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Employee engagement

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Employee engagement

Introduction

Engagement is one of the key buzzwords in 21st century management. The strategic human resources management (SHRM) approach is founded on the belief that people are the key differentiators in achieving competitive advantage. Employees need to be managed skilfully and seen as assets to be developed rather than costs to be controlled.

Employee engagement is therefore central to the ideology and practice of SHRM. But what does it mean to be engaged in work? How can engagement be encouraged? How does the reality of working conditions affect these attempts? To what extent does the structure of management and ownership in organisations affect the prospects of employee engagement?

In this free course we explore these questions though three key themes:

  • the concept of employee engagement
  • employee involvement and participation
  • collective aspects of employee relations.

We shall also examine how the wider context of employment relationship affects how engagement is understood and the methods used to encourage it.

In this free course, we define engagement as ‘a set of positive attitudes and behaviours enabling high job performance of a kind which is in tune with the organisation’s mission’.

Employee engagement is therefore vital to the success of organisations. Engaged employees are likely to be more satisfied, committed and productive in their work. In economies increasingly dominated by service industries, good customer relations – built by engaged employees – are central to success.

This free course works by building on your own experiences as employees and managers of different kinds of organisations. The organisation for which you work and those with whom you come into contact all make choices as to how they engage with their workforce. These choices raise all kinds of dilemmas and this free course aims to make you aware of these. It will also equip you with knowledge if you have to make these choices for yourself.

We shall see in this free course that strategies for and experiences of employee engagement differ. These differences are strongly influenced by contextual factors like organisational and industry norms and the wider environment of employee relations.

This OpenLearn course is an adapted extract from the Open University course BB845 Strategic human resource management.

Learning outcomes

After studying this course, you should be able to:

  • identify and describe the meaning of employee engagement and its different components

  • appreciate the strategic issues associated with employee engagement

  • describe the changes in systems of employee relations

  • appreciate the impact of structures of management and ownership on employee engagement

  • reflect on the current state of employee engagement in an organisation.

1 Experiencing engagement

Most people who have worked in different jobs in different sectors will have different experiences of employee engagement. Moreover, as we progress in our career and our lives change, we often find our own expectations about how we want to engage in our work also change. It is certainly not possible to identify a single set of assumptions and practices about employee engagement that is universally applicable.

We want to begin therefore with a set of activities that encourages you to reflect on your own experience of employee engagement.

Described image
Figure 1.1 As our career and lives change our engagement with our work also varies

Activity 1.1 Experiencing engagement

Activity 1

Timing: Allow around 120 minutes
Introduction

Purpose: to reflect on your own working experiences.

Before we unpick different aspects of employee engagement as it is understood and practised within SHRM we want to begin by identifying your own experiences at work which might be relevant to these ideas.

Task A

We would like you to think about the different jobs you have had in your career so far. Think about the following questions with reference to one of those jobs.

  • Which aspects of the job did you like and dislike and how did these change during your time of employment?
  • Which aspects of the job kept you engaged? Think of the different factors which were relevant to your level of engagement. Did you enjoy the work itself? Were you more motivated by the rewards you received for the work? Were you committed to the organisation?
  • Did your engagement with the work change over your period of employment? If so, what caused these changes?
  • If you are no longer in this job, what was it that influenced your decision to leave the organisation? You might think about the respective importance of ‘push’ (related to the job you are leaving) and ‘pull’ (related to the new job) factors in this decision.

In answering these questions, begin by contextualising the nature of the organisation and type of work. Explain what (if anything) kept you engaged with the work, whether and how this changed through the course of your employment and what influenced your decision to leave. Was there anything the organisation could have done differently to change your experience of the job?

It is important that for this and all other activities in this free course you make notes and prepare a short statement capturing these issues.

Task B

Now read the article ‘The time of your life’ which presents some recent research on the dynamics of employee engagement in the working population of the UK. It suggests that engagement is strongly influenced by such factors as the life stage and size of companies. While reading, make some notes and consider the question: to what extent does this reflect your experience?

The time of your life

Brown, A., Roddan, M., Jordan S. and Nilsson, L. (2007) ‘The time of your life’ People Management, vol. 13, no. 15, pp. 40–3.

Are your staff young and promiscuous, steady and driven or content and loyal? Finding out could reveal the best way to keep them motivated.

