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What is Employee Engagement? Everything You Need To Know


This is the ultimate guide on employee engagement for business leaders.

You’ll understand what engagement is. What is it not? Why are we even talking about it?

I’ll also cover some new strategies that work great. So let's get to it.

employee-engagement-joining-the-pieces

Employees are the heart and soul of an organization. If your workforce is enthusiastic and engaged at work, your business is more likely to thrive. If they feel undervalued, they’ll soon lose interest and start putting in less effort. That can be devastating. So to retain and motivate your people, it’s key that you understand employee engagement.

Global statistics on employee engagement are quite grim.

According to a Gallup study, only about 33% of employees are engaged in their jobs in the US. This percentage drops to 15% if you consider the metrics worldwide. Millennials show a higher tendency to be 'distracted' and 'disengaged' at work.

Thus, the need for an effective employee engagement strategy is only becoming higher.

So, how do you make sure your employees are fully engaged at work?

This article will help you clear all your doubts. You'll get all the basics you need to build up not just a happy workforce but also a strong and engaged team.

Let’s begin.

Chapter 1: Fundamentals of Employee Engagement

fundamental-concepts-of-employee-engagement-pyramid

What Is Employee Engagement?

Employee engagement is an employee's emotional commitment to work and the workplace. It's often mixed up with happiness or satisfaction. But it goes beyond whether or not an individual enjoys their work.

"The concept of employee engagement is sometimes confused with happiness, but it’s really about an employee’s psychological investment in their organization and motivation to produce extraordinary results."
– Ken Oehler

An engaged employee is fully invested in their work. They believe in taking the initiative. So they put in discretionary efforts to produce extraordinary results.

Engaged workers don’t work just for a paycheck or a promotion. They actually care about their work, their peers, and the company. Throughout the day, they receive a sense of fulfillment from their job. This eagerness reflects on their individual and company’s growth.

Download Now: A step-by-step Guide to Employee Engagement

Employee Engagement, thus, is about:

  1. How committed are the employees to their work and workplace?
  2. How well are the employees communicating and connecting?
  3. How can you boost your employees' emotional commitment towards their work?

Learn more: How to improve communication in the workplace?

But while we understand what employee engagement is, it is also vital to clarify what it is not.

What Employee Engagement is Not

Employee engagement has become synonymous with terms like employee satisfaction and employee experience. But there are clear differences. Let’s clarify.

Employee engagement is not employee happiness.

Your employees seem happy at work. They come on time, cheerfully address everyone and happily take part in team lunches. They don’t seem to have any complaints. But does it mean that they are engaged?

Your employees liking their job doesn't necessarily mean they are working hard. They may not be emotionally connected to their work.

Happiness is a state of mind. It can stem from simple things like a pleasant morning or a good conversation at work. We cannot deny that such factors are beneficial. But keeping employees engaged is different from making them happy.

Employee engagement is not employee satisfaction.

Although satisfaction is essential, it is only a part of the engagement process. Satisfaction is about enjoying the work irrespective of whether you like the company.

Here is an illustration that’ll help you know the difference:

A satisfied employee may have been working for you for a long while. But they may not feel inspired to go above and beyond their basic responsibilities.

But an engaged employee is committed to your success. They are proactive, innovative, and eager to suggest improvements to boost business results.

Satisfaction is transactional, while engagement is transformational. If you are close to losing an employee, you think about satisfying them. But if you want a meaningful connection, you go beyond transactions. You make sure your employees enjoy the work and think of themselves as part of your company’s future.

Employee engagement is not the same as employee experience or culture.

Employee engagement, employee experience, and company culture are all related but distinct terms.

The following infographic will help you understand these HR terms.

Good company culture can inspire and impact an employee’s experience. They may start actively participating in their work. They use the support and tools you provide to work better. As a result, the engagement increases.

So when you take steps to improve the employee lifecycle, they engage more. They feel valued and become motivated to contribute to the company.

Thus, employee engagement is the outcome of a good employee experience. A good employee experience is, in turn, a product of good company culture.

Why Is Employee Engagement Important?

The importance of employee engagement for HR and overall business cannot be overstated.

