Your ultimate guide to employee engagement

22 min read
Find out everything you need to know about employee engagement. This guide will give you all the tools and information you need to understand employee engagement in your organisation and identify the actions you need to take to improve it.

What is employee engagement?

Put simply, engagement is an employee’s commitment to helping their organisation achieve its goals. This can be seen in how employees think, feel, and act.

Engaged employees show behaviours such as:

  • intent to stay with the organisation
  • discretionary effort above and beyond what the role calls for
  • a willingness to recommend the company to peers or colleagues

People who are engaged in their work are committed to their organisation’s goals and values and motivated to contribute to its overall success.

“53% of employees around the world are engaged at work”

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How we measure employee engagement

Employee engagement is typically measured using data from employee surveys or employee listening programs. It isn’t just a yes or no, or sliding scale answer to: “How engaged are you at work?” – that simplifies such a complex question, not to mention people may interpret that differently.

At Qualtrics we measure engagement as a composite measure of 5 factors. These help us to understand intended behaviours like intent to stay, likelihood to go above and beyond what is required of employees, and willingness to recommend a company. These are:

  1. Intent to stay – the likelihood that people will still be with the company in the next 2 years
  2. Work involvement – the psychological and emotional contribution people apply to their work
  3. Discretionary effort – the level of effort above the minimum required that people are willing to put into their work
  4. Pride in the company – the extent to which people feel proud to work there
  5. Willingness to recommend their organisation – how likely people are to recommend their organisation to friends and family

Each of these items provides a score which, when combined, gives an overall metric of employee engagement.

Jump to: Employee engagement drivers

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Benefits of employee engagement

To win in the marketplace you must first win in the workplace.

Doug Conant, CEO of Campbell’s Soup

Research shows engaged employees are more inclined to work harder and solve problems, grow and develop faster, get along with people better, and stay longer at a company. All these factors have a measurable business impact:

  • Increased performanceSHRM research shows that people who are engaged in their work are more likely to help the company achieve its goals
  • Lower attritionaccording to the Oxford Handbook of Positive Psychology at Work, engaged employees are 87% less likely to leave their organisation, which means reduced costs in having to recruit new staff, train them and wait for them to ramp up to full productivity
  • Increased revenueaccording to Gallup, highly engaged teams show 21% greater profitability and those teams who score in the top 20% in engagement realise a 41% reduction in absenteeism, and 59% less attrition
  • A better customer experience – the same Gallup study found that highly engaged workplaces see a 10% increase in customer ratings and a 20% increase in sales

The history of employee engagement

Employee engagement has a long history in business — in fact, it’s been used in some form or other since the early 1970s.

In the early days, the focus was very much employee satisfaction. This then evolved into measuring ‘commitment’ in the 80s – still a key part of engagement, though the focus was on ‘how can we encourage people to stay in their job for life?’ – something that is now increasingly rare as the global workforce has become more fluid.

The rise of employee engagement

Engagement as a term first entered business lexicon in 1990 after the Institute of Employment Studies (IES) published ‘From People to Profits, the HR link to the service-profit chain’. Around the same time, William Kahn introduced the term employee engagement into his Academy of Management paper.

Powered by the growth of the service economy, it made a clear link between employee attitudes and behaviour and key business metrics like customer retention and revenue.

I define personal disengagement as the uncoupling of selves from work roles; in disengagement, people withdraw and defend themselves physically, cognitively, or emotionally during role performance..

William Kahn, Academy of Management

By the early 2000s, employee engagement had been the primary tool not just for HR to manage things like retention, absenteeism, and productivity but had entered the C-suite as a key strategy in delivering better customer outcomes.

From employee engagement to ‘experience’

Just as the rise of the service economy in the 70s and 80s opened the door to engagement, the experience economy has seen a shift towards ‘employee experience’ – a more holistic view of the workforce that sees engagement as just one lever to pull.

