Read more on Human Capital Metrics and Reporting.

What is employee engagement?

In the broadest terms, employee engagement brings together a range of established concepts, including job satisfaction, motivation, work effort, organisational commitment, shared purpose, energy and ‘flow’. It describes an internal state of being – both physical, mental and emotional – but can also include behaviour, such as commitment and ‘going the extra mile’.

However, narrower, more specific definitions of employee engagement can be more helpful, in particular when it comes to measuring and understanding it in organisational settings.

Utrecht University group of occupational psychologists measures ‘work engagement’ as having three elements:

• vigour (energy, resilience and effort)
• dedication (for example, enthusiasm, inspiration and pride)
• absorption (concentration and being engrossed in one’s work)

The strength of this view is its focus on a specific physical and psychological state of being, meaning that it can be reliably measured and acted upon.

However, other views argue that employee engagement relates to a broader range of factors, for example employees being aware of business context and having a clear line of sight between their job role, and the purpose and objectives of the organisation.

One wider view was developed by the Kingston Business School consortium on employee engagement: the report Creating an engaged workforce identified three dimensions:

• intellectual engagement – thinking hard about the job and how to do it better
• affective engagement – feeling positively about doing a good job
• social engagement – actively taking opportunities to discuss work-related improvements with others at work

What are the benefits of employee engagement?

Employers want engaged employees because, as well as being happier, healthier and more fulfilled, they are more motivated and deliver improved business performance. Research has repeatedly pointed to a relationship between how people are managed, their attitudes and behaviour, and business performance. Positive relationships are evidenced with profit, revenue growth, customer satisfaction, productivity, innovation, staff retention, efficiency and health and safety performance. There are nuances in the drivers and outcomes of employee engagement, but this basic link holds true across different sectors and job roles.

Conversely, having a disengaged workforce brings huge risks. As well as losses in performance, employers may lose talented people if they feel demotivated or disengaged. They may also face greater difficulties when embedding organisational change if employees are not on board, so wider alignment with strategy and engagement with the organisation is also important. Disengagement may also threaten effective collaboration, innovation and human capital management, as employees are less inclined to use their tacit knowledge and skills for the good of the organisation.

How to build an engaged and motivated workforce?

A range of factors can influence employee engagement and motivation, including employee voice, managerial support and self-determination or empowerment.

Drivers of employee engagement

A great deal can be learnt from existing research on what drives employee engagement. For example, the MacLeod Review summarised four ‘enablers’ that should be fundamentals of any employee engagement strategy:

• Leadership that gives a ‘strong strategic narrative about the organisation, where it’s come from and where it’s going’.
• Line managers who motivate, empower and support their employees.
• Employee voice throughout the organisation, to challenge or reinforce the status quo and involve employees in decision making
• ‘Organisational integrity’: stated values are embedded into organisational culture; what we say is what we do. This closely relates to the sense of fairness and trust in the organisation and the psychological contract, which depend on employers delivering on their commitments and fulfilling employees’ expectations.

Barriers to employee engagement

It’s important to remember that people management can get in the way of employee engagement as much as drive it. Employers should be careful not to assume that employees are inherently demotivated and the solution is for management to inspire and lead them in an engaging way. It can equally be the case that employees are naturally motivated and only demotivated by factors such as a lack of support, poor line management or frustrating HR systems. To know what the barriers and drivers are, employers should listen to employees and give them effective channels for voice.

Alignment and buy-in to employee engagement strategies

Successful employee engagement strategies will build on good people management and learning and development practices. They should be holistic, not only focusing on employees work engagement and well-being, but also helping employees see clear links between their work and the organisation’s purpose, vision and values.

Strategies should also be multipronged, aligning communications, HR policies and systems, learning and development and cross-organisational events. As such, they require the active buy-in and support of senior leaders and line managers throughout the organisation.

A minority of employees may not want to be engaged, so recruitment and selectionpractices and performance management are important tools. However, an engaged workforce cannot simply be hired. It needs good people management strategy and practices, for which there is no shortcut.

Organisational context

What drives employee engagement varies to some extent depending on the context. What motivates or demotivates people, and the challenges and opportunities in fostering employee engagement, can be shaped by many factors, including individual differences (for example, personality), organisational culture, management structures and leadership.

A first practical step in fostering employee engagement is to assess – and in large organisations, preferably measure – employee attitudes.

Measuring and understanding employee engagement

Gathering employees’ views

Many large employers in both private and public sectors conduct regular employee attitude surveys, often alongside focus groups or other forums to gain employee insight. The benefit of a survey approach is that employers can get a representative view from employees across the organisation. The benefit of qualitative methods, such as focus groups, is to hear the true voice of employees and get a richer, less constrained understanding than from pre-set questions and options.

While surveys are still a mainstay, some organisations have started to move to what are considered more engaging methods. In particular, using social media platforms potentially marks a major shift from the traditional survey approach, because employees interact with each other as well as management. This means they can read and comment on their colleagues’ opinions in real time and before senior management or HR have digested them. It also makes gathering employee insight a more active process, closely linking it to collaboration.

Measuring employee engagement

In survey approaches, many employers and consultants develop composite employee engagement measures from a number of different questions. ‘Engagement scores’ from these are typically used to identify how different parts of the organisation compare, how employee engagement is changing over time and which factors relate to higher or lower engagement.

A danger in this approach is that of oversimplification. Because of the multi-faceted nature of employee engagement, it is easy to develop ‘potpourri’ measurements that bundle together a number of distinct factors into an arguably unhelpful single metric. This is a major criticism of employee engagement, as it can result in a situation in which there is ‘much ado about nothing’; a lot of debate and figures about employee engagement but no clarity on what it actually is.

Human capital metrics can be invaluable, but they need to be reliable and give data that is clear and specific enough to be actionable. A single index of the proportion of employees classed as ‘engaged’ or ‘disengaged’ may be too vague to be of help, but more precise assessments of the levels of motivation, ‘work engagement’, shared purpose or trust in leaders, for example, are likely to be very useful.

Videos