Rethinking employee engagement and the benefits of getting it right
Updated: May 10, 2020
When done right, employee engagement leads to amazing bottom-line benefits
Gallup estimates that disengaged managers alone – so the people that are managing your employees – their disengagement costs somewhere between $77 billion and $96 billion annually. So disengagement has a very negative impact on organizations and the economy as a whole. Bloomberg found that $11 billion is lost annually due to employee turnover which is often the direct result of low engagement. Increasing employee engagement and reducing disengagement is obviously extremely important but if we’re all putting so much effort into it, then why is it still such a problem? Where are we going wrong?
Employee engagement – you think you know what it is and how to do it right but do you? Many people have very different understandings and perceptions about what the concept of employee engagement really is. The one thing that is incorrect with most people’s perception is that employee engagement is not just about happiness or satisfaction someone feels in the workplace. Many business leaders jump to the belief that employee engagement is about people being happy or feeling satisfied in their jobs, but the truth is that engagement is a much bigger concept than that. In fact, when you ask someone who is engaged in their job to talk about a time when they were most engaged, they rarely talk about a time when they were doing very little work, when they were bored, when they were just sitting around happy. It’s usually when they were working hard and really passionate about what they were doing.
So what is employee engagement and how do you master it? Employee engagement is the emotional commitment that a person has both towards the company itself and to the company’s goals. When people are really engaged in their company and the company’s goals, it ultimately leads to this thing called psychological ownership where people work and act like they’re actually a part of the company, a part of the ownership of the company, and make decisions in that way.
The second thing true employee engagement leads to is this idea of discretionary effort. Discretionary effort is really when you start to see employees do things on their own, make decisions and take actions without needing to be asked. They put in extra effort and energy because they want to do it, not because they have to do it. When people are really engaged, there’s much more willingness to go above the minimum requirements and to perform at a higher level because they’re passionate, energized, and enthusiastic to do it for the good of the company.
What does that look like in terms of behaviors? You’ll see employees not just working for a paycheck, they are willing to go the extra mile, and they deeply care about what customers think and want to do best for them because they know it impacts the company. Engaged employees think about their decisions and the way they spend company money like it was their own. You’ll also see employees happily putting in longer hours and excited about their work – all behaviors you’d want to see across your organization.
So what are the benefits of getting engagement right? Research done by many companies has found a high percentage of success in lots of different areas of a company when people are engaged including lower absenteeism, lower turnover, less shrinkage, and fewer safety incidents. Research also shows companies see increased productivity, higher sales, and lower turnover when their employees are engaged. Companies with highly engaged employees outperform others in terms of things that matter like net profits and shareholder value.
If the typical approach to engagement isn’t working, what can be done? It’s going to be a challenge but engagement needs to be addressed at the individual level. All managers should understand their people and their deeper core needs, drives, and motivations – the things that they need out of their work experience, the things that will make their work experience, their relationships, and their engagement individually higher. The second part to improving engagement comes when you examine an individual employee’s work experience – the types of pressures they face with their manager, job, team, and culture.
The critical problem is that companies spend too little time really understanding what makes their people unique and how this impacts their everyday work experience. In fact, many employees are faced with strong pressures to change who they are in order to meet the expectations of their job, manager, team, or culture. This pressure can cause great strain, disengagement, and eventual turnover. But there is a way to measure and understand this.