Today’s most successful organisations are looking not just at an annual or bi-annual snapshot of how their employees feel, but are running employee listening programs that gather feedback throughout the employee lifecycle. We call this experience data (or X-data) as it seeks to understand the complete employee experience.

Consider the lifetime of an employee at your organisation – there are numerous key milestones along the way, whether it’s their interview, onboarding process or their performance reviews.

Each one presents an opportunity to gather feedback and understand the key drivers of engagement and understand how to improve that experience:

  • Always-on feedback – on-demand, anonymous avenue where employees can raise issues and provide feedback.
  • Ad hoc surveys – just-in-time feedback on specific initiatives eg. organisational changes
  • Employee lifecycle feedback – event-triggered feedback that gets employees’ views at key milestones in their journey with a company. It includes candidate, onboarding, exit and training feedback
  • Multi-rater assessments – performance and development evaluations that simplify the 360 reviews and feedback from peers, managers, and direct reports
  • Census engagement surveys – the annual or bi-annual ‘deep dive’ it covers the widest range of topics and allows you to understand the key drivers of employee engagement and identify areas for improvement

Advanced employee experience practitioners are also leveraging operational data (O-data) such as employee churn rates, adoption of benefits programs, participation in affinity groups, etc. Combining this with experience data (X-data) allows HR leaders to get an even fuller picture of their people’s experience.

Customer Story

“The employee engagement survey is a super valuable tool. It makes people feel heard and it also gives us insight. We follow up with focus groups, and we do store visits.”

Karalyn Smith, Chief People Officer, Sephora

Read Karalyn’s Story

Measuring employee engagement

Employee engagement is easy to get started with – in fact, there are just 3 steps you need to follow:

  1. Run your survey
  2. Analyse the data
  3. Act on and communicate the results

…and repeat!

Here are the key ingredients for each of the 3 stages:

1. Run your survey

Survey design – a good rule-of-thumb for an engagement survey length is 30-50 items. Most organisations run an annual engagement survey, but you should choose a cadence that works for your organisation.

Read more about how to design your survey

Collect responses – make sure you encourage participation from your entire organisation and keep a close eye on response rates. You might need to keep the survey open for 2-3 weeks to give people the best opportunity to give their feedback.

2. Get the data

Define the dashboard roll out – decide what dashboard views different teams will be able to see and when.

Make it relevant – make sure you deliver results to the right people, and don’t drown them in data. For example, you can map your survey to your organisational hierarchy to ensure managers automatically receive their own teams’ results. This helps you keep it focused on the data that’s most relevant to them.

Set expectations – let managers know what you need them to do with the results and what you expect from them.

Brief the leadership team – don’t pile all the results data on the executive team. Schedule an overall briefing with the key insights and areas to focus on so you can work out next steps and action plans.

3. Act on the results

While there might be some things you can do at an organisational level, the greatest impact on engagement will come from the actions leaders across your organisation take to act on employee feedback.

For organisation-wide initiatives, align closely with your leadership team, and set 1 or 2 key focus areas. It’s a good idea to assign someone to each one to oversee progress on it.

When it comes to managers, ensure they’re able to see the key drivers of engagement for their teams, plus where the team returned low scores.

These should be their priority areas, and managers can then put action plans in place to improve them.

Communicating what’s been heard and what’s being done (or not) to resolve feedback is crucial. If something is actioned because of people feedback then it’s important that employees are told that this was the result. Often change can happen without employees becoming aware of the causal effect of their responses.

See more on driving actions to improve engagement

Customer Story

“We’ve learned that people who are giving feedback digitally are a lot more likely to hit their goals and objectives, and they actually get a 20% higher bonus than people who aren’t engaging in digital feedback.”

Dean Carter, CHRO at Patagonia

Read Dean’s Story

Employee engagement surveys

Designing an effective employee engagement survey needs careful thought to return the best possible results and data. Use our tips and template to create the most effective survey for your organisation.

