Hence, the above paragraphs show the similarities betweenBurr and Girardi’s (2002) ideas about intellectual capital and the TowersWatson (2012) framework for sustainable employee engagement. Burr and Girardi’sideas suggests that in order to optimise the intellectual capital that exist inwith people, organizations need to control the capacity of people working in afirm and their willingness to apply it and giving them the opportunity to do soas well. And Towers Watson ideas believes that engaged employees areemotionally invested in the organization. And the organization should facilitatesustainable engagement through its culture, work systems and the way it managesits people.
So, it can be said as these two different ideas have differentvalues but at some point these ideas are similar and at some point it’sdifferent. Even though they have few dissimilarities, but these both ideas havesame common objectives which is to increase employees’ performance andultimately organizational performance.There are few differences in between these two concepts.Burr and Girardi’s model says that organizations need to harness the capacityof employees and their willingness to apply it as well as giving them theopportunity to do so whereas Tower Watson’s framework says that organizationhas an important role in facilitating sustainable engagement through itsculture, work systems and the way it manages its people.
Burr and Girardi’smodel talks about the control mechanism but Watson’s framework talks about theemployee who are not just motivated to do their jobs well, but they areemotionally invested in the organization. Intellectual capital is thecollective insights, expert knowledge and commitment of employees whereasemployee engagement is the extent to which employees are emotionally investedin an organization. Burr and Girardi’s approach comprises competence,commitment and control but on the other hand Towers Watson approach comprisestraditional engagement, enablement and energy. Towers Watson is actually morethan commitment. As per this approach, engaged employees are not just motivatedto do their jobs but they are emotionally invested in the organization.Both the models are concerned with increasing the employee performanceand ultimately organizational performance through different concepts. Both theconcepts include the commitment factor which should be there in every firms toincrease the working efficiency.
Burr and Girardi’s model says that theintellectual capital is the product of commitment and competence. Withoutcommitment, a firm can get a talented employee but can’t get things done.Similarly, Watson’s elements also consist the traditional engagement elementwhich says employees’ commitment to the organization and willingness give extraeffort to their employer. Commitment is the degree of identification andinvolvement that individuals have with their organizations’ mission, values andgoals. Employee engagement goes further than simple compliance or surfacebehaviour, it is an emotional attachment to the organization. Employee thinknot just of “what’s in it for me?”, but also “what’s in it for us?” Companies thathave engaged employees perform better and have higher staff retention thanthose that do not. A highly passionate employee will have a high level of intellectualcapital and engagement, it means that s/he who is smart or competent and highlyengaged employee will perform well at work.
And also, Intellectual capitalcannot be separately applied in efforts to explain performance and performancemanagement. So, both the elements are required for increasing the organizationalperformance. As per the Burr and Girardi’s ideas, the nature of the employment relationshipinfluences the extent to which this discretionary effort is applied. So, employmentrelationship has to be good in order to create a proper working environment,culture and work systems. If the employees are engaged, then the firm can deliveroperating margins more that the low engagement companies. Within the frameworksof job designs, theorists suggest that the power over respective jobs and henceperformance encompasses influences on the ability to utilise skills, to conformto efficacy beliefs and job crafting with the ideology of worker empowerment atthe centre.Towers Watsonpreaches sustainable engagement – a measurement which has an increased focus onproductivity. And as per Watson, companies having high sustainable engagementdeliver operating margins that are 3 times higher than those of low-engagementcompanies.
According to the Towers Watson Australia Global Workforce Survey, 32per cent of people admitted to performing below par in the previous month, only52 per cent of people said the level of stress they were under was manageableand 56 per cent worried about their future financial state. According toTowers, there are five top workplace elements on sustainable engagement thathave the greatest collective impact. They are leadership, stress, balance , goals & objectives, supervisors and organizations’ image. AndTowers believes that by focusing on the five drivers of sustainable engagement,organizations can set a focused and relevant agenda that can make a differencein their performance, often without a significant monetary investment.
TowersWatson found that only two in five workers (39%) in Asia Pacific are highlyengaged at work. The rest, three-fifths of the workforce, are struggling tocope with work situations that do not provide adequate support and emotionalconnection. These workers are not consistently productive and they lack thewillingness to go the extra mile for their employers. The lack of employeeengagement translates to a cost for their employers in terms of loss inproductivity, lower work performance and high staff turnover. And Watsonbelieves that the organization should play an important role in facilitatingsustainable engagement through its culture, work systems and the way it managesits people.
Burr and Girardi expanded Ulrich model developed in 1998 which takes into considerationsa third integral element that is control, and provide an empirical causalitybetween the variables that can all be affected by an organizations’approach to HRM whichUlrich fell short of doing. Intellectual capital is consequently a product of “capacity whichis the knowledge, skills abilities, information and experience of people;willingness of people to apply capacity; and opportunity provided by the worksystem to activate stocks of intellectual capital”. It is also said as a productof competence and commitment.
It is evident within two broad levels which are individualand organisational. The interplay between ability, behaviour, effort and timeto which the employees have the sole autonomy is said to be an importantcontributing factor for organisations. The effectiveness of this theory toemployee performance is seen on how it clarifies the issue of competence andcommitment as limited or insufficient factors in the development ofintellectual capital. It is used in understanding HRM principles particularlyin employee performance.
As per Burr and Girardi, intellectual capital hasthree core ideas integrated into it: capacity, willingness and opportunity. Themeasure of intellectual capital is regarded as the measure of capacity, skills utilisationand efficiency when it comes to competence requirements as well as commitment,either affective, continuance or normative. And the model of Burrand Girardi indicates that organizations need to harness the capacity ofemployees, and their willingness to apply it and as well as giving them theopportunity to do so in order to optimise the intellectual capital that resideswith the people. So, therefore, we can say that the implication of this modelis that HRM policies and practices that enrich employee capacity and willingness,and which provide opportunity, will not only increase employee performance butalso leads to increase organizational performance.Engagedemployees perform better in their jobs.
And they are less likely to take leave,and businesses with high engagement levels tend to show higher profit margins. Engagement is not just anevent, it’s an experience that shapes employee behaviour and performance inpositive ways. And to manage employee engagement successfully, we have tomeasure the quality of work, not just the quantity. Sustainable engagement isthe intensity of employees’ connection to their organization, based on threecore elements which are traditional engagement, enablement and energy. Andsustainable engagement requires strong leaders and managers. It refersto employees maintaining a positive connection to their companies that yieldsconsistent productivity.”Theterm “Intellectual Capital” collectively refers to all resources that determinethe value of an organization, and the competitiveness of an enterprise.
” It isan intangible assets of the organization which grows if the firm is to prosperunlike other assets which begin to depreciate the day they are acquired. It is considered as a valuable,non-substitutable and inimitable strategic resources with similar propositionsin knowledge – based theory concerning knowledge based resources andcapabilities. Some people has also described intellectual capital as Intellectualproperty is the value of a company or organization’s employee knowledge,skills, business training or any proprietary information that may provide thecompany with a competitive advantage.
From a human resources perspective, it isnot an easily translatable into financial terms. Intellectual capital is bothascertainable and transferable and so as performance that travels fromindividual to organisational frameworks. Though the term capital is vague andproblematic, intellectual capital takes into consideration intangible assetsthat are not intellectual. As such, performance is said to be equally diffusedin organisations.
Intellectual capital includes the skills and knowledge that acompany has developed about how to make its goods and services.