vu CHAPTER 1 INTRODUCTION Employee engagement is a fairly new phenomenon that continues to gather the attention of and implementation into organizations

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CHAPTER 1
INTRODUCTION
Employee engagement is a fairly new phenomenon that continues to gather the
attention of and implementation into organizations. Consulting firms and survey
administrators have identified it with reducing turnover, increasing shareholder value and
as the catalyst for outperforming the competition (Woodruffe, 2006; Harley, Lee, &
Robinson, 2005; Watson Wyatt Worldwide, 2004). Research has also purported that a
key driver of engagement is internal communication (Baumruk, Gorman, & Gorman,
2006; Hoover, 2005; Woodruffe 2006; Yates 2006) and organizations that effectively
communicate with employees experience higher levels of engagement (Baumruk et al.,
2006; Debussy, Ewing, & Pitt, 2003; Yates, 2006). While consulting firms have
identified communication as a means for improving engagement, no scientific research
has concentrated solely on the relationship between the two.

Significance and Purpose of the Study
The purpose of this study is to first, determine whether a relationship between internal
communication and employee engagement exists. The second purpose of the study is to
determine in what way internal communication affects employees and their level of
engagement. My experience has been that organizations that communicate effectively
with their employees create an atmosphere where employees appear to believe in the
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organization’s goals and therefore exhibit more effort during their workday. If scientific
research could support this notion, internal communication would be viewed as integral
to engagement.

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Past research has provided some information on internal communication and its
relationship with job satisfaction. However, there is limited empirical research that can
support the link between internal communication and employee engagement. The data
available are largely comprised of surveys and research conducted by private consulting
firms that contain minimal information on communication and engagement.

The current study will provide empirical data on the relationship between internal
communication and employee engagement and provide research on how internal
communication affects employee engagement levels. The next section provides an
overview of internal communication and employee engagement. First discussed are the
shifts internal communication has experienced through several decades of research and
structure changes within organizations. Secondly, a definition of employee engagement
is provided along with information on its recent introduction into organizations.

Shifts in Internal Communication
This study examines both organizational communication and the method through
which messages are disseminated, referred to as communications. Internal
communication is operationally defined as the exchange of information both informal and
formal between management and employees within the organization. Communications
are operationally defined as the technology and systems used for sending and receiving
messages. Communications may include: newsletters, circulation materials, surveys,
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meetings, in-house television, face-to-face interactions, email, hotlines, suggestion boxes,
Intranet, Internet, telephone calls, videoconferences, memos, letters, notice boards,
formal presentations, reports, open forums, blogs, and wikis (Argenti, 1998; Asif ;
Sargeant, 2000; Baumruk et al., 2006; Debussy et al., 2003; Goodman ; Truss, 2004;
Hunt ; Ebeling, 1983; Yates, 2006). This study recognizes that all the above-mentioned
elements in the communication process are a combination of both the message and
medium. The purpose of this study is to examine whether employee engagement is
influenced by both of these elements.

While research on internal communication spans only a few decades, it has
experienced a number of organizational shifts in that short time. In 1982, D’Aprix wrote
of a critical time for communicating with employees and called for the reevaluation of
internal communication. In regard to communication within organizations, he believed
there existed a “lack of definition, inadequate budgets, limited professional staffing, and
nearsighted vision” (p. 30). This “nearsighted vision” coupled with changes occurring in
the workforce, demanded improvements in internal communication. D’Aprix expanded,
“companies are dealing with a different kind of employee than heretofore an employee
who is looking for job satisfaction, who believes in personal options, and who wants
meaningful work” (p.30). Prior to the introduction of employee engagement
organizations focused on measuring employee satisfaction to gauge how their employees
felt about where they worked. D’Aprix speaks of a change in employees where they now
demand more from their organization than a paycheck. Employees now looked beyond
their pay for additional qualities in a workplace. They desired a company they could
believe in, and a genuine feeling that what they did everyday made a difference. With
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these changes the old measurements used to gauge employee’s opinions about their
organization had to be reevaluated.

Research that measures internal communication’s link to job satisfaction finds there
to be a causal relationship between the two (Asif & Sargeant, 2000; Goris, Pettit, &
Vaught, 2002; Hunt & Ebeling, 1983; King, Lahiff, & Hatfield, 1988). However, while
the wealth of research supports the link between internal communication, job satisfaction,
and productivity, “there was nothing strategic or business-focused about these
communications” and “strategically managed employee communications is a relatively
new phenomenon” (Holtz, 2004, p. 8). The shift toward internal communication being
strategically aligned with organizational goals is in response to the changing business
environment. It brings new ways of reaching employees to ensure organizational
success. Holtz explained:
Given all the changes to the world of work, the function of communication to
employees have evolved from the kind of reporting that populated most “house
organs” – the name given to fluff-filled company publications-to a strategic business
activity, the kind that (in the words of a 2002 study by the Society of Human
Resources Managers (SCM)), “influence internal perceptions of organizational
reputation and credibility” (p. 12).

