Understanding Employee Engagement

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Adapted from Glenn Elliott’s Build it : The Rebel Playbook for Employee Engagement, published by Wiley, 2018.

Of all the things we do in modern business, the link between employee engagement and business results is one of the most clearly proven. Gallup, Great Place to Work, Best Companies and Glassdoor all analyse employee engagement and correlate it to stock market performance. Whichever data you look at, the results are the same – companies with engaged employees beat their competition.

The Gallup index alone has 30 million data points going back nearly two decades: They interview 500 American adults every day, collecting data on employee engagement 350 days of the year. We proved the link between employee engagement and business performance years ago. Many leaders seem to know that but with disengagement running at 70% globally, companies still struggle to take meaningful and effective actions to make things better.

The truth is that we’ve known for over 100 years that treating people better gets better business results. It’s important to focus on those words, so let’s repeat them: ‘Treating people better gets better business results.’ We have disengaged employees because we lie to them; treat them as adversaries; and give them crappy jobs without autonomy, excitement or accountability. Sorry if that sounds harsh, but we’ve spent too long making little progress for me to pull any punches.   

Now if you’re reading this thinking that you’ve already done work on engagement and it didn’t work, ask yourself: Did you really change how your organisation treats people? Because if you only focused around the edges – installing a new intranet, a tool that helps staff know whose birthday it is, or something to count how many steps they walked – then nice as that is, it won’t have been enough. To make a difference you have to fundamentally change how you treat your people.

So what is engagement? We define someone as engaged when they:

Understand and believe in the direction the organisation is going – its purpose, mission and objectives – so they feel part of something bigger than themselves.

Understand how their role affects and contributes to the organisation’s purpose, mission and objectives.

Genuinely want the organisation to succeed and feel shared success with the organisation. They will often put the organisation’s needs ahead of their own.

You’ll find that engaged employees build better, stronger and more resilient organisations. They do this in three ways:

Engaged employees make better decisions because they understand more about the organisation, their customers and the context they are operating in.

Engaged employees are more productive because they like or love what they are doing – they waste less time and get less distracted by things that don’t further the organisation’s mission or goals.

Engaged employees innovate more because they deeply want the organisation to succeed.

And before we go any further we need to talk about happiness. It’s easy to get happiness and engagement confused and I’ve even seen some companies with a Chief Happiness Officer. It’s also common to think that a good employer creates an easy place to work. Neither is true.

You do not need employee engagement to have happy employees. You can achieve that (at least temporarily) with a combination of good working conditions, low ambition and low accountability for results. This tends to result in the best people leaving and an average group of people staying and finding meaning and self-actualisation outside of work. It’s pretty dreadful for organisational performance, and you can guarantee those companies won’t have the durable and resilient cultures needed to navigate the tough years ahead.

Employee engagement is something deeper, more meaningful for the employee and more valuable to the organisation. And with the pace of business accelerating by the day, we need engaged employees more than ever.

Technology is making the world move faster, and when the world goes faster, competition gets harder. Companies are innovating and changing at a rate previously unimagined. Product life cycles are shorter, links between manufacturing and the customer are closer, and the demands for process improvement and process change have never been greater. We’ve never needed our staff on our side more than we do now.

This speed generally makes better outcomes for the customer, but it also brings huge instability. With technology, new players with small, highly engaged teams can outmaneuver and outperform their larger, slower competitors – look what happened to Nokia, Polaroid, Blockbuster and Borders. Each of these companies failed because when the winds changed, they couldn’t move fast enough, reorganise themselves quickly enough or stay connected to the customer closely enough. You could say they all failed because of a failure of their corporate cultures.

Great cultures are full of openness, honesty, courage, connection to the customer, and vast swathes of passionate, engaged employees doing tough jobs, jobs that have meaning, jobs that have ups and downs, jobs where you know you’ve had a great day at work when it all goes your way. These are the cultures that enable companies to react and respond to fast-changing markets and fast-changing environments.

Through the rest of Build it : The Rebel Playbook for Employee Engagement we’ll explain The Engagement Bridge model and show how you can use it to fundamentally change your organisation and create a highly engaged culture.

Glenn Elliott was the CEO of employee engagement specialist Reward Gateway from 2006 to 2017 and now advises businesses on company culture, leadership and growth. He is the author of Build it – The Rebel Playbook for Employee Engagement (Wiley, 2018). This article was adapted from Chapter 1 of Build it.