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How do we measure employee engagement effectively?

20 min read
Measuring employee engagement helps you monitor the progress of new initiatives, increase your return on investment and keep your employees happy. Learn more in our expert article.


Why measure employee engagement?

You might have a strong human resources (HR) program in place that gives you an overview of your employees’ journeys — from onboarding to exit interviews — but is that program up to date and measuring the right experiences?

Keeping it relevant and working for your organization’s goals and values will contribute to your overall success. And it’s as simple as measuring employee engagement.

Let’s talk about how.

53% of employees around the world are engaged at work

Source: Qualtrics 2020 global employee experience trends report

Turn data into action

Statistics and data from your program — positive or negative — are just data. For actionable insights, data needs to ultimately tell you how engaged your employees are.

Engaged employees show behaviors such as:

  • Intent to stay with the organization
  • Discretionary effort above and beyond what the role calls for
  • A willingness to recommend the company to peers or colleagues

Why does this matter? Well, engaged employees are more likely to work harder and solve problems, grow and develop faster, get along with colleagues and clients, and stay longer at a company. All of these have very positive impacts on your business.

What KPIs and drivers define employee engagement?

What KPIs and drivers are we talking about when we try to measure employee engagement?

Well, we’ve identified five key EX KPI outcome measures that indicate how well an organization is doing across key aspects of the employee experience. These are:

  • Engagement
  • Experience vs expectations
  • Intent to stay
  • Inclusion
  • Well-being

The higher an organization scores across these indices, the better the employee experience being delivered.

Then there are what we call EX Drivers, critical topics that will influence the KPIs. These are often referred to as predictors or independent variables that influence outcome measures. Understanding each driver provides critical signals to a company about where they should start improving their employee experience.

Several drivers relate to employee satisfaction, some examples are:

  • Authority & empowerment – Are employees empowered in their roles and able to operate autonomously?
  • Collaboration – Are employees able to easily work with other teams or colleagues without barriers or conflict?
  • Communication – Are employees getting enough info from the company about what’s happening and do they feel they’re being listened to?
  • Corporate Social Responsibility (CSR) – Do employees feel the company is a good corporate citizen with a worthwhile cause?
  • Customer focus – Are employees in a customer-centric organization and are they empowered to do what’s needed?
  • Ethics – Do employees feel that they work for a company that stands for the right things?
  • Growth & development – Do employees feel a sense of growth in their role and that they are being offered something by the business?
  • Innovation – Are employees working for a company that is creative and innovative — one that encourages ideas and fresh thinking?
  • Living the values – What are your values and are they easy for employees to live by
  • Managing change – How adaptable is your business and do employees feel they are supported through changes?
  • Pay and benefits – Do employees feel they’re fairly rewarded for what they put in
  • Performance and accountability – Do employees feel they have clear performance expectations and that all parties are held accountable?
  • Psychological safety – Do employees feel that they work in a safe environment where they can speak up?
  • Recognition – Do employees feel that they’re recognized and appreciated?
  • Resources – Are employees enabled to do their job through the equipment they’re given
  • Respect – Do employees feel respected and are they treated appropriately?
  • Role fit – While sometimes overlooked, the relationship between an employee and their job is a key part of the overall experience. Do employees feel as though they fit in? Is the role interesting enough for them to stay?
  • Safety – Do employees feel their safety is critical to the organization?
  • Strategic alignment – Do employees buy into where the company is going and how they’re a part of it?
  • Survey follow-up – Do employees feel their feedback has been listened to and implemented?
  • Training – Do employees feel they have the training they need to do their job?
  • Survey follow-up – Do employees feel their feedback has been listened to and implemented?
  • Trust in leadership – Do employees trust the senior leadership to make the right decisions for the company?
  • Trust in manager – Do employees feel that they can trust their manager and that their manager is transparent with them?
  • Work-life balance – Do employees feel that the company allows them to achieve the balance they need between work and personal life?
  • Work process – Do employees feel empowered by work processes or hindered?

It’s recommended that you measure all of the 25 EX drivers and supplement them with survey methods and other critical areas of engagement that may be unique to your business.

How to measure employee engagement using survey methods

When you start, you need to choose your methodology. Two ways to measure employee engagement (depending on your requirements) are survey methods and non-survey methods.

In this section, we’ll look at the methods that use a survey software platform, or an integrated survey solution, to administer and run your research.

A quick bit about surveys

Survey-based methods allow you to quickly, easily, and confidentially reach a larger number of employees at once.

The trade-off is that you lose the face-to-face interaction that builds stronger relationships between employees and staff, as well as the answers that come out from a conversation naturally.

