Show me the money

Abstract

Purpose The purpose of this paper is to reconcile various theoretical directions in employee engagement with self-determination theory (SDT) as a unifying framework and introduce an inter-disciplinary employee engagement economics model based on SDT. Design/methodology/approach Two studies were conducted applying a T1/T2 intervention study design. Study 1 examined the causal relationship between an organizational intervention and employee engagement with n=367 employees from a European pharmaceuticals company using both survey and actual performance data. Study 1 results were used as input data for study 2 which tested the employee engagement economics model by calculating the pre-/post-economic value added and return on investment (ROI) for the intervention. Findings Study 1 results showed a significant positive impact of the SDT-based intervention on both self-reported and actual employee engagement. Study 2 converted study findings into pre-/post-economic considerations putting an economic dollar value on achieved employee engagement gains and calculating an ROI in relation to the cost incurred. Practical implications The present results support SDT as a unifying theory for employee engagement and the proposed employee engagement economics model as strategic decision-making tool for planning and evaluating the economics of employee engagement interventions. Social implications This research supports a shift in corporate focus from “people as cost” to “people as values” proposing a systematic, value-based, strategic management approach to employee engagement based on cost-benefit analysis. Originality/value This is the first research to contribute an empirical economic model for employee engagement interventions to literature. It is based on the first reconciliation of engagement literature identifying SDT as a unifying framework. Finally, for the first time, this work identifies subjective vitality as a measure for engagement and contributes a definition for disengagement to literature.

Business Results and Well-Being: An Engaging Leadership Intervention Study

“…Organizations with lower levels of absenteeism report higher engagement and productivity [47], while higher frequencies of sick-leave absenteeism are associated with poor performance [48]. Lower levels of sick-leave absenteeism lead to lower costs and, just like productivity gains and increased performance, can be used as valuable input for business metrics, such as a return-on-investment (ROI) calculus, which is one of the most widely used performance evaluation metrics in the management literature [12,49]. We argue that engaging leadership, with its base in self-determination theory and need satisfaction, will also contribute to lower absenteeism rates.…”

“…New and emerging practices aim to contribute to both organizational performance and employee well-being [3]. However, studies on the effects on business performance are lacking [12]. The current study aims to fill this gap: The present study's leadership development program was shaped in a co-creation process and sought to improve actual business performance, decrease sick-leave absenteeism, and elevate motivation.…”

Navigating Motivation at Work

“…New and emerging practices aim to contribute to both organizational performance and employee wellbeing (Ardichvili et al, 2016). However, studies on the effects on business performance are lacking (Mueller, 2019). The current study aims to fill this gap.…”

“…Most research examining the impact of leaders, however, focuses on employee performance as an outcome, leaving the role of leaders in fostering the well-being of their employees underexplored (Inceoglu et al, 2018 (Bakker & Demerouti, 2008). As a result, employees feel well (Schaufeli, 2012), display high levels of extra-role behavior (Schaufeli & Salanova, 2009), and enhanced performance (Mueller, 2019), which in turn contributes to financial performance (Schneider et al, 2018) and growth (Sorensen, 2013) at the organizational level.…”

“…Organizations with lower levels of absenteeism report higher engagement and productivity (Gallup, 2017), while higher frequencies of sick-leave absenteeism are associated with poor performance (Bycio, 1992). Lower levels of sick-leave absenteeism lead to lower costs and, just like productivity gains and increased performance, can be used as valuable input for business metrics, such as a return-on-investment (ROI) calculus, which is one of the most widely used performance evaluation metrics in the management literature (Heerkens, 2010;Mueller, 2019). We argue that engaging leadership, with its base in self-determination theory and need satisfaction, will also contribute to lower absenteeism rates.…”