UPS AND DOWNS: CREATING A CULTURE OF ENGAGEMENT AT A SMALL AIRLINE by Rod Hayward PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION THE UNIVERSITY OF NORTHERN BRITISH COLUMBIA May 2010 © Rod Hayward, 2010 llNIVERSITY of NORTHERN BRITISH COLUMBIA LffiRARY Prince GeorRe. B.C. ABSTRACT An airline, whether large or small, relies on a vast array of talents and skills to operate successfully. With such a variety of goals and objectives, sometimes it is difficult for employees to see how their contribution affects the success of the company. As a result, employees may just "go about the motions" of their job without being actively engaged in the process. Fostering engagement in an airline presents some unique challenges, such as those derived from the conflicts between diverse work groups and the intensely competitive nature of the aviation industry. This paper explores several areas regarding employee engagement. First, it examines a variety of engagement definitions and the benefits of engagement. Next, it explores the concept of Relational Coordination. Finally, the paper examines the six drivers of workplace engagement and the six high performance work practices that support relational coordination. A plan for creating a workplace environment, which supports employee engagement, is presented at the end of this document, as a result of combining the information learned about employee engagement and relational coordination with the author's knowledge of a small airline. -11- TABLE OF CONTENTS Abstract ii Table of Contents iii List of Appendices v List of Figures vi Acknowledgments vii Introduction 1 4 Employee Engagement Benefits of Engagement 5 Definitions of Engagement 8 Engagement Definitions - Management Consultants 8 Engagement Definitions - Theorists 9 13 Measuring Engagement The Utrecht Work Engagement Scale (UWES) 14 Gallup 12 Element Scale 16 18 Creating an Engaging Environment Management's Role in Engagement -I ll- 20 Engagement Supporting Initiatives 22 Relational Coordination 27 Developing a Plan for Engaging Hawkair 37 Brief History of Hawkair 38 Current Situation 40 The Six Drivers of Engagement 44 High Performance Work Practices 50 Implementing the Plan for Creating an Engaged Workforce 56 Implementation Plan 59 How Do We Measure the Effects of our Strategy? 62 Conclusion 63 References 65 Appendices 69 - I V- LIST OF APPENDICES Appendix 1 - 2009 Survey Questions 69 Appendix 2 - UWES Survey Questions 73 Appendix 3-2009 Hawkair Mission Statement 74 • -v- LIST OF FIGURES Figure 1 - The Six Drivers of Engagement 25 Figure 2- Hawkair, A Coordination Challenge 31 Figure 3 - High Quality Vs Low Quality Relationships 32 Figure 4 - Relational Model of High Performance Work Practices 34 Figure 5 - The Six Drivers I High Performance Work Practices 38 Figure 6 - 2009 Qualitative Survey Results 43 Figure 7 - Six Drivers Action Plan 49 Figure 8 - High Performance Work Practices Action Plan 55 Figure 9- Draft Implementation Schedule 61 - Vl- ACKNOWLEDGMENTS I would like to thank my wife, Bonnie Hayward BSc for her assistance and encouragement on this project, and on the entire MBA program. I would also like to thank my children Aleksandr, Larissa, and Nicholas for their understanding while their father worked long hours on this project. This project would not have been possible without the assistance of the great staff and management of Hawkair who have taken an active interest in my progress as I worked towards the completion of this project. In conclusion, I would like to recognize Professor Fredrick Tallman for his guidance and advice on this project, whose sage counsel has opened my eyes to the importance and value of the study of organizational behavior within a small airline or within any organization. -VII- INTRODUCTION The topic of employee engagement has become a promising focal point for both management theorists and practitioners. Yet, what does "employee engagement" actually mean? As a manager, there is less interest in theory and more interest in looking at the practical advice we can garner on how to motivate employees to meet our organizational objectives. Those in leadership roles have sought to motivate people since people formed into cohesive groups. However, organizations still have difficulty trying to encourage individuals to move in the right direction at the right time. Leaders have used a variety of techniques to motivate their people: ranging from threats and fear, to cajoling and bribery. Modern management theory continues to postulate and promulgate new theories and ideas about how to motivate but, ultimately, the answer comes down to one simple point. Leadership is not about telling someone to do a task; leadership is about inspiring someone to choose to do what you want him or her to do. At the organizational level, the challenge for the leader is to find a means of persuading employees to choose to work cohesively together to achieve the desired organizational goals and objectives. It may be possible to tell an employee to do a task in the short term. However, in the long term, this approach to management may not achieve the organization's desired results. Consequently, leaders and managers have sought new management practices that will achieve the desired organizational goals and objectives. The following quote from Sir Alan Jones, Chairman Emeritus of Toyota UK, touches on the role of the -1 - manager within an organization : "Wherever you work, your job as a manager is to make your people be the best they can be- and usually they don 't know just how good they could be. It's individuals that make the difference. " When referring to employee engagement, we, first, need to answer the question : Does engagement only mean that an employee shows up for work each day and does their job or, is there something more? From an employer's perspective, an engaged and effective employee is one who goes beyond just doing the job and actually becomes actively involved in the job. Recent research by Gallup Research suggests that companies with an engaged workforce improve their earnings at a rate 2.6 times faster than companies who don't have an engaged workforce. This research indicates that these results can be sustained even through poor economic conditions. The financial benefits of having an engaged workforce are apparent. Yet, Gallup has also determined that, in average organizations, the ratio is 1.5:1 of an engaged to actively disengaged employee. The cost to organizations of this active disengagement has been estimated to be $300 billion in lost productivity in the United States, alone (Gallup, 201 0). As a small regional airline operating in a very competitive environment, Hawkair must achieve the objectives of profitability while ensuring high levels of safety and customer service. There are two specific questions regarding employee engagement at Hawkair that need to be examined. The first: is employee engagement a realistic option for improving profitability and -2- sustainability? The second question: if employee engagement is seen as giving Hawkair a potential competitive advantage, how would it be achieved? The objective of any airline, stripped down to basics, is to transport passengers from point A to point B, in a safe and efficient manner. This operation is divided into a number of tasks. Each of these tasks is performed, everyday, by a diverse work group of employees who must work together in a coordinated and cooperative manner. The jobs range from the obvious ones like pilot, flight attendant, and customer service representative to those behind the scenes jobs such as mechanic, dispatcher, marketing, and administration staff. When performing the day-to-day functions associated with operating a small airline, it is common for conflict to arise between work groups due to individuals focusing on their own task without considering their impact on coworkers. Complicating these internal conflicts are the realities of schedule integrity, and ongoing commercial pressures. Airlines face very narrow margins of profitability and since this is the case, they have developed a