To understand it better, let’s take note of some statistics:

  • Highly engaged teams show 21% greater profitability. (Gallup)
  • Disengaged employees can cost companies up to $550 billion a year. (HR Dive)

Engaged workers perform better. They are proactive and go above and beyond what is expected of them. Visionary organizations channel this energy in the right direction to improve performance.

Also, note that employee engagement is contagious. If you are highly engaged in what you do, people will likely pick up your excitement and join you. It holds no matter if you are the CEO or a manager, or a new employee.

This is the good part of the fact. But vice versa is also true. If your employee is disruptive at work, they may negatively impact others. Thus, positive engagement is the key differentiator of growth and innovation.

The Emotional Aspect of Employee Engagement

When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.
– Simon Sinek

Although humans are rational beings, in reality, they are quite emotional. And managing emotions can be tricky for HR professionals.

Employees feel happy when appreciated and valued. They feel low when they are lonely. Passion, empowerment, and inspiration drive them ahead. They work in teams and build emotional connections with their peers. This makes them feel more connected to their work as well.

With so many emotions at play, we must focus on rewarding people in ways other than monetary rewards. We need to think about the emotional aspect of employee engagement.

People customize the work they do by adding their own personal touch. They put in more of their emotions, creativity, time, and talent into work. They are motivated to deliver superior work and reduce turnover costs.

Employees, who invest their emotions into work, interact and collaborate more. They feel a sense of connection to form a positive opinion about the company. This results in better employee advocacy.

Engaged workers don’t just work for a company; rather, they become a part of the company. In turn, the company becomes an integral part of how these workers define themselves.

Chapter 2: Who Drives Employee Engagement?

Every person in a company impacts employee engagement.

Whether you are a leader, a manager, or an employee, you can shape engagement levels in your company.

So let’s understand the role of different actors in employee engagement.

drivers-of-employee-engagement

Role of Leadership

Top leadership has a massive role in driving employee engagement. Leaders can envision and promote the need for an engaged culture. They should lead by example and be proactive in their actions. They should let employees know about the steps taken towards better engagement.

Employees will see that their leaders value them and are committed to making it a great place to work. Soon, engagement will increase.

Learn more: 25 Leadership Qualities That Makes You A Good Leader

Role of HR

Employee engagement programs are primarily the responsibility of HR. They manage, implement and run the programs. Measuring the results of those engagement programs should be done by HRs.

Being a central player, HR needs to be proactive and hold teams accountable. At the same time, it should provide all the tools and techniques required for a better workplace.

Learn more: The Role of HR in Employee Relationship Management (ERM)

Role of Managers

Managers are at the forefront of every employee-related matter. And as such, the task of ensuring a healthy and engaged workforce also lies on their shoulders.

Managers need to give equal importance to every employee. They must listen to feedback and consider their suggestions. Appreciating employees’ efforts will boost their confidence. It, in turn, will increase engagement.

Learn more: The 5 Roles of An Employee Engagement Manager

Role of Employees

Employees are an asset that you can use to gauge and improve the employee experience. They, in turn, will help you drive better employee engagement.

So companies must use the right tools to ensure that employees have a great experience. Employees should be able to give meaningful feedback to the company. The work culture must be suitable for them to build meaningful peer relationships.

Read more: What Is the Role of Healthy Peer Relationships at Work?

Chapter 3: Levels of Employee Engagement

Employee engagement reflects how employees feel about their company.

How they feel about work can differ from person to person.

Based on their perceptions, we can categorize employee engagement into four levels.

Let’s understand these four levels of engagement.

levels-of-employee-engagement

1. Highly Engaged

They are the active ambassadors of the company. They believe in the company’s mission and see themselves as a part of the company’s future.

They are innovative, passionate, and have a deep connection with what they do. They are problem-solvers who also motivate others. Highly engaged employees intend to stay for the long term.

2. Moderately Engaged

These employees like their company and have a favorable outlook towards the mission. But something holds them back. There are opportunities for improvement in their engagement.

Although they spend a good day at work, they are unlikely to ask for new responsibilities. They usually underperform.

