Employee Engagement: What It Is And Why It Matters

Employee engagement is one of those issues that is easy to neglect when your business is running well. But doing so could have dire consequences for your employees, your team, and your company as a whole.

When an employee is not engaged, they are more likely to be absent, show up late, make careless mistakes, do the least they can get by with, and ultimately move on to another job.

Even one disaffected employee can be detrimental, but if it becomes a widespread issue, the problem only gets bigger. An unengaged workforce can bring down morale and affect your bottom line.

In this article, you’ll learn what employee engagement is and why it matters so much for the success of your business.

Table Of Contents

• What Is Employee Engagement?
• Employee Engagement Versus Employee Satisfaction
• Why Employee Engagement Matters
• How To Improve Employee Engagement

What Is Employee Engagement?

There are many definitions of employee engagement.

Most will do a pretty good job of addressing the core of the issue as long as they take into account the psychological state of the employee, their focus, and their motivation to get the job done.

The most common definition of employee engagement is:

The ability of your team members to be present in the moment, focused on the task at hand, and motivated to do the best work possible.

Employee engagement often manifests itself as a feeling that then drives your team to go above and beyond what is expected. In other words, employees have passion for their work and a commitment to the company, not just their paycheck.

When engagement is high, your employees will feel like they have a higher purpose — the success of your business and the betterment of your customers — and will be willing to put in the effort to make that feeling a reality.

That drive is the cornerstone of business success. And it all starts with employee engagement.

Employee Engagement Versus Employee Satisfaction

Employee engagement is not the same thing as employee satisfaction. Employee satisfaction is defined as:

The level of fulfillment, happiness, contentment, or enjoyment that each team member derives from their job

When you compare that definition with the definition from the previous section, you’ll notice that employee satisfaction doesn’t address an employee’s level of motivation, involvement, focus, or emotional commitment.

In fact, for some employees, being satisfied with their job means doing as little work as possible. That’s almost the opposite of employee engagement.

By all means, promote employee satisfaction in your business, but don’t stop there. Find ways to improve both employee satisfaction and employee engagement to get the most from your team.

Why Employee Engagement Matters

1) Task Management

When most managers think about employee engagement, they may picture their team members interacting with customers and clients. While that is a big part of what makes employee engagement so important, it’s not the only thing that matters.

On a more fundamental level, employee engagement contributes heavily to all of the little jobs — the daily tasks — on which your business depends.

These small tasks support the larger processes that make your business what it is. If the little jobs break down, everything resting on top of them will eventually topple.

It might not happen right away, but, over time, an accumulation of poor performance on the small tasks can erode the foundation on which everything above them sits. The result can be a catastrophic failure for both your team and your business.

When you maintain employee engagement, your team will tackle the small tasks with the gusto and determination that they deserve.

2) Profitability

As a manager or owner, profitability is always at the forefront of your mind. No doubt, you’re always looking for ways to shore up that variable. Improving employee engagement is a vital part of the equation.

Employee engagement has the unique ability to strengthen all of the aspects of your business that contribute to profitability at the same time.

Research from the Gallup organization shows that “Engaged employees make it a point to show up to work and do more work — highly engaged business units realize an 81% difference in absenteeism and a 14% difference in productivity.”

It goes on to describe that the effect of engaged employee behaviors, like consistently showing up to work and being productive while they are there, results in significant improvements to the bottom line:

“When taken together, the behaviors of highly engaged business units result in a 23% difference in profitability.”

It’s very much like throwing a small rock into a large pond. When you do, the ripples spread out until they reach every corner of the body of water. In this case, employee engagement is the small rock, and your business is the large pond.

When your team is fully engaged in the task at hand — no matter how small or large — they will outperform a disengaged team by leaps and bounds.

Those results will spread from one department to another (like the ripples on a pond) and can help you increase profitability across the board.

3) Retention Rates

Your business has put in a lot of time and expense to find, hire, and train your team. It would be a shame to see them leave after only a relatively short time.

That’s what makes a low retention rate such an important metric to measure. It’s also what makes employee engagement important to the process. An engaged team member is less likely to feel a sense of dissatisfaction that could prompt them to start looking for another job.

When your employees enjoy the company culture and feel valued, their performance will improve, and they will be motivated to stay.

Keeping those employees will benefit the company by lowering recruiting and hiring costs, and it will boost the morale of the employees. So it’s a win on both counts.

