Chapter 1: What Is Employee Engagement?

To start off, employee engagement is the emotional commitment an employee has to their work, their team's goals, and their company's mission.

Engaged employees feel like:

• They have a purpose at their company,
• Are aware of how their work helps them grow, and;
• Understand the impact they make on others.

Many people have different definitions of employee engagement, associating their own meanings with the term and making a relatively simple subject more confusing than it needs to be. Leadership and employee engagement expert Kevin Kruse offered a useful disambiguation for what employee engagement isn't:

"Employee engagement does not mean employee happiness."

"Employee engagement doesn't mean employee satisfaction."

This isn't to say that happiness and satisfaction are not part of employee engagement—in fact, they're integral elements of the larger ecosystem that drives engagement. So how do you inspire emotional commitment? The first step is to understand what drives it.

Every company is different, as is every employee. To support an emotional commitment from employees, organizations have to create a strong, tailored cultural foundation to truly achieve high levels of employee engagement.

Now, let's dive into the factors that drive the kind of great company culture that prioritizes employee engagement. 🏊

Purpose

The human yearning for purpose in work isn't a new idea. It's a universal human desire!

"92% of Actively Engaged employees feel that their job contributes to society, versus 44.6% of Actively Disengaged employees."

–Bonusly's 2019 Engagement and Modern Workplace Report

Considering that we'll spend an average of 35% of our waking lives at work, to find purpose and meaning at work contributes a lot to a meaningful life.

Over the past 40 years, researchers confirm that people seem to have an inherent need and desire for meaningful work—work that is experienced as significant and purposeful.

Today, experiencing a sense of purpose in work is more important than ever.

The research supports it: Organizations that enable the experience of purpose in work inspire their people to be more engaged, motivated, and fulfilled.

It can feel disheartening to read this if your job doesn't seem stereotypically aspirational, but this story from Zach Mercurio showcases how every worker has the potential to make a difference. Internalize this idea, and then communicate it to your wider team!

Here are a few ways to communicate purpose to your employees:

• Regularly show people how their work benefits others
• Tie their everyday tasks to a bigger purpose worth committing to
• Make contribution goals more important than achievement goals

What it comes down to is a clear and concise message of how your company's mission makes an impact. When you get this communication right, you can help people experience positive meaning and stay engaged with their work.

Psychological safety

When a workplace is psychologically safe, it means that employees are comfortable being vulnerable with each other and taking risks, without fear of punishment or embarrassment.

And it's not necessarily about being nice to each other.

Dr. Amy Edmonson, professor at the Harvard Business School and a leading researcher on team performance and psychological safety, explains: "What [psychological safety is] about is candor; what it's about is being direct, taking risks, being willing to say, ‘I screwed that up.' Being willing to ask for help when you're in over your head."

As you can imagine, psychological safety is crucial to employee engagement. Without it, employees are less likely to take ownership over their projects and bring their whole selves to work.

Flexibility

In a recent pay and benefits survey, 76% of respondents chose a flexible work schedule as the best incentive their employer could offer.

The definition of flexible schedules varies at every organization, but generally, these schedules are flexible in that employees aren't required to be at their desks for eight hours a day. Scheduling a doctor's appointment or running out to pick up kids from school during "work hours" is acceptable and encouraged. It signals that you trust your employees to get their work done.

Flexible work schedules are prevalent at modern organizations, and offering this kind of flexibility is a common perk for "Best Places to Work" honorees. This trend allows workers to stay engaged with work on their own terms.

Flexible work schedules are appreciated by most job seekers, and they're now expected by many prospective employees, especially those applying for remote positions. In a workplace preference survey, 77% of millennials indicated that a more flexible work schedule would heighten their productivity—a sentiment echoed by similar studies. It's a major motivator and engager, and will continue to be as we develop the technology necessary to make remote work seamless.

Inclusion

At its core, inclusion is the degree to which employees feel "valued, respected, accepted and encouraged to fully participate in the organization."

