77

Beal, B. D., (2013). Corporate Social Responsibility: Definition, Core Issues, and Recent Developments. Oakland, CA: SAGE Publishing. 78 Ibid. 79 Ibid. 80 Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-115.

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When companies maintain an excellent reputation in their community, employees take greater pride in their company and demonstrate a greater commitment to its mission and purpose. A European study found that employees feel a greater commitment to their companies when they are able to personally align with their company’s image and its reputation for fairness81. A study in an African journal reported that a company’s corporate social responsibility commitment not only positively influenced employee attitudes but its corporate financial performance as well82. Honoring ethical responsibilities owed to society and being a highly-regarded corporate citizen seem to positively impact public perceptions as well as employee commitment and engagement.

81

82

Coiner, J. & Esteban, R., (2007). “Corporate Social Responsibility and Employee Commitment.” Business Ethics, The Environment and Responsibility, Vol. 16, Iss. 1, pp. 19-33. Ali, I., Rehman, K. U., Ali, S. I., Yousaf, J. & Zia, M., (2013). “Corporate Social Responsibility Influences, Employee Commitment and Organizational Performance.” African Journal of Business Management, Vol. 4, Iss. 12, pp. 2796-2801.

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Individual Supervisors Organizational leaders owe their managers and supervisors the individual coaching and resources to be successful in their jobs. Those resources include the company policies, personalized training and development, and human resource management (HRM) support that enables supervisors to create effective relationships with their workforce83. The growing evidence about successful relationships in organizations emphasizes that the relationship between employees and their supervisors is the critical factor affecting the degree of employee commitment and affirms the importance of an organization’s overall culture in supporting highly successful supervisor-employee relationships84.

Supervisory and managerial positions are often filled by the most productive line employee of a department or by an academically-trained outside individual who may often be unfamiliar with the subtleties of the work performed by those to be supervised85. The training of first-line supervisors is often limited – if and when it occurs at all86. Although

83

See, for example, Pfeffer, J., (1998), op. cit., Beer, (2009), op. cit., and Caldwell, C., and Floyd, L. A., 2014. “High Performance Work Systems: Building Commitment to Increase Profitability.” Graziadio Business Review, Vol. 17, Iss. 3, found online at http://gbr.pepperdine.edu/2014/12/high-performance-work-systems/. 84 Clifton & Harter, (2019), op. cit. 85 Holland, J. N., (2018). Yay! I’m a Supervisor. Now What? Amarillo, TX: Thriftbooks. 86 Shepherd, E. & Phaup, J., (2020). Talent Transformation: Develop Today’s Team for Tomorrow’s World of Work. Miami, FL: Talent Transformation Press.

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individuals are often promoted to supervisory positions based upon their technical skills, the ability to relate to others and to care about their needs is an essential priority of today’s supervisors87. Success or failure in creating effective organizations typically depends upon supervisors’ relationship-building skills88.

Following the trend to downsize organizations, the role of supervisors in the modern organization has changed markedly89. Selfmanaged work teams – an organizational structure where leadership rotates among members of a work group – have frequently been established, based upon the premise that employees who work together know how to perform their jobs and are capable of their own problem solving. However, the individual responsible for the supervising of several such teams is often spread thin. Supervisors with a broad span of control are commonly tasked by organization leaders to emphasize cost containment and productivity, rather than improving employee relations. Particularly in the wake of the 2008 worldwide financial crisis, organizations have moved toward hiring part-time and temporary

Santonino, M. D. & Villa, F. J., Jr., (2017). The Supervisor’s Guide to Human Relations and Communication. Seattle, WA: CreateSpace Independent Publishing. 88 Ibid. 89 MacNeil, C. M., (2004). “Exploring the Supervisor Role as a Facilitator of Knowledge Sharing in Teams.” Journal of European Industrial Training, Vol. 28, Iss. 1, pp. 294307. 87

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employees – decreasing the emphasis on treating employees as valued long-term organization partners90. The changing nature of the HRM role has also affected first-line supervisors. Rather than staffing organizations to meet employee needs and addressing the importance of creating a high-trust organization culture, Human Resource Professionals (HRPs) have been asked to focus on issues associated with managing “big data,” increasing the utilization of technology, adapting more effectively to the speed of change, and identifying solutions to global expansion91. The unique requirements of managing many new part-time and temporary employees and creating a highly-committed work group are somehow lost on the priority list of HRPs who, in many cases, are inadequately trained themselves92.

The bottom line is that individual supervisors who are primarily viewed as responsible for the decline in employee engagement are frequently left to muddle through – attempting to manage employees who are often treated as commodities while having little reason to be

Popken, B., (2016). “Most Jobs Created Since 2005 are Nontraditional.” NBCNews.com, December 8, 2016 and found online on March 30, 2021 at Most Jobs Created Since 2005 Are Nontraditional (nbcnews.com). 91 Morgan, J., (2019). “6 Trends Shaping the Future of Leadership.” HRTrendInstitute.com, December 17, 2019 and found online on March 30, 2021 at 6 trends shaping the future of leadership | HR Trend Institute. 92 Gomez-Mejia, L. R., Balkin, D. & Carson, K., (2019). Managing Human Resources (9th ed.). NY: Pearson Publishing. 90

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confident of those who lead them93. Often inadequately trained and under-supported by HRPs who are struggling themselves with a growing workload, individual supervisors find themselves tasked with achieving constantly improving results while working with employees who have one eye on their work and their other eye on finding a better job. No wonder such supervisors struggle to succeed!

Individual Employees Whenever employee engagement is a work-related issue, there are always individual employees involved. Employees are engaged when they are treated as valued individuals, rather than as simply members of a larger group. Each employee has the obligation to do much more than simply meet the minimum expectations required of a job assignment if that employee is to become fully engaged at work. It is clear that employees are each in the position where they are required to respond to the context of a work situation, but individuals also have the obligation to make the effort to do more than simply comply with the bare minimum work expectations of the job if they wish to be treated as valued partners.

The mental model of an engaged employee is one in which (s)he views the work to be performed as purposeful, meaningful, and value producing. According to the Job Characteristics Model, work performed 93

Sturt, D. & Nordstrom, T., (2018). “10 Shocking Workplace Stats You Need to Know.” Forbes, March 8, 2018 and found online on March 30, 2021 at 10 Shocking Workplace Stats You Need To Know (forbes.com).

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is most engaging when it is challenging, requires autonomy, contains a variety of tasks, and includes a moderate degree of autonomy94. Accepting other work that is boring, lacking in variety, or that does not enable them to learn and grow is a self-deluding job choice by which an employee allows herself or himself to be employed in work that is unlikely to be personally fulfilling – and is a job in which (s)he is certainly unlikely to ever be fully engaged. Individual employees are obviously likely to struggle to be highly engaged in a work environment in which trust is low, a commitment to employee interests is missing, and supervisors communicate that their primary interest is in themselves and in their organization’s profits. At the same time, employees have an obligation to be open with those for whom they work to clarify to them their own assumptions about the work relationship – and high performing and highly committed employees have a moral and ethical responsibility to confirm those assumptions and their goals if they wish to work for an organization beyond the short term95.

Ultimately, however, employees are often victims of poor leadership, supervisors who they simply cannot trust, and organizational policies and rules that fail to treat them as valued partners96. The unfortunate reality, Saavedra, R. & Kwun, S. K., (2000). “Affective States in Job Characteristics Theory.” Journal of Organizational Behavior, Vol. 21, Iss. 2, pp. 131-146. 95 Caldwell, C., Floyd, L. Atkins, R., & Holzgrefe, R., (2012). “Ethical Duties of Organizational Citizens: Obligations Owed by Highly Committed Employees.” Journal of Business Ethics, Vol. 110, Iss. 3, pp 285-299. 96 Pfeffer, (1998), op. cit. 94

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according to the extensive research contained in the Gallup study – and other studies as well – is that the failures of organizations and their leaders is a common reality and individual employees have relatively little leverage in the employers’ market of 2021. Employee engagement, however, is an issue that individual employees should inform themselves about and, whenever possible, those well-informed employees should recognize that it is in their best interests to look for employers which have leaders who appreciate the importance of creating a work culture where employees can be empowered, engaged, and appreciated.

The Employee Group The entire employee group of an organization is the fifth stakeholder associated with employee engagement. Employees in this group and the degree of employee engagement are all affected by a company’s policies, the skills and effort of supervisors, the leadership example of the TMT, and the culture of the organization. As a collective group, employees tacitly learn from the organization what it values – as differentiated from the claims that are made by those who lead97. Although the degree of employee engagement that is possible in an organization is largely determined by the actions of leaders and supervisors, employees as a group also have a role in their commitment to an organization.

97

Schein & Schein, (2016), op. cit.

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The realities of the modern 21st century work world have redefined old ground rules about the employer-employee relationship. Employees as a group must acknowledge that they are also responsible for the culture of their organization and their willingness to be committed is a contributing factor to that culture and their company’s ultimate success or failure98. Although little is written about the importance of the follower’s role, more than eighty years ago Chester Barnard emphasized the role of employee commitment and followership as critical to every successful organization99. Barnard’s contemporary, Mary Parker Follett, also emphasized the importance of “power with” rather than “power over” others as an important factor in thriving organizations100.

Within the context of the 21st century’s totally redefined world, wise employee group members will recognize that their relationship with organizations has changed. Long-term organizational commitments to workers’ welfare are rare in a work environment in which companies are readily bought and sold, pension benefits disappear as companies declare bankruptcy, and the employment-at-will doctrine makes virtually every employee vulnerable to downsizing, restructuring, or furloughing. Accordingly, employees as a collective group and as individuals have the obligation to constantly keep learning, to identify how they can add value to their organizations, and to prepare themselves for the possibility that they may need to find a new employer for which to work.

98

Hayes, et al., (2015), op. cit. Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College. 100 Follett, M. P., (2013). Dynamic Administration: The Collected Papers of Mary Parker Follett. Eastford, CT: Martino Fine Books. 99

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The evidence about employee engagement in the 21st century affirms that employee engagement is an elusive relationship – but that employees who are fully engaged are more likely to be contributors to their companies’ profitability and competitive success101. Although employees are often dependent upon their leaders’ willingness to establish programs and policies that support empowerment and engagement, it is nonetheless also true that those same employees have the ability to contribute to the success of their companies and the success of those companies is directly correlated with employees’ understanding of the importance of their roles in contributing to the profitability, sustainability, and competitive advantage of those same companies102.

In today’s work environment, organizational leaders and employee group members often fail to realize the importance of creating and 101 102

Clifton & Harter, (2019), op. cit. and HR.Research Institute, (2019), op. cit. Christensen, (2016), op. cit.

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supporting an environment that promotes employee engagement – resulting in a net loss for the leaders, the employees, and society103. Leaders who lack an appreciation of the importance of creating a hightrust organizational culture have the primary responsibility to earn employee commitment by their actions104 – but employee groups who lack an awareness of their contribution to their company’s success also have an obligation to become true partners in their organization’s ability to be profitable and sustainable105.

THE LEADERS’ RESPONSIBILITIES Although each of the stakeholders can contribute to creating a culture of employee engagement, it is widely acknowledged that the primary responsibility of establishing that culture lies with the Top Management Team106. That responsibility is apparently not fully understood by leaders and managers in many organizations107 – but much has been written about the need for organizational leaders to rethink basic principles associated with human behavior that impact employee followership and commitment108. The primary obligation of today’s leaders is to recognize that their current assumptions about achieving organizational success are out of date and no longer effective in the 21st century work context.

103

Clifton & Harter, (2019), op. cit. See Pfeffer, (1998), op. cit., Beer, (2009), op. cit. and Caldwell & Anderson, (2020), op. cit. 105 Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass. 106 Schein & Schein, (2016), op. cit. 107 Clifton & Harter, (2019), op. cit. 108 See, for example., Burns, J. M., (2010). Leadership. New York: Harper, Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (7th ed.). San Francisco, CA: Jossey-Bass, and Caldwell & Anderson, (2020), op. cit. 104

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One of those erroneous and most detrimental assumptions is the belief that employees are commodities and cost centers to be minimized, rather than the key to generating and sustaining their companies’ success109. At the heart of this misguided thinking is the hubris of academically-trained technocrats who believe that running a company is a numbers game rather than a process based upon creating successful relationships. Taking a “command and control” approach to leading people has proven to be ineffective and is inconsistent with the basic principles of effective human relationships – but that management model continues to persist in many organizations110.

At the heart of leaders’ ethical responsibilities is the need to function as ethical stewards – demonstrating a long-term commitment to wealth creation that honors obligations owed to society and to all 109 110

Christensen, (2016), op. cit. Seddon, J., (2019). Beyond Command and Control. New York: Vanguard Press.

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stakeholders111. This long-term vision and a commitment to others earns leaders the trust of those with whom they work and demonstrates that the people with whom they associate are ends in and of themselves, rather than simply the means by which leaders maximize their own shortterm self-interests. Stanford University’s Jeffrey Pfeffer has proposed a principle-based set of guidelines for “building profits by putting people first” that are fundamentally ethically-based guidelines for creating successful organizations112. Despite the fact that Pfeffer’s ideas have been largely ignored by practitioners, a growing body of evidence has confirmed the wisdom of Pfeffer’s insights. We suggest six specific recommendations that summarize Pfeffer’s thinking. 1) Creating a supportive culture is an ongoing focus. Leaders have the opportunity and the obligation to create a work environment and culture that adopts inspiring moral values, integrates policies with strategy, and provides support systems that enable people to succeed113. A primary part of such a culture is an integrated HRM system with policies and programs that mesh, make sense, and reinforce an aligned management approach.

111

Hernandez, (2012), op. cit. Pfeffer, (1998), op. cit. 113 Ibid. 112

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2) Treating employees as partners and friends is the key to generating commitment and trust. Policies and actions that demonstrate to employees that they are full “owners and partners” in the success of their organizations empower employees, treat them with dignity and respect, and earn their trust by honoring promises made to them114. Great leaders who understand the importance of generating trust also acknowledge that leadership is a “nose-to-nose” and “face-to-face” personal relationship – and invest in training supervisors to create such relationships115. Those same leaders “model the way” by setting a personal example for supervisors and managers116.

3) Selecting world class employees is a critical priority. Rather than scrimping on the employee selection process, the most effective leaders understand the critical importance of getting “the right people on the bus” by hiring employees at every level who have world class skills, knowledge, and abilities117. Hiring based upon “flair factors,” or the unusual skills and abilities that make an individual uniquely qualified to add value, is a wise strategy that enables a company to differentiate itself from its competition118. The behavioral skills of great

114

Block, (2013), op. cit. Kouzes & Posner, (2017), op. cit. 116 Ibid. 117 Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . . And Others Don’t. New York: Harper Collins. 118 Caldwell, C, Beverage, M., and Converse, P., (2018). “Selecting for Flair Factors: Improving the Selection Process.” Business and Management Research, Vol 7, No. 115

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talent are especially important in creating espirit within an organization that brings people together in a united effort that strengthens an employee engagement culture119.

4) Investing in constant employee training and development is an ongoing process. Treating employees as a long-term resource makes great sense and demonstrates to individuals that they are a key organizational priority, rather than a short-term expense120. Training and development is also essential to maintain a competitive advantage in a world where constant learning and technological innovation are critical to success121. Continuous improvement of systems and processes and monitoring customer needs are essential elements of training and development that enable companies to keep pace in a constantly changing world122.

1, pp. 1- 9 and available online at http://www.sciedupress.com/journal/index. php/bmr/article/view/12892/7975. 119 Ibid. 120 Noe, R., (2019). Employee Training and Development (9th ed.). Boston, MA: McGrawHill Education. 121 Christensen, (2016), op. cit. 122 Ibid.

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5) Open two-way communication is the foundation for improvement. Employee engagement is strengthened when organization leaders not only share information with employees throughout their company but when they also listen to employee feedback123. Two-way communication enables employees to appreciate the fact that their role includes helping an organization to improve customer service and to make necessary changes to improve the organization. Keeping employees informed about how value is created and providing specific information about key performance indicators related to their jobs also enables those employees to understand how they can add value and reduce unnecessary costs124.

123 124

HR.Research Institute, (2019), op. cit. Pfeffer, (1998), op. cit.

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6) Demonstrating commitment to employees’ interests is long-term and mutual. Leaders demonstrate their commitment to employees’ interests by adopting policies that consistently treat those employees as full partners whose needs are understood and addressed125. At a time when many organizations have adopted an “arms-length” relationship with employees, leaders who make a commitment to employees’ long-term needs are actually rare. However, the organizations led by those leaders have seen employees reciprocate in the form of greater employee commitment, improved customer service, greater innovation, and reduced turnover costs126.

The unfortunate reality, well-documented by the 2019 Gallup research, is that most organizations fail miserably at incorporating these principles – resulting in employees who are typically not committed to their organizations’ success and who are only marginally engaged at work.

125 126

Ibid. Ibid.