Traditionally, survey-based methods are a great place to start to get the lay of the land from your employees, which can be used as the basis from which to do more in-depth research.

Pulse surveys

Employee pulse surveys are short surveys that can be sent out frequently. They traditionally ask fewer questions to get information quickly — no more than 10 is advised. They can cover any area and are great to get a sense of how employees think about an issue.

These can be administered ad hoc, or at more regular intervals (monthly, weekly, quarterly). For this reason, they’re great for tracking changing attitudes or thoughts on the progress of an issue. Use these when you want to learn something quickly or check in with employees.

Watch Demo: Employe Pulse Surveys

Employee Net Promoter Score

Employee Net Promoter Score (eNPS) is a tool used to understand how loyal your employees are to the brand. It works by asking employees one question: How likely are you to recommend this company as a great place to work? Employees can respond using a 1-10 scale, where 1 means they’re highly unlikely to recommend the company while 10 means they’re very likely to recommend it.

Using the answers, employees can then be placed into one of three categories:

  • Detractors (0-6 scores),
  • Passives (7-8), and
  • Promoters (9 and 10).

The Detractors are employees who would not recommend working for the organization, so you want to engage with these people to find out more.

Passives are on the fence (ask yourself what could swing them to a promoter?) and Promoters are happy to promote the organization (ask yourself how they could best be used to help with brand awareness?)

The overall eNPS score is based on this formula:

% Promoters ( – ) % Detractors = eNPS

or  (Promoters – Detractors)/ total respondents = eNPS

From a possible score range from -100 to +100, an organisation wants to be as far above 0 as possible (a score of 10-30 is good).

Watch Demo: Employee Net Promoter Score

Note: At Qualtrics, we generally don’t recommend eNPS as it’s not the most accurate nor effective way to measure employee loyalty and engagement. eNPS gives you the what but not necessarily the why — it doesn’t give you the root cause but the effect of that cause.

While eNPS alerts you to an issue, it lacks complexity: it doesn’t tell you what’s holding your employee experience back or how it could be improved, nor does it focus on how individual employees feel about your business. There are far more comprehensive and robust methods to measure employee engagement.

Annual engagement surveys

Annual engagement surveys are useful for getting a year-on-year understanding of employee engagement. As they are done yearly, these surveys can be longer and often look at all areas of the organization to:

  • Review progress against company goals
  • Evaluate the company culture
  • See the employee demographics.

Annual engagement surveys are a great way for organizations to base yearly recommendations and new goals on, as well as show the organization’s ongoing interest in employees while providing a holistic view of all areas of improvement.

eBook: How to design and employee engagement survey

How to measure employee engagement using non-survey methods

In this section, we’ll look at the methods that don’t use a survey software platform (or an integrated survey solution) to administer and run your research.

Non-survey methods allow you to either look at data to support your insights or have more face-to-face interactions with employees.

For data-driven insights, non-survey methods can give you great quantitative data that indicates trends and patterns, which are useful for further investigation. This sort of work requires data analysis, interpretation, and data storage, so make sure your researchers have the appropriate skills.

For face-to-face methods, you can glean detailed insight into the ‘why’ behind statistics and answers. It can also create a good environment for employee feedback.

However, issues like researcher bias and lack of anonymity mean that results gathered may not be the truest reflection of the employees’ views. Additionally, they take a long time to conduct so they’re not ideal for quick insights.

1:1s

One-to-one meetings with employees can be run as informal or formal chats, individually with a manager or HR lead, or in focus groups with a sample of employees.

A researcher is typically present during these meetings, which can last for an hour or more. Responses are collected in the interview, categorized by theme, and analyzed later. Researchers can delve into answers if they require more detail.

In these meetings, trust is paramount, so researchers will set ground rules to indicate the responses are confidential to the participants within the room. They may also break the ice with some trust exercises or easier questions. More sensitive topics should be asked in a 1-on-1 setting to promote respect for the employee’s privacy and truthfulness in their responses.

eBook: How to improve employee experience by empowering your managers

Exit interviews

Organizations can use interviews to gain feedback at the end of an employee’s working period. This allows HR employees to understand:

  • why people are leaving,
  • what the company could do better next time for the next person in the role,
  • and how to make the role more engaging for recruitment purposes.

Sometimes this may bring up issues that need attention right away, but are not specific to employee retention. Addressing these issues can be great for improving the organization’s offering or making certain changes.

Free template: Employee exit interview survey

Stay interviews

Unlike exit interviews, stay interviews are interviews to understand what would keep an employee in their role.

This can be useful to engage potential issues head-on and show that the employee is being listened to. This could lead to changes in remuneration and better work practices, but crucially, prevent loss of an employee’s expertise and the outcome of the company’s development investment.