A company's workforce may be diverse, but if employees do not feel safe, welcomed, and valued, that company isn't inclusive and will not perform to its highest potential. On the flipside, in inclusive cultures, companies foster a sense of equity, belonging, engagement, and psychological safety for all employees.

When employees feel comfortable at work and can bring their whole selves to the office, they're happier and more innovative.

Professional development

"85.4% of Actively Engaged employees work at companies that offer professional development opportunities, versus 35.4% of Actively Disengaged employees."

–Bonusly's 2019 Engagement and Modern Workplace Report

Employees now expect a wide range of learning and development opportunities to stay engaged and invested in their roles, and are especially interested in programs that equip them for the future. Engaged employees have the drive to grow and improve, and failing to empower their development can lead to stagnation.

Instead of thinking about professional development as subsidizing training costs for an employee's next employer, view it as an investment in human capital. Continued learning is a critical component of an engaged team, where leaders have the ability to directly influence the growth of individuals.

Recognition

Employee recognition is the open acknowledgement and expressed appreciation for an employee's contributions to their organization—and it's one of the fastest-growing trends related to employee engagement.

That's because recognizing employees and rewarding them is a powerful way to improve employee engagement. When asked what leaders could do to improve engagement, 58% of professionals recommended giving recognition.

According to our Employee Engagement and Modern Workplace Report, Highly Engaged employees are 2.1x more likely to work for a company with an employee recognition program than Actively Disengaged employees. You can't really argue with the facts! 💡

Aside from its effects on employee engagement, recognition statistics show that it can reduce turnover, enhance productivity, and improve morale.

You can make the most of a strong employee recognition program by using specific, timely, frequent, and visible recognition.

Recognition can be helpful by itself, but by tying recognition to real rewards, organizations will see greater adoption and return on program costs. One Deloitte report "found that employees who receive regular small rewards, in the form of money, points, or thanks, are a staggering eight times more engaged than those who receive compensation and bonus increases once a year."

Offering varied and creative rewards can help you win employee advocates and create a positive effect on employee engagement.

These are the pillars of a strong company culture, but the question remains: Is the effort to improve employee engagement worth it? See our answer in the next chapter. ➡️

If you’re looking for an easy way to start improving employee engagement, we invite you to take a tour of the Bonusly and join one of our recognition experts for a demo.

Chapter 2: Why is Employee Engagement Important?

Employee engagement can be the difference between an employee who just does enough to get by and an employee who always goes the extra mile.

However, understanding and measuring engagement isn't as simple as deciding if someone is "engaged" or "disengaged"–there is a spectrum or range that most employees fall somewhere on. And where they end up on that range is likely to make a bigger impact on your organization's goals than you might realize.

The state of employee engagement

The good news: employee engagement is easier than ever to measure and improve.

The bad news: it continues to be a focus probably because many employers still need substantial help creating a company culture of engaged employees. 😬

Employee engagement trends fluctuate from year to year, but one trend typically stays the same: workplace engagement tends to be a major challenge for most employers. Up to 71% of employees are not engaged with their work at all, spelling trouble for their productivity and quality of work.

In our State of Employee Engagement Report, we found that employees believe that less than 70% of their colleagues are engaged with their work. So not only do you have disengaged employees, but their disengagement is noticeable to others. 🙈

Instead of talking about the negative impacts of disengaged employees, let's cover the benefits your company stands to enjoy from high employee engagement levels.

Employee engagement benefits

Productivity

The studies prove it: engaged teams are 21% more productive than disengaged teams–even if they're remote! Makes sense, doesn't it? When you're disengaged with your work, getting your tasks done feels like a drag. When you multiply that by all the disengaged employees in the U.S., you're looking at a $450-$550 billion price tag in lost productivity.

Meanwhile, engaged employees have a deep understanding of why their work matters and their company's big-picture goals. They're not just doing the work–they're the ones driving innovation, creating products and services, pursuing new ideas and revenue streams, and pushing their organization toward financial success.

Financial performance

From our own State of Employee Engagement Report, we found that highly engaged organizations are more than twice as likely to report being top financial performers in their industries. 🤑

There's a strong correlation between employee engagement and company success, even in times of recession. Companies in the top quartile for employee engagement have 22% higher profitability than their competitors, and this makes a lot of sense when you take into account the impact of engagement on productivity and retention.