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CONTRIBUTIONS OF THE CHAPTER Employee engagement has received exponentially more public attention in light of the worldwide 2019 Gallup study and the report published by HR Research Institute about the topic. That research has confirmed the critical importance of leaders and organizations coming to terms with their erroneous assumptions about managing the modern organization and has provided clear evidence as to why the “command and control” model is not effective in the 21st century.

We join with those who have been critical of old ways of dealing with employees – as well as the increasing tendency to treat employees as a short-term investment or as a commodity or cost that needs to be contained in order to compete successfully. The importance of employees as organization assets is essential for competitive success, but organizational leaders also have a moral obligation to treat the people they hire as valued individuals. The relationship between leaders and employees must be understood at the personal level for organizations to optimize their ability to succeed127. We suggest that our chapter makes four important contributions to the employee engagement literature that both add value for practitioners and provide opportunities for additional dialogue for academic scholars.

127

Kouzes & Posner, (2017), op. cit.

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1) We emphasize leaders’ obligations to make employee engagement a critical priority for long-term success. The evidence that is well-documented in the Gallup study is that organizational leaders throughout the world are badly off target in recognizing the importance of employee engagement as a factor for organization success. Those same leaders have appeared to adopt strategies that undermine employee commitment, trust, and the willingness to personally invest in their companies’ long-term success.

2) We identify how employee engagement affects five key stakeholders who play vital organizational roles. We have provided specific information about the roles played by those five stakeholders, emphasizing the importance of each of the stakeholders in achieving organizational goals. The emphasis of our review has placed the primary responsibility on the Top Management Team and those who fill the leadership roles on that team – but we have noted how all five stakeholders have a shared interest in the ability of leaders to promote employee engagement.

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3) We propose six guiding principles for leaders and organizations to increase employee engagement efforts. Each of these guiding principles is based upon well-established research about creating successful organizations. Although the underlying evidence associated with this research is well documented, it is nonetheless apparent that those who lead many of today’s organizations either fail to understand the importance of this research or choose not to incorporate it within their organizations – to the detriment of their organizations and, ultimately, to the detriment of society.

4) We stress the behavioral nature and great importance of personal relationships in increasing employee engagement. Effective leadership is, in the end, a relationship128. Employee engagement is achieved by leaders, managers, and supervisors understanding the importance of treating employees as valued partners and friends129. When those who lead, manage, and supervise treat employees as “Its” or commodities, rather than as people who matter, the relationship with those employees is virtually guaranteed to break down130.

128

Kouzes & Posner, (2017), op. cit. Caldwell, C. & Anderson, V., (2021). “Employee Engagement and the Ethic of Friendship.” Paper accepted for publication in Business and Management Research. 130 Ibid. 129

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These four contributions are worthy of thoughtful consideration as practitioners and scholars strive to add value to organizations in today’s competitive world.

CONCLUSION The importance of leaders in organizations has been widely discussed for decades131. Leaders’ responsibilities in helping organizations to achieve shared goals through cooperative effort have been universally agree upon – despite the fact that many have disagreed about the most effective way for leaders to achieve those goals132. Cutting through all the dialogue and academic posturing, the evidence is irrevocably clear that leaders are most effective when they work with their employees rather than simply attempting to command and control them133.

131

Barnard, (1938), op. cit. Burns, (2010), op. cit. 133 Kouzes & Posner, (2017), op. cit. 132

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The research on employee engagement and the leaders’ responsibilities offers valuable insights for leaders, managers, and supervisors – despite the fact that many of those individuals either refuse to accept the evidence about core principles associated with effective human relationships. To those who are willing to consider the importance of working in partnership with their employees and engaging them as valued individuals, the research about employee engagement has the potential to improve organizations, add value to society, and improve the sustainability of society and the companies who adopt its principles.

Chapter 3

BREAKING ALL THE RULES – EMPLOYEE ENGAGEMENT FOR THE 21ST CENTURY In his landmark book about the keys to successful organizations, Stanford University’s Jeffrey Pfeffer suggested that the “new employee contract” has changed, compared to the “contract” between employers and employees of previous decades134. Rather than treating employees as valued assets with whom they have a long-term relationship, Pfeffer explained that modern employers have adopted an arms-length relationship in which the commitment to employees is primarily shortterm and focused on a transactional exchange of a paycheck for work performed135. Pfeffer’s thesis is that employers have been going down the wrong path and that the key to long-term success is to create a hightrust work culture136.

134

Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 135 Ibid. 136 Ibid.

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Consistent with Pfeffer’s claim that the causes of organization dysfunction were by applying incorrect assumptions, the past two decades have seen employers misapply correct principles about human relations and become increasingly short-term in their thinking about the employee relationship. This short-term focus has led to an overall decline in employee commitment and an awareness of the need to reassess assumptions about relationships with employees. The evidence from recent research about the modern work environment confirms that the current trends of the employer-employee relationship require a comprehensive reassessment if business leaders are to reestablish positive relationships with the employees with whom they work137.

137

Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press.

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The purpose of this chapter is to propose a new set of guidelines for leaders in the 21st Century – literally breaking all the rules associated with the current assumptions of many leaders and organizations. The chapter begins by documenting what seem to be growing trends adopted by many organizations and their leaders. After identifying those trends, we propose a new set of rules for building relationships between employers and employees. We identify why these new rules make practical sense for business leaders in a world where increasing global competition has made it difficult for many once-great organizations to survive. We conclude the chapter with a challenge to today’s leaders to thoughtfully reflect on the assumptions which guide their actions in today’s very difficult business environ.

CURRENT TRENDS

Trends in organizational leadership have accompanied the scurrying to cut costs as businesses have sought to compete on the basis of low price in order to survive in an increasingly competitive world. The following are ten trends that address this recent quest to achieve financial efficiency. We suggest that these trends, while emphasizing operational efficiency in organizations, can actually be to the long-term detriment of organizations.

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1) Contracting out traditional HRM functions. Although there may be cost savings involved in contracting out HRM functions like payroll and training and development, outsourcing functions that negatively affect organization culture, employee development or that conflict with an organization’s values is actually a bad idea138. Temporarily reducing money spent for HRM services that improve an organization’s effectiveness is counterproductive to achieving a company’s ability to serve customers, retain employees, and improve the quality of services139.

2) Hiring part-time, temporary, and contract employees. The trend of hiring part-time, temporary, and contract employees has become so common that, according to research conducted by professors from Harvard and Princeton, 90% of all of the new positions created from 2005 to 2016 fit within the category of a contingent workforce140. While contingent employees may be beneficial for organizations to fit a shortterm or emergency need, the evidence also suggests that temporary employees are less satisfied and have a lower level of commitment to an organization’s mission – typically resulting from the fact that these

Cicek, I. & Ozer, B., (2011). “The Effect of Outsourcing Human Resource on Organizational Performance: The Role of Organizational Culture.” International Journal of Business and Management Studies, Vol. 3, Iss. 2, pp. 131-144. 139 Caldwell, C. and Anderson, V., (Eds.). (2018). Human Resource Management: A Transformative Perspective. Hauppage, New York: NOVA Publishing. 140 Kopf, D., (2016). “Almost All the US Jobs Created Since 2005 Are Temporary.” Quartz, December 5, 2016 and found online on April 2, 2021 at Almost all the 10 million jobs created since 2005 are temporary — Quartz (qz.com). 138

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employees have a lower quality relationship with supervisors and managers141.

3) Downsizing organizations but increasing span of control. The downsizing trend, the creation of self-managed work teams, and the increase in the number of employees assigned to supervisors by flattening organizations has been a common practice as organizations have attempted to decrease costs. The impact of these changes, however, has limited the quality of supervisor-team member relationships – often influencing the quality of work performed142.

Bolino, M. C. & Turnley, W. H., (2009). “Relative Deprivation Among Employees in Lower-Quality Leader-Member Exchange Relationships.” Leadership Quarterly, Vol. 20, Iss. 3, pp. 276-286. 142 Thiel, C. E., Hardy, J. H. III, Peterson, D. R., Welsh, D. T., & Bonner, J. M. (2018). “Too Many Sheep in the Flock? Span of Control Attenuates the Influence of Ethical Leadership.” Journal of Applied Psychology, Vol. 103, No. 12, pp. 1324–1334. 141

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4) Data analytic emphasis of performance measurement. The metrics of organization performance have placed greater emphasis on the increased use of data in decision-making and have focused on easily-measurable performance indicators that can distort real value creation143. This approach is intended to measure productivity but has minimized identifying the qualitative outcomes that are so often critical to an organization’s long-term ability to satisfy customer needs144.

5) Reduction of pension and health-care and other benefits. Accompanying the move to hiring part-time and contingent employees has been the marked reduction in traditional employee benefits. In most cases, part-time and contract employees are not provided such basic benefits as vacation, sick leave, pension, and health-care benefits in an effort to save companies money. That strategy reduces employer costs but redefines the commitment made to employees who are expected to make do without the overall compensation benefits normally provided to full-time employees. The breach of the psychological contract between employers and their employees reflected by this effort may save costs at employee expense but does not go unnoticed by those employees affected145.

143

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Kerr, S., (1995), “On the Folly of Rewarding A while Hoping for B.” Academy of Management Executive, Vol. 9, No. 1, pp 7–14. Lawler, E. E., III & Boudreau, J. W., (2018). Human Resource Excellence: An Assessment of Strategies and Trends. Stanford, CA: Stanford University Press. Lucero, M. A. & Allen, R. E., (1994). “Employee Benefits: A Growing Source of Psychological Contract Violations.” Human Resource Management, Vol. 33, Iss. 3, pp. 425-446.

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6) Focusing training on job-task metrics. In many organizations employee training and development programs have been drastically reduced under the assumption that the short-term costs of such training do not justify the immediate return on investment. Although the strategic focus of training and development had historically emphasized the importance of leadership training and development, the need to cut costs and reduce short-term expenditures has also played a role in reconfiguring training goals146. Training has typically been redirected, when it is provided, to performing specific job-task metrics that focus on activities that allegedly add bottom-line financial value147.

7) Integrating technology and job performance. The continuing effort to integrate technology and job performance is particularly applicable to the Human Resource Information System 146

147

Clarke, N. & Higgs, M., (2014) “How Strategic Focus Relates to the Delivery of Leadership Training and Development.” Human Resource Management, Vol. 55, Iss. 4, pp. 541-565. Weiss, D, S., & Finn, R., (2005). "HR Metrics That Count: Aligning Human Capital Management to Business Results." Human Resource Planning, Vol. 28, No. 1, pp. 33-38.

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(HRIS) role. Metrics about organization performance have become increasingly data-oriented in gathering much of this performance-related information148. Although measuring performance is important, the mechanization of performance assessment has often replaced one-onone employee communication. Measuring performance based upon technology-based performance metrics is neither an accurate measure of qualitative factors nor related to important organizational objectives149.

8) Increased emphasis on operational efficiency. Business organizations have struggled for many years to distinguish between efficiency and effectiveness, and those who lead those organizations continue to put emphasis on that which can be counted, rather than on qualitative but difficult to measure outcomes150. Measuring the wrong metrics of performance has long been identified as a common measurement error151, but management systems continue to assess efficient rather than effective organizational results152. This common tendency spills over into inaccurately evaluating employee performance, customer satisfaction, and goal achievement. Hendrickson, A. R. (2003). “Human Resource Information Systems: Backbone Technology of Contemporary Human Resources.” Journal of Labor Research, Vol. 24, pp. 381-394. 149 Ethiraj, S. K. & Levinthal, D., (2009). “Hoping for A to Z While Rewarding Only A: Complex Organizations and Multiple Goals.” Organization Science, Vol. 20, No. 1, pp. 4-21. 150 Kerr, (1995), op. cit. 151 Deming, W. E., (2000). Out of the Crisis. Cambridge, MA: MIT Press. 152 Kavanagh & Johnson, (2017), op. cit. 148

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9) Emphasizing hiring and firing. Rather than understanding how all of the factors associated with organization effectiveness are most effectively addressed, many organizations put their primary focus on the hiring and termination of employees – often creating a revolving door of employees who are poorly selected, inadequately onboarded, incompetently coached, poorly evaluated, and wrongfully terminated153. The unfortunate reality is that many organizations have an inadequate understanding of the critical skills associated with their profession – with many HRPs lacking any meaningful preparatory training prior to being appointed in their current jobs154.

153

Kumler, E., (2020). How Not to Hire: Common Mistakes to Avoid when Building a Team. New York: HarperCollins. 154 Gomez-Mejia, L. R., Balkin, D. & Carson, K., (2019). Managing Human Resources (9th ed.). New York: Pearson Publishing.

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10) Increased emphasis on diversity and inclusion. One of the current buzz words of today’s business organizations is the increased focus on “diversity and inclusion” as the driving value for many organization decisions – particularly as related to employee selection and promotional. In today’s highly sensitive socio-political environ, social justice and accountability issues are critically important to address and are worthy of being incorporated in every organization’s values and goals. At the same time, organizations must also address the importance of accurately identified individuals who are properly qualified to perform important tasks. Hiring highly qualified candidates is of critical importance in every organization and is a condition precedent for organization success155. The failure to hire top quality individuals is often the root cause of organizational failure.156.

These ten trends are extremely common factors that are virtual ground rules of many organizations and routinely followed by HRPs. The unfortunate reality is that these trends are often the cause of poor organizational decisions, mediocre performance, and organizational decline that has affected even the most highly regarded corporations.

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156

Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . . . And Others Don’t. New York: HarperCollins. Caldwell, C, Beverage, M., & Converse, P., (2018.) “Selecting for Flair Factors: Improving the Selection Process.” Business and Management Research, Vol 7, No. 1, pp. 1- 9 and available online at http://www.sciedupress.com/journal/index. php/bmr/article/view/12892/7975.

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BREAKING ALL THE RULES AS A STRATEGY Because the trends that we cited are in conflict with the best interests of most modern business organizations, we suggest that there is wisdom in challenging the validity of the current thinking of many so-called “organization experts.” Consistent with the findings of Marcus Buckingham and Curt Coffman157, we advocate that modern leaders and organizations must “break all the rules” contained in much of the “conventional wisdom” of so many organizational leaders – which has been labeled the cause of most of the organizational dysfunction in unsuccessful organizations158.

Buckingham, M. & Coffman, C., (2016). First, Break All the Rules: What the World’s Greatest Managers Do Differently. New York: Simon & Schuster. 158 Pfeffer, (1998), op. cit. 157

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We suggest that there are a new set of rules that have been adopted by a small number of outstanding leaders and organizations and that a new “transformative” set of principles can enable leaders to increase employee engagement and the trust and commitment which engagement efforts generate159. For each of the ten new rules that we offer in the accompanying list, we identify their great practical value that resonates with employees in the 21st Century business world. 1) Create a culture based upon shared trust and commitment. Trust is often cited as the glue that holds relationships and organizations together160 and is the key to generating commitment and the extra-effort dedication so essential for competing companies to succeed161. A growing body of evidence confirms that high trust leads to that high commitment and that leaders earn trust by creating a culture that consistently demonstrates their concern for employees’ welfare162.

2) Require HRM staff to be world class experts. The unfortunate reality, according to highly informed HRM experts, is that most HRPs are poorly qualified for the complex job of serving their organizations163. It is also true that the most successful organizations 159

Caldwell & Anderson, (2018), op. cit. Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 161 Hayes, L., Caldwell, C., Licona, B. and Meyer, T. E., (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. 162 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 163 Gomez-Mejia, et al., (2019), op. cit. 160

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align their HRM systems and convey a consistent set of values, programs, and policies about organization expectations164. Hiring world class and highly qualified HRM staff can enable organizations to create HRM systems that can sustain an organization165.

3) Treat employees like valued friends and colleagues. As stewards of their organizations, leaders owe a special set of duties to their employees that demonstrate that employees are much more than paid “human resources166.” According to recent research about duties owed to employees, leaders need to move past the current “arms-length” and impersonal employer-employee relationship exhibited by many leaders and demonstrate genuine concern for their employees’ best interests167. The Ethic of Friendship, recently described as a means of increasing employee engagement, specifically extends the leader’s obligation to include creating relationships with employees that values them individually and pursues their long-term welfare, growth, and wholeness168.

164

Pfeffer, (1998), op. cit. Quereshi, T. M., Absuweilem, M., Alkhateeb, S. R., Anderson, V. & Caldwell, C., (2020). “Human Resource Management from a Justice-Based Perspective.” Business and Management Research, Vol. 9, Iss. 4, pp. 9-18. 166 Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass. 167 Caldwell, C., Atwijuka, S., & Okpala, C. O. (2018). “Compassionate Leadership in an Arms-Length World.” Journal of Business and Management, pp. 1-8. 168 Caldwell, C. & Anderson, V., (2021). “Employee Engagement and the Ethic of Friendship.” Paper accepted for publication in Business and Management Research 165

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4) Share information throughout the organization. To be optimally effective, employees depend upon knowing key information about customer needs, competitor products, and the factors that distinguish their company’s products and services in order to improve their performance and sustain their company’s growth169. Sharing information increases employee awareness of key issues facing a company and treats employees like partners in progress. Although some information is proprietary and necessarily confidential, many leaders grossly overdo the “need to know” concept and fail to share information w that will help employees to perform effectively170.

