How to Measure Employee Engagement and Why it’s Important

Joanne Chu

Employee engagement means different things to different people. Gallup defines engaged employees as “those who are involved in, enthusiastic about, and committed to their work.” Harvard Business Review defines them as people who “want to come to work, understand their jobs, and know how their work contributes to the success of the organization.” At 15Five, we defined engaged employees as “those who find work and life consistently energizing, inspiring, and meaningful because they are leveraging their highest strengths, values, and passions.”

Picking a definition is just the first challenge, however.

Measuring employee engagement brings its own difficulties. There’s so much data to collect and go through that using manual surveys just isn’t scalable. That’s why many leaders use performance management tools like 15Five to measure common employee engagement metrics like:

Employee satisfaction
Employee net promoter score
Employee retention rate
Productivity metrics

Despite its challenges, measuring and improving employee engagement is more than worth it. It reduces absenteeism, improves productivity, and can even prevent safety incidents.

Let’s dive in.

Why employee engagement is important

Whichever definition you prefer, it’s evident that employee engagement is tied to business outcomes. Gallup reports that organizations in the top quartile of engagement have 10% higher customer ratings, 17% higher productivity, and 21% higher profitability than those in the bottom quartile. Companies who invested in actual employee engagement had 4x the profit and 2x the revenue than companies that just focused on improving employee engagement numbers.

When you regularly measure and analyze employee engagement, you’re actually working toward much bigger goals. By identifying issues before they have a chance to become full-blown crises, you set the stage for an authentic culture built around collaboration and trust.

This, in turn, makes people comfortable taking on initiatives that help move the business forward. Instead of shying away from big ideas and grand goals, the supported employee will embrace them. Rather than getting frustrated by challenging tasks, the engaged team member will find satisfaction in overcoming them.

So employee engagement ties directly into your business goals. But how can you know how engaged your employees are? Or how specific events and changes at your organization affect this engagement?

Two things: communication and measurement.

Communication and employee engagement

Keeping channels of internal communication open is an essential part of both reading the pulse of employee engagement at your organization and making changes. Communication is key to building a holistic employee engagement strategy. Here are some examples of how that’s done:

All-hands and town halls: While you won’t necessarily be sourcing opinions from your workforce during an all-hands meeting, you can use it to surface issues with employee engagement or solutions for them.
Chat tools: Tools like Slack and Microsoft Teams have a ton of features you can use to improve communication and employee engagement. One-to-many announcements, Slack polls, and even dedicated channels are all useful for this.
Team meetings: A team meeting is one of the best ways for a manager to get input about issues relevant to employee engagement. It’s also a great forum for discussing any topics or events that have an impact on engagement in the broader organization.
1-on-1s: For managers, a 1-on-1 is a great way to get a sense of how engaged a specific employee is. They can also directly address any issues that might have affected that employee’s engagement.

Ways to measure employee engagement

When you’re starting out, an important thing to remember is that employee engagement should be measured on the same cadence as other business KPIs. In addition, you’ll need to connect your engagement metrics to other goals. Otherwise, you may end up with a lot of data — but little in the way of insight you can actually act on.

Thankfully, there’s an easy way to achieve this. Solicit feedback from employees, extract any problem areas, and decide immediately how you’ll resolve them. This straightforward process can have tremendous impacts on your most important business outcomes.

Here are some ways you can do this.

Annual engagement surveys

One of the best ways to understand your employees’ engagement levels and where you can improve is to use employee engagement surveys. From there, you can develop an employee engagement strategy that takes your workforce’s strengths and weaknesses into consideration.

Employee engagement surveys allow you to see what your employees truly think about your organization in a multitude of areas in a safe and comfortable manner. Because the engagement surveys are anonymous, employees can also freely give their honest feedback without fear of retribution.

