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Employee Engagement: The Complete Guide

Employee engagement is emerging as not just a trend but also a necessity in the business world and managers acknowledge the importance of having employee engagement culture in the organization.

Employee Engagement
10 Min read
Last Updated on
June 15, 2021

Recently, in an executive program on leadership, a professor elicited a lot of laughs by telling the following joke: 

“A CEO was asked how many people work in his company: ‘About half of them,’ he responded.” 

After the session, several participants put a more serious face on the problem when, while chatting, they bemoaned the fact that, in their organization, a significant number of people had mentally “checked out.” 

Other words, “Never mistake activity for accomplishment.”

“The truly engaged employees are attracted to, and inspired by, their work (“I want to do this”), committed (“I am dedicated to the success of what I am doing”), and fascinated (“I love what I am doing”). Engaged employees care about the future of the company and are willing to invest the discretionary effort – exceeding duty’s call – to see that the organization succeeds.In short, employee engagement is getting up in the morning thinking, “Great, I’m going to work.” - Tim Rutledge (Author of Getting Engaged: The New Workplace Loyalty) 

What is Employee Engagement?

Though the internet confidently throws out a gamut of paragraph definitions on employee engagement, both practitioners and academic researchers find themselves facing and using ambiguous versions of it. They are often found using the term ‘employee engagement’ as a psychological state or behavior or a trait, interchangeably. This ambiguity is intrinsic to many concepts of the HRM field and there are long-standing debates amongst experts on these definitions.

The Definitions of Employee Engagement from Different Perspectives

There are a number of popular and highly relevant employee engagement definitions. These definitions are currently defined through 3 different lenses- the employee, employer and both. In other words, a few of them address only the employee’s role in it (See 1, 2), a few both of the employee and organisation and a few only the organization.

The Employee Perspective

1. The Job role definition (w.r.t. the symptoms of an engaged employee)

An engaged employee is one who employs and expresses themselves physically, cognitively and emotionally at their job roles. [Kahn 1990]

2. The Work task definition (w.r.t. the performance of an engaged employee)

An engaged employee is one who has a positive, fulfilling, work-related state of mind that is directed towards work tasks with a strong sense of vigour, dedication, and absorption.

The Employee + Organisation Perspective

3. The Multi-dimensional definition (w.r.t. the employee’s and organisation’s performance)

Employee engagement consists of the cognitive, emotional and behavioral components of an individual’s role performance [Saks (2006)] that also results in the performance of the work group level and the organisation.

The Organization Perspective

4. The Management practice definition (w.r.t. the the organisation’s efforts towards employee engagement)

Employee engagement is the collection of organisational strategies that implement employment relationship and organisational communication so as to manage employee development and performance.  [Jenkins and Delbridge (2013), Arrowsmith and Parker (2013), Reissner and Pagan (2013)]

Let us consider a case study that demonstrates the applications of these definitions.

A Case study of Sue Thompson

(Excerpt from ‘The Talent Masters’, Bill Conaty & Ram Charan.)

Part 1: The Employee

Sue Thompson

Sue was an MBA from Wharton with three years of tech product selling experience at 3M. She graduated top third in her class and spent 2 years at Mckinsey in consulting. Sue joined Lindell Pharmaceuticals in 2006, and they made her the sales manager of the Pennsylvania and New Jersey territory, where she oversaw over a hundred people. After 2 years, she was outperforming all the other territories and setting new records of sales. In 2008, when pharma selling transformed from product selling to value selling, Sue quickly grasped the reality and set out procedures and metrics required for the new approach. She designed a proprietary system for studying drug usage patterns to give clients insights of improving healthcare while bringing down costs. Her sales force was put through intensive training exercises and she revamped half of her team with people who have business insights along with pharma selling knowledge. She also had a deep understanding of her customer’s business and their P&L.

Part 2: The Organisation

Lindell, the company
Lindell, the company

Lindell’s CEO was serious about creating pipelines of future leaders and four of the top executives were out on this task. Sue’s achievements were being watched very carefully. Each of these leaders not only watched these performance numbers but even shadowed Sue during her key client meetings. They studied how she saw things from the clients’ perspective, giving them key insights through financial analysis. They also adored how Sue enabled effective two- way dialogues with her clients. They learned that she reshaped her job and was now out-growing it. Even before she anticipated it, the board concluded based on a thorough analysis of her performance to give her a ‘Brand Manager’ role with P&L responsibility. This promotion fast-tracked her ascension towards an executive position and it opened Sue up to an environment that was ideal for her personal and professional growth.