well earned reputation for financial instability. This volatility as evidenced by bankruptcies and failures of airlines over the last decade, like Air Canada, Canada 3000, Jetsgo and Zoom, which continues today. Financial instability affects most airlines, both large and small, to some extent. Although an airline environment may provide more pronounced challenges for motivating staff to work together in a coordinated fashion, leaders and managers in most businesses and organizations face similar trials. -3- The purpose of this paper is to thoroughly examine the concept of employee engagement by focusing on the question of whether engagement is an appropriate strategy to use in achievement of Hawkair's long term organizational objectives. This examination will concentrate on the unique challenges of both Hawkair and the aviation industry. Using the observations and company specific knowledge of the writer, this report will identify the obstacles and impediments to employee engagement. Acting on these observations, a plan for fostering the development of an enduring culture of engagement at Hawkair will be presented. Employee Engagement Academics, management consultants and practitioners have developed a myriad of somewhat conflicting definitions for engagement. These differing definitions will be explored further in this section. Macey & Schneider (2008) suggest that employee engagement involves such traits as employee involvement, commitment, passion, enthusiasm, focused effort, and energy. Employees with these characteristics can have a positive benefit for the organization . Engaged employees have a high degree of energy and are effectively connected to their workplace, while maintaining an ability to deal with the demands of their job (Schaufeli & Bakker, 2003). -4- BENEFITS OF ENGAGEMENT It is apparent to most observers that the world is changing at a rapid rate. Technology has led to changes in how we work and how we compete in an increasingly globalized economy. Technological innovation combined with process improvement systems such as Six Sigma , and Kaizen , have been the focus of management since the 1980's. These strategies focus on improvements to the system itself, but what of the most important asset in any organization: what about human capital? In this ever more competitive world , it has become increasingly necessary to draw efficiently upon all our resources. The need for employees to be engaged in their workplace is a key component to companies being successful. A diverse cross section of experts in aviation, management and, even, in academics all recognize the benefits of employee engagement. In a cutthroat business such as the airline industry, successful organizations have already identified employee engagement as a critical success factor. Southwest Airlines is an airline often put forward as a model of success within an industry filled with failures. They owe much of their success to a policy that supports employee engagement by fostering a relationship-based culture (Gittell, The Southwest Airlines Way, 2003). WestJet is a Canadian example of airline success that owes much of its success to an engaged culture of shared ownership. The recent "WestJet owners" marketing campaign speaks to the fact that WestJet employees are not only workers but also engaged owners. -5- Corporate management consulting firms, such as Gallup, have suggested that high levels of engagement can have an impact of the financial health of organizations. In their corporate pamphlet titled, "Employee EngagementWhat's your engagement ratio?" Gallup presents statistics that promote engagement as an initiative that organizations should employ to improve financial and strategic outcomes. Some of the benefits of an engaged workforce suggested by Gallup include, 27% reduction in employee absenteeism, a 31% to 51% reduction in staff turnover, a 51% reduction in theft by staff, and a 62% reduction in accidents. Gallup has further suggested that these measurable improvements lead to increased overall organizational performance, which includes, productivity improvements of 18% and an average 12% increase in business profitability (Gallup Consulting, 2008). Researchers in the Faculty of Business and Law from Kingston University, London, conducted a two-year long project into employee engagement. They looked at a diverse range of sectors, including the National Health Service, local governments, environment services and consultants. As part of their research report titled, Creating an Engaged Workforce, the authors present a number of outcomes from engagement. The report, based on 5,291 questionnaires and 180 interviews, identifies a number of positive attributes of engagement, these include: • Engaged employees performed better than non-engaged employees -6- • Engaged employees are less likely to want to leave the organization • Engaged employees are more innovative • Higher levels of well being among engaged employees • A perception that the workload is sustainable (Aifes, Truss, Soane, Rees , & Gatenby, 2010). It is interesting to note that academic researchers, such as Alfes eta/, present many of the same positive attributes of employee engagement as management consultants. Dr. Wilmar Schaufeli and Dr. Arnold Bakker, professors of Work and Organizational Psychology, are the two founding members of the Center for Occupational Behaviour in the Netherlands. Together, in 2003, they developed the Utrecht Work Engagement Scale (UWES) to measure the meaning of "work engagement" in an empirical manner. For example, Schaufeli and Bakker list a number of possible consequences of work engagement. These consequences revolve around positive attitudes towards the organization and their work, including increased levels of job satisfaction, commitment to the organization and a low intent to leave the organization (2003). Benefits attributed to employee engagement have ranged from reduced sick time to increased employee innovation. In our increasingly bottom-line focused corporate landscape, management requires proactive employees who can work collaboratively with others to achieve shared goals. Engagement can lead to the development of a workforce that is committed, energized, and absorbed in their jobs (Bakker & Schaufeli , 2008). -7- DEFINITIONS OF ENGAGEMENT Defining engagement presents some challenges because there is no single, universal definition. Management consultants tend to use definitions that are tied to their own proprietary idea of how to improve engagement. Academics have suggested definitions as simple as "passion for work", to the more complex three-dimensional psychological state that encompasses cognition, emotion and the physical being, as suggested by William Kahn (1990). Engagement Definitions - Management Consultants The following definitions, from management consulting organizations, use the outcome of engagement as a key component of their definitions. These definitions point to engagement as being good for business: the benefits that the organization will see from engagement. These definitions act like a sales pitch for engagement, letting the manager know that engagement will assist in motivating employees through raising the level of enthusiasm for the job. • ''The individual's involvement and satisfaction with as well as enthusiasm for work" (Gallup, 201 0). • ':.4 result that is achieved by stimulating employees' enthusiasm for their work and directing it toward organizational success" (Hay Group Holdings, Inc. , 2010). • "The extent to which people value, enjoy and believe in what they do " (Wellins, Bernthal , & Phelps, 2005, p. 5). -8- • ''The capability and willingness to help the company succeed, i.e. , discretionary performance" (Towers Perrin, 2006, p. 18). Engagement Definitions -Theorists While these engagement definitions from management consulting firms tend to focus on the intended result of engagement from an organizational point of view, the more academic definitions presented by Kahn, Schaufeli and Bakker, and Alfes eta/ give more detail regarding the attributes of an engaged employee. Kahn defines engagement as a three layered psychological state that encompasses cognition , emotion and physical being (1990). Schaufeli and Bakker, further refine Kahn's definition of engagement. They also have three themes, but they label them: absorption, dedication and vigour (2003). Engagement is a positive, fulfilling, work-related state of mind that is characterized by vigour, dedication and absorption. Rather than a momentary and specific state, engagement refers to a more persistent and pervasive affective-cognitive state that is not focused on any particular object, event, individual , or behaviour.