169

170

Jo, S. J. & Joo, B-K., (2011). “Knowledge Sharing: The Influences of Learning Organization Culture, Organizational Commitment, and Organizational Citizenship Behaviors.” Journal of Leadership & Organizational Studies, Vol. 18, No. 3, pp. 353364. Lee, A., Willis, S. & Tian, A. W., (2018). “When Empowering Employees Works and When It Doesn’t.” Harvard Business Review, March 2, 2018 and found online on April 3, 2021 at When Empowering Employees Works, and When It Doesn’t (hbr.org).

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5) Commit to a long-term employment partnership. The evidence in favor of creating a culture that enters into long-term agreements with employees indicates that employers who adopt this approach find that their employees are more dedicated and more willing to go the extra mile on their companies’ behalf171. The idea that employees are temporary task performers, hired only for a short-term assignment, is inconsistent with creating high employee commitment and loyalty. Employees quickly recognize when they and their peers are viewed as valued long-term partners or as temporarily contracted hirelings to which their organization has no lasting commitment.

6) Hire for flair factors that add unique value. Recognizing the importance of “flair factors,” or unique qualifications that distinguish highly qualified individuals from their peers, can make a critical difference in the employee selection process and overall company performance172. Despite the acknowledged importance of hiring outstanding employees as the differentiator between good and great organizations173, few organizations understand the importance of identifying the critical skills not possessed by every candidate that can make the difference between an organization’s ultimate success or failure and overlook the added value that such individuals can provide174.

171

Pfeffer, (1998), op. cit. Caldwell, Beverage, & Converse, (2018), op. cit. 173 Collins, (2001), op. cit. 174 Caldwell, Beverage, & Converse, (2018), op. cit. 172

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7) Share profits at all levels and reward both teams and individuals. Organization success is ultimately a team achievement. Recognizing the contribution that the entire organization accomplishes is best reflected by creating a compensation plan that acknowledges that each person deserves to share in the resulting success175. The ability to compensate effectively depends upon clearly understanding the factors that actually add value to a company and identifying how individuals and teams contribute to that added value176. Helping employees to understand how they add value and then compensating them for increasing that value added builds employee understanding – but also increases employee commitment and trust177. 8) Involve top management in training and mentoring. Personalizing the relationships of top management and employees is most effective when leaders actively participate and engage with employees178. Being involved in employee training, coaching and mentoring employees, and modeling the values of the organization enable leaders to connect, motivate, and emulate what they are striving to incorporate throughout their organizations179. By setting a personal

175

Weaver, D., (2020). Pay Matters: The Art and Science of Employee Compensation. Austin, TX: Lioncrest Publishing. 176 Ibid. 177 Ibid. 178 Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (7th ed.). San Francisco, CA: JosseyBass. 179 Ibid.

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example, leaders reinforce the importance of their values and are more likely to have their employees mirror their efforts.

9) Empower and reward risk-taking and innovation. Organizations that constantly evolve and improve are able to survive and thrive in a world where change is the constant180. Creating systems that encourage and reward employees’ efforts to innovate and that encourage new ways to improve enable those companies to keep pace with customers’ demands and technological changes181. Teaching employees how to take calculated risks and how to test new ideas effectively are important steps in empowering employees, rewarding risk-taking, and achieving successful innovation182.

Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 181 Ibid. 182 Collins, J. & Hansen, M. T., (2011). Great by Choice: Uncertainty, Chaos, and Luck— Why Some Thrive Despite Them All. New York: Harper Business. 180

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10) Honor ethical obligations and keep promises. In a world where employees have often lost trust in the ethical values of their leaders, the importance of honoring obligations and commitments to employees has become increasingly important183. Although lip service is often given to the importance of honoring organizational values, the inconsistency of leaders in living those same values is typically the cause of employee distrust and the loss of employee commitment184. Leaders who are ethical and committed to doing the right thing are noticed by their employees and earn employees’ trust.

The great importance of these ten rules is that they all contribute to building organizational trust and inspiring employees to become committed members of the companies for which they work. We quickly acknowledge that these new rules are not of our own invention; that they have been proposed by others far more knowledgeable than we are; and that they are practical, well-established, value-based, and actually adopted in the occasional organization. At the same time, it is also clear that these rules are, more often than not, absent in an overwhelming percentage of modern businesses.

Sturt, D. & Nordstrom, T., (2018). “10 Shocking Workplace Stats You Need to Know.” Forbes, March 8, 2018 and found online on April 3, 2021 at https://www.forbes.com/sites/davidsturt/2018/03/08/10-shocking-workplace-statsyou-need-to-know/#2a90c892f3af. 184 Schein, E. H. & Schein, P. A., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass. 183

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THE CHALLENGE As leaders contemplate the trajectory of their own organizations in creating success in the 21st century, the importance of building relationships with employees is worthy of thoughtful consideration. The evidence of recent research affirms that traditional assumptions about leading people merit thoughtful review. The ten off-target trends that we have identified in this paper are, unfortunately, common practices in many of today’s businesses.

To those willing to “break the rules” of traditional thinking, we heartily endorse the ten ideas suggested herein. The importance of creating high trust is critical in successfully engaging employees as owners and partners in the pursuit of organization success. We encourage those who read this chapter to thoughtfully reflect on these new rules and consider

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how their application can improve relationships and build greater employee commitment.

Chapter 4

EMPLOYEE ENGAGEMENT IS A CHOICE – KEYS TO CREATING TRUST AND COMMITMENT Because the modern organization is so dependent upon the trust and commitment of employees to be competitive in the global marketplace185, understanding the keys to increasing employee engagement and creating a high-trust environment has become a topic of increased interest among academic scholars and organizational leaders186. The evidence from a growing body of practitioner research confirms that the actions of leaders, managers, and supervisors are largely the factors that determine whether organizations are successful in earning the employee effort, support, and dedication upon which organizational success is built187.

185

Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 186 HR.Research Institute, (2019). The State of Employee Engagement in 2019. Aurora, Canada: HR.com. 187 Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press.

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Despite the compelling evidence that affirms that employee engagement is vital for a company to thrive, those who lead many companies are either unaware of or oblivious to the importance of creating an organizational culture where employees are treated as full owners and partners188. The consequences of failing to recognize the importance of employee engagement are startling – with an Inc. magazine article reporting that 70% of employees feeling so disengaged that they are actively looking for employment at new companies189.

The focus of this chapter is on emphasizing that employee engagement, with its accompanying benefits in employee commitment 188 189

Ibid. Schwantes, M., (2018). “A New Study Reveals that 70 Percent of Workers Say They Are Actively Looking for a New Job. Here’s the Reason in 5 Words.” Inc., Dec. 4, 2018 and found online on April 14, 2021 at A New Study Reveals 70 Percent of Workers Say They Are Actively Looking for a New Job. Here's the Reason in 5 Words | Inc.com.

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and trust, is a leadership choice. Moreover, that choice requires a clear understanding of the factors that contribute to that engagement combined with the willingness to take the steps necessary to create the systems, processes, and practices that keep employees engaged.

The chapter begins by briefly reviewing key insights about employee engagement from recent research about the topic. We then identify ten important ways that leaders can create a culture of engagement that can strengthen employee commitment and increase the likelihood of success in their organizations. We conclude the chapter with a challenge to leaders, managers, and supervisors to reassess their actions, revise their outdated assumptions about leading their employees, and making the choice to change their companies’ cultures.

INSIGHTS ABOUT ENGAGEMENT

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It’s not news that only 15% of employees worldwide describe themselves as “fully engaged” at work190. The significance of that statistic, however, is rarely fully understood. According to the extensive research study conducted by Gallup, employee engagement is a byproduct of an organization’s culture191 – and the consequences may include any and all of the following.

190 191



An inability to attract world-class talent – Many leaders no longer understand the importance of acquiring world-class talent but opt to hire part-time, temporary, and contract employees who have minimal loyalty and marginal skills.



Difficulty maximizing organic growth based on customeremployee interactions – Increasingly, personalized interactions with customers have been deemphasized. Companies are now incorporating “mechanized” communications with artificial intelligence and automated phone systems replacing human contact.

Clifton & Harter, (2019), op. cit. Ibid.

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

Leadership initiatives that don’t go anywhere – Ad hoc programs and “flavor of the month” leadership initiatives that are not aligned with the strategic goals of a company constantly send mixed messages to employees.



Lack of agility and flexibility in responding to customer needs – Company policies about what is “acceptable” and “unacceptable” in response to legitimate customer concerns handcuff employees and their ability to meet customers’ needs.



Loss of best performers to top brands – Company philosophies about assessing the value-added of top employees and the importance of keeping such performers within the organization are rarely consistent with company needs – resulting in the loss of key employees.

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These symptoms of a “broken culture” undermine the efforts of companies to compete successfully while sending a message to a company’s employees that their leaders are either incompetent or unable to respond to competitive market requirements associated with fully engaging employees at work192.

CREATING A CULTURE OF ENGAGEMENT The challenge for leaders in creating a culture of engagement is to fully involve their employees as partners in the process of creating a competitive advantage for their organizations193. Despite the importance 192 193

Ibid., pp. 32-33. Christensen, C. M., (2016). The innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. New York: Harvard Business Review Press.

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of creating that partnership, more than one source confirms that more than two-thirds of employees do not feel fully engaged at work 194. Although creating a culture of engagement has been written about in numerous books and articles, the point made by many of these sources is that leaders seem unaware, unwilling, or unable to create organizational cultures that engage and empower their employees195.

In this section we suggest ten important ways that organizational leaders can revise their organizational cultures to increase the level of engagement that is so necessary for their companies to be successful. Although each of these recommendations can improve an organization’s culture, we emphasize, in making these suggestions, that they are likely to be most effective when implemented as part of a comprehensive cultural change – as opposed to piecemeal or incremental programs intended to piece-meal organizational improvements196.

194

See, for example, Duckworth, A. (2016). GRIT: The Power of Passion and Perseverance. New York: Scribner and Clifton & Harter, (2019), op. cit. 195 Smith, S., Peters, R., and Caldwell, C., 2016. “Creating a Culture of Engagement – Insights for Application.” Business and Management Research, Vol. 5, No. 2, pp. 70 80 available online at http://www.sciedupress.com/journal/index.php/bmr/ article/view/9734/5891. 196 Pfeffer, (1998), op. cit.

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1) Develop a strategic commitment at the Top Management Team level. The leaders of an organization are critical in creating an organizational culture and their commitment to the values and priorities of that culture are important strategic elements of every organization197. Both the internal integration of the organization’s relationships and the external pursuit of corporate goals are affected by the priorities of every organizational culture198. Without a strategic commitment from top management, employee engagement is not likely to happen199.

2) Invest in constant and ongoing employee training and development. This training must be a commitment to not only addressing opportunities to reduce costs and improve productivity, but must also focus on developing employee skills that benefit their ability to serve a firm long-term. An investment in training and development communicates to employees that they are valued – not only for their ability to contribute to the firm but that their needs are understood and respected as well200.

197

Schein, E. H. & Schein, P. A., (2016). Organizational Culture and Leadership (6th ed.). San Francisco, CA: Jossey-Bass. 198 Ibid. 199 Leibner, J., Mader, G. & Weiss, A., (2007). The Power of Strategic Commitment. New York: AMACOM. 200 Pfeffer, (1998), op. cit.

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3) Make the commitment to hiring world class employees. Because so much depends upon the organization-wide commitment to excellence, hiring great employees is simply the smartest and most effective way to create a better organization. Making hiring employees with distinctive and unique capabilities also distinguishes a company from its competitors – the primary way to achieve a competitive advantage201.

4) Measure and reward performance based upon value-added contributions. Teaching employees how value is created and using that information as the basis for an organization’s compensation philosophy establishes

201

Caldwell, C, Beverage, M., & Converse, P., (2018). “Selecting for Flair Factors: Improving the Selection Process.” Business and Management Research, Vol 7, No. 1, pp. 1- 9 and available online at http://www.sciedupress.com/journal/ index.php/bmr/article/view/12892/7975.

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standards of accountability and fairness in organizations202. Rewarding performance based upon the organization’s profitability and the achievement of teams acknowledges that value is created by employees at all levels of the organization203.

5) Reassess the impact of all Human Resource Management activities. HRM programs, policies, and systems need to be totally aligned with an organization’s commitment to its employees – in addition to the competitive success of the company204. Sending a mixed message by implementing HRM activities that are not aligned with the mission of an organization is a common mistake, but is counterproductive to building employee commitment205.

Anderson, V. & Caldwell, C., (2018). “Transforming Change: Internal Integration and the HRM Role” in Human Resource Management: A Transformative Approach, C. Caldwell & V. Anderson (Eds.). Hauppage, NY: NOVA Publishing. 203 Caldwell, C., & Floyd, L. A., (2014). “High Performance Work Systems: Building Commitment to Increase Profitability.” Graziadio Business Review, Vol. 17, Iss. 3, found online at http://gbr.pepperdine.edu/2014/12/high-performance-work-systems/. 204 Pfeffer, (1998), op. cit. 205 Ibid. 202

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6) Treat employees as valued partners, rather than as cost centers. Relationships with employees are meaningful when managers, supervisors, and leaders create a personal connection206. The obligation to people transcends the transactional perspective adopted by many organizations and views leadership as a moral obligation and a covenantal relationship207. Employees who are treated as valued partners respond as partners.

7) Constantly monitor supervisors and managers and their roles. Being an effective supervisor or manager has become increasingly important in the modern organization208. Failing to adequately prepare, train, and constantly evaluate supervisors and managers is a classic error made in many organizations and is the primary cause of top-quality employees leaving companies209.

Caldwell, C. & Anderson, V., (2021). “Employee Engagement and the Ethic of Friendship.” Working paper. 207 DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. 208 Clifton & Harter, (2019), op. cit. 209 Miller, S. K., (2019). From Supervisor to Super Leader: How to Break Free from Stress and Build a Thriving Team that Gets Results. Eugene, OR: Pine Bench Publishing. 206

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8) Emphasize the importance of building relationships with all stakeholders. Great organizations care about all of their stakeholders and honor obligations owed to each of them210. The current trends of using automated phone-answering systems, relying upon big data to make decisions, and creating arms-length transactional relationships with employees are all out of line with the importance of building relationships that increase employee commitment and engagement211.

9) Involve the entire organization in research and innovation. Making every employee responsible for learning about customer preferences, changes in the industry, and technological innovations enables an organization to give high priority to staying current with the factors that are constantly evolving212. Giving every employee the responsibility to constantly research also enables them to contribute to the process of improving service quality and product features213.

210

Carroll, A. B., Brown, J. & Buchholtz, A. B., (2017). Business and Society: Ethics, Sustainability, and Stakeholder Management (10th ed.). Boston, MA: Cengage Learning. 211 HRResearch Institute, (2019), op. cit. 212 Christensen, (2016), op. cit. 213 Ibid.

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10) Require that employees at all levels honor organizational values. Selecting employees for values is part of the way that companies can ensure that employees actually fit an organization’s culture214. Constantly monitoring their commitment to those values is also necessary, however, to ensure that employees at all levels of an organization are consistent in adhering to those same values215.

These ten important changes are choices that leaders and Top Management Team members can choose to implement in their organizations . . . or not! The evidence overwhelmingly affirms, however, that these suggestions can help change organizational cultures, build Morley, M. J., (2007). “Person-organization Fit.” Journal of Managerial Psychology, Vol. 22, pp. 109-117. 215 Carroll, Brown & Buchholtz, (2017), op. cit. 214

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commitment,

and

increase

long-term

THE CHALLENGE It is no longer enough for organizational leaders to earn an MBA degree and expect that their training and technical expertise can sustain them and their companies in today’s globally competitive world. Being competent is a necessary but far from sufficient qualification to lead today’s organizations. However, technical competence and an advanced college degree are inadequate for creating employee commitment and the dedication necessary for organizations to thrive – or even survive.

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The trends in leadership are disconcerting216. If organizational leaders are to make a significant difference in earning employee trust and the extra-mile effort required for companies to succeed, those leaders will do well to rethink their assumptions about what is required for successfully retaining customers and keeping pace with competitors.

Employee engagement is a choice – a choice that requires leaders, managers, and supervisors to rethink their approach to employees and to adopt more behaviorally proven ways of serving the people who work with them. The ten suggestions offered in this chapter are far from being adequate to ensure organizations’ success . . . but they are a beginning and leaders willing to change their approach to creating stronger and more effective organizations would do well to make the choice to engage their employees as full organizational partners.

216

Clifton & Harter, (2019), op. cit.

Chapter 5

ENGAGEMENT AND GENERATION Z – CULTURE REQUIREMENTS FOR THE FUTURE The nature of the workforce is changing. The values of each generation subtly evolve and members of each cohort group are motivated by important differences that, when best understood, can be effectively applied in creating working conditions and organizational cultures that support those individuals. Organizational leaders have a moral obligation to understand and meet the needs and expectations of their employees, and by understanding those needs those leaders are also able to increase the employee commitment and engagement that benefit organizations. That brief restatement applies as significantly to members of Generation Z – the future employees of the upcoming cohort – as they do to all previous generational groups.

