How do you measure employee engagement? And does it matter for every business? Let’s deconstruct the concept and why you should care.

Every business owner wants to have happy employees. However, understanding what makes employees satisfied in their workplace is the first step to improving employee engagement

What is employee engagement?

And how do you measure it in your workforce? What are some employee engagement best practices? And, why does it matter for your business?

What is employee engagement?

Employee engagement is the level of enthusiasm and dedication an employee feels toward his or her job.

It’s more than having happy workers. For engaged employees, the job is far more than just a paycheck. They’re eager to take on responsibilities and carry out their duties well.

This passion for the job often translates into an employee’s superior performance and better outcomes for the company’s productivity. That direct correlation means business leaders will want to encourage employee engagement for a better bottom line.

What are the different types of employee engagement?

Take a look at your staff. You’ll see that your employees will fall into one of three categories of engagement:

  1. Engaged – The employee believes in the business, wants to improve their work and the work of those around them, is willing to do what it takes to help the organization succeed and is motivated by their leaders. Efficiency and enthusiasm are the hallmark traits of an engaged worker.
  2. Disengaged – The employee does little more than the bare minimum, exhibits little passion for their job and sees work as an exchange of time for a steady paycheck. Disengaged workers are often engaged workers who’ve lost their enthusiasm for one reason or another.
  3. Actively disengaged – The employee dislikes their job and makes that misery known wherever they go, spreading negativity across the organization and often dragging operational efficiency down with them.

Engaged employees often become your company’s high performers – those who are self-motivated, innovative, proactive and are eager to learn new skills. Studies have shown that these valuable achievers can deliver as much productivity as four average employees. A bonus is that these employees are often your company’s best ambassadors, speaking well of your business.

On the other hand, disengaged employees will cost your company. A Gallup poll estimates actively disengaged employees cause U.S. companies between $450 – $550 billion in lost productivity per year.

Actively disengaged employees can cost the business owner even more. Their negative attitudes impact overall productivity, lower company morale or may even scare away talent from joining your team.

What are some employee engagement best practices?

An employee engagement strategy can help the business owner develop a highly engaged workforce of happier, healthier and more dedicated employees who make your business thrive.

Here are some best practices on how to improve employee engagement.

1. Retaining engaged employees starts by hiring the right people.

Create job posting descriptions with specific language to attract the best candidates. Being transparent in your expectations about job responsibilities from the start forms a solid foundation of engagement.

2. Build an atmosphere of trust, transparency and communication.

A strong culture of trust and communication makes it more likely that employees will approach a manager to discuss why they are unhappy.

With two-way communication built on trust, you’ll have better chances of motivating a disgruntled employee to become more engaged.

3. Recognize and reward employees who are meeting your expectations.

You can foster employee engagement with a culture of gratitude.

Not only does showing a little appreciation increase productivity, but people will continue to do the right things for the right reasons.

4. Cultivate a recognition program with both formal and informal awards.

Praise need not cost your bottom line for every job well done.

Everyday rewards like a handwritten note or email of thanks go a long way. Gift cards for a coffee, book or lunch will be appreciated and more frequent than the more formal award.

5. Engaged managers are better at building teams of engaged employees.

Good managers convey consistent expectations to their employees that are realistic, clear and concise. Distracted managers often ignore their employees, while unaware managers may show signs of favoritism.

Make sure your managers are supporting employee engagement strategies.

6. Make your engaged employees feel “seen” with career opportunities.

Provide engaged employees with career opportunities such as a mentor, a choice assignment or a promotion that reflects career progression. Such opportunities can help an engaged employee blossom into one of your top high performers.

7. Remember to be flexible, adaptable and transparent with your workforce.

When a business owner models the company’s core values, employees will understand how to reproduce them in the workplace. Sharing news while being flexible and adaptable not only helps the company through difficult times. It’s an opportunity to be a powerful role model for employees who may be struggling.

8. Strive for accountability in all your employees.

Fairness is a foundational concept in the workplace during good times and bad. When employees see that everyone is held accountable to a clear set of rules, a business owner will often have a better outcome in instituting cost-cutting measures, for example.

9. Team-building activities help support employee engagement in the workplace.

Whether it’s a team lunch via teleconferencing or an in-person recreational activity, team building helps employees make meaningful connections with their colleagues. Positive company morale and employee engagement often go hand in hand.

10. Support employee engagement outside the workplace

Giving back to the communities where you do business can be meaningful for you and your staff. Employee volunteer programs can foster employee engagement by increasing feelings of commitment to the company they represent while helping an organization, offer avenues for skill development and provide a sense of pride and recognition.

How do you measure employee engagement?

Employee engagement measures track employee activity to see how engagement impacts business goals, such as increased sales, revenue, retention rates and other company growth indicators. Several ways to measure employee engagement include:

  • Solicit feedback. You can ask about an employee’s engagement in a companywide anonymous survey or receive it in one-on-one sessions. 
  • Look at retention numbers. If more employees are leaving than is typical, conduct exit interviews to uncover the root causes.
  • Examine your productivity. If your company misses productivity targets, an in-depth look could point to less than ideal employee engagement.
  • Create an in-house focus group. Include employees from different levels and departments and consider using an outside trained facilitator to solicit insights.
  • Hire an outside consultant. Sometimes, a specially trained consultant can best assess employee engagement across operations, recommend a remediation plan for improved performance and set up measures for tracking employee engagement.

Why does employee engagement matter for your business?

Employee engagement yields several concrete benefits for any business owner.

  • Employees can feel more connected to each other, your company’s purpose and your customers. When people feel more connected to the company culture, there’s more communication and higher employee input levels.
  • They tend to stay longer in their jobs. Higher retention means less turnover, less time spent recruiting and training new hires, and more money saved due to less turnover.
  • Engaged employees yield higher productivity for your business. Highly engaged employees outperform teams of disengaged employees when it comes to more satisfied customers, higher output and lower absenteeism rates.
  • They’re better at cultivating customer satisfaction and loyalty to your company’s brand. Customers remember meaningful consumer experiences. Consistency in excellent customer relations happens when you have engaged company employees.
  • Engaged managers working with engaged teams are more capable of innovation and growth. Any engaged manager will need enthusiastic team members eager to work hard and meet (and exceed) company goals.

Get more employee engagement ideas by downloading our free magazine: Insperity guide to employee engagement