Employees who perform above average are a scarce and valuable resource, and organisations do everything they can to retain these workers for the long term. They use specific HR tools – including both economic ones such as pay and benefits and social ones like recognition, work support and trust – to improve employee engagement and commitment. Today’s employees, it turns out, would not expect anything less in ‘exchange’.
This model is basically just an enhanced version of the traditional employee loyalty model, based on a social-exchange relationship, industrial-organisational psychologist Ali Fenwick explains in his doctoral thesis, Creating a committed workforce, which he successfully defended last year. The model involves an ‘exchange’ of sorts, with the employer promising the security of gainful employment in exchange for the employee’s commitment and engagement.
However, this model – developed some 30 years ago – is under strain and badly in need of an update. Not only has the organisational environment itself become significantly more dynamic, the labour market has become more flexible at the same time, due to factors such as digitalisation. Fenwick also argues that a side effect of the New Way of Working (also known as ‘working anywhere, anytime’) is that the sense of loyalty that has traditionally existed between employees and employers is essentially being undermined from within. In sum: ‘taking good care of your people’ as a psychological device to retain and motivate employees is increasingly falling by the wayside. Fenwick therefore does not believe the current form of organisational engagement – based exclusively on social exchange – is viable enough to bond employees to their employers in the long term. This begs the question: what alternative should take its place?
Pride and unity
Fenwick reckons that today’s organisations would do well to strengthen the social-exchange model with an alternative loyalty strategy to increase employee engagement, a phenomenon he refers to as ‘social identity’. This system ensures that employees identify with organisational attributes such as its values, standards, ideals and management styles, creating a sense of pride and unity.
Employees in organisations that have embraced social identity tend to integrate these attributes into their personal identity and begin exhibiting behaviours they have witnessed among their colleagues or managers. Fenwick: “The more strongly employees identify with the organisation’s vision and objectives, the greater the organisation’s impact on how employees identify themselves and choose to dedicate themselves to the organisation.”
Fenwick’s doctoral research reveals that employees who strongly identify with their organisation are better equipped to handle situations of uncertainty and more intrinsically motivated to pursue organisational goals, as well as being more attuned to what’s going on in the organisation. Core values, shared goals, ambition and meaningful work are all essential when it comes to fostering commitment and engagement within organisations. Fenwick: “Social identity creates a sense of belonging. It helps people move towards a shared goal, even if they don’t share the same physical workspace. Empirical research consistently shows that employees with a high level of organisational engagement perform better, are more inclined to assist and support their colleagues, comply with rules and procedures, take less sick leave and remain employed by the organisation longer than workers who don’t share that same commitment.”
Improving competitive advantage
Fenwick’s research outcomes reveal that organisations which make employees’ social identity a priority throughout the talent management cycle have a better vantage point when it comes to using employees strategically and over a longer period of time. In addition to contributing to the organisation’s value creation and effectiveness, this also improves its competitive advantage, the academic explains.
Ali Fenwick’s complete doctoral thesis is available here: ‘Research creating a committed workforce with social identity’
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