What Holtz explains is the major shift in the way businesses structured their internal
communication. Employees would no longer be satisfied with “fluff-filled” company
propaganda and demanded honest and direct communication. Members of the SCM
Editorial Board were brought together in 2006 to discuss majpr trends in organizational
communication. They believed that because of growing public distrust in big business
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there existed for employees “an erosion of trust” toward management (SCM, p. 17). This
distrust posed challenges for internal communication in creating campaigns that solidified
the organization’s values, beliefs, and the credibility of its management (p. 17).

Strategic communication goes beyond announcing birthdays, births, and bar mitzvahs
in the monthly newsletter to an integration of all communication messages along with the
internal marketing of that information. The variables for internal communication and job
satisfaction do not encompass the depth that organizations now demand. Organizations
can no longer get by with a survey that says their employees are happy; they must
develop methods for engaging the workforce. However, organizations with a formalized
way of communicating with employees on a regular basis are not necessarily successful
in business. Merely communicating with employees does not secure an organization’s
success, rather those who have a formalized method for effective communication find
they stand out from the rest. The Watson Wyatt Worldwide (2004) survey found that,
“organizations that communicate effectively overall are significantly more likely to be
effective in a number of aspects of communications” (p. 5). The hierarchy of effective
communication is comprised of three tiers: foundational, strategic, and behavioral. The
foundation tier establishes “a strong foundation by addressing process and resource
issues” (p. 6). This tier includes a formal communication process, employee input,
linking desired behavior to employee compensation, and the effective use of technology
(p. 6). The strategic tier is utilized once the foundation is in place and moves towards a
“more strategic and targeted approach more directly linked to business results” (p. 8).

This tier focuses on facilitating change, continuous improvement, and connecting
employees to business objectives (p. 8). The final tier is behavioral, “where the most
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significant increase in shareholder value can be realized” (p. 10). At the behavioral level
businesses focus on communication that drives or changes the behavior of management
and creates a “line of sight” where employees clearly understand their role in the
organization’s success (p. 11). Watson Wyatt summarizes, “creating a communication
program that encompasses each of the three tiers of the communication and all its
underlying elements will open the pathways of communication within the workforce and
enhance the value of the organizations significantly” (p. 6).

There has been a shift in the way businesses must communicate with the workforce of
today in order to see results, however not a lot is known about how they can strategically
communicate to shift employee engagement. In addition there is limited research and
corporate understanding of employee engagement.

Employee Engagement
Moving beyond job satisfaction, consulting firms and researchers encourage
organizations to find ways of measuring employee engagement. Engaged employees are
operationally defined as motivated, self-improving, and productive (Harley et al., 2005,
p. 24) while understanding and aligning themselves with their company’s culture and
business strategy (Coleman, 2005, p. 66). According to Sias (2005), the engaged
employee is, “an employee being fully intellectually and emotionally committed to a
particular job, so that he or she wants to give to that job what is known as discretionary
effort” (p. 29). This discretionary effort is not necessary for the employees to give, but
they have an innate desire to give anyway. Employees who provide this extra effort often
demonstrate these traits: positive attitude towards the job; believes in and identifies with
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the organization; works actively to make things better; treats others with respect and
helps colleagues perform more effectively; can be relied upon and goes beyond the
requirements of the job; acts with the bigger picture in mind; keeps up to date with the
field; and looks for and is given opportunities to improve organizational performance
(Harley et al., p. 24). Most importantly, these key traits are also delivered on a consistent
basis. In addition, Baumruk et al. (2006) found these three general behaviors in engaged
employees: advocates organization with co-workers and customers; desire to be part of
the organization despite other opportunities; exerts extra time, effort, initiative to
contribute to the success of the organization (p. 24).

The recent shift has changed the focus from job satisfaction to multifaceted
commitment and positive attitude toward the organization (Coleman, 2005, p. 66).

Coleman explains the evolution over the past decade and a half:
Fifteen years ago, it was enough to simply ask staff if they were happy in their job. A
decade ago, the emphasis shifted away from satisfaction towards commitment and the
measuring of positive attitudes towards the organization. The focus is changing
again, this time towards levels of employee engagement and measurement of that
(p.66).

Employee engagement goes beyond employee satisfaction and therefore traditional
measures of satisfaction need to be updated to include employee engagement scales
(Harley, 2005, p. 25). With the introduction of employee engagement some of the new
variables for measuring effective internal communication include: trust, credibility,
organizational goals, identification, internal and external alignment, accuracy, openness,
transparency, timeliness, receiver relevance, using numerous channels, and message
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management to name a few (Asif & Sargeant, 2000; Goris et al., 2002; Holtz, 2004;
Hoover, 2005; Ruppel & Harrington, 2000).

The limited research that has been conducted on employee engagement identifies
numerous variables for measurement, however its relationship to internal communication
has not been fully developed. Just recetly we have seen the employee dynamic change.

As D’Aprix explained, employees are looking for more than a paycheck from their
organization, they want and need more from that relationship. Organizations have come
to realize that there is a gap between what employees want and what they are receiving
from their workplace. They have found that measuring job satisfaction no longer
captures what employees really want from them. Employees are looking for a company
they can believe in; share values and goals with; meaningful work; an emotional and
intellectual connection – all of this plus job satisfaction. Researchers have identified all
of these new factors and more as employee engagement. However, existing research in
this area is very slim and could benefit from additional support. Academic research
could provide organizations solutions for better understanding and interacting with their
employees. In addition research may provide specific areas for organizations to focus on
to best enhance the engagement of their employees.