Older workers may be more expensive, but engagement and motivation increase with age and employees aged 55 and over tend to be happier with their work and more likely to stay with their employers.

Findings from the 2007 YouGov PeopleIndex employee engagement study reveal three distinct stages of the work-life cycle: “young and promiscuous”, “steady and driven” and “content and loyal”. These different phases have important implications for UK companies and suggest employers should consider approaching employee engagement in a segmented way, according to life phase.

Turnover, for instance, is likely to be high among younger staff, which makes it all the more important to engage them right from the start and offer great career development so they are committed and motivated to perform for however long they stay.

The survey of 40,000 employees from a broad range of industries across the UK, conducted earlier this year, shows that, in general, only 52 per cent of employees are engaged in their organisation, less than three-fifths (57 per cent) would speak highly about their company as an employer, and only two-thirds (67 per cent) are motivated to perform well in their job.

Loyalty is also a key challenge for today’s companies. Gone are the days when young people joined a firm and stayed for the long term. Employees with 10, 20 or even 30 years of service in the same company tend to be the exception rather than the rule.

Less than two-thirds (64 per cent) say they feel loyal towards their company. Only three-fifths (61 per cent) would want to be with their firm in a year’s time, and this falls to less than half (48 per cent) in three years and less than a third (31 per cent) in 10 years’ time.

Moreover, when comparing strongly engaged employees with strongly disengaged employees in the UK, the strongly engaged are almost 25 times more likely to have strong loyalty towards their organisation, more than five times more likely to feel motivated to perform, almost four times more likely to speak highly of a company’s products, services or brands, and almost three times as likely to believe the company is customer-focused.

However, these statistics vary markedly between the three stages of the engagement life cycle. The young and promiscuous (aged 18-24) demonstrate the lowest levels of engagement (48 per cent), motivation (65 per cent), job satisfaction (59 per cent) and commitment (60 per cent). This is not surprising when you consider that this group has grown up in a period where it is not unusual to move between jogs in quick succession, and, indeed, it can be the quickest way to get ahead.

This group can be daunted by the prospect of commitment to an organisation, even in the short-to mid-term, and three years – a relatively short period of time within a person’s entire career – is seen as considerably longer in their eyes. Only half (52 per cent) say they want to be with their organisation in a years time, and a third (33 per cent) in three years’ time.

Figure 1.2 Extent to which respondents would speak highly about their organisation to people externally

UK organisations need to ask themselves: is high turnover among this age group inevitable, or can something be done?

Note, however, that the young and promiscuous have the highest satisfaction rating in terms of training opportunities (52 per cent) and are the most satisfied group in terms of career development (45 per cent), although these career opportunities could be perceived as external by making a move elsewhere, rather than internal within the current organisation.

It therefore becomes important for organisations to marry training with the perception of internal opportunities. To maximise long-term loyalty and engagement, young employees should be given the opportunity to apply their new skills and take on more responsibility. Internal promotion opportunities need to be communicated effectively and recognised and rewarded accordingly.

At the next stage – the steady and driven period, which covers the 30 years between the ages of 25 and 54 – the study suggests people tend to have found their main career interest and are striving to get ahead. Engagement tends to remain steady during this period, scoring around 51 per cent. Similar patterns are seen in satisfaction, motivation, commitment and loyalty.

Just over three-fifths of the steady and driven report that they feel loyal towards their organisation, but there are differences between the younger and older members of this group when it comes to actual loyal behaviour. For the younger members, moving jobs after a reasonably sort period is de rigueur, whereas staying with a company for over three years becomes more acceptable with age.

As employees hit the content and loyal period (55 plus), they are at their happiest in terms of working life. People have progressed to a level they are content with, or are resigned to the fact they may not go further, and so are less focused on getting ahead. The highest levels of engagement can be seen during this stage, at 59 per cent (compared with a UK average of 52 per cent), and this group tends to be the most satisfied in terms of reward and recognition. Not surprisingly, they are the most loyal, with 58 per cent of this age group saying they want to be with their organisation in three years’ time.

There are also big differences in engagement between large and small companies. It is easier to feel part of the team and that you are making a real difference if you are an employee in a small company of less than 100 people. You are closer to senior management and hence the strategic vision of the organisation.

