The most important asset for any company is its people. Employee engagement should be a key focus for every business since it has been proven that companies with engaged employees are more profitable.
In this post, we will cover everything you need to know about employee engagement and why it matters to your company. We'll also provide actionable tips on how you can improve employee engagement in your workplace and create a culture where all employees feel appreciated and inspired to do their best work!
Contents
It's time to bring humanity back to work
For far too long now, many employers have treated employees as easily replaceable disposables. They use and abuse their employees and squeeze every ounce of their soul out of them.
It's time for a reinvention.
Fortunately, there are great employers who already understand that their people are their most valuable asset in creating a positive impact related to their higher purpose.
These employers understand that the social contract of an employer and employee has to change and this means that the dynamic of the employee role is upended.
Who Benefits from Employee Engagement?
The short answer is "everyone".
The employee, who feels that they are valued and appreciated. They are positive about their work, which is good for their health and wellbeing.
The people in the employee's circle of friends and family, who get to be around someone who is more positive and fulfilled at work, and this translates to their relationships.
The customers, who receive better quality and better experiences as a result of a strong commitment to the organization.
The employer whose company culture is so positive, their employees don't want to leave for more money or better benefits elsewhere.
The investors, who receive betters returns due to higher productivity and lower cost of goods sold, and lower employment-related expenses such as recruitment and onboarding.
It has been shown that an engaged employee contributes more, stays longer, and enjoys their work more than a disengaged employee, who often commits sabotage through theft, poor quality output, or absenteeism.
Employee engagement leads to customer satisfaction
You can't expect your customer experience to be good if your employee experience is not.
A study by Gallup found that customer engagement improves profitability, with engaged customers spending 134% more than those employees who are disengaged.
This makes sense because when customers see happy employees, they tend to assume that the rest of the staff must be just like them. This creates a ripple effect of positivity throughout the entire team.
When employees are happy, they're able to deliver exceptional customer experiences. When customers perceive high levels of employee happiness, they become loyal fans of the brand.
When customers are happy, it makes the work that employees perform much easier. It's a virtuous circle of positivity.
How employee engagement drives growth
Companies with engaged employees grew profits 3 X faster than competitors Source: Corporate Leadership Council
The key takeaway here? If you want a happy workforce, make sure you're providing them with opportunities for growth and development. This will help create an environment where people feel valued and appreciated. It also helps ensure that everyone has something meaningful to do every day.
In addition, when you have a positive culture of respect, trust, collaboration, and communication, this creates a safe space for all team members to share ideas and feedback without fear of reprisal or retribution.
With this combination, employees tend to give more discretionary effort, which results in higher productivity, lower costs, increased profits, and so much more.
Employee engagement reduces turnover
Highly engaged organizations have 87% less staff turnover and 20% better performance than average
Source: Corporate Leadership Council
Employees will leave you for a number of reasons:
- They don’t like what they do or where they work.
- They feel undervalued.
- They want something better elsewhere.
- They have no idea how much money they make.
- They think management doesn’t care about them.
- They believe there isn’t any career growth.
There are many other reasons why people quit but these six are most common.
Employee retention is a key to success
Engagement leads to employee retention, less turnover leading to reduced recruitment costs saving time and money in the long term;
Employee engagement is good for operating margin
Businesses with low engagement have an average operating margin of just under 10%, compared with 27% for those with the highest engagement score.
Source: “Global Workforce Study," Towers Watson, 2012. Based on a study of 50 global companies
Employee engagement is good for creativity
59% of engaged employees say their job brings out their most creative ideas vs. 3% for disengaged.
Source: WBCSD, “People Matter – Engage: Inspiring Employees about Sustainability,” August 2010
How can employee engagement impact business performance?
If the above statistics aren't appealing to you, perhaps these two stories might give you a sense of how engagement impacts business performance and can provide a competitive advantage.
I had a conversation with an employer about increasing employee engagement and I got an all too familiar response "shouldn't they just be happy to have a job?".
My reply is always "Wouldn't it be better if your employees were more productive?