Turnover rate

An organization can see how frequently employees leave a company voluntarily over a period by using this formula:

(# of Departures / # of Employees) x 100 = Turnover Rate

You need to divide the average number of employees during a period (usually a year) by the number of employee departures during that period. When it is multiplied by 100, you get the turnover rate.

A high turnover rate means a lower level of employee engagement. A low turnover rate (10 percent or less) shows good employee engagement.

Employee absenteeism

When employees don’t engage with their role, they may not show up on time or at all. Employee absenteeism is a formula for analyzing over a period. To work out what percentage of employees are absent, use this formula:

(# of Absences / # of Workdays) x 100 = Absenteeism Rate

You need to divide the number of absent days within a period by the number of total workdays during that same period. When you multiply this by 100, you get the absenteeism rate.

A high absenteeism rate suggests that there is a low level of employee engagement.

Employee productivity

You can measure employee productivity by how well their job performance and output affect the bottom line. Does their work help the organization sell more products and services or hinder it?

Use this formula:

Revenue divided by total number of employees

Divide your company revenue for a period by the total number of employees. This figure gives a benchmark that can be filtered by departments or products, for example, and compared periodically to see if productivity has increased.

While this is useful as a guideline measure, further analysis is needed to see what the specific causes of productivity and sales are.

Text analytics with NLP

Another great way to measure, understand, and act on employee sentiment is to use text analytics with natural language processing. Wherever employees are talking about your business, you can utilize these capabilities to understand verbatims and sentiment, and then leverage that information to take action and improve employee experiences.

How not to measure employee engagement

Now that you’ve seen the do’s, let’s review some common areas that organizations get caught out on:

  • Using only one method to measure engagement

Each method has its advantages and disadvantages and companies need to decide what their end goals are, what resources and time they have available, and what their employee engagement risk areas are. Usually, using more than one method will give you richer results and more information at different time intervals.

  • Don’t send too many surveys to employees

To ensure employees don’t get tired of your surveys, communicate when you’re going to do them and spread them out. An annual survey, with a periodic pulse survey, may bring up enough insights on a topic to warrant in-depth interviews with relevant employees on a smaller scale.

  • Don’t wait until something has gone wrong with employees

You could use these methods to conduct regular check-ins, develop HR processes and create a culture of employee feedback. Don’t wait until something has gone wrong to react; be proactive.

If you’re using surveys, structure your survey well and include open-ended questions at the end to capture any information not covered by the previous sections or other relevant comments. Qualtrics recommends using this process (below) when creating a successful employee experience (EX) survey:

The building blocks of an employee engagement survey

Get started with our employee engagement survey template

Measure employee engagement to increase your ROI

As you progress with measuring employee engagement, you’ll have some very promising insights over time that lead to natural questions:

  • What actions should I take to boost the benefits to the organization
  • How can you make changes to benefit employees?

Actionable measurement insights that can boost ROI

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

Here are some practical steps to take your employee engagement insights forward:

1. Think about how you wish to communicate the results to the relevant company departments and the employees. Understand who has the responsibility to do this at each stage. Also, take this time to thank your employees for their participation.

Using a survey software platform to administer the survey methods means that you can easily send a response email to those participants to let them know of the results, whilst personalizing the emails, tracking the open rates and dealing with any queries.

2. Where you are responsible for action planning, look at a few things to improve. Start with one or two issues, then discuss how you could improve each item, how you’ll measure the results, and over what period.

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 have 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.

3. Check in with responsible team members to check progress. Highlight blockers, troubleshoot issues, and then create a new time period to repeat and follow-up on this action.

Keep improving your employee experience program regularly by setting reminders, alerts and scaling your research as your business grows.

How do employees benefit from measuring employee engagement?

Engaged employees feel that their company cares about their career, their wellbeing, and their progression. You can help your employees by addressing their pain points, showing interest in their views — which in turn prevents turnaround and the additional spend to rehire.

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

Source: Qualtrics 2020 global employee experience trends report

At Qualtrics, we measure engagement as a composite measure of 5 factors. These help us to understand intended behaviors like intent to stay, likelihood to go above and beyond what is required, 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 organization – how likely people are to recommend their organization to friends and family

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

We increase your user experience with our unique features:

  • Best-in-class industry content and program guidance created by HR experts & I/O psychologists build directly into the platform.
  • Expert engagement question set (~80 questions) in 14 different languages aligned to WorldNorm’s benchmark database
  • Pre-built Dashboards for Executives, HR leaders, managers
  • Bespoke customization to suit your business need and organizational structure

Find out how our Qualtrics XM Solution for Employee Engagement could work for your organization.

eBook: How to design an employee engagement survey