High levels of pride in the organisation (70 per cent against a UK average of 64 per cent) are seen among employees in small firms, who are much more likely to recommend their organisation as a good employer (68 per cent compared with a 57 per cent average) and the products and services they offer (80 per cent against 67 per cent). These ratings all drop off as company size increases.

In fact, a comparison with larger companies, small firms are rated highly by their employees for communication, line management, reward, recognition, senior leadership and training.

Figure 1.3 ‘I want to be working for my current organisation in three years’ time’

Three-quarters (75 per cent) of staff in small firms say they feel loyal to their organisation, and almost two-thirds (65 per cent) say the organisation deserves their loyalty. Compare this with companies with 1,000 and more employees, where loyalty falls to only 59 per cent and less than half (44 per cent) say their loyalty is deserved.

The result is that employees in small companies are more engaged. This presents a big challenge to both large organisations and those that are taking the next steps in growing from small – to medium-sized and beyond.

For large companies, the task of engaging employees in the organisation is inherently more difficult. It therefore becomes more important to identify and monitor the factors that specifically drive engagement for their employees. It is too easy to feel like a ‘small cog in a big wheel’, but we find that the large organisations that manage to make their staff feel like they are part of the fold and that they are making a real difference reap the rewards in terms of individual and team productivity.

Expanding companies should take stock of how they can continue to drive engagement by maintaining the factors that have helped them to be so successful as a small company. Maintaining a small, family atmosphere for as long as possible and continuous, effective communication is vital to making employees feel they are valued and recognised. This can be encouraged through smaller teamworking models and strong two-way communication mechanisms. It is also important to ensure that good quality processes are in place for the next stage of the company’s life.

What drives engagement?

Employee engagement is an individual’s connectivity to an organisation. It is made up of both their emotional and rational attachment to the company, its work and its performance. Employee satisfaction is, as the HR community recognises, no longer enough, it is engagement that is critical to aligning people with our strategy.

Research has shown there is a strong link between employee engagement, and harder organisational metrics such as customer service, productivity and financial performance. The best organisations understand these links and are focused on identifying the factors that will drive stronger engagement levels among their employees.

The 2007 YouGov PeopleIndex employee engagement study suggests that there are a number of core factors driving employee engagement. These hold true across organisations in different sectors, large and smaller companies and at various stages of the employee life cycle.

1 Recognition: do managers and the company as a whole make people feel valued by telling them when they have done a great job and celebrating their successes?

2 Reward: are people fairly rewarded for their efforts and do they see the effort-reward balance as a two-way street?

3 Change management: how well do companies communicate about change (and the rationale for it) and how well do they engage employees throughout the company in the change process?

4 Performance management: how well do organisations deal with poor performance and how good are they at rewarding great performance differentially?

5 Leadership: how well do senior executives in the organisation outline the vision and strategy for the company, communicate and engage their people with it and lead by example in terms of the behaviour and values needed to deliver the vision?

‘The best firms are focused on identifying the factors that drive engagement’

The study suggests that it is many of the softer, people-based skills that are lacking in UK organisations: the factors about are all ones that the data shows have a high impact on employee engagement levels but that, at present, are given low ratings by the typical employee. The challenges of effective leadership, effective management and getting the balance of reward and recognition right remain the key issues for companies wishing to raise their engagement levels.

Andy Brown is managing director, Matt Roddan associate director, Sarah Jordan senior analyst and Louise Nilsson analyst in the organisational consulting group at YouGov, an online research and consultancy agency.

Task C

Finally, watch this short video. We shall see in later sections of this free course that employee engagement is big business for management consultants. In this video we see one such consultant, Will Marre, outline his reasons for its contemporary importance. He summarises what he considers the different levels of employee engagement and proposes what he believes to be the most important factor in contemporary work affecting these levels. While watching, consider the following and make some notes:

  • To what extent does this reflect your experience?
  • What is his central argument?
  • Do you share his view?
Interactive feature not available in single page view (see it in standard view).

If you are reading this course as an ebook, you can access this video here: The future of work and employee engagement - Will Marre

Discussion

Most people find that their level of engagement with their work is far from consistent. There are many factors that can affect this. It is not simply moving to a different job that creates change. Changes to personal circumstances can also affect our attitudes. Management and organisational practices are extremely influential too and often dictate how work is carried out and experienced. External factors are very important and shape the context for work. What is nominally the same job will actually change from year to year.