Would it be helpful if your employees came to work as scheduled rather than calling in sick?
And wouldn't it be easier to trust that your employees aren't thinking about what they can get from you rather than what they can contribute to your success?" The logic from the employer's perspective is that they are doing a favour by hiring employees and that the employees should be thrilled to have a job but that's not the way the world works these days.
Employees want to feel appreciated and engaged. They need more than a paycheque at the end of every month, they need job security so that they are confident in their position with your company.
There is always going to be competition for employees these days because top performers are hard to come by but that doesn't mean that you can't build your company into a desirable employer by making sure that employee engagement is high.
The main goal of every business owner should be to create an environment where employees are engaged, happy and productive.
The employer needs to specify the company values, company culture, rules of engagement, responsibilities, expectations, and the areas where the employee is accountable for predefined results.
Employee performance should be measured on all of the above and employees should be recognized, compensated, and rewarded accordingly.
However, the employer does not have the right to demand unpaid work. The employer explicitly states the conditions of work when they hire the employee and this becomes the employer's social contract (and legal contract as an employer.) When the employer approaches their role as an employer in this regard -- doing someone a favour by hiring them -- they miss out on the opportunity to enjoy and benefit from the employee's full talents.
Employees also enter into a social contract (and legal contract too). Employees agree to fulfill the responsibilities, duties, accountability, and role that they've been hired to do.
I also spoke to an employee recently. He was hired by a startup that still hasn't been able to startup fully due to extenuating circumstances as a result of many companies being involved in a major project.
This salaried employee feels that he shouldn't have to work shift work, is trying to start a union, leaves work early because there is no work to do, is a general shit-disturber, and is constantly on his phone.
He's totally disengaged and rather than attempting busy work which will ultimately help him (like learning more about the new project) and helping to set up systems and processes which will be needed when the project roars to life in its full capacity, he's checked out emotionally, mentally and physically.
In both of these situations, these individuals act and sound entitled. They want more than their legal and social contracts provide while providing less than is expected.
In both cases, there are no winners, when there could be and should be winners.
Be a desirable employer... be a contributing employee.
The most important step to improving employee engagement is to realize that the world has shifted and expectations have changed. The businesses that are doing well have embraced a variety of new techniques, strategies, and mindsets.
18 key drivers of engagement are:
- Meaningful work
- Fulfilling work
- Alignment of values between employee and the organization
- Belief in the higher purpose of the organization
- Social relations at work
- Relationship with immediate supervisor or manager
- Health, safety, and well-being
- Work-life balance
- Equitable and fair approach to opportunities, assignments, promotions, training, workload, career advancement, etc.
- Compensation and benefits
- Rewards
- Recognition and appreciation
- Management and the leadership team, and more specifically, being able to trust them to be competent and do what they promise
- Workplace diversity, and inclusion
- Effective, transparent, honest, and respectful communication
- Corporate culture
- Feeling a sense of pride with the work they are doing personally and as an organization
- Being empowered to act appropriately
How can employee engagement be improved?
There are many ways to improve engagement:
- Redefine work to pivoting to a values-driven and purpose-driven organization,
- Refine strategy to produce the biggest impact,
- Invest in better equipment and software,
- Commit to improving your ESG and SDG results,
- Use pulse surveys to regularly check in on progress,
- Create more opportunities to have fun at work,
- Provide communications and leadership training,
- Enhance employee benefits,
- Update your approach to performance reviews,
- Create an employee survey to ask them what they'd recommend
- Make every day "Employee Appreciation Day" and 1,000+ other ways.
Start with an assessment of the biggest picture of your business and where it fits into the world, industry, market, and community, and then get very specific about areas of opportunity that will not only improve the well-being and personal fulfillment of the people your organization impacts but also the business itself.
As the world starts to open up again, a new normal is emerging and now is the best time to capitalize on a revised approach to business.
As with all change initiatives, you need to build a business case and get buy-in from the top. The change initiative must be championed from the "corner office" and the appropriate strategy and communications need to be shared.
