A Project report On
At J.K. Cement, Nimbahera (Chittorgarh).
Submitted to
Rajasthan Technical University In the partial fulfillment for the award of Master Degree of Business Administration Session 2007-2009
Submitted By: Guidance of: Mr. Mr. Manu Vijay MBA III sem.
Under the Mr. Mr. Rahul Rahu l Jain
Vision School of Management (Affiliated to Rajasthan Technical University & Approved by AICTE) Udaipur Road Chittorgarh (Raj.) E-mail:
[email protected] Website: www.visionmanagement.Org
DECLARATION: This This is to certi certify fy that that the the MRP MRP subm submit itte ted d by me in Mast Masters ers of Busi Busines nesss Administration Program from Vision School Of Management, Chittorgarh [Rajasthan technic technical al univers university ity,, Kota] Kota] embodie embodiess the origin original al work work done by me under under the able able guidance and supervision of Mr. R.P. Singh, General Manager (HRD & RTC), at J.K. cement, Nimbahera (Chttorgarh). No No part part of this this report report has has been been produ produced ced from from any any othe otherr summ summer er proje project ct,, mono monogr grap aph, h, repo report rt or book book and and all all fact factss and and figu figure ress have have been been conf confir irme med d by organizational guide.
Manu Vijay M.B.A. [RTU] Vision Vision School Of Management
PREFACE: This MRP is prepared as the partial fulfillment for Two-Y Two-Year ear degree Program of MBA curriculum of Rajasthan Technical University, University, Kota. It is expected from an MBA to possess a good communication & effective presentation skills. Objectives of the project report, these are:i.) i.)
To stud study y the the impac impactt of emp emplo loye yeee engage engageme ment nt on on produ product ctiv ivit ity y of the the org organi aniza zati tion. on.
ii.) ii.)
To stud study y the the vari variou ouss meth method odss of emp emplo loyee yee eng engage ageme ment nt prev prevai aili ling ng in in the organization.
The research provides an opportunity to a student to demonstrate application of his/her knowledge, skill and competencies required during the technical session. Research also helps the student to devote his/her skill to analyze the problem to suggest alternative solutions, to evaluate them and to provide feasible recommendations on the provided data. Although I have tried my level best to prepare this report an error free report every effort has been made to offer the most authenticate position with accuracy. This report contains a number of additional features: Chapter Chapter 1.
Introdu Introduces ces cement cement industry industry in India, general general characteri characteristi stic, c, key
external drivers, cement manufacturing process, swot analysis, price & profit to the firm, firm, trend trend & player players, s, domest domestic ic player players, s, market market opport opportunit unities ies for investm investment ent & company profile & objectives of the report. Chapter 2. On conceptual framework which related to employee engagement (in the public public sec sector tor,, interp interpret retativ ativee models, models, power power of employe employeee engagem engagement ent & 9 core statement. Chapter 3. On review of literature which consider “Merit board links employee engagement engagement & productivity productivity”, ”, “Engagement “Engagement equals equals productivity” productivity”,, “Cambridges “Cambridgeshire hire county council” etc. Chapter 4. On research methodology which consider definition, sample size, types & techniques, tools used & limitation of the study. study. Chapter 4. On data analysis & interpretation related to employee engagement & productivity of J.K. cement.
Chapter 5. On observation & finding, conclusions & suggestion related to research methodology, data analysis & interpretation which consider the topic of “Impact of employee engagement on productivity ( with specific reference of J.K Cement) of organization.” A bibliography in project report is provided at the end that should serve as good sources of reference material for learners & researchers in the area. An annexure appears at the end of the report that provides some useful sources of information on the Internet regarding project report. This should prove to be a welcome features for those persons who would like to access the net for more information on issues covered in this project report.
ACKNOWLEDGEMENT: The successful completion of a MRP requires guidance & help from a number of people. I was fortunate to have all the support from my teachers. I therefore take this opportunity to express my profound sense of gratitude to the all those who extended their whole hearted help and support to me in completing the project study report work on
p roductivity ( with specific reference of “Imapct of employee engagement on productivity J.K Cement) of organization.”
I also express my deep sense of gratitude to Mr. R.P. Singh, General Manager (HRD & RTC), at J.K. cement, Nimbahera (Chttorgarh), who has helped us to Mr. Narendra Vaishnav Vaishnav (Officer(Officer- RTC).for do our project. We also thank to Mr.
his valuable help in each stage of the project. Because of his co-operation and continuous guidance successful completion of this project study report was made possible. I am sincerely thankful to Dr. A.L. Jain (Director, Vision Vision School of Management) for allowing me to undertake the report and making available all facilities for the successful completion of the report besides guiding me to pursue the study on proper line. Mr. Rahul Rahul Jain Jain (Gu (Guide ide,, I also express my deep sense of gratitude towards Mr. Faculty at VSM), Mr. Vibhor Paliwal, Dr. Snehal Maheshkar, Ms. Pratibha Paga Pagari ria, a, Ms. Ms. Shobh Shobhik ika a Tyagi yagi,, P.L. .L. Dasho Dashora ra (L (Lib ibra rari rian) an) & all all facu facult lty y members.
No Acknowledge would suffice for the support my family members, my training colleagues, classmates & friends. Lastly, I extend my thanks to all those whose name have not been mentioned way in successfully carrying out the project report.
(MANU VIJAY) VIJAY) Executive-Summary: For several years now, 'employee engagement' has been a hot topic in corporate circles. It's It's a buzz buzz phras phrasee that that has capt capture ured d the the atte attent ntio ion n of work workpl plac acee obser observe vers rs and HR managers, as well as the executive suite. And it's a topic that employers and employees alike think they understand, understand, yet can't articulate articulate very easily. easily. employee employee engagement engagement as "a
heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work". At least four of the studies agreed on these eight key drivers. 1. Trust Trust and integrit integrity y – how well managers managers communi communicate cate and 'walk the the talk'. talk'. 2. Nature of the job –Is –Is it mentall mentally y stimul stimulating ating day-to-day? day-to-day? 3.
Line of sight between between employee employee perform performance ance and company performance performance
4.
Does the the employee employee understand understand how their work work contributes contributes to the company's performance?
5. Caree Careerr Growt Growth h opport opportuni uniti ties es 6. Are there there futu future re opport opportuni unitie tiess for growt growth? h? 7. Pride Pride about about the compa company ny 8.
How much self-esteem self-esteem does does the employee employee feel by being associated associated with with their company?
9. Cowo Coworke rkers rs/t /tea eam m membe members rs 10. significan significantly tly influence influence one's level of engagement 11. Employee Employee developme development nt 12. Is the company making an effort to develop the employee's employee's skills? 13. Relationshi Relationship p with one's manager manager 14. Does the employee value his or her relationship with his or her manager?
We define employee Engagement as a psychological state in which in which employees feel a vested interest in the the company ‘s success and are both willing and motivated to perform to levels that exceed the stated job requirements. Its reflects how employees feel about the overall work experience Employee Engagement foster & drives driv es discretionary behavior, eliciting employees, highest productivity, their best ideas & their genuine commitment to the success of the organization. Employee engagement , also called Work engagement , is a concept that is generally
viewed as managing discretionary effort, that is, when employees have choices, they will act in a way that furthers further s their organization' their organization'ss interests. An engaged employee is a person
who is fully involved in, and enthusiastic about, his or her work. her work. Employee Engagement is now measured by items which have been linked to key business outcomes. In a study of professional service ser vice firms, the Hay Group found that offices o ffices with engaged employees were up to 43% more productive The most striking finding is the almost 52% gaps gap s in operating incomes between companies with highly engaged employees and companies whose employees have lowengagement scores. High-engagement companies improved 19.2% while lowengagement companies declined 32.7% in operating income during the study period. For example, New example, New Century Financial Corporation, Corporation, a U.S. specialty mortgage banking company, found that account executives in the wholesale division who were actively disengaged produced 28% less revenue than their colleagues who were engaged. Furthermore, those not engaged generated 23% less revenue than their engaged counterparts. Engaged employees also outperformed the not engaged and actively disengaged employees in other divisions. It comes as no surprise, then, that engaged employees have been statistically linked with innovation events and better problem solving. Arnold is more likely to define engagement as a beneficial two-way relationship where employees and employers 'go the extra mile' for one another. ano ther. Companies that get it right reap the rewards and so do their employees, he said. The benefits of having happy staff are well-documented. But the challenge for many organisations is showing that engagement brings a tangible return on investment - a process many companies find elusive. "Engagement means different things to different people," Arnold said. "There was a risk that it would become just another buzzword, so settling on a definition gave us a lot of debate." With this in mind, Arnold embarked on a study with Personnel Today to find out what engagement meant to professionals in different organisations. The study, called Get Engaged, measured engagement levels and whether companies felt they were making progress. Introduces Introduces cement industry industry in India, India, general characteristi characteristic, c, key external drivers, cement manufa manufactu cturing ring process, process, swot swot analysi analysis, s, price price & profit profit to the firm, trend trend & players players,,
domestic players, market opportunities for investment & company profile & objectives of the report. On conceptual framework which related to employee engagement (in the public sector, interpretative models, power of employee engagement & 9 core statement. On review of literature which consider “Merit board links employee engagement & productivity”, “Engagement equals productivity”, “Cambridgeshire county council” etc. On research methodology which consider definition, sample size, types & techniques, tools used & limitation of the study. On data analysis & interpretation related to employee engagement & productivity of J.K. cement. On observation & finding, conclusions & suggestion related to research methodology, methodology, data analysis & interpretation which consider the topic of “Impact of employee engagement on productivity ( with specific reference of J.K Cement) of organization.” A bibliography in project report is provided at the end that should serve as good sources of reference material for learners & researchers in the area. An annexure appears at the end of the report that provides some useful sources of information on the Internet regarding project report. This should prove to be a welcome features for those persons who would like to access the net for more information on issues covered in this project report.
CONTENTS
DECLARATION PREFACE ACKNOWLEDGEMENT EXECUTIVE-SUMMARY TABLE-CONTENT PIE-CHART CONTENT
I II-III IV V-VIII XI XI-XII
Particular Chapter – 1 Company Profile
1.1 Introduction of the Industry 1.2 History behind J.K. cement 1.3 Management Setup 1.4 J K Marketing Organization 1.5 Social Responsibility 1.6 Type of cement 1.7 Corporate Profile 1.8 Company Strength 1.9 Company Achievement 1.10 Corporate Plan 1.11 Company Product
1.12 Information Required Under Section 217 (1)(e) of The Companies Act, Chapter –2 Conceptual frame work 2.1 Introduction of Employee Engagement 2.2 Understanding Employee Engagement in The Public Sector 2.3 Interpretative Models of Employee Engagement. 2.4 Power of Employee Engagement 2.5 The 9 Core Statement of Engaged Employees 2.6 Four Fundamental Action Leading to +ve Results 2.7 Essential Reading 2.8 Latest on Employee Engagement 2.9 Ea Earlier Stories on Employee Engagement
Page No. 1- 42 1 19 22 23 23 26 27 29 31 33 35 36
43-72 43 45 49
3.11 Merit Board Links Links Employee Engagement &
58 61 62 65 66 70 73-89 73
Productivity Engagement Equals Productivity Ca Cambridgeshire County Council Rotherham Metropolitan Borough Council CIPD (2006c): Employee variations B&Q Towers Perrin RBS - How a major corporation uses its
74 76 77 78 80 81 82
Chapter –3 Review of Literature
3.12 3.13 3.14 3.15 3.16 3.17 3.18
employee data 3.19 Literature view on impact of engagement 3.20 Im Importance of Employee Engagement
87 88
Chapter –4 Research Methodology 4.1 Research - Objective 4.2 Research - Plan 4.3 Limitation
Chapter – 5 Data Analysis and Interpretation Chapter – 6 Conclusion and Suggestion Reference and Bibliography
90-91 90 90 91 92-127 128-129 130
LIST OF TABLES
Particular 1.2.1 Industry demand supply outlook 1.2.2 Cement capacity that can be sold million tones 1.2.3 Present capacity & Performance
1.5.1 Types of cement 3.1 Li Literature view on impact of engagement 3.2 Importance of Employee Engagement
LIST OF CHARTS AND FIGURES
Page No. 3 18 21 26 36 39
Particular
Page No. 2
1.1 General characteristics 1.2 Per Capital Consumption Of Cement (2003) 1.3 Capacity additions (million tones) 5.1 Employee engagement helps you a lot to increase your knowledge, skill, attitude & ability to perform the job. 5.2 You had proper discussion with your head of
12 17 92
95
department on the topics of training or the areas of production are decided after proper discussion with you. 5.3 The objective of the production were clear to
98
you. 5.4 The senior is able to provide you knowledge
101
about all the aspects, which you want. 5.5 The methodology of production was excellent. 5.6 There is open discussion between you & the
104 107
HRD. 5.7 You had achieved your learning goals from the
110
employee engagement. 5.8 The HRD department seriously follow-up the
113
suggestion provided by you for the improvement of the production. 5.9 Is the employee engagement supportive?
116 119
5.10 If their any feedback system about the production from the production department. 122 5.11 What type of error may arise in your job, if you don’t involve in employee engagement. 125 5.12 What quality of production you are getting getting from J.K. cement.
Introduction:Introduction :-
Industry Profile:The Indian cement industry with a total capacity of 151.2 million tones (including mini plants) in March 2003 has emerged as the second largest market after China, surpassing developed nations like the USA and Japan. Per capital consumption has increased from 28kg in 1980-81 to 110kg in 2003-04. In relative terms, India’s average consumption is still low and the process of catching up with international averages will drive future growth. Infrastructure spending (particularly on roads, ports and airports), a spurt in housing housing constructio construction n and expansion in corporate corporate production production faciliti facilities es is likely likely to spur growth in this area. South –East Asia and the Middle East are potential export markets. Low cost technology and extensive restructuring have made some of the Indian cement companies the most efficient across global majors. Despite some conso consoli lida dati tion on,, the the indu indust stry ry rema remain inss some somewh what at frag fragme ment nted ed and and merg merger er and and acquisiti acquisition on possibilit possibilities ies are strong. strong. Investment Investment norms including including guideline guideliness for foreign direct investment (FDI) are investor-friendly. All these factors present a strong case for investing in the Indian market. Cement industry trends in India:
Cement industry is growing at 10-12%YoY
There are over 125 large manufacturing plants and over 300 mini cement plants.
Over 180 million tonnes installed capacity and utilization is over 90%.
Over 10 million tonnes exports.
Growth is driven by infrastructure and housing boom.
Technology changes in recent years towards modern and environmental friendly.
General characteristics: characteristics:
Good made to stock High capital intensive Low labor intensive Highly automated
High weight/price Ratio, hence High freight cost
General Characteristics
End product is cheap Low differentiation differentiation
Cyclic industry, Demand related to economic activity. activity .
Industry demand supply outlook:
As on31 march Current Capacity Capacity growth Cement demand Demand growth Domestic
FY04 144.5 117.2 113.8
consumption Growth domestic consumption Exports Export growth Cement capacity
3.4 81%
FY05 151.3 4% 127.1 8% 123.1
FY06 157.1 4% 141.6 8% 135.6
7%
10%
4.1 21% 84%
6.0 47% 90%
utilization India’s per capita cement consumption of 110kg per year, whereas china’s figures of 659 kg per year. This clearly shows that demand of cement in India’s market has a lot to catch up. During the tenth plan, the industry, expected to grow at 10% per annum adding a capacity of 40-52 million tonnes, according to the annual report of the department of industrial policy and promotion (DIPP). The report reveals that this growth trend is being driven mainly by the expansion of existing plants. The Indian cement industry not only ranks second in the production of ceme cement nt in the the world world but but also also prod produc uces es qual qualit ity y ce ceme ment nt,, whic which h meet meetss glob global al standards. however , the industry faces a number of constraints in terms of high cost of power , high railway tariff; high incidence of state and central levies and duties duties;; lack lack of privat privatee and public public invest investmen mentt in infras infrastru tructu cture re projec projects; ts; poor poor qualit quality y coal coal and inadeq inadequat uatee growth growth of relat related ed infras infrastru tructu cture re like like sea and rail rail transport, ports and bulk terminals .in order to utilize excess capacity available with the cement industry, the government has identified the following thrust areas for increasing demand for cement: 1. Housing development program.
2. Promotion Promotion of concre concrete te highways highways and roads. 3. use of ready ready mix concret concretee in large large infrastr infrastructur ucturee projects; projects; and and 4. Constructi Construction on of concre concrete te roads roads in in rural rural areas. areas.
Indian cement industry is modern and uses u ses latest technology. technology. Efforts are being made to recover waste heat and success in this area has been significant. India is also providing different varieties of cement like Ordinary Portland Cement(OPC), Portland Pozzolana Cement(PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Well Cement, Cement, Rapid Hardening Portland Cement, Sulphate Resisting Resisting Portland Cement, White Cement, etc.
CEMENT MARKET IN INDIA: NORTH
WEST
Punjab, Delhi, Haryana, Himachal Pradesh, J&K and Rajasthan. Rajasthan .
Maharashtra and Gujarat
SOUTH
Tamil Nadu, Andhra Pradesh, Karnataka, and Kerela
EAST
Bihar, Orrisa, West Bengal, Assam and Meghalaya
CENTRAL
Madhya Pradesh and Uttar Pradesh
KEY EXTERNAL DRIVERS
S Y R R E A V I M I R D R P
SECONDARY DRIVERS
T E - C R A U U R R F T N I S
*Bank lending rate *Disposable income *Government initiative
T S T O U P C N I
*Raw material cost *Fuel price *Transportati on cost
Y N T I O S L A A E S
*Monsoon *Festive season
A FLOW DIAGRAM OF CEMENT MANUFACTURING PROCESS: 75-80% CaCO3,
20-25% Sio2 + Al2O3 + Fe2O3, Clay,
Chalk, Limestone,
Sand, Shale.
Quarrying
Quarrying
Crushing
Crushing
Mixing
Raw Grinding
Burning to Clinker
Gypsum
Additives
Cement Grinding
Cement
Packing & Transportation
3 P’s of PERFORMANCE at J.K. CEMENT: Profit does not provide the only clue to a company’s true performance.
This is because not all benefits and costs, arising from the company’s operation, find their way to the balance sheet. For instance, the positive impacts of a company’s operation on people in its vicinity, say the establishment of a hospital, do not appear in its balance sheet. Neither do the negative impact.
It is for such reason that J.K. Cement prefers to highlight its performance from three different angles, or what is called The Triple Triple Bottom Line – (1). Economic (balance sheet performance) (2). Community (service to the society or community) (3). Environmental (steps taken to nurture environment)
At J.K. Cement, we call them THE 3 Ps of Performance – Profit, People & Planet. PROFIT: J.K. Cement way as far as profit is concerned besides making efforts to influence turnover J.K. Cement emphasize on cutting cost to cut ahead. The reason is simple turnover is an outcome of the price, price realization and quantity sold – all factors dependent on externalities like government policies and market cycles which are beyond company’s control. Cost, on the other hand, is something J.K. Cement can and does exercise a lot of control over.
PEOPLE:
The importance of the HR function lies in the fact that in an extremely compet competiti itive ve industr industry y like like cement cement,, the the compan company's y's perfor performan mance ce depend dependss on the creativity, motivation and initiatives of the individuals. Individuals comprise the crit critic ical al reso resour urce ce,, inst instru rume ment ntal al in brin bringi ging ng abou aboutt impr improv ovem emen ents ts in the the manufacturing process thereby reducing operating costs and maximizing gains. To maximize gain from people side ASCENT GROUP has been created. Ascent group is a motley collection of individual who get together to engage in the self-development projects and motivate each other. Beside this an IN-HOUSE MAGAZINE “MANTHAN” is published. The simple objective of bringing out such magazine was to create a regular forum for people at J.K. Cement to interact and express ideas and feelings. It is believed that such an effort would have positive payoffs far beyond its pages. Beside Beside this every year it organize organizess HANUMAN MANDIR CULTURAL CULTURAL FIESTA.
