Engaged employees – a crucial factor for successful companies?

Jim Andersén, a professor of sustainable development focusing on industrial transformation at the University West, has published the research article "Commitment capital: Bridging the gap between organizational commitment and human capital resources" in the internationally top-ranked journal Human Resource Management. The article studies a company that has distinguished itself through extremely high profitability over many years, achieved by having highly loyal and dedicated employees.

-  This is an excellent example of the type of 'win-win' relationship that interests me. While previous research has addressed methods for organizations to achieve more engaged and dedicated employees, our study focuses on demonstrating the benefits by identifying how employee engagement impacts company profitability, says Jim.

“Commitment capital” – a new concept

The study introduces the concept of "commitment capital," which, unlike the already established term "human capital," indicates that it is a form of capital created in the relationship between the organization and the individual. By focusing on strengthening this capital and creating a work environment where employees feel appreciated and involved, both companies and society can reap significant benefits.

- Being engaged in one's work is an important health factor in organizations, and engaged employees are likewise a prerequisite for successful companies. In most cases, a high degree of 'commitment capital' is therefore beneficial for the entire society. However, in our study, we also discuss that an excessive level of engagement, which we term 'absolute commitment capital,' often requires some form of alignment and collectivism. Thus, there can also be risks with over-engaged employees, but most organizations are likely characterized by too little rather than too much engagement.

Significant improvement potential among companies

According to the study, commitment is something that develops over time – from the initial relationship to a deeper one, and finally to the most developed form, best described as a strong collective where shared success is more important than individual success. According to Jim, there are some established tools for increasing employee engagement, but also significant potential for improvement.

- Mere talk and policy documents rarely lead to truly engaged employees. Our study illustrates that a prerequisite for employees to become extremely engaged is that owners and company leaders lead by example and make real sacrifices themselves. This should be expressed both through genuine care for employees and financially, for instance, through bonus systems and social activities.

There are several insights for companies to take away from the study. Here are some examples:

1. Invest in attractive working conditions

To attract the best talent, companies must offer more than just a good salary. Companies that invest time and resources in creating a good work environment and a healthy culture find it easier to attract and retain skilled employees.

2. Build a culture characterized by support and learning

Social activities and shared experiences can strengthen the bond between colleagues. When employees experience genuine engagement from the company's leadership, they feel involved and are more likely to take responsibility for both their own and their colleagues' learning, which improves the company's competence.

3. Be prepared to make sacrifices

Building a culture of extreme loyalty requires sacrifices from the company as well, such as having a uniform salary structure and profit-sharing systems. This involves a short-term cost but creates a strong sense of community that can lead to long-term benefits.
 

The article, co-authored with Christian Jansson at the University of Skövde, can be read here

Contact: Jim Andersén, Professor of sustainable development focusing on industrial transformation, University West, jim.andersen@hv.se , +46 733 123550