Applying the Employee Engagement Definition to Sue’s Story

If Kahn (Definition 1) was to observe this event, he would have concluded that the very person that Sue was at work – passionate and constantly pursuing excellence, made her an engaged employee.

If Schaufeli (Definition 2) was to observe this, he would have concluded that not only her demeanour at work affected her being an engaged employee, but also how she delivered results, adapted to dynamic market conditions and engaged with her clients.

If Saks and Selmer (Definition 3) were to observe this tale of Sue, they would have added how her entire team performed and grew and how the organisation facilitated this process.

If the Definition 4 was to be put to use, Sue’s story would have been a demonstration of Lindell’s culture of nurturing leadership and intently monitoring talent (in other words, their employee engagement strategy), that resulted in the extraordinary recognition of Sue’s achievements.

Likewise, these definitions are schools of thought that attempt to capture employee engagement from their respective scopes. Though each of these has definitive differences, all intend to derive an engaged employee who shall result in an optimised workplace functioning.

Causes and Effects of Employee Engagement

The limitation of all these definitions is that they fail to address whether the engagement indicators are causes or effects of an engaged employee.

Catherine Bailey, Adrian Madden, Kerstin Alfes and Luke Fletcher, conducted their very popular 2017 study that did narrative synthesis by reviewing over 6000 primary pieces of research done on employee engagement. They extracted five causes and five effects of Employee Engagement that were most frequently derived during these studies.

Causes of Employee Engagement

It is important to understand the engagement indicators that are the causes so as to understand the ‘controllable’ portion of the employee engagement equation. These factors, as identified by the study after eliminating thousands of others for insignificance, are listed out as below.

Causes of Employee engagement
Causes of Employee engagement

1. Individual psychological states (Personal Resources)

The employee’s individual psychological characteristics are found to play a great influence on their state of engagement. It is found that the positive perceptions that individuals hold of their personal strength and ability allow them to be engaged with the organisation.

Self-efficacy: An individual’s sense of self-efficacy, in other words, how he/she can be of use to the organisation seems to play the most significant role amongst the individual psychological factors.

Resilience: The ability of an individual to quickly learn and adapt to the demands of a job and the organisation is another strong influencer to the employee’s engagement.

Personal capacities: Personal capacities like hope and optimism were identified as strong factors that go a long way in getting the individual engaged with the organisation.

Sue’s psychological state:

Sue was the third top in her Wharton MBA class and she was dispositioned to work hard and be resilient to achieve her results. Her three years of experience at 3M gave her intensive experience in sales processes and methodology. Further to Wharton, her placement in consulting gave her deep learning of business analytics and understanding of P&L. Together, these skills combined together as great personal resources for her role at Lindell.

2. Job-design-related factors (Job resources)

Job resources like feedback, empowerment, opportunities for development, role clarity and autonomy are found to be positively correlated to an employee being engaged.

Feedback: A good feedback mechanism (both from the employee and for the employee) is a strong determinant to employee engagement and has proven to have strong correlations to the performance.

Empowerment & Autonomy:  Employees were proven to experience high levels of engagement when they were empowered to do their job functions autonomously.

Opportunities for development: If the employees are able to see growth trajectories and sufficient opportunities for them to grow and prosper in an organisation, they were observed to be better engaged in their job roles.

Role clarity: When an employee understands what they need to do and what is expected of them – in terms of the content of their tasks, work methods and priorities, they are known to have better engagement with the organisation.

Sue’s Job Design

Sue’s job as a territory manager for Lindell was the right job fit for many reasons. She had 3 years of sales experience in the pharma industry. Her knowledge about business and analytics over her 2 years in Mckinsey further fine-tuned her as a manager. She was completely empowered in her role, which allowed her to strategize, train and further empower her team. Lindell had a long line of powerful positions that she could envision to hold in the future if she was consistent in her performance.

3. Perceived leadership and management (Leadership resources)

Supervisory support comes up as the strongest factor for an employee’s engagement that relates to perceived leadership. Organisations with transformational leadership are also found to be the most engaged amongst the rest.

Other elements of leadership like trust in one’s manager/leader, ethics of the leadership team, supervisory coaching, leader-member exchange and the empowering behaviour of the leader – have all shown a strong positive correlation to engagement.

Sue’s leaders

Not only were the leaders of Lindell passionate about developing new leaders but also they were ready to invest in intently studying their growth path. The leaders shadowed her discussions, without intervention – rightly allowing her to display her sales and business skills. They empowered her to fully and independently function for her territory.

