Employee Engagement: What It Is, What It Isn’t, and Why It Matters

Towers Watson released a disturbing bit of news last week. According to their 2012 Global Workforce study, 63 percent of U.S. workers “are not fully engaged in their work and are struggling to cope with work situations that don’t provide sufficient support.” This has a significant financial impact. In 2004, Gallup estimated that disengaged workers were costing U.S. businesses a staggering $300 billion a year in productivity losses.

As Tucker Robeson, CEO of CDL Helpers, says, “You need to wake up to the fact that if you’re not engaging your employees, you’re hurting them–and your company.”

Clearly, engagement needs to be addressed. Although employees should certainly bear some of the responsibility for not being engaged in the workplace, ultimately it’s up to employers to develop and implement a strategy that boosts engagement. And there’s plenty of great advice available on how to do that (here and here).

Even so, few companies actively combat engagement issues. The reason, I suspect, is that there’s a lack of consensus on what the term “engagement” really means. For many business leaders, “engagement” is just a buzzword. “The issue here is that employee engagement is a catch-all phrase that doesn't have a very clear definition,” says Orin Davis, Principal Investigator at Quality of Life Laboratory.

Before you can tackle engagement, you have to understand what it’s all about. In this article, I’ll shed some light on what “employee engagement” is–and isn’t–and why it matters.

What Employee Engagement Is

Employee engagement is a critical indicator of how successful a business is–and the sustainability of that success. Robeson defines employee engagement as “how connected people are to their work, and the organization for which they’re performing those duties.” You’ll note that this definition doesn’t equate engagement to happiness. That’s because they’re not synonymous.

Engaged employees understand their role in achieving the goals of an organization, and the value of that role. This gives their work meaning, and ensures employees are contributing productively every day.

When you’re engaged, “you’re more connected, more tuned in to why what you’re doing is important–to the organization, to the customer, whatever,” says Robeson. “You’re drinking the juice, and you like it.”

At its heart, employee engagement is about motivation. You can’t “buy” engagement. In fact, when you require a certain standard of service, studies show that motivation can’t be limited to monetary compensation. To bolster engagement, Davis suggests fostering a sense of meaning to an employee’s work, “and likewise to allow the employee to craft the job to his/her capabilities, strengths, and likes, as much as possible.”

What Employee Engagement Isn’t

Though they’re related, employee engagement isn’t strictly a company culture issue. It’s just as much an operational issue. If your employees aren’t engaged, it’s going to come through in the quality of their work.

Deep, lasting engagement doesn’t require an overhaul of your company culture. Rather, it requires an adjustment in how leaders communicate with employees. How you announce important business objectives, how you measure success, how you show appreciation–everything needs to strengthen your employees’ connection with the organization and their work.

Furthermore, employee engagement isn’t an HR initiative. Although HR is often tasked with spearheading projects to boost engagement, Robeson says every person in a management role is responsible for driving engagement, especially the CEO.

“The CEO may not be directly responsible for keeping every employee engaged, but (s)he is responsible for creating and maintaining an environment where employees understand why the work they do is meaningful.”

Davis agrees, pointing out that engagement “should be addressed as a strategic initiative at the upper levels of management, and a tactical issue at the lower ones… and the CEO has to lead off.”

Finally, it’s important to understand that engagement isn’t a “project” with a clear set of deliverables and a completion date. You’re never “done” working on engagement. It’s a continuous process.

Why Employee Engagement Matters

Employee engagement has direct, demonstrable impacts on productivity and performance that translate to financial results.

“Companies have known for years that employee engagement is important to business performance,” said Julie Gebauer, managing director, Talent and Rewards, at Towers Watson in last week’s press release announcing the Global Workforce Study.

Davis elaborates: “When employees are not engaged, they generally aren't paying attention to their work, and tend to be apathetic about their jobs.”

Conversely, companies with engaged employees are reaping significant financial rewards. The Global Workforce Study found that companies with engaged employees “had operating margins almost three times those of organizations with a largely disengaged workforce.” That point alone makes engagement a strategic issue worthy of executives’ attention.

Admittedly, engagement isn’t easy–and “Engagement is quite fragile,” says Gebauer, “and will not be sustained over time without careful attention to very specific elements in the work environment.” But with so much on the line, can companies really afford to ignore it?

How engaged are employees in your organization? Has leadership rolled out any initiatives to bolster engagement? What successes or challenges did they face?

Feature Image by: Hasan Basri AKIRMAK