PLANET: ‘Produce more with less’ l ess’ has been J.K. Cement’s guiding philosophy over the years. The objective is to leave the minimum footprint, or negative impact, of its operations on the earth’s resources. To protect environment J.K. Cement has taken various initiatives in the field as waterr conservati wate conservation on by Recyc Recycling ling of Waste Water , Rain Water harve harvesting sting,, by reducing Co2 emission, by Green belt development and by energy conservation
SWOT SWO T- ANALYSIS:-
STRENGTH
WEAKNESS
Low cost production Lime stone reserves
No rail at Ras site
Captive power plant
Waiting time of trucks adds to
Low logistic cost
extra cost
100% use of pet coke as fuel
THREATS OPPORTUNITY
Explore new alternate fuel
Rise in inflation
Increase the sale of PPC
Gap in demand & supply
Explore new markets
Increasing competition
Improve IT infrastructure
Increase in fuel price Reduction in cement prices
Objective, CSI The purpose of the Cement Sustainability Initiative is to: •
Expl Explor oree what what sust sustai aina nabl blee deve develo lopm pmen entt mean meanss for for the the part partici icipa pati ting ng companies and the cement industry.
•
Identi Identify fy and facil facilita itate te act action ionss that that compan companies ies ca can n take take as a group group and individually to accelerate the move towards sustainable development.
•
Prov Provid idee a fram framew ewor ork k thro throug ugh h whic which h othe otherr ce ceme ment nt comp compan anie iess ca can n participate, and
•
Provide a framework for engaging external stakeholders.
Agenda, CSI The 10 companies involved in the CSI have chosen to develop an agenda for three reasons: •
To prepare for a sustainable future by making a more efficient use of natural resources and energy, and engaging with local issues in emerging markets.
•
To meet the expectations of stakeholders and maintain their ‘license to operate’ in communities across the world through a greater transparency of operations, effective engagement with society and initiating actions, which lead to sustained positive changes, and
•
To individually understand and build new market opportunities through process innovations, which achieve greater resource/ energy efficiency and long long-t -ter erm m cost cost savi savings ngs;; prod produc uctt and and serv servic icee inno innova vati tion onss to redu reduce ce environmental impacts and work with other industries on novel uses of by product and waste materials in cement production.
The companies have identified six key areas where they believe that the CSI can make a significant contribution towards a more sustainable society
Climate protection.
Fuels and raw materials.
Employee health and safety. safety.
Emissions reduction
Local impacts.
Internal business processes.
A GLOBAL HEAVY WEIGHT
India India is the sec second ond larges largestt ce ceme ment nt produc producing ing count country ry in the world. Cement Cement demand in the country grows at roughly 1.5 times the GDP growth rate. The industry had a turnover of around US$7.8 billion in 2003-04 and according to CRISIL is expected to grow at a CAGR of around 7per cent in the next five years. The demand for cement is closely related to the growth in the construction sector. Consequently, cement demand has been posting a healthy growth rate of around 8per 8per cent cent since since 1997-9 1997-98, 8, propel propelled led by the increa increased sed thrust thrust on infras infrastru tructu cture re develo developme pment, nt, and the higher higher demand demand from from the the housin housing g sec sector tor and industr industria iall projects. This trend is likely to continue in the coming years.
3.2 LOW PER CAPITAL CONSUMPTION CONSUMPTION – A LONG TERM OPPORTUNITY
3.2.1 PER CAPITAL CONSUMPTION OF CEMENT (2003) (2003)
1230
1030
830
630
430
230 0 Germany
China India Thailand France
US
Japan
Korea
Mexico
Source: United State’s Geological Survey
Another factor that makes Indian cement an attractive investment destination is the combination of a lower per capital consumption and a faster growth rate. The Indian cement industry has registered a production of more than 100 million tones since 200102.
The per capital consumption of 102kg as compared to the world average of 260kg, 450kg in China and 631kg in Japan underlines the tremendous scope for growth in the Indian cement industry in the long term.
Prices and Profits to the Firm
Major players in the industry are not planning any significant capacity addition for the next two years. Considering the gestation period of setting up a cement plant, additional supply from new capacities, if any, will arrive only from 2005-06 onwards. Limited capacity additions and high demand will narrow the demand supply gap, improve price realizations and lead to higher profitability. Any further reduction in import duties on cement and clinkers is unlikely to affect the industry as the cement produced is at par with the international standards and the prices are lower than those prevailing in other international markets.
3.3.POLICY Opening up the FDI Channel
The impact of government policies on cement demand has been steadily decreasing with the sector being gradually deregulated. At present, 100per cent foreign direct investment (FDI) is permitted in the cement industry. Lafarge Lafarge was the first foreign company to enter the Indian market in 1999. Easing Environment Norms
To set up a cement plant in India, with an investment of over US$22million entrepreneurs are required to obtain environmental clearance from the Ministry of Environment.100per centFDI is allowed for private cement companies to set up power projects as well as coal or lignite mines for captive consumption. State policies and norms to encourage investment. Both the state and export policies promote cement production. Exporters can claim duty drawbacks on imports of coal and furnace oil up to 20 per cent of the total value of imports. Most state governments offer fiscal incentives in the form of sales tax exemptions in order to attract investment. In some states, this applies only to intra-state
sales, like Madhya Pradesh and Rajasthan. States like Haryana offer a freeze on the power tariff for 5years, while Gujarat offers exemption from duty d uty on electricity. electricity.
3.4.TRENDS AND PLAYERS PLAYERS
Cement production in India has increased at a CAGR of 8.1per cent during the last decade with a production level of 117.5million tones in 2003-04. The cement industry comprises 125 large cement plants (capacity more than 0.198million tones per annum) with an installed capacity of 148.28million tones and more than 300 mini cement plants (capacity less than 0.198million tones per annum) with an estimated capacity of 11.10million tones per annum. The industry worked at an estimated 80.2per cent capacity in 2003-04. Small plants, however, work at an installed capacity of around 40per cent. Among the different varieties of cement, India produces Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement and Sulphate Resisting Portland Cement. The share of blended cement in total cement production has increased from 29per cent in 1997-98 to 54.5per cent in 2003-04.
Deconstructing Costs
Energy (including the landed cost of coal), freight and limestone costs are the ma jor cost components of the cement industry. These costs account for around 35per cent, 22per cent and 9.5per cent of the total production costs respectively. respectively.
Decline in energy cost Indian cement companies have been able to curtail costs through the setting up of captive power plants. There has been a decline in the average coal consumption from 0.18 tones per tone of cement to 0.17 tones per tone due to pyro processing systems, increased usage of im ported coal (with higher calorific calorific value) and the higher production production of blended blended cement. cement. The
switch from the wet process to the dry process of cement manufacturing has also aided in saving energy costs.
DOMESTIC PLAYERS
Associated Cement Companies Ltd (ACCL)
ACC Ltd manufa manufactu ctures res ordinary ordinary Portlan Portland d cement, cement, compos composite ite cement cement and specia speciall cement and has begun offering its marketing expertise and distribution facilities to other other producer producerss in cement cement and related related areas. areas. It has twe twelve lve manufa manufactu cturin ring g plants plants located throughout the country with exports to SAARC nations. The company plans capital expenditure through acquisitions. Non-core assets are to be divested to release locked up capital. It is also expected to actively pursue overseas project engineering and consultancy services. Birla Corp
Birla Corp’s product portfolio includes acetylene gas, auto trim parts, casting, cement, jute goods, calcium carbide, yarn etc. The cement division has an installed capacity of 4.78million metric tones and produced 4.77million metric tones of cement in 2003-04. The company has two plants in Madhya Pradesh and Rajasthan and one each in West Bengal and Uttar Pradesh and holds a market share of 4.1per cent. It manufactures Ordinary Portland cement (OPC), Portland pozzolana cement, fly ash-based PPC, Low-alkali Portland cement, Portland slag cement, low heat cement and sulphate resistant cement. Large quantities of its cement are exported to Nepal and Bangladesh. Going forward, the company is setting up its captive power plant to remain cost competitive. Grasim – Ultra Tech Cemco
Grasi Grasim’ m’ss product product profile profile includ includes es viscos viscosee stapl staplee fibre fibre (VSP), (VSP), grey cement, cement, white white cement, sponge iron, chemicals and textiles. With the acquisition of Ultra Tech, L&T’s L&T’s cement division in early 2004, Grasim has now become the world’s seventh largest cement producer with a combined capacity of 31million tones. Grasim (with Ultra Tech) held a market share of around 21per cent in 2003-04. It has plants in Madhya Pradesh, Pradesh, Chattisgarh Chattisgarh,, Punjab, Punjab, Rajasthan, Rajasthan, Tamil Tamil Nadu and Gujarat Gujarat among others. The
company plans to invest over US$ 9million in the next two years to augment capacity of its cement and fibre business. It also plans to focus on its international ventures, ramping up the capacity of Alexandra Carbon Black in Egypt to 1,70,000 tones Per annum (from1, 20,000tpa) and raising the capacity of the carbon black plant in China from12,000tpa to 60,000 tpa. Gujarat Ambuja Cements Ltd (GACL)
Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of commercial production at its 2million tone plant in Chandrapur, Maharashtra. The group has clinkermanufacturing facilities at Himachal Pradesh, Gujarat, Maharashtra, Chattisgarh, Punjab and Rajasthan. The company has a market share of around 10per cent, with a strong foothold in the northern and western markets. Its total sales aggregated US$ 526million with a capacity of 12.6million tones in 2003-04. Gujarat Ambuja is India’s largest cement exporter and one of the most cost efficient firms. GACL has a 14.45per cent stake in ACC, making it the second largest cement group in the country, after Grasim-Ultra Tech Cemco. The company has free cash flows that it is likely to use to grow inorganically. The company is scouting for a capacity of around two million tone in the northern northern and western western markets. It has also earmarked around US$ 195-220 million million for acquisition.
India Cements
India Cements is the largest cement producer in southern India with a total capacity of 8.81million tones and plants in Andhra Pradesh and Tamil Nadu. The company has a market share of 5.4 per cent with a total cement production of 6.36 million tones in 200304. Its product portfolio includes ordinary portland cement and blended cement. The
company has limited its business activity to cement, though it has a marginal exposure to the shipping business. The company plans to reduce its manpower significantly and exit non-core businesses businesses to turn around its fortune. It also expects the export market to open up, with the Gulf emerging as a major importer.
JK Synthetics
JK Synthetics, a Singhania Group company, started manufacturing nylon at Kota in 1962. Subsequently, it diversified into PSY/PFY, nylon tyre-cord, cement (in 1975), acrylic and white cement (1984). The company has a market share of 2.7per cent. JK Synthetics Limited is restructuring its business divisions into two separate entities- JK Cements and JK Synthetics. After the restructuring, it will be left with a cement plant at Nimbahera in Rajasthan, with a capacity of 3.26 million metric tones and manufacturing white cement.
3.4.MARKET OPPORTUNITIES FOR INVESTMENT Growing demand-supply gap
Capacity additions (million tones) Capacity additions (million tones)
250
200 195.2 168.2 150 146.4 117.3 100 1 50
0 2003.4
2006-07
Accord Acc ording ing to CRISIL CRISIL estim estCapacity imate ates, s, given givdemand en the demand demand-su -suppl pply y gap of roughl roughly y 40million tones, capacity addition is expected over the next five years. Of this, almost 30million tones will be met through Greenfield/Brownfield expansions
and 10million tones through blending. The capacity addition of 30million tones would require an investment of around US$ 2.2 billion. Consolidation opportunity: Merger and Acquisitions
Cement capacity that can be sold million tones Million tones East West North South Total
1.20 2.36 10.37 9.42 23.35
Consolidation is expected to increase further in the cement industry. Around 23million tones of additional capacity could be sold simply because on a stand-alone basis these units are unviable. As part of a larger group, their operations could be cost effective. This opens up a number of possibilities for acquisitions and mergers.
The Infrastructure Opportunity
The National Highways Development Project (NHDP) includes the 5,846km Golden Quadrilateral (GQ) and the 7,300km North-South, East-West corridor. In addition, upgradation of rural roads, up-gradation to four/six lanes of about 13,000km of National Highways and 10,000km of additional highways have been initiated. The NHDP is expected to lay a significant significant part of the roads in cement concrete. concrete. Thus, if 25per cent of the roads of East-West corridors are laid by concrete, it is likely to lead to an incremental demand of 5-6million tones of cement per annum. Likewise, the Golden Quadrilateral is expected to add 4-5million tones of demand per annum. The total demand from these road projects is expected to generate an incremental growth of 4-5per cent per annum over the next 2-3 years. Among other infrastructure sectors, construction and modernization of four airports and two seaports, railroad, power plants and water management systems are also likely to boost the demand for cement, in particular the ready-mix cement.
Company Profile 1.1 HISTORY BEHIND BEHIND J K CEMENT
The initial "J.K." stands for a father- son team, namely: Juggilal Kamlapath Singhania
J .K. organization started in the year 1884 at Calcutta. J .K. started their business as a Financier, Investor, Trading Supplier of cotton belts and manufacturer of small machinery parts like ‘V' belts, etc. They established few small cotton textile industries also.
In the year 1914 they shifted their business from Calcutta to Kanpur where they established many big industries like J.K. cotton Mills, Straw product Co, Lohia Mach, J.K. Pulp and Raymond’s Woolen, Woolen, etc.
In the year year 1934 1934 J.K. organiz organizati ation on starte started d one more more divisi division, on, as J.K. J.K. Synthetics Ltd. They established various big plants of Nylon, Acrylic fiber, etc. at Kota and Tyre Tyre Cord, Chemical and Pesticides at Jhalawar.
In the year 1974 under the same division one more unit was started for manufacturing of Grey Cement at Nimbahera.
Expansion of this plant took place in the year 1979, when 2nd kiln was commissioned with a capacity of 1200 tone per day and 7-lakh tones per year. year. After modification in Preheater its present capacity is 1800 TPD.
Again in the third phase, a kiln was erected in the year 1982 and production of this kiln was 1350 tone per day.
In the year 1988 a new technology was introduced in this 3rd Kiln that consisted of precalcination process, which raised the capacity of this plant
to 3400 tone per day,which was earlier 1350 tone per day. Besides, J.K. cement plant is having its own diesel generator sets, producing power to meet the power energy requirements.
Main raw material for cement is LIMESTONE, for limestone we have our own open cast mines adjoining to the plant. Besides we have developed few more mines at Maliakhera, Karoonda and Tilakhera for producing 10,000 tones limestone per day as needed.
J .K. Cement erected one more plant from Jan. 2001 with the capacity of 1400 tone per day at village Mangrol. In Nov.-2003 after modification in Preheater and installation of Mechanical elevator its capacity increased to 2200 TPD.
Due to power shortage as imposed by Ajmer electricity supply board J.K. establ establish ished ed its own The villagee Bamani Bamania, a, near near Therma rmall Power Power Plant Plant at villag Shambhupura, which is generating 15 M.W. power every day, which is consumed by J.K. Cement Plant.
J K Cement also has a plant of 400TPD-installed capacity of White Cement at Gotan, Nagpur (Raj).
J.K. Cement has started the following projects:
Cement Project at Karnataka of over 5500 TPD and Thermal Power Plant of capacity 30 MW.
MW. Thermal Power Plant at Nimbahera of 22 MW. capacity. Waste Heat Recovery Plant at Nimbahera of 15 MW capacity. Bhumi mi Poojan Poojan of Dr Gaur Gaur Hari Hari Singha Singhania nia Tech echnic nical al Univer Universit sity y at Bhu Bhatewar Bhatew ar,, Udaipur. Ud aipur.
J.K. cement is one of the most productive, cost efficient cement producing plant in the country, a company, believing in corporate responsibility to
society, integrity and fairness. The company’s cement is sold under the J.K. Sarve Shaktiman Shaktiman bran brand d name name,, enjo enjoys ys good good bran brand d imag imagee and and a pric pricee
premium. The following types of cements are produced by J K Cement Works. Works. (a) (b) (c) (d) (d)
Ordina Ordinary ry Portlan Portland d Cement Cement (OPC) (OPC) Portlan Portland d Pozzo Pozzolan lanaa Cemen Cementt (PPC) (PPC) Super Super Silic Silicate ate Cement Cement (SSC) (SSC) Maso Masonry nry Ceme Cement nt (MC) (MC) J. K. Cement manufactures and markets cement and clinker for both domestic as well as exports markets. 1.2 PRESENT CAPACITY AND PERFORMANCE
1.2.1 CLINKER PRODUCTION Ist Plant / Kiln
1200 Tone Per Day (TPD)
IInd Plant / Kiln
1800 TPD
IIIrd Plant / Kiln
5000 TPD
IVth Plant at Mangrol
2200 TPD
Total Capacity
10200 TPD
1.2.2 PRODUCTION ANALYSIS ANALYSIS TABLE: IN TONS Cement
Year
Clinker
2005-06
3170268
3511022
2006-07
2907196
3640823
2007-08
2917045
3765855
1.2.3 FINANCIAL F INANCIAL ANALYSIS: ANALYSIS: IN Rs.
PBT
Year
Turnover
2005-06
1108.7
52.2
2006-07
1529.7
272.0
2007-08
1812.8
346.6
1.3. MANAGEM MAN AGEMENT ENT SETSET- UP
1.3.1 Corporate Level- Kanpur
Chairman
- Dr Gaur Hari Singhania
Managing Director
- Shri Y P Singhania
Group Executive President
- Shri R G Bagla
1.3.2Unit Head Level- Nimbahera
President
- Shri.D.Ravisankar J.K.Organization
J.K. Cement ltd.
J.K. Cement Works (Grey Cement) 1. J.K. J.K. Ceme Cement nt work works, s, Nimb Nimbahe ahera ra 2. J.K. J.K. Cem Cemen entt work works, s, Man Mangro groll 3. J.K. J.K. Therm Thermal al Power Power Pla Plant, nt, Bamania Bamania 1.4. J K Marketing Organisation & R T C - North 4. J.K. J.K. Therm Thermal al Power Power Pla Plant, nt, Nimbah Nimbahera era Project: J.K. Cement Project, Karnataka
J.K. White Cement Works Works J.K. Grey Cement Works Works Gotan,Nagaur,
1.4.1 J K MARKETING ORGANIZATION ORGANIZATION
The Head office of Marketing Department of J K Cement Ltd. is at Delhi, which is headed by Sr. V P (Marketing-Grey Cement) and Sr. V P (MarketingWhite Cement). The White Cement is sold all over India and the Grey Cement is sold in the States of Rajasthan, M.P., U.P., Haryana, Punjab, Gujarat and Delhi. With the commissioning of J. K Cement Project, Karnataka Southern region will also be covered for Grey Cement .
1.4.2 Regional Training Centre
The Regional Training Centre - North is a premier training centre of North India promoted with assistance from World Bank, DANIDA and Govt. of India as a unique HRD project in Cement Industry is also attached with J K cement Works as Lead Plant. It is equipped with modern training aids and caters to the skill skill enhanc enhanceme ement nt and compet competenc ency y develo developme pmenta ntall needs needs of more more than than 20 cement and other plants. It has trained over 5000 technical and managerial personnel during the last 12 years. The centre has conducted many tailor-made in-house programs for cement and other industries in India and abroad including for Oman Cement, Oman and Star Cement,
1.5. SOCIAL RESPONSIBILITY
Educational services:
Construction of rooms in Govt. College at Nimbahera.