(p. 4) The purpose of Schaufeli and Bakker's Utrecht Work Engagement Scale is to empirically define and measure the attributes of an engaged worker. This is done through the use of three descriptors; vigour, dedication and absorption, -9- which are then linked to a series of survey questions which are designed to measure the intensity of each descriptor on an individual basis. The first descriptor the UWES defines is vigour. From a popular management point of view, when describing an engaged employee, we think of an employee who has a high level of "get up and go." They also can keep going "when the going gets tough". Vigour speaks to an employee who has a combination of physical and mental strength and energy: intensity to get the job done and the ability to grow and thrive. The second descriptor that is tested using the UWES manual is the aspect of dedication. This attribute is very closely tied to vigour in that it requires both vigour and dedication to "get the job done". This level of commitment to the job can be tied to the strength of an employee's identification with the organization. Dedication, also, speaks to a commitment or devotion to the organization held by the employee who often places a high value on the organization's goals and objectives. The final descriptor, absorption, focuses on the positive benefits of challenge within the workplace. An employee who is fully absorbed in his work will notice that "time flies." Other aspects that come into play when discussing absorption revolve around how immersed the employee is and how fascinating they find their work. In other words, absorption means an employee who is preoccupied by his job. -10- The clarity needed to really determine how to foster engagement is not available when relying on the management consulting definitions alone. Alfes et a/, in their 2010 report, Creating an Engaged Workforce, focuses on better understanding employee engagement from both an academic and a managerial perspective. Alfes eta/ offer as their definition of engagement, "Being positively present during the performance of work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to others" (p. 5). This definition touches on the three themes first laid out by Kahn: of physical state (being positively present during the performance of work), cognition (willingly contributing intellectual effort) and emotion (experiencing positive emotions and meaningful connections to others). Alfes et a/'s definition can be further distilled into three fundamental factors of engagement: • Intellectual engagement- or thinking hard about the job and how to do it better • Affective engagement - or feeling positively about doing a good job • Social engagement- or actively (acting) taking opportunities to discuss work-related improvements with others at work (2010, p. 5). These three fundamental factors are very similar in nature to the three aspects of physical state, cognition, and emotion originally put forward by Kahn -11- in 1990 and refined by Schaufeli and Bakker. The following chart shows an evolution and refinement of the terms used to describe engagement while still maintaining a very similar framework for engagement. Kahn (1990) Schaufeli and Bakker (2003) Alfes, et al (201 0) Physical State Vigor social engagement (acting) Cognition Dedication intellectual engagement (thinking) Emotion Absorption affective engagement (feeling) In reviewing the literature from management consultants , one sees a different approach to engagement than the approach taken by academics such as Kahn, Schaufeli and Bakker, and Alfes eta/. Management consultants seem to view engagement as a strategy to achieve organizational goals implemented through the employees. The academic approach seems to point to a state where employees experience engagement due to an intrinsically generated sense of contribution to the organization's success. These two views of engagement ultimately agree that engagement is a beneficial organizational construct. The description of an engagement put forward by Alfes et a/ is in alignment with the definitions of Kahn , and Schaufeli and Bakker. However, the plain language used by Alfes eta/ is easily explained to and understood by both -12- managers and employees. During the process of creating and fostering an engaged culture at Hawkair, the ability to clearly describe engagement in a manner that all managers and employees will understand is critical. A further benefit to this engagement definition is that its authors have also built a framework to describe the attributes of an engaged employee in a manner that most managers can easily understand . For these reasons, this report will be using the definition of engagement developed by Alfes, Truss , Soane, Rees , & Gatenby. MEASURING ENGAGEMENT Touching on the above definition of engagement as being something that an individual employee thinks and feels about his work, creates a scenario where the measurement of engagement within an organization involves measuring individuals' levels of engagement. Thus, measuring engagement within an organization is dependent upon building a construct for testing all individuals and determining an organizational engagement level. The usual means for determining an organization 's level of engagement is with standardized questionnaires, which measure the levels of engagement on an individual basis. Then , this collected data is distilled into useful information , which permits the organization to identify areas of concern . The organization can then take the appropriate action. -13- The Utrecht Work Engagement Scale (UWES) The Utrecht Work Engagement Scale (UWES) test manual is an example of a system designed to test employee engagement within the workplace. The test manual, developed by Schaufeli and Bakker in 2003 to measure levels of organizational engagement, has been used in a number of countries such as the Netherlands, Australia, Canada, Germany, France, Norway Spain, Russia, Portugal, and Greece. The survey has also included a number of diverse occupational groups, such as Salvation Army officers, blue-collar workers, hospital staff, paramedics, police officers, teachers, military officers, and farmers. The UWES uses a seventeen-question Work & Well-being Survey to determine the engagement level of the employee. The survey is based upon the three attributes of vigour, dedication, and absorption, which are the foundation of the engagement definition used within the UWES. The following excerpt from the UWES manual details the questions asked in the survey and how they relate to the three key attributes of engagement as defined in the scale. Vigour is assessed by six questions that look at an employee's energy level and degree of resilience. These six questions are: 1. At my work, I feel bursting with energy 2. At my job, I feel strong and vigorous 3. When I get up in the morning, I feel/ike going to work 4. I can continue working for very long periods at a time 5. At my job, I am very resilient, mentally -14- 6. At my work I always persevere, even when things do not go well Dedication is assessed by five questions that examine an employee's commitment to their job. These five questions are: 1. I find the work that I do full of meaning and purpose 2. I am enthusiastic about my job 3. My job inspires me 4. I am proud of the work that I do 5. To me, my job is challenging The final attribute that the UWES can measure is absorption. There are six questions that look at whether an employee is