You'll want to check out our eBook about Leading Change Initiatives for assistance and you'll want to download our workbook for building a business case.
Lead Your Business Through a Successful Change Initiative with This Free eBook Most change initiatives fail -- don't be a statistic -- and download this eBook to discover how to lead positive and profitable change.
Benchmark where you are at right now. Regardless of the results, it's where you are. As part of the benchmarking process, you'll need to come up with measures that make sense to your company.
Some measures can be employee engagement survey results, employee turnover numbers, recruiting costs, productivity, revenue per employee, employee satisfaction scores, 360 review results, customer reviews, customer acquisition cost, cost of goods sold, and reputation scores to name a few. In other words, there are many ways to measure employee engagement.
Use this worksheet for getting feedback from managers and supervisors
Use this T-Form worksheet for getting feedback from employees.
Ask your managers and supervisors to coach them on the use of the form, which is intended to discover what you can be doing differently and what you should not touch at all with respect to business outcomes, customer experiences, customer service, human resources policy, and various processes impact on employee ability to do their job well.
The worksheet is designed to be used as a simple way to get employee feedback across all areas of the business.
Each of the steps above is designed to build your foundation for improved employee engagement. If you are not used to involving employees in decisions, there will be a bit of a learning curve as you change the dynamic.
If you are used to involving employees in decisions and they are jaded because their input is rarely used, you'll need to come up with a plan. Likewise, if you have many failed change initiatives and a jaded audience of employees, you'll need to explain what you've learned from previous failures and why this time will be different.
As you embark on your quest to improve employee engagement, you'll have to define the different expectations and accountabilities. You'll identify people who need specific training and coaching so that they can adjust their style of management and/or communication. Investing in your people pays off, so show them that you are willing to help them discover alternate ways of handling situations.
Ultimately, your goal is to lessen the friction and frustration of your employees and give them the tools, support, and resources they need to rebuild the culture in a way that achieves your purpose, vision, and targets.
Also recognize that there will be resistance, so include your plan for handling resistance in the presentation of your proposal. Note that you may also have to release people who cannot or will not embrace the initiative. Keeping those people onboard, regardless of role, will derail your plans.
And create a culture of recognition and appreciation. Have both a formal and informal employee recognition program with and without rewards (sometimes it's best to leave rewards out of the program because they'll do more harm than good.)
FAQ
There are many definitions of employee engagement and we believe that the combination of these two phrases summarizes it the best:
- Engaged employees have an emotional connection to the organization and they want it to succeed because they will succeed too.
- Engaged employees contribute wholeheartedly. Disengaged employees expect that they should be able to take wholeheartedly.
Employee engagement fosters feelings of empowerment, motivation, and job satisfaction
It is the simple act of recognizing contribution toward the goals of the organization. Employee recognition creates a sense of value for employees; it also leads to higher levels of morale.
It is the feeling that an employee has when she/he feels valued by the organization.
It's also the effort that a co-worker, supervisor, manager, or leader takes to demonstrate that they see what their employees are doing and relate it to the "why" and "purpose" of the organization and give heartfelt thanks for the effort given.
Employee appreciation helps make staff feel acknowledged and valued by the organization they work for.
It refers to how much work a person can do in a given period of time and it reflects their efficiency as well as their skills.
One definition from Psychology Today states, "happiness is a state of well-being that encompasses living a good life, one with a sense of meaning and deep contentment." Therefore, employee happiness is feeling this way at work.
An employee experience is the sum of all interactions an employee has with their employer as well as other people and organizations that come into contact with them during a given time.
Perhaps the best way to describe the difference is with an example:
Suki just went above and beyond on a project to meet its deadline.
Ramon, Suki's boss, could recognize her by saying "Suki, you saved the day. Thank you." which would be a form of informal employee recognition.
Informal employee recognition is not part of any formal programs. Instead, it is spur-of-the-moment, delivered spontaneously to show the individual or team that you recognize their effort.
Ramon could also say "Suki, you saved the day. I thank you so much for all the extra effort you put in. I truly appreciate your commitment to this project and our team.