Running JK Institute of Technology, ITI in five trades affiliated to NCVT.
Running 10+2 CBSE affiliated school
Running Regional Training Centre for Cement technocrat’s aided by WB & DANIDA.
Various constructions in nearby govt. Schools of Chittorgarh district.
We are involved in girls school (under construction) and committed reasonable financial contribution for above
Medical services
Rs. 36 lacks contribution for the construction of govt. Hospital at Nimbahera. Ambulance to govt. Hospital. Free facility of pathological laboratory for the persons of surrounding area. Financial contribution to various NGOS for medical camps in the district. Financial contribution for construction of dispensary & health centre in nearby villages. Free Homeopathic consultancy/medicines consultancy/medicines for the patients of nearby area.
Religious services
Radhakrishna temple at colony premises.
Prayer hall in hanuman temple in Nimbahera.
Bheemkeshwar temple in staff colony.
Dharmashala at Bhanwarmata (tourist/ religious place).
8 rooms for Dharamshala at Pashupati Nath temple in Mandsaur (M.P.). (M.P.).
Various temples in number of nearby villages.
Sports services
Sports Sports infras infrastru truct cture ure like like wooden wooden badmin badminton ton court, court, table table tennis tennis court, court, billiard room, and cricket ground, volleyball ground in colony campus.
Sponsoring all India youth football, volley ball and badminton tournaments.
Sponsoring inter-district tournaments.
Arranging summer camps for various sports.
Other social services
Construction of approach roads in and around villages of mining area.
Digging of tube wells.
Supply of tube well pumps.
Construction of water tanks.
Supply of drinking water in tankers in nearby needy places during summer.
Regular plantation in plant, colony and nearby villages.
Dire Di rect ct and and indi indire rect ct empl employ oyme ment nt to thou thousa sand ndss of pers person onss of surrounding area.
Financial helps to NGOS.
Financial aid to organize religious festivals by municipals
Cement
Cement are bonding consisting essentially of compounds of calcium oxide with silica alumina and iron oxide which can harden in air and water. In general cement is a generic name for powdered materials, which initially have plastic flow when mixed with water or other liquid but form a solid structure in severa severall hours hours wit with h varyi varying ng degree degree of streng strength th & bondi bonding ng proper propertie ties, s, which which continue to improve with age.
History of Cement
Joseph Aspendence discovered cement in1824.
Materials used were Lime, Brick bed marl volcanic lava ash and water.
Burn these materials in furnace at 1200C and ground with gypsum.
1897 wet process kilns came in existence.
Semi-dry process kiln slowly picked up.
Dry process with two-stage kiln.
Four stage pre-heater with pre-calcinator.
Developed grinding process.
Types of Cement
Future Cement : -Portal cement tried cement and Soral cement, Reactive belite cement and rice husk ash cement.
BIS covers 14 types of cement. 9 are commercially produced in India. Major cements are OPC, PPPC, PSC. Cements are classified into four groups o General purpose cement o
Cements to meet environmental & climatic needs.
o
Cements to meet the service conditions in construction.
o
New cements .
1.5.1
Types of cement CEMENT Ordinary Portland Cements 33 grade Ordinary Portland Cements 43 grade Ordinary Portland Cements 53 grade Portland Slag Cements Low Heat Portland Cement Rapid Hardening Portland Cement Sulphate Resisting Portland Cement Portland Pozzolana Cement (Fly ash based) Portland Pozzolana Cement (Calcined clay based) Masonry Cement High Alumina Cement Supersulphated Cement White Portland Cement Oil Well Cement Hydrophobic Cement
SYMBOL 33OPC 43OPC 53OPC PSC LHC RHC SRC PPC (Fly ash
STANDARD IS: 269-1989 IS: 8112-1989 IS: 12269-1987 IS: 455-1989 IS: 12600-1989 IS: 8041-1990 IS: 12330-1989 IS: 1489(Part1)-1991
based) PPC (Calcined
IS: 1489(Part2)-1991
clay based) MC HAC SSC WPC OWC HC
IS: 3466-1988 IS: 6452-1989 IS: 6909-1990 IS: 8042-1989 IS: 8229-1989 IS: 8043-1991
CLASSIFICATION CLASSIFICATION OF CEMENT CEM ENT S.No
CLASSES OF CEMENT
CEMENT
1. 2.
General purpose cement OPC, PPC, PSC, HSC Cements to me meet en environmental & climatic co con- SRC, HAC, SSC, HC
3.
dition needs Cements to me meet the se service co conditions in co con- HA HAC, C, LHC, LHC, RHC RHC, HS HSC, C,
4.
structions New cements
OWC, WPC Portal cements, trief
ce-
ment and soral cements and rice husk ash cement 4.1.CORPORATE PROFILE
Vision –
“To “To be a premium conglomerate with a clear focus on each business.”
Mission –
“To deliver superior value to our customers, shareholders, employees and society at large.”
Values –
“Respe “Respect ct for the indivi individua dual, l, integr integrity ity,, speed, speed, simpli simplicit city y, sea seamle mlessn ssness ess,, self self assuredness and a 100per cent commitment are the values we value.”
Management Philosophy –
Customer Satisfaction
Always invest in latest technology
Huge distribution network creation
Expansion through balancing equipment
Constant focus on cost control & quality
Invest in Managers & Develop people skills
Stability of Executive Management & Low Employee Turnover
Social Welfare – A Priority
Salient Features –
1. First First dry process process plant plant in in India. India.
2. Latest Latest process process precalcinato precalcinatorr technolog technology y for for clinker clinker..
3. UNT –II was was first first PLC PLC controlle controlled d cement cement plant plant in in India. India.
4. Most Most modern modern and sophis sophistic ticated ated centra centrall control control room for entire entire process process control from one point.
5. First First Fuzzy Fuzzy Logic Contro Controll kiln and Cen-sc Cen-scanne annerr for monitori monitoring ng of kiln shell temperature in India.
6. On-line On-line quali quality ty contro controll by X-ray X-ray analyze analyzerr.
7. First computerized computerized managemen managementt system system in Indian cement cement industr industry y.
8. Now Now comp comput uteri erized zed manag managem emen entt syst system em exten extended ded to stor stores es,, purch purchas ase, e, sales, accounts, and personnel functions.
9. Continuous Continuous on going going process process of of training training & developmen development. t.
4.2.COMPANY STRENGTH
We enjoy a number of key competitive advantages, which have helped us maintain our position as one of the leading cement manufactures in the Northern Indian cement market. Our principal strengths and competitive advantages are as follows:
Leading position in attractive Northern India grey cement market:
Based Based on CMA data, Norther Northern n Indian Indian cement cement manufa manufactur cturers ers have consis consisten tently tly operated at the highest levels of capacity utilization among India’s five regions. We believe this reflects the strong demand in Northern India for cement products relative to supply. Further, based on capacity expansions announced by cement manufacturers, we except cement plants in Northern India to continue to operate at high utilization levels and anticipate continued strong demand for our grey cement products in the near and medium-term. medium-term. We We believed that we are well positioned to take advantage advantage of this demand, as the fourth largest grey cement manufacturer in Northern India, and the largest grey cement manufacturer in the state of Rajasthan.
Second largest white cement producer in India:
White cement accounted for 16.6% of our total revenue and 35.2% of adjusted EBITDA from our cement operations in fiscal 2005, and 15.5% of revenues and 26.7% of our adjust adjusted ed EBITDA EBITDA from our cement cement operatio operations ns in the six months ended Septem September ber 31,2005. Unlike grey cement, the white cement industry in India is highly concerned with the two largest players accounting for the substantial majority of India’s production capacity. Consequently, prices of white cement have been relatively less volatile and sales of white cement have generated more stable cash flows for us even during industry downturns downturns in grey cement. We also believe our position as the second largest producer of white cement in India, India, togethe togetherr wit with h our nation nationwid widee delive delivery ry network network,, signif significa icantl ntly y enhances enhances the overall brand image of JK Cement.
Proximity and access to large reserves of high quality limestone:
We have access to large reserves of limestone for both our grey and white cement operations, which we believe are sufficient to sustain our operations well into the future. Based on independent geological surveys of different mines during 1996 to 2001, we believe that our limestone reserves are sufficient to support our current and planned capaci capacity ty for for appro approxi xima matel tely y 40 years years for for both both grey grey and and whit whitee cement cement.. (Put (Put in risk risk assuming assuming we are able to renew our existing leases upon their expiry). expiry). As one of the first cement producers in Northern India, we were able to choose our limestone reserves in an area with high quality limestone resources. In addition to allowing us to produce white cement, which requires high quality limestone, it also provides us with a cost advantage, as we are not required to purchase sweeteners to improve the quality of limestone.
Further Further,, our manufa manufactur cturing ing plants plants are in close close proximi proximity ty to our limest limestone one reserve reserves, s, resulting in lower transportation costs. Finally, our mines that supply our white cement plant at Gotan also have a supply of white clay, an important additive necessary for white cement production.
Experience and technical know-how:
We have 30 years of experience in the Indian cement industry, which we believe provides us with the skills to maximize production efficiency, expand production capacity quickly and reduce costs. Over the years, we believe that we have developed long-term customer relationship and a strong reputation r eputation for quality. quality. Further, we have a stable and experienced middle and senior level management team, many of whom have been working in our cement operations for more than 20 years. Our Nim Nimba bahe hera ra manuf manufac actu turi ring ng faci facili lity ty wa wass chos chosen en by World orld Bank Bank and and the the Danis Danish h International Development Agency as one of the four training centers in India to serve as the “Regional Training Center” for Northern India. There are only four regional training centers for the cement industry in India, and we believe our operation of the training center provides us with access to state of art training aids, live working models, and technical expertise developed by well known national and international cement producers. 4.3.COMPANY ACHIEVEMENTS
The key events in respect of the JKSL Cement Division and the Company are set forth below: YEAR
1975
The grey cement plant at Nimbahera, with an initial capacity of 0.3 MnTPA, commenced commercial production
1979
A second production line was added at Nimbahera, increasing the capacity from 0.3 MnTPA to 0.72 MnTPA
1982
A third production line was added at Nimbahera, increasing the capacity from 0.72 MnTPA to 1.14 MnTPA
1984
Lime-based white cement plant was established at Gotan, with an initial capacity of 0.05 MnTPA
1987
A captive thermal power plant was installed at Bamania
1988
A pre-calciner was installed at Nimbahera, increasing the total to tal capacity to 1.54 MnTPA
1990
The JKSL Cement Division instituted Architect of the Year award
1994
(i) The Company was incorporated (ii) The Regional Training Centre for Northern India, which was established at the Nimbahera plant of the JKSL Cement Division with aid from the World Bank and the Danish International Development D evelopment Agency, Agency, commenced service serv ice
2000
The total capacity of the white cement plant at Gotan was increased to 0.3 MnTPA as a result of continuous modernization and up gradation
2001
A new grey cement plant with a capacity of 0.75 MnTPA was installed at Mangrol
2004
(i) The Company acquired the JKSL Cement Division (ii) The total capacity of the grey gre y cement plant at Nimbahera was increased incr eased to 2.8 MnTPA as a result of continuous modernization and upgradation
2005
(i) The Company allotted allotted 7,426,950 Equity Shares to to the shareholders of JKSL JKSL pursuant to the AAIFR order dated January 23, 2003 (ii) The Company was listed on the BSE
2006
-JK Cement has finalised finalised the issue price of its recently recently concluded initial public offering (IPO) at Rs 148 per share. -Jk Cement Limited has informed that w.e.f. 16.12.2006 Mr. Manish Bajpai Company Secretary and Compliance Officer of the company has resigned and in his place Mr. Ashish Sabharwal has been appointed as Company Secretary.
2007
-Jk Cement Limited has appointed Dr. K.B. Agarwal as Additional Director of the Company to hold office until the conclusion of next Annual General Meeting.
4.4.CORPORATE 4.4.CORPORATE PLAN
Increase Power generation capacity to 50MW by 2006-2007. Establish one R&D center for cement & its applications such as concrete, tiles etc. To To achieve specific power consumption level of 85units per tone of cement. O.k. Cement has excellent track record of HR Planning and Development. The initiative taken for setting up Regional Training Center (RTC) as Nimbahera (in the campus of J.K. Cement works) is an indication of Management’s commitment towards HRD. The Center at Nimbahera is one of the four Rat’s in India and caters the manpower development needs, not only to J.K. Cement Works, but also supports cement industry in Western M.P., Rajasthan, Haryana, Jammu & Kashmir, Himachal Himachal Pradesh and Punjab (i.e. Northern Region). 1. First Five-Year Plan (1951-56): -
In the beginning of the first five-year plan, there were 22 factories with a production was 2.69million tones only. The target set for the first five-year plan was 5.02million tones. Therefore, capacity enhancement was the main m ain objective of this plan. 2. Second Five-Year Plan (1956-61): -
Due to the rising demand a the end of the first plan period government imposed a sort sort of cont contro roll of issui issuing ng an orde orderr unde underr sect sectio ion n 18G 18G of the the indu indust stri ries es (Development & Regulations) Act, 1951, making it necessary for all cement producers to sell their total production to State Trading Corporation of India for
distribution to consumers at uniform price fixed by the Government from time to time on F.O.R. destination basis. 3. Third Five-Year Five-Year Plan (1961-66): -
This plan marked for industrial growth led the government to anticipate a heavy shortage of cement and to meet this challenges. Expansion programs were undertaken:
To make survey for the prospecting and providing cement grade limestone in the country.
To set up unit in public sectors to achieve plan targets.
To support all the ancillary and subsidiary activities connected with cement and make efforts for its growth and a nd development.
4. Policy of 1980:
National Highway Project, new railway lines, bridges, irrigation canals and dams dams reshap reshaped ed the countr country y and projec projected ted a new face face of the industr industria ialis list’ t’ss scenario. The government of India had to decide start a partial decontrol of cement industry and subsequently to fuller decontrol of it. The new policy granted cement manufactures a profit of about 12% in their investments so that rapid increase in cement production can take place to bridge the gap of demand and production capacity. capacity.
Greenfield Grey Cement at Karnataka in Jaykaycem Ltd
A Greenfield Grey Cement project is being set up in Jaykaycem Ltd. (wholly owned subsidiary of the Company) at Mudhol in the State of Karnataka with a capaci capacity ty of 3.5 milli million on tones tones at an estima estimated ted proje project ct cost cost of Rs.1050 Rs.1050 crores (Rs.950 crores to be spent in first phase and Rs.100 crores in second phase for putting up a Grinding Unit at Bellary). Bellary). The project cost includes includes cost of Captive Power plant of 50 MW. Foundation stone of the plant was laid on 8th December;
2007.The Company is in process of obtaining various approvals. Necessary land has has alre alread ady y been been ac acqu quir ired ed and and orde orders rs for for long long deli delive very ry item itemss of plan plantt and and equipments have already been placed. Financial closure of the project is likely to be completed completed by end of September September 2007. The Company Company proposes to invest invest about Rs. 400 Crores Crores in the said projec projectt from from its intern internal al accrual accruals. s. A total total sum of Rs.76 Rs.76.4 .40 0 cror crores es has has alre alread ady y been been spen spentt on the the proj projec ect. t. Barr Barrin ing g unfo unfore rese seen en circumstances, the project is expected to be on stream in first quarter of 2009. During the year, the Company has acquired from IDBI the assets of Nihon Nirmaan Ltd. at Gotan for Rs.42 crores. The Company has decided to utilize this facility to produce Grey cement. It has been decided to revenue these facilities at an estimated cost of Rs.70 crores the capacity of plant is expected to be 4 Lacs Tons Revamping has already started and it is likely to be completed by December 2007. In the meantime, the Company has already started grinding facilities at the plant w.e.f. 19.3.2007.
4.5.COMPANY PRODUCTS
We produce grey cement and white cement. Grey cement produced by us consists of Ordinary Portland Cement (“OPC”) and Portland Pozzolana Cement (“PPC”). OPC has three principal grades that are differentiated by their compressive strengths, and consists of 53-grade, 43-grade and 33-grade OPC. All our products comply with the quality standards specified by the Bureau of Indian Standar Sta ndards ds (“BIS”) (“BIS”).. Our cement cement products products are market marketed ed under under the brand brand names names J.K. J.K. Cement and Sarvashaktimaan for OPC products, J.K. Super for PPC products and J.K. White and Camel for white cement products, which we believe are well known brands in their respective markets. Types of Cement C ement
Grey Cement
White Cement
J.K. Wall Putty
GREY CEMENT:
SPECIFICATION
GREY CEMENT
RAW MATERIAL TRADE NAME TRADE MARK PRODUCTS GRADES PACKAGING CAPACITIES
LIMESTONE & GYPSUM SARVASHAKTIMAAN VIJAYSTAMBH 43, 53, PPC 50 Kg per bag
During the year under report, the production of Grey cement at Nimbahera Nimbahera and Mangrol Mangrol plants were higher at 3.64 million tons compared to 3.51 million tons in the previous year. Sales volume also increased in tandum with production. Higher realizations during the current year coupled with increase in production of blended cement resulted in substantially higher profits after setting of price increase of various inputs. INFORMATION REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956
A. CONSERVATION OF ENERGY
(a) Energy conservation measures taken:
* Installation of Cement Mill 5 to increase production of Cement Mill 4 along with close
circuiting.
* Installation of Cement Mill 6 to increase production of Cement Mill 3 along with close
circuiting
p ower. * Enlargement of down comer duct of PH 2 to save power.
* Replacement of Cement Mill 4 separator * Feeding of fly ash at outlet of Cement C ement Mill 3 from fly ash silo
* Close circuiting of 1 & 2 Cement Mills.
* ESP up gradation work at Kiln 4
* Additional Elevator for Cement Mill No.8
* Dust & Spillage Control System
* Installation of 13.0 MW waste heat recovery power plant.
* Installation of 20 MW Pet coke based captive power plant.
* Installation of 10 MW Turbine at Bamania to replace existing 7.5 MW Turbine.
* Installation of control & automation system at Kiln -3.
B. TECHNOLOGY ABSORPTION
(i) Research & Development, specific area in which R & D has been carried out.
* Increase in fly ash in PPC production
(ii) Benefits Derived as a result of above R & D
* Fly ash addition has been increased from 18.44% to 24.08% at NBH and from 17.72%
to 21.56% at Mangrol
* Reduction in cost * Cleaner Environment
* Smooth & continuous running of Kiln & raw mill
(iii) Future Action Plan * Size reduction of clinker granule and limestone
* Mechanical transport system for Kiln 1&2 CM 3&4
(iv) Expenditure on R & D The Research & Development activities are carried out by our own team under the advice and consultancy of foreign consultant. Apart from regular expenditure on research activities debited to profit & loss account under different heads, the company has paid contribution of Rs. 29 lacs to Research institutes for carrying out research and development work related to Company's products.
(v) Effor Efforts ts in brief, brief, made made toward towardss Tec echno hnolog logy y Absorp Absorptio tion, n, Adapta Adaptatio tion n and innovation. * Daily monitoring of power consumption * Preventive monitoring of all critical equipments.
WHITE CEMENT:
The production of white cement at 248880 M.T. during the year under review against 226729 M.T. in 2005-06 recorded growth of 9.77%. This was mainly on account of robust growth of around 65% recorded in export volumes (37294 tons vs. 22472 tons). The growth in domestic market (including Nepal) was 3.59%. Increased market of value added products mainly wall putty also contributed to additional profits.
A. CONSERVATION OF ENERGY
(a) Energy conservation measures taken:
* Ste Steam am exhaus exhaustt cyclon cyclonee dust dust collec collectio tion n arrang arrangeme ement nt modifi modified ed for online online refeeding, eliminating the operation of additional drug chain to conserve energy
* Calciner installed to enhance kiln capacity and achieve further reduction in energy consumption.
