What does it mean to have employees who are connected to their workplace and one another? Employing a team of engaged workers can have a profound impact on your organization.
Employee engagement influences multiple parts of the business, from employee retention to customer service to revenue. In this guide, you will learn what employee engagement is and the different types of employee engagement that exist.
You’ll also learn about why employee engagement is important, its drivers, and how to build a strategy. Finally, you’ll see examples of companies excelling at employee engagement, and we’ll answer some frequently asked questions. Let’s get into it.
What is employee engagement?
Employee engagement is a metric to measure how connected employees are to their employers. It’s a driver of other key business outcomes and can play a significant role in the efficacy of an organization. The effects of satisfied employees even trickle down to things like customer satisfaction.
Employees who are positively engaged and have a good employee experience will stay with the organization longer and be more productive. Their positivity can permeate the workplace and lead to high-performing teams and better business outcomes.
On the flip side, a workforce that is disengaged is likely to underperform and hurt the bottom line of an organization’s success.
Investing in employee engagement initiatives pays off. A Harvard Business Review survey reports that 98 percent of respondents showed a positive ROI on investments in employee engagement.
What are the types of employee engagement?
Psychologist William Kahn identified three different types of employee engagement. His 1990 paper,Psychological Conditions of Personal Engagement and Disengagement noted that workers can bring each type to their work. The levels of each type greatly affect their experiences while at work and, as a result, their performance.
The three types are cognitive, emotional, and physical.
Cognitive Engagement: This engagement is tied to how focused employees are on their work. Cognitively engaged employees are better able to focus, even during work disruptions, interruptions and other distractions.
Cognitively engaged employees are aligned with the organization’s mission and goals. They believe in the initiatives and strategies at play. In addition, they understand the roles they play in achieving those important objectives.
In many ways, cognitive engagement may be the most important of all levels of employee engagement. That’s because it ties into what the employer’s values are and how true they are to those values in practice.
Emotional Engagement: Feelings and emotions are closely connected to employee engagement and job satisfaction.
Emotional engagement is related to how employees feel about their coworkers and the organization’s leadership. It’s often a reflection of how employees feel at the moment.
Emotional engagement is important. Employee satisfaction depends on feeling valued, respected and that they are contributing to meaningful work.
Emotionally engaged employees will emanate those positive feelings into their work and among their colleagues. These employees are more invested and more likely to have high levels of job satisfaction. They will contribute to a positive work environment and help others feel engaged in their work.
Leadership plays a crucial role in fostering emotional engagement. They can shape positive or negative emotional engagement based on how they interact with employees.
Physical Engagement:Physical engagement is about an employee’s attitude and involvement in work activities. It’s also an indicator of the physical and mental effort they put into their work. The mental and physical effort can result in increased confidence, according to Kahn.
Physically engaged workers are more enthusiastic about their work. They take an improvement mindset into their work, seeking to better themselves and the work outcomes. They may be more likely to consider learning and development opportunities provided at the workplace.
Physical engagement is tied closely to employee well-being. Employees need to feel that leaders are invested in their health and well-being at work. If that investment is felt, those workers are more likely to be engaged and satisfied employees.
Why is employee engagement important?
“Quiet quitting” is a popular phrase these days. It describes groups of disengaged employees who choose not to do more than the minimally required tasks. They stick to the bare minimum and become disinvested in the work.
Quiet quitting is one consequence of poor employee engagement and can hinder an organization’s success. It’s a challenge that can be as difficult as low employee retention rates. Employees who stick around but are disinterested can erode morale and reduce productivity.
Some of the other downsides of poor employee engagement are:
Higher rates of employee absenteeism
Lower employee retention rates
More workplace accidents
Higher incidents of employee theft
Poor product quality
Reduced customer engagement and satisfaction
As you can see the impacts on a business can be significant and lead to lower profitability and revenue. However, the benefits of strong employee engagement are significant for employees and employers alike.
Here are some of the major benefits of investments in strong employee engagement.
The benefits of employee engagement on employees
Among the benefits to employees of higher rates of employee engagement are:
Reduced Stress: Employees who do not feel engaged are likely to experience more work-related stress. And more stress leads to lower engagement rates. Breaking this vicious cycle pays dividends for employees and employers alike.