Next time your leadership team questions the ROI of focusing on employee engagement, you know where to point them.

Customer experience

You may not immediately connect employee engagement with customer experience, but the two go hand-in-hand!

Think about it: You employees are the ones that are interacting with your customers. An engaged employee is more willing to go the extra mile for a customer that needs help, find solutions that benefit the customer experience, and generally, be the friendly face of the company! 🤩

Even employees that don't directly interact with customers make an impact by being thoroughly engaged with the products and services they're building. Overall, companies with engaged employees tend to have 10% higher customer ratings than companies with disengaged employees.

Employee engagement is so essential to the customer experience that it's identified as one of the four core competencies of a customer-centric culture, based on research done by Qualtrics.

Retention

According to our Employee Engagement and Modern Workplace Report, we found that 58% of Actively Disengaged employees are on the job hunt, compared to only 35% of Highly Engaged employees.

Humans naturally strive toward a sense of purpose and self-actualization–and if they feel consistently disengaged with the work they do, they're likely to look for a different opportunity. That doesn't mean your company is helpless to turnover, though! Focusing on employee engagement strategies is a great way to counteract turnover. For an in-depth understanding of employee turnover and retention, check out The Ultimate Guide to Employee Retention.

Considering that the cost of replacing an employee can easily exceed 200% of their salary, this is an area that you should be watching carefully.

Think about it–decreased morale and productivity, lost institutional knowledge, the time it takes to interview and onboard an employee... it adds up fast. Our Cost of Employee Turnover Calculator can help you put a price tag on how much your company stands to lose when an employee leaves.

Next steps

Does your team still have work to do around employee engagement?

It can be easy to attribute employee disengagement to individual personalities. But waving away engagement issues as, "Well, they're just lazy," never helped anyone, least of all your organization.

If you read Chapter 1, then you already know that you can influence employee engagement for the better. So, in our next chapter, we'll cover the data-driven strategies that will help increase employee engagement at your organization.

We also invite you to take a tour of Bonusly’s employee engagement platform and join us for a demo to understand how you can start building a highly-engaged organizational culture.

Chapter 3: 10 Data-Driven Ways to Improve Employee Engagement

Employee engagement is a wide-reaching and complex subject. To get started, here are 10 data-driven ways to improve employee engagement, based on our recent Employee Engagement and Modern Workplace Report and other research:

Measure engagement

"Highly engaged organizations are more likely than other organizations to measure engagement, and they are more likely to measure it more than once a year."-Bonusly's State of Employee Engagement

You're going to have a hard time improving your employee engagement levels if you don't know what your levels are in the first place!

It's important to collect data around employee engagement to understand where your team is at, understand what areas need to improve the most, and have a benchmark for future efforts.

If you're not already doing so, use an employee engagement survey, and make sure that survey is both relevant and actionable. A great place to start is with Gallup's Q12 survey, which consists of 12 carefully crafted questions that measure the most important elements of employee engagement.

After gathering responses (aim for 100% participation!) and reviewing the data, share the results with your teams. Transparency is important! Discuss trends and ideas, then determine where you should put your resources based on results.

Here's an important next question: How often should you send out these employee engagement surveys?

Our answer: More than once a year!

It's extremely difficult to have a complete understanding of your workplace with annual surveys. They're heavily dependent on an employee's current engagement levels, and don't provide an accurate view of their day-to-day feelings. Plus, if there's a circumstance that you receive feedback about, wouldn't you want to address it soon after it happens, instead of six months later?

We highly recommend pulse surveys: frequent, short surveys meant to capture a snapshot of your organization's current vibes. Instead of one gigantic survey wrapping up your year, you break it down and receive actionable feedback year-round.

Coach leadership

"Employees who are supervised by Highly Engaged managers are 59% more likely to be engaged than those supervised by Actively Disengaged managers."
-Gallup's 2017 State of American Workplace

An organization's leadership team and managers have a huge impact on employee engagement. It might not come as a surprise, but if your manager is engaged, you're much more likely to be engaged yourself.

