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  • Writer's picturePaul Hunter

How to Drive Real Improvements in Employee Engagement Levels

The annual employee engagement survey and its outcomes are often a bugbear in many organizations. Powerful analytics slice and dice the surveys in an attempt to extract vital information to allow organizations to better understand why their engagement might be low and lackluster. In today’s tight labor market, employee engagement has been put firmly back on the front burner as organizations grapple with fast-changing market conditions in trying to both attract and retain the human resources critical to the survival of ongoing operations. What can we learn from organizations that have higher engagement and retention than their industry peers? In this article, we examine the top five factors most highly correlated with good or bad employee engagement.

The Role of Leaders

Senior business leaders have a powerful and important role to play in employee engagement. The 2017 Corporate Governance Reform white paper introduced and brought to the fore the requirement for a greater formal “employee voice” for U.K. organizations. Principle D of the U.K. Corporate Governance Code states, “In order for the company to meet its responsibilities to shareholders and stakeholders, the board should ensure effective engagement with, and encourage participation from, these parties.” The code recognizes the key role that both executive and nonexecutive directors play in driving engagement.

While response to the new code has been mixed in the United Kingdom, ongoing work has identified the key ways engaged leaders can directly affect employee engagement:

  • Being accessible when required

  • Being connected to the people and the business

  • Being available and visible in online and open forum-type events

  • Being actively involved in issue identification and dispute resolution

Strong employee engagement begins with the active and visible involvement of business leaders. Giving employees a “voice” through the leadership and governance structure is vitally important in overall levels of engagement.

The Role of Managers

The second factor in driving employee engagement and retention is the competence, style, and quality of managers in the business. While the role of senior leaders within the organization remains important, evidence suggests that for most employees, it is the relationship with their direct supervisor or manager that has the biggest influence on overall levels of happiness and engagement and on their willingness to stay at and contribute to the company. Culture and training are two factors organizations can employ to develop and guide better managers. A good manager is better able to translate the objectives of the company into goals for the team and individuals and support the ongoing development and career progression aspirations of his or her reports. Better managers will lead to more engaged employees and better business and people outcomes across the entire organization.

The Role of Pay and Benefits

Pay and benefits have a significant effect on employee engagement, motivation, and morale. Pay equity has been identified as probably the biggest concern for a number of organizations and the one that can most negatively impact engagement. Ensuring your pay and reward structures are objective, fair, and transparent can go a long way toward ensuring pay equity and concerns around pay equity can be properly managed. Benefits are also increasingly in the spotlight as the workforce model changes in the post-COVID world. As remote work evolves, a number of companies are looking critically at their benefits. Do the benefits support home working and flexible working options? Do the benefits offered allow the organization to compete for and retain a remote workforce that includes the gender (and other) diversity that is part of the overall people strategy? Does the organization have a formal and approved remote working policy that is well aligned with the market in terms of allowances and benefits?

The Role of Recognition

Outside of pay and benefits, recognition also plays an important part in employee engagement. Fair rewards and recognition create a culture where employees know how they can contribute to the success of the organization and feel valued when they do. Your company’s performance management system should be both objective and reasonable and aligned with the individual and team behaviors and culture the organization is targeting as part of its strategy to engage and retain more talent. Recognition, both monetary and nonmonetary, should be designed to reinforce your performance management principles. A system that encourages objective performance measurement, drives motivation, and engages mindsets can go a long way toward supporting overall employee engagement objectives.

The Role of Development and Career Progression

In employee feedback, especially from younger and developing talent, a key factor that’s revealed in surveys is the opportunity for career progression and personal development. When organizations have well-defined career paths, or ladders, and opportunities for growth, and when these programs are more formalized, there’s better engagement from younger employees. A well-thought-out and approved policy regarding both career and aligned pay progression is crucial in retaining millennial talent. In-career progression and opportunities to become more diverse and multiskilled are likewise highly valued by organizations’ more experienced workers. While it’s true that opportunities for learning and growth might be more easily achieved in high-growth industries, it’s also true that the competition for top talent is commensurably also higher in these industries and that regardless of the industry you are in, devoting appropriate levels of care and attention to learning and development will pay dividends in the quest for improved employee engagement. Being able to provide meaningful work options will, in turn, greatly improve employee engagement.

The factors that will improve levels of employee engagement include channels for employee voice, visible and engaged business leaders, high-quality managers, appropriate and equitable rewards and recognition, and opportunities for career progression and skills development. To the extent these factors are woven into the fabric of the business with sufficient care and authority and to the extent they are properly aligned with business objectives and support the overall strategy, organizations will see increased levels of employee engagement and an increase in business success.

This is good news for both business leaders and staff, as well as for shareholders and other stakeholders, in a fast-changing and competitive market.


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