Decreased Burnout: Stressed employees with low engagement rates are more likely to experience burnout. A lack of motivation and difficulty connecting to work can cause employees to lose interest and leave their jobs. A 2021 report by McKinsey & Company indicated that 49 percent of employees reported some level of burnout.
Better Overall Health: Disengaged employees are more apt to have negative physical and mental health outcomes, further reducing productivity and increased absenteeism. Employees who are engaged, by contrast, are likely to have improved health and more energy for wellness behaviors. Healthy eating, exercise, and regular preventative care all help improve the workplace and the bottom line.
Higher Job Satisfaction: Job satisfaction is inherent in the definition of employee engagement. Employees who are satisfied with their jobs are more likely to be a positive influence on their colleagues and more productive in their work. Job satisfaction, good or bad, will permeate the teams they work on, interactions with customers, and the quality of work.
The benefits of employee engagement on employers
Employee engagement has considerable impacts on employers. Here are some of the major benefits of positive employee engagement.
Lower Turnover Rates: It’s challenging for teams to continue working productively and positively when staff is turning over constantly and new hires are being made. Low turnover rates and higher employee retention lead to better work, stronger teams, and more experienced staff. Understanding your retention rate and taking steps to improve it helps boost employee engagement and productivity.
Increased Sales: Engaged employees are more productive and build stronger long-term relationships with customers. These connections lead to more sales, both new and return business, that can dramatically shape the bottom line. Long-lasting relationships help customer retention and lifetime customer revenue.
Improved Team Collaboration: Teams that have collective positivity are going to work better together while valuing each other. Collaborative teams will be efficient in their work and better aligned on the business outcomes of projects or meeting goals.
Higher Levels of Employee Commitment: Employees who are committed to the business and each other are going to perform better. Employees who feel good about the work they do, the outcomes, and the purpose will be more committed to their work. Those employees will want to stay when surrounded by peers who are motivated and driven
Safer Workplaces: Engaged employees keep workplaces safer, leading to lower rates of workplace accidents and the consequences that can occur. They pay closer attention to work being done, take fewer risks, and are more likely to express safety concerns. A Gallup report indicated that organizations in the top quartile of employee engagement have 70 percent fewer accidents.
Fewer Mistakes: As a related benefit, engaged employees are less likely to make errors on the job. Fewer mistakes means less lost productivity or the need for rework. Disengaged employees are less likely to take the extra steps to ensure work is top quality.
Increased Productivity: Why are engaged employees producing better work and are more efficient in the work they do day-to-day? Because they care about their performance, their job, and the output they’re responsible for. Accountability and commitment lead to more productivity and increase returns for the organization.
Improved Recruitment: Your employees are some of your strongest ambassadors and can make or break recruitment efforts for new hires. When candidates meet employees who are positive and believe in the work they are doing, it’s a powerful selling point to join the organization. Highly engaged employees are more likely to leave positive reviews on employer websites and reflect positively in formal interview conversations.
How to build an employee engagement strategy
The importance of employee engagement cannot be understated. For organizations seeking to deploy employee engagement strategies, there are easy-to-apply practices. By focusing on management practices, messaging, and your teams, you can begin to boost employee engagement.
Here are a few ways to develop the right employee engagement strategy.
Establish a baseline
To understand where and what needs to be improved, you need to know where your employees are today. Surveys and one-on-one interviews can provide quantitative and qualitative data to establish a baseline. Consistently and regularly measuring the level of engagement of your employees is important to show the impact of initiatives and employee engagement programs.
Outline a compelling vision
Your organization’s vision and values need to inspire employees. You need a vision that employees can understand, embrace, and get behind. Drafting this vision can be a challenge because, too often, companies fall back into bland, generic language.
Instead, consider being bolder with your vision. Lay out the beliefs and ideals that are unique and avoid the usual business buzzwords. “Client-centric,” “collaborative,” and “innovation” should be expected; what in your vision statement goes beyond those words and ideas?
Regular communication
Open and transparent communication is a powerful way to convey vision, mission, and values. It’s important that communication, whether in newsletters, surveys, or town hall meetings, is a two-way street. Two-way communication needs to come both in formal venues and informal conversations among employees, managers, and HR professionals. Reviewing survey results can also help facilitate this open communication.