To improve engagement, start by coaching leadership and keeping them accountable. Think about who's moved into leadership roles and how they influence your team. Listen to leaders, and equip them with the right education to be engaged and engage your team.

At the same time, encourage them to attend onboarding sessions for new employees to set the right tone. And when analyzing engagement, consider the leadership level of respondents if possible.

Onboard thoughtfully

"Highly Engaged employees are 2.3x more likely to feel confident in their organization's onboarding program than Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

Onboarding is a key time to connect new employees with their work, team goals, and organizational mission. Looking back at Maslow's Hierarchy of Needs, onboarding is an essential time for that middle step of Belonging. Think about your own onboarding experience and what stands out. Does it excite new employees, or overwhelm them?

When planning your own onboarding program, be sure to follow best practices like:

• Introducing mentors that aren't direct managers to guide new employees in their first 12 months
• Involving executive leadership in onboarding presentations and events
• Prioritizing relationship building with new employees' coworkers
• Creating smooth transitions from onboarding to regular work cadence

Need more guidance? Read our ultimate checklist for candidate interviews and employee onboarding.

Prioritize wellness

"62% of Highly Engaged employees feel their work positively affects their physical health compared to 22% of Actively Disengaged employees."
-Gallup's Management Journal Employee Engagement Index Survey

"Actively Disengaged employees are 59% more likely to often feel anxious at work compared to Highly Engaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

When we talk about employee wellness, it includes both physical and mental wellness. Often overlooked, wellness is a powerful factor in employee engagement. Our basic needs, from rest to nutrition to stability need to be met before we can even think about higher level needs!

When it comes to physical health, is your company encouraging healthy living? Do your employees get enough sleep each night? Are they eating healthy inside and outside of work? Are they comfortable in the office?

As for mental health, do your company culture and benefits work together to create a welcoming and supportive environment for employees built on trust? Do you have a psychologically safe workplace? Do you offer a flexible work schedule? Do employees have work-life balance? Can employees talk openly about leaving for appointments with expectation of privacy?

Wellness–in and out of the office–is crucial to helping employees bring their full focus and engagement to their work.

Focus on feedback

"Highly Engaged employees are 2.3x more likely to say that their organization takes their feedback seriously than Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

"93% of Highly Engaged employees feel like they receive adequate feedback for their role and contributions compared to only 41% of Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

You simply can't have engagement without feedback. That means taking feedback from your team as well as giving feedback.

If you're not already doing so, solicit feedback from your employees. Make it easy, offer anonymous methods, and test your feedback system to make sure it's easy and accessible.

Once you receive feedback, make sure leadership acts on that feedback. Even if changes aren't made, share your reasons why–at organization-wide meetings when appropriate, or privately.

An organization that doesn't listen to its employees is one that's likely to produce disengaged employees. Feedback is based upon the hope that the recipient will improve–and you never want your employees to not care about the ways you can improve.

Recognize contributions

"86% of Highly Engaged employees were recognized the last time they went above and beyond at work compared to only 31% of Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

"Highly Engaged employees are 2.7x more likely to work for a company with a peer employee recognition program than Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

The most powerful factor that predicts employee engagement levels is recognition. Highly engaged organizations are far more likely to recognize employees for a job well done than their peers.

"We usually fill in a negative when we don't hear anything"
-Paul White, author of The 5 Languages of Appreciation in the Workplace

It's important to give recognition; it's more important that the receiver feels recognized. Keep in mind that your coworkers may (and likely do) prefer to be recognized differently than you do. Learn how your team prefers to be recognized, and bridge the appreciation gap to maximize your benefits.

Effective recognition follows best practices and prioritizes peer recognition. It's timely, frequent, specific, visible, inclusive and values-based. When giving recognition, think about using the SBI model instead of just saying "good job"–that means describing the situation, the behavior that occurred, and the impact of that behavior.