totally and happily immersed in their work. These six questions are: 1. Time flies when I'm working 2. When I am working, I forget everything else around me 3. I feel happy when I am working intensely 4. I am immersed in my work 5. I get carried away when I'm working 6. It is difficult to detach myself from my job (pp. 5-6) The UWES uses complex statistical analysis of the answers to these questions to come up with a rating in each category. Employees who are highly engaged score as high positive numbers in each category. Yet, employees who -15- are burned-out and disengaged will have a negative number in each category. At Hawkair, this could be a good system to measure the engagement of our employees . However, the full statistical analysis, as conducted in the UWES is too cumbersome for use within a small organizational setting. For this reason, a streamlined version touching on the three categories of engagement will be developed for use at Hawkair. Gallup 12 Element Scale The UWES means of determining levels of organizational engagement was developed within the environs of Utrecht University. A different view of how to measure engagement is from the view of how management consultants I practitioners measure engagement. Gallup Incorporated is a business information and consulting organization which has developed a management consulting practice around the area of employee engagement. Gallup postulates that top performing organizations understand that employee engagement is a driving force for positive business outcomes, and that measurement of organizational engagement is a key part of their engagement program. A key component of Gallup's focus on engagement has been the development of their "12 Elements of Engagement". Gallup proposes that these 12 elements predict employee and workgroup performance. In order to create a benchmark index of an employee engagement within an organization, Gallup has developed the following list of statements. Gallup claims that, through the analysis of the employee responses to these statements, an accurate engagement measurement can be established. Gallup claims that these statements are -16- predictive statements which when taken together indicate if a culture conducive to engagement exists. The 12 Elements of Great Managing 1. I know what is expected of me at work. 2. I have the materials and equipment I need to do my work right. 3. At work, I have the opportunity to do what I do best every day. 4. In the last seven days, I have received recognition or praise for doing good work. 5. My supervisor, or someone at work, seems to care about me as a person. 6. There is someone at work who encourages my development. 7. At work, my opinions seem to count. B. The mission or purpose of my organization makes me feel my job is important. 9. My associates or fellow employees are committed to doing quality work. 10. I have a best friend at work. 11. In the last six months, someone at work has talked to me about my progress. 12. This last year, I have had opportunities at work to learn and grow. (Gallup Consulting, 2008) -17- Gallup suggests that organizations should add their own questions developed to represent their organizations unique culture. Using research that it has conducted , Gallup then analyzes the answers from the surveys to build a plan for improving employee engagement levels within an organization. However, Gallup's focus is mainly on extrinsic rewards for the employee. For example, number six in Gallup's list states, "someone at work encourages my development." This suggests that employees need people at work to be their cheerleaders rather than the employee themselves taking pride and ownership of their role in the organization. Granted, it is beneficial to encourage employees, but that should not be the only path to an engaged workforce. Although an interesting take on engagement, this will not be the route taken at Hawkair. CREATING AN ENGAGING ENVIRONMENT In the article, "Accelerating Corporate Transformations by Rapidly Engaging All Employees", Robert H. Miles suggests that, in the era of corporate leaders, such as Jack Welch , Sam Walton , and Lee lacocca , the means of meeting corporate objectives is through streamlining, and the shedding of noncore activities. These strategies focus on the mechanics of corporate process and procedures . Over time , process-based improvements have, for the most part, reached their zenith. He suggests that the future success of further process-based improvements , like Six Sigma, is dependent upon the organization 's ability to successfully engage their employees. Miles concedes -1 8- that many employees have become sceptical and disengaged during the streamlining process. The new focus for management should be on the employee, not the process. Miles also suggests that, as technology increases and business cycles become more condensed , an engaged workforce that is able to rapidly respond will become essential for organizational survival (2001 ). Management consultant Bill Piersol (2007), in his article "Employee Engagement and Power to the Edge," further expands upon the concept of engagement within the organization by focusing on the responsibility of management in fostering a culture of engagement within organizations. Piersol suggests that, while engagement is not entirely management's responsibility, they are the ones primarily responsible for establishing an environment of empowerment and shared ownership. He uses the analogy of a dance to symbolize the relationship between employee and employer. It is a relationship that neither can exist without the other: it is a process of give and take. Employee engagement should not be viewed as a series of engaged individuals. It needs to be seen as the engagement of the entire organization . Just as the old cliche states, "there is no 'I' in team", an organization is not only individuals but parts of a team working together. In order to assist in developing engagement within an organization, it is necessary to have a robust, open communication system, and that the employees have the tools that they need to do their jobs. Reflecting on what Miles and Piersol have written, it is clear that engagement is an organizational state that needs to be fostered and cultivated by creating a work environment that supports engagement. Just as a manager -19- cannot order an employee to be happy; the manager cannot also order an employee to become engaged. In the UWES manual, Schaufeli and Bakker have suggested a number of possible causes of work engagement. Some of the characteristics positively associated with work engagement include social and job autonomy. Self-efficacy has also been tied closely to high levels of engagement (Schaufeli & Bakker, 2003). Other reports have suggested that the main drivers of engagement include: how important an employee feels their contributions are to the organizations success, how supported in their job and in their career they feel, how well senior management communicates a vision for the organization, and the individual job I employee fit (Aifes, eta/, 201 0). Looking back to our definition of engagement with the three aspects of social, intellectual, and affective engagement presented by Alfes eta/, we see that engagement is not entirely an individual endeavour. Any strategy used to promote engagement must be carefully constructed to allow the organization , as a whole , to become more engaged . This adds to the complexity of any scheme to improve engagement because the organization's management I leadership need to approach engagement in a holistic manner. They need to touch the hearts, minds and souls of a diverse group of individuals. Management's Role in Engagement As the previous section states, an environment of engagement within an organization does not just happen. Engagement is a state that must be cultivated and nurtured. It has also been pointed out that the creation of an environment that supports engagement cannot and will not be successful through -20- the unilateral work of management. Since engagement is a state that includes the physical, cognitive , and emotional states of the employee, any plan for increasing the level of engagement within an organization must involve the entire organization; addressing engagement at numerous levels simultaneously. A number of suggestions have been brought forward as consequential means to increase the engagement level of organizational members. However, each mechanism may only address one aspect of engagement be it a physical , cognitive , or an emotional component. The ultimate goal, when building a culture that supports engagement within an organization , is to put in place strategies that will support organizational members to care about the organization , care about themselves, and care about those whom they work with. This means that procedures must be initiated that will allow the organizational member to feel that their contributions matter and that they are going in the right direction. Taking this into consideration , management needs to develop strategies that will engage the employee's mind, body, and soul. But strategies alone are not sufficient. In order for an engagement plan to be effective, the full support of top management is crucial. If senior leaders within the organization do not clearly demonstrate an unambiguous commitment to engagement through active involvement, engagement efforts are doomed to failure. Senior managers need to recognize that motivation and engagement are about more than just financial rewards; it is the intrinsic aspects of employee motivation that make the difference when developing a culture of engagement. -21- Engagement Supporting Initiatives One of the engagement-supporting initiatives suggested for building an engaging environment is to focus on strategies which will allow the employee to feel that the organization values them and their contributions . In order for the employee to feel valued , it is critical that the employee clearly knows what is expected of them and what their role is within the organization. The key to this alignment of employee and employer expectations is two-fold. The first is clear communication of the corporate goals, vision, and mission and what each employee's role is within the organization. Clearly defined roles and purpose helps create meaning for employees. The second critical aspect is comprehensive feedback from management about employee performance, both positive and in areas where improvement is needed. Practitioners and theorists both agree that communication is a key aspect of any engagement strategy (Endres & Manchemo-Smoak, spring 2008) (Kular, Gatenby, Rees , Soane, & Truss, 2008). Communication strategies must focus on communication from top to bottom , bottom to top , and between different work groups within an organization. Plans should be implemented that give every member of the organization an opportunity to use their voice. Looking back at one of the questions under the heading of dedication , in Schaufeli and Bakker's UWES manual: I find the work that I do full of meaning and purpose. Management can demonstrate that they value the work of their employees by asking for their input and keeping them informed of developments within the -22- organization. Employees reciprocate by feeling connected to the company because their opinions and input are seen as meaningful. Giving and receiving clear and constructive feedback can be one of the most daunting challenges for many managers, supervisors, and employees. It can be often fraught with misperceptions and hyperbole. Yet, as managers or employees, we need feedback from our supervisors, reports and peers to improve how we do our job. Time and again we see situations where a manager bemoans the fact that one of their report's fails to do a job as expected. Often this scenario is a result of the employee not being clear about what is expected from them or exactly how they should carry out the task. Most employees and managers have a desire to do a good job; often the only missing ingredient is direct, clear and concise feedback about what is expected . Of course positive feedback is a critical part of the feedback continuum as well. Positive feedback for a job well done reinforces the spirit, leading to increased levels of engagement. When designing feedback systems, leaders must ensure that strategies and policies are introduced that will allow for feedback from the frontline employee to reach both line and senior management. A key component of any feedback I communication system is the development of protocols which will ensure that the contributor is acknowledged so they know that views I observations will be taken seriously. In addition to good communication systems and clear feedback, Dent and Holton (2009) offer four more initiatives to support engagement in an organization. The first is to have a creative reward system. This system can be -23- both financial and non-financial in nature. Policies such as flexible working , offering sabbaticals, percentage contracts and work-life balance would be several ways to appeal to the various needs of employees. The second initiative is to create a culture of life-long learning by encouraging opportunities for mentoring , coaching , and taking courses , online or at a post-secondary institution. Learning and development, as coined by Dent and Holton, should be part of the day to day work environment of all employees, including managers, and not just brought up at employee performance reviews . The next initiative focuses on line managers. It is important to give these managers support from each other and to discuss best practices from across the organization . Coaching and mentoring support also needs to be available to managers who take on unmotivated employees or departments, in order to successfully re-engage these employees. The fourth initiative is one we have also discussed before: the need to measure employee motivation and engagement (Dent & Holton , 2009). The following engagement model (Figure 1) put forward by Alfes eta/ speaks to the same four attributes of engagement as suggested by Dent and Holton . However, this model expands the motivators of engagement into the six distinct drivers. -24- Figure 1 (Aifes, Truss, Soane, Rees, & Gatenby, 2010, p. 56) Alfes eta/ offer a number of recommendations associated with each of these key drivers of engagement, which, when combined, may assist management in creating an engaged workplace. Although each facet of engagement may be implemented independently, for the full organizational benefits to be felt, the goal should be the development of a plan which plays on each of these drivers. The first driver is "Meaningfulness of Work." An employee who does not see how their efforts contribute to the organizational goals will have difficulty maintaining a high level of engagement. For this reason, it is essential that each -25 - individual clearly knows how his work contributes to the organizations overall success. The link between ones work and the organization success needs to be reinforced both intellectually and emotionally using metrics, honest feedback and the odd pat on the back. The second driver is "Voice, the Ability to Have Your Views Heard." Knowing that your opinion is valued by the organization is a critical aspect of intellectual engagement. Why think about your job and ways to improve it, when you know that no one will listen? Front line employees are a valuable source of information for the organization. Listening to opinions and feedback from all employees will contribute to the organization 's success. Implementing strategies, which will enhance the flow of information from employees , need to be a part of any engagement strategy. The third driver is "Communication of Vision by Senior Management." Directly linked to both intellectual and emotional engagement, having a vision of where the organization is going is important when trying to engage the minds and hearts of employees. The organization's members need to know that senior management knows where the organization is going . Management also needs to communicate that direction to their employees and let them