The Importance of Employee Engagement

Global analytics firm, Gallup, states that nearly 85% of employees worldwide are not engaged or actively disengaged at work; this figure is a huge 89% for the UK. Engaged employees are defined as ‘those who are involved in, enthusiastic about and committed to their work and workplace’. Gallup suggests the biggest factor in this lack of engagement is a lack of ownership by leaders and managers and a lack of understanding from employees.

Whereas it was once common for people to think of a job as being separate from their life, people are now far more likely to consider their life as a whole. Gallup have found that the modern worker values purpose over pay. They are more interested in their development than simply hitting targets, and they want their manager to be a coach, rather than the stereotypical boss telling them what to do. They would also prefer to receive regular feedback than having an annual review. 

Managers and engagement

The line-manager relationship is critical to employees as Gallup found that the manager or team leader alone accounts for 70% of the variance in team engagement. The old adage, of course, states that ‘people don’t leave bad jobs, they leave bad bosses’. But what impact does a boss really have? CIPD’s 2019 ‘Health and Well-being at Work’ report placed management style as the second highest cause of stress at work (behind workload), with 43% of respondents citing this as one of their top three causes of stress. This was an increase from 32% in 2018.

In 2020, a McKinsey survey found that the quality of interpersonal relationships was the primary driver of employees’ job satisfaction. Significantly, 86% of respondents cited their relationship with management as the main driver of satisfaction in their interpersonal relationships at work. Where relationship between employees and management was considered very good, 94% of respondents were fairly, very or completely satisfied with their job. In contrast, where relationships between employees and management was considered to be very bad, 45% of people were fairly, very or completely dissatisfied.

Today’s workplace requires a shift in management style. Managers are now expected to support employees to be self-directed, rather than reverting to the traditional ‘boss’; a controller who commands and instructs, then closely monitors the execution of all tasks. The modern way is of a more supportive coaching style that nurtures and improves your people, creating space for them to have autonomy, whilst providing support and encouragement when needed.

Some of the areas where managers can impact engagement and performance include:

• Connecting team members to the team (and organisational) purpose
• Living the team/organisational values and recognising when others do the same. This can be done by highlighting the example and emphasising the impact it had.
• Ensuring team members understand their role and how it links to the purpose and success of the team/organisation.
• Setting effective targets
• Providing constructive feedback
• Focusing on people’s strengths, rather than their weaknesses
• Understanding and supporting a team member’s personal goals and development needs
• Promoting learning and development, for individuals and as a team. This includes enabling people to learn, practice, fail and try again, helping to support the process but allowing people the space to grow.
• Building a psychologically safe space where team members can openly challenge each other for the greater benefit of the team.

There is now an expectation on managers to be far more empathetic and compassionate, understanding people’s commitments and needs in their lives as a whole, rather than just focusing on what their job specification states. This has become very evident during the Covid-19 pandemic as many people have worked from home, looking after (and even helping to educate) children and relatives alongside work, and have needed to find alternative ways to exercise and support their own wellbeing in new, challenging and changing circumstances.

Alongside empathy, it is crucial to have trust in the relationship otherwise engagement is likely to suffer. Creating the space for people to learn and grow, avoiding micro-management and living the desired values all help to create trust, as does being accountable. Doing what you say you will do goes a long way in getting people to believe in you.

It is vital that leaders and managers are given the relevant training to help them develop the required skills. They need to understand the conversations they are required to have and how best to listen to their team members, rather than simply being thrown in at the deep end and hoping for the best. It is also advisable that they should understand signs of poor mental health and know where to direct colleagues to get the required support. Each person’s needs are different, and it is only in speaking with each individual and understanding their situation that you will be able to find the right solution, training and practice opportunities to develop the required skills. 

Of course, senior leaders have a critical role to play in living the values and setting the culture of the organisation. We should also recognise that full responsibility for setting these at team level doesn’t just lie with the manager; the team members are very much part of an effective process. In our Performance Teaming programmes, we recommend that the courses are completed as a team. All team members input into the team’s purpose, vision, values, etc. Everyone has an opportunity to have their say, the team as a whole is engaged and takes ownership, and team members hold each other accountable.

Performance Management

It is common for engagement to be viewed as something HR deal with, or it can simply be thought of as performance reviews and staff surveys that are seen by many as annual tick box exercises. In 2016, CIPD found that 55% of HR leaders and 73% of non-HR leaders felt their annual appraisal system was ineffective. These figures reduced for half-yearly reviews, but still resulted in 37% (HR) and 46% (non-HR) of leaders believing them to be ineffective.

The same report reviewed a range of research and concluded that goal setting and performance reviews could be powerful tools in raising performance, but could also have negative effects depending on how they are implemented.

To boost engagement and measure performance effectively, you can:

• Use simple, specific metrics that are in the control of the employee and that are easily measurable. These should be agreed with the employee (indeed generated by them where possible), rather than thrust upon them.
• Ensure the metrics (and their lead indicators) are measured regularly; again, preferably by the employee. Agree a cadence for this and ensure all parties understand what is required for the task to be deemed a success.
• Identify potential risks in advance so these can be negated or managed effectively.
• Offer an easy route for employees to provide feedback and to enact improvements, and have a process in place to listen, review and respond to these within a set timeframe.

When providing feedback on both positive and negative events, ensure it is constructive. Feedback should be provided with positive intent, even if it is about a negative incident. It should be intended to provoke a positive outcome next time the situation occurs and, preferably, to create a process within, and owned by, the employee to stop it happening again. To do this, feedback should be given in relation to a specific event and should be provided at the time of the event, or as close to it as possible, rather than waiting for a formal performance review.

