What is Employee Engagement?

At the heart of employee engagement is the idea that employees are emotionally invested in a business and giving their best selves at work.

A brief history of employee engagement

In 1990, the Institute for Employment Studies introduced the business world to a topic that would completely reshape the role of HR professionals everywhere: Employee Engagement.

In their groundbreaking report, ‘From People to Profits, the HR link to the service-profit chain,’ Barbar, Hayday, and Bevan identified a connection between employee attitudes and overall business performance. It was this link between engagement and the bottom line that would force the HR industry to fundamentally change over the next three decades.

In that time, most business leaders have come to understand the importance of engagement (and actively fear disengagement); but they don’t always know why, or what to do about it. The idea of dedicating resources to engagement initiatives can seem vague at best, and frivolous at worst.

But the numbers on employee engagement don’t lie. According to Gallup survey results, highly engaged organizations experience:

  • 21% greater profitability
  • 41% reduction in absenteeism
  • 17% increase in productivity
  • 25-65% lower turnover
  • 10% higher customer engagement
  • 48% fewer staff safety incidents
  • Higher stock value

Now, how’s that for value? Creating engaged workforces not only improves the quality of life for employees and their leaders, but it also translates into recovered revenue and new business.

What exactly is employee engagement?

At the heart of employee engagement is the idea that employees are emotionally invested in a business and giving their best selves at work. They’re performing at optimal productivity. They work smarter, not harder. They’re happy to go the extra mile. They make contributions they wouldn’t otherwise make, and they’re willing to do it.

And though that definition may seem straightforward, it’s easy to confuse engagement with other important HR health metrics.

Here are a few things engagement is not:

Employee satisfaction. An employee can be satisfied in their job without being engaged. Employees are satisfied when they’re simply able to avoid feelings of unhappiness in their job; they’re engaged when they’re committed, interested, and are highly attached to the outcome of their work.

Retention. Don’t get us wrong, employee retention is also critically important. But if retention is a cake, engagement is the icing on the cake. Remember, organizations gain a return on their investment with retention. They gain a competitive edge with engagement.

The employee experience. Much like job satisfaction, the employee experience is something that must precede engagement; but they’re not one-in-the-same. Great employee experience is a gift given from the employer to the employee; engagement is the gift the employee gives back.

Ultimately, employee engagement is a competitive advantage. Companies with high engagement generate more revenue, have higher profit margins, and recover more quickly after setbacks. If a brand rises above the rest — think industry giants like Amazon, Facebook, or Google — you can bet there’s an engaged workforce behind them.

What drives engagement?

As a business leader, how can you create and cultivate the environment for which engagement is able to flourish? Though there’s no one-size-fits-all approach, there are some common practices shared by companies that prioritize every facet of an employee’s well-being.

Here are the top 5 drivers of employee engagement:

  • Connection. Building relationships with others
  • Contribution. Doing something meaningful
  • Freedom. A sense of choice and autonomy
  • Growth. Developing personally and professionally.
  • Fun. Really enjoying their time at work.

When measuring engagement, it’s important for businesses to ask questions related to these five drivers. After all, when employers do their part to prioritize and optimize connection, contribution, freedom, growth, and fun, engagement begins to thrive.

Blueprint for employee engagement

How to improve employee engagement

So now what? We’ve covered what engagement is, and where it’s been. We’ve highlighted its business value, and the specific drivers that cause an employee to feel engaged. All that’s left is putting it into practice.

Set a foundation of meaning

Align employee work to company goals. Did you know that only 7% of employees understand their role in achieving high-level business goals? Combining goal management software with the OKR goal-setting method are two sure-fire ways to help employees plug into the bigger picture, take accountability, and increase engagement.

Let employees lead. Whether it’s teaching a training course, designing a team-building activity, or getting a group together for a fun run — asking employees to take the lead on a project that matters to them (sometimes outside their work area!) instills a sense of impact.

Create career growth opportunities. In a survey of highly engaged top performers, 45% said that professional or skill development was a top motivator, and another 13% said opportunities for advancement mattered to them. Try offering employees a mentorship lunch with an executive or reward them for taking a class to show them that their growth matters to you.

Frame it with appreciation

Say “thank you” regularly. A whopping 66% of employees admit they’d quit a job if they felt undervalued and unappreciated. Luckily, recognition is an easy, low-cost strategy to fight disengagement. The secret? Recognition needs to flow from all directions — managers, teams, and individual employees must feel empowered to recognize their peers for a job well done.

Prioritize coaching and recognition. Closely related to growth and development, employees crave feedback. No one wants to be in the dark about where they stand. Fortunately, there are plenty of tools available to help you create exceptional feedback and recognition programs.

Top it off with impact

Give frequent and specific feedback. Industry leaders are ditching the annual performance review for continuous performance management conversations. More frequent feedback gives employees a stronger direction, makes it easier for them to perform well, and gives them a better sense of meaning.

Include Leadership. Having corporate leadership and management involved with recognition and engagement helps keep employees connected to the corporate purpose. For example, have the CEO give recognition to employees or teams that live out the corporate values at a company meeting.

And finally, be mindful of trends

The fact that employee engagement is mission-critical will never change; the methods we use to make it happen will. Here are some trends to watch in the exciting world of employee engagement:

The growing role of HR tech. Engagement and its drivers are no longer an intangible HR health metric. Want to benchmark employee feedback? There’s a tool for that. Need a simple way to reward your workforce? There’s a tool for that. Don’t know where to start with HR analytics? Yep.

The labor crisis is forcing business leaders to rethink where employee engagement falls on their priority list. With an unemployment rate lower than we’ve seen in decades, recruiting and retention are turning into big business problems. The solution? Engagement, engagement, engagement.

The pulse survey. Why wait an entire year to measure improvements in engagement when you can keep your fingers on the pulse all year long? Consider turning to quarterly, monthly, or even weekly pulse surveys that track engagement with a set of regular, repeated questions.

Ready for your own engagement program?

Kazoo’s all-in-one Employee Experience Platform has helped hundreds of businesses tap into the power of employee engagement through continuous performance management, Recognition & Rewards, and employee engagement surveys. So, if you’re ready to re-engage your workplace, book some time for a personalized demo today.

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