How Employee Engagement Drives Business Success

How Employee Engagement Drives Business Success

Over the past 30 years, there has been much discussion about the value of employee engagement in the business world. If you’ve been employed at any point in the past three decades, chances are that you’ve been asked to take stock of your personal level of engagement—or if you are an employer—disseminated a survey to take stock of your own employees’ engagement.  

The term “employee engagement” came to prominence with the rise of academic management theory in the 1990s, and has been commonly attributed to William A. Kahn and his influential, epoch-making article, “Psychological Conditions of Personal Engagement and Disengagement at Work,” published in the Academy of Management Journal (AMJ) at the top of the decade. 

Beneath the layers of academic jargon above lies a relatively straightforward concept. Simply put—employee engagement is the extent to which employees feel passionate about their jobs, their level of commitment to the organization, and the corresponding effort that commitment engenders on a day-to-day basis.  

When speaking about engagement, however, there is a tendency to conflate it with mere satisfaction, but there is an important distinction to be made between the two. While the former refers exclusively to  how happy or content an employee feels, the latter encompasses their level of motivation and involvement, as well as their emotional commitment to their work.  

Some employees are content to just show up, keep their head down, and collect a paycheque, while others feel the drive to always go above and beyond. They feel an intense connection to their work, viewing their labour—and the goals of their organization it serves—as meaningful and ultimately worth doing, part of something larger than themselves.  

An oft-cited example used to illustrate the concept of engagement comes from President John F. Kennedy’s visit to NASA headquarters in 1961. There, he encountered a janitor mopping the floor. When the president asked him “what do you do here at NASA?”, the man responded, “Sir, I’m helping to put a man on the moon.”    


The Big Picture   

Why is this important? Research shows that 92% of executives believe that engaged employees perform better, boosts the success of their teams, and produces better outcomes for their organizations. In a 2012 article for Forbes, author and CEO Kevin Kruse proposes an “engagement-profit chain” to demonstrate the ROI of engagement, stating:  

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). 

Furthermore, when employees are engaged, they use discretionary effort, going above and beyond without needing to be asked. This, in turn, produces better business outcomes. According to surveys by Towers Perrin and Kenexa, companies with engaged workers have 6% higher net profit margins and five times higher shareholder returns over five years. 

Despite this, it would appear that companies have a long way to go to increase engagement levels among their total workforces. Engaged employees typically make up roughly 15% of the workforce, while 67% are not engaged, and 18% are actively disengaged, creating negative, toxic work environments and sometimes even spreading their toxicity throughout the organization. 


How to Increase Employee Engagement  

What steps can you take to ensure that your employees foster engagement in your workplace? 

Leadership strategist Brent Gleeson suggests that leaders and managers have an important role to play in fostering a sense of engagement—the former by defining and communicating a powerful vision for the organization and developing engagement management teams that empower employees and the latter by acquiring and developing great talent, and actively prioritizing engagement.  

Cultivating a sense of meaning and purpose in the workplace, coupled with strong relationships and coaching to help employees feel supported is key to fostering engagement. Feeling a sense of belonging—and the belief that their employer is invested in their well-being—are also significant drivers of engagement, motivation and performance, according to Deloitte’s 2021 Global Human Capital Trends list.  

While 79% of respondents claimed that they considered fostering a sense of belonging important or very important for their success over the next 12 to 18 months, only 13% claimed they were equipped to address this trend. So—let’s increase those numbers. From here on out, 2022 is the year of the engaged employee!  

Ready to revitalize your HR strategy, fostering engagement at every level of your workforce? The Burke Group can help! Get in touch today.