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The focus of this chapter is on understanding the unique qualities of the Generation Z age group and to identify the most effective way to engage them as company employees by creating a culture that resonates with their unique perspectives. We begin the chapter by identifying and describing the values and perspectives of the Generation Z cohort group – noting its common characteristics, identifying factors that distinguish this generation from other age groups, and explaining the significance of those factors in forming the values and priorities of Gen Zers.

We then identify the role of organizational culture in affecting employee engagement. Following that explanation, we suggest eight culturally-related management practices that can effectively address the distinctive characteristics of Generation Z employees and clarify how those management practices can assist organization leaders to encourage, empower, and engage with Generation Z workers. We identify four contributions that this chapter makes in helping practitioners to be effective in interacting with this employee group and challenge those who will be leaders of these employees to thoughtfully consider how they can increase the level of engagement, commitment, and ownership of the Generation Z cohort.

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UNDERSTANDING GENERATION Z For each generational group, the significant events of their early years profoundly influence their lifetime values and their priorities217. For Generation Z, the impact of their formative years has been profound with the events of September 11, 2001, the 2007-2008 world fiscal crisis, and COVID-19 being the most notable factors affecting this generation. However, perhaps the most significant factors that have influenced every member of Generation Z has been the advent of digital technology, the ubiquitous nature of the worldwide web, and the impacts of the smart phone and social networking218.

Generation Z, the youngest of all current generations, is a technology savvy and ethnically diverse cohort of young people who have been born in 1997 or thereafter219. They are motivated by financial stability yet want to make a change in the world220. They value diversity and have a deep commitment to saving and preserving the environment221. Their generation has never known a time when the internet was not readily

217

Massey, M., (1979). The People Puzzle: Understanding Yourself and Others. Englewood Cliffs, NJ: Reston Publishing Co. 218 The Barna Group, (2018). Gen Z: The Culture, Beliefs, and Motivations Shaping the Next Generation. Ventura, CA: Barna Group. 219 Dimock, M., (2019). “Defining Generations: Where Millennials End and Generation Z Begins.” Pew Research Center, January 17, 2019 and found online on April 4, 2021 at Where Millennials end and Generation Z begins | Pew Research Center. 220 Harris, R. E., (2020). “Who Is Generation Z?” Psychology Today, December 8, 2020 and found online on April 4, 2021 at Who Is Generation Z? | Psychology Today. 221 Ibid.

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available. They use Facebook to connect with family members but other social media apps to network with friends and colleagues222. Videogaming and online entertainment are high priorities among their favorite hobbies and the average Gen Zer spends three hours a day accessing technology223.

The economic realities of COVID-19 have had a greater financial impact on Generation Z than on any other generational group224. During 2020 almost half of Generation Z saw their work hours decreased, more than one-third were unable to work or get paid, and one in four filed for unemployment225. In addition, 25% of Generation Z reported that they thought they would be financially worse off after the pandemic was over226. More than any other generational cohort, during the COVID-19 crisis, Generation Z members were also the most likely to become unemployed, have their work hours cut, or be assigned to a job that was different than the position for which they had been originally hired227.

222

Ibid. Pearson.com, (2018). “Beyond Millennials: The Next Generation of Learners.” Pearson Global Research & Insights, August, 2018 and found online on April 4, 2021 at TheNext-Generation-of-Learners_final.pdf (pearson.com). 224 Dorsey, J., (2021). “7 Things You Need to Know about Generation Z.” MarketWatch.com, January 29, 2021 and found online on April 4, 2021 at 7 things you need to know about Generation Z - MarketWatch. 225 Ibid. 226 Ibid. 227 Ibid. 223

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Although Gen Zers are very interested in education, they nonetheless are risk- and debt-averse and are open to online, community college, and career-based learning opportunities228. Many indicate that a traditional college education is not in their interest, although three in five believe that an advanced education is an important stepping stone to their success229. They express concern about accruing debt for an education that may have a marginal economic value230. In addition, 43% prefer learning from the internet than from other information sources. More than half cite YouTube as their preferred learning site231. Nearly two-thirds of Generation Z thinks that technology skills are more important than behavioral skills232. Gen Z members are highly entrepreneurial, in part because the “gig economy” has required them to be flexible233. According to a recent Nielsen study, more than half of all Gen Zers want to start their own business234. Although Generation Z members are not as ambitious as Millennials about making it to the top of their profession, more than forty percent have set professional success as a personal goal235. The impact of the worldwide economic downturn, followed by the impacts of the 228

Ibid. Pearson.com, (2018), op. cit. 230 Harris, (2020), op. cit. 231 Pearson.com, (2018), op. cit. 232 O’Brien, M. J., (2018). “Here’s How Gen Z is Shaping the Future of Learning.” HRExecutive.com December 27, 2018 and found online on April 4, 2021 at 233 Schroeder, B., (2020). “A Majority of Gen Z Aspires to be Entrepreneurs and Perhaps Delay or Skip College. Why That Might be a Good Idea.” Forbes, February 18, 2020 and found online on April 4, 2021 at A Majority Of Gen Z Aspires To Be Entrepreneurs And Perhaps Delay Or Skip College. Why That Might Be A Good Idea (forbes.com). 234 Ibid. 235 Pearson.com, (2018), op. cit. 229

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COVID pandemic, has made concerns about financial stability a major factor in their lives236. Nearly two-thirds of Generation Z thinks that technology skills are more important than behavioral skills237. Socially, 75% of the Gen Z cohort have friends from different races, backgrounds, and beliefs and 61% believe that having diverse friends makes them a better person238. They are more socially diverse than other cohorts – with 48% being members of racial minority groups239. One in four Gen Zers is Hispanic, 14% are Black, and 6% are Asian 240. Politically, Generation Zers believe that government should play a greater role in society241 – although only 20% indicated that they are “very interested” in political issues. Although they tend to be somewhat liberal politically as a group, their political views span a wide range on the political spectrum. In the US, 39% identify as moderate, 28% as liberal or very liberal, and only 25% identifying as conservative or very conservative242.

From a mental health perspective, more than 7 in 10 Generation Z members experienced depression during the COVID-19 pandemic – the

Merriman, M., (2020). “How Contradictions Define Generation Z.” EY.com, January 28, 2020 and found online on April 4, 2021 at How contradictions define generation Z | EY - US. 237 O’Bren, M. J., (2018). “Here’s How Gen Z is Shaping the Future of Learning.” HRExecutive.com, December 27, 2018 and found online on April 4, 2021 at. 238 Pearson.com, (2018), op. cit. 239 Living Facts, (2020), op. cit. 240 Ibid. 241 Living Facts, (2020), op. cit. 242 Merriman, (2020), op. cit. 236

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highest level of stress reported by any generational cohort243. More than half of all teens reported that the pandemic made it impossible for them to plan for their futures – and that number rose to more than two-thirds of Gen Zers enrolled in colleges or universities. Stressed out by a world that they cannot control, they tend to see the world as uncertain and even threatening – and lack the life experience to put the status quo into perspective244. They report high levels of worry and anxiety, fear failure, and consequently are often uncertain and reluctant about making decisions about the future245.

When surveyed about their greatest worries, a majority of Gen Z felt “very or extremely” uncertain about the future246. Concerns about having enough money (67%), getting a good or better job (64%) and paying for college or university (59%) were high level personal priorities in their lives247. In addition, they cited global issues of gun violence (62%) and climate change (61%) as being major concerns248. In prioritizing the importance of global concerns versus preparing for their own futures, most Gen Zers expressed the need to focus on their own needs249. Stieg, C., (2020). “More Than 7 in 10 Gen Zers Report Symptoms of Depression During Pandemic, Survey Finds.” CNBC.com October 21, 2020 and found online on April 4, 2021 at Survey: More than 7 in 10 Gen-Zers report depression during pandemic (cnbc.com). 244 Ibid. 245 Harris, (2020), op. cit. 246 Merriman, (2020), op. cit. 247 Ibid. 248 Ibid. 249 Ibid. 243

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Overall, Generation Zers reflect the growing emphasis on diversity and change in society – with accompanying concerns about the future. Although they love technology and are technologically advanced, they also value interpersonal interaction – although that interaction has often occurred via social networking, smart phone apps, and other technology. By necessity, their focus has been on striving to identify how they can succeed in an economically uncertain world. In a world that is increasingly diverse, they are accepting of others but also concerned about their own priorities and personal success250.

THE ROLE OF CULTURE AND ENGAGEMENT An organization’s culture includes the artifacts, espoused values, and underlying beliefs that are present in every organization and that clarify “how things get done” in accomplishing day-to-day work251. Those who have studied culture describe it in many ways.

250 251

Ibid. Schein, E. H. & Schein, P. A., (2016). Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Bass.

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In their landmark book about organizational culture, Edgar and Peter Schein have included the following list of ways that culture is viewed and that meanings are conveyed within organizations252. 1) Observed Behaviors of Interaction – These include the patterns, language, customs, and traditions of interpersonal behavior in the world of work.

2) Work Climate – Work climate generates the feeling that is conveyed by the physical layout of a work environment and affects how work colleagues interact, how customers are treated, and how other outsiders are dealt with. 3) Rituals and Celebrations. Rituals include the ways in which organizations celebrate memorable events, promotions, completion of projects, or other regularly recurring events. 4) Espoused Values. Espoused values are the formally articulated principles and priorities which an organization uses to promote its business – whether to its employees, customers, or the public.

252

Ibid, p. 3-5.

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5) Formal Philosophy. A company may adopt a formal statement of its philosophy or guiding assumptions which describe the company’s purpose and its beliefs about how its business should be conducted. 6) Group Norms. Employees may adopt informal group standards or norms that are intended to serve as shared expectations about how the entire group is expected to perform – such as the production standards that members of the group are expected to meet and/or not exceed.

7) Rules of the Game. These are implicit standards of conduct which govern how individuals within an organization are expected to interact, how they are to dress, and other informal group expectations about interpersonal conduct.

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8) Identity and Image of Self. This group identity enumerates how an organization or group defines itself, the purpose of the organization and its goals, and how work tasks are expected to be accomplished. 9) Embedded Skills. These skills are the unique competencies exhibited by organization members, often tacit skills that are passed on without being formally articulated but which are vital for the success of the organization. 10) Mental Models. Mental models are the habits of thinking, the paradigms, or the special language used within an organization that convey its shared cognitive framework and that are required for socialized members of the group.

11) Shared Meanings. These meanings are the unique ways in which members of a group communicate about work-related

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Summarizing the importance of these elements, Schein and Schein defined culture as the means of shared learning of a group. That learning becomes the ground rules by which members interrelate as they strive to achieve the internal integration and smooth functioning of an organization as it seeks to adapt to conduct its business in the external world253. These two tasks of external adaptation and internal integration are required of every successful organization and are an important part of every company’s culture.

An organization’s culture and its ability to engage employees effectively are closely related factors254. Adopting a strategy that engages employees can positively impact both employee motivation and strengthen the ability of a company to create a culture that produces

253 254

Ibid, p. 6. Taneja, S., Sewell, S. S. & Odom, R. Y., (2015). “A Culture of Employee Engagement: A Strategic Perspective for Global Managers.” Journal of Business Strategy, Vol. 36, Iss. 3, pp. 46-56.

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outcomes that increase success255. In creating the high trust that is required for engaging employees, leaders can effectively incorporate the many elements of culture to address the needs and priorities of their employees. Employee engagement is facilitated and increased when organization leaders make the effort to understand the needs of their employees, involve them as partners in constantly improving an organization, and empower them to be contributors in the decisions made by the organization. As employers acknowledge that their actions are significant in promoting the psychological growth needs of their employees, they have the opportunity to change their cultures, increase engagement, and improve organizational results by creating a culture that emphasizes meaningful leader-follower relationships256.

CULTURAL PRACTICES FOR GEN ZERS As organization leaders consider ways to create cultural factors that will increase the engagement of Generation Z employees, several specific opportunities come quickly to mind. We suggest eight culturallyrelated management practices that seem to be aligned and integrated with Gen Zers and their needs. 255

256

Little, B. & Little, P., (2006). “Employee Engagement: Conceptual Issues.” Journal of Organizational Culture, Communications, and Conflict, Vol. 10, No. 1, pp. 111-120. Clack, L., (2020). “Employee Engagement: Keys to Organizational Success.” The Palgrave Handbook of Personal Well-Being, pp. 1-28.

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1) Incorporate career-related employee training and development opportunities. Generation Z’s present and future employees have a deep commitment to job-related training and education and demonstrating a commitment to constant learning resonates with that commitment. Employee engagement efforts are strengthened when companies provide employees with ongoing training and development programs and invest in employees’ futures257.

2) Adopt a world class corporate Employee Assistance Program to help employees to manage stress. Employee Assistance Programs are highly regarded for their ability to assist employees to manage personal and job-related problems that can negatively affect job performance258. Adopting world class EAP resources will naturally appeal to Gen Zers who have faced high stress in their lives. Gen Zers want an employer who cares about their wellbeing259.

Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Cooper, C. L., Dewe, P., & O'Driscoll, M. (2003). “Employee assistance programs.” In J. C. Quick & L. E. Tetrick (Eds.), Handbook of Occupational Health Psychology. Washington, D.C.: American Psychological Association, pp. 289-304. 259 O’Boyle, E., (2021). “4 Things Gen Z and Millennials Expect from Their Workplace.” Gallup, March 30, 2021 and found online on April 6, 2921 at 4 Things Gen Z and Millennials Expect From Their Workplace (gallup.com). 257 258

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3) Create long-term employment contracts to build loyalty and commitment. Employment stability and financial security are high priorities for Gen Zers and creating long-term employment relationships with members of this cohort group will increase their commitment and strengthen employee engagement. Long-term employment relationships build employee loyalty and strengthen the bond between employees and their leaders260.

4) Create career path opportunities that enable employees to advance professionally. Generation Z is interested in making a positive difference and growing personally. Creating job ladders and career path opportunities within the organization demonstrates a company’s commitment to their

260

Pfeffer, (1998), op. cit.

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employees’ future progress261 and is consistent with the principles of employee engagement262.

5) Align Human Resource Management programs to reinforce corporate cultural values. A key element of employee engagement and empowerment is in creating aligned systems, programs, and policies that affirm organization values263. Aligned Human Resource Management policies convey a company’s commitment to employees’ welfare and earns employee trust264.

261

Fitzgerald, J., (2006). Moving Up in the New Economy: Career Ladders for U. S. Workers. Ithaca, NY: Cornell University Press. 262 HR.Research Institute, (2019). The State of Employee Engagement in 2019. Aurora, Canada: HR.com. 263 Ibid. 264 Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

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6) Institute a world class supervisor/manager training program to upgrade coaching skills. The clear evidence confirms that supervisors and managers have lacked the interpersonal skills required to establish working relationships that engage employees265.

Upgrading skills by providing those who supervise employees with insights about interacting more effectively with Gen Zers will enable those managers and supervisors to be more effective at coaching Generation Z employees and supporting their efforts to succeed. 7) Establish tuition reimbursement programs to upgrade employee learning opportunities. Because Generation Z employees are reluctant to incur debt to obtain the necessary academic training required to develop the knowledge they need to perform at the highest levels, companies that offer tuition reimbursement for Gen Zers will be attractive as employers – while improving the capabilities of those employees and increasing their commitment to the company266.

265 266

Clifton & Harter, (2019), op. cit. Pearson.com, (2018), op. cit.

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8) Adopt and incorporate meaningful corporate citizenship goals that involve employees. Because Gen Z members care about preserving the environment and want to be actively involved in making a positive contribution in the world, companies that have an authentic commitment to Corporate Social Responsibility are more likely to attract them and earn their respect267. Involving Gen Zers in achieving meaningful corporate citizenship goals as a company strategy is likely to make members of this cohort group more engaged and committed employees268. Gen Zers want their employers to be ethical269.

267

Harris, (2020), op. cit. HR.Research Institute, (2019), op. cit. 269 O’Boyle, (2021), op. cit. 268

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Each of these management practices addresses values that are representative of the priorities of Generation Z. Those leaders who incorporate these suggestions into the cultures of their organizations are thereby more likely to have Gen Zers feel comfortable with their companies and align themselves with their organization and its values. Recognizing the uniqueness of Generation Z employees, respecting their values and priorities, and appreciating their ability to add value to the companies for which they work will be likely to be reciprocated by this cohort group with high levels of personal commitment and engagement.

CONTRIBUTIONS OF THE CHAPTER We suggest that this chapter makes four useful contributions in helping practitioners to understand how they can be more effective as organization leaders in creating organization cultures that generate high levels of engagement from Generation Z employees. The information contained herein also has value for academic scholars and those studying this important cohort group.