* A clay crusher was developed and installed at raw mill to take care of large size lumps and to cater demand for increased capacity resulting in smooth operation and energy conservation.
(b) Additi Additiona onall Invest Investmen ments ts & propos proposals als being being imple implemen mented ted for reducti reduction on in conservation of energy. energy.
B. TECHNOLOGY ABSORPTION
(i) Research & Development, specific area in which R & D has been b een carried out.
* Clinker dryer circuit optimization to achieve homogeneous seasoning resulting in improved cement quality
* Kiln inlet modified with improved seal to reduce the fresh air entry to improve the Clinkerisation process
* The clinkerisation process controls switched to free lime control in place of clinker litre weight control by installing latest X-Ray analyzer having XRF & XRD features
(ii) Benefits Derived as a result of above R & D
*Consistency in quality with increased whiteness
*Consistency in kiln operation and clinker quality
(iii) Future Action Plan *Compl *Complete ete automa automatic tic Putty Putty manufa manufactu cturing ring plant plant keepin keeping g the the specia specialit lities ies of import imported ed high-s high-spee peed d mixers mixers,, batch batch contro controlle ller, r, to ca cater ter the increa increased sed market market demand and consistency in quality. *Upgrading of Packing machines with check weigher arrangement for 50 Kg. Cement
bags.
*Petcoke/Coal/Lignite *Petcoke/Coal/Lignite based thermal power plant.
(iv) Expenditure on R & D The Research & Development activities are carried out by our own team under the advice and consultancy of foreign consultant. Apart from regular expenditure on research activities debited to profit & loss account under different heads, the company has paid contribution of Rs. 29 lacs to Research institutes for carrying out research and development work related to Company's products.
(v) Effor Efforts ts in brief, brief, made made toward towardss Tec echno hnolog logy y Absorp Absorptio tion, n, Adapta Adaptatio tion n and innovation. * Monitoring of energy consumption * Proactive approach towards Environmental Management System. J.K. Wall Putty:
White cement based putty for luxurious and silky interior/ exterior finish of our dream home. J.K. Wall Putty is White Cement based putty for cement plastered walls and ceilings. J.K. Wall Putty is used to fill the uneven surfaces of cement
plastered walls and concrete walls. Application of J.K. Wall Putty provides smooth and strong finish to the walls for further application of all kinds of paints. The smooth finish gives better look to interiors and exteriors. Surface Preparation:
The surface should be cleaned to make it free from dirt, dust, grease, oil and paint paint.. All foreig foreign n impuri impuritie tiess should should be remove removed d wit with h a wire-b wire-brus rush. h. Wall surfaces should be cured so that the surface is saturated with water yet in ‘touch dry’ condition. Treatment of New Surface:
The new surface requires only soft treatment such as removal of dust, dirt and foreign matter. In case of cracks, voids and damages; it should be patched up prior to application of J.K. Wall Wall Putty with grey/white cement. Treatment of Old Surface:
All loose material and/or organic growth must be removed with putty blade or brush. In case of old painted surface scrub the surface with course emery stone/paper. Preparation of J.K. Wall Putty Paste:
J.K. Wall Putty is a fine powder. Mix slowly J.K. Wall Putty with approx.40% water by volume to prepare paste of desired consistency. Mix vigorously for 510 minutes lump free, uniform and smooth putty paste. Product should be mixed in required quantities to be used within 2-3 hrs. of preparation.
Application:
Apply uniformly the first coat of J.K. Wall Putty with blade/ trowel on the wall from bottom to top. Apply second coat after the first coat has dried completely.
Limit the total thickness of 2 coats to 1.5mm. Allow Allow completely drying and then use fine emery paper to remove the application mark if any. Any kind of paint can be applied on this surface. Use water for curing before applying paint. Precaution:
Although J.K. Wall Wall Putty does not contain any toxic material, use rubber gloves while mixing, mixing, as prolonged exposure with water may soften the skin resulting resulting in fine cuts/legions due to cement particles. Precaution should be taken to avoid dust inhalation while handling the powder putty. Storage:
Store J.K. Wall Putty in a dry place and open the pack just before use. Keep out of reach of children.
Theoretical Theoretical frame work :Employee Engagement:Engagement:-
For several years now, 'employee engagement' has been a hot topic in corporate circles. It's It's a buzz buzz phras phrasee that that has capt capture ured d the the atte attent ntio ion n of work workpl plac acee obser observe vers rs and HR managers, as well as the executive suite. And it's a topic that employers and employees alike think they understand, understand, yet can't articulate articulate very easily. easily. employee employee engagement engagement as "a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work". At least four of the studies agreed on these eight key drivers. 15. Trust and integrity integrity – how well managers communicate and 'walk 'walk the talk'. 16. Nature of the job job –Is it mentally mentally stimulating stimulating day-to-day? 17. Line of sight between employee performance and company performance 18. Does the employee understand how their work contributes to the company's performance? 19. Career Growth Growth opportunit opportunities ies 20. Are there future future opportunities opportunities for growth? growth? 21. Pride about about the the company company 22. How much self-esteem does the employee employee feel by being associated with with their company? 23. Coworkers/tea Coworkers/team m members members 24. significan significantly tly influence influence one's level of engagement 25. Employee Employee developme development nt 26. Is the company making an effort to develop the employee's employee's skills? 27. Relationshi Relationship p with one's manager manager 28. Does the employee value his or her relationship with his or her manager?
We define employee Engagement as a psychological state in which in which employees feel a vested interest in the the company ‘s success and are both willing and motivated to perform to levels that exceed the stated job requirements. Its reflects how employees feel about the overall work experience Employee Engagement foster & drives driv es discretionery behaviour, eliciting employees , highest productivity, their best ideas & their genuine commitment to the success of the organization.
Employee engagement , also called Work engagement , is a concept that is generally
viewed as managing discretionary effort, that is, when employees have choices, they will act in a way that furthers further s their organization' their organization'ss interests. An engaged employee is a person who is fully involved in, and enthusiastic about, his or her work. her work. Employee Engagement is now measured by items which have been linked to key business outcomes. In a study of professional service ser vice firms, the Hay Group found that offices o ffices with engaged employees were up to 43% more productive The most striking finding is the almost 52% gaps gap s in operating incomes between companies with highly engaged employees and companies whose employees have lowengagement scores. High-engagement companies improved 19.2% while lowengagement companies declined 32.7% in operating income during the study period. For example, New example, New Century Financial Corporation, Corporation, a U.S. specialty mortgage banking company, found that account executives in the wholesale division who were actively disengaged produced 28% less revenue than their colleagues who were engaged. Furthermore, those not engaged generated 23% less revenue than their engaged counterparts. Engaged employees also outperformed the not engaged and actively disengaged employees in other divisions. It comes as no surprise, then, that engaged employees have been statistically linked with innovation events and better problem solving. Arnold is more likely to define engagement as a beneficial two-way relationship where employees and employers 'go the extra mile' for one another. ano ther. Companies that get it right reap the rewards and so do their employees, he said. The benefits of having happy staff are well-documented. But the challenge for many organisations is showing that engagement brings a tangible return on investment - a process many companies find elusive. "Engagement means different things to different people," Arnold said. "There was a risk that it would become just another buzzword, so settling on a definition gave us a lot of debate." UNDERSTANDING EMPLOYEE ENGAGEMENT IN THE PUBLIC SECTOR Introduction
3.1 The objective of this review the extent to which employee engagement varies between the public and private sectors. This was examined on two levels: •
•
Are there any fundamental differences in how employee engagement operates between the public and private sectors that would impact on interpretative models? In particular, do the drivers of employee engagement vary between the two sectors? And What evidence, if any, is there on the effectiveness of employee engagement between the public and private p rivate sectors? Are there any marked differences between the sectors in terms of how engaged staff are?
Variations in employee engagement process
3.2 From our analysis of the models presented the differences between the public and private sectors have no impact whatsoever on how employee engagement works. This reflects the fact that the positive factors impacting on employee engagement apply with equal weight to the public and private sectors. In particular this includes: •
•
•
The importance of providing high quality management, especially at supervisory and immediate line management level The importance of having a strong organisational vision and clarity in goals that are clearly articulated and communicated commun icated to staff at all levels The importance of engaging in effective two-way communication between the organisation and its staff
3.3 No interpretative model of the employee engagement process assessed as part of the literature review has drawn any sectoral distinction: they are generic across all organisational types in the public and private sectors. This is a key finding of the literature review. 3.4 However, the employee engagement outcomes do vary according to a range of factors reflecting organisational and employee characteristics. charac teristics. The aspiration to find a 'one size fits all' model does not no t apply, apply, either to all individual employees or to all organisations. These variations are discussed below. Variations in employee engagement outcomes
3.5 There is a surprisingly limited amount of research commenting on variances in employee engagement between the public and private sectors. This may relate to the fact that there is more in common between the sectors than there is variation and the principles of engagement tend to be generic across both sectors. The literature reviewed tends to highlight the relatively strong performance of the public sector in terms of job specific parameters ( i.e. public sector workers are more likely to receive compensation for working extra hours, and find their work more worthwhile and personally meaningful) but its weaker performance in the critical employee engagement drivers such
as strategic vision and management. For example, CIPD (2006c) in a national survey of 2,000 UK employees found the following: •
•
•
Hours worked - there are no differences between the public and private sectors in
terms of hours worked. However, public sector workers are more likely to receive some compensation for working extra hours than those in the private sector; Work-life balance - one would have expected that public sector workers would be receiving more help from their employer to achieve a good work-life balance, but actually there is no difference; Employer negatives - public sector employees are more negative about their employers than their private sector counterparts, reporting that: They experience more bullying and harassment than those in the private sector They are less satisfied with the opportunities they have to use their abilities They are more stressed and under more pressure They are more critical cr itical of their organisation They are less likely to feel their senior managers have a clear vision for the organisation They have less trust and confidence in their senior managers; and They are also less likely to believe organisational communication. Job positives - however, the public sector ethos is reflected re flected in the fact that more public sector workers find their work worthwhile and personally meaningful. This is an important finding, that Penna (2007) presents a model whereby 'meaning at work' is at the apex of the model, and one of the most important factors in driving engagement. Individual/employee performance outcomes - public sector workers rate their own performance lower than private sector employees and are more likely to have taken more sick leave in the last year. o
o
o o o
o o
•
•
3.6 Ipsos MORI (2006) has highlighted the need for public sector organisations to improve the way in which they manage change and develop leadership capability. It is discussed later how engagement can help organisations manage change (see the Cambridgeshire County Council case study which highlights how engagement was brought in to assist a large and difficult change in the Council). Drawing upon research data from over 200 of the UK's leading organisations, an analysis an alysis by sector shows that in many areas there is typically little difference in employee attitudes. However, in core aspects of working life (ref. 'job positives' above), public sector staff tend to be happier with: • • • • •
Job security Being paid fairly and their pay reflecting level of performance Training and development opportunities The feedback they receive from line managers Working hours.
3.7 As a result of the research, Ipsos MORI (2006) conclude that public sector employees are more likely to feel that the work they do is interesting and, in general, perceive a greater feeling of morale where they work. 3.8 In contrast, the public sector usually trails the private sector in two key areas: change management and leadership capability (this is despite the fact that public sector employees report a greater level of contact with senior management). The Ipsos MORI (2006) research found that whilst around three-quarters of employees in both sectors understand the need for change, there is a large disparity in terms of those who support the need for change - with 75 per cent of employees in the private sector supporting the need for change, compared to 65 per cent in the public sector. Moreover, public sector employees are significantly more likely to feel that some of the changes being implemented are unnecessary: they believe that " there is too much change for change's sake". Thus it is imperative that managers fully engage staff in understanding the rationale for change, rather than just communicating the change to them, and support employees through the change process. 3.9 In terms of the more practical aspects of change management, again public sector employees are more critical. A quarter of private sector employees, compared to just 15 per cent of public sector employees, believe that change is well managed in their organisation: see Figure 3.1. Figure 3.1 Perceptions of Change Management by Sector
Source: Ipsos MORI (2006) 3.10 The Ipsos MORI (2006) research highlights other areas in which public sector staff are usually more critical than their private sector counterparts:
•
• • •
Receiving recognition for good performance and providing opportunities for employees to let the organisation know how they th ey feel about things that affect them in their work Having adequate /sufficient facilities or resources to do their work effectively The belief that their organisation puts customers first Confidence that they are working for a successful organisation.
3.11 As a consequence, the public sector tends to trail the private sector in core areas that can lead to enhanced employee engagement, such as clarity of direction, effective communication and management. The conclusion of this research is that the public sector needs to concentrate more on how it manages change and develops leadership capability, to contribute to delivering the Public Sector Reform Agenda effectively. effectively. 3.12 These findings in the UK are supported by research in Canada conducted by the Auditor General of British Columbia (Office of the Auditor General of Br itish Columbia, April 2002). The British Columbia public service received an engagement rating of 59 per cent compared to 79 per cent for the top 50 companies to work for in Canada (Hewitt Associates: The 50 Best Companies to Work for in Canada, as cited in Office of the Auditor General of British Columbia 2002). In comparison to the leading private sector companies, British Columbia's public service employees are relatively happy with their work, are just as committed to staying with their employer, but due to a climate of distrust, a lack of confidence in their managers, and a feeling that the public hold a negative view of them as workers, they are not as proud of where they work. Only 43 per cent would highly recommend their department to a friend seeking employment, compared to 86 per cent in the comparison group. Again the public sector compares favourably in job content, but is weak in terms of organisational identity and advocacy adv ocacy amongst staff. Summary and key findings •
•
•
•
•
No interpretative model of the employee engagement process that has been reviewed has drawn any sectoral distinction: they are generic across the public and private sectors. However, the employee engagement outcomes do vary according to a range of factors reflecting organisational and employee characteristics. charact eristics. The aspiration to find a 'one size fits all' model does do es not apply. In general, public sector employees are more satisfied with their job characteristics, but are significantly less satisfied with key drivers of employee engagement compared to the private sector. These weaknesses include lack of orientation to organisational objectives and lack of advocacy. However, variations in employee engagement within sectors are far more significant and important than any reported variations between the public and private sectors. The challenge is for employers to understand the importance of employee engagement within their own organisation o rganisation and to address it effectively. effectively.
INTERPRETATIVE INTERPRETATIVE MODELS OF EMPLOYEE ENGAGEMENT Introduction 4.1 This chapter looks at the models of engagement as found throughout the literature. An employer's point of view, engagement is often about employees 'going the ex tra mile' or exerting 'discretionary effort'. It was also discussed that many of the factors that drive engagement are under the control of the organisation. However, employees will place different emphasis on the extent to which they value each of these factors in exchange for their discretionary effort. This chapter therefore examines the models of engagement in the literature to determine what the key drivers of engagement are, and the extent to which employees value these, and what employees find connects them to the organisation, motivates them to perform above and beyond expectations and compels them to actively promote the interests and objectives of the organisation. 4.2 Although the organisation has primary responsibility for leading engagement, there are also secondary employee and job specific factors which can affect levels of engagement. These are also discussed in this chapter to provide a more comprehensive picture of the factors that determine engagement. The findings are presented under the following headings: •
Modelling Engagement - a series of the most relevant interpretative engagement
models are presented. •
•
•
Role of Engagement in Organisational Outcomes - this section illustrates the
mechanisms through which engagement can impact on organisational outcomes. Organisational Variations - an analysis of the extent to which engagement varies between organisations. Employee Variations - an analysis of the extent to which engagement varies between employees.
Modelling engagement 4.3 As highlighted by CIPD (2007a) there is no definitive all-purpose list of engagement engagemen t drivers. There are many individual and organisational factors that determine whether employees become engaged, and to what extent they become engaged. This section highlights the models that illustrate these factors and the importance that employees place on them in becoming engaged. 4.4 The approach to employee engagement, discussed by Robinson et al (2004), stresses the importance of 'feeling valued valu ed and involved' as a key driver of engagement. engagem ent. Within Within this umbrella of feeling valued and involved there are a number of elements that have a varying influence on the extent to which the employee will feel valued and involved and hence engaged. Figure 4.1, which is based on a diagnostic model in Robinson et al (2004), illustrates the drivers of engagement suggested through a survey of over 10,000 NHS employees. Robinson et al (2004) state that this can be a useful pointer to
organisations towards those aspects of working life that require serious attention if engagement levels are to be maintained or improved. Figure 4.1 Robinson et al (2004) model of the drivers of employee engagement
Source: Robinson et al (2004) 4.5 Although tested within the NHS, the authors suggest that many of the drivers of engagement will be common to all organisations, regardless of sector. However as is discussed later in this chapter, engagement levels can vary according to demographic and job related factors. What is noted from the model above is that some of these factors are what would be fundamental or contractual requirements for the organisation (the 'hygiene' factors), such as pay and a nd benefits and health and safety, safety, whereas others are the areas where the organisation must 'go the extra mile' to ensure effective communication, management and cooperation. 4.6 Penna (2007) presents a hierarchical model of engagement factors (see figure 4.2), which illustrates the impact each level will have on the attraction, engagement and retention of talent. They propose a model with "meaning at work" at the apex, which they maintain is borne out by the research carried out into meaning at work. In this context, Penna (2007) defines meaning at work as the situation where a job brings fulfilment for the employee, through the employee being valued, appreciated, having a sense of belonging and congruence with the organisation and feel like they are making a contribution. In this model, as the hierarchy ascends and the organisation successfully meets each of these engagement factors, the organisation becomes more attractive to new potential employees and becomes more engaging to its existing staff.
Figure 4.2 Penna (2007) model of hierarchy of engagement
Source: Penna (2007) 4.7 Interestingly in this model the 'hygiene' factors appear at the foundation of the model, indicating the nature of these factors as a necessary, but not sufficient, building block upon which the organisation must further develop in order to engage staff. 4.8 Work by Schmidt (2004) (see figure 4.3) frames engagement within the context of organisational health hea lth and Workplace Well-Being 4 ( WWB). Engagement is defined by Schmidt (2004) as the overarching label that brings employee satisfaction and commitment together. This model highlights the importance of commitment to the job as driven by job satisfaction, and also notes no tes the importance of the supportive organisation. By creating the right conditions to generate high levels of employee engagement, the organisation can drive high performance - with high performance being defined as the achievement of the overarching public sector goal of advancing the public good. The model depicts the flow of organisational dynamics that begins b egins with recruitment and moves through support for work, to workplace well-being, to engagement and finally to high levels of organisational performance.