3. Somewhat Disengaged

This set of employees is primarily indifferent towards the company. They are not connected to their work and lack motivation. There are high chances that they are looking for other jobs. Thus, they pose a high turnover risk.

4. Disengaged

They have a negative opinion about the company. They actively doubt the mission and often make their dissatisfaction clear. They can be disruptive towards the workplace and can undermine company culture.

It is important to take appropriate measures to tackle disengaged employees. Otherwise, they will impact the productivity of all the employees around them.

Chapter 4: Components of Employee Engagement

Employee engagement has two major components:

  • Employees engaging with the organization as a whole, and
  • Employees engaging with their managers in particular.

Separating these two components is useful to understand how employees connect at work.

engaged-employees-working-at-office

Engagement with the Organization

This gives a broad view of how employees connect with the organization as a whole. It extends to their perception of the top leadership. This component will help you get answers to questions like:

  • Does your employee have confidence and trust in the leadership?
  • Do they feel motivated and empowered in your company?
  • Does the work culture challenge your employees?

You can also judge if your employees are willing to contribute to the company's mission.

Engagement with Manager

This component is more specific than the above. It measures if the employees relate to their immediate managers. Engagement with managers can include factors like:

  • Is the manager skilled in building a solid working relationship with their employees?
  • Are the managers setting clear expectations for the team?
  • Are they motivating and supporting their employees to do their best?
  • Is there a sense of mutual respect and fairness?

Focusing on both these areas will drive your efforts in the right direction.

Chapter 5: Benefits of Employee Engagement

The benefits of keeping your employees engaged are immense.

Here's why you need to incorporate employee engagement ideas into your work culture.

employees-engaged-at-work

Increased Productivity

There’s no doubt that engaged workers are the best performers. They are creative and put in discretionary effort. They work hard and scale the extra mile to fulfill their responsibilities. Higher employee productivity directly results in positive business outcomes.

A poll by Gallup says engaged employees are 17% more productive than disengaged ones.

Higher Retention

A 2017 report by Gallup shows that 51% of workers are planning to leave their current jobs. This can be due to the lack of a culture of engagement. High employee retention happens when employees feel connected to their work. They will want to commit more if you recognize their efforts and help them grow.

Rise in Profitability

When workers are more productive, the profitability of a company rises.

A study shows that companies with engaged employees produce 26% higher revenue. So higher engagement results in an overall increase in the company’s performance.

Decrease in Absenteeism

When people don’t come to work, it impacts the productivity of all around them. It delays projects, damages customer satisfaction, and work relationships. But passionate and engaged employees rarely miss their work. They enjoy their work and get it done most efficiently.

Learn more: The HR Professionals Guide to Employee Absenteeism

Enhanced Customer Satisfaction

Employee engagement can directly affect a company’s customer base. When employees are happy, they treat customers well. This results in happy customers. Satisfied customers are the key to higher revenue and profit generation.

Improves Employee Satisfaction

When employees realize how important their work is, they feel good. And no one can deny the importance of employee satisfaction.

Appreciating them every time they do great work lifts their morale. When satisfied workers engage with customers, they spread the same positive vibes. This positively affects your customer experience as well.

So, managers must make it a point to design a fulfilling employee's experience.

Chapter 6: Strategies To Improve Employee Engagement

This is the most important chapter of this complete guide.

Poor employee engagement is a serious concern. Many companies are failing to resolve this problem, which results in high turnover.

different-strategies-for-improving-employee-engagement

The increase in job opportunities increases the chance for employees to switch jobs. Skilled and experienced employees don't mind switching jobs if their efforts go unnoticed.

Who’d like to work at a place where there is no one to appreciate or motivate them? No one.

So you need to focus on fostering a good workplace relationship. Only then can you retain your top performers.

14 actionable strategies to increase employee engagement:

1. Start With Onboarding

An employee onboarding process is the best way to get your employees’ attention as soon as they join. Employees get a chance to know the company culture and their colleagues. They develop the initial opinions and thoughts about the company.

So provide them with a smooth onboarding so that they are enthusiastic about starting work. You can start with ice-breaking sessions and team-building activities. Also, assign them a mentor to help them around.