know what their role is in that vision in order for the employees to know that their work is meaningful. The next driver is "Supportive Working Environment." Knowing that the organization and co-workers are supportive will allow the employee to focus on the job. This support needs to include support for growth both personally and -26- within the organization through education or training. This personal and professional growth leads to longer-serving, more engaged employees. The fifth driver is, "Job Fit." The old analogy of trying to fit a square peg into a round hole fits this aspect of an engagement model. Organizations who wish to support engagement should ensure that appropriate HR policies are in place to assist employees being placed in the right position within the organization. An employee in the wrong position can cause disharmony for those around them while trying to do a job for which they are not suitable. The sixth and final driver, as indicated by Alfes et al, is "Front Line Management Style." Line managers act as a conduit of information between the organization and employees. Due to the importance of effective communication, it is essential that line managers do not become barriers to information either from the employee or from the organization . Line managers must be carefully selected and trained in effective communication in order to develop their potential as leaders that support and validate engagement strategies. Relational Coordination To this point the paper has touched on engagement in a generic manner, yet this report attempts to focus on engagement specifically within a small airline. As previously mentioned , the airline industry can present some unique challenges to the creation of an effective engagement strategy. When developing management strategies, an often used means of building a plan is to closely examine successful industry peers with the hope of garnering ideas. -27- One such successful airline is Southwest Airlines. Southwest, headquartered in Dallas, Texas, has been put forward by many aviation industry pundits as the most successful airline in the United States. Southwest has successfully achieved 37 consecutive years of profitability in an industry fraught with bankruptcies (Southwest Airlines company, 201 0). Jody Hoffer Gittell, a professor of Management at Brandeis University, has spent a considerable amount of time investigating organizational behaviour at airlines such as Southwest Airlines. She has developed theories for why and how Southwest Airlines has been successful for so long in an industry filled with business failures. Gittell presents the emerging theory of Relational Coordination: a theory for understanding the relational dynamics of coordinating work, as an explanation for Southwest's success. Relational coordination, "is a mutually reinforcing process of interaction between communication and relationships carried out for the purpose of task integration" (Gittell, 2009). Much like engagement, relational coordination is a multi-faceted construct which focuses on three aspects: shared knowledge, shared goals, and mutual respect. One aspect of this theory is put forward by Gittell in her 2003 book, The Southwest Airlines Way- Using the Power of Relationships to Achieve High Performance. She suggests that, through the understanding the relational dynamics of an organization, management can facilitate and better develop communication strategies between groups. Better communication strategies allow an organization to disperse information to the employees about shared goals, shared knowledge, and mutual respect. Better communication results in -28- better organizational outcomes. Gittell, through her work with airlines in the area of relational coordination, suggests that organizations with high levels of organizational coordination benefit from positive outcomes. These positive outcomes include stronger long term financial strength and higher levels of employee engagement. Therefore , relational coordination is a theory that supports organizational engagement within the airline industry. Relational coordination is a means to improve process and the flow of information between work groups . There are inherent stressors involved when different groups are trying to meet often-conflicting agendas. These inherent task conflicts can then lead to situations where conflict may occur. These conflicts then lead to ineffective communication and, thus, reduce overall organizational effectiveness and decrease levels of employee engagement. Relational coordination suggests that improvements in communication between interdependent groups can lead to better task completion . In a complex industry, such as the airline industry, where many different tasks need to be accomplished by a variety of very different work groups, the concept of task interdependence becomes critical when designing work routines. There are four types of task interdependence: pooled, sequential , reciprocal and team . Pooled interdependence describes a situation where two or more groups carry out tasks on a parallel basis, while using a common resource. In the case of an airline, each of the multiple bases performs the same tasks using the airline as the common resource . In this scenario, conflict is limited by geographic separation but the organization does require that each base works well , while -29- supporting the organization as a whole. Sequential interdependence describes a situation where Group A must successfully complete a task before Group B can begin their work. This form of dependence inherently has a higher probability for conflict than pooled interdependence due to the coordination required between groups. In an airline , sequential interdependence shows itself in a myriad of situations. During the check in process the sequence is as follows: the customer service agents must finish checking in the passengers before the flight attendants can board the airplane. The pilots, in turn, must wait for the flight attendants before they can start the engines for departure. Reciprocal interdependence involves tasks where one group is dependent upon the work of another group but there exists a feedback continuum between groups. An example of this type of interdependence is the reservations department and the customer service agents at the counter doing check-in. They communicate back and forth in order to make sure the correct passengers board the correct plane at the correct time. Team interdependence is the most common form of interdependence at Hawkair. Team interdependence refers to situations where multiple work groups must work together in a coordinated manner to accomplish a common task. For example, multiple groups (maintenance, Customer Service agents, flight attendants, dispatch, ground service and pilots) must work together during the process of an aircraft departure. This form of interdependence is not only common within an airline but is also the form of interdependence where the greatest probability for conflict exists (Bowdich, Buono, & Stewart, 2008). The following chart (Figure 2) shows the different work groups within Hawkair. Just -30- imagine the conflicts that could arise if one group does not perform as expected. Thus, a key part to any engagement implementation program would be an organizational education program geared towards educating the employees about how their job is critical to organizational success. Without such a program, different employee groups will often revert to forming into independent groups or silos, with the outcome being the formation of communication barriers between groups. As discussed earlier, good communications between all levels is a key aspect of any engagement strategy. Figure 2 Airlines, -A Coordination Challenge Adapted from (Gittell, 2009) Dispatch Pilots Customer Service Agents Mechanics -31- Relational Coordination and Communication Previously, it was stated that communication is a key driver of engagement within organizations. In her 2009 report, Relational Coordination: Guidelines for Theory, Measurement and Analysis, Gittell