smiling retail employee

Employee engagement drives everything from year-over-year growth to operational efficiency. Engaged employees outperform their disengaged peers across the board, from customer satisfaction measures to productivity. 

But what drives employee engagement? 

As an HR professional, you might find yourself wondering if you can even make a difference to engagement rates. After all, perhaps engagement comes down to factors beyond your control, like business performance, market turbulence, or even the employees’ home lives. As an HR team, can you actually increase employee engagement? And if so, how?

In this article, we’ll explore: 

  • What employee engagement is 
  • The main drivers of engagement, according to business leaders and HR experts 
  • What HR initiatives actually drive employee engagement 
  • How to effectively measure engagement, so you know what’s working
  • How to build a recognition and reward system that will make a tangible difference to employee engagement rates

You’ll learn how your HR team can have a massive impact on employee engagement, without breaking the budget. 

What is employee engagement? 

Employee engagement is the measure of how involved and enthusiastic your employees are about coming to work every day. An engaged employee is: 

  • Proud of where they work
  • Keen to remain long-term 
  • Likely to recommend their workplace to others 
  • Actively interested in their daily tasks 
  • Happy with their job, their working culture, and their manager 
  • Inclined to encourage and support their colleagues 

The benefits of engagement to employees is obvious—but employee engagement is also massively important for business success. Gallup found that companies with engaged employees have:

  • 81% lower rates of absenteeism
  • 43% lower turnover rates 
  • 64% fewer accidents
  • 41% lower rates of product defects
  • 10% higher rates of customer loyalty
  • 23% higher profitability 

In other words, when it comes to investing your HR team’s time, effort and resources, employee engagement is a great place to start. But what should we do to increase employee engagement? 

What are the 5 drivers of employee engagement? 

Research by the Stanford Social Innovation Review found that there are 5 key drivers of employee engagement: 

  1. Feeling that their employer shows care and concern for employees
  2. Believing in the organization’s leadership
  3. Seeing that employee well-being is a priority at the organization
  4. Experiencing open and honest two-way communication 
  5. Feeling a sense of belonging in the organization

What might surprise you about this list is that salary doesn’t appear on it. While salaries do matter (of course!), they aren’t a key driver of engagement. An appropriate salary is what psychologist Frederick Herzberg termed a “hygiene factor”—meaning, something that must be present or employees will be dissatisfied. This is in contrast to “motivating factors”—which, when present, cause employees to become actively satisfied and engaged. 

Two-factor motivation theory chart

Image source

A bad salary can make you miserable, of course. But a great salary can’t make you particularly motivated. In fact, a good salary will rapidly become what you expect from your workplace, along with a clean and pleasant environment to work in, or access to drinking water. 

On the flip side, the 5 drivers listed above are motivation factors. While you might not immediately quit your job if you didn’t feel a strong sense of belonging, for instance, you probably wouldn’t feel highly engaged. You might feel a little downcast, or spend some of your free time browsing job sites. However, if you worked in a company where all five of these drivers were done well, you’d be very likely to be extremely engaged. 

Thus, we can classify them as key engagement drivers—and know that they’re the areas we should be actively working to improve. 

How to boost the drivers of employee engagement in your company 

We asked  a number of business leaders and HR experts how HR teams could increase the levels of engagement in their company. Here are their top tips that you could implement in your business today, without breaking the bank: 

Driver #1: Feeling that their employer shows care and concern for employees

One of the most fundamental ways to get your employees to care about their work? Show that you care about them. The principle of reciprocity is key here—we are keenly attuned to fairness in the workplace. 

For Linda Schaffer, Chief People and Operations Officer (CPOO) at Checkr, demonstrating that you care about your employees requires “regular recognition, feedback and opportunities for growth.” Specifically, Shaffer suggests that HR teams can make sure that employees feel cared about by: 

  • Offering more job enrichment opportunities
  • Providing flexible work hours or remote access options for employees
  • Introducing recognition programs for outstanding performance
  • Creating development programs to help employees reach their fullest potential. 

Driver #2: Believing in the organization’s leadership

Employers will work harder for a company that they feel is well-led, aligned with their values, and heading in the right direction. A company with a great employer brand and a strong culture will find it far easier to foster employee engagement. But how do you increase this sense of belief and trust? 

According to research recently published in the Harvard Business Review, one of the key ways to foster employee belief in leadership is to make sure that your company is doing what it says it will. For instance, while leaders may publicly stress the importance of a healthy, supportive company culture, nearly half of employees (45%) say their organization’s leaders are “minimally or not at all committed to improving culture.” 

This may reflect a lack of true commitment, but it may also be a failure of internal communications. As the HR team, your role is to make sure that employees are aware of the ways in which leadership are putting their money where their mouth is—for instance, by sharing new cultural initiatives via a monthly newsletter. 

For Yonason Goldson, author, leadership consultant and director of Ethical Imperatives, leaders can foster employee engagement through setting and demonstrating high ethical standards:

“How does a boss earn trust? Communicating a clear vision, setting high but reasonable expectations, consistency, ethical integrity, and recognition.” 

Driver#3: Seeing that employee well-being is a priority at the organization

Many of today’s organizations talk about well-being, but employees will be looking for action rather than words. Well-being programs that increase employee engagement will be customized to meet real employee needs, rather than one-size-fits-all offerings.

