How To Measure Employee Engagement in a Way That Improves It

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Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

If an organization wants to improve employee engagement, the first and most important step they have to take in the process is measuring engagement to determine where they are and what they need to do to get to where they want to go. 

The success of any employee engagement strategy is contingent upon an organization’s ability to accurately and effectively measure how engaged employees are—not just once a year with tedious surveys half its staff probably won’t fill out, but on a regular and consistent basis, so it is an ongoing process that supports continuous improvement. 

There are several ways to measure employee engagement to gauge how well engagement strategies are working:

• Annual employee engagement surveys
• Pulse surveys
• Employee Net Promoter Score surveys
• 1:1 meetings
• Exit interviews
• Stay interviews 
• Retention rate

In this article, I’ll discuss these approaches and identify the best approach to measuring employee engagement to significantly improve it. 

Before I delve into the best ways to measure employee engagement, I’ll provide some background information on employee engagement and discuss why measuring employee engagement is essential. 

Then I’ll provide a highly effective method for developing an employee engagement measurement strategy that is informed by the top drivers of employee engagement, as well as some insight into how and why this method can dramatically improve employee engagement in any organization. 

Employee Engagement Explained

Employee engagement refers to the degree to which an employee is motivated to do great work, passionate about their work, and committed to the organization and its mission. 

Workers fall into three categories of engagement: engaged, not engaged, and actively disengaged.

Engaged: Engaged employees are committed to their jobs, find meaning in the work they do, care about their co-workers, and are dedicated to the organization’s mission and vision.

Not Engaged: Employees who are not engaged exhibit little commitment to or enthusiasm for their work, lack a strong sense of purpose at work, and, while they may do what they are asked, will not go the extra mile for customers or their co-workers because they aren’t fully invested in the organization’s success or aligned with its vision.

Actively Disengaged: Disengaged employees lack the commitment engaged employees demonstrate. These employees aren’t just unhappy in their roles; they can make their co-workers unhappy in their roles by spreading negativity that ends up causing them to disengage. 

There are three dimensions of employee engagement: cognitive, emotional, and physical. 

Cognitive engagement: This is the extent to which employees focus on their work. When an employee is engaged cognitively, they are better able to focus on their work, even during distractions and other work interruptions.

Emotional Engagement: This kind of engagement is related to how an employee feels about their organization, co-workers, and leadership. It is influenced by the employee’s “in-the-moment” experience of doing their work.

Physical Engagement: This kind of engagement involves the employee’s attitude towards their work, engagement in work activities, and the physical and mental effort they expend while performing their jobs.

When employees are cognitively engaged, they’re committed to their job; when they’re physically engaged, they’re invested in their work; and when they’re emotionally engaged, they have an emotional connection to their work.

Why Measuring Employee Engagement Is Essential

Engagement is a critical metric for organizations because it can have a tremendous impact on many aspects of a business and can significantly affect its overall profitability.

Gallup’s research routinely finds that organizations with high levels of employee engagement realize the following outcomes when compared to organizations with low levels of employee engagement:

• Roughly 40% lower absenteeism
• Roughly 50% better employee retention
• 10–20% better customer ratings
• Roughly 20% better sales 
• Roughly 20% higher profits

When employees are engaged, they are more motivated on a daily basis, more loyal to the organization, less likely to leave for another opportunity, and more likely to recommend the organization to others. 

Engagement enables them to stay self-motivated, clearly understand their roles, feel a strong sense of purpose in their work, view what they do as impactful and important, develop a continuous improvement mindset, and feel a strong sense of belonging within their team and within the organization, all of which improve performance. 

To reap the benefits of high rates of engagement, organizations have to continually work at engagement with the right strategies. 

Though it seems like a challenging task, regularly measuring employee engagement can help an organization understand how engaged all its team members are and help them provide a better overall employee experience for all employees.

The interactions an employee has at work every day and their perceptions of their role (the employee experience) have a tremendous impact on engagement. As Business Leadership Today contributor Pamela Hackett points out, “Measuring the level of employee engagement provides a valuable indicator of the overall employee experience.” 