2. Ensure A ‘People First’ Culture

A people-first culture is at the center of an engaged working environment. Such a culture is adaptive and puts employees at the center of their priorities. Employees feel like they are an essential asset to the company.

To build a people-first culture, you can

  • Help your employees be comfortable sharing concerns
  • Make sure their voice is heard and respected
  • Help them with opportunities for growth
  • Provide scope for a fair work-life balance
  • Ensure employee well-being
  • Use people-centered technology

Employee engagement has an emotional connotation to it. To emotionally connect with your people, start putting them first.

3. Encourage Freedom of Opinions

Employees, who feel free to share their opinions and ideas, are more productive. You should encourage your employees to express their views more often. Also, conducting regular one-on-one meetings with your workers is a great way to hear them out.

Learn more: How to conduct successful one on one meetings?

Remember, knowing your workforce will help you drive employee engagement the right way. To do so, pulse surveys are a powerful tool to use.

4. Decentralize Your Power Structure

One of the main drivers of employee engagement is a decentralized power structure. When you give some executive powers to your high-performing employees, they feel valued. It fills them with a sense of responsibility and makes them accountable. This also motivates them to apply new innovative ideas.

5. Involve in Important Tasks

You should also involve employees in the decision-making processes. Employees feel valued when you involve them in the important courses of action. As a result, they work harder for the company's growth.

6. Strong Communication

Communication is the key. Companies with strong communication practices perform better than others. Lack of communication leads to misunderstandings and pushing of deadlines.

Open communication between the members of the organization is vital. It helps employees open up and discuss ideas or problems they face and builds trust. So try to maintain continuous two-way communication.

To get to know your employees, communicating outside the office is as necessary as inside. Team outings and offsite training programs can help teams bond and coordinate better. Such activities also result in brainstorming sessions. New ideas come up, along with building a better employee experience.

7. Recognize and Reward Efforts

Employees get the utmost satisfaction when they know their worth. They take pride in knowing that their efforts have benefited the company. So, you should make it a point to appreciate your employees and their work. No matter how small their contribution is, always recognize your employees.

Go with the classic employee of the month or employee of the year award. Acknowledge their tenure with your company with employee service awards. Promote peer-to-peer recognition and ensure star performers achieve authentic and timely recognition.

Unrecognized contribution hampers both the enthusiasm and passion for working for an organization. Even a simple “Thank you” goes a long way while encouraging and motivating your employees.

Also Read: The Ultimate Guide To Employee Rewards and Recognition

8. Encourage Growth & Development

An employee aspires to learn and grow at his or her workplace. It is a quintessential element that every job seeker looks for in a job. But failing to provide the scope for growth and development leads to dissatisfaction.

Organize training and upskilling sessions for your employees. As a manager, you must always encourage healthy competition within the workplace. Also, reward the best performers for motivating others.

9. Work-Life Balance

All work and no play make Jack a dull boy.

Making your employees work continuously will exhaust them. The issue of employee burnout is real, and you must not overlook it. An employees’ work-life balance is as important as your company’s growth.

When your employees feel enthusiastic about their work, they will give their best. An equilibrium between personal lives and careers will lead to higher engagement.

So try to create a positive work environment that provides a work-life balance. You can include facilities like parental leaves, flexible work, and childcare services. They will help your employees see that you understand your worker’s needs. It will, in turn, boost employees' emotional commitment to work.

Listen to our podcast on: What is the future of Employee Engagement?

10. Ensure Diversity and Inclusion

Diversity in the workplace goes hand in hand with better employee engagement. If your work culture is inclusive, there will be more ideas on the table. Your employees will be more innovative, productive, and engaged.

Gender equality, women empowerment, and women's safety are not just trends or targets. They are the natural way to be. We need to note that almost 40% of the total workforce in the world are women.

So make sure the employee’s lifecycle is diversity-friendly. Start from the recruitment process.

Employees should not face discrimination at work, from the first day till the day they leave. Be it based on gender, region, language, age, or culture. It will inspire the entire workforce to contribute more without any fear of bias.