Before you start

Here are some things to think about first:

  • Decide whose input you need to include and whose input you don’t need (manage expectations by explaining why you are not consulting them)
  • Set clear deadlines and turnaround times right from the start
  • Ask participants to let you know upfront if they cannot meet the timeframe, so you can assign someone else
  • Establish one person for the final sign-off, and make it clear to everyone in the sign-off process that when they say it’s final, it’s final
  • Distinguish ‘nice to have’ questions from ‘must have’ questions
  • Avoid designing your survey by committee

Using our survey template

In line with the industry standard, our employee engagement survey template uses a 5-point likert scale from ‘Strongly agree’ to ‘Strongly Disagree’ for all items.

Download the employee engagement survey template

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The questions cover three key areas:

Engagement – these questions go at the front of your survey, and measure: pride in the organisation, motivation, advocacy for the organisation, intent to stay and job satisfaction.

Jump to: Key drivers of engagement

Core themes – these ask about the conditions that influence engagement. For example, questions about collaboration, communication, customer focus, growth and development, inclusion, leadership, and work processes.

Additional themes – depending on what’s happening in your company or market at the time, you might also want to ask about additional topics. In our engagement survey template you’ll find some additional ones you can include – try to avoid throwing them all in, and only ask them if they’re relevant. This will prevent your survey from becoming too unwieldy.

Download: The Essential Guide to Employee Experience Surveys

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Analysing your results

Once your data is in, you need to turn it into insights.

With the right analysis, you can what’s driving key metrics, such as engagement and retention, so you know where to focus your improvements.

One of the most useful tools here is a key driver analysis — a statistical test that surfaces the factors that have the biggest impact on employee engagement.

It shows, in an easy-to-read format, the drivers of engagement, how important they are and, how people rated them.

The idea is that by focusing on the high impact/low scoring drivers, you’ll tackle areas with the biggest impact on engagement in your company.

The key drivers of employee engagement

The following factors have all been shown to be key drivers that impact how engaged people are at work. These should all be included in your engagement survey (see our engagement survey template if you need help with yours). Your analysis should surface the ones you need to focus on most.

Collaboration – are they able to easily work with other teams or colleagues without barriers or conflict?

Communication – are they getting enough info from the company about what’s happening and do they feel they’re being listened to?

Company leadership – do employees believe in and trust their senior leaders?

Corporate responsibility and ethics – do they feel the company is a good corporate citizen with a worthwhile cause?

Culture – Management creates an environment of openness and trust where their values are aligned with that of their employer

Customer focus – are they in a customer-centric organisation and are they empowered to do what’s needed?

Growth and development – do your people feel they have opportunities for advancement at this company and a clear understanding of how to do this?

Inclusion – do they feel the organisation is inclusive and fair to all employees?

Job enablement – do they feel they have the training they need to do their job?

Safety – Do people feel their safety is critical to the organisation?

Work-life balance – do they feel the company allows them to achieve the balance they need between work and personal life?

Work processes – do the work processes in your organisation allow employees to be as productive as possible?

Using employee engagement software to find insights

Using an employee engagement platform is an effective and scalable way to automatically analyse the data.

The best platforms make running complex analysis easy, whether it’s identifying the key drivers of engagement or automatically surfacing the actions that have the biggest impact on engagement.

The best platforms also map the results back to the organisational hierarchy, it’s all delivered straight to managers’ inboxes so they can get stuck in immediately and start improving things for their teams.

See how you can improve engagement with EmployeeXM

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How to improve employee engagement

The best way to improve employee engagement is by taking action on the insights. Here’s how to make sure your employee engagement insights result in real change and improvements for your people

There’s a science to improving employee engagement. But unfortunately, there’s no cookie-cutter approach — it all comes down to understanding your key drivers and company context so you can take action to improve what will have the biggest impact.

There are two ways to approach your improvements – changes at an organizational level, and changes within individual teams.

In most cases, you’ll need to do both.

At an organisational level, work with your leadership team to identify the key drivers that affect everyone.

