Employee Engagement: How to Recognize, Measure and Grow It for Organizational Success

What is employee engagement?

The textbook definition of employee engagement is the degree to which employees invest their energy toward meeting company goals and outcomes. It’s not just about working hard or collecting a paycheck. It’s also about being emotionally invested in organizational success.

Engaged employees care about the work they are doing and the company for which they work. They believe in the company’s mission, and they're focused and committed toward helping fulfill it. They're motivated to work hard, deliver on individual and shared goals and get the job done.

Recognizing the signs of employee engagement

The telltale signs of an engaged employee are easy to spot and important to acknowledge. Indicators include when an employee:

• Follows up on project deadlines even if the deliverable is out of his or her court.
• Enjoys helping team members and colleagues with input and support as needed.
• Speaks positively of the employer, would recommend the company as a great place to work and is eager to recruit friends.
• Stays late when needed to complete a task, even if it’s not urgent.
• Participates in professional development opportunities, team building activities, and other direct or indirect employee engagement initiatives.

Employee engagement does not necessarily reflect how happy an employee is at work. But feeling connected, committed and engaged at work can play a role in overall job satisfaction and employee happiness.

Why is employee engagement important to an organization?

When people feel challenged and passionate about their work and employer, the positive vibe creates a notable ripple effect. This can influence everything from recruitment efforts to increases in team engagement, employee retention, career development, employee satisfaction and overall experience.

The concept is both proven and measurable. Year after year, study after study, employee engagement research affirms the relevance and value of highly engaged employees and their contributions to organizational success. According to Gallup, organizations with the most engaged workforces realize notable differences and improvements in:

• Employee attendance and retention.
• Productivity, quality and safety.
• Customer satisfaction, relationships and ratings.
• Sales, profits and growth.
• Better business outcomes across the board.

Measuring employee engagement

Given its significance, many business leaders pursue deeper analysis of the concept and the extents to which their own employees engage. Fortunately, workforce engagement isn't hard to assess.

Measuring employee engagement can be as much an art as it is a science. Over the years, tools and techniques have been developed for both formal and informal means to gather feedback of value. Whether that feedback is positive, negative or neutral, it's necessary to support company efforts toward improving employee engagement.

Informal means include the more traditional, intuitive approaches, such as impromptu check-ins and candid, casual conversations. Employees who feel comfortable sharing their insights and experiences with leadership can act as a barometer of sorts. On an even less-formal note, you can often measure employee engagement just by walking into a workplace unannounced. Are employees focused and working diligently, either independently or collaboratively, to achieve company goals? Do you get a sense that people are on a mission to get their jobs done for mutual cause or benefit? Are you recognizing the signs of employee engagement or disengagement over repeated informal attempts to identify it?

Formal means for measuring individual or team engagement typically involve more analytics than intuition. They range from soliciting employee feedback via pulse surveys, employee engagement software and more to establishing and evaluating key performance indicators.

Useful KPIs can help you identify and measure baselines of employee engagement and disengagement and the effectiveness of past, present and ongoing engagement initiatives.

KPIs to measure employee engagement

When employees are unengaged, you may first see the warning signs in their behavior. Signs of disengaged employees include:

• Decreased productivity.
• Withdrawal from participation with colleagues or managers.
• Increased lateness, sick days or time off; absenteeism.
• Withdrawal of physical, emotional, intellectual and/or creative energy from company culture and mission.

Some behaviors might be noticeable; others may require additional investigation to uncover. Your HR software can help you manage the KPIs that signal when employees are not giving their all at work. Ultimately, examining the right KPI metrics as part of company employee engagement strategies can inspire new ideas for specific employee engagement initiatives. Consider the following common KPIs as an exact guide or inspiration to shape your own.

Absenteeism

Studies show that businesses with highly engaged workforces experience lower absenteeism rates than other companies. So keeping an eye on absenteeism can help you uncover problems with engagement. Here's how to calculate it.

Absenteeism formula

Absenteeism = (Number of unexcused absences / measurement period) x 100

Employee turnover rate

If your company experiences significant turnover, that's another sign that employees may not be engaged. Consider including this critical KPI metric in your regular reporting.

Employee turnover rate formula

Employee turnover rate formula = (Number of employees who left the company / average number of employees during the measurement period) x 100

Organizations should keep a close eye on turnover rates and benchmark them against other companies in their industry for context. For example, a turnover rate of 30% may seem very high to you, given your industry experience. But many contact centers experience annual turnover rates as high as 50% to 60%. A 30% employee turnover would be exceptional for them.

Promotion rate

One of the keys to employee retention and engagement is providing opportunities for career development and advancement. Tracking the rate of internal promotions will illuminate whether this is a strength or weakness in your organization.

Promotion rate formula

Promotion rate = (Total number of promoted employees / Total number of employees) x 100

Net promoter score

Companies use the net promoter score (NPS) as a tool to gauge customer loyalty: How likely are customers to recommend you to others? You can also use NPS to gauge employee loyalty, via employee engagement surveys. Engaged employees are often also advocates for their companies, and they tend to provide great customer service.

An employee net promoter score (ENPS) survey is simple to administer. Employees are asked to answer one question on a scale of 1 to 10: How likely are you to recommend our company as a place to work?

Those who score in the 9 to 10 range are considered "Promoters." Those scoring 0 to 6 are "Detractors." Others who rank your company in the 7 to 8 range are considered neutral.

Net promoter score formula

Employee net promoter score = [ (Number of total promoters – Number of total detractors) / Total survey respondents ] x 100

Anything above zero reveals you have more Promoters vs. Detractors. But a score of 30 is considered good, and 50+ is considered excellent.

