What Is Employee Engagement?

Employee engagement is a hot topic, but what exactly is it? Why does it matter? And how do you measure it?

Did you arrive at this article through a Google internet search for the term “employee engagement?” That wouldn’t be surprising as the number of such searches has increased by a factor of 1,000 in the last 15 years, showing the growing popularity and acceptance of the term.

By 2020, 20% of organizations will include employee engagement improvement as a shared performance objective for HR and IT groups. “But before you can incorporate employee engagement into performance management,” says Gartner Senior Director Analyst Helen Poitevin, “you need to be clear what it is, why it matters, and what needs to be measured.”

70% of business leaders agree that employee engagement is critical to achieving business results

Employee engagement is the state of mind of an employee in which they are both rationally and emotionally committed to their work as a result of their past events, present experiences and expectations about the future with their organization. This state motivates them to put energy and effort into their work beyond the minimum level required to “just do their job” and stay longer with their organizations.

Globally, employee engagement is low, and has been low for at least the last two decades. The latest Gartner Global Talent Monitor finds that only 32% of employees globally report high levels of intent to stay and only 14% report high levels of discretionary effort day to day.

Read more: Are Your Employees Quitting In Their Seats?

How engagement ties to performance

Repeated studies in recent years have shown that the business performance of organizations in the highest quartile of employee engagement scores outpaces that of competitors. High employee engagement correlates with higher average revenue growth, net profit margin, customer satisfaction and earnings per share. Today, 70% of business leaders agree that employee engagement is critical to achieving business results.

But in an environment of complexity and frequent change — key characteristics of today’s digital workplace — merely improving employee engagement isn’t enough to drive performance since it is now more difficult for even the most engaged employees to direct their work to the right outcomes.

Digital workplace initiatives focus on delivering a more consumerized and collaborative work environment to promote employee agility and effectiveness in changing business environments. The digital workplace is an integral part of digital business and includes the transformation of business models, the pervasiveness of technology and the Internet of Things (IoT).

Employee engagement is a critical component of the success of digital business and needs to be one of the focal points of any digital workplace initiative, but it includes many more elements than the use of digital workplace tools and content (the focus of engagement for many in IT).

Learn more: Digital Dexterity at Work

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Factors that contribute to engagement

While engagement models on the market today range anywhere from three to more than 15 factors, all models at their core attempt to measure a few basic engagement categories:

  • Rewards. To what extent do employees believe their overall compensation and rewards package are fair.  
  • Career and development opportunity. To what extent do employees believe that their stay with the organization can be more than just a short-term “job” and will allow them to gain skills and experiences that are of interest.
  • Perceptions of the organization. To what extent do employees identify with the values, brand and future of their organization.
  • Team and colleague quality. To what extent do employees’ supervisor, immediate team and other colleagues positively contribute to their experience at work.
  • Work environment. To what extent do employees’ physical work setting and work-life enable them to execute their day-to-day job.

Measuring and analyzing engagement

Armed with their holistic engagement definition and model, organizations move next to engagement measurement. Annual or biannual surveys continue to be the most common method of measuring employee engagement, but in a world of increasingly real-time analytics, many in HR now believe they need more frequent insights into engagement. Some leading organizations have taken a page from voice-of-the customer initiatives, applying these concepts and services (such as social network analysis, sentiment analysis and social recognition and feedback channels) to gather additional insight around employee opinions, behaviors and attitudes — and create a “voice of the employee.”

Read more: Is It Time to Toss Out Your Old Employee Engagement Survey?

Regardless of the method or technology through which data is collected from employees, many organizations take the results and divide the employee population into different segments — such as “fully engaged,” “somewhat engaged,” “unengaged” and “actively disengaged.” Further segmentation of the results — by e.g., region, location, job level or supervisor — offer important insights on segments with particularly high or low engagement scores and help identify the underlying drivers of engagement (or disengagement) within those segments.

Many HR organizations also try to correlate engagement scores with other HR metrics such as attrition, performance ratings and internal mobility to better determine the business value of measuring engagement and to be more proactive in containing problems.

Taking action to improve engagement

The ultimate step is taking action based on the engagement data findings; it’s also often where organizations struggle most. According to a Gartner survey, only 20% of heads of engagement believe their organizations are effective at acting on engagement data. Failing to act creates cynicism among employees and reduces participation rates in subsequent surveys, as employees think, “Why bother to take this survey again — they didn’t listen to me the last time.”

Effective action plans document the particular talent segments that will be prioritized for improvement

Creating an engagement survey action plan is the most traditional mechanism for establishing accountability for improvement. Effective action plans document the particular talent segments that will be prioritized for improvement (typically those with lower levels of engagement), as well as engagement categories that will be prioritized, such as career opportunity or work environment.

Beyond the action plans themselves, HR organizations are also providing additional support to equip leaders and managers to understand and act on the results specific to their teams and ensure that all members of the workforce clearly understand how they can contribute to their organizations’ action plans.

Gartner for HR Leaders clients can read more about trends in measuring employee engagement and Measuring Employee Engagement: Past, Present and Future by Ron Hanscome and Helen Poitevin. Other Gartner clients can read that report here and can also read A Conversational Model for Improving Employee Engagement.