Frequently checking in with employees on their engagement lets them know that engagement is important to the organization and ensures new hires are brought into the engagement process as soon as possible; it also ensures that the organization is supporting a positive employee experience from day one. 

These frequent check-ins are essential to the successful implementation of engagement strategies, and monitoring engagement strategy progress can help organizations take additional actions to make continuous improvements in engagement strategies. 

Frequently measuring progress enables organizations to be more agile and adaptable in addressing engagement issues and demonstrates a commitment on the part of leadership to supporting employees. This helps leaders connect with team members and be transparent about what they are doing to address their needs and improve in those areas being measured.

How To Measure Employee Engagement 

There are two approaches to measuring employee engagement: surveys and non-survey approaches. 

Survey Approaches

With survey-based methods, we can quickly measure engagement and do so confidentially, which is key to getting honest answers from employees.

There are several survey-based approaches you can take to measure employee engagement. These include annual employee engagement surveys, pulse surveys, and employee Net Promoter Score (eNPS) surveys. 

Annual Employee Engagement Surveys

Annual employee engagement surveys are usually long surveys that can help us get an understanding of employee engagement organization-wide on a year-to-year basis. 

They can help organizations gain an understanding of how much progress they’ve made toward achieving goals for the year, formulate new recommendations and goals for the coming year, and determine how well organizations are delivering on culture. 

While these large annual surveys can be useful, they don’t necessarily reflect employee sentiments throughout the entire year. 

Pulse Surveys

Pulse surveys are short surveys that can be sent out frequently. They focus on a specific question about one aspect of a driver of engagement. Because these surveys are short, it’s easier and faster to gather up-to-date employee feedback from them. 

Unlike large annual surveys, which can sometimes be misleading and even hurt engagement, pulse surveys can gather feedback in small, digestible bits on how well direct supervisors are meeting the universal needs people have for being engaged at work. This allows direct supervisors to quickly respond to the feedback. 

This is one of the most effective ways to measure employee engagement with surveys, and the process itself can actually increase engagement by demonstrating to employees that their voices are heard and management is responsive to their feedback. 

Employee Net Promoter Score (eNPS) Surveys

This tool can help us understand how loyal employees are by asking them one simple question: How likely are you to recommend this organization as a great place to work? 

Employees can rate how likely they are using a 1–10 scale, with 1 indicating “highly unlikely to recommend the organization” and 10 indicating “very likely to recommend the organization.”

These answers are then used to sort employees into one of three categories:

• Detractors (0–6 scores)
• Passives (7-8) 
• Promoters (9 and 10)

To determine the overall eNPS score, this formula is used:

(Promoters-Detractors) / total respondents = eNPS

When using this measurement, organizations want to see scores in the 10–30 range.

While this kind of survey can let you know if there is an engagement issue, it doesn’t provide much insight into what’s causing the disengagement or how to address it. 

Non-Survey Approaches

Non-survey approaches allow us to get more specific and have face-to-face interactions that build stronger relationships with employees.

There are several non-survey approaches to measuring employee engagement that can provide greater insight into the data gathered from surveys and additional employee feedback. These approaches are more time-intensive than surveys, so it’s important to set aside the time needed to successfully gather feedback using these methods.

1:1 Meetings 

1:1 meetings can be formal or informal conversations with employees that help us understand how they are feeling about their jobs and what we can do to help them thrive in their roles.

Putting time on the calendar to invest in 1:1 meetings with team members, and doing whatever we can to make sure we meet at the scheduled time, sends a very strong message that we truly care about them. 

While there is an initial investment of time that may give some managers pause, when done well, 1:1 meetings can save a lot of time in the long run, and make your work as a manager much more enjoyable and rewarding. 

Regular, proactive, quality meetings with team members take significantly less time than reacting to big problems like losing a good employee and having to scramble to replace that person.