Consider a recognition platform that meets your team where they're at and makes recognition accessible. Bonusly is an employee recognition and rewards program that empowers teams to enrich company culture, available on the web, mobile apps, and integrations with chat platforms like Slack and Microsoft Teams as well as HRIS systems like BambooHR and Namely.

Want to learn more about employee recognition and see examples of employee recognition in action? Check out our Guide to Modern Employee Recognition.

Foster innovation

"Highly Engaged employees are 2.9x more likely to report working for an innovative organization than Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

Think about ways that your company can protect time to work on new, creative initiatives. You'll find that your employees' personal interest and passion projects can often lead to innovative, financially-impactful solutions for your company.

At Bonusly, we reserve a week every quarter for our team to work on something outside of their normal day-to-day projects. We call them our "hackathons!"

During these hackathons, we're able to bring together teams from different departments to work on creative projects with support from the entire organization. In addition to being a great team-bonding exercise, our hackathons have produced more streamlined processes and actual products!

It's also necessary to give your team autonomy. Laszlo Bock, former leader of People Ops at Google shares sage advice in his book, Work Rules:

"Give people slightly more trust, freedom, and authority than you are comfortable giving them. If you're not nervous, you haven't given them enough."

For an engaged workplace, encourage creativity and innovation on your team by supporting a culture that celebrates experimentation, welcoming failure, and reflecting after projects.

Encourage professional development

"89% of Highly Engaged employees are satisfied with their professional development opportunities compared to only 36% of Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

Here's a well-known but powerful exchange from Peter Baeklund:

A CFO asks a CEO, "What happens if we invest in developing our people and then they leave us?"
CEO: "What happens if we don't, and they stay?"

😅

Part of your job is to help your team achieve their professional goals. That can manifest itself in many different ways, from internal workshops to team lunch n' learns to external education stipends. Employees focused on positive growth opportunities at their current role are more likely to stay engaged and less likely to look for opportunities elsewhere.

Work with managers to implement career conversations in regular meetings with direct reports. Equip them with the skills to understand their team and help them plan for the future.

If your employees have the opportunity to work toward and be rewarded for reaching their goals, they'll be more engaged with their work and in turn, help the organization reach success.

Embrace transparency

"Highly Engaged employees are 2.1x more likely to report working for a transparent organization than Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

A transparent work environment fosters trust, which leads to a sense of belonging and stability. It also gives employees the necessary contest to understand how their own role connects with the wider team and stakeholders.

Look for opportunities to make your own organization more transparent. Consider defaulting to transparency. By making transparency the modus operandi, you'll always strive for transparency unless there's a particularly compelling reason not to. It means that concealing is the exception.

Start by discussing important company metrics at organization-wide meetings. Be vulnerable and ask for feedback. Work to break down barriers between teams by facilitating cross-team relationships through tools like Donut.

Focus on purpose

"75% of millennials are willing to take a paycut to work for a values-driven company."
-Cone Communications' 2016 Millennial Employee Engagement Study

"95% of Highly Engaged employees feel like their job contributes to society compared to only 64% of Actively Disengaged employees."
-Bonusly's 2020 Engagement and Modern Workplace Report

Extrinsic motivation (motivation provided by external factors, like receiving a salary or health benefits) is necessary to an extent. People need to have enough to take care of themselves and their family.

However, thinking back to Maslow's Hierarchy of needs, intrinsic motivation (motivation from internal factors, like a personal desire to do good in the world) is necessary for our higher-level needs. Jobs need to provide meaning.

Scrutinize your company's mission and values. Then put them into action with the goal of your team embodying them every day. Your employees should know what the organization stands for and whether or not that aligns with their own values.

While you can't give an employee a sense of purpose, you can help them discover it for themselves. Show employees the positive effects their work has on their colleagues, the company, and the world around them to help encourage a sense of purpose.

Zach Mercurio shared a powerful story of purpose from one of his recent workshops:

A group of supply chain managers was recently asked, "Why does your job exist?"

A woman in the back of the room raised her hand and said, "I found out why last month. I got diagnosed with cancer and was in an MRI machine. I looked up and realized we distribute a widget in that model. I realized my job existed all this time to save my own life."