For the current study, we will take one possible solution, communication, and
examine how it may or may not influence engagement.

8
Link between Internal Communication and
Employee Engagement
There are many variables that may contribute to promoting employee engagement.

These include coaching, career development, recognition, rewards, accountability,
satisfaction, meaningful work, perceived safety, adequate resources, individual attention,
alignment with organization’s values, opinion surveys, effective communication,
management’s interest in well being, challenging work, input in decision making, clear
vision of organization’s goals, and autonomy (Baumruk et al., 2006; Kahn, 1990;
Woodruffe, 2006). Internal communication serves as an avenue in which these variables
many be disseminated, supported, and communicated. The proposed link between
internal communication and employee engagement, whether implicit or explicit, should
lead to an area of research that either supports or refutes this notion.

External prestige, also referred to as “construed external image”, is the term used to
describe how employees think external audiences either positively or negatively view
their organization (Dutton, Dukerich, & Harquail, 1994, p. 239). According to Smidts,
Pruyn, and Riel (2001) and DeRidder (2004) internal communication is a factor
contributing to external prestige and when that external image is positive, employees
experience a greater sense of identification with the organization. Organizational
identification is a variable of employee engagement. Regardless of whether an internal
communication campaign is effective or not, it is still no match for the overload of
external messages the mass media provide. It is via these external messages that
employees receive the majority of information about whom they work for (Hoover, 2005,
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p. 25). Faced with this reality of information flow, how do organizations engage the
workforce despite these external challenges?
While effective communication should be the goal of any organization, merely
communicating is the first step. An organization that is silent can experience the worst
outcomes as it forces employees to speculate, listen to the grapevine and turn to the
media for information about their company (Hoover, 2005, p. 25). In times of change
and challenge, communication can be the key to sustaining the business. As Hoover
elaborates, “even in a time of crisis, good communication keeps employees engaged and
the organization moving forward” (p. 25). On the contrary, the lack of communication
can create a “disparity between what employees hear from their manager and what they
see in the media, it leads to distracted, de-motivated employees who feel a lack of trust
caused by lack of transparency -whether that is real or perceived” (p. 25). Organizations
can be most effective by developing a communication plan that focuses on internal
messaging and media, but is also equipped and able to evolve around external messaging.

In an interview with Hewitt Associates a global human resources outsourcing and
consulting firm, Baumruk et al. (2006) outlined five steps to increasing engagement. The
fifth step is communication that includes “frequent and scheduled interaction and sharing
of information, feedback and ideas. Listen, understand and respond appropriately” (p.

25). Here we see at a very basic level the importance of internal communication in
engaging employees.

Research by Welsch and La Van (1981) found that communication was a factor in
overall organizational climate. Organizational climate is the link between individuals and
the organization and as Guzley (1992) further explains; it represents employee’s
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standardized beliefs and attitudes about the organization they work for (p.382).

Communication was just one of five variables Welsch and La Van (1981) introduced, but
they found it to have the strongest correlation to commitment with 38% of the variance
(p. 1086). While they were able to find that communication affected the overall feelings
employees had toward their company, Dennis (1974) conceptualized communication
climate as a separate construct from organizational climate. He defined communication
climate as:
A subjectively experienced quality of the internal environment of an organization: the
concept embraces a general cluster of inferred predispositions identifiable through
reports of members’ perceptions of messages and message-related events occurring in
the organization, (p.29).

Dennis’ communication climate survey includes five factors: (as listed in O’Connell,
1979) superior-subordinate communication, quality of information, superior
openness/candor, opportunities for upward communication, and reliability of information.

Determining the communication climate at an organization will provide insight into
employee’s perceptions about the communication they receive, the quality and reliability
of the messages, and the transparency of their workplace. In the present study, Dennis’
communication climate survey will be utilized in a questionnaire to gauge an employee’s
perceptions about their organization’s internal communication practices.

A limited amount of research has been able to link internal communication to
variables of employee engagement. Organizations that communicate effectively
experience less turnover and resistance, higher shareholder returns, increased
commitment and higher levels of employee engagement (Goodman & Truss, 2006;
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Guzley, 1992; Sias, 2005; Yates, 2006). According to Yates, “effective communication
practices drive employee engagement, commitment, retention, and productivity, which, in
turn translate into enhanced business performance that generates superior financial
returns” (p. 72). The Watson Wyatt Worldwide study of 2002 found that organizations
that were, “highly effective communicators were 4.5 times more likely to have highly
engaged employees, which positioned them for better financial results” (Yates, p. 73).

The subjects discussed above are examined further in the next chapter with a look
into the research available within each area. A literature review of internal
communication, employee engagement, and a summary of both are presented in chapter
2. Chapter 3 offers the hypotheses and methodology utilized in this study. Chapter 4 will
discuss the results of the study. Finally, chapter 6 closes the study with further discussion
of the results and any implications the results leave for future research.

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