“It is only ever worthwhile to measure and analyse employee sentiment if you are willing to share results back and drive action”

Marina Pearce, Head of Talent Analytics at Ford

The biggest impact however, will come at a team level. The vast majority of key drivers are things managers can impact, such as career growth, resolving issues at work, clarifying objectives.

The old saying “people don’t leave companies; they leave managers” is a bit oversimplified, but the underlying notion is spot on. Gallup reports that 50% of employees who quit a job cite their boss as the primary reason.

Empowering your manager to drive change

If your managers have their employee engagement results, they’ll know where they have a problem — that’s the easy part. But how do they improve it?

This isn’t something most managers will know. That is, not without a little help from the HR team.

44% of new managers say they’re underprepared for the role

You can help your managers to take action through a process called guided action planning.

Guided action planning provides managers a “double click” on their opportunity areas. It goes beyond surfacing broad areas for improvement and offers specific actions leaders can take on the feedback they receive.

Here’s how it works:

+ A manager learns they need to improve in one or more areas based on employee survey results

+ HR surfaces the specific survey statements that got low rankings

+ HR suggests specific actions — an action plan — based on the feedback, which the manager can take to address and improve

Guided Action Plans create a closed-loop system with employee feedback; they give every leader the intel and power to drive impact in areas employees care about most. They also shift the dynamic from HR imposing accountability on managers — “here’s your feedback; please act on it accordingly” — to enabling that accountability.

What happens when you see a dip in employee engagement or key drivers of engagement? For Bright Horizons, it was a chance to “radically listen” to their team’s needs — both within and beyond the workplace.

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Automating guided action planning

Driving action at scale is difficult without the help of technology, this is especially true in medium-to-large organisations

EmployeeXM allows managers to automatically see their action plans as soon as the engagement results are in.

The plans are all based on what their teams’ said, and the key driver analysis that shows which areas to focus on.

All a manager needs to do is log in, open up their plans and follow them step by step. They can also track their progress, and check in regularly with the team through employee pulse surveys.

Improve employee experience by empowering your managers

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Maintaining your engagement program

An employee engagement program is not static — it will likely evolve over time as your workforce changes or as your program matures. Here’s how to keep things fresh.

If you’ve been running your employee engagement program for a while, you may find it’s no longer getting the responses or results it used to. This may just mean that it needs a refresh. Here’s what you can do.

Review your questions

Look in detail at the questions you’re asking. Some of them may now be redundant or irrelevant and need to be removed.

Keep an eye out for questions that:

  • score very highly year-over-year
  • are frequently skipped (this could be because they’re either not relevant or the question is confusing)
  • are not actionable or answerable – every item should have an action and resources connected to it
  • now seem irrelevant or outdated to your organisation

Take a look at your reporting review

Assess the effectiveness and impact of your executive and team reporting so that it can be improved.

Make sure that you:

  • know who your audiences are for reporting and that you can reach each one
  • have resources in place for your managers to facilitate necessary change
  • consider other forms of reporting, such as videos and animations to communicate your results in an impactful way

Reconsider frequency

The timing of your engagement survey is critical to getting a good response rate. If you usually do an annual survey, also consider:

  • Would it be better to do it more than once a year? (A lot can change in a year)
  • Would shorter, more frequent surveys be better for the rhythm of your business?

Employees whose employer turns feedback into action “really well” are twice as engaged as those whose employer does not act their feedback well.

Personalise engagement

Think about ways you can engage better with individual employees on the survey. You could have:

  • individual reports for each employee to view a summary of their results upon completion
  • a central place for employees to view results, or a general sharing of results
  • other channels of communication – do you rely solely on email, are there other platforms you can use?

Branding refresh

Make your survey look up-to-the minute and relevant by freshening up the design with colours and features.

If you have a creative team, let them loose on designing a new brand and theme for your program. Do you have a strong name for the initiative?

Refresh the online branding and site coding where necessary. If you have internal resources that design your website in CSS, they can help design a theme for the Qualtrics survey that feels consistent.

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