expands on the concept of communication and engagement. Gittell proposes that there is a direct correlation between relationships and communications between groups. A company without an effective communication plan will often suffer from ineffective or low quality relationships between groups. The absence of an effective communication strategy will not result in no communication; it will result High Quality Relationship High Quality Communication Shared goals Frequent communication Shared knowledge Timely communication Mutual respect Accurate communication Low Quality Relationships Low Quality Communication Functional goals Infrequent communication Specialized knowledge Inaccurate Delayed communication Disrespect "Finger-pointing" communication Figure 3: High quality relationships vs. Low quality relationships From Gittell, J. H, 2009, p. 20 -32- in poor communication. Using the basic science fact, "nature abhors a vacuum," in the context of communication and the following will occur: "any information void will be filled with something regardless of whether it is true or not. " Figure 3 demonstrates the relationship between high quality communication and high quality relationships. (Gittell, 2009) In order to implement a relational coordination model within an organization, Gittell proposes the Relational Model of How High Performance Work Systems Work, as illustrated in Figure 4. This model touches on supportive high performance work practices. These practices will help to instil relational coordination within an organization with the associated positive benefits. These positive benefits are similar to suggestions for engagement made by Alfes eta/ in Figure 1. Selection for Cross-functional Teamwork When managers hire employees, the focus is often on selecting the employee based on their individual performance without looking at the candidate's ability to work with others. In a work environment like a small airline, it is critical to select employees based on functional expertise. However, their ability to work with others to accomplish common goals must also be considered. Cross-functional Conflict Resolution The realities of time constraints and limited resources often lead to conflict between functions or tasks within an organization. In the relational coordination model, organizations embrace this conflict as an opportunity to break down barriers between work groups. Often conflict is swept under the carpet or -33- ignored. This failure to deal with a problem often leads to long running disputes between groups. Using cross-functional conflict resolution, the individuals or groups in conflict are brought together to discuss how their roles have an impact on each other and how their roles contribute to the organizations goals. The idea is, that through better understanding of the challenges faced by the other party, the level of conflict will be reduced . Figure 4: A Relational Model of how High Performance Work Systems Work, (Gittell, 2009) _J_o_b;_D_e_s_ig-n--,1 .--1 High Performance Work Practices • Selection for Crossfunctional Teamwork Relational Coordination • Cross-functional Conflict Resolution * Shared Goals * Shared Knowledge * Mutual Respect • Cross-functional Performance Measurement Frequent Communication Timely Communication Accurate Communication Problem-Solving Communication • Cross-functional Rewards • Cross-functional Meetings • Cross-functional Boundary Spanners Outcomes Efficiency Outcomes Quality Outcomes Increased Operational Performance Passenger-Perceived Quality of Service Improved Financial Health Engaged Employees -34- Cross-functional Performance Measurement When instituting performance metrics within an organization , managers will sometimes institute measurements which force one group to compete with another. For example, many airlines base flight delays on which employee group last left the aircraft. If the last person off the plane was a customer service representative, then that group would be responsible for the delay. This competition between groups often leads to a scenario where each group focuses on getting off the plane first, and then finger pointing at the group who was last off. The employee groups fight amongst themselves rather than create a situation where they work together to accomplish the common goal. This scenario reinforces the importance of instituting broad performance measures, which broach functional boundaries. Cross-functional Rewards This work practice touches on the same issues as touched on with performance measurements. Managers need to ensure that rewards are based on organizational goals as opposed to goals geared towards individual groups. Although healthy competition may lead to spurts of performance improvements by individual groups , the reality is that these improvements in performance may come at the cost of performance from other groups. Cross-functional Meetings This work practice is meant to improve relationships between groups. Improved relationships then lead to better quality communications as described in Figure 3. -35- Cross-functional Boundary Spanners A boundary spanner is a position within an organization that, in doing their job, communicates across numerous functional work groups. In this way, they act as a link between functions. Within an airline, the flight operations agent I dispatcher operate within this role. The departure of an aircraft requires the coordinated effort of pilots, flight attendants, customer service agents, fuelers, baggage handlers, and others . The role of the dispatcher is to act as a coordinator ensuring that all roles are accomplished. In this role, the dispatcher is often seen as just a conduit for information between groups. Yet, the effective dispatcher who acts in the boundary spanning role also reinforces relationships between groups by sharing information and challenges faced by others. Outcomes of High Performance Work Practices The outcomes from the implementation of effective high performance work practices are shared goals, shared knowledge and mutual respect between work groups. These outcomes are very much in alignment with the drivers of engagement suggested by Alfes et a/. -36- DEVELOPING A PLAN FOR ENGAGING HAWKAIR This report has defined engagement as a state where the employee is, "being positively present during the performance of work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to others" (Aifes, Truss, Soane, Rees, & Gatenby, 2010, p. 5). This definition touches on the multi-faceted aspects of engagement, where the employee feels , thinks , and acts in an engaged manner. In reviewing the data from management consultants and academic sources, we see that employee engagement can be a positive state that will assist the employer in meeting organizational objectives . A review of the drivers of engagement shows that engagement levels are dependent upon a number of intrinsic and extrinsic organizational factors. These factors include: whether employees feel that their work is meaningful; the organization's leadership has clearly communicated organizational goals and objectives; and whether the organization has policies and practices that are in alignment with a culture of engagement. We, then, reviewed how the concept of relational coordination and the improved communications derived from good relationships between groups could assist the development of engagement. In reviewing the idea of relational coordination in the context of engagement at Hawkair, justification exists for integrating the relational coordination supporting high performance work practices into the plan for fostering a culture of engagement at Hawkair. The following chart graphically details the suggested link between the six drivers of engagement and the high performance work practices of relational coordination. -37- ( Selection for ~Cross· functional Teamwork Meaningfulness of Work rVoice, the ability Cross functional ~ Connict \. Resolution to have your views heard [ Communication of avision by senior management The six drivers of Engagement I Engagement High Performance Work Practices Supportive Work