Exit Interviews

Interviews conducted by organizations at the conclusion of an employee’s tenure can serve as a valuable source of feedback. This process helps leaders understand why an employee is leaving and identify potential improvements for the role to make it more appealing in the recruitment process.

These discussions can highlight immediate concerns that, while not directly related to employee retention, are crucial to addressing disengagement issues. Tackling these issues can significantly improve the employee experience for the next person who will fill the role.

Stay Interviews

Stay interviews help us understand what we’d need to do to retain an employee. This approach can build trust, boost engagement, and help us do a better job of retaining talented employees.

Author Dick Finnegan has some helpful tips on how to get the most out of stay interviews:

“With stay interviews, we answer five key questions that lead to higher trust and higher engagement among employees: 

• What do you look forward to at work? 
• What are you learning at work? 
• Why do you stay here? 
• When was the last time you thought about leaving, and what prompted it? 
• What can I do as your manager to make work better for you?

When managers learn to ask, listen, and probe with these questions, they learn what is really important for their employees and how they can do better in serving them.”

Retention Rate

Retention rate, also referred to as the “stability index,” measures the rate at which staff members stay with an organization. 

To calculate an organization’s retention rate, divide the number of employees who have remained with the organization for a specific period of time by the initial number of employees for the same period of time, and multiply that number by 100.

(Remaining employees during a set timeframe / Initial number of employees during the same time frame) x 100 = Retention rate

A high retention rate (90% or more) means a higher level of employee engagement. A low retention rate can indicate engagement issues, but it will not necessarily provide insight into why people are disengaging and leaving the organization.

Other Non-Survey Methods

In addition to these non-survey approaches, there are a few other non-survey approaches we can take that rely on the observations we make in the workplace and can give us insight into how engaged employees are. 

Productivity, performance, employee happiness, employees’ relationships with co-workers and managers, alignment with core values, job satisfaction, and employee wellness can provide clues to how well we are engaging team members and where course corrections may be needed. 

A Few Caveats (How NOT To Measure Employee Engagement)

It’s just as important to be aware of how NOT to measure employee engagement. Here are a few things to keep in mind when measuring employee engagement so that you get the most out of your efforts:

• Don’t rely exclusively on surveys (or survey a sample population)
• Don’t just look at quantitative measures (at the same time, don’t just rely on qualitative results)
• Don’t confuse satisfaction with engagement
• Always follow up as soon as possible on feedback

The last item on that list is particularly important. Surveys are only effective if actions are taken to achieve the desired outcomes. In the next section, I’ll discuss the best approach to ensuring you follow up on the feedback you receive from employees with real actions that create change. 

How To Develop an Employee Engagement Measurement Strategy

Measuring employee engagement is a crucial part of an organization’s employee engagement strategy, but it can be challenging. Putting together a sound employee engagement measurement plan can improve the success rate of engagement strategies.

A sound employee engagement measurement plan should answer the following questions:

• Who is responsible for employee engagement?
• What factors drive employee engagement?
• How do we gather the feedback we need to measure employee engagement?
• How do we respond to feedback quickly and effectively to improve employee engagement?

The following four-step process for measuring and improving employee engagement incorporates the best survey approach (pulse surveys) and the best non-survey approach (1:1 meetings). 

Who Is Responsible for Employee Engagement?

Employee engagement is something that everyone should be thinking about, all year long, but, ultimately, leaders have the biggest responsibility when it comes to engagement.

Leaders at all levels need to be reminded regularly that their top priority is to inspire greatness in their team members, so that they prioritize activities that drive engagement and remove obstacles that can hurt engagement, instead of over-focusing on tasks and short-term metrics.

A simple process for achieving this is to have all managers print a document that will remind them what their primary job is:

My primary job is to inspire greatness in my team by serving as a coach who helps people to be happy, great human beings, who do great work.

Once leaders have this printed, they should create a calendar event that reminds them to read this document several times a day for at least 30 days. Every time leaders read this, they’ll be more likely to take some action that helps bring out the best in their team members, and team members will feel more cared for and engaged as a result. 