4) Productivity

The more your employees can get done in a day, the more productive your team — and your business as a whole — will be. But it’s not just about the sheer volume of tasks your employees finish. It’s also about the quality of their work.

The term discretionary effort refers to what an employee is willing to do that falls outside of or in addition to their job description. The more passionate and engaged an employee is about their job, the more likely they are to work beyond expectations.

Employee engagement plays a role in both the number of jobs your team can accomplish and the quality of the work they give. Engagement, in essence, makes your team more productive.

High levels of productivity can help your business finish projects early, under budget, and at a level of quality that others can’t duplicate. And it all starts with employee engagement.

5) Innovation

Innovation is something that every business wants to achieve — even if it’s just a small tweak in a work process that only your employees see.

Coming up with a new method, idea, or product, though, is a difficult process to replicate. In many cases, it happens without warning.

Employee engagement is the key. It can open the minds of your employees so that they’re more receptive to novel ways of thinking and performing.

When they’re engaged, they’re more likely to think about ways to improve the work they’re doing — to innovate — rather than just performing the minimum necessary to get the job done.

With high employee engagement as the driver, innovation becomes less like an accident and more like a regular, replicable occurrence.

That’s good for you, your team, and your business.

6) Connection

It’s amazing how interconnected various aspects of your business are. We’ve already talked about how task management and productivity contribute to profitability (and how employee engagement affects all three).

Like innovation, however, the connections within your business that make it run smoothly may seem beyond your control. They’re not.

Engagement has a ripple effect that can strengthen areas you didn’t know were weak. Connection is a perfect example.

“Connection” is simply another word for the bonds that team members forge while working together on the job.

When each member of your team is engaged and working at their best, they’re more open to the connections that lead to friendship and camaraderie. They may even choose to spend time together after work.

Those connections, in turn, encourage a type of honesty, communication, and loyalty that you can’t find anywhere else.

7) Collaboration

Team collaboration lies at the heart of every successful business. When employees work together effectively, the whole business thrives.

Collaboration leads to new ideas, improved efficiency, better quality work, higher morale, stronger cohesion — the list goes on and on.

Collaboration even helps reduce the workload, spreads the burden throughout the team, and diffuses and decreases conflict.

Such teamwork is only possible when your employees experience the connections we mentioned in the previous section. And how do you strengthen those bonds? By building up employee engagement.

8) Commitment

Commitment is your employees’ ability to stay positive, effective, and efficient even during difficult times and busy periods.

No business runs smoothly all the time — it’s just not possible.

When things do get difficult, though, you don’t want your employees to start jumping ship. That’s when a strong sense of commitment becomes important. And it’s about more than just job satisfaction.

Your employees will build commitment when they’re focused on the task at hand and energized about achieving good results. For all intents and purposes, that’s the very definition of employee engagement.

How To Improve Employee Engagement

Make The Work Meaningful

People need meaning in their personal lives and in their work lives. In other words, they need to believe they matter to others. Being an employee gives a person a paycheck, but if that’s all it provides, there is little motivation to stay in that job.

However, if the work a person does can be shown to matter in a broader context than the mundane daily grind of tasks, it can completely change how that person sees themselves and their worth.

Meaning can give an employee a feeling of ownership and motivate them to work harder and stay longer. But how can you ensure you’re providing meaning in the work you assign?

The Harvard Business Review suggests writing a clear and specific mission statement and then rewriting job descriptions to tie them to the broader mission of the organization. For instance, a janitorial job in a hospital can be tied directly to helping patients.

Provide Training

If you provide employee development in the form of training or coaching, you will likely see a significant return on that investment.

Not only will your employees develop the necessary job skills for what they are currently doing, but they will also see that you believe in their potential and that you are investing in their future at the company.

This translates into feeling valued because they can see that you intend for them to stick around.

Be Empathetic

Empathetic leadership is something more often thought of as a trait that is nice to have as a person, but not a trait with any bearing on your business.

It may even be seen as a weakness in some business leadership models, but research shows that it is a key factor for employee engagement.

Ernst and Young Consulting completed an extensive survey of American workers and released their findings in 2021 in the EY Empathy in Business Survey, which tracks how empathy affects leaders, employees, and innovation in the workplace.