Related: Diversity and Inclusion in the Workplace: A Guide

11. Focus on Coaching Leadership

One of the most important roles toward employee engagement is that of the leaders. In his book “I Love It Here”, Clint Pulver says that if leaders don’t invest in their employees, it can be a huge mess. The employees will start leaving.

But Pulver points out a worst-case scenario. They will mentally quit and stay. This will be a loss for the company as well as the employees.

Top management should devote time and attention to workers. This makes them more accessible to the team. If leaders care, their employees will be engaged. If leaders are disinterested, employees are highly likely to be disengaged.

Leaders are the mentors that employees look up to. For better results, you might need to train the mentors. As an HR manager, act as the bridge that connects higher management and employees. Interactive sessions, training, and communication can help leaders build better relationships with employees.

Related: Coaching Leadership and Its 6 Benefits

12. Prioritize Employee Well-being

A Gallup research has shown that employee engagement and well-being are reciprocal to each other. The future state of one influences the others. But they are also additive in nature. Focusing on employee well-being enhances engagement.

So you cannot ignore employees’ well-being if you want them to engage at work. Focus on both physical and mental wellness to build a more happy and engaged workplace.

Here is what you can do. Ask the right questions at the right time in the right way.

Are they getting proper sleep? Are they drained out? Be very thoughtful and actively listen to them. Provide them professional support and personal freedom.

With remote work, ensuring employee well-being has become more important and challenging. Use technology for fun activities like fitness challenges and diet tracking.

Download Now: A Complete Guide To Corporate Wellness Program

13. Gen Z Friendly Employee Benefits

Millennials employees are going to be 75% of the workforce by 2030. So your old engagement strategies need to be revamped to meet new needs.

Gen Z and millennials are a tech-savvy generation. Also, their priorities are quite different from traditional outlooks. Studies say that 89% of millennials prefer benefits over pay raises. So the benefits you provide them need to be attractive to them.

Work-from-home or a flexible work schedule can motivate them to commit more. Some other options to make your Gen Z workforce happy:

  • E-commerce coupons
  • Tech support
  • Mental health support programs
  • Or even occasionally allowing their pets at work.

Read more: Company Benefits That Millennials Actually Seek

14. Measure Employee Engagement

Before you apply these strategies in your workplace, you need to know where you stand. You need to collect data to understand your efforts, weak areas, and a benchmark for the future. Here is where measuring employee engagement comes into play. The following chapter will give you a clear idea about measuring engagement.

Read more: The Right Ways to Measure Employee Engagement Remotely

Chapter 7: How Do You Measure Employee Engagement?

Employee engagement can be subjective.

It deals with complex factors like commitment, motivation, trust, purpose, and passion.

So the best way to know more about these engagement factors is to ask your employees.

tools-to-measure-employee-engagement

Employee engagement surveys are one of the most effective ways to assess engagement. Surveys help you analyze areas in your workplace that are doing well and where you need to improve. You can use them to compare engagement levels with other organizations.

There are many types of employee surveys to help you measure employee engagement.

Employee Engagement Surveys

These comprehensive surveys can help you understand engagement at the organizational level. They are mostly annual in nature. They measure employee engagement over a longer period of time across several issues.

Pulse Surveys

Pulse surveys help you identify issues right now. They can gather real-time feedback from your new hires and current employees on any topic at any time.

Vantage Circle has a powerful employee survey tool, Vantage Pulse. It can help you analyze trends and create meaningful feedback loops.

Related: Employee Pulse Surveys: The Ultimate Guide

Employee Lifecycle Surveys

Such surveys collect employee feedback during the key moments in their lifecycle. Exit surveys, new hire surveys fall under this category.

Learn more: 50 Employee Engagement Survey Questions That You Must Ask In 2021

Your overall engagement strategy needs to answer questions like:

  • How engaged are your employees right now?
  • How engaged will you like them to be in the future?
  • Which metrics will you use?
  • How will you identify action areas?
  • What measurable outcomes will you use to evaluate progress?
  • What specific actions will you take to address the survey results?
  • How will you sustain your engagement strategy over time?

Engagement surveys should not just answer if your employees are engaged or not. They also should try to identify why. For that, the survey questions need to be comprehensive and cover a vast range of issues.