All of these factors will influence how we engage with our work. Intrinsic and extrinsic influences are also important. For example, we might engage with a job which is intrinsically unstimulating because of the rewards that it provides. Some work is valued because of the wider social contribution that it makes. This, according to Will Marre, is an increasingly important explanation for engagement.

2 Finding meaning and engagement in work

You will no doubt have found from the previous section that most people who have worked in different jobs in different sectors will have different experiences of employee engagement. Moreover, as we progress in our career and our lives change, we often find our own expectations about how we want to engage in our work also change. It is certainly not possible to identify a single set of assumptions and practices about employee engagement that are universally applicable.

No doubt there are a number of issues which keep you engaged in your job. It is likely that financial reward is an important factor. The nature of the work itself is significant, as are social factors derived from the people with whom you are working. You might identify with the organisation that you are working for and wish to contribute to its objectives. You might have professional attachments that are more important than organisational identifications or, conversely, you may work in an area for particular personal or family reasons. There is a strong diversity of reasons why people engage with their jobs.

People bring meaning to and take meaning from their work. We might consider how our individual identities are influenced by our work. For example, we often ask, when introduced to someone for the first time, ‘What do you do?’ Why do we ask this? What conclusions do we draw from the answer?

Clearly for many work is more than a means of simply paying the bills, it takes a major role in making them who they are. On the other hand, we must also recognise that for some people work offers only toil and drudgery and can produce both physical and mental pain.

It is because of this diversity of purpose that building employee engagement is problematic. Managers must make strategic choices about how to engage employees in the hope of winning their commitment and encouraging them to expend discretionary effort in their work. But it is important to recognise that any such interventions will depend on an understanding of the meanings that people bring to, and derive from, their work. These meanings are unlikely to be fixed but they represent the reasons why and how people work, and the consequences of their work for their sense of self-identity. The relationship that individuals have with their work is likely to change as their circumstances change.

It is naïve to consider engagement independently from this context. We must recognise that the nature of employment and the different relationships that individuals have with their work are central to understanding, and influencing, their engagement with this work.

In the following set of activities we consider the different meanings that individuals can derive from work.

Activity 1.2 The meaning of work

Activity 2

Timing: Allow around 60 minutes
Introduction

Purpose: to consider the different meanings that individuals can derive from work.

Task A

Read the following short extract from Alain de Botton’s book, The Pleasures and Sorrows of Work.

Printed item icon
The pleasures and sorrows of work

De Botton, A. in Henley, J (2009) ‘The new work order’ The Guardian, 24 March.

[ … ]

Nowadays workers have to be ‘motivated’, meaning they have – more or less – to like their work. So long as workers had only to retrieve stray ears of corn from the threshing-room floor or heave quarried stones up a slope, they could be struck hard and often, with impunity and benefit. But the rules had to be rewritten with the emergence of tasks whose adequate performance required their protagonists to be, to a significant degree, content, rather than simply terrified or resigned. Once it became evident that someone who was expected to draw up legal documents or sell insurance with convincing energy could not be sullen or resentful, the mental wellbeing of employees began to be a supreme object of managerial concern.

The new figures of authority must involve themselves with childcare centres and, at monthly get-togethers, animatedly ask their subordinates how they are enjoying their jobs so far. Responsible for wrapping the iron fist of authority in a velvet glove is, of course, the human resources department. Thanks to these unusual bodies, many offices now have in place a zero-tolerance policy towards bullying, a hotline for distressed employees, forums in which complaints may be lodged against colleagues and (I know of one office) tactful procedures by which managers can let a team member know his breath smells.

Contrived as these rituals may seem, it is the very artificiality that guarantees their success, for the laboured tone of group exercises and away-day seminars allows workers to protest that they have nothing whatsoever to learn from submitting to such disciplines. Then, like guests at a house party who at first mock their host’s suggestion of a round of Pictionary, they may be surprised to find themselves, as the game gets under way, able to channel their hostilities, identify their affections and escape the agony of insincere chatter. Power has not disappeared entirely in modern offices; it has merely been reconfigured. It has become ‘matey’. It is by posing as regular employees that executives stand their best chances of preserving their seniority.