Figure 4.3 Schmidt (2004) model of organisational dynamics in the public sector
Source: Schmidt (2004) 4.9 This model implies that the foundations of engagement engag ement lie in policies to recruit and retain the right workforce ( i.e. in terms of employing specific competences, knowledge and experiences required re quired for success as well as diversity) and to promote health, safety, and well-being. Schmidt (2004) bases the model on a variety of studies and writings, implicit in which is the notion that it is WWB that drives engagement. CIPD (2007a) concurs with this view of the importance of well being, stating that engagement e ngagement is 'wholly consistent' with an emphasis on employee well-being. we ll-being. 4.10 In Schmidt's (2004) (2 004) discussion, WWB itself is driven by commitment and job satisfaction, which in turn are determined by a number of factors. It is a similar idea to the model presented by Robinson et al (2004) where 'feeling valued and involved' was the key driver of engagement, but in turn was influenced to a varying degree by a range of factors. As is the case throughout much of the literature, Schmidt (2004) does not present a definitive list of the drivers of commitment and satisfaction (as the drivers of engagement) but reviews several studies and reports. Concentrating here on the studies presented by Schmidt (2004) that appear to be based on a more robust approach ( e.g. regression analysis as opposed to theorising) theor ising) the following results are of interest:
4.11 WorkUSA (2000) - This survey used regression analysis to identify the key factors affecting employee commitment: • • • • • • •
Trust in senior leadership Chance to use skills Competitiveness of rewards Job security Quality of company's products and services Absence of workplace stress Honesty and integrity of company's business conduct
4.12 ERIN Research - The Region of Peel (a large municipality in Ontario, Canada) carried out an employee survey in 2002. Schmidt (2004) advocates the robustness of the results, from the Canadian public sector, s ector, due to the use of 'advanced statistical techniques' and 'excellent' return rates on the survey of 72%. 72 %. The survey identified job satisfaction and commitment as the drivers for the engagement model, with the following factors found to be important to each: Job satisfaction: • • • •
A career path that offers opportunities for advancement; Fair pay and benefits; The perception that the municipality offers good value to customers; A satisfactory satisfactory work environment, as defined d efined by: A reasonable workload; Good relations with immediate supervisor; Smoothly functioning organisational dynamics; Good relationships with colleagues; and Effective internal communication. o o o o o
Commitment: • • • •
Job satisfaction; A career path that offers opportunities for advancement; A positive perception of senior management; and The perception that the municipality offers good value to customers.
4.13 The analysis of the survey found a correlation between satisfaction and commitment of 0.57 suggesting that the two concepts are related but deserve separate analysis. Further, what also emerges from these results is that satisfaction is a driver dr iver of commitment, but not vice versa, as commitment does not appear as a key factor in the analysis of what drives satisfaction. Management and communication
4.14 The importance of good management and effective communication has been highlighted as key vehicles through which employee engagement can be b e implemented. As Robinson et al (2004) highlight, organisations must work to engage employees and establish a two-way relationship between the employer and employee. Michelman (2004) notes that the defining contribution of great managers is that they boost the engagement levels of the people who work for them. Michelman (2004) suggests that they achieve this through concentrating on four core areas of managing people: • • • •
Selection; Expectation setting; Motivation; and Development
4.15 Michelman (2004) points out that in leading engagement, great managers will seek the right fit for a person's talent, they work to see that employees are rewarded for their performance and they endeavour to ensure that talent is developed through progressively more challenging and meaningful assignments. 4.16 A research report into employee engagement by Melcrum Publishing (2005) based on a global survey of over 1,000 multinationals concluded that from an organisation's point of view it is the senior executives that 'set the tone' of engagement in an organisation, whatever the size. There are a number of actions and strategies that senior management can make use of to inspire engagement among employees and motivate them to go the extra mile. The six top drivers of engagement from the senior management perspective were found to be: • • • • • •
Communicating a clear vision of the future Building trust in the organisation Involving employees in decision making that will affect them Demonstrating commitment to the organisation's values Being seen to respond to feedback Demonstrating genuine commitment to employee's well being
4.17 The same Melcrum Publishing (2005) report also examined the role of line managers in encouraging engagement. In this regard, the survey results imply that 'creating a climate of open communication' is the single most important action for line managers in affecting levels of employee engagement, engag ement, with 60% of those surveyed claiming it is the most important element. 4.18 Regarding the importance of communication, Moorcroft (2006) discusses the restructuring that took place at the Royal Bank of Canada ( RBC) in 2004. It was noted at that time that there was a need to engage rather than inform employees and thus better align their performance with the organisation's vision and business goals. Formerly, communication strategies had focused on informing employees and creating awareness. However a new strategy was designed by the company in order to engage employees (and
thus generate desired behaviours) that would help create outcomes (measurable effects) in support of the organisation's objectives. 4.19 The strategy has four key objectives: i) Help employees develop a better understanding of how what they do relates to the organisation's vision, strategies and goals; ii) Create a more dynamic and interactive communication environment that involves employees in thinking about and understanding how they can influence business results; iii) Ensure employees are getting the information they need to help frame and guide their day-to-day decisions; and iv) Promote and recognise the desired behaviours and outcomes in communication. 4.20 This strategy is illustrated by RBC in the following model: mod el: Figure 4.4 RBC's new model of employee communication
Source: Moorcroft (2006) 4.21 Moorcroft (2006) notes that the 'old' model was focused on developing tactics and methods by which to inform employees, or create awareness, of company news and objectives. However, the new model (see figure 4.4 above) is based on engaging employees in the communication process in order to achieve the desired outcomes and thus build the business value. This is achieved by b y helping employees have a better idea of how what they do impacts upon the organisation and by promoting behaviours that help achieve organisational objectives. Moorcroft (2006) reports that the changes to employee communications are beginning to show solid results, with employee alignment and
engagement scores improving. Interestingly, the communication budget has actually been reduced at the same time, illustrating that a more focused and thought through strategy can result in better value for money. The role of engagement in organisational outcomes
4.22 This section discusses the models that illustrate the place of engagement in the wider operations of the organisation and the mechanisms through which engagement can impact on the wider context. 4.23 The elements of various models that illustrate the nature in which engagement can have an impact upon the organisation. Heintzman and Marson (2006) use the private sector service-profit chain model as a basis for producing a public sector equivalent (see figure 4.5). They base the model on research carried out in Canada on what the top public sector challenges are, namely; • • •
Human resource modernisation; Service improvement; and Improving the public's trust in public pub lic institutions.
4.24 Heintzman and Marson (2006) point out that the private sector has, for over a decade, documented the links between employee engagement and client satisfaction, and between client satisfaction and bottom line financial results. The authors note that the third element (the bottom line) cannot be transferred directly to the public sector but based on research on the link between public service outcomes and the public's rating of overall government performance, they suggest the following public service value chain: Figure 4.5: Heintzman and Marson's (2006) public sector value chain
Source: Heintzman and Marson (2006) 4.25 Whilst Heintzman and Marson (2006) state that work is still underway to document the drivers of employee engagement enga gement with respect to this model they state that possible candidates (based on secondary research quoted within the paper) are: • • • •
Support for the goals and mandate of the organisation; Effective leadership and management; Supportive colleagues and work unit; Tools, authority and independence to do the job;
• •
Career progress and development; and Workload.
4.26 Heintzman and Marson (2006) cite emerging Canadian evidence that supports this concept. They suggest that by understanding the drivers of engagement and the link between engagement and performance of the institution, this tool can be used across public sector management to make significant improvements in employees' work and in the overall performance and perception of the public sector. 4.27 A model produced by the CIPD (2006c) and presented in the organisation's Employee Attitudes Attitudes and Engagement Survey' of 2006, brings various elements of employee engagement together in one overarching model (see figure 4.6). This then formed the basis of the survey surv ey,, which was carried out across the private and public sectors. 4.28 The model, which illustrates the linkages and important factors in each of these elements, is provided below, with arrows indicating directions of influence: Figure 4.6: The CIPD (2006c) model of employee engagement model
Source: CIPD (2006c) 4.29 Individual factors are those such as gender, age, ethnicity and disability (discussed in more detail later in this chapter). chapt er). Working Working life describes factors such as occupation, oc cupation, hours of work and pay, as well as important issues such as bullying or workplace wor kplace harassment. 4.30 Management, leadership and communication refers to how employees view their managers and leaders, how much opportunity they have to participate in organisational decision making and levels of trust. As CIPD (2006c) highlights, these factors have been found in research to be very important in determining dete rmining levels of engagement. This is also the area where managers can have an important influence. 4.31 Attitudes to work refers to employees' perceptions of their jobs and includes levels of well-being, satisfaction, enthusiasm, commitment and loyalty. It is important to note
here the two-way interaction in this model between attitudes to work and engagement. Whilst satisfaction, commitment, stress and loyalty factors feed into levels of engagement, it follows from the model that organisations that successfully engage their employees will engender greater levels of job satisfaction and loyalty, for example. 4.32 The engagement box itself refers to the CIPD's (2006c) three types of engagement (as discussed in section 2.21 above) abo ve) - cognitive, emotional and an d physical. Finally, Finally, in the model above, engagement and attitudes to work lead to outcomes for the organisation, in terms of individual performance, intent to quit and absence levels. The model was used by CIPD in their annual attitude and engagement survey, with the finding that there is in fact a lot that managers and leaders can do to drive up engagement. Levels of trust and confidence in senior management and line managers were found to be 'disappointingly low' in the survey, however CIPD (2006c) cites c ites this as an opportunity for managers manager s to evaluate how their own organisation compares with the national sample and to consider how best to harness the engagement levels of their own workforce.
Power of employee Engagement:By now, many of us have heard the buzz on employee engagement – so much so that that the the buzz buzzwo word rd is loos loosin ing g its its valu value. e. Talen alentt mana manage geme ment nt and and empl employ oyee ee engagement, just like other buzzwords and business fads, really do have value – if we unde unders rsttand thei heir true true meani aning and don’ on’t let let them hem get get dil diluted uted wi with th misconceptions. Engage Engagemen mentt goes goes beyond beyond the good good employ employee ee or the good good compan company y cit citize izen. n. Employee engagement is the extent to which employees put discretionary effort into their work, in the form of extra time, energy and brainpower. Think about it… When companies companies are often trying to improve improve performance performance with fewer people and decreasing resources due to cutbacks and financial pressures, discretionary effort is the grail managers are seeking. Employees who freely give that extra effort are of tremendous value. General studies show that a 5% increase in employee engagement results in a 2.5% increase in growth. Growth measured by company value, which in the public sector is measured by stock value. The relationship between employee engagement, high performance, and company growth is compelling to say the least. Unfortunately, national surveys of company managers show an overall dissatisfaction with employee engagement levels and measures of employee engagement show a very distressing di stressing picture...
The Three Levels of Employee Engagement Highly Highly Engaged Engaged empl employ oyee eess are are buil builde ders rs.. They They wa want nt to know know the the desi desire red d
expectations for their role so they can meet and exceed them. They're naturally curious about their company and their place in it. They perform at consistently high levels. They want to use their talents and strengths strengths at work every day. They work with passion, and a nd they have a visceral connection to their company. And they drive innovation and move their organization forward. Moderately Engaged to Not Engaged employees are the largest group. Those that
put their time in and take a wait-and-see attitude towards their job, co-workers, and employer. They aren’t a negative force at work but neither are they a positive force. Actively Disengaged employees are those fundamentally disconnected from their
jobs. The actively disengaged counter the productivity of engaged and highly engaged employees. They miss an average of 3.5 days more than other employees and cost the U.S. economy between $292 billion and $355 billion per year. For most most busi busine nesse sses, s, only only 14% 14% of thei theirr empl employ oyee eess are are high highly ly enga engage ged d and and upwards of 24% are actively disengaged. (I’ve seen these numbers vary – from a low “highly engaged” number of 5% to a high of 17%, and a low “actively disengaged” number of 19%.) The Cost of Low Employee Engagement
So what is the cost? Let’s assume... • • •
•
A business has a payroll of ten million dollars. Highly engaged employees are 90% productive (probably higher). Moderately engaged and not engaged employees average out at 70% productivity. Actively disengaged employees are 50% productive (probably lower).
And we’ll adjust the breakdown to more favorable numbers (and easier math)… •
15% are highly engaged employees and are 90% productive. .15 * .90 * 100 = 13.5% productivity.
•
65% are moderately engaged employees and are 70% productive.
.65 * .70 * 100 = 45.5% productivity. •
20% are actively disengaged employees and are 50% productive. .20 * .50 * 100 = 10.0% productivity.
Overall productivity level = 13.5% + 45.5% $10,000,000 annual payroll * 69% product uctivity
+ =
10.0% = 69%. $6,900,000 ROI. or
$3,100,000 lost on unrealized productivity pro ductivity.. However, it gets worse. The 19% to 24% of actively disengaged employees not only give a comparatively low level of effort, they undermine the efforts of others thus decreasing the effective productivity of the entire staff. Furthermore, if these employees are in customer-facing roles, they can cost the company current and new business. The really really scary scary part part is that that nation national al averag averages es show show the number number of act active ively ly disengaged employees going up - from a low of 16% in the mid 90’s to a high of up to 24% today. What Can We Do To Increase Engagement? The most critical element to employee engagement is the front-line manager. manager. Managers need to discover and develop employees' talents if they want to keep them engaged. Employees must have a strong relationship with, and clear communication from, their manager. Managers have to challenge employees within their areas of talent, and then help them gain the skills and knowledge they need to build their talents into strengths. Managers should help employees develop ownership of their goals, targets, and milestones, so employees can enhance their contributions to the company and increase their impact. In this his art articl icle I disc discus usse sed d what what employ ployeee enga ngageme gement nt is, is, the cost ost and consequences of low levels of engagement, and touched on what managers need to do. Next time, we’ll delve into more detail about what managers and leaders must
do to measure and increase engagement levels and thus productivity and company growth. In the the last last arti articl clee on empl employ oyee ee enga engage geme ment nt,, we talk talked ed abou aboutt what what
engag engageme ement nt is, the relat relation ionshi ship p betwee between n employ employee ee engage engagemen ment, t, high high per perfo form rman ance ce,, and and comp compan any y growt growth, h, and and the the cost cost of low low empl employ oyee ee engagement levels. In this article, I want to focus on what a manager can and needs to do to raise levels of engagement. But first, let's build a little on the definition of Employee Engagement ... We stated in the last article that employee engagement is "the extent to which employees put discretionary effort into their work, in the form of extra time, energy and brainpower". A good definition to be sure but there's more to it than that. Empl Employ oyee ee enga engage geme ment nt ca can n be brok broken en down down into into two two area areass - the the first first bein being g emotional and the second, rational. Within these we can define 9 core statements that characterize engagement. The 9 Core Statements of Engaged Employees Emotional 1. 2. 3. 4. 5.
I would recom recommend mend my compan company y to a friend friend as a good good place place to work. work. My compa company ny inspi inspires res me me to do my my best best work. work. I am proud proud to tell others others I work for my compa company ny.. My job provide providess me with with a sense of of personal personal accompl accomplishme ishment. nt. I really really care care about about the the future future of my compan company y.
Rational 1. I understand understand how how my unit contribut contributes es to the success success of of my company company.. 2. I understand understand how how my role role is related related to my my company's company's overall overall goals, goals, objectives, and direction. 3. I am willing willing to put in a great great deal deal of effort effort beyond beyond what what is normally normally expected to help my company succeed. 4. I am personall personally y motivated motivated to help my compan company y be successful successful.. Obviously, an employee who would make these statements is highly engaged, but our topic today is how to increase the level of engagement in those employees who would not make these statements.
Managers Make The Difference As was concluded in part 1, the most critical element to employee engagement is the front-line manager. manager. 1. Managers Managers need to discover discover and and develop develop employee employees' s' talents talents if they want want to keep them engaged. 2. Employees Employees must must have a strong strong relation relationship ship with, with, and clear clear communic communication ation from, their manager. 3. Managers Managers have to challe challenge nge employees employees within within their their areas areas of talent, talent, and then then help them gain the skills and knowledge they need to build their talents into strengths. 4. Managers Managers should should help employee employeess develop develop ownership ownership of their their goals, targe targets, ts, and milestones, so employees can enhance their contributions to the company and increase their impact. But saying it doesn't get it done. Managers need to know how to do these things and, sad to say, most MBA programs don't teach it. Additionally, managers cannot do it alone. The organization must adopt a "talent management" culture in order to make engagement initiatives successful. That being said, let's look at a few critical fundamentals that will lead to positive results. Four Fundamental Actions Actions Leading to Positive Results 1. Clarify Expectations Create Goal Statements that formalize the following: • • • •
What is to be accomplished Who will be involved When the activity will be completed How much it costs and which resources will be used
Evaluate work against measurable standards -Positive Results will most likely include: For the employee •
Less frustration and stress - clear direction direction
• • •
Higher level of motivation and satisfaction A common or shared language More effective communication with manager
For the manager • • • •
More effective communication with team member More focused and productive team member Higher productivity and accomplishment of business goals A common or shared language
2. Don't Leave Employees Out Of The Plan Even the best plan can fail if the employees are not committed to it Get Commitment Get Accountability -Positive Results will most likely include: For the employee • • •
Higher level of motivation and engagement Ownership to the process and to their own development Commitment and accountability to the plan
For the manager • • •
A better performance plan overall - dual input Higher level of commitment and accountability from team members Streamlines Streamlines work processes, saves time and money m oney
3. Meet On An On-Going Basis To Share Feedback Increase effectiveness of communication Increase competence and confidence Increase productivity and accuracy Encourage a higher standard
-Positive Results will most likely include: For the employee -
• • • •
Recognized for what they are doing well Learn if "off course", receive guidance, and improve performance Clearer sense of what's expected if goals change Less frustration and stress due to more m ore timely feedback and input
For the manager • • • • • •
Time Time and opportunity to provide critical feedback Learn valuable information and gain insights Increased commitment, quality standards and productivity productivity levels More insight into potential talent and development opportunities Increased quality of communication Increased levels of credibility credibility and trust w/ team members
4. Providing Factual / Behavior-Specific Behavior-Specific Feedback Give specifics and facts of performance Be clear about what changes are needed Provide objective guidance and direction Focus on behavior vs. attitudes or personal characteristics Solve problems and move forward -Positive Results will most likely include: For the employee • • •
Commitment and accountability to changing their behavior Feels treatment is fair, professional Information provided is tangible, practical and actionable
For the manager • • • •
Clarifies performance outcomes Cultivates a more healthy environment Increases levels of credibility and trust w/ team members Focused team members, leading to: More timely results More accurate results More productive teams o o o
Essential Reading A road map for employee engagement
Now that we have identified the key drivers of employee engagement, how can we start to create – and implement - a road map for achieving outstanding organisational performance? Attitude and engagement creates turbulence in corporate America
Corporate America America is not aligned with the needs and requirements of its increasingly diverse workforce and radical changes in attitudes mean that a growing number of young Americans are dissatisfied, disengaged and unproductive. A is for Apathy
A quick search on Amazon Amazon reveals not one single sin gle business book or pamphlet about overcoming apathy. apathy. And yet anyone who been a manager for more than a week must surely recognise that proving that effort is worthwhile is the real essence of leadership. Employee disengagement a global epidemic
At a time when companies are relying on their workforces to achieve growth, a major new survey has found that only one in seven employees worldwide are fully engaged with their jobs and willing to go the extra mile for their companies. Employee engagement: What exactly is it?
The notion of employee engagement is causing a big buzz in management circles at the moment. It's a topic that employers and employees alike think they understand, yet often can't articulate very easily. So what exactly is it? Employee engagement: the what, why and how
Employee engagement is the new Holy Grail for organisations worldwide. But what exactly does it mean? Why is it so important? And if you haven't got enough of it, how can you get some more? The keys to employee engagement
Keeping your employees engaged really isn't rocket science - it's just a metter of listening, learning and leading by example. Managers critical to employee engagement
Managers' behaviour has a huge impact on the work climate and is a critical component in employee engagement and motivation. Yet Yet too many reward programmes simply focus on money and ignore this human factor.
Engage me or enrage me
More managers and leaders ask me "how to engage" and, "how to innovate" than any other question. As well they might, given that so many of us have to disengage just to survive their endless ill-conceived meetings, badly-laid plans, and the waste, day by day, minute by minute, of our lives. Latest on Employee Engagement:Recession promps a rat race re-evaluation
In tough times, many organisations slip into treating people badly. But with half of workers considering down-shifting to a more fulfilling job, poor employers could find their offices rapidly emptying when things pick up. Conflict can be a force for good
Never mind about emotional intelligence, empathy or consensual leadership, what really drives workplaces is passion, ambition and even conflict. Are people really your most important asset?
