How to Measure Employee Engagement

There’s a lot of buzz about how to measure employee engagement these days—and for good reason. Engagement drives satisfaction, which leads to loyalty and productivity. But, how is engagement really determined or measured? Is it about employee satisfaction scores?

The short answer is no. Understanding how to measure employee engagement can help ensure you’re staying ahead of the engagement curve and making process improvements that can lessen the odds of great employees jumping ship.

The Impact of Disengagement

In an employee-driven hiring market, employers are understandably concerned about attracting and retaining top talent. Recruitment and training are expensive for companies of all sizes.

Having a revolving-door environment where turnover is high and recruitment is constant represents a significant expense for employers and has a negative impact on productivity and business outcomes.

What can employers and their learning and development (L&D) leaders do to minimize disengagement and have a positive impact on the bottom line? The first step is developing a solid understanding of the key elements of employee engagement.

Key Elements of Employee Engagement

Jeff Miller is the senior director of talent management at Cornerstone OnDemand, a cloud-based learning and human capital management platform. He has a PhD in motivation and learning and 25 years of experience working in education.

When measuring and tracking employee engagement, Miller suggests companies focus on six elements of their organizational climate to boost engagement:

1. Rules and regulations. How much red tape do you have within your organization? Too many policies and processes can be a big employee turnoff and have a negative impact on engagement. Many of these rules and regulations, says Miller, may be unnecessary. It’s a good idea to evaluate the requests you’re making of employees and management to ensure these requests have a positive purpose and don’t just represent unnecessary bureaucracy.
2. Empowerment. When staff and managers aren’t hampered by unnecessary rules and regulations, they feel freer to exercise their own judgment and take ownership of their work. It’s important for organizations to exhibit a high level of ownership, says Miller. When employees feel empowered, they’re likely to be more engaged, more innovative, and more productive.
3. Principles. Employees like to feel that their efforts are contributing to the greater good—to some worthy and desired outcome or vision. Consequently, it’s important for managers to clearly communicate the organization’s goals and standards in ways that clearly convey how what an employee does contributes to his or her desired endpoints. Furthermore, says Miller, goals should be challenging but achievable to help employees feel a sense of accomplishment.
4. Acknowledgment. Recognition and reward aren’t all about raises and bonuses, says Miller. In fact, money alone isn’t enough to motivate people. So what is? Plenty of positive and constructive feedback. Employees need to hear from their supervisors and managers when they’re doing things well and when there is opportunity for improvement.
5. Understanding. Do employees have a solid understanding of and clarity around their role, their career path, and how what they do impacts the organization’s success? It may seem simple, says Miller, but achieving this level of understanding is often difficult. He recommends reviewing and revising job descriptions to clearly reflect employees’ roles—something that should be done regularly.
6. Culture. “Culture eats strategy for lunch” is a popular management quote often attributed to Peter Drucker. While he may or may not be the original source, the sentiment is apt and critical for achieving high employee engagement. Solid relationships build team spirit, which can drive collaboration even during disagreements or dissension. Providing employees with opportunities to get to know each other personally can go a long way toward building a powerful team.

But, even in an environment that ensures employees are engaged, how do you accurately assess and measure their engagement?

Assessing and Measuring Engagement

You can measure employment in three critical ways, says Linda Henman, PhD and founder of Henman Performance Group:

• Productivity
• Retention of top talent
• Discretionary effort

The first two can be measured quantitatively based on desired levels of output and an assessment of turnover by key position/employee. Discretionary effort may be more difficult to measure, but most managers and HR professionals say they “know it when they see it.”

Ultimately, the best employee engagement metrics are outcomes, says Ed Brzychcy, president of Blue Cord Management. Arbitrary measurements of engagement, like employee satisfaction surveys, are highly subjective, Brzychcy notes, and may or may not be an accurate reflection of engagement.

Instead, he says, “I have found that the best measurement of employee engagement is based on the goals and desired outcomes of the organization’s leadership.”

Business leaders hoping to improve engagement, Brzychcy says, “should drill down and find the underlying issues and help the organization fix the underlying problems rather than specifically addressing a symptom based around a vague idea such as engagement.”

Employees Can’t Be Engaged and Unproductive

The concept of engagement can present a bit of a conundrum for organizations, agrees James Pollard, business consultant and owner of The Advisor Coach. “It’s possible for an employee to be productive and disengaged, but it’s never possible for an employee to be engaged and unproductive,” he says.

Production, says Pollard, is a sign of engagement and should be the first sign that organizations look for when attempting to assess engagement. “Every job in a marketplace should have a particular key metric associated with it,” says Pollard. “For insurance agents, it might be number of calls in an hour. For customer service representatives, it might be a higher number of compliments and lower number of complaints on a quarterly basis.”

The key to tracking employee engagement, says Pollard, is tracking and measuring the key metrics associated with the position. After all, achieving those desired outcomes is what employee performance is—or should be—all about.