Don’t focus on only quantitative results. Listen to the experiences, and identify what’s important for your employees. You may include open-ended questions that need respondents to elaborate on their points. This will help you develop meaningful experiences.

When Should an Organization Measure Employee Engagement?

I’d say, anytime.

Employees may face many issues like lack of leadership or inadequate support tools. It is always better to identify these issues sooner rather than later.

By conducting regular surveys and feedback sessions, you’ll be aware of what’s going on. You can accordingly take action before larger problems arise.

Jacob Morgan gives some valuable tips on how often to measure employee engagement:

  • Use an app to ask 4-6 questions regularly.
  • Then, use a longer and more formal survey every six months.
  • You can innovate and do something different on an annual basis. Companies like Cisco have regular, real-time check-ins.

Companies can have different policies on their frequency of conducting surveys. It can be carried out weekly, monthly, or quarterly. Some companies prefer keeping an informal but continuous dialogue. It is not necessary to be very structured and formal in your methods.

The key is to conduct it regularly and frequently. Keep the outcomes you want to achieve in mind. Figure out what works for you and go with it. Just make sure that you get all the information you need to make the change happen.

Chapter 8: Must Have Features In An Effective Employee Engagement Tool

By now, you should have a comprehensive idea of the strategies for better engagement.

But you’ll need tools to execute them. Employee engagement tools help measure and increase engagement levels in an organization.

They help improve the productivity of the employees and reduce turnover.

employee-engagement-tool-features

Engagement Tools provide various features in the following six categories:

Employee Perks

This includes benefits like employee discounts, instant vouchers, gift cards, memberships, and mobility.

Check out Vantage Perks, A Comprehensive Employee Benefits Program

Employee Recognition

Employee recognition mainly consists of boosting employee motivation. It can be through peer-to-peer recognition, on-spot recognition, or social feed nominations. They also help in rewarding the best performers with awards, badges, and others.

Check out Vantage Rewards, A Complete Employee Rewards and Recognition Program

Employee Pulse Survey

This refers to real-time surveys like Vantage Pulse to measure current engagement levels. Features include survey question templates, actionable insights, 360-degree feedback, heatmaps, and others.

Click here to know about Vantage Pulse, A Powerful Employee Survey Tool

Employee Wellness

Employee Wellness tools help create a healthy workforce. They provide features like contests, fitness guides, and personalized goals.

Check out Vantage Fit, An AI Powered Corporate Wellness Solution

Employee Communication

Tools like GoToMeeting and Wrike help maintain the flow of communication. Managers can use these tools to make sure that employee feedback is taken seriously. Important features include content curation and creation, interactive content, and social media integrations.

Employee Advocacy

Employee Advocacy tools like SproutSocial and LinkedIn Elevate help employees promote their organization through social media. They provide features like social network integration, content analytics, brand communications, and others.

The Conclusion

Conclusion-of-employee-engagement

Employee engagement is all about how you treat and interact with your employees. And only the manager can bridge the gap between employee engagement and disengagement.

There’s no doubt that it’s a tough job. But there are many ways to achieve this.

Having an employee engagement platform can be a brilliant move. AI-powered tools like Vantage Circle are helping HRs boost engagement and wellness. These tools are designed to keep a people-first outlook at the workplace.

Achieving true engagement does not have one simple strategy. It requires a multi-dimensional approach that is fueled by continuous improvement.

In an increasingly volatile world, the future of work is uncertain and dynamic. But one thing is constant. Employees are crucial to a company’s existence.

Doug Conant says, "To win in the marketplace, you must first win in the workplace."

And we firmly believe that success can be achieved only with a truly engaged team.

This article is written by Swati Baruah who is a content marketing specialist at Vantage Circle. She is a post-graduate in Labor Studies from Tata Institute of Social Sciences. Passionately interested in people dynamics, she enjoys writing pieces that strike conversations. An avid reader and a frequent traveler, she loves exploring new perspectives. To get in touch, reach out to editor@vantagecircle.com

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Vantage Circle is a simple AI-powered Rewards & Recognition Platform for upgrading your employee experience and engagement for better productivity.