Positive communication has been shown to link with better performance. In 2004, Losada and Heaphy found that the ratio of positive comments to negative comments was 5.6:1 in high performance teams, i.e. there were nearly six positive comments for every negative one. In low-performing teams, they found there were three times as many negative comments compared to positive ones. Therefore, managers taking the time to intentionally look for reasons to praise and thank their team members - as Ken Blanchard said, ‘to catch people doing something right’ - can significantly boost the performance of the team. 

Feedback can therefore become part of every day, informal conversations, that boost both performance and engagement when given in the right way. Having specifically identified what happened (where, when, what behaviour), it is important to state the impact the behaviour had. The feedback then concludes with a discussion where the employee determines the actions required to produce a positive outcome next time the situation arises; this can include learning points, action points and practice points.

Benefits of employee engagement

The benefits to organisations of high employee engagement are numerous. A 2016 Gallup ‘Q12’ survey of more than 82,000 teams across 73 countries found significant differences between those teams in the top quartile for employee engagement and those in the lowest quartile. For teams in the top quartile, benefits included:

• 41% lower absenteeism
• 24%-59% less staff turnover
• 70% fewer safety incidents
• 40% fewer defects
• 10% higher customer ratings
• 17% higher productivity
• 20% higher sales
• 21% higher profitability.

These figures show just how critical it is that employee engagement is taken seriously and is not viewed simply as an HR function.

Of course, employees who are not engaged can still do a good job; however, they are likely to lack the connection to the company and are quite likely to leave for a better offer. Those who are actively disengaged can not only cause your company damage through their work, but the added danger is the potential to grow a toxic culture around them. In contrast, engaged employees care about the company they work for; they buy in to the company’s purpose, they give their best to achieve their goals and they want to actively contribute to the company’s success.

Employee engagement and wellbeing

Engagement is also strongly linked to wellbeing. The wellbeing of employees impacts their overall sense of motivation and performance, including their motivation and performance at work. It can also impact those around them.

The 2012 CIPD report, ‘Managing for sustainable employee engagement’, suggests that a focus purely on employee engagement - without considering employee wellbeing - risks any engagement being unsustainable. The report particularly highlights that global competition and economic conditions in recent years have caused many employees to work harder and longer, which poses risk to employee wellbeing. For example, risks of reduced wellbeing include stress, anxiety, depression and heart disease. From a company’s perspective, the cost of lost working days can be high. The report stated that average absences due to stress lasted 21 days, while stress also correlates with a higher accident risk according to the HSE.

Studies by Inpulse and Public Health England have shown that cases of anxiety, mental distress and sleep problems have increased during the Covid-19 pandemic, so the importance of employee engagement and wellbeing should reasonably be considered to be even more relevant now.

Managers have a crucial role to play in supporting the wellbeing of their team members. As well as following steps discussed above, managers can help colleagues manage workloads and offer flexible working hours. They can demonstrate model behaviour; for example, not sending or answering emails during set hours. It can also help for leaders and managers to show an element of vulnerability; for example, in discussing the challenges they have faced this year and what they have found to help them. This often opens the door for others to start discussions and get the support they require.

The need to understand and improve employees’ wellbeing is, therefore, high. It is vital that employers understand the needs of their people. Asking questions, actively listening and spotting signs of changes in behaviour all play a significant part. Leaders must implement programmes that will successfully engage and benefit their employees, and managers must be given the tools to support the programmes and their team members. The evidence for engagement and wellbeing improving performance is significant (and is discussed further in our ‘Wellbeing: great for us and great for business’ article); now is the time to ensure that your organisation acts upon it.

References

Gallup, ‘What is employee engagement and how do you improve it?’: (https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx#ite-285761

Gallup, ‘State of the Global Workplace’ (2017): https://www.gallup.com/workplace/238079/state-global-workplace-2017.aspx

CIPD, ‘Could do better? Assessing what works in performance management’ (2016): https://www.cipd.co.uk/Images/could-do-better_2016-assessing-what-works-in-performance-management_tcm18-16874.pdf

CIPD, ‘Managing for sustainable employee engagement’ (2012): https://www.cipd.co.uk/Images/managing-for-sustainable-employee-engagement-guidance-for-employers-and-managers_2012_tcm18-10753.pdf

McKinsey, ‘The boss factor: Making the world a better place through workplace relationships’ (2020): https://www.mckinsey.com/business-functions/organization/our-insights/the-boss-factor-making-the-world-a-better-place-through-workplace-relationships

Inpulse, ‘Inpulse Surveyed Over 11,000 Employees in May 2020: Here Are the Results’: https://www.inpulse.com/inpulse-surveyed-over-11000-employees-in-may-2020-here-are-the-results/

Inpulse, ‘Lockdown in winter – expert warns working from home creates new challenges for employers and employees’ (2020): https://www.inpulse.com/lockdown-in-winter-expert-warns-working-from-home-creates-new-challenges-for-employers-and-employees/

Public Health England, ‘COVID-19: mental health and wellbeing surveillance report’ (2020): https://www.gov.uk/government/publications/covid-19-mental-health-and-wellbeing-surveillance-report/2-important-findings-so-far

Losada and Heaphy, ‘The Role of Positivity and Connectivity in the Performance of Business Teams’ (2004): https://www.factorhappiness.at/downloads/quellen/s8_losada.pdf