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1) We identify characteristics of Generation Zers, incorporating insights from other experts. The descriptive summary of Generation Z attributes and attitudes can help both practitioners and academics to understand more about the unique individuals who make up this group. 2) We summarize the important factors that make up organizational culture and explain why an organization’s culture affects employee engagement. An organization’s culture is a major determining factor that affects how individual employees are integrated within organizations and reflects its values and priorities. Those factors significantly influence employees’ roles and the extent which an organization’s culture promotes employee engagement. 3) We affirm the need for organization leaders, managers, and supervisors to be aware of the importance of their actions in engaging Generation Z employees. The importance of engaging these employees as full partners in the success of organizations can enable organizations to optimize the contribution that Gen Zers can make to their companies and to society. 4) We suggest eight culturally-related practices likely to increase the commitment and motivation of Generation Zers and increase their engagement. These recommended management practices are aligned with many of the defining characteristics that typify many Gen Z members. Employing these practices is likely to enable leaders and organizations to more effectively engage Gen Z employees, with resulting positive benefits. Each of these four contributions has practical value in today’s complex world where leaders and organizations have consistently struggled to engage employees and to optimally involve them as contributors and partners. The value for practitioners is to identify how the insights from this chapter can enable organizations to be more effective while the academic benefit provides opportunities for additional

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research and discussion about employee engagement and Generation Z.

CONCLUSION The realities facing modern businesses affirm that many of the current assumptions about employees seem to be off target in their ability to generate high employee commitment and engagement. Leaders, managers, and supervisors have apparently lost sight of the importance of creating organizational cultures that treat employees as valued partners and the compelling evidence is that many of today’s managers and supervisors are ineffective and are major contributing causes to the levels of engagement currently found in organizations literally throughout the world270.

The increase in concern about employee engagement and how to achieve it has practical importance for practitioners and has attracted increasing interest from academic scholars. As the new generational cohort, Generation Z, begins to play an increasingly important role in the work force, identifying how companies can more fully engage this group of employees is a priority that will need to be thoughtfully addressed. Leaders and organizations need to incorporate management practices designed to increase their competitive position. The insights from this 270

Clifton & Harter, (2019), op. cit.

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chapter are worth carefully considering to meet the challenges facing tomorrow’s businesses and to most effectively involve Generation Z employees.

Chapter 6

ENGAGEMENT, EMPOWERMENT, AND EMPLOYEE TRUST The ability to inspire individual employees to give the best of themselves in the pursuit of an organization’s highest possible achievements requires a profound knowledge of those individuals as well as a full understanding of human relations. However, this cognitive knowledge is far from enough and effective leaders must also effectively apply what they know in their interactions with others. It is this combination of understanding and application that is the key to motivating employees and accomplishing great goals. At the heart of an organization’s success is the ability of its leaders to engage and empower its employees271.

271

Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup.

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The purpose of this chapter is to identify the critical behaviors that leaders must demonstrate in order to unlock the great potential that employees possess. We begin the chapter by identifying the importance of engagement and empowerment as strategies that leaders often employ to involve employees in their organizations. We identify six zones which describe a compliance-commitment continuum and reflect the degree of employee commitment to organizations. We clarify why employee engagement and empowerment ultimately depend upon the ability of leaders to prove that they can be trusted by those whom they lead and suggest five reasons why creating a high-trust leader-follower relationship is so critical to organizations. We close the chapter with a challenge to leaders to examine their personal commitment to their employees by incorporating key elements of trust in building relationships.

THE NATURE OF ENGAGEMENT When employees feel fully engaged at work, their level of personal involvement and ownership rises above the level of compliance that includes simply following directions, making a reasonable effort, and obeying policies and rules272. Most of the leading research about employee engagement focuses on the roles of organizational leaders, supervisors, and managers273 or on the perspectives and roles of Human Resource Professionals (HRPs)274. In contrast with the more traditional approach to employee engagement, our focus in this chapter is on how employees view the leader-follower relationship and how their level of engagement is impacted by the nature of that relationship.

272

Ibid. Ibid. 274 HR.Research Institute, (2019). The State of Employee Engagement in 2019. Aurora, Canada: HR.com. 273

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Research about followership enjoyed a major resurgence over the past two decades, although the importance of followers in the leaderfollower relationship was articulated more than eighty years ago by Chester Barnard in his landmark book about keys to effective leadership275. Barnard had explained that authority is the choice exhibited by followers to accept the legitimacy of leadership, rather than an obligation demanded by those who hold positions of power276. Barnard explained that followers do not ascribe infallibility to organizational leaders but were much more inclined to follow a leader if they perceived those leaders to be authentic and genuine.

Barnard explained that the lack of cooperative effort of an employee reflected her/his lack of confidence in the integrity and sincerity of that

275

Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard College. 276 Ibid.

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leader277. Leadership is ultimately dependent upon the leader’s moral commitment to the organization, the purposes for which an organization is created, but also the commitments owed to its employees. Organization members accept a leader’s communications as authoritative when four factors are present: 1) when the individual can understand the communication, 2) when (s)he believes that communication is not inconsistent with the purposes for which the organization exists; 3) when (s)he believes that the communication is compatible with his/her personal self-interests; and 4) when (s)he is able to physically and mentally comply with that communication278. Barnard emphasized that whether an order has authority lies with the persons to whom that order is addressed and does not depend upon the position or title of those who issue orders279. Thus, the decision to be engaged is each employee’s personal choice and is based upon her/his perceptions about the worthiness of the manager, supervisor, or leader to lead and that person’s competence, character, caring, clarity, and capacity to perform280.

277

Ibid., p. 43=44. Ibid., p. 163-165. 279 Ibid. 280 Caldwell, C. & Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 10761086. 278

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The degree of each follower’s engagement or personal ownership is measurable on a compliance-commitment continuum that contains six zones that range from reluctant acceptance and grudging compliance to totally committed personal stewardship. Diagram 1, provided below, identifies those zones and an explanation of the applicability of the zones to employees’ engagement and their responses to their leaders follow immediately thereafter.

Diagram 1. Compliance – Commitment Zones.

These six zones are associated with each employee’s perceptions of the leader, supervisor, or manager with whom (s)he works. The specific characteristics of employee responses in each of the zones reflect the degree to which an employee feels committed to the individual with whom (s)he labors.

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Zone of Reluctance Employees are in reluctant compliance with their leader’s directives when they feel disassociated with the leader and their organization. Reluctant compliance may include performing as expected when directly being supervised but also reflects the withholding of one’s best effort. Closely supervising employees is a supervisory strategy that acknowledges that employees are resistant to performing at a desired level281. The comprehensive Gallup study about employee engagement placed the blame for reluctant compliance on relationships with managers and supervisors282. For example, a Forbes magazine article reported that employee distrust is so high that 58% of employees surveyed indicated that they would rather trust a complete stranger than their supervisor283.

Brett, J. F., Uhl-Bien, M., Huang, L & Carsten, M., (2016). “Goal Orientation and Employee Resistance at Work: Implications for Manager Emotional Exhaustion with the Employee.” Journal of Occupational and Organizational Psychology, Vol. 89, Iss. 3, pp. 611-633. 282 Clifton & Harter, (2019), op. cit. 283 Sturt, D. & Nordstrom, T., (2018). “10 Shocking Workplace Stats You Need to Know.” Forbes, March 8, 2018 and found online on September 30, 2020 at https://www.forbes.com/sites/davidsturt/2018/03/08/10-shocking-workplace-statsyou-need-to-know/#2a90c892f3af. 281

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Dysfunctional reluctant employees may resent their supervisors and work in opposition to the pursuit of organizational goals284. A major part of the reason for the disengagement of employees is due to how those employees are treated as organization members, but other leadership credibility problems also exist. The Gallup survey reported that only 22% of employees strongly agreed that the leaders of their organization have a clear direction for guiding its efforts285. Only 27% of employees reported that they strongly believed in their companies’ values and only 26% of employees felt that their company always delivers on its promises made to customers286. Employee reluctance may be founded on a variety of negative feelings toward leaders and toward an organization but reluctant compliance may simply reflect the fact that an employee feels that (s)he has no other employment alternatives287. Employees are reluctantly compliant because they feel that their organization has violated the psychological contract owed to them and they often view their supervisors and leaders as lacking in integrity and consideration for their needs288.

284

Miller, L., (2007). From Difficult to Disturbed: Understanding and Managing Dysfunctional Employees. Seattle, WA: AMACOM. 285 Clifton & Harter, (2019), p. 20. 286 Ibid., p. 31. 287 Penley, L. F. & Gould, S., (1988). “Etzioni’s Model of Organizational Involvement: A Perspective for Understanding Commitment to Organizations.” Journal of Organizational Behavior, Vol. 9, Iss. 1, pp. 43-59. 288 Miller, (2007), op. cit.

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When that perceived psychological contract is violated, employees may feel betrayed and tend to respond by withholding commitment and making much less than a best effort to help an organization to accomplish its goals289. Employees may do “just enough” to avoid being terminated but their contribution to their organizations is far below what these employees have the potential to add.

Zone of Indifference In his landmark book about the leader-follower relationship, Chester Barnard identified employees’ willingness to respond and called their willingness to accept a leader’s request as falling within what he labeled a Zone of Indifference. Barnard defined this zone as follows. If all the orders for actions reasonable and practicable be arranged in the order of their acceptability to the person affected, it may be conceived that there are a number that are clearly unacceptable, that is, which certainly will not be obeyed; there is another group more or less on the neutral line, that is barely acceptable or barely unacceptable; and a third group unquestionably acceptable. This last group lies within the “zone of indifference.” The person affected will accept orders lying within this zone and is relatively indifferent as to what the order is so far as the question of authority is concerned290.

The behavior of employees within this zone is to acknowledge the acceptability of the request, order, or assignment and to respond as required. By making the affirmative decision to comply with the order of a leader, the employee accepts the reasonableness and legitimacy of that request in pursuit of the desired goals, outcomes, and purposes of the organization.

Morrison, E. W. & Robinson, S. L., (1997). “When Employees Feel Betrayed: A Model of How Psychological Contract Violation Develops.” Academy of Management Review, Vol. 22, No. 1, pp. 226-256. 290 Barnard, (1938), op. cit., pp. 168-169. 289

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In writing about this Zone of Indifference, March and Simon suggested that this zone may vary from person to person and is directly affected by the nature of the inducements offered relative to the work and effort required from the employee to accomplish the response requested291. Compliance within the Zone of Indifference, then, is influenced by the nature of the exchange relationship between the parties relative to the instrumental goals to be achieved and the incentives offered292.

The Zone of Indifference’s focus on an instrumental exchange relationship gives context to the primary compliance-related motivations that drive individuals in this zone. This instrumental commitment, however, can also be accompanied by affective attitudes that are based 291 292

March, J. G. and Simon, H. A. (1958). Organizations. New York: Wiley. Penley, L. F. & Gould, S., (1988), op. cit.

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upon relationships with supervisors, alignment with the goals of the organization, and the unique personal qualities of the individual employee293.

Zone of Acceptance The Nobel laureate, Herbert Simon, adapted the Zone of Indifference identified by Barnard, renaming it a Zone of Acceptance. Simon explained his justification for this relabeling, based upon the premise that this zone comprised the area that “a subordinate is willing to accept the attempts of a superior to influence his opinions or behavior294.” Simon had acknowledged that this acceptance of a leader’s efforts to convince the employee to comply may range from a reluctant compliance to a more significant personal commitment. Both Simon and Barnard addressed the importance of a follower being willing to cooperate, comply, and coordinate efforts in the pursuit of common objectives and both described this compliance as the relinquishing of personal choice as part of the decision to cooperate.

Simon suggested that each person “establishes an area of acceptance in behavior within which the subordinate is willing to accept the decisions made for him by his superior” based upon that individual’s “expectations of the authority relations of their position295.” To Simon, 293

Ibid. Simon, H. A., (1997). Administrative Behavior (4th ed.). New York: Free Press, p. 131. 295 Ibid., p. 131. 294

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this zone of acceptance is a subjective perception of each individual that is a function of the nature of the leader-follower relationship – regardless of whether the leader’s request accomplished the purposes of the organization296. Simon’s belief was that authority within the subordinate’s Zone of Acceptance would result in a willingness to accept a directive from a leader.

Research about the zone of acceptance suggest that a subordinate’s willingness to accept a leader’s decision is also influenced by the degree of importance of the outcome being sought. As that outcome becomes more important, followers are more willing to accept a leader’s request297. A Zone of Acceptance is differentiated from a Zone of Indifference to the degree that acceptance requires a higher level of affective support for a leader’s decision and a willingness to support that decision – rather than simply being indifferent about it298. The conditions for acceptance suggest a respect for the leader’s role, combined with no objection to the purpose of the leader’s request.

296

Ibid., p. 133. Nielsen, P. A. & Jacobsen, C. B., (2018). “Zone of Acceptance Under Performance Measurement: Does Performance Information Affect Employee Acceptance of Management Authority?” Public Administration Review, Vol. 78, Iss. 5, pp. 684-693. 298 Hayes, L., Caldwell, C., Licona, B. & Meyer, T. E., (2015). “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285. 297

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Zone of Trust The Zone of Trust reflects the degree to which an employee is willing to relinquish her or his decision-making power to an organization leader in the expectant hope that the leader 1) has made a wise and wellinformed decision, and 2) will act in a manner that benefits the employee and the company299. Entering into the Zone of Trust confirms that a follower accepts the leader’s authority and embraces the organization’s ground rules for expected behavior300. The commitment that is manifest in trusting a leader integrates both the cognitive and the affective perceptions of the employee in accepting the leader’s request and cooperating to accomplish a task.

Trust behavior demonstrates significantly more than the mere acceptance of a leader’s directives and conveys a desire to cooperate in the pursuit of an organization’s mission and purpose. Trust goes beyond compliance and acceptance and includes the yielding of one’s personal power in the belief that there is a mutuality of obligation between the parties301. Behavior within the zone of trust conveys a willingness on the part of the employee to undertake a risk and to be personally vulnerable302. In the Zone of Trust, a follower expresses a belief in the

299

Ibid. Ibid. 301 Mayer, R. C., Davis, J. H. & Schoorman, F. D., (1995). “An Integrative Model of Organizational Trust.” Academy of Management Review, Vol. 20, No. 3, pp. 709-734. 302 Ibid. 300

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credibility of the leader, rather than simply an obligation to perform a specific task for which the employee is to be compensated303.

The Zone of Trust is associated with a personal relationship between a leader and a follower in which the leader has established that (s)he is worthy of being trusted. Being worthy of being trusted enables a leader to do more than simply negotiate an exchange of rewards with an employee as quid pro quo for the employee’s compliance. In the Zone of Trust, the leader has created a connection with the follower that conveys a genuine commitment to the follower’s welfare, growth, and wholeness304. Establishing that trust relationship encompasses a moral obligation and the personal commitment that employees expect from a trustworthy leader305.

Zone of Commitment In the Zone of Commitment, employees both trust their leaders and seek to cooperate with them in positive ways in order to help their companies to succeed306. Employees willingly follow leaders who they

303

Ibid. Caldwell, C. and Anderson, V., (Eds.). (2019). Trust, Trustworthiness, and Stewardship: A Transformative Approach. Hauppage, New York: NOVA Publishing. 305 Mayer, Davis & Schoorman, (1995), op. cit. 306 Senge, P. M., (2006). The Fifth Discipline: The Art & Practice of the Learning Organization. New York: Doubleday. 304

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believe understand what is necessary to accomplish company goals. The relationship between the leader and follower is decidedly positive and leaders are perceived as having a commitment to employees’ success as well as the success of the organization307. The degree of employee commitment is on a continuum that reflects the degree of trust that each individual employee has toward his or her leader308.

Peter Senge emphasized the importance of and the distinction between compliance and commitment309. Successful organizations create high follower commitment – a critical element for building a thriving organization and a vital requirement to sustaining a competitive advantage310. Employee commitment is also well recognized as a key to creativity, improved customer service, increased profitability, and the successful management of change311. Commitment creates “energy, passion, and excitement” that far exceeds the personal investment generated by being merely compliant, “even genuinely compliant312.”

307

DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. Caldwell, C. & Hansen, M., (2010). “Trustworthiness, Governance, and Wealth Creation.” Journal of Business Ethics, Vol. 97, Iss. 2, pp. 173-188. 309 Senge, (2006), op. cit. 310 Ibid. 311 Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 312 Senge, (2006), op. cit., p. 221. 308

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The Zone of Commitment reflects the degree of engagement and empowerment that employees feel as members of the organization at which they labor. For each employee this level of personal involvement is subjectively assessed – typically reflecting the employee’s perceptions of the nature of the psychological contract that exists between the employee and the organization313. This Zone of Commitment is influenced by the degree of communication that exists between each employee and her/his leaders – as well as the programs, policies, and systems that demonstrate the organization’s commitment to the employee.