Talk about an antidote to disengagement. The group was instantly more energized, creative and passionate. When people can see that their work matters to another person, they are more motivated.

How does your own work impact others both inside and outside the company?

Now that you know the factors that cause turnover, what can you do to fix it? Keep reading to find out.

Want a head start? Check out Bonusly’s employee engagement platform for a turnkey employee engagement booster by requesting a demo.

Chapter 4: Employee Engagement Tools and Resources

Employee engagement doesn't necessarily need to be a manual process–there are plenty of products and tools out there that can take on the heavy lifting for you.

Communication and collaboration

Communication tools also play a major role in shaping culture, providing transparency, and engaging employees, especially in growing and more dispersed companies. From a business standpoint, we recommend looking for technology that also supports productivity and innovation:

• Slack is a popular platform intended to be a single place for messaging, tools, and files
• Google Hangouts Chat offers secure direct messaging and group conversations
• Microsoft Teams is another platform that puts chat, files, and conference calls in one place

By the way, these communication tools, and others, integrate with Bonusly, our industry-leading recognition platform. That means you can communicate and recognize openly. Two birds, one stone. 😉

Measurement and analytics

Our number #1 tip in Chapter 3 is to measure your engagement! Your employee engagement surveys will provide the insights you need to build a great company culture, and there are many tools you can use to facilitate the process.

• SurveyMonkey is a popular survey tool with a lot of functionality packed into their free plan
• Typeform is a survey platform that also integrates with integrates with over 500 apps
• Officevibe is a user-friendly employee engagement solution with a focus on insights direct to managers
• Culture Amp makes it easy to collect and understand employee engagement data, including turnover forecasts powered by machine learning

Professional development and performance management

Opportunities for growth and development make a major impact on employee engagement. As we adapt to the way that employees need and want to learn, we are seeing more self-directed, on-demand, and bite-sized options.

If you are considering or already have a core HR system, it may offer a learning management system (LMS). These do:

• Workday
• Cornerstone OnDemand
• SAP SuccessFactors

You could add to the LMS–or offer on its own–online learning like the following massive open online course (MOOC) platforms:

• LinkedIn Learning
• edX
• Udacity
• Coursera

Another option is Small Improvements. Their focus on continuous feedback–through objectives, 1:1s, reviews–is designed for small to medium companies.

For a more thorough guide with tips and considerations, check out How to Provide the Best Professional Development Opportunities for Your Team or The Guide to Modern Employee Performance Management.

Wellness

A wellness program can encompass efforts to build awareness, education, and access to tools that empower employees to manage their own well-being.

If you already have an Employee Assistance Program (EAP), then you may start by communicating and encouraging employees to take advantage of the EAP coaching and healthcare professionals.

You may also consider mindfulness tools like the meditation app, Headspace, to support stress management and focus. Their research found that just four sessions reduced burnout by 14%. Fitbit also has a program for employers, offering subsidized ownership of a Fitbit device and internal company competitions and rewards.

Recognition

This is our favorite subject! We're Bonusly, the industry-leading recognition and rewards platform. 😜👋

In our expert opinion, when choosing a tool for employee recognition, look for a platform that:

• Embeds into existing workflows
• Provides rewards
• Collects data to shares people analytics
• Scales easily

Bonusly has all of these, and more. 👋

When it comes to having a fun and easy way to engage all your employees, Bonusly empowers your employees to show their appreciation for each other, build stronger working relationships, and feel a greater sense of belonging.

Bonusly also has a Dashboard feature that can help integrate recognition in the day-to-day to improve engagement and retention. If you have a screen set up in a main area like a lunch room or reception, it brings employee pride and belonging into the public sphere.

Implementing a recognition program is a great first step in building an engaging, people-first company culture. Join us for a demo to make an immediate impact on your employee engagement goals! 🎉

Ready for what's next? Cool. Let's talk about concrete employee engagement ideas and examples.

Looking for an easy solution to increase employee engagement. How about checking out Bonusly’s employee engagement platform? Join us for a demo to learn more about how you can start building a highly engaged organizational culture.