causes of employee disengagement

abstract

The subject of this thesis is to explore the phenomenon of employee
disengagement. The main aim of this research is to understand the nature of
this phenomenon, its roots and consequences, as well as provide a description
of why an organization would be interested in improving employee engagement
and what human resource practices can be used for this purpose.
To get a clear picture of the phenomenon, this study examines an academic
literature and earlier practitioners‟ works on the subject. Theoretical data on
employee engagement is used as the basis for understanding the phenomenon
of employee disengagement. A single-case study is chosen as the research
method. Empirical research objective is a group of ten people who work in small
and medium-sized companies in Finland. Collected empiric data is analyzed by
use of content analysis.
The study results show that the disengagement of employees is a complex
phenomenon, and therefore its management requires certain academic and
managerial knowledge. Personal disengagement is associated with negative
changes in employee‟s behaviour, which lead to harmful consequences for both
the worker and organization. The study defines the main causes of the
phenomenon and its potential consequences, and also suggests solutions for
how to manage with its negative impact.
The research findings also show that there is also one more interesting
phenomenon. This is the phenomenon of non-engagement as a personal
choice. The behaviour of people who choose the state of non-engagement as
preferred for them differs significantly from the behaviour of other employees
without engagement.

CHAPTER ONE
INTRODUCTION
1.1 Background
Employees are very important inputs in the production process and service delivery in
any given industry. Their skills, roles and satisfaction at the place of work influence the
competitive edge of the firm within the industry. For employees to play their part
effectively, it is important that they are satisfied, motivated and managed in a way that
enhances their level of engagement with the employer. Firms need to create conducive
working environment and institute policies which support employee commitment.
Gunnigle and Moore (1994) note that human resource policies are not only derived from
business strategy but also that business strategy is likely to be problematic if not properly
attached to human resource policy. Human resource strategies and policies that are
concerned with the use of labor in firms (Boxall and Purcell, 2000) consequently need to
be effective.
Good spirit at work, at the personal level, reflects a distinct state that involves profound
feelings of wellbeing, a belief that one’s work makes a contribution, a sense of connection
to others and common purpose, an awareness of a connection to something larger than
self, and a sense of perfection (Kinjerski and Skrypnek, 2004). Perceived as beneficial to
employees, customers, and employers, spirit at work is being promoted by academics and
organizational consultants. Organizations are introducing programs to increase spirit at
work, however, research identifying organizational characteristics that directly cultivate
an individual’s experience of spirit at work is lacking. At the organizational level,
spirituality in the workplace refers to an organizational culture guided by mission
statements, leadership and business practices that are socially responsible and valuedriven, that recognizes the contributions that employees make to the organization, and
that promotes personal spiritual development and wellbeing (Ashmos and Duchon, 2000;
Guillory, 2000; Mitroff and Denton, 1999)

Frequent turnover of employees brings to the enterprise evident costs, both
direct and indirect. According to different research studies, the cost of hiring and
training a new employee can vary from 25 percent to 200 percent of annual
compensation (Fitz-enz 1997, Surmacz 2004). Labor turnover is still the point at
issue; some companies accept it as a cost of doing business. It is understandable, especially in the current economic situation where a lot of
people are unemployed.
This paper will be useful for those employers, who look ahead and make longterm plans for the future and who understand that people are the most valuable
capital. Indeed, it is necessary to remember about the effect of labor shortage,
which, for example, in Finland is expected to be significant for the next several
decades. According to the population projection from 2009–2060, the proportion
of people of working age in the population will decrease from the present 66 per
cent to 58 per cent by 2040 and to 56 per cent by 2060 (Statistics Finland
2009). This problem also adds value for this research, which has the aim to find
out the roots of employee disengagement and measures to retain talented
people.
Usually problems of employee engagement, employee satisfaction and intention
to leave are studied based on the data of big American companies. The
empirical part of the current research is done with the focal point on the SME
sector in Finland. Companies from this sector often do not have extensive HRM
resources, such as a HRM department or HR manager. Besides, SMEs are
often limited in budget and can‟t allow spending money for research. At the
same time, talent loss is an actual problem for these companies that often have
a small staff. Employees in SMEs often do large amounts of diversified
operations and are able to substitute for each other when it is necessary. That
is why the loss of each talented person from the team can become a “painful
hit” for an organization

For the last several years, observers have been interested greatly in employee
engagement. Some have asserted that employee engagement prognosticates
employee results, organizational accomplishment, and financial performance
(Harter, Schmidt and Hayes 2002; Bates 2004). Although the concept of
employee engagement is a relatively new one, HR consulting agencies heavily
market advice about how this phenomenon can be created and leveraged
(Macey and Schneider 2008, p. 3). Many employee engagement studies are
done by consulting firms and practitioners. At the same time, there is a
surprising dearth of research on employee engagement in the academic
literature (Robinson, Perryman and Hayday 2004, according to Saks 2006, p.
600).
There is no single and generally accepted definition for the term “employee
engagement”. Employee engagement has been defined using many different
ways. This fact is making the situation more difficult with definitions and
measures often looking like some other already known and established
concepts, for example, organizational commitment and organizational
citizenship behaviour (OCB) (Robinson et al. 2004). Most commonly, employee
engagement was identified as emotional and intellectual commitment to the

organization (Baumruk 2004; Wellins and Concelman 2005). Other definitions
were associated with the amount of discretionary effort demonstrated by
employees in their jobs (Towers Perrin 2003).

1.2 Statement of the Problem
t is important therefore, to redefine competitive advantage for firms in the
telecommunication industry. Non price competition such as skilled and committed
employees provides more sustainable and firm specific competitive advantages.
Employees who are engaged in their work and committed to their organizations give
companies crucial competitive advantages including higher productivity and lower
employee turnover. Organizations with an inculcated employee engagement philosophy
within their work environment naturally become counted as best companies to work for
since they put people at the heart of the corporate purpose (Gratton, 2000). Thus, it is not
surprising that organizations invest substantially in policies and practices that foster
engagement and commitment in their workforces. It is important for managers to cultivate
engagement given that disengagement or alienation is central to the problem of workers’
lack of commitment and motivation. Meaningless work is often associated with apathy
and detachment from ones work. In such conditions, individuals are thought to be
estranged from themselves. Weatherly (2003) argues that human capital can be developed
and cultivated, but it can also decide to leave the organization, become sick, disheartened,
and even influence others to behave in a way that may not be to the advantage of an
employer, thus usurping or siphoning off resources intended for use elsewhere in the
organization. To reduce loss of resources, it is imperative that employees be engaged by
their employers.

Success in the telecommunication industry depends on human capital because identical
products and services are offered by competing companies. Given this scenario and the
fact that Zain rolled out a strategy to increase its competitiveness in the industry, it is
important to find out the level of engagement of its human resources. A study by Devi
(2009) found that pay and benefits are not by themselves effective drivers of employee
engagement. He therefore concluded that corporate culture contributes to employee
engagement. Piersol (2006) reported that communication is instrumental to promoting
employee engagement. These studies were however, carried out in the developed world
implying that they may not mirror realities in the developing countries.

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