Many companies proclaim that their employees are their greatest asset. Unfortunately, Unfortunately, the phrase has become somewhat cliché, similar to saying employees are "empowered." These are valid statements only if companies put actions behind their claims. A little respect
Whatever our age, it seems Aretha Franklin was right. What most of us want from work is simply to be managed with a little respect. Fear brings loathing, not harder work
In the current climate it's easy to ignore the career needs and motivations of your workers. But assuming your team will go the extra mile just because b ecause they feel lucky still to have a job is a big mistake. Making sure not everybody hurts
It's a tough thing to ask when times are so tough, but it is now even more important that senior executives find time to provide encouragement, advice and support for their people. Cut in haste, repent at leisure
Before cutting jobs, take a deep breath and consider whether this is really the answer to your woes, or whether it simply create even more problems down the line.
I'm a manager, manager, get me out of here
Most managers are a bundle of nerves who would prefer to be back in the ranks rather than leading their teams through the worst recession in a generation. Time to rethink your job
Is it possible to get staff more engaged and committed just by changing how they think about their work? A new Canadian study has suggested that it is. Economic crisis drains morale
With the news full of yet more job losses, it's not surprising that worries about job security are having a significant impact on productivity, productivity, engagement and the general working environment. Demoralised, demotivated, dysfunctional
Just when they thought things couldn't get any worse, many organizations organizations are seeing employee morale plummet as long hours, anxiety and stress tends sends productivity levels through the floor. floor. A cultural conundrum
Robert moved from the UK to a management job in China a year ago. While things went well at first, one of his team has recently been openly challenging his working-style and being dismissive of his decisions. What should he do? Looking after talent is vital in a downturn
In the current climate, you might have thought that organisations would focus on containing costs and managing employees out of the door. In fact the opposite is the case. US workers left cold by b y their leaders
Nearly half of American workers rate their immediate supervisor more highly than their boss, viewing their senior executives as uninspiring, demotivating and stuck in their ivory towers. Positive thinking: does it really get results?
The idea that positive thinking can affect our lives for the better has been gaining momentum over the past 80 years, and even more so recently. So does the concept work? I dare say it does - within reason. Generation Y the least engaged
The knives are out again for Generation Y as a new survey finds that in almost all parts of the world, employees born since 1980 are the least engaged enga ged members of the workplace.
Five simple keys to building solid teams
When I ask teams what they would like from their supervisors, the same simple things keep coming up. You You might think they're obvious - but if they are, teams wouldn't continually be mentioning them! The rise and rise of the four-day week
A four-day four-day work week might seem like a radical way to cut energy consumption, but it is gaining acceptance among state governments across the U.S. and looks set to spread further still. Get rid of managers and we'll all be happier
It's not the lack of money, money, the daily commute or even the mindlessness of what they are doing that makes workers feel most unhappy. It is - you guessed it - their managers. Pare back perks at your peril
In a downturn cutting back on benefits may seem like a win/win decision. But according U.S business school Wharton, firms that take an axe to their perks may soon live to regret it as it. Green credentials can boost employee loyalty
With rising fuel prices hitting workers' wallets, an employer's green credentials are becoming an increasingly important retention tool as well as something s omething nice to have from a brand perspective. What are you doing to increase trust?
Without trust, there's no passion or desire for excellence. Employees stop contributing, valuable new ideas are never brought the table and bad ideas are never challenged. An organization suffering from these conditions eventually becomes incapable of correcting its own mistakes. Managers fail to live up to expectations
Seven out of 10 employees still trust their bosses highly, despite the fact that the vast majority of managers generally fail to live up u p to their expectations and aspirations. Meetings and emails take the happiness out of work
It's official. Endless meetings and the constant deluge of emails e mails really do drain most of us of the will to live, let alone work effectively. effectively.
Is your work an obligation or an opportunity?
People tend to see work either as an obligation, overbearing, or an opportunity. And if you want to take the opportunity to rise above the mundane and "make a difference", try thinking like an entrepreneur. entrepreneur. Bitter workers feel ignored and overlooked
The modern workplace is a hot-bed of simmering resentment, with workers feeling ignored and overlooked and preferring to communicate by email rather than actually speaking to each other. other. Americans bitter as the dream turns sour
Half of US workers believe that the American dream of a nice home, financial security for you and your family and hope for the future is now unattainable. Are you dead on the job?
Here's a challenge for you. Find someone doing something good today and tell them what a good job they're doing. Because praise is the thing that motivates us the most, even though it takes so little time and costs nothing. Avenues for employee complaints seem to be closed
A prime reason for employee unhappiness is that companies do not adhere to a set of standards. Some are too forgiving of employee misconduct, while others are managed by people who themselves overstep boundaries and could care less about rules. What makes managers tick
Interesting and challenging work is what drives most managers to go the extra mile, not performance-related pay, pay, cash bonuses or a stake in the business.
Earlier Stories on Employee Engagement . . . Passion and purpose at work Engagement crisis could tip UK into recession The kids are all right Thank you costs nothing, but is worth a fortune Four out of 10 managers sap the will to work U.S. workers are more loyal, but only when they're old Lions led by donkeys Employee engagement has a ring to it Getting to the heart of the disengagement gap Why loyalty pays The many faces of employee engagement Can we stop the rot? British bosses are bullying bureaucrats Clarity the key to employee engagement Work-life Work-life grumbles are a sign of deeper management failings Good communication boosts the bottom line Workers prefer tough love In praise of praise Even high-flyers need a bit of support Trust the boss? No chance Managers fail to find out why staff leave The disengagement gap Third of workers don't rate their boss
Are corporate leaders losing the plot? Secrets, lies and career plans Unlocking the power of ownership Is corporate America cutting its own throat? Measuring employee communication Sliding loyalty causes retention headaches Why manners matter
Stock options aren't enough to keep employees engaged. You You need state-of-the-art communications that can drive performance and in an environment that employees want to be every day. Employee engagement leads to employee retention, higher customer productivity, productivity, motivated employees and profitability. And we're here to help you achieve those results. See for yourself. Here's how to get started: 1. Get a free eNewsletter. eNewsletter. Sign up for The Engagement Report by completing the form to the right. Written Written by engagement expert Linda Dulye, The Engagement Report will bring you the latest news and information on successful engagement programs around the world. 2. Brush up on your skills. View Ragan's calendar of upcoming events to choose the conference, workshop or teleseminar on employee engagement that's right for you. 3. Listen to a multimedia CD. Hear a CD recording of our teleseminar on employee engagement: The new rules of engagement for executive messaging. messaging . Or choose another multimedia another multimedia CD on how to improve employee retention and increase employee productivity. productivity. 4. Start talking. Jump into the conversation about employee engagement on Ragan's message boards. boards . 5. Take Take a peek at our archives. Read about employee engagement, employee productivity and employee retention in these informative articles: •
Rules of employee engagement Motivating employees? Companies are getting a whole lot better at it
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Employee engagement: It's not about communications, stupid After two days of talking about employee engagement, one thing became abundantly clear: It's really hard to do, and very few people are doing it well Get Engaged: Why companies are paying close attention to employee engagement and what it means to you Does engagement work? A new book tackles what drives employee productivity and employee retention
Review of literature:literature:-
1.) Merit board links employee engagement and productivity By Brittany R. Ballenstedt
[email protected] November 18, 2008
Employees who are fully engaged tend to work in offices that achieve better program results, call in sick less often and stay with their agencies longer, according to a new report by the Merit Systems Protection Board. The report report,, which is based on results from a 2005 survey of nearly 37,000 employees at 24 federal agencies, found that despite dwindling resources and increased pressure to improve programs, agencies can thrive if managers connect with their employees. "Federal supervisors and managers have an important role to play in engaging employees," said MSPB Chairman Neil McPhie. "Those who are successful in engendering these attitudes will lead a more engaged workforce that will produce better outcomes for their agencies." The survey found that about one-third of federal workers considered themselves to be fully engaged, while almost one-half are somewhat s omewhat engaged and 17 percent are not engaged. The report noted a connection between levels of employee involvement and specific outcomes, though the cause and effect were not always a lways clear. clear. Higher levels of employee engagement correlated with higher scores on the results and accountability portion of the Office of Management and Budget's Program Assessment Rating Tool. Additionally, Additionally, employees at the five agencies with the best engagement levels used an average of nine sick days in 2005, while those at the five agencies with the most apathetic workforces took off an average of 12 sick days. Finally, only 17 percent of the nonretirement eligible employees who reported they were "very likely" to leave their agencies within the next year were w ere engaged, while 36 percent classified themselves as "somewhat engaged" and almost 47 percent put themselves into the "not engaged" category. category. There were differences in the level of employee job involvement among different groups of federal employees, the report noted. For example, Senior Executive Service members told of higher levels of engagement than supervisors, who, in turn, were more invested in their work than nonsupervisors. Employees with higher salaries and more education also tended to be more engaged, according to the report. Employees at the Air Force, Army, Army, NASA and the State S tate Department reported the highest levels of engagement, while employees at the Federal Deposit Insurance Corporation and the Homeland Security Department reported the lowest. MSPB said the nature of an organization's organization's work and its management practices, culture, mission and overall stability were important factors in piquing employees' interest.
The board recommended that agencies foster engagement by improving new hire marketing, encouraging networking and rotating employees to different teams or organizations. Employees also should be shown that they are valued from their first day on the job, MSPB said, and agencies should have mentoring programs to help them define their roles. In addition, supervisors should use the various phases in the performance management process to provide guidance and feedback and to tell employees how their work contributes to the agency's overall mission. Finally, Finally, MSPB said, agencies should measure employee engagement periodically and energize the workforce if it is found to be lacking. "By establishing a link between employee engagement and agency outcomes, we hope to refocus attention and energy on management practices that can increase the level of employee engagement in federal agencies," McPhie said.
2.) Engagement equals productivity Johann Tasker Tasker 05 October 2004
Employee engagement is a trusted motivational tool, yet only the most high profile organisations are truly taking it seriously. If you were to ask people what it means to get engaged, most would probably glaze over and talk about true love, l ove, diamonds and wedding cake. Not Bob Arnold, director of strategy and human capital management at HR consultancy, consultancy, Chiumento. Arnold is more likely to define engagement as a beneficial two-way relationship where employees and employers 'go the extra mile' for one another. Companies that get it right reap the rewards and so do their employees, he said. The benefits of having happy staff are well-documented. But the challenge for many organisations is showing that engagement brings a tangible return on investment - a process many companies find elusive. "Engagement means different things to different people," Arnold said. "There was a risk that it would w ould become just another buzzword, so settling s ettling on a definition gave us a lot of debate." With this in mind, Arnold embarked on a study with Personnel Today Today to find out what engagement meant to professionals in different organisations. The study, called Get Engaged, measured engagement levels and whether companies felt they were making progress.
The results, drawn from a survey of 400 HR professionals conducted via the Personnel Today Today website, are surprising. One in four organisations admitted that staff were not engaged. A similar number said the situation had worsened wor sened in the past year. And 44 per cent said that tackling engagement was an overwhelming challenge. "While many claim to be actively tackling the issue, it is worrying that a significant number don't know where to start," Arnold said. "But if you don't know where you are, it's difficult to know where to go." Asda topped the list of companies most admired for its abilities to engage staff, s taff, followed by Microsoft and Virgin Virgin companies. But manufacturing and retailing rank staff engagement lower than any other sector. "The bigger companies have the money to spend on engagement and publicity," Arnold said. "But I don't decry the PR because it's good that the importance of engagement is highlighted." Board directors appear to have their heads h eads in the clouds, according to the research, with 69 per cent believing that engagement levels in their organisations had increased in the past 12 months. Only 38 per cent of HR managers agreed with them. This difference might be because directors rarely come into direct contact with the feelings of employees on the shop floor, instead basing their opinions on the feelings of managers with whom they have regular or day-to-day contact. A more likely theory might be that directors are overly optimistic because they base their opinions on what they are told. Sometimes, junior managers feed them an overly rosy picture of company life in an attempt to show all is well. Some obstacles to engagement included lack of time (48 per cent), lack of knowledge (40 per cent) and proving return on investment (40 per cent). But poorly skilled line managers were seen as the biggest barrier, with 50 per cent of HR managers saying it was a problem. Arnold said such a response was understandable, but he warned that line managers are an easy target. They are, he said, often unfairly blamed and are expected to have a sixth sense when it comes to influencing an organisation's culture. "Putting in a new manager will change the level of engagement, but it could rise or fall. We We should be concentrating on better communication and coaching our managers to do what they do best, while addressing their problem areas."
Measuring the benefits of engagement can be especially hard for some organisations. Better job performance tops the list of benefits, but some firms do not measure engagement at all. Others mistakenly measure levels of absenteeism. "Measuring engagement by looking at absenteeism levels is like looking in the rear-view mirror while you are driving a car," Arnold said. "It tells you where you've been rather than where you're going." Other popular measures include staff turnover (67 per cent), staff opinion surveys (60 per cent) and achievement of targets (42 per cent). But, Arnold said, the biggest benefit of engagement is the value added per employee. High staff turnover rates in the retail sector, for example, mean most employees never stay long enough to get engaged. Similarly, Similarly, the spectre of job losses loss es means building engagement in a manufacturing company can be a big challenge. Arnold said despite the efforts of the HR managers, no one will stay engaged in the same job forever. The level of engagement will wax and wane, he said. A third of respondents said engagement levels were static. And where levels had fallen, just 48 per cent of firms were doing something about it. But part of the problem could be that some engagement programmes are too rigid. "There's no easy quick fix," Arnold said. "It's an ongoing process and if one programme provided the solution then someone would have patented it and be making a fortune by selling it. "My belief is that engagement cannot be addressed by a mechanistic approach," he said. "Each situation is different and it comes back to the fact that employers and employees must support each other." 3.) Cambridgeshire County Council Profile : 18,000 staff & turnover of £550m Approach : it has had a formal people strategy since 2001 - it is clear about developing
the organisation, having a single culture, employee development and creative ways to reward good performance. In 2005 the Institute for Employment Studies ( IES) ran a culture audit out of which the ' Inspire Project' was born - the objective being to change the way people work and communicate. A new framework defining 17 behaviours b ehaviours was rolled out with the assistance of the Hay Group. The project included work on leadership development, with managers - including the Chief Executive - receiving 360-degree appraisals and team-building workshops.
It has also led to a new customer service charter and employee charter. The latter outlines not only what the Council can expect from its employees, but also what they can expect in return - " it is the psychological contract made explicit ". ". Impact : in HR benchmarks the Council has top quartile performance including absence
management, and bottom quartile quar tile costs for HR service delivery. HR even sells its best practice to other public-sector organisations to generate revenue. The staff survey results are very strong: 85% of employees thought they were doing a worthwhile job 84% said that managers listened to their ideas 90% felt they had the chance to give feedback during appraisals; and 71% said they had enough opportunities to raise issues of importance " We are not a traditional authority - we seem to have more ways to get messages out and actively listen to people than you see in most organisations." " If you don't start with your workforce, how can you reach the public?" " 18,000 ambassadors are better than 18,000 assassins." 4.) Rotherham Metropolitan Borough Council Profile: 13,500 staff Historic Performance: in 2002 the Council was in the 'doldrums', with 1 star and rated
as 'weak' in the Comprehensive Compreh ensive Performance Assessment. Only 24% of staff rated morale as 'high'. Approach: Rotherham's 'Exchange Programme' was runner up in the 'Improving
Business Performance Through Engaging Staff' category of the CIPD People Management Awards. Awards. A representative 'Reach-in' panel that gives detailed feedback and quarterly focus groups to handle hot topics supplemented conventional methods such as staff surveys and an employee suggestion scheme. Through effective promotion the number of employee suggestions increased six fold from 50 per year to 300. " Letting people know the outcomes of their suggestions was the most important part of the process ."
The Council's wider mission to motivate and inspire is encapsulated in their HEART approach: •
Help each other learn and develop
• • • •
Empower through open communication Appreciate and respect others Recognise and acknowledge contributions Try new ideas and initiatives.
Impact:
Staff turnover is down from 18% to 9% Average absence is down from 13.8 days to 9.2 days Rotherham is now a three star council and rated as 'strongly 's trongly improving'. 65% of staff responded that they are happy at work. " Happy employees are more likely to come to work." "We know staff feel valued, and confident that they are having an input into our "We success as a council." "The culture has changed from one that was progressing slowly to one that wants to achieve, and is achieving results ." 5.) CIPD (2006c): Employee variations
The final variable impacting on employee engagement relates to employees themselves. A number of studies have produced quantitative research r esearch findings that demonstrate the impact that biographical and job characteristics can have on employee engagement. One of the most in-depth was conducted by the Institute for Employment Studies ( IES) (as analysed by Robinson et al 2004) which analysed attitude survey data for 2003 from 14 organisations in the NHS (>10,000 completed questionnaires). The key findings were: Biographical characteristics •
•
Gender - the difference in engagement scores between men and women was not
significant (although note that some surveys (see CIPD 2006c discussed below) find that females are generally more engaged than males - this difference may be due to the fact that the NHS study surveys across employees within the same organisation, whilst the CIPD survey cuts across a wide variety of industries and organisations). Ethnicity - minority ethnic employees have higher engagement levels than their White colleagues. Black, Chinese and Asian employees have higher scores than those in Mixed and White groups.
•
•
•
•
Age - engagement levels go down slightly as employees get older - until they
reach the oldest group, 60 and over, where the highest engagement levels of all are displayed. The high level of engagement levels expressed by experienced employees, who may be considered to be approaching the end of their working lives, suggests an untapped source of potential in many organisations. Work-life balance - those in their 40s and 50s have the highest levels of workplace stress and are likely to find it difficult to balance work and home life. Robinson et al (2004) therefore suggest that attention to family friendly policies could increase the engagement levels for this group. Caring responsibilities - the need for a family-friendly approach and greater emphasis on work-life balance is further underlined by the fact that employees with caring responsibilities for children have significantly lower engagement levels than those who have no caring responsibilities. Medical - those with a disability/medical condition have lower engagement levels than those who do not have such a condition.
CIPD (2006c) in their national survey of 2,000 employees across a wide spectrum of public and private sector employers found broadly similar findings to the NHS survey surv ey,, although several disparities are noted: •
•
•
•
Gender - women were found, in general, to be more engaged than men, but they
also tend to be doing different kinds of jobs. Women Women are more satisfied with their work and hold more positive views of their senior management team than do men. They are more loyal to their organisation as an employer and report higher levels of loyalty to their customers and clients than men. This is in contrast co ntrast to the NHS survey result conducted by IES and analysed by Robinson et al (2004), where it was found that there was no discernable difference between engagement levels between men and women. As discussed above this may be due to the fact that the NHS study surveyed employees across the same organisation whilst CIPD (2006c) cut across a range of different industries and organisations. This may suggest that males and females are responding r esponding in a similar fashion to the same NHS environment but that in general differences in male/female engagement may be due to participation in different d ifferent occupations and industries. Age - workers aged 55+ are more engaged with their work than younger employees, and they are also happier with their work-life balance, working shorter hours than others. Employees aged under 35 are significantly less engaged with their work than older workers. Again this is contrast to the NHS results where it was found that engagement levels go down as age increases, although both surveys find that workers in the 55+ or 60+ bracket are more engaged. Disability - employees with a disability are less engaged due to a range of negative factors including: bullying and harassment, not being listened to, the stress of work, a feeling of less control over their work, and higher levels of anxiety. Managers - they find their work more important and more meaningful than nonmanagers do. Their responses on communication and involvement are much more
•
positive than those of non-managers, and managers feel that they have more support and recognition and are listened to more than non-managers are. Flexible contracts - some surprisingly strong differences were found between those working on a flexible contract ( e.g. flexible hours, term time contracts, homeworking etc.) and other workers. Those on flexible contracts tend to be more emotionally engaged, more satisfied with their work, more likely to speak positively about their organisation and least likely to quit than those thos e not employed on flexible contracts.