[ … ]

Though we think of the point of work as being primarily about money, these dark economic times only emphasise the extent to which generating money is an excuse to do other things, to rise from bed in the morning, to talk authoritatively in front of overhead projectors, to plug in laptops in hotel rooms and to chat in the office kitchen. Long before we ever earned any money, we were aware of the necessity of keeping busy: we knew the satisfaction of stacking bricks, pouring water into and out of containers and moving sand from one pit to another, untroubled by the greater purpose of our actions. To view our upcoming meetings as being of overwhelming significance, to make our way through conference agendas marked ‘11 a.m. to 11.15 a.m.: coffee break’ and not think too much about the wider purpose – maybe all of this, in the end, is the particular wisdom of the office.

Office work distracts us, it focuses our immeasurable anxieties on a few relatively small-scale and achievable goals, it gives us a sense of mastery, it makes us respectably tired, it puts food on the table. It keeps us out of greater trouble.

Task B

Now watch the following video where de Botton expands on his ideas about the role of work in society.

Interactive feature not available in single page view (see it in standard view).

If you are reading this course as an ebook, you can access this video here: Why do we have HR departments?: Alain de Botton

Having watched the clip, reflect on the following questions:

  1. What are de Botton’s key points about changes in societal attitudes to work over time?
  2. Do you agree with his suggestions about the importance of work today?
  3. What do you think about his argument that work provides a necessary distraction from the rest of life?
Task C

As we have seen, de Botton provides a wryly cynical account of the modern workplace. However, it is worth reminding ourselves that for many work remains hard physical labour suffered through economic necessity as we see in the following documentary.

Watch the next film, where workers in France account for their experiences in the car, food, fishery and electronics industries. What do you think it means to be ‘engaged’ with work in these environments? Note that this clip is in French with English subtitles.

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Discussion

De Botton suggests that the ‘problem’ of engagement is a modern phenomenon. In the past, we worked because we had to. Work was hard and hours were long. Questions of engagement in this context were almost irrelevant as the result of not working hard was severe physical deprivation.

‘Management’, such as it existed, simply saw its role as ensuring that levels of output were maintained. To use the common adage, management was all stick and no carrot.

Now, according to de Botton, there is something of an inversion. Management is now so preoccupied with ‘motivation’ and ‘engagement’ through the soft rhetoric of the HR department, that work has become almost more pleasurable than the rest of our life.

Moreover, we seek meaning and self-identity through our work. We have expectations that our goals should be realised through this work and are dissatisfied if they are not.

However, de Botton’s account of the gentle ironies of modern office life does ignore the large ‘hidden’ sector of the labour market in which work exerts a real physical cost and engagement is simply the result of economic necessity.

The final video offered a testament to the experiences of a handful of workers in France. However, we should also remember the harsh working environments faced by many workers in the developing world, many of whom are making the cheap products that sustain our modern economies and enable us to enjoy more pleasant work.

3 The contemporary emphasis on employee engagement

It is perhaps in recognition of changes in people’s work and the growing emphasis on the delivery of ‘services’ that the idea that senior strategic management should pay serious attention to employee engagement is growing.

It is sometimes suggested that this is just as important – if not even more important – during times of economic recession when there is risk of workers feeling alienated and insecure.

Employee engagement also represents big business for many consultancy firms that emphasise the importance of employee engagement and market their ‘solutions’. Virtually all the larger international firms have some presence and some product ‘offer’ in the area of employee engagement. For example, Gallup Consulting (2009) claims to maintain one of the most comprehensive global databases linking employee engagement to business outcomes. These include measures of retention, productivity, profitability, customer engagement and safety. The database is updated annually and the firm suggests that this enables clients to benchmark their organisation’s employee engagement levels against data collected in 45 languages from 5.4 million employees in 504 organisations in 137 countries.

Outside the normal commercial consultancies are organisations such as the Chartered Institute of Personnel and Development (CIPD) and the Institute for Employment Studies (IES). Reilly and Brown (2009) of the IES report that employee engagement is far more than a new fad.

Another indicator of the perceived importance of employee engagement is the way various governments have mobilised initiatives around the idea. In the UK, the Department of Business established a national commission on the theme headed by the industrialist David MacLeod. The MacLeod Commission reported in July 2009. We would like you to consider their findings in the next activity.