4. Perceptions of organizational and team factors (Organisational resources)

Organizational support, the organisation’s HRM practices, its psychosocial climate, person-organization fit, trust, team-level engagement and communication form the parts of the organisational and team factors that affect employee engagement.

Sue’s Organisational factors

The leadership team identified Sue’s excellence right from the bud and put her on a fast track list for potential leaders – this shows the rich sense of people centricity Lindell nurtures and their keen eye for performing employees.

5. Organizational interventions or activities (Extraneous Resources)

Training and development programmes, new ways of working and other engagement activities conducted by the company, form essential ingredients to driving employee engagement.

Lindell’s organisational interventions

Fast-tracking Sue on her career path through a thorough understanding of her strengths, aspirations and performance, is spoken as a landmark example of how talent management in great organisations work, tells the narrator of Sue’s story, Bill Conaty, an HR veteran.

Results of Employee Engagement

What does an engaged employee or a team result in for the organisation? This section explores all that results from employee engagement. These also provide people-managers strong cases to convince organisations to bet on engagement.

There is credible research that states that employee satisfaction influences customer satisfaction positively. Forbes Insights research reveals the following:

Engaged Organisations

4X Times more probable of achieving >10% growth
3XTimes more probable of achieving top quartile NPS scores

  1. If a company is a leader in engagement, they have four times the chance than the rest, of achieving growth of more than 10%
  2. These companies are also 3 times likelier than the others to be in the top quartile of customer NPS scores.

These implications of employee engagement are far-reaching and below given are the most significant five, as derived by the study, from amongst thousands of other effect variables.

Employee Engagement Resources
Outcomes of Employee engagement

1. Performance outcomes of the organisation

A variety of performance outcomes, such as team performance, quality of service, customer-rated employee performance and customer loyalty, is proven to be affected when employees are engaged. Organisation level performance metrics are seen to become drastically better as a result of driving organisational engagement.

Sue’s organisational performance:

During 2008, when pharma selling underwent a transformation – Sue’s customers were one of the first to find value in her value offerings. She gave deep insights to them of their own businesses and P&Ls which lead them to highly rate Lindell’s value offering as a whole.

2. In-role task performance of Individuals

Net promoter scores, service quality and performance appraisal ratings are a few of the metrics that are positively affected when the employee is engaged.

Sue’s task performance:

Sue’s territory was leading revenues amongst all the others in Lindell.

3. Extra-role performance of Individuals

Employee behaviours like organizational citizenship behaviour, innovation and adaptive service offerings can be seen to increase with the increase of employee engagement.

Sue’s extra-role performance

Before even Lindell themselves could sense the change in the pharma selling market, Sue started implementing adequate strategies to hedge her team from its aftermath. She proactively went into retraining them to enable them to refocus.

4. Well-being and health perceptions

Employee Wellbeing and health-related perceptions like exhibiting positive health conditions, fewer indications of stress/burn out, vigour, dedication, life satisfaction and morale is exhibited by engaged employees.

Sue’s extraordinary vigour to break through dynamic market barriers is a result of her engaged state.

5. Work-related attitudes

Engaged employees show lesser turnover intentions, high organizational commitment and high job satisfaction.

Though not explicitly stated, everything that Sue did denote that she was engaged and possessed high organisational commitment.

6. Customer satisfaction

Engagement practices are only about employee performance but also about your profits, the company’s online reputation and customer satisfaction. 

Better employee performance in the domain of customer relation management and PR services or customer grievance management brings positive outcomes in terms of improving customer satisfaction. Better products are also another way to impress your customer and develop a long lasting relationship.

How do you differentiate an engaged employee from a disengaged one?

Engaged employees can be differentiated from disengaged employees mainly through their attitudes towards work and their productivity. Disengaged employees are harmful to the progress of the organization. These employees are not only unhappy and discontent with work but they sometimes also act against the interest of the company. They are capable of creating adverse effects on the company’s relationship with the customers and even cause damage to the company’s reputation in general. 

