What Is Employee Engagement? 14 Drivers for Success

Conversation around employee engagement is high in HR circles, but what does it actually mean? In this article we’ll cover the essentials, including the relationship between employee engagement and employee experience.

This article was updated to reflect new information on May 23, 2023.

In everyday life, engagement refers to a positive commitment between two parties. People are engaged with their passions, their hobbies, and, most significantly, with their friends, family, and partners. In the most productive instances, that engagement is two-sided. Employee engagement is no different. 

The good news is that employees want to feel engaged at their workplace. But for employees to be engaged, they need to simultaneously believe in your company goals and see how their individual function helps reach those same objectives. An employee performs best when they feel valued in the workplace, and understand the value they provide the company. 

In the shifting world of work, engaging your employees has become increasingly essential. A recent Workday report found that 27% of employees had engagement scores that suggested they were at risk of attrition. For companies to attract new talent and retain high-performing employees, understanding the importance of employee engagement is critical.

What Is Employee Engagement?

Employee engagement refers to the degree to which an employee feels connected to their work, their colleagues, and the wider business. Engagement isn't driven by one aspect of an employee’s working life. It’s the full picture, from hiring practices, to the solutions they use, to the snack situation in the kitchen.

An engaged employee brings their full self to work, often performing beyond their required duties. That means they identify areas where they can develop new skills, take pride in their working environment, and evangelize the business. When they make discretionary effort, they do so out of a genuine desire to contribute more to the company. 

By contrast, a disengaged employee will rarely surpass the minimum required of them—and frequently dip below that. Beyond their own workload, they won’t seek out ways to contribute to the wider business and culture. Because they don’t see a future for themselves at the organization, they’re happy to maintain the status quo.

Employee engagement refers to the degree to which an employee feels connected to their work, their colleagues, and the wider business.

What Is the Difference Between Employee Engagement and Employee Experience?

When discussing company employee engagement, we usually do so within the framework of employee experience. Since employee engagement and employee experience have some overlap, you may see them being used interchangeably, but the two are distinct.

If employee experience is the journey each employee goes on from onboarding to exit, employee engagement reflects the quality of that journey. Not only that, but employee engagement is a major contributing factor to the quality of the overall employee experience. However, while a positive employee experience is an important goal, engagement requires its own strategy and solutions.

What Are the Benefits of Engaged Employees?

Employee engagement is no longer solely the purview of HR leadership teams. For an organization to succeed, leaders at every level need to appreciate what makes employee engagement important. That's why decision-makers need to advocate for the value of increased engagement across the organization.

Data consistently shows that companies with higher employee engagement outperform competitors where engagement is lower. According to Harvard Business Review, when employees feel like they belong:

  • Performance increases by 56%
  • Turnover risk drops by 50%
  • Sick days usage is reduced by 75%

For a 10,000-person company, this would result in annual savings of more than $52 million. Needless to say, a sense of belonging is an essential part of employee engagement. Employees with a higher level of workplace belonging showed a 167% increase in their employer net promoter score, or eNPS (one of the measures of engagement).

Just as there are benefits to high engagement, there are drawbacks to disengagement. When comparing businesses in the top quartile of employee engagement with the bottom quartile, a recent study from Gallup reported:

  • An 81% difference in employee absences
  • An 18% difference in turnover for high-turnover organizations
  • A 43% difference in turnover for low-turnover organizations

A recent Workday report found that 27% of employees had engagement scores that suggested they were at risk of attrition.

How Do You Measure Employee Engagement?

Since employee engagement is complex, there are different schools of thought on measuring employee engagement. At Workday, we use an intelligent listening survey platform, Workday Peakon Employee Voice, that measures employee sentiment across multiple topics. Those topics include autonomy, growth, reward, environment, and so on, as well as a measure of engagement as a critical outcome.

Questions are answered on a scale of zero to 10. That way businesses can either measure engagement as a mean score out of 10 (to one decimal place), or use the eNPS scoring system. Scores out of 10 are well understood across different cultures, enabling stronger benchmarking.

