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How is it possible that employee engagement is still so abysmal in so many organizations? After all, managers and HR professionals have emphasized engagement for over two decades.
They’ve emphasized it because there’s a lot of data indicating a relationship between employee engagement and various other measures of business success. Yes, there are still arguments about causation versus correlation, but most HR professionals think there is solid evidence linking engagement to performance.
Management consulting company Gallup has even estimated that, on a global level, the engagement deficit is costing employers trillions (yes, with a “t”) of dollars.
HR.com has conducted its own research on this topic, examining everything from the overall state of employee engagement to, more specifically, its relationship to factors such as performance management, rewards, recognition and communication.
It’s impossible to sum up all that information in a few pages, but below are some of the key insights and a handful of actions that may help move the needle in the right direction.
Our research found that just 9% of responding HR professionals strongly agree that their employees give discretionary effort, and only about a third say that 70% or more of their employees are actually engaged. Levels of engagement vary considerably by size, with smaller companies enjoying higher engagement levels than larger ones.
Source: The State of Employee Engagement in 2018: Leverage leadership and culture to maximize engagement
In the HR community, there is no consensus on a single definition of engagement. Our research shows that HR professionals' top two choices of definitions are "employees giving their best at work" and "commitment to organizational objectives". These are indeed legitimate engagement definitions. However, job satisfaction and happiness were also chosen by a majority of respondents. In our view, these are engagement outcomes or drivers rather than part of a core definition. One can imagine, for example, an employee being happy and satisfied at work but not willing to do his / her best or be aligned with the organization's purpose. Without a universal understanding of engagement, it becomes more difficult to measure, benchmark, and take the right actions.
The figure below shows the factors most closely associated with engagement. The top two choices, "trust in leaders" and "relationship with immediate supervisor", occupy the top two spots. Clearly, leadership is the primary influencer of engagement.
"Organizational culture" takes third place, and this is also a factor strongly driven by leadership. Only 9% of HR professionals indicate they have strong cultures. Culture is, of course, influenced by "belief in the organization", chosen by 67% of respondents.
We asked respondents to choose from five categories—dynamic, productive,functional, strained and adversarial—to indicate the nature of the employee- supervisor relationship. Fewer than half chose the two most desirable categories: dynamic (9%) and productive (34%).
We then looked at how the nature of the relationship impacts employee engagement. Just over 70% of the organizations that characterize their employee-leader relationships as dynamic or productive report elevated levels of engagement. This number drops by half in organizations with functional/ strained or adversarial relationships as shown in the figure below.
We also explored six leadership skills and behaviors that best characterize dynamic / productive leaders and their relationship to engagement. The figure below shows the differences in levels of engagement when leaders use these skills sets. Every one of these skills set apart those leaders who excel at engaging their teams compared to those leaders who are less successful. And, as you can see, the differences are large, with gaps of about 30 percentage points or more.
Employers can use tools that measure engagement in order to determine baselines and benchmarks. Yet, close to half of our sample do nothing to measure engagement. For those that do measure, 42% report using formal measures once a year. Thirty-eight percent measure more than once a year.
While a formal survey is the predominate measurement tool, HR professionals report using a range of additional tools like exit interviews, informal pulse checks, and monitoring outcome measures like retention, productivity, and customer satisfaction.
However, moving engagement upwards requires developing action plans based on survey and informal results along with diligent follow-through. Data in the absence of action is unlikely to drive any significant changes. We looked at the relationship between action and engagement. As it turns out, 73% of highly engaged organizations take forceful actions based on the data, compared to 37% in less engaged organizations.
Many studies indicate there's a relationship between engagement and a variety of other business metrics such as sales, profit and productivity. Our own research supports this. Ninety-one percent of HR professionals believe there is solid evidence linking engagement to performance. And, as shown in the figure below, 62% of highly engaged organizations report being in the top quartile of financial performance, compared to 40% in organizations where employees are less engaged.
The following are suggested practices for organizations that wish to improve in this area. Of course, every organization is different, so only adopt or adapt the ideas best suited to your circumstances.
Both formal and informal measurements are a starting point for any organization serious about engagement. Measurement allows you to focus in on the critical barriers to engagement (as well as your strengths) and measure progress over time. Without it, you are flying blind.
As important as measurement is, a lack of action is a sure way to guarantee poor progress. In fact, asking employees for input in the absence of serious efforts to change is likely to make things worse. One Fortune 500 company does it right. Survey feedback is given throughout the organization. Individual business units and teams know where they stand relative to one another and outside benchmarks. Suggestions for improvements come from the entire organization and are put into required action plans. The plans are reviewed by HR and leaders to ensure progress through each measurement cycle with checks along the way. As a result, engagement scores have gone up six percent over a two-year period.
Leadership crops up repeatedly as a vital component of engagement. Interestingly, engagement scores often vary more between departments in a single organization than between two separate companies in the same industry. Some of the variability may be due to the nature of work from one department to the next. But we know that leadership also plays a key role. Systematic and on-going training needs to be provided to leaders to hone their skills. Teams with consistently low engagement scores may need to consider replacing their leaders. And, organizations should consider promoting people who are more likely to have the right engagement skill sets.
As with other areas of HR, using predictive analytics might take a lot of the guesswork out of improving engagement. The right tools along with asking the right questions reveal which engagement factors are more critical for a organization or team. And, it will reveal the relationship between the actions we plan on taking and their likelihood of improving engagement.
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inspiring and educating today's HR professionals.
Over the past three years, the HR Research Institute has produced more than 85 exclusive primary research and
state of the industry reports based upon surveys of thousands of HR professionals.
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