We must, however, exercise caution in evaluating the claims of management consultants. They are in the business of selling solutions to problems. How can we be sure that their solution is sound? Indeed, how can we be sure that the problem exists in the first place? Bear these issues in mind as you undertake Activity 1.3.

Activity 1.3 Why engagement?

Activity 3

Timing: Allow around 90 minutes
Introduction

Purpose: to look in more detail at the claims made for employee engagement and reasons why it is considered particularly important to contemporary businesses. We shall do this by examining the objectives and findings of the MacLeod Report.

Task A

Begin by exploring the  MacLeod commission report.

You will find it useful to examine it in full; although it is a lengthy document it is presented in a digestible form and there are a number of useful case studies.

Task B

Independent commentary on the report and its findings are found in the online version of HR magazine. Read the article and click through the related links.

Task C

Reflect and make notes about the following questions:

  • The report offers a number of enablers for improving employee engagement in the workplace. What are these?
  • Consider their relevance to your workplace. How might they be applied?
  • Do you think they offer a route for increasing levels of engagement in your organisation?
  • More generally, do you think these principles are universally applicable?
Discussion

The MacLeod report identifies four enablers as being particularly relevant for engagement:

  • Leadership is necessary to provide a narrative about organisational purpose and how employees can contribute to this purpose.
  • Engaging managers should facilitate and empower rather than control or restrain.
  • Voice represents the central role of employees in providing views that are listened to and acted upon.
  • Integrity describes a situation where behaviour is consistent with values which lead to trust.

As with Activity 1.1, everyone’s organisational experiences will differ. The question is whether the presence (or otherwise) of these enablers is seen as leading to high levels of engagement. Were you able to provide illustrations for each of the enablers in practice?

Conclusion

Employee engagement is attracting a great deal of interest from employers across numerous sectors. In some respects it is a very old aspiration – the desire by employers to find ways to increase employee motivation and to win more commitment to the job and the organisation. In some ways it is ‘new’ in that the context within which engagement is being sought is different. One aspect of this difference is the greater penalty to be paid if workers are less engaged than the employees of competitors, given the state of international competition and the raising of the bar on efficiency standards. A second aspect is that the whole nature of the meaning of work and the ground rules for employment relations have shifted and there is an open space concerning the character of the relationship to work and to organisation which employers sense can be filled with more sophisticated approaches.

But there is reason to worry about the lack of rigor that has, to date, often characterised much work in employee engagement. If we continue to refer to ‘engagement’ without understanding the potential negative consequences, the core requirements of success, and the processes through which it must be implemented, and if we cannot agree even to a clear definition of what people are supposed to be engaged in doing differently at work (the engaged ‘in what’ question), then engagement may just be one more ‘HR thing’ that is only here for a short time. On a positive note, there is now a wider array of measurement techniques with which to assess trends in engagement and an associated array of approaches to effect some change. Thus, aspiration can more feasibly be translated into action.

References

de Botton, A. (2009) The Pleasures and Sorrows of Work, London, Hamish Hamilton.
Gallup Consulting (2009) 'Employee engagement [online] www.gallup.com/ consulting/ 52/ employee-engagement.aspx. (Accessed 12 June 2009).
Reilly, P. and Brown, D. (2009) 'Employee engagement; what is the relationship with reward management?', HR Network Paper MP83, Institute for Employment Studies, January.

Acknowledgements

Except for third party materials and otherwise stated (see terms and conditions), this content is made available under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 Licence.

The material acknowledged below is Proprietary and used under licence (not subject to Creative Commons Licence). Grateful acknowledgement is made to the following sources for permission to reproduce material in this free course:

Cover image fdecomite in Flickr made available under Creative Commons Attribution 2.0 Licence.

Text

De Botton, A. (2009) 'The new work order', Henley, J. The Guardian, 24 March. Copyright © Guardian News & Media Ltd 2009.

Images

1: iStockphoto.com.

AV

Activity 1.2: ‘My work, my sorrow’ interviews on physical distress at work in France today, © LVP Limited (2009), London.

Every effort has been made to contact copyright owners. If any have been inadvertently overlooked, the publishers will be pleased to make the necessary arrangements at the first opportunity.

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