Because leaders play such a vital role in the engagement process, they need to be involved in the process of measuring and taking action once feedback is received. I’ll discuss this more in a bit. 

What Factors Drive Employee Engagement?

The second step to creating and sustaining an environment that helps employees thrive both professionally and personally is to identify the universal needs that people have for thriving. These are the main drivers of engagement, and it is important to frequently measure how well these needs are being met to determine engagement levels in an organization. 

According to Gallup, 70% of employee engagement is driven by direct supervisors. Employee engagement is driven by how well leaders, and most importantly, direct managers, meet the 14 universal needs people have for thriving and being engaged at work

We have identified the 14 needs for thriving that are very strongly correlated with employee engagement. These needs are essentially universal—almost everyone shares these needs for thriving at work and being engaged.

14 Universal Needs

1. Clarity of Expectations

When employees are unsure about what is expected of them in their roles, it creates a situation where they experience daily conflict about their duties and responsibilities, which can raise stress levels, erode confidence, and decrease motivation.

Lisa Baker, founder of Ascentim LLC, says clarifying cultural norms and expectations is key to eliminating toxicity and building authentic relationships that boost engagement in the workplace:

“Culture norms and expectations must be clear to everyone. It’s equally important to demonstrate what is and is not acceptable behavior, as well as the consequences of toxic behavior. It’s important for leaders to model what they want to see from their team.’

2. Having the Tools Required to Do One’s Job

Lacking the tools to do one’s job is a significant source of anxiety and frustration and can prevent employees from doing their best work.

Kathleen Steffey, founder and CEO of Naviga Recruiting and Executive Search, says that with remote access becoming a necessity in today’s business world, having the tools to work remotely is essential for engagement:

“Having the ability to work remotely from a professional standpoint requires high-speed internet, a functional laptop, and basic software programs. It is not optional to go without these anymore because most businesses are not returning to an in-person work environment and if they are it is a hybrid model.”

3. Doing Work That Leverages One’s Strengths

The more time people spend doing work they enjoy and are good at, the more likely they are to be engaged and reach their full potential.

According to leadership development expert Sara Canaday, one of the best ways to ensure role fit and leverage strengths is to understand the distinction between performance coaching and developmental coaching:

“One of the best ways to get team members more engaged is to spend time with them through developmental coaching. When you demonstrate that you genuinely care about their career aspirations and want to support them, you can bet those employees will be ‘all in.’ To do it well, you need to really get to know your employees—their strengths, challenges, and professional goals.”

4. Appreciation / Recognition

There is strong evidence that suggests recognition is a great way to engage employees because it boosts self-esteem and personal competency.

Robert Hefner, Vice President of Human Resources at David Weekley Homes, says one of the best ways to keep employees engaged and focused on the vision is recognizing and celebrating employee achievements:

 “Success breeds success, and failure breeds failure. If you aren’t celebrating the successes, to be able to build on that and have more successes, then you are possibly doing the opposite and building failure that keeps building more failures on top of it. We have found it is so important to be able to recognize those successes and have fun with them before we move on to the next thing.”

5. Growth

People need to be continuously growing to be engaged with their work and happy in the workplace. This can also be vital to the success of the innovative efforts organizations make. 

Author and thought leader Shane Green says the best way to do this is to make your employees’ careers a priority:

“If you are focused on someone’s career you should know three pieces of information: what was their career highlight to date, what is their big picture goal, and what can I do to help them get to the mountaintop.”

6. Feeling Like Opinion Matters / Is Heard

People need to feel like they’re contributing ideas that are at least considered. 

According to author Linda Holbeche, having a voice and feeling heard at work creates a respectful work environment that is conducive to engagement:

“If people are listened to, even if their ideas are not the ones that finally get taken onboard, they are more likely to go along with what is decided because they have been respected.”

7. Meaningful Work

According to a recent study, almost 70% of employees say they would not work for an organization without a strong purpose. Employees increasingly want their organizations to be socially responsible and for senior leadership to live core values.