However, it is particularly important to point out that demographic variables should not be seen in isolation as predictors of performance or engagement. CIPD (2006c) stresses the following: "…what we have found is that good management practice and a conducive working environment can lead to high levels of engagement and performance amongst all groups of workers."
CIPD (2006c) also note the following regarding job characteristics: •
•
•
Job group - the nature of the job makes a big difference to engagement levels. In
general, managers and professionals have higher levels of engagement than do their colleagues in supporting roles. Working pattern/hours - full-timers are significantly more engaged than parttimers, while employees who work days are more engaged than their colleagues on shifts or on a rota. This suggests that employers need to work harder har der with people who are not necessarily at work during 'standard' working times - to ensure that they receive communications, are managed effectively and have opportunities to grow and develop in their jobs. Length of service - engagement levels go down as length of service increases - an indication to employers that they need to ensure that longer-serving employees continue to be exposed to new and interesting challenges.
6.) B&Q Profile: Europe's largest home improvement retailer. UK employment growth doubled
from 17,500 in 2000 to 35,000 by 2003. Approach: Since 2000, B&Q has used a 12-question survey developed by Gallup, on
seven occasions to measure employee engagement - defined by the degree to which workers are emotionally committed to their jobs. Employees respond to each of the 12 questions on a scale of 1 (strongly disagree) to 5 (strongly agree) on a range of topics related to employee needs in the workplace such as friendships, pay, pay, benefits, progress reports, and job related growth opportunities. High scores reflect engaged employees whose needs are being met and who are fully engaged in improving workplace productivity. productivity. Middle of the range rang e scores reflect workers who are not engaged, engage d, whilst low
scores imply active disengagement - those employees whose needs are not being met and who can actually discourage productivity. However, the survey does not merely gauge prevailing workplace sentiment, rather it is designed to be a tool for action and strategy development . The survey asks about aspects of engagement that can be influenced by supervisors, such as recognition and communication. Thus depending on the outcome, managers can either plan how to exploit their strengths and/or address the weaknesses. Further, the survey is designed to translate the 'softer' aspects of workplace emotions and behaviours into a hard measure of engagement, which in turn can be linked to organisational outcomes. Impact: The use of the Gallup survey at B&Q over 7 separate occasions has allowed the
company to build up a wealth of knowledge about what drives engagement within the company and how engagement engag ement levels link to greater productivity pr oductivity,, better customer engagement and higher profits. The results of surveys have been taken forward into actions to improve scores. Earlier surveys revealed that company-wide, scores were fairly low, prompting management and employees alike to change their attitudes in order to improve engagement. For example, one store scored particularly low on the question 'At work do my opinions seem to count?' Managers changed the agenda of meetings to ask staff if they had issues to raise, and required managers to feed back subsequently on how the issue was being addressed. Thus the use of the survey here highlights how an issue can be identified, and how actions can be taken to create the environment to enable the issue to be resolved. B&Q customer surveys reveal that stores that score highly in the engagement survey also score higher on customer satisfaction. Translating Translating this into organisational outcomes, the stores in the top half of customer loyalty generated £3.4m more in sales each year than stores in the bottom half. 7.) Towers Perrin (2003) presents a range of engagement statements, many of which have elements common to the Robinson et al framework, including pride in being part of the organisation, advocacy about the products and services of the organisation, being on e's best work, and willingness to put in effort inspired by the organisation to produce one's above and beyond normal expectations. The full list of the Towers Perrin engagement
statements is provided below: • • • • • • •
I really care about the future of my company I am proud to work for my company I have a sense of personal accomplishment from my job I would say my company is a good place to work The company inspires me to do my best work I understand how my unit/department contributes to company success I understand how my role relates to company goals and objectives
• •
I am personally motivated to help my company succeed I am willing to put in a great deal of effort beyond what is normally expected
Based on use of these statements, Towers Perrin (2003) found that just 17% of respondents are 'highly engaged' whilst 19% were found to be 'disengaged. The remaining middle are considered to be the 'moderately engaged'.
8.) RBS - How a major corporation uses its employee data Profile : The Royal Bank of Scotland Group ( RBS) has over 140,000 employees in 30
countries. Approach : RBS has recognised that in an organisation of its size, understanding the
effectiveness of its people strategy and 'employee proposition' is a strategic imperative. From 2003, RBS developed a human capital strategy that provides its leaders with a detailed understanding of how effective the group is at attracting, engaging and retaining the best people. RBS has adopted a human capital 'toolkit' which includes diagnostic tools, benchmarking resources and employee research and measurement tools. RBS employs the use of comprehensive surveys which benchmark performance and report on a variety of topics such as absence, turnover and diversity. However, the key to the human capital strategy is its annual survey surv ey of employee attitudes delivered to all 140,000 staff. The results are communicated around the organisation and managers are provided with an action plan so that at a local level, tangible actions are agreed and targeted. " This is a sophisticated, business-focused strategy within which employee attitude surveys play a key role" ( Aitken Aitken 2006 cited in CIPD (2006a)) Impact : RBS publishes its human capital measures in its annual accounts and in its corporate responsibility r esponsibility report. As Aitken highlights " By reporting how our people strategy drives business performance, we differentiate RBS Group as a great company to work for, invest with and bank with. Sharing our approach to developing a highly rewarding and productive workplace is a key part of this approach". Implications for managers: Employee attitude surveys are a fundamental component of
sophisticated strategies for managing human capital. Findings on employee engagement can be used to monitor performance, communication, diversity diver sity,, leadership and work-life wor k-life balance. Combining attitudinal data with other indicators in the organisation can provide managers with a greater understanding of the relationship between HR policies and practices and organisational performance.
discretionary effort is the grail managers are seeking. Employees who freely give
that extra effort are of tremendous value. General studies show that a 5% increase in employee engagement results in a 2.5% increase in growth. Growth measured by company value, which in the public sector is measured by stock value. The relationship between employee engagement, high performance, and company growth is compelling to say the least. Unfortunately, national surveys of company managers show an overall dissatisfaction with employee engagement levels and measures of employee engagement show a very distressing di stressing picture... 9.) Schmidt 2004 defines WWB as " a holistic approach to creating high performance organisations through
establishing the right conditions to generate high levels of employee engagement. This approach assumes that achieving high levels of organisational performance depends on employees who are strongly committed to achieving the goals of the organisation, and who show this through their actions. This behavioural objective is influenced in turn by levels of employee satisfaction, and by supportive, respectful and healthy work environments. 10.) Ken Scarlett, USA
The Conference Board "study" of Employee Engagement is a referenced based, not empirically based, journalistic examination of published papers and sales materials that produces a homogenized definition based on word count frequency inaccurately described as "meta-analysis". The Conference Board's definition sets back scientific standardized measurement of engagement to the dark ages by publishing this collated version of definitions drawn primarily from their financial sponsors. Engaging employees is an art and responsibility of management made possible only by statistically measuring 15 engagement drivers via validated survey questionnaire instument with results reported by group and holding managers responsible for keeping employee attitudes towards those engagement drivers within or above the acceptable range. For those interested in a nonmystical, empirically proven definition and practical description of engagement see white papers at www.ScarlettSurveys.com. www.ScarlettSurveys.com. Be well.
11.) John Truty, Truty, Chicago Ch icago You need to ask the question ... Why have management and the academics and the consultants been asking these questions since the dawn of the industrial era... Why have they remolded/repackaged/re-re the same basic questions and why have they FAILED? What is it in the basic construction of work (not the physical physi cal effort - the construction of the institution of work) that has persisted in defeating attempts by the "professional" to rectify the "problem"? A re-examination re-examination of hierarchy and the distribution of benefits within the corporate entity needs to be questioned. Questioning the standard narrative of hierarchy, hierarchy, who controls work processes and knowledge would seem to be salient. And the basic position for corporate power and the "rights" of management are central. When reviewing the literature of labor and the working classes it would seem as if these types of issues are central. My 30 years experience tells me that as long as management perceives itself as have power over other classes of workers (we tend to forget that management are workers too) that these issues will remain unsolved and a rich source of income for a few with little change in the outcomes.... metrics aside ... we have all a ll experienced how surveys are created and analyzed... These are issues of power and the benefits accrued to those powerful people ... In my humble opinion, when the benefits of the labor of all the workers are distributed with greater equity these issues will diminish ... 12.)M.S.Sreekumar, Trivandrum/ Cochin, Kerala, INDIA I am practisng HR for over 3 decades. In the beginning, we were only taking Opinion Surveys. Subsequently Subs equently,, we migrated to Employee Satisfacvton survey also, on selected critical paarmeters. Criticial parameters unwent change/ refinement, as time went by. Contexualising Contexualising the HR H R interventions & tracking thier outcomes wer our objective. We We were alost trying to identify their acceptance/ rejection & effectiveness of the HR activies were captured. We aso went throguh Climate Surveys. Later, we also went for Employee Commitment Surveys. For the last couple of years, we are also conducting Employee Engagaement Surveys. The surveys output is respoed at the enterprise elvel and Corrective Action/ Preventive Action/ Remedial Plan is put in palce, and actions taken. 13.) Tulasi, India I feel larger companies have successfully concentrated on mechanisms/concepts to improve employee engagement. Branding angle adds a lot to this. Employees are more satisfied to be associated with bigger bi gger brands. In my opinion companies start looking at the concept only after a sizable growth. Smaller organization are
focusing more on increasing business not realizing that the engaged employees can yield better profits. It’s a learning which would come with growth. Bigger organisations also have stronger processes in place which do not allow indivisual interference. leaving little space to the managers to violate "walk the talk" concept. con cept. 14.) Rich DiGirolamo, www.richdigirolamo.com
When I talk with clients (and potential clients) about employee engagement I ask them what their employees are doing to get themselves engaged. I ask them what excites their the ir employees. Too Too often we’re looking to deliver a result or a process rather than deliver a mechanism/concept that will allow the employee to figure it out by his or herself. Telling your people “this is how you’re going to be engaged” is ludicrous. It’s almost as bad as telling people you’re empowered to run with a task and then all the manager does is steer them and correct them to do it “my way.” way.” Staff needs to be given far more credit. Staff ideas need to be listened to, heard and implemented. That’s That’s how you get engagement. If you’re going to keep ramming things down their throats………….good throats………….good luck. And while I know some of you are envisioning chaos with this approach – let’s just answer one question………………….Is your way working? 15.) Annette Kurer The reason employee engagement is not articulated easily is the same as the reason that employees are often not engaged in their job and organisation. What is the reason? Most people's dialogue skills let them down and they are unable to communicate with clarity or check their message is understood. Most M ost of us have no idea how we look and sound when we communicate we merely state state our point or command and move on. What often happens though is that the other person's understanding and ultimate implementation of our message is different from what we thought we'd conveyed. The impact of our communication has been impaired by how we looked and sounded, we don't check it and we get frustrated when some time down the line the message hasn't transformed into action in alignment with our communication. 16.) Andy Parsley, Green Lion Insight and Solutions, UK Look after your reputation. If the world believes that your organisation is a poor "corporate citizen" they will tell your people. If your y our employees believe what they
hear they will increasingly distance themselves from the business. And if they don't, they will get increasingly frustrated if they see that you are doing nothing to correct these misperceptions. Either way, organisations organisations that proactively manage their reputations will also enjoy higher levels of employee engagement. 17.)Phil Whiteley To me, the research showing the importance of employee engagement is overwhelming, and goes right back to the Hawthorne experiments in the 1930s. The barrier to wider acceptance of the link is the illogical separation of strategic discussions, policies for greater efficiency, efficiency, etc from misleadingly entitled 'soft' matters. We We need to challenge the false metaphor that people are 'resources' or 'assets'. They're not. They are the company, and produce every asset within it. 18.) Greg Harris, Omaha, Nebraska It's amazing that the HR community is still debating whether or not employee engagement is a "big deal." Employee engagement is NOT a fad. It's the byproduct of our economy's transition from an industrial in dustrial base to a service and information base. As the American workforce evolved from laborers to knowledge workers--a power shift occurred between employer and employee. Engagement will become the best competitive advantage companies will exert to defend their businesses. Engagement research ought to be performed by every company with more than 10 employees. And the results should be scrutinized with the same vigor as financial metrics. My firm operates "Best Place to Work" Work" programs in 41 US markets. The winners of these contests don't leave engagement to "chance." They are intentional about engineering an environment where talented people flourish. 19.) Erik Mazzone, www.erikmazzone.com Interesting article. Regarding the concluding paragraph (organizations (organizations are attempting to increase employee engagement by flattening hierarchies): I'm not sure this is a sensible response to the problem. If all of the studies agree that a key factor in engagement is the employee's relationship with his/her direct line manager, doesn't flattening the hierarchy make this more difficult? Flattening a hierarchy (removing layers of bureaucracy and
management) would seem to increase the number of direct reports each manager has. Having more direct reports means a manager has less time for each individual. Less time for each individual means less time to build a personal relationship. Doesn't this "fix" potentially go in the wrong direction? No matter the definition of employee engagement, the payback to allowing employees to develop a strong sense of ownership, a feeling that it is their workplace, is huge. Stephen Covey wrote that the difference between essentially poorly motivated and highly motivated employees is about 500% in productivity. productivity. My own experience in four successful turnarounds verifies this difference and indicates that it is within the grasp of every manager should they decide to act appropriately. appropriately. My definition of same is embodied in the ten question test below. This is a simple test of 10 questions. Rank yourself (or a manager) on a scale of 1 to 10, 10 being the best or almost always, 1 being the worst or almost never. never. Add up the points for each question. If you score close to 100, I would expect that your employees will be over 3 times more productive than if your score was 30 or less. In addition, employees will unleash their full potential creativity and innovation, love to come to work and have very high morale. Table 3.1 Literature view on impact of engagement Impact of Employee Engagement Statement
Source
"There are clear links between employee engagement and effectiveness, which, in turn, affect productivity. productivity. Employee engagement goes to the heart of organisational capability issues"
Briggs (2005), Australian Government Public Service Commissioner as cited in Meere (2005)
"….high levels of engagement have been found to be associated with a whole range of beneficial outcomes, including high levels of performance"
CIPD (2006c)
"….there appears to be a general willingness to accept the underpinning finding: the higher the level of employee commitment, the better the business outcome. If employee engagement is indeed one-step beyond commitment, the reward should be even greater"
Robinson et al (2004)
"….it takes little persuasion on a theoretical level to convince a business leader that employees who are more committed, work harder and smarter will be better for the company than those who turn up, do merely what they are obliged to do and leave"
Melcrum Publishing (2005)
"Your organisation's success depends on people's true engagement…..Research has shown that engaged employees Right Management (2006) make for a stronger organisation and better business results" "Employers want engaged employees because they deliver improved business performance"
CIPD (2007a)
Table 3.2 Importance of Employee Engagement - case study evidence Case Study
Evidence
Source
Public Sector Runner up in CIPD People Management Awards - Judges' assessment:
Rotherham Metropolitan Borough Council
Cambridgeshire County Council
"The council made big improvements in employee turnover, turnover, satisfaction and absence levels following Brockett (2006) an employee engagement initiative. Communication between the council officers, the community, unions and council members was outstanding. A good example of how to drive through change quickly, in collaboration with stakeholders." "We are not a traditional authority. We seem to have more ways to get messages out and actively listen to people."
Johnson (2006) "If you don't start with the workforce, how can you reach the public? 18,000 ambassadors are better than 18,000 assassins." Private Sector
BBC
"….the BBC has moved very strongly and sincerely Melcrum towards an engagement culture and is doing a lot Publishing to encourage behaviour that might, elsewhere, fit (2005) under this banner. But instead, we talk more about words like 'involve', 'participate' and 'respond'
rather than 'engage'. That means creating shared meaning and understanding in such a way that our people actively want to participate." RBS is the world's fifth largest bank and it has the concept of employee engagement at the heart of its business strategy. Its model is based on engaging staff to:
Royal Bank of Scotland
• •
•
' Say' Say' that the job and company are good ' Stay' Stay' with the company and develop it
Robinson et al (2004) Appendix 3
' Strive' Strive' to go the extra mile for the company
"People need to become engaged with the business so that they become advocates of the business. This means that by your employer brand you have to employ the right people to begin with. Microsoft does this well. Not everyone wants to work for Microsoft, but those that are there love it".
Microsoft
West Bromwich Building Society
Royal Bank of Canada
McKenzie, A.
"The people who get in have a communications HR Gateway vehicle, systems and processes that reflect what they want in terms of the employer brand and what it stands for. for. Of course, when you have the right people you have the trouble of creating ways of letting them know what is going on in the business and where they fit in - in regard regard to business goals and objectives". "… it has a powerful people engagement strategy that consistently demonstrates the link between leadership, culture and business competitiveness. Most recently the society won the UK Business Excellence award for Employee Satisfaction, which recognises 'outstanding performance in the area of staff development and involvement." "At RBC we decided to reinvent our employee communication so that it would not only inform employees, but do a better job of engaging and aligning their performance with our vision and business goals."
IRS Employment Review (24 March 2006) Melcrum Publishing (Oct/Nov 2006)
3.1 RESEARCH METHODOLOGY THE RESEARCH OBJECTIVES :i.) i.)
To stu study dy the the imp impact act of empl employ oyee ee eng engage ageme ment nt on produ producti ctivi vity ty of the the
organization. ii.) ii.)
To study study the the vari variou ouss meth methods ods of emp emplo loyee yee eng engage ageme ment nt pre prevai vaili ling ng in in the
organization.
1. ADOPTED RESEARCH METHODOLOGY AS FOLLOWS
:-
RESEARCH PLAN:
Data source
Primary & secondary data (questionnaire, different form as reports, magazines, websites etc.)
Research approach
Descriptive research
Research tools Research Instrument Analytical tools
Likert’s (z – test), Chi test Questionnaire Pie chart
Sample size
30
Sample unit
Employee
Sample area
Chittorgarh
Questionnaire
Structured
Sampling Procedure
Judgment Sampling
Data Collection Method
Survey
Type of Question
Close & Open ended
LIMITATION
The research conduct was limited to Udaipur region only. Due to time constraints, more time could not be b e devoted to individual respondent.
Due to unwillingness of providing any information, the respondents filled the questionnaire casually which might have effected the conclusion.
Marketing Marketing manager being busy with his job. He was not able to spare enough time for our proper guidance.
A busy schedule of dealers d ealers / retailers also makes the collection of information a very difficult one.
Full district was not covered as this is very tedious job to be done in 7 – days. da ys. However almost all main areas of the district d istrict were covered.
The projections are purely purely based on verbal meetings and may be influenced by unprecedented factors.
Non – cooperative behavior of the respondent was a big problem p roblem in this survey.
While studying the above fact should taken into consideration.
DATA DATA ANALYSIS & INTER I NTERPRETA PRETATION: TION: 1. Employee engagement helps you a lot to increase your knowledge, skill, attitude & ability to perform the job. 1
3
10
4
12 S trongly Agree
Agree
Dis a ag gree
S t rongly di s agree
X 5 4 3 2 1 15
F 10 12 4 1 3 30
Not dec ided
FX 50 48 12 2 3 106
(X- X) 1.47 0.47 -0.53 -1.53 -2.53
(X-X)2 2.161 0.221 0.281 2.341 6.40 11.40
F(X-X)2 21.61 2.652 1.124 2.341 19.2 46.93
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
Strongly
(P) 5
10
50
Agree Agree Not
4 3
12 4
48 12
Decided Strongly
2
1
2
Disagree Disagree
1
3
3
15
30
106
Total
X = ∑FX / N
σ
2
=
X = 106 / 30
3.53
1.27
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.53 (Survey Mean) σ σ
2
= 46.93 / 29 = 1.62
= 1.27 (Standard Deviation)
Hypothesis respondents think that there is no significance difference between employee engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
0.23
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.23
3 - 1.96 × 0.23
3 + 0.45
3 - 0.45
3.45 (That’s upper limits.)