Traits of Engaged Employees

  1. Optimistic
  2. Team-oriented
  3. Goes above and beyond
  4. Solution-oriented
  5. Selfless
  6. Shows a passion for learning
  7. Passes along credit but accepts blame

Also Read: 8 Important Traits of Engaged Employees

Traits of Disengaged Employees

  1. Pessimistic
  2. Self-centered
  3. High absenteeism
  4. Negative attitude
  5. Egocentric
  6. Focuses on monetary worth
  7. Accepts credit but passes along blame

Also Read: 10 Signs of Demotivated Employee in the Workplace

Moreover, there is a danger of the company losing precious resources of money, time and leadership that is invested in these employees. If the number of disengaged employees in the organization is high, even the efforts of engaged employees may fail to bear results. On the contrary, an employee who is engaged has high levels of focus and motivation. He is more involved in the work culture of the organization and in his own performance to benefit the company. He is expected to and focused on bringing better results and accomplishing both smaller and larger goals for the organization.

Differentiating Employee Engagement from other related terms

The term employee engagement evolved in management studies in the early 1990s. Previously and even today, the term has been often misread and associated with other related terms such as Employee Satisfaction, Employee Recognition and Appreciation, Employee Experience and few others. Although the above-mentioned terminologies describe employee’s relation to the organization in various aspects and levels, none of them describe the extent to which an employee is engaged in his work as the term employee engagement does. While others have their own place of importance in the study of employee management, to gauge your employee’s productivity, you should check how “engaged” they are.

How to Measure Employee Engagement?

The extent to which an employee is engaged can be measured in three aspects-

  1. The employee’s performance and relationship to his team’s goals/team members.
  2. The employee’s connectedness and appreciation of the organization’s values and objectives.
  3. How the employee perceives his professional growth in his career trajectory.

That said, the best way to measure the benefits of engagement techniques and strategies is to check the team or employee’s performance improvement or to conduct a pulse survey with an appropriate set of questions. Assessing the results of the questions helps to figure out the percentage to which the program has raised performance bars.    

Employee Engagement Strategies      

1. Equal Focus on Every Level

Motivation should pervade all the layers of the organization, not just the top one. It’s important to have highly motivated employees in the bottom layers also. They are the driving force within an organization and are like the evangelist for your brand. Hence it is of crucial importance to instill a sense of self-importance at all levels of the organization.

2. Be People Focused

Organizations that cultivate a people-focused culture has a better approach towards addressing employee grievances, giving and taking feedback. This, in turn, brings the same results such as performance enhancement which is the objective of other approaches as well.

3. Discuss Employment Engagement

Pay attention to the level of engagement in your team and also in the organization. Make discussions about engagement techniques a part of meeting agendas. Cultivate a culture of rewarding and appreciating for individual contributions at all levels of working.

4. Let Employees Contribute

All your efforts in employee welfare is incomplete if you do not seek feedback. Conduct surveys and feedback sessions to know how engaged they are and to understand their preferences. You can also ask for their suggestion for the same.

5. Flexibility

Be flexible with your plans in employee engagement. Plans may need some last minute changes and corrections.

6. Increase communication

Increase Communication among employees, managers and higher authorities. Use of an employee communication tool can help improve communication efficiencies and ethics of the company. Help him get closer to his personal career goals by enhancing his skill or efficiency. Get him connected with the core values and

7. Regular Feedback

Give regular feedback about employees’ performance.  Know your employee better- his aspirations, life goals and family goals etc.

8. Regular Survey

Take regular employee engagement and pulse surveys. Be quick to identify and deal with performance issues. Make the employee feel empowered in the team’s work. Make him aware of the changing goals in the organization. Align your engagement strategies to your key business goals and organizational results.

Check out these Top 10 Ways to Improve Employee Engagement

Future of Employee Engagement  

Employee engagement is emerging as not just a trend but also a necessity in the business world. Entrepreneurs, HR managers and team managers, today, acknowledge the importance of having employee engagement culture in the organization. There are various researches and studies conducted in the human resource management field to bring out the most effective techniques of employee engagement and thereby understanding employee behavior in depth.

The new age addition to this is managing employee engagement and the methods of rewards and recognition through technology. These software solutions offer a platform to virtually represent employee engagement data and history of rewards and recognition that makes the task much easier for management.

Among the leading platforms, Empuls by Xoxoday is a employee engagement software-based platform that helps HRs and team managers at various levels of engagement. It has multiple features to aid the process of creating positively engaged employees at the workplace. In the future, employee engagement will be a common practice even in small companies but the trick is to get the strategies right. Want to know more? See the platform in action. Book a demo or start a free trial.

Free Guide on  Why should organizations invest in a well-designed Employee Engagement Program?

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Blog posts allow you and your business to publish insights, thoughts, and stories on your website about any topic. They can help you boost traffic, brand awareness, credibility, conversions, and revenue.
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