environment Job Fit rCross-functional perlormance Measurements WCross-functional 1 fro I= r Front line Rewards Cross-functional Meetings [Cross-functional · Boundary Spanners Management Style Figure 5 Link Between Alfes eta/'s Six Drivers of Engagement and Gittell's HiQh Performance Work Practices Brief History of Hawkair Hawkair, like many airlines, has experienced many ups and downs over their history. In order to know where we need to get to, we must first look at where we have been and how we got to where we are right now. Hawkair began as a partnership between three aviation professionals in 1994 as a remote area cargo service, in order to service gold mine operations in -38 - northern BC. In 2000, sensing an opportunity to enter the passenger airline industry, the company transformed itself into a scheduled passenger airline. Using a DeHavilland Dash-8 aircraft, Hawkair began a service between Terrace and Vancouver in September 2000. Over the next five years, Hawkair expanded to five aircraft connecting five northern communities with Vancouver, and employing as many as 130 employees. The volatility in the airline industry is proven by the history of the company in the past ten years. From 2000 to 2010, Hawkair went from ten employees, up to 130, then back down to seventy-five. We currently stand at ninety. We went from one plane, to five, back to two and are now at three planes. Due to a heavy debt load, Hawkair spent two years in bankruptcy protection between 2005 and 2007. In 2007, Hawkair was purchased by a group of investors from Alberta. These investors brought new opportunities for Hawkair to expand into the charter business of flying crews to and from oil projects in Alberta. Once again, the situation was looking positive. The owners, believing they needed an expert in airline growth to help the company grow even further, hired a senior manager. Unfortunately, while this manager came highly recommended, once at Hawkair, he proceeded to sow discord through lack of communication, issuing dictates and dishonest interactions with the staff. As a result of his actions, specifically with regard to the pilots and restructuring their pay scale without consulting them first, the pilot group was so enraged that they began a union certification process. These events all occurred within a short period of time and by the fall of 2008, company morale was in decline . At the same time, the world was undergoing -39- what at the time was being described as being the worst economic downturn since the Great Depression . Revenue sources were reduced . The internal conflicts and discord were intensified by the financial uncertainty brought about by current world economic conditions. Current Situation On March 15, 2010, Hawkair announced a change in ownership. The Alberta-based owners sold Hawkair to a northwest BC-based ownership group that also owns several other small airlines. This has, once again, changed the landscape for Hawkair and its employees. Although the recency of this event precludes a full analysis from being included into this report, an attempt will be made to summarize the impacts of this change of ownership upon the employees and culture of Hawkair. The ownership group that purchased Hawkair also controls and directly manages Central Mountain Airlines (CMA). Therefore, a very brief description of CMA is in order to understand some of the cultural similarities and differences that exist between these two airlines. Central Mountain Air is a regional airline, which serves seventeen destinations within BC and Alberta, employing approximately thirteen 19passenger Beech 1900 commuter airliners and two 30- passenger Dornier 328 aircraft. CMA employs 300 employees based out of Vancouver, Prince George, Calgary, and their head office located in Smithers, BC. Their main focus is on scheduled passenger operations, but CMA does carry out a limited amount of charter operations, mainly from its Calgary base. -40- From this brief description of CMA, it is apparent that Hawkair's new ownership group has more in common with Hawkair than Hawkair's previous Alberta-based owners. The new ownership group is located in Northwest BC and has extensive experience in running scheduled operations, as opposed to being Alberta-based and focused on charter operations. In light of this observation , it may be possible to assume that cultural challenges encountered during this ownership change may be somewhat less than previously encountered. Issues to be investigated when developing a plan for engagement within Hawkair will revolve around employee fears of what the impact of this acquisition will have on them as individuals. What is the Current Engagement Level? Although certainly not unique within the Canadian aviation industry, Hawkair has seen its fair share of uncertainty and change within the last ten years. This has often led to ambiguity about where Hawkair was heading as an organization , as well as, fear about employment security. Each ownership group had a different approach to management and a different vision for Hawkair. The last group had very little experience in running a scheduled airline and sought out a "professional" airline manager. Through a lack of attention to employee relations , this manager damaged employee relations to the point where one group sought union certification. The writer, who has maintained the role of General Manager at Hawkair through the ownership changes , has witnessed uncertainty and the resulting damage to employee morale. Each new owner had -41 - a slightly different vision for Hawkair and as a result employees have been left with an impression that management lacks a vision for Hawkair. In an effort to measure the level of employee satisfaction after a tumultuous period, the previous Board of Directors of Hawkair engaged an outside consultant to conduct an employee survey during the Fall of 2009. Although the purpose of this survey was not to measure engagement per se, it does act as a valid representation of employee views, and concerns. The survey reflects a snapshot view of the state of employee satisfaction when this survey was carried out in September 2009. These survey questions focus on the following six categories: Company, Departmental Effectiveness, Supervisor Evaluation, Personal Satisfaction , Compensation & Opportunities, and Working Conditions. These quantitative surveys allow the employees from nine different departments to rate each of the six categories from one to five. Based on the quantitative results, most employees are generally satisfied working for Hawkair. The average scores, from all segments of the questionnaire, range from 3.0 to 3. 7 out of 5 (five indicates the employee strongly agrees with the statements and that the company consistently exceeds expectations). The areas that rank the lowest are the Company (average of 2.9/5) and the Compensation & Opportunities (average of 2.7/5). The area that ranks the highest is the Departmental effectiveness (4/5). This score is a reflection that members of each department generally feel that their own departments are running smoothly and effectively, but, that effectiveness is not present on an inter-departmental basis . -42 - Figure 6 Quantitative Survey Results .of complalad ....,.,. department categOry1 categOry2 c:ategOI'y 3 CCimpanJ 8upei'Villor .,..,...._.... effeclhel- 8¥llluatlon c:ategOI'y 4 .. c:ategOI'y 6 Penlonal CCimpenAIIon Wortlng ~ & c:ategOI'y • Total average .corebr COidioiM dapllnment oppor1unitiM 7 Unassigned 2.89 4.04 3.42 3.62 2.64 3.61 3.4 3 In-flight 2.25 3.50 3.37 3.30 2.1 3 3.33 3.0 services 5 Right CrGws 2.75 3.87 2.95 3.53 3.18 3.46 3.3 13 Customer 2.53 3.98 3.37 3.59 2.55 3.22 3.2 2.89 4.33 3.95 3.55 2.74 3.39 3.5 7 Service Base OperatiOns 5 R9SG-er A fuw til!ru!:. a yenr or l.es.; Qn.c_e- 11 lOOllLh ,l'O!Jfocj i1 o ~ Oft:n 3 ... - A few rim!!:. 11 On.ce a 'i!ieek A few 'limes ~ V.1!ek Ar mywcuis:, I :-eel b."IJI5tfng 'iJii!h en.ergy• Ar rm wo.rk.in.g (ABJ ~· job, I feel ·; aong md vi.gorou:. 6 Emyday ~ 11bout my job WI ) • 5. 6. 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