Zone of Stewardship The Zone of Stewardship is the realm of the most highly committed employees who believe passionately in the goals of their organization to the extent that they become organizational citizens willing to go the extra mile to serve the organization and accomplish its goals314. These

313

314

Rousseau, D. M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks, CA: SAGE Publishing. See, for example, Joshi, B., Vuong, A., Casey, J., Quey, I., & Caldwell, C. (2011). “Organizational Citizenship Behavior and the Hofstede Model: Implications for Business.” Journal of Global Business Development, Vol. 3, No. 1, pp. 126-139 and Caldwell, C., Floyd, L. Atkins, R., & Holzgrefe, R., (2012). “Ethical Duties of

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employees fully trust their leaders, believe in the goals and purposes of their company, and are willing to accomplish whatever they can to contribute to their company’s success. They function as stewards of their organization’s best interests and willingly give of themselves – even at personal sacrifice to themselves. Their commitment is long-term in its focus and they are “all in” to help the organization to grow and thrive315.

Stewardship denotes a commitment to full dedication in which the steward acts as if (s)he is an “owner and partner” of the organization316. The steward engages in pro-organizational behaviors in which (s)he seeks the best interests of the organization, rather than personal selfinterests. Stewards view their obligation to the organization as a covenantal relationship that rises to the level of a moral obligation that binds the employee and the organization in the pursuit of common goals without taking advantage of each other317.

Organizational Citizens: Obligations Owed by Highly Committed Employees.” Journal of Business Ethics, Vol. 110, Iss. 3, pp 285-299. 315 Hayes, L., Caldwell, C., Licona, B. & Meyer, T. E., (2015), op. cit. 316 Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass. 317 Hernandez, M., (2012). “Toward an Understanding of the Psychology of Stewardship.” Academy of Management Review, Vol. 37, Iss. 2, pp. 172-193.

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Organizations that create high trust cultures and that establish high performance management systems are more likely to earn the trust and followership that generate Zone of Stewardship responses on the part of their employees318. Leaders of such organizations model the virtues that they hope to see embraced by followers and translate their values into programs, policies, and practices that build trust and enhance commitment319. A growing body of empirical evidence suggests that leaders and organizations who adopt a virtuous approach to governance and who treat employees as valued ends rather than as means are more likely to create organizational cultures where organizational citizenship and extra-role behavior are high and where creativity and profitability exceed levels achieved in other organizations320. These six zones demonstrate the importance of the relationship created by leaders with employees as a key factor in determining employee engagement, ownership, and commitment.

ENGAGEMENT AND EMPOWERMENT Engagement and empowerment are also closely related321. Empowerment has been defined as the capacity of a person, team, or organization to be legitimately and proactively engaged in the pursuit of 318

Hayes, L., Caldwell, C., Licona, B. & Meyer, T. E., (2015), op. cit. Cameron, K., (2011). “Responsible Leadership as Virtuous Leadership.” Journal of Business Ethics, Vol. 98, pp. 25-35. 320 Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 321 HR.Research Institute, (2019), op. cit. 319

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a specific result, combined with the cognitive and emotional belief that the desired outcome is realistically achievable, and accompanying actions in pursuit of that outcome322. The significance of empowerment is that it typically results from leaders encouraging and supporting those with whom they work to utilize their talents and abilities to achieve important organizational outcomes.

By empowering employees, leaders, managers, and supervisors demonstrate their trust in employees and acknowledge the importance of those employees to the organization. Treating employees as valued partners and sharing decision-making power communicates that trust323. Withholding power and trust create a condition of “power over” employees but diminishes the ability of those same employees to benefit the organization. Leaders are most effective when they create “power with” employees, rather than seeking to maintain “power over” them324.

Huang, J., (2017). “The Relationship between Employee Psychological Empowerment and Proactive Behavior: Self-Efficacy as Mediator.” Social Behavior & Personality: An International Journal, Vol. 45, Iss. 7, pp. 1157-1165. 323 Caldwell C. and Anderson, V., (Eds.). (2020). Empowerment is a Choice. Hauppage, New York: NOVA Publishing. 324 Ibid. 322

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Empowerment of employees is well recognized as a means of increasing employee engagement and gives employees the opportunity to make a more meaningful contribution to an organization325. The tendency of organizations to hire part-time and temporary employees and to limit the scope of their responsibilities demonstrates low trust, undermines empowerment, and reduces the level of employee engagement326. More significantly, by failing to establish a partnership relationship with employees, leaders limit the ability of their organizations to be flexible, creative, and capable of responding to the demands of change327.

WHY HIGH TRUST MATTERS The key to creating high levels of employee engagement is to establish a partnership with employees in which leaders, supervisors, and managers are perceived as trustworthy328. A trust relationship that generates high levels of employee commitment and extra-mile effort is typically a by-product of how employees view their relationship with their leaders, the demonstrated commitment of the organization to their

325

HR.Research Institute, (2019), op. cit. Caldwell & Anderson, (2020), op. cit. 327 Ibid. 328 Clifton & Harter, (2019), op. cit. 326

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welfare, and the virtuousness of the organization’s mission and purpose329.

It is axiomatic to note that leaders are trusted when they are perceived as being trustworthy330. Trust and trustworthiness, like commitment, are subjective perceptions viewed through each individual’s personal lens331. Summarizing much that is known about the nature of trust and trustworthiness, we suggest five important reasons why creating a high-trust leader-follower relationship is such an important contributing factor in generating employee engagement. 1) Trust is earned by leaders who demonstrate competence by utilizing technical abilities and organizational skills necessary to guide their organizations. Leaders must have the knowledge, skill, and ability to demonstrate personal excellence332. Their personal competence, understanding of their industry, and knowledge of customers’ needs are essential qualities that give confidence to their employees that their business can succeed. Lacking the knowledge, skills, and expertise to create a competitive advantage, leaders cannot instill in their employees the high levels of commitment necessary for a company to excel333.

329

Caldwell & Hansen, (2010), op. cit. Mayer, Davis, & Schoorman, (1995), op. cit. 331 Caldwell & Anderson, (2019), op. cit. 332 Mayer, Davis, & Schoorman, (1995), op. cit 333 Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 330

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2) Trust is increased when leaders demonstrate high character in their dealings and honor commitments to employees. Character and integrity are the universally-viewed personal characteristics cited as the most important qualities in establishing a leader’s credibility334. More than any other factor, character establishes that a leader is fair, honest, and trustworthy in her/his dealings with others335. Keeping commitments and honoring duties owed to others enable leaders to establish a culture of integrity that motivates employees and models organizational values336.

334

Kouzes, J. M. & Posner, B. Z., (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It. San Francisco, CA: Jossey-Bass. 335 Colquitt, J. A., & Rodell, J. B., (2011). “Justice, Trust, and Trustworthiness: A Longitudinal Analysis Integrating Three Theoretical Perspectives.” Academy of Management Journal, Vol. 54, pp. 1183-1206. 336 Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (7th ed.). San Francisco, CA: JosseyBass.

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3) Trust is enhanced when leaders demonstrate that they authentically care about their employees’ needs and priorities. Beneficent actions earn others’ trust337. Authentic caring is perceived as a critical factor in establishing lasting personal relationships. Employees quickly recognize insincerity and lip service about the importance of people that are not accompanied by a leader’s demonstrated interest in employees as valued partners338. The ability of leaders to encourage the employees’ hearts is based upon their consistency in treating employees well and in working for their best interests339.

4) Trust is reinforced when leaders are clear in communicating and sharing important information with employees. Clarity in communicating what is expected and keeping employees well informed are leaders’ actions that demonstrate that employees are valued partners worthy of contributing to an organization’s success340. Openness in communicating with employees can build trust and encourage employees to communicate when they have genuine concerns about an organizational issue that needs to be addressed. Caldwell, C., Floyd, L. A., Taylor, J. & Woodard, B. (2014). “Beneficence as a Source of Competitive Advantage.” Journal of Management Development, Vol. 33, Iss. 10, pp. 1057-1069. 338 Ibid. 339 Kouzes & Posner, (2017), op. cit. 340 Caldwell, C., and Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 10761086. 337

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Candor in speaking the truth, when necessary, and consideration in being appropriately tactful are important elements of communication that build mutual respect and strengthen interpersonal relationships341.

5) Trust is sustained as leaders integrate the many parts of the organization and demonstrate their capacity to meet long-term customer needs. The capacity to translate a strategy into an actuality distinguishes leaders that get things done342. Leaders that are worthy of being followed understand their industry and the present and future needs of their customers343. Organizations are successful when they are sustainable long-term in managing change and responding to the demands of a constantly-evolving world344. This capacity to translate great ideas into action and to recognize what is necessary to coordinate the many factors essential to achieve success inspires employees to increase their trust in a leader345.

Anderson, V. & Caldwell, C., “Love, Forgiveness, and Humility – Moving Toward Greatness” in C. Caldwell & V. Anderson (eds.) Humility as Enlightened Leadership. Hauppage, NY: NOVA Publishing. 342 Pfeffer, (1998), op. cit. 343 Christensen, (2016), op. cit. 344 Ibid. 345 Pfeffer, (1998), op. cit. 341

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Each of these five factors associated with trust can help leaders to understand how trustworthiness, trust, commitment, and employee engagement are interrelated. A leader’s ability to earn the trust of others is critical in establishing a relationship that will motivate that employees to demonstrate the personal commitment and dedication that are so important for extra-mile employee engagement.

CONCLUSION Leaders who understand the significance of employee engagement also recognize that their actions are critical in establishing an organizational culture that empowers employees and builds trust346. The unfortunate evidence from business research, however, has been that organizations and leaders have often failed to create systems, policies, and practices that support employee engagement. This self-defeating practice erodes the ability of organizations to compete in today’s challenging economic world.

346

Clifton & Harter, (2019), op. cit.

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Employees withhold their commitment, as reflected by the behaviors that they exhibit in the compliance-commitment continuum, based upon how they are treated and whether they feel trusted, empowered, and respected by their leaders, managers, and supervisors. Those employee responses are largely a product of the degree to which leaders create organizations that value employees and demonstrate that leaders are committed to their employees’ welfare and success.

We encourage leaders to carefully examine the evidence about the importance of empowerment and trust in creating greater employee engagement. The underlying assumptions of leaders in earning the trust of employees are based upon the attributes of trustworthiness that enable leaders to be credible, effective, and worthy of employees’ committed effort. Employee engagement and the commitment that they make to their organizations and leaders is ultimately directly related to

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those leaders’ ability to recognize the value of their employees and to create organizations that enable employees to unlock their potential.

Chapter 7

EMPLOYEE ENGAGEMENT – A TRANSFORMATIVE APPROACH Employee engagement, while well established as a benefit to the modern organization, is nonetheless far less prevalent in companies than today’s leaders would like to see. However, the relatively low degree of employee commitment that is present in many organizations reflects the somewhat off-key approach of leaders who persist in adopting policies and practices that actually undermine their employees’ willingness to give their best efforts.

The focus of this chapter is on understanding a “transformative” approach to leadership that is based upon an integrated model of leadership that combines six other leadership perspectives and honors

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the ethical duties owed by leaders to the employees with whom they work. We begin the chapter by briefly explaining why many employees are disengaged or under committed to their leaders and organizations. We then introduce Transformative Leadership (TL) and clarify how that leadership model reflects key qualities of the six leadership perspectives upon which it is based.

We explain how the contributions of each of those six perspectives promote employee engagement and explain why creating commitment is viewed by employees as an ethical obligation owed by those who lead them. The chapter concludes by encouraging leaders to rethink their assumptions about the ethical duties that they owe to their employees and recognize how those ethical duties relate to employee engagement and TL in their own leadership approach.

WHY EMPLOYEES ARE DISENGAGED Employees in many organizations feel treated like their needs are not understood, their potential is undeveloped, and their value is underappreciated347. Increasingly, employers have hired part-time employees to whom those employers have offered minimal benefits and

347

HR.Research Institute, (2019). The State of Employee Engagement in 2019. Aurora, Canada: HR.com.

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no career hopes348. Supervisors and managers are poorly trained and often considered to be unethical and dishonest – with 58% of employees indicating that they would rather trust a complete stranger than their boss349.

Frederick Laloux summed up the problem with leadership in organizations of all types in the abstract to his book, Reinventing Organizations. Laloux wrote the following350. The way we manage organizations seems increasingly out of date. Survey after survey shows that a majority of employees feel disengaged from their companies. The epidemic of organizational disillusionment goes way beyond Corporate America-teachers, doctors, and nurses are leaving their professions in record numbers because the way we run schools and hospitals kills their vocation. Government agencies and nonprofits have a noble purpose, but working for these entities often feels soulless and lifeless just the same. All these organizations suffer from power games played at the top and powerlessness at lower levels, from infighting and bureaucracy, from endless meetings and a seemingly never-ending succession of change and cost-cutting programs. Deep inside, we long for soulful workplaces, for authenticity, Popken, B., (2016). “Most Jobs Created Since 2005 are Non-Traditional.” NBCnews.com December 8, 2016 and found online on April 17, 2021 at = Most Jobs Created Since 2005 Are Nontraditional (nbcnews.com). 349 Sturt, D. & Nordstrom, T., (2018). “10 Shocking Workplace Stats You Need to Know.” Forbes, March 8, 2018 and found online on April 17, 2021 at https://www.forbes.com/sites/davidsturt/2018/03/08/10-shocking-workplace-statsyou-need-to-know/#2a90c892f3af . 350 Laloux, F., (2014). Reinventing Organizations. Oxford, UK: Nelson Parker Publishing. 348

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Calling for a new approach to managing organizations, Laloux accurately identified the out-of-touch and soulless approach that is typified by leaders, managers, and supervisors in organizations of all types – and that has led to disengaged, disheartened, and distraught employees that are found in so many of today’s companies351.

The unequivocal declaration of the root cause of so much employee disengagement is summarized in the powerful study conducted in more than 150 countries worldwide by the Gallup research organization352. Their book, It’s the Manager, provides a detailed summary of the organizational missteps and the leadership debacles353 that have led to a lack of trust toward leaders of organizations in business, government, the media, non-governmental organizations, and all levels of society354.

Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press. Ibid. 353 Ibid. 354 Rainie, L., Keeter, S. & Perrin, A., (2019). “Trust and Distrust in America.” Pew Research Center, July 22, 2019 and found online on April 17, 2021 at Americans' Trust in Government, Each Other, Leaders | Pew Research Center. 351 352

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At the heart of the failure of so many organizations in earning the trust and commitment of employees is their leaders’, managers’, and supervisors’ failure to establish relationships with employees that demonstrate that leaders are trustworthy355. The top-down, high-control, numbers-oriented approach to running organizations that is taught at so many top business schools and practiced by many of today’s leaders is inadequate at engaging employees or earning the extra-mile effort that is so important for a firm to establish a competitive advantage356. Nonetheless, it is this current approach to leadership that has resulted in low employee engagement and lack of trust in many organizational leaders.

TRANSFORMATIVE LEADERSHIP AS A NEW APPROACH The leadership literature has begun to acknowledge the need for the new approach to working with employees that Laloux addressed in his book. Warren Bennis and Bert Nanus have called for a new transformative leader ‘‘who commits people to action, who converts followers into leaders, and who may convert leaders into agents of change357.’’ James MacGregor Burns used similar language in

355

Ibid. Mintzberg, H., (2005). Managers not MBAs: A Hard Look at the Soft Practice of Managing and Management Development. Oakland, CA: Berrett-Koehler Publishing. 357 Bennis, W., & Nanus, B. (2007). Leaders: Strategies for Taking Charge (2nd ed.). New York: Harper-Collins. 356

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encouraging leaders to adopt a new transformative approach to developing people and achieving optimal organization outcomes358.

TL is defined as a model of ethical stewardship that integrates six well-regarded leadership perspectives in the pursuit of optimizing longterm wealth creation, achieving the best interests of employees and other stakeholders, and responding to the demands of change359. These six leadership perspectives provide a powerful basis for helping leaders and organizations to establish partnerships with employees in the pursuit of goals that enable their organizations to succeed by empowering and engaging employees. Figure 1 below is a pictorial representation of the six leadership perspectives that make up TL. Each of these six leadership perspectives contributes to TL’s ability to enhance employee engagement by creating strong leader-follower partnerships. The following is a summary of each of these six perspectives, along with an explanation of how the perspectives increase employee commitment, trust, and engagement.

358 359

Burns, J. M., (2010). Leadership. New York: Harper Perennial. Caldwell, C., Dixon, R. D., Floyd, L., Chaudoin, J., Post., J., & Cheokas, G. 2012. “Transformative Leadership: Achieving Unparalleled Excellence.” Journal of Business Ethics, Vol 109, Iss. 2, pp. 175-187.

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Figure 1. Transformative Leadership.

Transformational Leadership Transformational leadership emphasizes the importance of organizations and individuals managing change as companies seek to constantly improve360. This leadership perspective integrates duties owed to employees and to their organizations and motivates followers to pursue their own development in addition to working for the goals of their company361. Transformational leaders seek to optimize organizational excellence while simultaneously honoring duties to employees. Transformational leaders are committed to providing employees with the resources that enable them to achieve individual organizational goals while pursuing their highest potential362.

360

Burns, J. M. (2010), op. cit. Ibid. 362 Ibid. 361

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This integrated ability of transformational leadership to achieve the best interests of the organization and its employees is a foundation principle of the TL model and demonstrates the perspective’s win-win balance363. TL assumes that leaders who seek to create greater profitability while also seeking employees’ interests are more ethical and trustworthy than other leaders. The transformational leader’s ability to create this high trust enhances a firm’s ability to outperform other competitors and is characteristic of organizations that achieve both high commitment and high performance364.

