Impact of Employee Engagement on Organizational Profitability Report

This report delves into the critical topic of employee engagement and its direct correlation with a company's financial success. It begins by examining the stark contrast between engaged and disengaged employees, highlighting how engagement significantly boosts productivity, morale, and customer satisfaction, while disengagement leads to decreased profits and increased costs. The report then applies Lewin's 3-Stage Model (unfreezing, changing, refreezing) to provide a structured approach to re-engaging disengaged employees at all organizational levels, emphasizing the importance of communication and training. Furthermore, it integrates Drucker's Management by Objectives with Lewin's model to secure employee commitment by aligning individual and organizational goals. Finally, the report discusses leadership's crucial role in sustaining employee commitment through recognition, rewards, and fostering a culture of open communication and continuous improvement.

Running head: Employee and Organizational Behavior 1
Employee and Organizational Behavior
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Employee and Organizational Behavior. 2
1. What is the impact of “engaged” versus “disengaged” employees on a company’s
profits?
The issue of employee engagement has been a topic of discussion among many
companies globally. It has also made human resource management departments to have very
difficult times trying to ensure that employees are well engaged. This issue has been fundamental
since the performance of any company depends on how its employees are engaged or
disengaged. If a company has a huge lot of engaged employees then its turnover will be high
while a company that has the a large percentage of its employees disengaged will have very low
turnover and this will eventually lead to low profit margins for the company (Blanchard,
Welbourne, & Gilmore, 2017). There is no much empirical research about how this exactly
impact on companies. However, a research conducted by Gallup asserts that only about 13% of
the employees normally feel engaged in their work. If this figure from Gallup study is anything
to go by, then employers have a reason to worry about; their companies have been
underperforming. That is what it means.
a. Impact on productivity
The above paragraph begs the question; how important is it to have or to engage
employees and how detrimental is it to have disengaged employees in a company? Highly
engaged employees increase the level of productivity of a given company thus increasing their
revenues (Chaudary, 2015). An engaged employee has a way of using less resources to achieve
high productivity compared to a disengaged employee. This makes him or her be in a position to
earn more than his or her counterpart and this encourages the level of engagement.

Employee and Organizational Behavior. 3
b. Affects morale of employees
To add on, there is a way in which engagement influences the morale of an employee.
Highly engaged employees have got high determination to work to achieve the company’s
objectives within its timelines (Bledow & Schmitt, 2014). On the other hand, disengaged
employees are always dissatisfied and thus have got low morale towards work. The disadvantage
of this is that their lack of morale can have a negative effect on the engaged employees hence
leading to a decreased morale for the whole team. This can really affect the overall productivity
of the company.
c. Costs the company
Disengagement costs a company a lot more. Because of their unhappiness, disengaged
employees tend to undermine and sometimes sabotage various processes at work that actively
engaged employees are engaged in. by doing this, they are taking off the employer’s valued time
and hard earned resources. They consume managerial time by engaging them in solving minor
disputes hence leading to shrinkage of productivity. This cohort of employees can water down
the efforts put in by the actively engaged employees. Therefore acknowledging the existence of
such employees in an organization is very key in trying to mitigate production reduction.
d. Affects customer satisfaction and loyalty
Engagement and disengagement affects customers in different ways. Engaged employees
are enthusiastic and proud of their jobs and hence will strive to ensure customer satisfaction.
They always establish new bonds with customers (Glavas, 2012). It is from this satisfaction that

