Employee Engagement – Definition and Relevance

Published on 23-08-2018

High employee engagement rates are supposed to have a diverse range of positive effects on an organisation’s performance. In our new series, we will look behind the curtain of this buzz term and resolve pressing questions and issues, discussing culture, strategy, and future trends.

Before we can explore all the different strategies to engage employees effectively, we need to gain a deeper understanding of what successful ‘employee engagement’ really means and why it shouldn’t be a side project on the agenda. In this post we wil therefore answer the following questions:

  • What is Employee Engagement?
  • Why is Employee Engagement so important?
  • How does Culture affect Employee Engagement?

What is Employee Engagement?

Defining ‘Employee Engagement’ isn’t as easy as it sounds. If you look for ‘definition employee engagement’ online, you will end up with a variety of different definition. This often leads to confusion and a misunderstanding of the term.

Wikipedia defines employee engagement as “the nature of the relationship between an organization and its employees”. Engaged employees are defined as fully absorbed by and enthusiastic about their work as well as have a positive attitude towards the organisation and its values.

Kevin Kruse, author, Employee Engagement 2.0, says “Employee engagement is the emotional commitment the employee has to the organization and its goals” (Forbes.com).

The bottom line: Employee engagement describes the level of enthusiasm, purpose, and dedication an employee has towards his or her job. They work or more than a pay cheque or promotion. It’s about contributing to something great, a common goal they believe in and are willing to work for. This eagerness and passion towards their tasks are often reflected in their individual outcomes. Employee engagement, thus, describes an internal state of mind – physically, mentally and emotionally – that combines the work effort, commitment, and satisfaction of an employee.

When people go to work, they shouldn’t have to leave their
hearts at home. –Betty Bender, author

But how can you tell if your employees are engaged?

Kruse explains that if employees are engaged – if they care – they use discretionary effort. This means that an engaged waitress picks up the trash from the floor, even when her manager isn’t watching. The engaged sales guy calls customer outside his official work hours, without being asked to do so. The engaged police officer pulls out a speeding car, although her shift is almost over. They do it because they care. Because they think that with their work they can make a difference.

Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy. – Warren Buffet

Why is Employee Engagement so important?

A study by Glassdoor (2015) indicates that 54% of employees believe that they would be able to find a new job in a comparable position within 6 months if they decide to leave a company. This highlights one factor: If you don’t provide employees with a compelling reason to stay – they leave. Especially highly talented and skilled employees are at high-risk of turnover. Why? The can find a job anywhere, at any time – and they know it.

A Gallup study shows that 73% of disengaged employees are actively looking for jobs, compared with 37% of engaged employees. A lack of engagement is, therefore, a clear reason for employees to leave a company.

It is therefore crucial for every business’s success to engage employees to decrease turnover rates and the costs of bad hires. Especially in times of fierce competition on the job market and expensive onboarding procedure, employee engagement becomes more and more important.

The benefits of high engagement rates are diverse. Breaking it down, engaged employees lead to…

  • higher service, quality, and productivity, which leads to…
  • higher customer satisfaction, which leads to…
  • increased sales (repeat business and referrals), which leads to…
  • higher levels of profit, which leads to…
  • higher shareholder returns (i.e., stock price).

Most importantly, however, engaged employees are happier – in their professional as well as private lives. And when you are happy, it infuses everything with some sort of enthusiasm, purpose, and energy. This has a direct effect on the performance of a company. In fact, according to Towers Perrin research, companies with engaged workers have 6% higher net profit margins, and according to Kenexa research engaged companies have five times higher shareholder returns over five years.

Employee engagement is the key to activating a high performing workforce. – Kevin Kruse, employee engagement expert

How does Culture affect Employee Engagement?

Employee engagement is the direct result of a strong company culture. As mentioned before, employees are only then engaged if they see a deeper purpose in their work. A company’s culture should communicate exactly this common goal. The stronger the culture, the more likely are employees to understand what they are working toward.

The cultural fit of employees has a massive impact on engagement. Workers who feel detached from their company cultures are unlikely to agree that the mission or purpose of their company makes them feel their job is important (Gallup.com).

You’ll attract the employees you need if you can explain why your mission is compelling: not why it’s important in general, but why you’re doing something important that no one else is going to get done. –Peter Thiel

Employee engagement and culture are so closely related that in order to improve engagement rates, you need to improve your culture – or define it further. This is easier said than done. The 2015 Deloitte Trend Report shows that 87% of HR leaders state that company culture and engagement are their biggest challenges. In the following weeks, we will tackle those challenges together and explore different strategies and methods how to improve, measure and maintain employee engagement.

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