You must be exhausted. Right after our presentation, if you'd like, please take the rest of the day off."
Employee appreciation is much more than simply recognizing effort or the outcome.
Recognition is very important for people, in general, and employees in particular because it shows that you notice their contribution.
Appreciation is one level higher. It is recognizing the effort and stating why it matters. However, it goes beyond this by reinforcing the value that the individual brings to your team.
Both recognition and appreciation help create a positive work culture and stronger employee engagement.
Yes, and they are fluid.
Highly Engaged Employees - These individuals are highly motivated and committed to achieving organizational objectives. They enjoy working together towards shared visions and values. Highly engaged employees tend to be self-directed and proactive. They seek opportunities to learn new things and develop themselves professionally. Their commitment to the company often extends beyond just the workplace into other areas such as community service and volunteerism.
Moderately Engaged Employees – Moderately engaged employees typically exhibit positive attitudes about their jobs and their organizations. However, they may lack enthusiasm and excitement about some aspects of their work. This does not mean that moderately engaged employees don’t care about their jobs or their companies. Rather, they simply aren't fully engaged in all parts of their roles within the organization. Moderately engaged workers usually report moderate levels of productivity and performance.
Lowly Engaged Employees – Lowly engaged employees generally show little interest in their jobs. They rarely express any opinions on issues related to their responsibilities and duties. In fact, many lowly engaged employees seem unaware of even existing policies and procedures. As a result, these employees frequently fail to perform tasks effectively. They may appear apathetic, disinterested, unproductive, unmotivated, and disengaged.
Disengaged Employees - Disengaged employees have no desire to participate in their workplaces activities. They seldom contribute ideas or suggestions regarding improvements to processes and systems. Instead, they focus only on completing assigned tasks without regard to quality or timeliness. Many disengaged employees spend more than 50% of their time off task.
Actively Disengaged Employees - Actively disengaged employees actively avoid participating in the workplace. They may refuse to attend meetings, ignore emails, turn down assignments, and/or walk away when asked to complete routine tasks. Some actives disengaged employees actually sabotage their own efforts by sabotaging others' projects. Others intentionally undermine the success of colleagues and supervisors.
There are several ways to measure employee engagement. One method involves asking employees directly if they are satisfied with their current position. Another approach asks managers how well each individual performs his or her job. Still another technique uses surveys to determine whether employees feel valued, respected, appreciated, challenged, supported, inspired, and so forth. The most popular measurement tool for measuring employee engagement is called the Gallup Q12 survey.
https://www.gallup.com/access/323333/q12-employee-engagement-survey.aspx
Employees who are highly engaged at work tend to be happier overall. Highly engaged employees also experience less stress, greater motivation, higher morale, better health, increased productivity, improved customer satisfaction, stronger relationships with co-workers, and lower turnover rates. These benefits can help your business achieve its goals and objectives.
The first step toward improving employee engagement is understanding what it means. A high level of employee engagement requires that an employer create a positive environment where people want to come to work every day. This includes providing opportunities for growth and development as well as challenging them to do things outside their comfort zones. It also entails creating a culture where people enjoy coming into work because they know they will be treated fairly and respectfully.
A good strategy starts with an honest look at where you are now and how you got here. What are you doing that's working well? Why does it work well?
What isn't working well and why?
Remember to ask your employees. Just realize that -- in a toxic workplace -- some employees might not tell you everything they think about the company. But don’t take anything they say personally; just use it to inform future decisions.
The next step is to identify areas of improvement. Remember the drivers of employee engagement and decide which drivers are best to tackle first.
Are there any policies or practices that need changing? Is something missing from the way you communicate important information? Does your organization have a strong sense of purpose? If not, then figure out how to get one!
Next, make sure everyone knows exactly what he or she needs to do to improve performance. Make sure this message comes across clearly through regular communication channels such as email, phone calls, newsletters, etc.
Finally, implement changes based on feedback received from employees. Be willing to change course if necessary. Remember: Everyone has strengths and weaknesses. Don’t try to fix someone else’s problem unless you understand what the issue really is.