Employee engagement is a popular topic among executives and researchers, but the concept remains vague. Even still, it draws a good amount of interest from the public, executives, and researchers alike.
Many people assume employee engagement is the same as employee satisfaction, but it is not. Employee engagement requires a higher level of buy-in and investment. Just going to your 9-5 job and feeling satisfied doesn’t mean you are an engaged employee. In a similar way, being a happy employee doesn’t necessarily mean you are highly-engaged.
Engagement is worth digging into because when it is unleashed, companies see a major change in overall morale and performance, including discretionary, or voluntary engagement behaviors. Let’s take a look at employee engagement and its role in the modern workplace.
Employee Engagement Defined
Let’s start with a brief history lesson on engagement and how we understand it today. Employee Engagement was first defined in the management industry in the 90s by William Kahn as the way team members harness themselves to their working roles in physical, cognitive, psychological and emotional ways.1 The concept caught on in the field of human resources and quickly became the go-to opposite of employee burnout. Over time, the field of organizational development took notice and focused on the relationship between the employee and the wider organization, and so the modern definition of employee engagement was born.
Today, Forbes defines employee engagement as the emotional commitment the employee has to the organization and its goals.2 Modern workforce leaders understand that every employee brings his or her whole self to their work environment, daily. This is why many companies provide complementary services on-site and aim to reduce stress through perks like discount gym memberships and weight-loss challenges among work teams. It’s long been shown that employee stress at work will translate to stress at home and vice versa.
Just as stress has a reciprocal impact, so do the positive feelings that accompany employee engagement. The idea refers to the prosocial way employees behave when they are emotionally committed to company goals and the resulting morale. Highly engaged employees are inspired and motivated to go above and beyond in their work because they truly care. They express value to and for their coworkers as they feel valued by the organization. Sounds ideal and nice to have, right? Turns out high levels of employee engagement aren’t just a rare luxury high engagement levels are 100% critical for a company’s success.
Why is Employee Engagement Important?
Engaged employees can transform a company inside and out. Years ago, retail giant Target struggled with low morale after layoffs and a data breach. Executives decided to invest in employee engagement, specifically through strengthening internal communications. Target ditched the dress code, began the share inspiring stories, started learning series events where employees could hear top industry talent speak. The company created internal networks for employee networking and friendships to evolve, offered digital and in-person town hall meetings including access to the company’s CEO on a regular basis and it all made a huge difference. Target went from planning how to close stores and lay off thousands of employees to 61% of employees reporting they are proud to be a part of the company.
Companies with high levels of engagement are 21% more profitable. Employee engagement matters because it is good for business; it has been linked to positive financial performance and overall business success, exactly what every business leader desires. Though many leaders hope to increase engagement, only 15% of employees worldwide are engaged with their work according to Gallup. So where is the disconnect?
Engagement levels have a domino effect for a company, positive or negative. Employees who are eager to learn and take on more responsibility show higher engagement levels, resulting in better customer service, leading to more repeat customers, higher profit margins and higher shares. Negative levels of engagement implement the reverse cycle, resulting in higher turnover rates that cost more money, lower levels of customer service reviews, and an overall lower reported revenue.
Retaining top talent is a prevalent issue in our society and employees are becoming more aware of what kind of work environment (physical, emotional and professional) they want to be a part of. Accepting a job offer isn’t just about providing for basic needs, it has become an endorsement for the mission and vision of the company. Employees want to feel connected, valued, and proud to tell others where they work.
Redbooth a modern and team-oriented project management platform, focuses on creating a positive and accepting community at work and beyond. Employees gather often for meetings, meals and life celebrations in addition to appreciating one another’s achievements through celebration activities at work. One hundred percent of employees at Redbooth describe their work environment as a positive place they enjoy being a part of. High levels of positivity and engagement contribute to the company’s award-winning success.
Who is responsible for employee engagement levels within a company?
Clearly executives at the top of the organizational chart play a significant role as they set the tone for the full organization. In addition to the executive team, a company’s managers are also important when it comes to employee engagement. Additionally, the board and finance team need to be willing to fund a full employee engagement program and see the potential for a return on investment.
All levels of the organization need to understand the ways an effective employee engagement strategy can result in a win for both employees and their families as well as top executives concerned about the bottom line. An act as simple as celebrating employee birthdays each week can improve engagement levels. Home design app Houzz does just that. Every week birthday employees are celebrated and the simple gesture makes a big impact, and contributes to a company culture built around fun and engagement. It is tough to stand on the sidelines when you are singled out and celebrated on a regular basis.
Examples of Employee Engagement
When Gary Tomlinson took over HR at Kia Motors UK in late 2006, he took a pulse of employee engagement levels with an internal survey.3 He found engagement levels to be shockingly low. He suspected these levels were the main reason for poor business performance and high turnover rates in the company.
So, in 2007 Tomlinson, with the help of the board, designed a new employee engagement program with three main aspects including belief or mental perception, the emotions the brand generates for people, and the level of employee effort and positive behaviors. The strategy was based on three of the main drivers of employee engagement: leadership, internal communications, and professional development.
The program improved leadership skills, employee recognition, communication, and many aspects of organizational and personal development as well as overall profit margins. The program was so successful that the umbrella company Hyundai-Kia, the fourth largest automotive manufacturer in the world, with 40,000 employees in over 167 countries, began to implement the same employee engagement program as the smaller Kia (UK) team and reported positive results.
Kronos Worldwide, a workforce management company, raised profit from $600 million to $1 billion over six years, in part, by increasing employee engagement by a steady 30%.4 The leaders of the company knew the importance of building trust and authenticity between employees and managers and made that the focus of their program.
In addition to solidifying these workplace relationships, executives treat employees well and only 2% of the company’s top performers ever resign. And when top talent resigns managers celebrate their work at the company and make sure to verbally invite them to return to work for the company, any time. And they do.
As of 2016 Kronos reported over 180 boomerang employees who have resigned and later found their way back to the company by choice. The hiring team at Kronos appreciates boomerang applicants because they already know the culture and company expectations. And the frosting on the cake is that boomerang employees bring new energy to the team and increase morale when they return.
How does a Company Improve Levels of Employee Engagement?
Low employee engagement costs companies between $450-500 billion each year,6 that’s a steep price tag and proves engagement programs are worth adopting and investing in. Disengaged employees drain the workplace of productivity, motivation, and morale, so professionals at all levels of the organization should be concerned with improving engagement levels.
As a manager, you can start by actively listening to your team members, regularly expressing appreciation for the work your team accomplishes, and preventing boredom by getting to know each person you manage and better understanding areas of personal interest and professional growth. The more time you take to build trust and authenticity with your team the higher engagement levels and productivity will soar.
Erica Thomas is a writer and marketer who is passionate about organizational behavior and leadership.
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