HR Management & Compliance, Talent

Engagement Matters: How to Measure It Effectively

Employee engagement is a key focus of management and Human Resources teams across organizations. It’s also one of the most difficult measures to gauge objectively and accurately. How can you tell if Employee A is more engaged than Employee B within the same organization? How can you measure the engagement of those employees against the engagement of others in a competitor’s company?

engagement

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Because engagement is subjective, it’s extremely difficult to measure it objectively. As we’ll see in this feature, based partly on input from industry experts and practitioners, there are several methods used in attempts at measuring this, with surveys perhaps being the most common tool. We’ll also discuss the importance of employee engagement to businesses—as well as arguments that it isn’t as important as many believe—and some methods for measurement.

Why Companies Care About Employee Engagement

Generally, proponents of employee engagement typically point to a specific group of benefits:

  •  Increased productivity. Engaged employees are more focused on their work and are often willing to work harder, longer, and better to complete tasks they are engaged in and committed to.
  •  Reduced absenteeism. Engaged employees are less likely to call in sick, leave early, or otherwise not be present at work.
  •  Reduced turnover. Companies see less turnover from engaged employees. These employees are less likely to look for work elsewhere, retire early, or be terminated for poor performance.
  •  Improved safety. Engaged employees are less sloppy in their work, resulting in fewer accidents that could cause property or inventory damage, serious injuries or deaths, and legal or regulatory consequences.

These benefits aren’t just theoretical. Researchers and various studies have demonstrated concrete links between engagement and the benefits discussed above. Ian Cook, Vice President of People Solutions for Visier, a people analytics firm, points to data showing that companies with engaged employees outperform those that don’t.

“Work units that score in the top quartile for employee engagement outperform those that score in the bottom quartile on many measures,” Cook says. “Profitability is 22% higher, absenteeism is 37% lower, and safety incidents are 48% less frequent.” Cook also says, “By increasing investment in employee engagement by just 10%, businesses can increase profits by $2,400 per employee, per year.”

Engagement to What End?

Despite these apparent benefits, some experts believe businesses place too much importance on employee engagement and that there might not be as much return on investment from the time and money spent trying to measure it.

Bethany Spence, Content Marketing Specialist for Exposure Ninja, says companies should focus on the desired end result instead of trying to objectively measure engagement. “Engagement isn’t a metric that can be objectively measured,” she says. “The closest alternative is the measurement of productivity, which we keep track of using time tracking software, such as Hubstaff. If an employee is productive—i.e., he/she gets their work done in a timely manner, ahead of deadlines—there’s a good chance that they are feeling motivated and engaged.”

Mark Webster, Cofounder of Authority Hacker, says measuring engagement does have value, but you first must focus measurements on the desired end result. “For example,” he says, “an employee can be happy within their job and be doing great, but that doesn’t necessarily mean they are being a good brand ambassador to the business outside of their workday.”

He recommends first evaluating what the company wants to gain from engagement. It could be greater innovation, customer loyalty, or increased productivity. Depending on the ultimate goal, the strategy for measurement may change.

The All-Important Survey

We polled a number of experts and practitioners about how companies seek to objectively measure employee engagement, and the most common response was surveys. These surveys can ask employees directly about their level of engagement or be less direct and include open-ended questions such as:

  •   “How likely are you to refer friends to this company?”
  •   “Where do you see yourself in 1, 5, or 10 years?”
  •   “What are your biggest motivations in your current role?”

In fact, the question of how likely they are to refer friends to the company yields what marketers call the “Net Promoter Score,” a strong indicator of loyalty for employees as well as customers.

Survey questions also might include yes/no or scaled (i.e., 1–5 or 1–10) prompts, like:

  •   “I can see myself working here in 5 years.”
  •   “I have a clear understanding of my company’s strategic goals.”
  •   “It really feels like everyone is on the same team at my company.”
  •   “I can easily see how my work affects the company’s overall success.”

Surveys are commonly conducted with current employees but can also be useful in exit interviews with departing staff.

A couple of cautionary notes with surveys: Ryan K. Lahti, PhD, Managing Principal of OrgLeader, LLC, points out that surveys can set the expectation that things will change, leaving employees disappointed when they don’t. And Samuel Johns, HR Specialist and Hiring Manager for Resume Genius, recommends that surveys be infrequent, short, and precise to avoid survey burnout because employee feedback deteriorates if respondents view them as a tedious and pointless exercise.

Other Measures

Surveys may be a common method for measuring employee engagement, but many companies also value one-on-one interviews between employees and their managers and HR staff. These can be more in-depth and provide insights that surveys might not reveal.

However, interviews don’t lend themselves to anonymous feedback like surveys do, so staff may withhold their true feelings. In addition, these types of conversations make it more difficult to gain objective—as opposed to subjective—feedback that can be compared across staff.

Organizations can objectively measure employee engagement through attendance at company events, amount of time voluntarily working outside of regular business hours, and number of suggestions for improvement from staff—either solicited or unsolicited.

Although employee engagement might not be the Holy Grail of determining business success, it’s certainly a key element in promoting productivity, efficiency, and profitability while reducing accidents, absenteeism, and turnover.

The challenge for organizations will continue to be finding accurate, useful, and objective means of evaluating engagement, not simply for the sake of measurement but also as a means to improve engagement, providing benefits to the bottom line and long-term health of the company.

The recommendations here can be a good starting point for your own employee engagement measurement efforts.