Employee Engagement

Why is Employee Engagement important?

Organizations with highly engaged workforces routinely outperform organizations with lower levels of engagement on a number of important business metrics, including higher profit, lower employee turnover, and greater customer satisfaction.

How important is employee engagement? Partnering with one of our clients, Perceptyx found that disengaged employees were 2.5 times more likely to voluntarily leave the organization. A focus on creating an engaging work environment would have resulted in nearly 1,000 fewer terminations, saving the organization more than $10 million annually. Perceptyx analyses also helped a leading global retailer determine that stores with higher levels of engagement had 70% higher net sales, 6.25% higher underlying operating margin, and 20% less shrink.

Clearly, engaging employees can pay big dividends for a company’s bottom line. When it comes to business success, then, engagement is essential. To achieve it and the benefits it confers, however, we have to first understand what engagement is and how organizations can better engage employees.

What is Employee Engagement?

Employee engagement is one outcome of a positive employee experience. It goes beyond how employees feel about your organization and takes into consideration how they interact with it. While engaged employees feel valued and identify with the culture, they are also active participants in all aspects of the company. There is a behavioral element to engagement, not just an emotional attachment. Engaged employees are willing to do more, and go above and beyond, even when no one is looking. They truly want to do their best work because they care: for the company, its management, and their fellow co-workers.

At Perceptyx, we believe that employees will engage with the organization when they can anticipate achieving their own level of success. Engaged employees work harder and smarter, advocate for the organization, and are more likely to stay with the organization for the long term.

Many elements of the employee experience have the power to influence employee engagement. When companies understand which elements of the employee experience engage employees, they can use this information to break down barriers to engagement across the employee population. This understanding will allow organizations to determine what barriers are preventing other employees from fully engaging with the company. Companies can understand what they are doing right — what engages their employees — and do more of it across the organization.

How Does Perceptyx Measure Employee Engagement?

Every organization has highly engaged employees. When we understand what engaged employees are experiencing, we can help leaders to do more of that across the entire organization. To do this, we must first clearly identify the engaged population by measuring the behaviors indicative of full engagement on the job.

These four indicators help assess whether or not employees have engaged:

• Intent to stay
• Referral behavior
• Pride in organization
• Intrinsic motivation

These indicators can be measured by asking employees to rate their agreement with statements such as:

“I intend to stay with the company for at least the next 12 months.”

“I would recommend the company as a great place to work.”

“I am proud to work for the company.”

“My work gives me a feeling of personal accomplishment.”

Responses are most commonly rated on a five-point Likert scale, from “strongly agree” to “strongly disagree.” Engagement may be calculated using an average of the percent favorable scores for all questions or by calculating the percentage of respondents that agreed with all engagement measures; employees who have neutral or negative responses on any of the indicators are not fully engaged.

Once the engaged population is accurately and clearly defined, their perceptions can be compared against those of the disengaged population. This allows leaders to see what matters, and offers insight into those things that have the greatest influence on employee engagement and are preventing their employees from experiencing or anticipating success in their role. These drivers – or barriers to engagement – can and do vary by company, by region of the world, by country, by industry, and by company subgroup, such as function, division, or job type. Therefore, it’s imperative that leaders not only look at an overall engagement score, but really dig into their data to understand the unique barriers to engagement for their people at a more granular level.

How Can Companies Improve Employee Engagement Scores?

Asking employees for their opinions is only the first step to engaging with them. To create a truly engaging work environment, people also need to feel they’ve been heard and understood. Asking isn’t enough; the organization needs to demonstrate that it was listening as well, by continuing the dialogue with employees and taking actions to address issues that matter to them.

When action plans focus on what’s most important to employees, engagement improves. For example, Perceptyx research found that the locations of a national healthcare system that listened to employees and made changes saw engagement scores increase, business metrics improve, patient satisfaction scores go up by 27%, voluntary turnover reduce, and EBITDA improve by more than 100 basis points.

What Should a Company Look for When Selecting an Employee Engagement Survey Vendor?

The most important feature organizations should look for when choosing a survey provider is a technology and methodology flexible enough to allow them to get the data they need, as quickly as possible. Rather than a vendor pushing a specific methodology or another one-size-fits-all solution, look for one that will act as a partner in exploration. Your vendor should be focused on providing the insight your organization needs to meet its unique objectives – not trying to fit you into the same template or “box” as every other customer.

At Perceptyx, we partner with large, complex organizations – including more than 30% of the Fortune 100 — to build and run their core listening strategies. We can confidently say that one approach does not fit all of them; each listening program we design for these customers is very unique. Global organizations tend to have very specific needs and requirements; the selected survey provider must be able to support surveys in any language and have the ability to analyze thousands of open-ended comments – as well as the technology to translate them and group them into themes.

Also important is the ability to integrate both employee demographic data and business performance data, to identify connections between the employee experience and performance outcomes, and to link data across multiple surveys to generate insights that span time and depict patterns so that organizations can get ahead of problems. The ability to customize the entire experience, to match the unique culture and brand of each organization, and flexibly adapt questions to the specifics of culture, region, and location within the org chart – and still provide real-time results – is also critical.