Author and thought leader Libby Gill says that when it comes to creating a strong sense of purpose for employees and helping them find meaning in their work, leaders set the tone: 

“You were privy to what the top leaders, maybe the founders of the organization, set out to accomplish. But that doesn’t mean everybody knows where you want to be six months, a year, or five years from now. It’s up to the leader to share that information. And the best way to do it is to create a narrative, to create a really compelling story that is so alive and so robust that people say ‘Oh, I see where we are going, and I see how I can connect within that.’”

8. Excellence

People inherently want to do a great job, but they often struggle to break the habits that impede excellence. 

Breaking bad habits is essential to achieving excellence, and, according to author Piyush Patel, leaders who want engaged employees who consistently perform well coach them for excellence:

“I look at leadership as Little League coaching. Imagine if you were coaching a Little League team, and you waited until the end of the year to tell everyone on the team how they did and said, ‘Next year, I hope you give it a better shot.’ You wouldn’t have a winning team. It’s all about real-time.”

9. Belonging

According to research from Gallup, teams with people who truly care about each other 

collaborate better, are more innovative, and are better at avoiding burnout, making belonging and psychological safety essential components of an engaged workplace.

Author Shanda Miller says relationships at work create the belonging that fuels engagement and high performance:

“It is good for leaders to build relationships with their team and encourage team members to build relationships among themselves.”

10. Feedback

People need regular, helpful feedback to grow, improve, and build confidence.

Author Andrew Freedman says feedback is an essential component of a high-performance, high-engagement work environment:

“In order for people to know what they’re doing that they should do more of, or what they are doing that they need to do differently or better in order to achieve those high standards of excellence, they need feedback—we all need feedback.”

11. Autonomy

People need to feel that they have as much control as possible over their lives. 

According to Dr. Wanda T. Wallace, author and thought leader, when employees are given authority and autonomy, and when they are empowered to take ownership of their performance, they are more engaged at work and will perform better:

“Instead of simply telling your team members the why and how of a task, it is better to direct them to learn the how and why themselves because they are much more likely to absorb and retain that information. Don’t step in and do things for your team. Way too many deep experts default to ‘Never mind, I’ll do it myself because that’s faster.’ Which leaves your team members feeling demotivated.”

12. Trust

People need to trust their coworkers, and, most importantly, their leaders. They also need to feel that they are working in an ethical, respectful work environment.

Dr. Paul Marciano, author and strategic advisor, says establishing trust with your employees creates engagement and improves team performance:

“Building trust can be like a piggy bank. We have a relationship where I put a nickel in, you put a dime in, and so on and so forth. And if one of us does something to break that trust, it’s like the piggy bank has been shattered. We can try to put it back together, but it will more than likely never be the same again.”

13. Well-Being

Negatively impacting well-being is strongly negatively correlated with engagement and retention. 

Author Brandi Olson says high performance and well-being go hand-in-hand; the key to achieving the level of engagement that leads to the former requires taking care of the latter:

“We get sucked into some powerful cultural illusions that keep us thinking that busy = important or that well-being and high performance exist on opposite ends of the spectrum—that’s a false binary. The opposite is true. Well-being is the only path to SUSTAINABLE high performance.”

14. Feeling Cared for by Supervisor

This is, perhaps, the most powerful driver of engagement and the foundation for meeting all other needs. Employees need to feel cared for by leadership to engage at work. Pay and benefits fall into this category, but a truly caring culture will go well beyond these basics. 

Author John Baldoni says leaders who show grace at every step of the way create a caring culture that is conducive to high engagement and top performance:

“The concept of grace under pressure comes from the idea that when we are in a period of flux, leaders have to do three things: take care of their people, take care of themselves, and prepare for the future. The key is that leaders must involve grace in all of these actions and aim to build towards the greater good for everyone.”

In addition to the 14 universal needs above, each individual has needs for thriving that are unique to them. These needs are often best identified by employees’ direct supervisors through meaningful, 1:1 conversations.