The research they conducted shows that employees want fair and transparent leaders who follow up on actions and can be trusted to handle difficult conversations. Employees also want to be encouraged to share their opinions.

Steve Payne, EY Americas Vice Chair – Consulting said, “Empathy’s ability to create a culture of trust and innovation is unmatched, and this previously overlooked trait must be at the forefront of businesses across all industries.”

Payne goes on to say that empathy fosters innovation, inspires growth, and leads business transformation efforts.

Give Regular Feedback

Foster engagement with employees by providing frequent feedback.

Companies that perform reviews only once a year miss a big opportunity. If an employee gets regular feedback they can course-correct long before a negative annual review leaves them with a sour feeling about the process and lower morale about their job.

In a report titled “20 Essential Employee Feedback Statistics [2022],” Zippia reports the following statistics that should be of interest to any company wishing to improve their employee engagement:

• 85% of employees take more initiative when they receive feedback in the workplace.
• Four out of 10 employees who receive little to no feedback are actively disengaged from their work.
• Employees who feel their voice is heard are 4.6 times more likely to perform their best work.

Recognize Accomplishments

According to the Harvard Business Review, “…every measure of morale, productivity, performance, customer satisfaction, and employee retention soars when managers regularly provide recognition.”

There are common approaches to recognition. Management can call out what they see as an employee’s performance achievements in an annual review or during any one-on-one meeting.

Management can also call out achievements in team meetings so an employee’s peers are witness to the praise and can congratulate them also.

Either way, it’s important to be genuine when offering praise for a job well done. Your employee will be able to tell a genuine compliment from flattery before asking for a favor.

Also, be specific. Instead of saying, “Thank you for going out to pick up the team lunch. You’re the best,” you can say, “I know it’s your job to pick up the team lunch, but I’m grateful that you are always reliable in getting it here early so our meeting can start on time. Thank you.”

But there’s another, possibly much better, approach to recognition than the standard ways we’ve always done it. The term “Reflective Recognition” is a different way of saying thank you and was developed by Christopher Littlefield, International Speaker, Author, Trainer, and Founder of Beyond Thank You!

“Reflective Recognition invites others to share that which they are proud of
and gives them an opportunity to share why they are proud of it.”

Littlefield has found that most people don’t want to be recognized for the outcome of their work as much as for the effort it took to get to that outcome.

But how can you, as a manager or business owner, know the long hours and creative thinking it took to accomplish an outcome? The best way to know is to ask.

Simply ask your employees what they’ve been working on that they’re proud of, and then ask how they were able to accomplish it. Then, reflect back to them what they said and recognize their effort.

Assign Tasks According To Strengths

Some companies have found that by having their employees complete personality tests and strength assessments, they are able to more closely align the tasks they assign with the individual strengths and interests of their employees.

It stands to reason that we are more engaged in general when we are doing something that interests us or that we are gifted in. This practice can be a great motivator and an easy win for companies who practice it.

Offer Time In Addition To Money

Of course, money is necessary, but once you’ve addressed any deficit in your compensation structure, think about gifting your employees with time. This strategy is a brilliant motivator and a sure fire-way to increase employee engagement.

Some companies do this by going to a company-wide four-day workweek. Other companies encourage their employees to use their vacation time by giving a vacation bonus, which kicks in when they actually travel.

Another idea is for your business to partner with concierge companies to offer discounted services like prepared meals or laundry and housekeeping services to your employees.

Better Communication For Better Employee Engagement

At its most basic, employee engagement is all about communication. Communication between you and your employees and communication between each member of the team.

It doesn’t matter if that communication revolves around the large issues your entire business is facing or the small issues that employees face on a daily basis.

The better you communicate with your employees — and the better they communicate with you — the more engaged they’ll be.

We developed the Inch software to facilitate communication, improve employee engagement, and streamline the way your team works.

Features include:

• Powerful task management
• Intuitive scheduling
• Comprehensive time-tracking (with geofencing)
• Dynamic reporting
• Time-saving payroll processing
• Customizable communication (e.g., location-specific or team-wide)
• Effective budgeting
• Productive labor cost optimization
• Helpful overtime control
• And much more…

All of that in a mobile-friendly app that you and your team can use on any device and with any operating system, wherever the job takes you.

For more free resources to help you manage your business better, keep your team on task, and track and calculate labor costs, visit TryInch.com today.