As with any business outcomes, employee engagement is best understood when it’s measured regularly with pulse surveys. While annual employee surveys may give you insights into shifts in employee sentiment year-on-year, employee engagement often shifts quicker. That’s why your technology needs to be equally reactive.

What Are the Drivers of Employee Engagement?

To truly understand your survey insights, you need to grasp the drivers behind it. Creating actionable insights from your employee engagement survey involves collecting information on the related causal factors. We refer to these as the 14 drivers of employee engagement. 

Based on a long history of validated academic research, these 14 drivers shape our core question set, comprising 45 survey questions. Whatever method you use to measure employee engagement, these drivers should form the basis of any employee engagement survey.

  1. Accomplishment: Ensuring each employee is making regular progress.

  2. Autonomy: Recognizing autonomy as a fundamental human need.

  3. Environment: Creating a positive in-person, remote, or hybrid workplace environment.

  4. Freedom of Opinions: Promoting psychological safety in the workplace.

  5. Goal Setting: Keeping employees engaged at work with clear, autonomous goals.

  6. Growth: Creating a culture of learning and development.

  7. Management Support: Building manager relationships based on empathy.

  8. Meaningful Work: Providing purpose, challenge, and respect in the workplace.

  9. Organizational Fit: Understanding the value of shared goals and aspirations.

  10. Peer Relationships: Developing strong team relationships and a sense of belonging.

  11. Recognition: Recognizing why recognition is more than an occasional “thank you.”

  12. Reward: Acknowledging the importance of employee compensation for performance.

  13. Strategy: Inspiring your employees with inclusive and decisive communication.

  14. Workload: Keeping workloads manageable and avoiding burnout.

Where some surveys ask every question simultaneously, the latest research suggests taking a more targeted approach. By regularly sending different questions to different employees, you develop an up-to-date view of overall employee sentiment. In doing so you promote greater personalization, avoid survey burnout, and retain top talent.

A 2022 study found that employee engagement in the U.S. had dropped for the first time in a decade.

How Can You Improve Employee Engagement?

This 2022 study found that employee engagement in the U.S. had dropped for the first time in a decade. The percentage of actively engaged employees fell from 36% in 2020 to 34% in 2021. Those figures should act as a wake-up call: employees are expecting more from their employers.

Improving employee engagement is a complex process, but the principles are simple. By actively listening to your employees, you create actionable, up-to-date insights. Those same insights can then be used to enable actions across your organization, creating an effective feedback loop. Here are five employee engagement ideas to consider when creating an action plan for your employee engagement strategy.

  1. Incorporate an employee feedback solution into your employees’ routine. Continuous participation is essential to long-term success. By making regular surveys “business as usual,” your people see that the company values their views and welcomes their input. That means your surveys have to be delivered into your employees' natural workflow, so consider what method of HR service delivery works best.

  2. Empower your people to contribute to the conversation honestly. Promoting honest and productive workplace communication is critical for employee engagement. All results and scores from your surveys should be confidential, as well as any written feedback. This promotes psychological safety, ensuring the feedback you receive is candid.

  3. Create experiences that proactively support employees. The best approach to tackling problems is being proactive. Solutions such as Workday Journeys provide organizations the ability to deliver personalized guidance through moments that matter, both personal and professional. Improving engagement rests on your company’s ability to seamlessly support employees from the onboarding process through the rest of their professional growth. 

  4. Empower managers to take meaningful action. Your people leaders need visibility on engagement data, as well as suggestions on how best to respond to any issues. By enabling them to interpret the data and track any corresponding actions, you help managers to drive employee engagement at a granular level.

  5. Make scores and actions transparent. Only highlighting areas where employees strongly agree with the company and its direction is a mistake. If multiple teams have low scores, acknowledge it as an area that needs attention to the entire company. Then, make space to discuss it, and report on any progress being made.

By only measuring output and efficiency, we miss the most important aspect: An employee's emotional connection to the workplace. Whether looking at an employee’s job satisfaction, their working environment, or their belief in the company’s mission statement, a good employee engagement program is fundamental to understanding the relationship between your company and your employees.

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