We spend such a large amount of our time at work that to do so in a role that doesn't spark any enthusiasm is a colossal waste of human potential. When we are engaged in our work, it enhances our sense of our well-being and is a positive force in our lives. Managing employee engagement has become an important part of the HR function and is rising up the agenda of many board rooms. Still, many business owners do not know how to start measuring employee engagement.

This guide seeks to answer these questions; it is for business owners, leaders, managers, or anyone else who wishes to create a workplace where trust, integrity, commitment, and well-being are essential. 

Contents

What is employee engagement?

Why should I measure employee engagement?

Who does employee engagement impact?

How can I measure employee engagement?

How can impact the levels of employee engagement?

Conclusion and further reading

What is employee engagement?

At its core, employee engagement is about creating a workplace that enables all employees of an organisation to achieve their potential every day, working towards the achievement of the organisation’s mission, embracing the values, while feeling a sense of well-being in themselves.

Definition of Employee Engagement

Definition Employee Engagement

The Chartered Institute of Personnel and Development defines employee engagement as:

“being positively present during the performance of work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to other”.

Or, put another way, David MacLeod, founder of Engage for Success (a charity founded to elevate the importance of employee engagement,) says employee engagement is about “how we create the conditions in which employees offer more of their capability and potential”.

Employee engagement is not about trying to make all your employees happy by providing perks such as discount gym membership or free fruit. It is the process of understanding your workforce and shaping the workplace such that you reinforce positive attitudes and behaviours, developing a workforce that is proud to work there.

Why should I measure employee engagement?

Besides the seemingly obvious statement that having an engaged workforce is preferable to a disengaged workforce, why should employers care about levels of employee engagement? After all, measuring employee engagement takes time, effort and energy that could be spent elsewhere. So, why bother?

Over the past decade, there has been a significant level of research conducted in the field of employee engagement. This research has consistently found that higher levels of engagement lead to higher levels of productivity, so much so that one study found the UK could benefit from a £25.8bn increase in GDP if it could move engagement levels to the same level of in the Netherlands.

employee engagement stats infographic

Reduce absenteeism

Work-related stress is one of the leading causes of absenteeism in the UK and around the world. The demands of the workload, changes in the workplace, and a lack of support are frequently at the top of the list of causes of workplace stress.

A 2017 study found there is a "significant and negative relationship between employee engagement and job stress and keeping the employees engaged is becoming a major challenge for the contemporary organisations” (Sharma, 2017). There also is a strong, positive correlation between highly-engaged workforces and reduced levels of absenteeism.

It is one thing to know there is a relationship between engagement and stress; it is another thing to know what to do about it!

Given that the research shows us that work-based stress leads to disengagement, the question employers must ask is “do our employees experience work-based stress and, if so, what can we do to alleviate this?”

To find the answer to that question, carry on reading.

Employee retention rates increase

Anyone who has ever hired top talent knows just how challenging the process can be and why keeping hold of existing talent in your workforce is almost always preferable to recruiting new staff members. Replacing staff is also very costly, therefore, putting effort into ways of increasing your employee retention will usually have a positive ROI.

“Employees who are engaged are more likely to stay with their organisation, reducing overall turnover and the costs associated with it. They feel a stronger bond to their organisation's mission and purpose, making them more effective brand ambassadors. They build stronger relationships with customers, helping their company increase sales and profitability.”

Gallup's State of the American Work

Research from Hay, a global recruiting company, found companies with high levels of engagement have turnover rates that are 40% lower than companies with low levels of engagement.

Boost your productivity and value

A report from Hay in 2019 found that 85% of the world’s most admired companies believe that efforts to engage employees have reduced employee performance problems.

Research by Kenexa found organisations with high employee engagement levels outperform their low engagement counterparts in total shareholder returns and higher annual net income.

Who does employee engagement impact?

Providing good working conditions for employees is nothing new and most responsible employers cover the basics very well. Managing employee engagement is more than covering the basics though and getting it right can have an impact far more significant than what might be immediately apparent.

The impact on employers is clear, as evidenced in the benefits of employee employment. Find me a manager who isn’t interested in reducing absenteeism, increasing staff retention, and raising levels of motivation within the workforce, and I’ll show you a micromanaging autocrat. Those who are interested in such things should be monitoring engagement levels among their team, as this is a leading indicator for much of the above.

For employees, the benefits of working in a company that looks out for your well-being and provides work that is rewarding and stimulating seem obvious enough. Who doesn’t want that from their work? I certainly do, and I’m sure you also do.