Typically, companies take an annual engagement survey approach, but this cadence is usually just to get a general view of the company and not dig any deeper. By measuring employee engagement on a quarterly basis, companies can actually start to identify trends within their organization and be proactive in addressing issues before they arise. Through regular back-to-back surveys, leaders can get to know their employees on a much closer level and make effective, faster changes throughout the fiscal year.

Regular employee 1-on-1s

Frequent 1-on-1s are essential for measuring employee engagement on an individual level and make managers the experts in how engaged their direct reports are.

Manager enablement is essential to ensuring a standardized approach to 1-on-1s which gives the organization better data to work from. While a 1-on1 definitely shouldn’t be just about measuring employee engagement, managers must learn how to use them as such, both for their own purposes and for the broader organization.

Pulse surveys

Pulse surveys aren’t as in-depth as annual engagement surveys, but are still an essential tool for measuring employee engagement.

By measuring engagement at regular intervals, you see how employees’ current levels of motivation and commitment impact other business drivers like retention and customer service. We’ve seen this play out numerous times at companies in a variety of industries. For example:

If you gather employee feedback at regular intervals, you might discover that a small, simple investment is all you need to empower employee creativity.
By measuring employee engagement during down times, you could uncover ways to make a difficult merger or acquisition go more smoothly.
When you make employee engagement a top priority, increased retention is a very likely result.

Even your customers want you to take employee engagement seriously, since it means better services and experiences: when you take care of your people, they’ll take care of your customers.

Discussing employee absenteeism rate and voluntary turnover rate

These are two of the most common issues in organizations with low employee engagement rates. While there might be a temptation to ignore these topics while you work on improving employee engagement rates across the board, you need to tackle them head-on.

Employee absenteeism should only really be discussed in 1-on-1s or other private settings with the employee involved. The goal isn’t to admonish the employee for their absenteeism but to understand the root cause. This allows you to both help the employee reduce their absenteeism while learning more about what could cause this trend throughout the organization.

Stay interviews are one way organizations can discuss voluntary turnover with their employees. Learn the factors that go into it, find out who’s most likely to leave for other opportunities, and figure out how you can reverse this trend.

Maintaining employee engagement

Engagement measurement is only productive if something is done with the results. It may be overwhelming at first to know what to do with all the data after an employee engagement survey. If you feel stuck, it may be beneficial to enlist the help of an engagement survey consultant to help unpack the survey results and roll out an action plan tailored to your organization.

Then, arm your managers with the knowledge and resources needed to further support their team. Many times, the success of an employee engagement strategy depends on these people leaders. If you are proactive in helping managers be proactive, you will be one step closer to a more productive and engaged workforce.

Here are just a few ways you can use the employee engagement data you get:

Turn feedback into HR initiatives as soon as possible.
Regularly revisit programs employees value most, from compensation to your remote policy.
Use enablement and education platforms like 15Five to train up managers on employee engagement.
Involve stakeholders at every level to surface potential employee engagement problems before they get bigger.

Why job crafting is essential

Job crafting, originally called job architecting, changes the meaning and purpose of work for people. It’s the key to creating a positive-sum game between employees and organizations.

In many organizations, it’s common to squeeze employees into a predefined mold, which is cemented with a job description. But this approach misses a critical step: self-discovery. Self-discovery is an important precursor to self-development and helping people find their work meaningful.

Meaningful work helps people shift from having jobs (work as a source of income) to careers (advancement in an occupation) to callings (fulfillment from the work itself). When people find their work meaningful, levels of motivation, engagement, and satisfaction go up, while stress and absenteeism go down.

Rules of engagement

Employee engagement is closely linked to your organization’s goals. What would you prefer? Highly-engaged top performers that can create outsized results that allow you to outpace the competition? Or a workforce that’s looking for job openings on their lunch break because they feel like numbers rather than people? Make employee engagement a priority and you’ll feel the difference throughout the company.

Putting Data Into Action

Check out 15Five’s employee engagement feature Engage to learn how you can boost the type of engagement that drives performance.