NPS and ENPS are good ways to uncover hidden problems within your organization. While these metrics won’t tell you specifically what the problems are, low scores should be taken seriously and lead to more in-depth investigation.

Employee satisfaction index

An employee satisfaction index (ESI) measures how satisfied employees are in the workplace. It differs from NPS by asking several questions. Typically, ESI surveys ask three questions based on a scale of 0 to 100, such as:

• How satisfied are you in the workplace?
• How well does the workplace meet your expectations?
• How would you compare your workplace to an ideal workplace?

Each response provides insight into how employees feel. The ESI can be expressed overall or broken down by divisions, departments or work units. Scores averaging 70 or more are generally considered high, while scores less than 60 are considered low.

Goal attainment

An important part of maintaining high levels of engagement is performance management. Highly engaged employees consistently meet or exceed goals. By tracking whether goals are being met, you can often tell how employees are responding to your efforts and staying engaged.

Offer acceptance rates

How your company is perceived by those outside your organization can play a big part in whether employees remain engaged. If you’re offering jobs to candidates and they are turning you down, it might be because your company culture needs some work. Therefore, it's especially important to track candidates who interact with your employees during the hiring process.

Offer acceptance rate formula

Offer acceptance rate = ( Offers accepted / Offers made ) x 100

Acceptance rates outside the norm can reveal problems. You may need to revisit your compensation and benefits to make sure they are attractive. It can also signal to current employees, especially your top performers, that there are better jobs out there and cause them to start looking or stop engaging.

Industry review sites

It's not technically a KPI you need to measure, but you’ll still want to pay attention to what current and former employees are saying about your company online. Disgruntled employees and their scathing reviews aside, you can often judge a lot about a workplace from what people write.

Internal employee engagement surveys

Despite the upsides, many leaders argue that collecting metrics around something so “nebulous” as employee engagement is next to impossible. That perspective may have merit as well. So measure your KPIs carefully, but also trust your gut. If something doesn’t feel right, take the time to figure out why. Remember the primary point of all your engagement efforts: Getting your workforce engaged will be crucial to company success.

If you’re unsure about where your employee base stands in terms of engagement, consider taking a pulse by distributing an employee engagement survey. Develop an employee engagement score system to see where employees land in categories as they relate to teams, managers, leaders, communication, culture and more.

Having collected quantifiable feedback pertaining to multiple areas of your business, you’ll be able to slice and dice data according to chosen variables. You can then zero in on where your team is doing well and where to focus attention.

When you offer employee surveys, you demonstrate genuine care in how your team is doing. From an employee perspective, having the opportunity to deliver feedback goes a long way toward creating a positive employee-employer relationship.

Simple, effective ideas and activities for growing employee engagement

Even once you have a vision and some useful tools for how to increase employee engagement, your job's just begun.

As a manager, it can be challenging to keep your teams productively humming amid the bustle and distractions. Understanding the ins and outs of employee engagement activities can make all the difference for driving a successful year ahead.

You’ll want to pursue activities that can drive engagement, especially during lulls in the calendar. And rest assured, these activities don’t need to break the bank.

Consider the following employee engagement activities to help keep your workforce connected and committed. Also consider asking your teams and managers for their ideas.

1. Create a culture of collaboration. Buy a bucket of whiteboard paint and cover one of your office walls with it. Allocate this space as a creative area for collective brainstorming, employee art, or a “Values Winner of the Week” for nominating and honoring employees who’ve done a great job.
2. Track and acknowledge milestones. Take a moment to collect your team’s start dates and log them on your team calendar. People love the chance to celebrate and reflect on a milestone such as one month complete, six months, or a year!
3. Celebrate your peers. Purchase a small item that relates to your company logo or team mascot and pass it around your department. Make it a weekly rotation that suggests the previous week’s nominee pass it on to the next. Spread good feelings for good work!
4. Express gratitude. Take a moment to say thank you. It’s easy to get wrapped up in the day to day and assume everyone delivers great work and on time. Reflect on today. Who gave you great work that helped you do your own job? A handwritten sticky note can go further than you'd imagine.
5. Get moving. Routine 1:1s can get stale and boring. In your next 1:1, suggest getting outside for a stroll around the block. Stepping away from screens, pings and other distractions signifies your priority in connecting with colleagues without interruption.
6. Contribute to a cause. Create a fun environment in your office by hosting a bake sale. Decide as a team which local cause you’d like to sponsor, and donate all proceeds. Rallying behind a charitable cause gives employees the chance to build bonds with their employer outside of deadlines, dates and meetings.
7. Encourage learning. In just a few minutes, connect with your company via email and ask if anyone has special skills, experience or subject-matter expertise in areas often correlated to hobbies outside of work. Ask if they’d be game to host an in-office lunch-and-learn to share their knowledge on the subject. By encouraging your team to bring their whole selves to work, employees look forward to getting to know their colleagues at a deeper level. Moreover, who doesn’t love the opportunity to build a new skill?
8. Honor the concept of work-life balance. Remind and encourage highly engaged employees to apply that deep sense of commitment and engagement to priorities in their personal lives as well.

By choosing even one or two of the engagement activities above, you’ll be well on your way toward supporting a more engaged workforce. Employee engagement is more about the journey than the destination. We know it’s a constant work in progress, so keep your engagement surveys, scores and activities rolling.

At TriNet, we help organizations and HR professionals create thriving, engaged workforces every day. For information about how our professional employer organization (PEO) offerings can benefit you and your people, speak with a knowledgeable representative today.