2.55 (That’s lower limits)
We can say that µ > 3 is rejected. Most respon responden dents ts agree agree that that employ employee ee engage engagemen mentt helps helps a lot to increa increase se a knowledge & skills to perform the job. Perc Pe rcen enta tage ge of sati satisf sfac acti tion on of empl employ oyee ee enga engage geme ment nt uses uses by the the rela relate ted d respondents. We can say that µ > 3 is rejected.
Lower limit = 2.55
µ=3
Upper limit = 3.45
2. You You had proper discussion with your head of department on the topics of training or the areas of production are decided after proper discussion with you. 1
2
10
5
12 S t rongly Agree
A gree
Dis agree
S t rongly dis agree
X 5 4 3 2 1 15
F 10 12 5 1 2 30
Not dec ided
FX 50 48 15 2 2 117
(X- X) 1.10 0.10 -0.90 -1.90 -2.90
(X-X)2 1.21 0.01 0.81 3.61 8.41 14.05
F(X-X)2 12.10 1.2 4.05 3.61 16.82 37.78
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
10
50
Agree Agree Not
4 3
12 5
48 15 15
Decided Strongly
2
1
2
Disagree Disagree
1
2
2
15
30
117
Total
X = ∑FX / N
σ
2
=
X = 117 / 30
3.90
1.14
0.21
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.90 (Survey Mean) σ σ
2
= 37.78 / 29 = 1.30
= 1.14 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.21
3 - 1.96 × 0.21
3 + 0.41
3 - 0.41
3.41 (That’s upper limits.)
2.59 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that proper discussion with head of department on the topic of productivity. productivity. Percentage of satisfaction uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.59
µ=3
Upper limit = 3.41
3. The objective of the production were clear to you. 2
1
1
14
12
St rongly Agree
A gree
Disagree
S t rongly dis agree
X 5 4 3 2 1 15
F 14 12 2 1 1 30
Not dec ided
FX 60 48 6 2 1 117
(X- X) 1.10 0.10 -0.90 -1.90 -2.90
(X-X)2 1.21 0.01 0.81 3.61 8.41 14.05
F(X-X)2 16.94 0.12 1.62 3.61 8.41 41.20
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
14
60
Agree Agree Not
4 3
12 2
48 6
Decided Strongly
2
1
2
Disagree Disagree
1
1
1
15
30
117
Total
X = ∑FX / N
σ
2
=
X = 117 / 30
3.90
1.19
0.22
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.90 (Survey Mean) σ σ
2
= 41.20 / 29 = 1.42
= 1.19 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.22
3 - 1.96 × 0.22
3 + 0.43
3 - 0.43
3.43 (That’s upper limits.)
2.57 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that objective of production are clear for him. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.57
µ=3
Upper limit = 3.43
4. The senior is able to provide you knowledge about all the aspects, which you want. 2
3
8
7 10 S trongly Agree
Agree
Dis a ag gree
St rongly disagree
X 5 4 3 2 1 15
F 8 10 7 2 3 30
Not dec ided
FX 40 40 21 4 3 107
(X- X) 1.43 0.43 -0.57 -1.57 -2.57
(X-X)2 2.04 0.18 0.32 2.46 6.60 11.60
F(X-X)2 16.32 1.80 2.24 4.92 19.81 45.09
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
8
40 40
Agree Agree Not
4 3
10 7
40 21 21
Decided Strongly
2
2
4
Disagree Disagree
1
3
3
15
30
107
Total
X = ∑FX / N
σ
2
=
X = 107 / 30
3.57
1.24
0.23
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.57 (Survey Mean) σ σ
2
= 45.09 / 29 = 1.55
= 1.24 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.23
3 - 1.96 × 0.23
3 + 0.45
3 - 0.45
3.45 (That’s upper limits.)
2.55 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that senior is able to provide to knowledge & information. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.55
µ=3
Upper limit = 3.45
5. The methodology of production was excellent. 2
1
9
7
11 St rongly Agree
A gree
Disagree
S t rongly dis agree
X 5 4 3 2 1 15
F 9 11 7 1 2 30
Not dec ided
FX 45 44 21 2 2 114
(X- X) 1.20 0.20 -0.80 -1.80 -2.80
(X-X)2 1.44 0.04 0.64 3.24 7.84 13.20
F(X-X)2 12.96 0.44 4.48 3.24 15.68 36.80
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
9
45 45
Agree Agree Not
4 3
11 7
44 21 21
Decided Strongly
2
1
2
Disagree Disagree
1
2
2
15
30
114
Total
X = ∑FX / N
σ
2
=
X = 114 / 30
3.80
1.13
0.21
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.80 (Survey Mean) σ σ
2
= 36.80 / 29 = 1.27
= 1.13 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.21
3 - 1.96 × 0.21
3 + 0.40
3 - 0.40
3.40 (That’s upper limits.)
2.60 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that methodology of production are excellent. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.60
µ=3
Upper limit = 3.40
6. There is open discussion between you & the HRD. 1
2
10
5
12 St rongly Agree
A gree
Disagree
S t rongly dis agree
X 5 4 3 2 1 15
F 10 12 5 1 2 30
Not dec ided
FX 50 48 15 2 2 117
(X- X) 1.10 0.10 -0.90 -1.90 -2.90
(X-X)2 1.21 0.01 0.81 3.61 8.41 14.05
F(X-X)2 12.1 0.12 4.05 3.61 16.82 36.70
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
10
50
Agree Agree Not
4 3
12 5
48 15 15
Decided Strongly
2
1
2
Disagree Disagree
1
2
2
15
30
Total
X = ∑FX / N
σ
117
2
=
X = 106 / 30
3.90
1.13
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.90 (Survey Mean) σ σ
2
= 36.70 / 29 = 1.27
= 1.13 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
0.21
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.21
3 - 1.96 × 0.21
3 + 0.41
3 - 0.41
3.41 (That’s upper limits.)
2.59 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that open discussion with HRD. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.59
µ=3
Upper limit = 3.41
7. You You had achieved your learning goals from the employee engagement. 1
3
1
10
15 St rongly Agree
Agree
Dis agree
Strongly dis agree
X 5 4 3 2 1 15
F 10 15 3 1 1 30
Not dec ided
FX 50 60 9 2 1 122
(X- X) 0.93 -0.07 -1.07 -2.07 -3.07
(X-X)2 0.86 0.00 1.14 4.28 9.42 15.70
F(X-X)2 8.6 0 3.42 4.28 9.42 25.72
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
10
50
Agree Agree Not
4 3
15 3
60 9
Decided Strongly
2
1
2
Disagree Disagree
1
1
1
15
30
122
Total
X = ∑FX / N
σ
2
=
X = 106 / 30
4.07
0.94
0.17
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 4.07 (Survey Mean) σ σ
2
= 25.72 / 29 = 0.89
= 0.94 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.17
3 - 1.96 × 0.17
3 + 0.34
3 - 0.34
3.34 (That’s upper limits.)
2.66 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that achieved learning goal by the employee engagement. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.66
µ=3
Upper limit = 3.34
8. The HRD department seriously follow-up the suggestion su ggestion provided by you for the improvement of the production. 2
1
1
14
12
St rongly Agree
A gree
Disagree
S t rongly dis agree
X 5 4 3 2 1 15
F 14 12 2 1 1 30
Not dec ided
FX 60 48 6 2 1 107
(X- X) 1.43 0.43 -0.57 -1.57 -2.57
(X-X)2 2.04 0.18 0.32 2.46 6.60 11.60
F(X-X)2 28.56 2.16 0.64 2.46 6.60 40.42
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
14
60
Agree Agree Not
4 3
12 2
48 6
Decided Strongly
2
1
2
Disagree Disagree
1
1
1
15
30
107
Total
X = ∑FX / N
σ
2
=
X = 107 / 30
3.57
1.18
0.22
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.57 (Survey Mean) σ σ
2
= 40.42 / 29 = 1.39
= 1.18 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.22
3 - 1.96 × 0.22
3 + 0.43
3 - 0.43
3.43 (That’s upper limits.)
2.57 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that HRD department seriously follow-up the suggestion for the improvement of the production. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.57
µ=3
Upper limit = 3.43
9. Is the employee engagement supportive. 2
1
1
11
15
St rongly Agree
A gree
Disagree
S t rongly dis agree
X 5 4 3 2 1 15
F 11 15 2 1 1 30
Not dec ided
FX 55 60 6 2 1 124
(X- X) 0.87 -0.13 -1.13 -2.13 -3.13
(X-X)2 0.76 0.02 1.28 4.54 9.80 16.40
F(X-X)2 8.36 0.30 2.56 4.54 9.80 25.56
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
11
55
Agree Agree Not
4 3
15 2
60 6
Decided Strongly
2
1
2
Disagree Disagree
1
1
1
15
30
124
Total
X = ∑FX / N
σ
2
=
X = 106 / 30
4.13
0.94
0.17
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 4.13 (Survey Mean) σ σ
2
= 25.56 / 29 = 0.88
= 0.94 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.17
3 - 1.96 × 0.17
3 + 0.34
3 - 0.34
3.34 (That’s upper limits.)
2.66 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that employee engagement supportive. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.66
µ=3
Upper limit = 3.34
10. 10. If thei theirr any any feed feedba back ck syst system em abou aboutt the the prod produc ucti tion on from from the the prod produc ucti tion on department. 2
1
1
12
14
St rongly Agree
A gree
Disagree
S t rongly dis agree
X 5 4 3 2 1 15
F 12 14 2 1 1 30
Not dec ided
FX 60 56 6 2 1 125
(X- X) 0.83 -0.17 -1.17 -2.17 -3.17
(X-X)2 0.69 0.03 1.37 4.71 10.05 16.85
F(X-X)2 8.28 0.42 2.74 4.71 10.05 26.20
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Strongly
5
12
60
Agree Agree Not
4 3
14 2
56 6
Decided Strongly
2
1
2
Disagree Disagree
1
1
1
15
30
125
Total
X = ∑FX / N
σ
2
=
X = 106 / 30
4.17
0.95
0.17
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 4.17 (Survey Mean) σ σ
2
= 26.20 / 29 = 0.90
= 0.95 (Standard Deviation)
there is no signif significa icance nce differ difference ence between between employ employee ee Hypothesis respondents think that there engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is
µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.17
3 - 1.96 × 0.17
3 + 0.34
3 - 0.34
3.34 (That’s upper limits.)
2.66 (That’s lower limits)
We can say that µ > 3 is rejected. Most respon responde dents nts agree agree that that feedba feedback ck system system about about the produc productio tion n from from the production department is available. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.66
µ=3
Upper limit = 3.34
11. What type of error may arise in your job, if you don’t involve in employee engagement. 2
2
2
12
12 Confus t ion
Delay
No Error
W as tage
Spoilage of the product
X 5 4 3 2 1 15
F 12 12 2 2 2 30
FX 60 48 6 4 2 120
(X- X) 1.0 0.0 -1.0 -2.0 -3.0
(X-X)2 1.0 0.0 1.0 4.0 9.0 15.0
F(X-X)2 12.0 0.0 2.0 8.0 18.0 40.0
TABLE
OPTIONS
POINT’S
RESP-
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’
(R)
-TION
(s/n)2
S SCALE
(σs)
(P) Confusion Delay No Error
5
12
60
4
12
48
3
2
6
Spoilage of
2
2
4
the product Wastage
1
2
2
15
30
120
Total
X = ∑FX / N
σ
2
=
X = 106 / 30
4.00
1.17
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 4.00 (Survey Mean) σ σ
2
= 40.0 / 29 = 1.38
= 1.17 (Standard Deviation)
Hypothesis respondents think that there there is no signif significa icance nce differ difference ence between between employ employee ee engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3. Level of significance for which the formula is µ ± z Sx
0.21
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.21
3 - 1.96 × 0.21
3 + 0.42
3 - 0.42
3.42 (That’s upper limits.)
2.58 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that error may arise without the employee engagement. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.58
µ=3
Upper limit = 3.42
12. What quality of production you are getting from J.K. cement. 1
1
10
7
11
Ex c ellent
X 5 4 3 2 1 15
Very good
F 10 11 7 1 1 30
Neither good nor bad
FX 50 44 21 2 1 118
Bad
(X- X) 1.07 0.07 -0.93 -1.93 -2.93
W or ors e
(X-X)2 1.14 0.00 0.86 3.72 8.58 14.30
F(X-X)2 11.4 0.00 6.02 3.72 8.58 29.72
TABLE
OPTION
POINT’S
RESP-
S
GIVEN
P×R
SURVEY
STAN-
STAN-
ODEN-
MEAN
DARD
DARD
ON
TS
(∑P×R/∑R)
DEVIA
ERROR
LIKERT’S
(R)
-TION
(s/n)2
SCALE
(σs)
(P) Excellent
5
10
50
Very
4
11
44
Good Neither
3
7
21 21
bad Bad
2
1
2
Worse
1
1
1
15
30
118
good good nor nor
Total
X = ∑FX / N
σ
2
=
X = 106 / 30
3.93
1.01
0.18
F(X-X )2 ¯¯¯¯¯¯¯¯¯ N-1
X = 3.93 (Survey Mean) σ σ
2
= 29.72 / 29 = 1.02
= 1.01 (Standard Deviation)
Hypothesis respondents think that there there is no signif significa icance nce differ difference ence between between employ employee ee engagements with regards to productivity of organization.
Points have been allocated to the response using Likert’s Likert’s scale as Hence the Null Hypothesis (Ho) µ = 3 Alternative Hypothesis (Ha) µ
≠
3
Which means that µ may be greater or lesser than 3. The z value is 1.96 at 95% confidences level or 5% level of significance in table. So, midpoint will be 1+5/2 =3.
Level of significance for which the formula is µ ± z Sx
First equation will be:-
Second equation will be:-
µ + z Sx
µ - z Sx
3 + 1.96 × 0.18
3 - 1.96 × 0.18
3 + 0.36
3 - 0.36
3.36 (That’s upper limits.)
2.64 (That’s lower limits)
We can say that µ > 3 is rejected. Most respondents agree that quality of product are very good. Percentage of satisfaction of uses by the related respondents. We We can say that µ > 3 is rejected.
Lower limit = 2.64
µ=3
Upper limit = 3.36
FINDINGES AT A GLANCE
Good brands image of J.K. cement in existing market.
Low sales as compaired to market potential, which is around 27 % of the total market.
Birla , Binani and Bangur have maximum market share’s viz.
Less advertisement of the product as compaired to other company.
Lack of self – enthusiasm in working patterns of employees.
Proper Proper communication between employees and HRD and other parties.
Many facility are available available to employees from the side of compny compny on time.
There is a need of a proper information, information, encouragement & motivation related to employee engagement.
There is a complaint from the side of retailers is that dealers deal customer directly directly and sell cement on lower price, due to this customer does not go to retailers and purchase from dealers. thus the retailers are not interested to keep stock of J.K. cement & impact on production department.
SUGGESTIONS
A company would be wise to measure employee satisfactions regularly the key to employee retention is employee satisfaction. Company can increase the role of the employee by considering their suggestions or complaints about service or product, so that necessary action can be taken. Review meetings should be often held so that the working pattern of the employees can be checked and improved if needed. Employees need to be more self-enthusiastic and aggressive towards sales for these appraisals should be gives to those employees who worked hard. Company representatives should reward employees and should make a long term relationship with the employees so that they can push the product & productivity. Since customer are value maxi miser and their expectation to this brand is high, as the brand image shows their complaints should be attended immediately to make then remain brand royal. It should be checked that the non- trade consignment is not sold in the market, so that is does not disturb the retail price of the market. Since transportation forms the major part of the cement cost, market potential of the region should be properly accessed so that emphasis can be more on high retention zone, which can be done by employing more authorized retailers. Top management should be convinced to pass the incentives to the employee so that they are motivated to employee engagement & productivity. Company should increase the promotional and advertisement activities for giving the popularity to the product. Company should set the policy on pricing. There should be certain time period for increment and decrement in the pricing. Company should also give the prior information for this to employee, dealers and retailers. There should be proper loading facility in the plant and out side the plant, delivery of goods should be on time. Top management and employees should maintain proper communication with dealers and retailers. Increase the number of dealers and retailers as this will help in making high sales volume. Cash discount should be competitive and luring. Try to remove dealer’s monopoly.
BIBLOGRAPHY & REFERENCES:
BOOKS: •
• •
•
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Kotler Philip, ‘marketing management’ prentice Hall of India Pvt. Ltd. New Delhi. Kothari C. R. ‘research methodology’, vishwa publication, New Delhi. Beri G.C. ‘marketing research’, Tata McGraw-hill publicating Co. Ltd. New Delhi. Dr. Dr. Sharma Sharma D.D. ‘marke ‘marketi ting ng resea research rch’, ’, Sultan Sultan Chand Chand & Sons Sons educat education ional al publication, New Delhi. Saxena Rajan ‘marketing management’ Tata McGraw-hill publicating Co. Ltd. New Delhi. Verma H. V. ‘marketing of services’ Global business press, New Delhi. Business today magazine of August issue, 2008.
WEB RESOURCES: http://www.jkcement.com http://www.jkwhite.com http://www.rediff.com http://www.india_today.com http://www.cmaindia.or www.cmaindia.orgg http://www.en.wikipedia.org www.en.wikipedia.org http://www.allbusiness.com PUBLICATION: Business Standard The Hindu
ANNEXURE:- (Questionnaire) Dear Sir/ Madam, Please answer the following questions by checkmark again box which you find most suitable for the statement given above it. This questionnaire will help me in evaluating your training and development activities prevailing at J.K. cement limited, Nimbahera, Chittorgarh. Thank you for your contribution. NAME:…………………………………………… AGE:……………………………………………... SEX:………………………………………………. EDUCATION:…………………………………… DESIGNATION:………………………………… DEPARTMENT:………………………………… PHONE NO:……………………………………..
Please tick mark against suitable box: 1). Employee engagement helps you a lot to increase your knowledge, skill, attitude & ability to perform the job.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
2). You had proper proper discus discussio sion n wit with h your your head head of depart departmen mentt on the topics topics of training or the areas of production are decided after proper discussion with you.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
3). The objective of the production were clear to you.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
4). The senior is able to provide you knowledge about all the aspects, which you want.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
Disa ree.
Stron l
5). The methodology of production was excellent.
Stron l a ree.
A ree.
Not decided.
6). There is open discussion between you & the HRD.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
7). You You had achieved your learning goals from the employee engagement.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
8). The HRD department seriously follow-up the suggestion provided by you for the improvement of the production.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
Disa ree.
Stron l
9). Is the employee engagement supportive.
Stron l a ree.
A ree.
Not decided.
10). If their any feedback system about the production from the production department.
Stron l a ree.
A ree.
Not decided.
Disa ree.
Stron l
11). What type of error may arise in your job, if you don’t involve in employee engagement.
Dela De la .
Wasta asta e.
Conf Confus usio ion. n.
S oila oila e of rodu roduct ct..
No erro error r
12). What quality of production you are getting from J.K. cement.
Excellent Excellent.. Ver ood. Neither ood nor bad. Neither Bad. 13). By, which sources you know about the J.K.cement center. center.
B Senior.
B News a er.
B
ood ima e.
Worse
B relatives.
Other
14). Your Your suggestions for the improvement of the production & employee engagement.
……………………………………………………………………… ……………………………………………………………………… ……………………………………………………………………… Date: ___/___/_______ Signature