But the case for improving employee engagement extends well beyond benefits derived by the immediate participants in the employee/employer relationship.

 

QUOTE mentally healthy workplace and increased employee engagement are interdependent

 

A 2017 report from Deloitte, a big four consultancy, and Mind, the mental health charity, found that the benefits of employee engagement impact the whole of society due of the positive correlation between high-levels of employee engagement and positive mental health. In 2015-16, work-related stress accounted for 45% of all working days lost due to ill-health, totalling 488,000 reported cases of work-related stress, anxiety or depression.

A mentally healthy workplace and increased employee engagement are interdependent – by looking after employee’s mental wellbeing, staff morale and loyalty, innovation, productivity and profits will rise.

Emma Mamo, Head of Workplace Wellbeing, Mind

When asking the question “who does employee engagement impact?”, the answer must surely be everyone. Good mental health and positive employee engagement are so closely linked that for the benefit of us all – as employers and employees, as friends, neighbours, carers – we must all take this matter seriously.

How can I measure employee engagement?

“We know presenteeism is a problem, we just don’t know how to measure it.”

Large manufacturing company (Source: Deloitte)

Knowing where to start with measuring employee engagement is difficult. Do you start by integrating it into the performance management process and asking engagement questions? You could, but employees will likely to guarded in a face-to-face discussion which prevents you from getting the real, valuable insights.

Some companies choose to distribute an annual engagement survey. While this approach is better than doing nothing, it means insights can only be garnered once every twelve months, and a lot can happen in that time! Tracking engagement with a more regular survey – monthly or quarterly – can provide insights with enough regularity that you should be able to track the impact of any actions you take following a survey.

Analysing the results of an employee engagement survey can require a significant investment in time. It is recommended that an employee engagement survey is designed so that it can be completed in 15 minutes or less, otherwise busy employees become, somewhat ironically, disengaged while completing it.

Rather than sending out a lengthy employee engagement survey, many companies are switching to more frequent pulse surveys. These can be sent as frequently as once per week, although many will choose to conduct them on a monthly or quarterly basis. These shorter surveys will usually consist of two or three simple questions; as such, they can typically be completed in under three minutes and then interpreting the data can be completed at a glance, rather than taking many days to collate the results and conduct an extensive review. To keep the surveys short and the data consistent, it helps to ask the same question regularly. For this, we recommend the Employee Net Promoter Score.

Employer Net Promoter Score

You may not be familiar with the term Net Promoter Score (NPS), but you will likely have completed a Net Promoter Score survey at some point in your life. NPS is a survey focused on a customer’s experience of dealing with a company, and you often receive them via email following a purchase from a website. The format is always the same, and it will ask “How likely is it that you would recommend (this product, service, company) to a colleague or friend?” with the answer presented in a 0 – 10 scale ranging from Very Unlikely to Very Likely; This is known as “The Ultimate Question”.

Employee Net Promoter Score Defined Detractors Passives Promoters

The Employee Net Promoter Score is an adapted version of the Net Promoter Score, where the survey recipients are employees rather than customers. The question will also be slightly different, asking “On a scale of zero to ten, how likely is it you would recommend this company as a place to work?”

Each employee will choose a number between zero and ten. Those who giving a score between zero and six are classified as detractors, those scoring seven or eight are passives, and those scoring nine or ten are promoters.

eNPS Detractors

Detractors are those who rate your company between 0 - 6 on the eNPS survey. This score tells us that they are not particularly satisfied in their role or with the company. These employees are likely to hurt customer satisfaction levels as well as negatively affecting their colleagues.

eNPS Passives

Passives are those to rate your company between 7 - 8 on the eNPS survey. That are neither emotionally invested or disengaged in their role or the company. The scores are not included within your eNPS calculation.

eNPS Promoters

Promoters are those who rate your company between 9 - 10 on the eNPS survey. You can expect these employees to be loyal, hardworking individuals who speak highly of the company. They will be advocates for the business, and their word-of-mouth recommendations can be used to attract recruits or new customers. These employees will typically have a positive influence on customer satisfaction.

Calculating an eNPS score

Employee Net Promoter (ENPS) Score Calculation

Once you have collected all of the responses, you then need to calculate your score. To calculate the eNPS score, you need to subtract the percentage of detractors from the percentage of promoters; the number of passives is used to calculate the number total number of respondents. The score will be between -100 and 100

Example eNPS score

To keep the example easy-to-follow, we will use a total number of 100 respondents.