Recognizing employees
Employee recognition is a long-held tenet of employee engagement. Recognition can take on many forms, from monthly acknowledgments of work recently done to yearly accolades for top performers. Consider tying in your recognition programs to your vision, mission, and values to closely connect work to those guiding principles.
Make work meaningful
Does your work have purpose? It may be difficult to think of every job having a meaningfulness and transformative impact. But you should frame each job in these terms anyway.
Each employee must see the purpose of the work they do. Otherwise, it’s hard for them to engage in the work or the workplace fully. Finding purpose in your work can be highly motivating and lead to more engaged workers.
Drivers of employee engagement
What will drive employees to feel more positive about their employer and their work? There is no magic fix. The drivers will differ based on the organization, industry, and region.
There are some grounding drivers that must be working well to encourage positive employee engagement, including:
Clarity of purpose
Employees need to understand the work they are doing and why it matters to the organization and its customers. Job expectations must be clear and tie into the mission and vision.
Resources
For positive employee engagement, workers must feel they have the resources to succeed. Tools, technologies, materials and resources that allow them to do work well are critical.
Company performance
Success begets engagement. Employees who feel their employers are successful, and meeting goals are more apt to be positive. Their work will be better, and they’ll feel their work and contributions matter. This will be reflected in the customer experience, too.
Accountability for leadership and employees
Management has to be inspirational and responsible. Employees see when others are held accountable for their work, whether positively or negatively. When employees see few rewards or consequences to their work, they’re less likely to care deeply about it.
Collaboration and teamwork
Most employees want to work as part of teams that are healthy, engaged, and committed to shared success. A company culture of collaboration and teamwork creates a sense of safety and camaraderie. Employees are more apt to ask for help and provide it when needed.
Learning opportunities
Workplaces that provide for on-the-job learning as employee benefits demonstrate they value employees. Developing employees and fostering employee feedback leads to more an engaged workforce and longer tenures at the workplace.
Growth opportunities
Does the organization look to promote from within? To foster employee engagement, employers should develop programs and practices that provide employees with opportunities to advance. Hard work and commitment that are rewarded help with retention, too, lengthening the employee lifecycle.
Trust
Do your employees trust the organization and its leaders? A prevailing sense of trust goes a long way toward building employee engagement. The extra effort to build trust allows organizations to be bolder and take calculated risks.
Real-world examples of employee engagement
Employers that get employee engagement right from the start, even in the onboarding process, are more apt to see business success. Here’s a look at three companies that are investing in employee engagement and doing it well.
Kaiser Permanente
The healthcare giant naturally places emphasis on employee well-being. It offers work-life balance programs that include healthy eating options, online nutrition courses, team wellness, and smoking cessation classes. There are also moving meetings, stretch breaks, onsite classes, and flexible schedules.
Home Depot
The big-box retailer truly empowers its employees, with each associate allowed to give discounts of up to $50 for any item for any reason. Through their Team Depot program, employees can work with local community organizations. There’s also support for employees facing financial emergencies and tuition reimbursement, which supports an employee’s personal life outside of the workplace.
REI
The sporting goods chain has an Employee Engagement Index that reports 92 percent of staff go beyond what’s expected. That’s due in part to “company campfires” that encourage two-way communication between upper management and store clerks. There are also two days off to explore the outdoors and closed stores on Black Friday.
FAQs
How do I increase employee engagement?
Employers can take several steps to improve employee engagement, including investing in employee engagement software to track and measure. Initiatives can include professional development, wellness initiatives, open communication, manager training, and employee recognition.
Should employee engagement surveys be anonymous?
In general, keep employee engagement surveys anonymous to encourage more candid answers. If you’re implementing surveys that are tied to an individual, employees may be fearful about answering truthfully. That defeats the purpose of using surveys to gather accurate information.
How can I measure employee engagement?
One indicator of employee engagement is the employee retention rate. That’s the ratio of employees who remain employed compared to employees at the start of a period, typically a year. Employee retention rates below 90 percent are considered to need improvement.
Happiness or climate surveys are another way to measure engagement. These tools ask about how happy employees are in their work and what the workplace is like.
Employee engagement is a powerful way to connect workers to the organization and their work. At Gusto, we help businesses with onboarding, training, employee benefits, and talent management. If you’re looking for help with your employee engagement, contact Gusto today.
