Here’s some depressing news: Since Gallup started formally measuring employee engagement in 2000, engagement rates for U.S. employees have never gotten above 33 percent. For Millennials, engagement rates are often even lower than in the overall workforce.
This is a problem. Studies show engaged employees stay longer at their jobs, reducing turnover costs. And companies with the most engaged employees are more profitable and deliver more value to shareholders.
From multinational Fortune 100 corporations to small nonprofits to government agencies, engaged employees are a secret ingredient that helps the most successful organizations rise above the rest.
Take the example of a heavy equipment company whose employee engagement levels, on the surface, looked healthy. Annual employee surveys showed workers loved their jobs and were committed to the organization.
That wasn’t enough for this firm, though. The company’s sales were flat; competitors were selling similar products at lower prices. The company was failing to pursue a common strategy in its industry—using data generated by sensors on the equipment it sold to better understand customer needs and develop superior products.
Does this mean employee engagement isn’t as important as we thought?
Bad Data, Bad Results
No. But this case does illustrate a common pitfall: Companies fail to measure employee engagement in precise, meaningful ways that could allow them to strengthen engagement in ways that directly impact business outcomes.
Based on academic research and the Center for Creative Leadership’s in-the-field experience with organizations around the world, we’ve developed a lens for employee engagement called E4. This gives us a data-driven model for understanding the different dimensions of employee engagement, in turn helping companies develop more targeted strategies to improve engagement where it matters most.
E4, as the name suggests, looks at employee engagement at four levels:
- Boss—Being engaged by and connected to your boss
- Job—Being actively involved and absorbed in the job
- Team—Being motivated and energized by coworkers
- Organization—Being devoted to and passionate about the organization as a whole
The heavy equipment company, obviously, scored well on two of these dimensions—job and organization—but that wasn’t the whole story.
Manager-Driven Engagement
With clearer data on employee engagement, you have a place to start. But improving engagement takes more than simply knowing the numbers. The CCL E4 Process focuses on managers as key drivers of employee engagement at all levels.
Why? Because the data indicates bosses are one of the most powerful employee engagement levers. A recent Gallup poll found an individual’s boss accounts for at least 70 percent of the variance in employee engagement scores. Bosses are expected to elevate and sustain employee engagement.
The E4 Process is a three-step process that bridges the gap between data and action.
Step 1: Working with stakeholders in the organization, we identify business priorities, desired outcomes, and outcome measurements. We also identify common barriers to engagement and other insights that connect employee engagement with business goals. This helps us identify important leader behaviors and leadership culture or organizational climate factors that could move the dial on employee engagement.
Step 2: Next we assess each of the E4 dimensions of engagement. We use tools such as 360-degree feedback instruments to gather information about whether managers demonstrate competencies that could improve engagement, as well as organizational surveys that reveal how your leadership culture and organizational climate impact engagement. We analyze this data and work closely with our clients to understand which factors predict higher engagement.
Step 3: Finally, with a clear view of what kinds of engagement are most important and where there may be gaps, we design leadership development initiatives that give bosses and organizations the tools and knowledge to boost engagement. This includes empowering managers by equipping them with pulse survey tools. These tools enable managers to quickly collect targeted feedback, helping them better understand how behavior change efforts are impacting the engagement levels of direct reports. This data-driven approach reinforces what is working and pinpoints areas that require more attention or different approaches.
In the case of the heavy equipment company, it turned out that team engagement was particularly lacking. Organizational silos and managers’ inability to build more collaborative relationships were preventing the firm from tapping into sensor data and using that to develop better products.
To turn sales around, company managers needed to focus on effective coordination and integration, team orientation, and change management. They needed to build more collaborative relationships and strengthen their participative management skills.
Having a framework to precisely measure employee engagement, matching engagement levels to business goals, and then developing a high-impact plan to address the underlying challenges is a powerful approach to start getting those Gallup numbers going up.
Stephen F. Young, Ph.D., and Michael D. Smith work at the Center for Creative Leadership (CCL) based in Greensboro, NC. Young is a research scientist focused on leadership insights and analytics to help leaders and organizations increase their effectiveness. Smith is a director in CCL’s Organizational Leadership Practice, and works with organizations to align their leadership strategy and talent development solutions with their business strategy to drive organizational performance.