How Do We Gather the Feedback We Need To Measure Employee Engagement?

Once you’ve identified the universal needs of employees for thriving at work, managers need to get regular feedback from their direct reports on how well they’re meeting those universal needs. 

Although large, broad surveys do have their place later on, they are generally not the best way to start your efforts to consistently drive high levels of employee engagement. 

To drive high levels of engagement, you should start with one small survey, with just one or two questions that are focused on meeting just one element of the 14 universal needs. To make the most impact the fastest, spend the first six months to a year only asking how well supervisors are meeting the needs of their direct reports.

Because 70% of employee engagement is driven by direct supervisors, this helps make the biggest impact the fastest. We can get feedback on organization-wide issues later; by getting feedback in small, digestible bits, it’s easier for employees to provide feedback.

This process allows employees to see action being taken on their feedback within days of completing the survey. Surveys should only be open for two to three days. You may not get responses from every employee on every survey, but the speed with which you take action on the feedback is much more important.

When leaders focus on universal needs first, engagement efforts are most highly 

leveraged. After addressing the universal needs with sound engagement strategies, you can then uncover and meet unique needs.

How Do We Respond To Feedback Quickly and Effectively To Improve Employee Engagement?

Building trust alone can dramatically improve engagement. This is why research from Gallup suggests that engagement is nearly three times higher when employees strongly agree with the statement:

“My organization acts upon the results of surveys I complete.”

The secret to quickly and consistently improving employee engagement is to ensure that employees see meaningful action being taken on their feedback, as fast as possible.

Ideally, direct supervisors should take at least some action within three to five business days of the survey closing to improve their ability to meet the needs addressed. Although this may sound impossible, there’s a simple hack that will allow you to easily respond to feedback almost immediately.

Rather than getting feedback from employees and then spending time coming up with a plan for addressing deficiencies after the feedback comes in, you should have a brief video training ready to go that helps managers more consistently meet the needs of their employees before a survey even goes out.

For instance, if you know you’re going to send out a survey on appreciation, you should have a brief video training ready that is focused on a simple habit for better showing appreciation, so that managers can watch and take action on the training as soon as they get feedback from their team members.

The Benefits of Taking This Approach to Employee Engagement

This approach is extremely important for several reasons.

Managers Are More Open To Learning

First, one explanation for why most leadership training fails is that people aren’t as open to learning something new if they don’t think they’re deficient in the area being taught.

But when managers get feedback from team members letting them know that they have at least some room to grow in a given area, they are much more likely to want to improve in that area and more likely to be open to the training.

It Makes Taking Action Easier

The second reason you should have training ready before the survey goes out, and have it focused on meeting just one need, is that instead of being overwhelmed with lots of different things to work on, managers have just one area to work on.

If the training provides just a couple of simple, actionable ideas for improving in that one area, it’s much more likely that the managers will take some action. Because the managers are only working on one new leadership behavior at a time, they are much more likely to make that new behavior a habit that sticks.

This is the key to helping people create lasting transformation.

People very rarely change much as a result of learning something new, however exciting the new learning is. Lasting transformation occurs gradually over time when we develop simple habits that are easy to stick with.

It Causes Almost No Interruption

The third reason this approach of timely, focused, short training is so effective is that the managers’ work isn’t interrupted for a half day or full day of training, so, when they go back to their workflow, they are much less likely to feel overwhelmed with things they fell behind on.

With this approach, the manager likely only missed 10 minutes or so, including the time to read the feedback, watch the training, and take the first steps to create a new habit for improvement.

By taking less time out of a manager’s workflow, they’re more likely to take action and stick with what they learned in the training.

Employees See Action Immediately

Finally, and perhaps most importantly, this approach of having quick, focused training ready to go before surveys go out also helps ensure that employees see action being taken on their feedback in a matter of days.

With this approach, you can build a virtuous cycle of employees sharing feedback, feeling heard, and quickly seeing action taken on their feedback.

With each cycle of this simple process, employees have more confidence and trust in their managers and the leadership team.

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