Transformational leaders enhance employee engagement by not only providing their employees with training and development but empower them and encourage them to play an active role in improving relationships with customers and assisting the organization in managing 363 364

Caldwell, C., et al., (2012) op. cit. This integration of high commitment and high performance and their relationship to high trust in organizations is the theme of Beer., M., (2009). High Commitment, High Performance: How to Build a Resilient Organization for Sustained Performance. San Francisco, CA: Jossey-Bass.

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change365. By honoring commitments to their employees and to the organization, transformational leaders demonstrate to employees that they understand the important role that employees contribute to achieving organizational goals366.

Servant Leadership Servant leadership is a leadership perspective in which the first obligation of leaders is to serve those whom they lead367. Servant leaders seek the welfare of others above their own personal selfinterest368. This obligation requires that the servant leader keeps employees fully involved in the pursuit of the needs of the organization but that those needs are not to be achieved at the expense of the interests of employees369. This duty to serve others is viewed by servant leaders as a sacred obligation of each leader and the assumption of this perspective is that honoring employees’ needs earns their commitment and benefits the organization as well370.

Caldwell, C., (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press. 366 Ibid. 367 This servant leader perspective is well-documented in DePree, M., (2004). Leadership is an Art. New York: Crown Publishing. 368 Block, P. (2013). Stewardship: Choosing Service over Self-Interest. San Francisco, CA: Berrett-Koehler Publishers. 369 Ibid. 370 Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press. 365

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TL adopts the servant leader’s commitment to employees’ best interests and acknowledges that doing so builds loyalty and enables employees to develop their highest potential371. Servant leaders and transformative leader share a commitment to others that inspires others to work for their organizations’ best interests372. The commitment of servant leadership and TL to employees’ interests motivates others to become their best and, by doing so, to also seek to achieve the longterm best interests of their companies as well.

Servant leadership and TL promote employee engagement and trust by demonstrating to employees that those who lead clearly recognize the legitimacy of the partnership role that employees play in contributing to a company’s success373. The achievement of this relationship with employees is authentic and morally virtuous374. Rather than treating employees as solely instrumental contributors who are compensated for their efforts, servant leaders look for and implement opportunities to benefit the long-term interests of employees375.

371

Caldwell, C., et al. (2012). op. cit. DePree, M., (2004) op. cit. 373 Caldwell, C., (2012), op. cit. 374 Cameron, K., (2011). “Responsible Leadership as Virtuous Leadership.” Journal of Business Ethics, Vol. 98, pp. 25-35. 375 DePree, M., (2004), op. cit. 372

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Level 5 Leadership Level 5 leaders are passionately dedicated and combine personal humility with the ‘‘fierce resolve’’ to achieve previously unaccomplished organizational outcomes376. Leaders with this perspective do not seek personal recognition but ‘‘looks out the window’’ and gives credit to others for success and “looks in the mirror” when problems arise and accepts personal responsibility377. Giving others the credit that they are due for a company’s success recognizes that collaborative contributions are key to that success.

The motivating ethical perspective of level 5 leaders is focused on a commitment to achieving the best possible results and cooperation is recognized as key to achieving that result378. TL incorporates the fierce resolve and dedication to an organization’s success of Level 5 leaders, coupled with their personal humility379. The transformative leader combines a commitment to succeed with a high regard for others.

376

Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . . And Others Don’t. New York: HarperBusiness. 377 Singh J. (2008). “Impostors Masquerading as Leaders: Can the Contagion be Contained?” Journal of Business Ethics, Vol. 82 Iss. 3, pp. 733–745. 378 Brady, F. N., (1999). “A Systematic Approach to Teaching Ethics in Business.” Journal of Business Ethics, Part 2, Vol. 19, Iss. 3, pp. 309-318. 379 Caldwell, C., et. Al., 2012), op. cit.

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The focus of TL honors the importance of each person in achieving a company’s mission and goals. It is the Level 5 leader’s ability to create a culture that engages, enables, and empowers others and earns the trust of employees. The recognition of the importance of employees’ contributions reinforces the Level 5 leader’s ability to earn others’ commitment and extra-mile effort.

Principle-Centered Leadership Principle-Centered leadership advocates that there are universallytrue principles that enable leaders and organizations to achieve outstanding outcomes efficiently and effectively380. Principle-Centered leadership is values-based and views leadership as an obligation to create a productive and moral society381. The ethical responsibilities of Principle-Centered leaders are to incorporate correct principles in relationships with others and are based upon a virtue-based ethical foundation382.

380

Covey, S. R., (2013). The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. New York: Simon & Schuster. 381 Covey, S. R., (2005). The 8th Habit: From Effectiveness to Greatness. New York: Free Press. 382 Brady, F. N., (1999) op. cit.

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The TL model embraces this leader’s adherence to universal principles and values and exemplifies organizational values by her/his conduct. By doing so, TL and Principle-Centered leadership recognize that moral leadership is ultimately the integration of both ends and means383. Correct principles, ethical values, and compliance with the needs of all stakeholders are all important factors that motivate PrincipleCentered and are a fundamental part of TL.

Such leaders treat others with as valued “You’s,” rather than as commodities or as “Its384.” TL incorporates Principle-Centered leadership’s commitment to high ideals – enabling TL to create a competitive advantage as leaders who adopt its underlying assumptions earn the trust and participation of employees who respect this leader’s 383 384

Covey, S. R., (1999) op. cit. This same interpersonal relationship is addressed in Buber, M. (2008). I and Thou. New York: Hesperides Press.

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personal example385. Because correct principles and values align with the skills requires to succeed – as well as with the qualities so important in maintaining healthy relationships – leaders who adopt this approach are respected by those whom they lead and are able to create high-trust organizations.

Covenantal Leadership Covenantal leadership views the leader as functioning as a teacher, a servant, a personal example, the empowerer of others, and the creator of new meanings386. The Covenantal leader’s pursuit of new meaning involves the entire organization in acquiring truth and knowledge and is a key to the creativity and synergy in the modern organization387 Moses Pava has suggested that it was through new meaning that Covenantal leaders possessed the power to ‘‘unleash the great human potential which is often dormant and silent’’ but which can enrich and ennoble the lives of others388.

385

Covey, (2004), op. cit. Covenantal leadership was first introduced as a leadership perspective in Pava, M. (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: Palgrave Macmillan. 387 Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Publishing. 388 Found in Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press, p. 26. 386

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TL adopts the Covenantal leader’s desire to create a learning culture in the search for new opportunities for innovation389. Transformative leaders’ commitment to discovering new truths enables companies to keep pace with technology in order to compete successfully in a constantly changing world390. By constantly learning and seeking to understand new truths, Covenantal leaders model for others the importance of dealing with a world in which technology and innovation redefine what is required to be competitive391.

Transformative and Covenantal leaders engage and empower others by providing opportunities to experiment and innovate392. Employees at all levels of the organization are treated as full partners in the learning process and their role is viewed as contributors to new learning and to assisting their companies to grow, to learn, and to evolve by applying new knowledge393. This honoring of employees acknowledges their value and increases their commitment to the organization and their trust in their leaders394.

389

Caldwell, C., et al., (2012) op. cit. Ibid. 391 Christensen, (2016), op. cit. 392 Ibid. 393 Pava, (2003), op. cit. 394 Ibid. 390

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Charismatic Leadership Charismatic Leadership involves a dynamic, relationship-based, leadership perspective focused on achieving a mission, a calling, or a noble goal for society in the quest to make a better world395. Charismatic leaders are often visionary future and are advocates of a highly moral purpose396. The charismatic leader and followers are typically aligned in their values and the charismatic leader is viewed by others as a personal role model397. Charismatic leaders ask others to transcend their selfinterests in the pursuit of an organization’s higher purpose398.

TL and Charismatic Leadership both motivate others to sacrifice personal priorities in pursuit of a higher purpose399 . The ability of the leader to create personal connection with employees strengthens employee commitment and enhances an organization’s ability to outperform other firms. Organizations in which charismatic leaders serve tend to be founded upon a compelling set of moral ideals and create

395

Lussier, R. N. & Achua, C. F., (2009). Leadership: Theory, Application & Skill Development (4th ed.). Mason, OH: South-Western Publishing. 396 Conger, J. A., and Kanungo, R. N., (1998). Charismatic Leadership in Organizations. Thousand Oaks, CA: Sage Publications. 397 Hayibor, S., Agle., B. R., Sears, G. J., Sonnenfeld, J., & Ward, A., (2011). “Value Congruence and Charismatic Leadership in CEO – Top Manager Relationships: An Empirical Investigation.” Journal of Business Ethics, Vol. 102, pp. 237-254. 398 Brown, M. E., & Trevino, L. K., (2006). “Ethical Leadership: A Review and Future Directions.” Leadership Quarterly, Vol. 17, Iss. 6, pp. 595-616. 399 Caldwell, C., et al., (2012), op. cit.

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highly committed team members400. The leader’s ability to advocate for and promote the noble objectives of the organization are the source of his/her charismatic influence and ability to sustain relationships401.

Transformative and Charismatic leaders empower others to follow their example402. By creating close personal connections and modeling moral principles, these leaders encourage others to also examine their own lives and their life’s purpose403. These leaders create powerful relationships that positively influence others’ lives – motivating others to pursue high personal ideals and to be fully engaged organization members404. This ability to connect with others on a personal level and to model the values that these leaders espouse are critical factors in inspiring employees to be fully committee to their organization’s purpose. Each of these six leadership perspectives that make up TL strengthens the ability of leaders who adopt that leadership model to not only honor ethical obligations owed to employees but provides those employees with a greater sense of commitment that makes their work more personally gratifying. Employees who work with leaders who adopt the TL model are more engaged because they have a higher sense of purpose, believe in the credibility of their leaders, and perceive that they have a greater opportunity to make a contribution to their organization and to the world in which they live. 400

Ibid. Conger & Kanungo, (1998), op. cit. 402 Lussier & Achua, (2009), op. cit. 403 Caldwell C., et al., (2012), op. cit. 404 Ibid. 401

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A CHALLENGE TO READERS The ethical duties inherent in establishing employee relationships are a byproduct of the leadership philosophy, assumptions, and interactions that leaders adopt. In turn, those leadership factors determine the way that leaders establish organizational cultures, establish policies, and direct the actions of their organizations. Unfortunately, a growing body of evidence affirms that many leaders and an abundance of companies are struggling to be perceived as ethical or trustworthy – and those same leaders and organizations fail to earn the trust and commitment of their employees405.

405

Clifton & Harter, (2019), op. cit.

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The ability of leaders to establish high-trust and high-performance organizations is closely related to the policies, practices, systems, and values of those leaders406. As leaders reflect on how they can be most effective in being perceived as trustworthy and ethical, the six leadership perspectives that make up TL are worthy of consideration407. More significantly, adopting the principles of TL can enable organizational leaders to not only increase employee engagement but can improve the competitive position of the organizations that they lead and benefit the employees that they serve408.

406

Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass. 407 Anderson, V. & Caldwell, C., (2017). “Competitive Advantage and Transformative Leadership” in Competitive Advantage: Strategies, Management, and Performance, C. Caldwell & V. Anderson (Eds.). Hauppage, NY: NOVA Publishing, Chapter 14. 408 Ibid.

Chapter 8

HUMAN RESOURCE MANAGEMENT AND EMPLOYEE ENGAGEMENT The efforts of organizations to succeed and thrive financially have been difficult due to the inconsistency of Human Resource Management (HRM) policies and practices that often make little logical sense and that destroy trust in an overwhelming number of organizations409. Top Management Teams (TMTs) and organization leaders focus on quarterly balance sheets but miss the importance of longer-range priorities that add value and improve their firms’ position to compete based upon quality rather than simply on low cost410. The result, according to an abundance of research, is that an alarming number of companies have been unsuccessful in tapping the potential of the employees who make their products and deliver their services411.

409

Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press. 410 Christensen, C. M., (2016). The Innovator’s Dilemma: Why New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business Review Press. 411 Clifton, J. & Harter, J., (2019). It’s the Manager. Omaha, NE: Gallup Press.

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In this chapter we examine the struggles of TMTs and organization leaders specifically associated with their inability to understand, establish guidelines for, and oversee their HRM systems in establishing aligned programs and policies that engage employees. We introduce ten current deficiencies occurring in many 21st century corporations in creating effective HRM systems, explaining how those shortcomings undermine employee engagement, commitment, and trust. Following that introduction, we cite recommendations from highly regarded experts who have identified changes necessary in addressing the problems that so many organizations have failed to adequately address. We conclude with encouragement to TMTs, organization leaders, and Human Resource Professionals (HRPs) to incorporate these recommendations.

WHY TODAY’S ORGANIZATIONS STRUGGLE Although some economic indicators suggest that the world economy has begun to revive from the 2008 fiscal crisis and the global COVID-19 pandemic, there is nonetheless powerful evidence that all is not well in the modern corporation. The 2021 Edelman Trust Barometer is just one of many studies that confirms that trust in leaders is disappointingly low412 and the worldwide Gallup research report affirms that leaders and managers have been off track in generating employee commitment and 412

Edelman, (2021). “Edelman Trust Barometer 2021,” found online on April 20, 2021 at 2021-edelman-trust-barometer.pdf.

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loyalty413. Behavioral scholars, business experts, and academic researchers have placed the blame on the misguided thinking of TMTs, short-term decision-making, and the ineffectiveness of employee managers and supervisors to be credible414.

Our premise is that employee engagement, while ultimately the responsibility of a company’s TMT, is often the result of inadequate, insufficient, and incapable HRPs and their inability to achieve the goals, objectives, and purpose of HRM in today’s extremely challenging global environment. While we do not in any way absolve TMTs of their failure to provide adequate direction for HRM staff, we suggest ten critical deficiencies in HRM systems that erode the effectiveness of organizations in engaging employees. Each of those ten deficiencies is now briefly summarized, with accompanying comments as to why those HRM shortcomings fail to engage the employees of today’s corporations.

413 414

Clifton & Harter, (2019), op. cit. The list of critics is plentiful but the final responsibility for the success or failure of organizations lies with an organization’s leadership. See Schein, E. H. & Schein, P. A., (2016). Organizational Culture and Leadership (6th ed.). San Francisco, CA: Jossey-Bass.

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1) Misguided Understanding of the HRM Mission. It is well established that HRM is a staff function that exists for the purpose of achieving an organization’s strategic goals415. Unfortunately, some well-intended HRPs fail to recognize the full extent of what it means to fill that staff role for the TMT. The common approach is to promote “flavor of the month” HRM programs that sound good but that fail to support their organization’s strategic priorities416. This revolving turntable or “lazy Susan” approach to management fads conveys to employees that organization leaders do not have a clear understanding of what is needed to achieve company success. When the HRM mission is not aligned with the corporate strategy, the underlying values implicit in the differences between the two are also in conflict.

415

Gomez-Mejia, L., Balkin, D. & Cardy, R., (2014). Managing Human Resources (8th ed.). New York: Pearson Publishing. 416 Best, J., (2006). Flavor of the Month: Why Smart People Fall for Fads. Berkeley, CA: University of California Press.

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2) Lack of Personal Preparation. Because TMTs may not appreciate the strategic contribution that HRM can make to acheiving an organization’s objectives, the individuals selected to manage the HRM function are sometimes pulled from clerical staff and asked to serve in a management role for which they lack personal preparation417. The HRM profession requires a broad combination of skills that range from interpersonal competence and emotional intelligence to statistical expertise and a knowledge of psychometrics418. Unfortunately, fewer than one-third of HRPs have had academic training to prepare them for their profession. Lacking a combination of high-level skills and knowledge, those who work in HRM are limited in their ability to engage employees in a work context.

3) Ineffective Employee Selection. Hiring world-class employees is essential for creating a competitive company419. . . but most HRPs lack the ability to recruit, assess, and retain those outstanding individuals420. The ability to identify the “flair

Caldwell, C., (2018). “Transforming a Discipline: The Evolution of Human Resource Management” in Human Resource Management: A Transformative Perspective. C. Caldwell, C. & V. Anderson, (Eds.) Hauppage, New York: NOVA Publishing, Chapter 2. 418 Gomez-Mejia, et al., (2014), op cit. 419 Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . . And Others Don’t. New York: HarperCollins. 420 Caldwell, (2018), op. cit. 417

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factors” that differentiate the best employees for key positions eludes most HRPs who typically do not understand the foundation principles of testing and selection or appreciate how flair factors are determined421. The consequences of ineffective hiring and promotional practices are severe and often result in creating dysfunctions that hamper a company’s success and create havoc within organizations422. The impact on organizations often results in the best employees leaving the organization and less productive employees remaining.