Employee and Organizational Behavior. 4
cause repeat business and customer loyalty. A disengaged employee will extend his or her
discontent to the customers. These customers are able to sense the unhappiness and thus respond
by avoiding any further engagement with the company.
2. Using Lewin’s 3-Stage Model, how would you re-engage disengaged employees at every
level in the organization?
Kurt Lewin came up with a model that was geared on guiding the change process. The
model has three stages. The first stage is called the unfreezing stage, second stage is the changing
stage while the third stage is the refreezing stage. The unfreezing stage involves establishing a
perception that something is wrong and there is indeed need for real change. The changing stage
involves moving to the needed change and lastly the refreezing stage involves making the new
change a tradition.
a. The unfreezing stage
As defined above, this stage involves making it known and understood to the employees
that there is a problem. This is likened to the fact that before you cook frozen food you must first
of all unfreeze it. So before the employees accept the new changes, they must first accept that
there is a problem. This stage is very important and if this is not done there is a possibility of
people resisting change since people like status quo naturally. The background of this is that the
more the employees acknowledge that change is necessary and inevitably urgent, the eager they
will to accept change. Therefore to engage the disengaged employees here, communication is
very important. Employers are encouraged to talk to their employees more often about problems
at the work station just the same as employees should be encouraged to talk about the problems
they face at work. There are disengaged employees who have a lot of potential but they feel that

Employee and Organizational Behavior. 5
their voices are not being heard. This group of employees may sometimes have important points.
Open forums such as office meetings should therefore be encouraged for the employer and the
employees to discuss problems that are there.
b. Changing stage
At this stage people have been made to understand (unfrozen) and acknowledged that
there is indeed a problem. Since change does not occur spontaneously, the organization is
allowed to transition smoothly adopting the new changes that have been agreed upon by both the
employer and the employees who feel disengaged. It is after the implementation of these changes
that an organization achieves real change. It is natural that many will struggle with the new
changes. However, it is imperative that certain aiding processes are put in place to help in this
transition. Some of these can be conducting trainings within work places and having review
meetings between the employer and the employees to address emerging issues.
c. Refreezing stage
This stage involves cementing the changes that have been made to make them a norm.
This stage is very important in the whole process of change as it ensures that the employees to
not go back to their earlier behaviours. The company can help cement the new behavior in the
organization’s culture by acknowledging and rewarding excellent performance, promotion of
workers, setting goals together, uncovering hidden talent and always making them to be in the
bigger picture.

Employee and Organizational Behavior. 6
3. How would you use Drucker’s Management by Objectives, combined with Lewin’s 3-
Stage Model, to secure the commitment of all employees, at every level an organization?
Drucker’s management by objectives seeks to strike a balance between the employee’s
objective and the organization’s objective. This joint objective accord managers new
commitment and also motivate employees to fully give the company their best hence total
engagement. The objectives of the organization should be set out in such a way that they are not
only challenging but also motivating to bring fulfillment to both the employer and the employee.
The introduction of recognition and performance related pay should also be employed as this
motivates the employees to a greater extent.
4. What can leaders do to preserve this commitment, once it is attained?
The company leaders can help preserve the new behavior in the organization’s culture by
acknowledging and rewarding excellent performance, promotion of workers, setting goals
together, uncovering hidden talent and always making them to be in the bigger picture. Secondly,
leaders can help cement the new behavior in the organization’s culture by acknowledging and
rewarding excellent performance, promotion of workers, setting goals together, uncovering
hidden talent and always making them to be in the bigger picture. Leaders can also conduct open
forums such as office meetings should therefore be encouraged for the employer and the
employees to discuss problems that are there.

Employee and Organizational Behavior. 7
References
Biswas , S., & Bhatnagar, J. (2013). Mediator analysis of employee engagement (Vol. 1).
Vikalpa.
Blanchard, A., Welbourne, J., & Gilmore, D. (2017). Followership styles and employee
attachment to the organization. The Psychologist-Manager Journal, 2(12), 111-131.
Bledow , R., & Schmitt, A. (2014). The affective shift model of work engagement. The Journal
of Applied Psychology, 96, 1246–1257.
Chaudary, P. (2015). Effects of employees’ motivation on organizational performance-A case
study. International Journal of Research in Economics & Social Sciences, 2(9).
Glavas, A. (2012). Employee engagement and sustainability: A model for implementing
meaningfulness at and in work. ,. Journal of Corporate Citizenship, 46(1246).