Detractors - 20

Passives - 50

Promoters - 30 

Total - 100

This means our calculation is 30% (promoters) minus 20% (detractors), giving us an employee net promoter score of 10.

Feedback questions

Alongside your eNPS survey question, you should also be asking for feedback from your employees to garner more detailed answers about why they gave that score. You can start by asking a simple question such as “What is the main reason for your score?”.

Personalising the feedback question so that it reflects the score given is a good way of increasing the response rate. For example, asking detractors "What could we do to improve your experience?" shows them that there is an intention to make things better in the future.

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How can we impact the levels of employee engagement?

Once you have an understanding of how engaged your workforce is, you will probably want to know how to improve the engagement score over time. The first thing to note is that, by merely conducting employee engagement surveys, you are taking a positive step towards creating an engaged workforce. The following suggestions are designed to help you continue that process:

Listen to the employee feedback

The most crucial factor in positively impacting engagement measures will be how well you address the feedback you receive. One of the quickest ways to turn a passive employee into a detractor to ignore their feedback consistently. Whenever you are undertaking an employee voice exercise - whether that is via the eNPS surveys or another format - not responding to the input makes employees believe the whole process is a waste of time.

If you uncover some common themes in the feedback, make sure you address them. This could be by simply fixing the issue, if practically possible, or by setting up an employee working group to discuss ways that the issue could be tackled should it require more thought.

Try encouraging your employees to provide feedback that is not anonymous and promote a culture of honest feedback. This will make it much easier to address an issue with an employee directly if their feedback does not impact a wider group.

Provide a Strategic Narrative

Where information is missing, people have a habit of filling in the gaps themselves. This is just as true of our companies and workforce, as it is about news stories and the general public.

Business leaders and communications professionals must provide the workforce with a clear and compelling vision for the organisation. This strategic narrative should explain where did we come from, where are we now, and where are we heading in the future. Employees should understand the big picture so that they can make sense of the decisions that are made and how the changes will impact them.

Tips for Sharing a Strategic Narrative for Better Employee Engagement

The narrative should tell the story of the organisation and its people, communicating the purpose of the organisation with clarity. This should help people feel they belong to something bigger than themselves and shows then how they are a part of shaping the future.

Having a compelling strategic narrative helps to bring meaning into your employee's working lives and should motivate them to bring their best self to the workplace.

Develop Engaging Managers

You've probably heard the saying "people don't leave companies, they leave bad managers." Here at StaffCircle, we're not sure we agree with that, but we do believe bad managers contribute significantly to why people would choose to leave a company.

The relationship between manager and employee is an essential element for maintaining a healthy and engaged team. Being a good manager isn't about being everybody's friend; it requires a coaching mindset and the right approach to having difficult conversations. Good managers are clear when setting objectives, making sure everyone understands the expectations placed upon them, and being direct when delivering feedback.

Rather than finding fault in the individual, a good manager will deliver clear feedback and work with the individual to improve the process.

"Engaging managers make each of us feel part of the team.  Engaging managers agree with us clear objectives and show us how our work contributes to the organisation’s objectives. Engaging managers coach us and stretch us and bring the best out of us."

Engaging Managers, Engage For Success

Embrace Organisational Integrity

In the research conducted by Engage For Success on what it looks like to have high levels of employee engagement and high levels of performance, organisational integrity stood out as a common theme. This means "the values on the wall are reflected in day to day behaviours. There is no ‘say –do’ gap. Promises made are promises kept, or an explanation given as to why not."

If employees experience a disconnect between what leaders say and what they do, it leads to a breakdown in trust. This is especially true when thinking about our company values. Consider the hypocrisy of an organisation that repeatedly encourages one behaviour but managers display another. When employees experience this 'say - do gap', the begin to question everything that management says.

To create a culture of integrity, put into place a rewards and recognition scheme that celebrates those who demonstrate the behaviours you wish to see. Use these rewards to reinforce company values throughout the workforce.

Conclusion

Creating a highly-engaged workforce is more likely to happen when there is a focused effort on it. Companies that are most successful at making it happen provide ways to gather feedback from their teams and track their engagement metrics on a regular basis. They then use this information to act upon the insights gained through the feedback process and start a dialogue with employees.

Further reading about employee engagement

EngageForSuccess.org

CIPD – Employee Engagement Factsheets

HBR – The Hidden Power of Teams

Gartner – What is Employee Engagement

Create a high performance value drive culture ebook