4) Incompetent Employee Onboarding. Onboarding new employees and orienting them within an organization is typically done poorly423 – and has been made more difficult with the advent of virtual relationships where online, Zoom, and email communications are a weak replacement for face-to-face relationships424. Failing to socialize and prepare employees adequately for new responsibilities is a foolish choice that is repeatedly made and Caldwell, C, Beverage, M., and Converse, P., 2018. “Selecting for Flair Factors: Improving the Selection Process.” Business and Management Research, Vol 7, No. 1, pp. 1- 9 and available online at http://www.sciedupress.com/journal/index. php/bmr/article/view/12892/7975. 422 Caldwell, (2018), op. cit. 423 Caldwell, C. &Peters, R. (2018). “New Employee Onboarding – Psychological Contracts and Ethical Perspectives.” Journal of Management Development, Vol. 37 Issue 1, pp. 27-39 and available online at http://www.emeraldinsight.com/doi/ pdfplus/10.1108/JMD-10-2016-0202. 424 Morgan, N., (2018). Can You Hear Me? How to Connect with People in a Virtual World. Boston, MA: Harvard Business Review Press. 421

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that results in a waste of money, increased turnover, and decreased respect for company leaders425. Poor onboarding makes a new employee’s transition more difficult but also creates problems for that employee’s colleagues and associates as well426.

5) Failure to Understand Value Added. Individuals who self-select to become HRPs often choose that profession because they are comparatively weak in their analytical skills and mistakenly believe that their financial shortcomings can be glossed over427. Plainly, today’s HRM personnel must fully understand value added and use that understanding in helping employees to improve their ability to contribute to a company’s financial success. Because the world of work has become increasingly competitive, HRPs must be experts about understanding how financial decisions and long-term financial consequences interact in advising TMTs428. By being able to coach employees about how their performance affects their companies’ bottom line, HRPs also build greater employee understanding about how they can improve their performance and personally benefit as well.

425

Kouzes, J. M. & Posner, B. Z., (2010). The Truth about Leadership: The No-Fads, Heart-of-the-Matter Facts You Need to Know. San Francisco, CA: Jossey-Bass. 426 Ibid. 427 Gomez-Mejia, et al., (2014), op cit. 428 Ibid.

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6) Misaligned Policies and Practices. One of the classic errors made in organizations is to adopt HRM policies and practices that conflict in their values and purposes429. The most common example of that mistake is to create a competitive zerosum compensation system in an organization attempting to build collaborative cooperation430. Each HRM program, policy, and practice must reflect both the core values and strategic objectives of that organization. The failure to align a company’s HRM policies and practices inevitably results in a mixed message to employees and creates ill will toward colleagues, supervisors, and the organization’s leadership431.

429

Pfeffer, J., (1998), op. cit. Ibid. 431 Ibid. 430

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7) Ineffective Training and Development. Understanding how training and development programs equate with long-term organization priorities is a necessity in the modern corporation432. Creating a culture that constantly involves employees in improving their skills and in understanding how they can provide better products and services is a critical factor in a world where changes in technology and in customer requirements are ongoing433. HRPs have the responsibility to help organizations to document the benefits achieved by training and development programs and to assist their TMTs to make that assessment based upon long-term priorities. Training that is focused only on improving short-term outcomes often misses the mark in enabling a company to accomplish outcomes key to long-term success434.

8) Unwillingness to Confront Issues. HRPs must be the eyes and ears of an organization in gathering information, interpreting its meaning, and identifying for the TMT the nature of the organization work climate and the needs of employees435. When necessary, HRPs must be willing to confront issues with employees – but also with managers, supervisors, and leaders who need

432

Senge, P. M., (2006). The Fifth Discipline: The Art & Practice of the Learning Organization (2nd ed.). New York: Image Books. 433 Ibid. 434 Ibid. 435 Gomez-Mejia, et al., (2014), op. cit.

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to understand and appropriately respond to those issues436. HRPs must combine the refined skills of interpreting employee responses with an awareness of the implications of employee concerns on organization productivity and the achievement of important objectives437. If HRPs fail to effectively confront these issues, the underlying factors will continue to fester until they erupt as major issues.

9) Barriers to Build Employee Trust. HRM systems, policies, and practices are perceived as credible when they are effectively integrated and when they convey to employees the message, “You are important and valued assets438.” The failure to convey that message consistently destroys the ability of HRPs to be perceived as trustworthy. Employee handbooks written by attorneys to “protect the company” and the morally suspect “employment-at-will” doctrine are just two examples of how many HRM systems destroy trust and convey to employees an entirely different message439. Although the clear evidence overwhelmingly confirms that creating high-trust cultures leads to high performance, most HRM systems fail in encouraging their TMTs to establish such cultures440.

436

Ibid. Goleman, D., (2005). Emotional Intelligence: Why It Can Matter More than IQ. New York: Bantam. 438 Pfeffer, (1998), op. cit. 439 Caldwell, (2018), op. cit. 440 Pfeffer, (1998), op. cit. 437

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10) Inadequate Research Abilities. The inability of HRM staff to become subject matter experts about state-of-the-art issues in their profession is well documented and reflects the reality that so many HRPs are poorly prepared for their profession and its complex responsibilities441. Although it is a disappointing reality that HRPs lack the ability to maintain a cutting-edge understanding of best practices in their profession, that fact is nonetheless real – even if it is disturbing. HRM staff must also be involved in researching a myriad of other issues in order to be effective business partners for busy managers and supervisors. Lacking this skill set, most HRPs are unable to make the contribution to their organizations upon which they depend to maintain their companies’ effectiveness.

441

Gomez-Mejia, et al., (2014), op. cit.

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These ten HRM deficiencies are common in organizations of all types. Despite the fact that the HRM profession has made great strides in the past several years, it is nonetheless true that HRM professionals are often woefully unprepared and unable to perform at the level required for their companies to succeed in a global market place442.

Addressing These Deficiencies There are no instant solutions for addressing these ten deficiencies443. The problems associated with the limitations of HRM systems are deep-seated and will take major changes to resolve. Nevertheless, those changes are badly needed if businesses are to be successful in creating high levels of employee engagement. Although the Society for Human Resource Management and other professional organizations have made a concerted effort to upgrade their profession and increase the training available to HRPs, the root causes of the problems are far more significant than a professional organization can address alone. Acknowledging the difficulties facing the HRM profession and its shortcomings, we respectfully propose five recommendations that we believe can exponentially increase the public profile about these deficiencies.

442 443

Ibid. Caldwell, (2018), op. cit.

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1) Address the HRM competence problem in major graduate schools of business. Brilliant academic scholars like Stanford’s Jeffrey Pfeffer, the University of Michigan’s David Ulrich, and business experts like Jim Collins and Diane Mills have acknowledged the problems facing the HRM profession. Despite the fact that improvements have been made, the plain truth is that the problems facing organizations in the 21st century are, in large measure, due to the failure of leaders to motivate and engage the employee work force. Unless and until HRM issues become a significant priority in the business schools of major academic institutions – including the most prestigious of those institutions – little is likely to change for the profession in teaching business students the critical skills and knowledge required to improve the quality of HRM systems in today’s organizations. Moreover, unless curriculum changes are made to emphasize the importance of the HRM function, MBA graduates at these schools will be unlikely to fully involve HRPs in guiding their organizations444.

444

Mintzberg, (2005), op. cit.

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2) Create a public/private sector partnership sponsored at the federal level to address upgrading the HRM profession. Under the aegis of the federal government, a series of special partnership projects need to be established together with representation including elected members of congress, major corporations, professional associations, small business, employee unions, and HRM experts to create demonstration projects to revitalize and upgrade the HRM profession. These projects should be conducted with the purpose of increasing HRM standards and providing guidelines for employers for HRPs and for the conduct of HRM at a world class level. The challenges facing business require a collaborative effort and, without government support and business participation, the necessary changes are unlikely to be made.

3) Expand research conducted by SHRM and other professional groups about HRM issues. Assisted by funding from the federal government the Society for Human Resource Management (SHRM) and other professional organizations should initiate extensive expanded research about the many HRM issues that need to be improved to increase the efficiency and effectiveness of businesses of all sizes. That research should be integrated with input from the entities who are involved with the other recommendations of this proposal and should be assisted by world class academic scholars. This research should include funding academic journal research and the associated publication of HRM academic and professional journals. Researching these issues and providing evidence

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regarding the findings are necessary elements in improving the likelihood of achieving lasting change.

4) Increase governmental sponsorship for HRM scholarships and funding for HRM faculty chairs. Inasmuch as public and private universities are struggling financially, the federal government should play a major role in increasing the number of HRM scholarships at public and private universities – particularly where those scholarships involve students and faculty in applied research in partnership with the businesses served by those academic institutions. Because full-time HRM chair positions are necessary to conduct and oversee the development of improved courses of study and research, the federal government should also fund multiple HRM faculty chairs at those academic institutions. Government involvement and financial support are necessary elements inasmuch as universities have been adversely affected financially over the past two decades.

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5) Involve state and city governments and associated organizations in creating programs supporting HRM. State, county, and municipal governments should collaborate with academic institutions, businesses, employee groups, and other related parties in creating programs within their jurisdictions that increase the effectiveness of HRM systems at businesses within their boundaries. Those governments should provide tax incentives and other forms of incentives and support for participants who are part of the effort to improve the quality of HRM in order to encourage such projects. Addressing the needs of individual communities and the businesses located within them should be a priority in order to improve the businesses within those same jurisdictions.

We encourage decision makers in universities, government, businesses, union organizations, and other important stakeholders to consider these five recommendations – and to adopt these recommendations on a timely basis.

THE CHALLENGE The growing evidence has made it clear that successful business organizations are dependent upon the active participation, engagement, and contributions of the employees who work for those companies445. Employee engagement reflects the degree to which employees trust the leaders, managers, and supervisors with whom they labor – and that

445

Clifton & Harter, (2019), op. cit.

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trust is far below what it needs to be for employees to be fully engaged446. Unless current trends are reversed, businesses will continue to struggle to obtain the commitment of their employees.

Employee engagement can be substantially enhanced when the deficiencies of HRM systems are thoughtfully addressed and HRPs are more effectively prepared to perform the complex duties of their positions. The task of upgrading the quality of HRM systems and their staff members will not be easy – but the task is both possible and necessary for employee engagement efforts to be meaningful. Although the ultimate responsibility for employee engagement lies with an organization’s TMT and the relationships established by its managers and supervisors447, it is also true that HRPs and HRM systems need to be immediately upgraded if 21st century businesses are to compete successfully in the complex global market place.

446 447

HRResearch Institute, (2019), op. cit. Clifton & Harter, (2019), op. cit.

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ABOUT THE AUTHORS Cam Caldwell, PhD (Business Professor - Retired) Email: [email protected]

Dr. Cam Caldwell received his PhD in Human Resources and Organization Behavior from Washington State University where he was a Thomas S. Foley Graduate Fellow. He holds the Senior Professional and Global Professional in Human Resources professional certifications. Prior to earning his PhD, he worked as a Human Resource Director, City Manager, and Management Consultant for more than twenty years. This is his fifteenth book and he has published many papers about a variety of management and leadership topics.

Verl Anderson, PhD Professor (Business) Dixie State University, St. George, UT, US Email: [email protected] Dr. Verl Anderson obtained his doctorate degree in Business Administration from Arizona State University. He is currently a professor in Management and International Business at Dixie State University, St George, Utah. He has taught university

186

About the Authors courses as a visiting professor in New Zealand and four universities in China. He has published 34 articles in the past two years on leadership, ethics, China culture, kindness, strategic management, and social responsibility. His research interests include China culture and international cultures. He has traveled extensively, and annually takes groups on cultural/educational tours to China and New Zealand.

INDEX A accountability, 60, 80 authority, 111, 112, 116, 118, 120

B Barnard, Chester, 37, 49, 111, 112, 116, 118, 173

COVID-19 pandemic, 92, 156 creativity, 5, 8, 10, 13, 26, 122, 125, 148 culture, v, 5, 10, 11, 16, 19, 24, 27, 28, 31, 33, 36, 37, 39, 41, 43, 51, 54, 62, 64, 65, 68, 72, 73, 74, 76, 77, 78, 83, 87, 88, 89, 94, 95, 98, 99, 106, 129, 132, 146, 149, 157, 163, 174, 177, 179, 180, 183, 184, 186 customer service, 10, 13, 29, 44, 45, 122 customers, 8, 28, 29, 54, 67, 74, 75, 85, 95, 115, 128, 131, 142

C Charismatic leadership, 150, 177, 178 Christensen, Clayton M., 1, 5, 10, 26, 38, 40, 43, 67, 76, 82, 128, 131, 148, 149, 155, 176 coaching, 31, 66, 103 competitive advantage, viii, 1, 7, 10, 13, 26, 38, 43, 76, 79, 122, 128, 139, 147 competitors, 19, 21, 79, 85, 142 compliance, 17, 110, 113, 114, 115, 117, 118, 120, 121, 122, 133, 147 corporate social responsibility, 29, 30, 104, 173, 174, 177 Covenantal leadership, 12, 143, 148, 182 COVID-19, 89, 90, 92, 156

D disengaged, 18, 72, 136, 137, 138

E employee commitment, 1, 15, 16, 17, 21, 22, 25, 26, 30, 31, 37, 39, 45, 47, 52, 65, 66, 68, 70, 72, 73, 80, 82, 84, 87, 107, 110, 122, 127, 135, 140, 150, 156, 173, 177 employee engagement, i, iii, v, vii, viii, 1, 2, 3, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 23, 24, 33, 34, 36, 38, 39,

188

Index

43, 46, 47, 48, 50, 51, 62, 63, 71, 72, 73, 74, 78, 81, 88, 98, 99, 101, 102, 106, 107, 110, 114, 125, 127, 128, 132, 133, 135, 136, 139, 140, 142, 144, 153, 155, 156, 157, 166, 171, 173, 174, 175, 177, 178, 179, 180, 181, 184 employee onboarding, 160, 175 employee selection, 42, 60, 65, 159 employee training, 43, 57, 66, 78, 100, 182 empowerment, v, 9, 17, 20, 38, 102, 109, 110, 123, 125, 126, 127, 133, 175, 179 espoused values, 94, 95 ethical stewardship, 140

F Follett, Mary Parker, 37 formal philosophy, 96

G Generation Z, v, 16, 17, 87, 88, 89, 90, 91, 92, 94, 99, 100, 101, 103, 105, 106, 107, 177, 178, 181 group norms, 96

I ineffective training, 163 innovation, 8, 10, 13, 26, 43, 45, 67, 82, 149

J job performance, 57, 100 job satisfaction, 11

L Laloux, Frederick, 137, 138, 139, 180 leadership, vii, viii, 11, 15, 17, 18, 20, 22, 24, 32, 33, 35, 36, 42, 47, 48, 53, 57, 73, 75, 81, 85, 111, 115, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 146, 147, 148, 150, 151, 152, 153, 157, 162, 181, 185, 186 Level 5 Leadership, 145 loyalty, 65, 74, 101, 144, 157

M mentoring, 66

H high commitment, 1, 22, 26, 62, 102, 142, 153, 174 high trust, 62, 69, 99, 125, 127, 142 high-trust environment, 71 Human Resource Management (HRM), 155 Human Resource Management (HRM) policies, 18, 31, 33, 41, 54, 62, 80, 155, 156, 157, 158, 159, 161, 162, 164, 165, 166, 167, 168, 169, 170, 171, 173

N NGOs, 1, 28, 178

O organization values, 102 organizational culture, 16, 39, 72, 77, 78, 83, 87, 88, 95, 106, 107, 125, 132, 152

Index

189

P

T

Pava, Moses, 12, 143, 148, 149, 182 Performance measurement, 56 Pfeffer, Jeffrey, 11, 22, 25, 31, 35, 39, 41, 44, 51, 52, 61, 63, 65, 71, 77, 78, 80, 101, 122, 131, 155, 162, 164, 167, 182 Principle-centered leadership, 146

top management team, 23, 39, 47, 78, 83, 155 Transformative leadership, 18, 136, 139, 140, 141, 153, 173 trust, v, vii, viii, 1, 5, 6, 7, 8, 10, 14, 15, 17, 18, 19, 20, 21, 22, 25, 26, 27, 28, 29, 33, 35, 39, 41, 42, 47, 51, 62, 66, 68, 71, 73, 85, 102, 109, 110, 112, 114, 120, 121, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 137, 138, 139, 140, 144, 146, 147, 149, 152, 153, 155, 156, 164, 170, 175, 176, 177, 178, 180, 181, 182

Q quality of service, 54

R

U

rituals, 95

S Schein, Peter, 24, 28, 36, 39, 68, 78, 94, 95, 98, 157, 183 self-managed work teams, 55 Senge, Peter, 121, 122, 163, 183 servant leadership, 143, 144 Simon, Herbert, 61, 117, 118, 146, 174, 177, 181, 183 stewardship, 6, 8, 24, 39, 63, 113, 121, 123, 124, 125, 143, 174, 175, 176, 179

unions, 168 universities, 93, 169, 170, 186

W work climate, 24, 95, 163 work environment, 13, 27, 35, 37, 38, 41, 52, 95

Z Zone of Acceptance, 119 Zone of Indifference, 116 Zone of Trust, 120