For Mark Pierce, the CEO of Cloud Peak Law Group, showing their employees that they are valued and cared about comes down to investing in their well-being. He explains, 

“One thing that we’ve done to improve employee engagement rates is to incorporate mindfulness into our workplace. We encourage employees to take short mindfulness breaks during the workday to help reduce stress and maintain focus. We’ve provided all employees with online training to help them learn mindfulness techniques, as well as brought in a wellness practitioner who led us all through guided meditations and shared a lot of useful tips.” 

Driver #4: Experiencing open and honest two-way communication 

To feel engaged in the workplace, employees need to know that their voices are heard and that their work is valued by their managers and business leaders. Creating a culture of communication and feedback requires a multichannel approach, including: 

  • Employee surveys
  • Manager-employee one-on-ones 
  • A reward and recognition program
  • A performance management program 

Getting this right isn’t just about creating channels for communication, though. It’s also about how you use those channels. 

For instance, when it comes to employee surveys, Anton Konopliov, the founder of Redline Digital, warns that they must be well-designed in order to make a real impact on engagement rates: 

“For surveys to be actionable, relevant, and high-quality, there needs to be a defined and structured cycle. You should avoid having long intervals between surveys because you risk overlooking important data or information. With so much time passing between surveys, you won’t be informed of problems or concerns as they develop, which might mean that by the time you do learn about them, it will be too late to fix the problem. 

Similarly, be certain that your questions are thorough and precise. Avoid asking general questions that apply to all situations, since they frequently obscure important information and yield inadequate answers.”

Driver #5: Feeling a sense of belonging in the organization 

Creating a sense of belonging comes down to a combination of factors: a culture that promotes psychological safety, a leadership team with a clear commitment to diversity, equity and inclusion, and well-trained managers that demonstrate trust and support for their teams. 

When it comes to creating a sense of belonging, Kim “Kimfer” Flanery-Rye, a DEI and Culture practitioner, advises that HR teams take a DEI-informed approach. She cautions: “It is a misconception that you are trained and well-versed in Diversity, Equity, and Inclusion (DEI) just because you are an HR team.” 

The good news is that often, it’s not a question of creating new initiatives to foster belonging. Instead, Flanery-Rye suggests adjusting your existing cultural initiatives and training offerings to be more engaging and inclusive. Her ideas for improving this driver include: 

  • Working with an external DEI expert to find ways to optimize your existing culture
  • Providing training for managers to help them foster psychological safety within their team
  • Offering employees the autonomy and flexibility to decide how, when and where they work
  • Improving your mentorship programs by optimizing the match-making process between mentors and mentees, such as by creating a mentorship “marketplace”

Do reward and recognition programs help drive employee engagement? 

A well-designed rewards and recognition program can make a huge difference to employee engagement rates. After all, recognition programs are one of the most effective ways to show your employees that you care about them, prioritize their well-being, and value their work—all critical drivers of engagement rates. 

However, our experts caution that recognition programs are only effective when they are: 

1. Fair

“Reward and recognition schemes can have a positive impact on employee engagement by showing employees that their work is valued, appreciated, and noticed,” comments Karolina Kijowska, the Head of People at PhotoAiD. “However, it is important to ensure that rewards are given out fairly and consistently to avoid creating an environment of favoritism or competition among employees.” 

2. Personalized 

Flanery-Rye believes that “reward and recognition work well if the recipient feels it is personal and not just a cookie-cutter experience. Employees’ morale and appreciation drop severely when a leader, for example, says an employee’s name wrong when trying to reward or recognize them!” 

Instead of one-size-fits-all reward programs, she advises businesses to align their organizational values to their rewards and recognition scheme: “ This is a great way to embed behavioral change for the good and provides employees with a purpose that directly ties to company values and results.”

3. Frequent 

Jack Underwood, the CEO of Circuit, recommends that organizations seize opportunities to acknowledge employees’ performance as often as possible, to create a culture of positive feedback and recognition: “Find ways to recognize your employees during every check-in, send weekly personalized thank-you emails, and hold performance reviews more often—once a quarter isn’t enough.” 

4. Well-communicated

GemPool’s CEO, Michael Lantry, stresses the importance of having a well-designed communication plan in place before introducing a new recognition and reward program: 

“Typically, as humans, any changes that happen are perceived firstly irrationally, not rationally. Rather than considering the commercial merits to a new bonus scheme, for example, people will think about how fair it is, or how it might impact their own role and relationships. 

Therefore, before you put in any scheme, you should consider how each person will perceive it and carefully plan the rollout. A good idea would be to identify one or two champions in the team (who are not line managers) who can help to sell the scheme internally and informally. How the scheme is communicated is vital. Be transparent and open about what you are doing, why you’re doing it, and the desired business impact.”

The five drivers of employee engagement can transform your company’s performance. 

If you want to increase employee engagement in your company, you’ll need to target the five key drivers—recognition, trust, well-being, communication and belonging. A well-designed employee rewards and recognition program can make a powerful impact on engagement rates, and in turn transform organizational performance. If you’d like our help creating a culture that people will feel proud to be a part of, we’d love to hear from you. To set up a free demo, visit our website here.