The ultimate guide on how to measure employee engagement

How to measure employee engagement is a thoroughly researched topic by human resources professionals around the globe. And, while there are many ways to measure it, the unique nature of humans means engagement looks different from one person to the next.

So, why not focus on just measuring performance or profit instead? Because understanding employee engagement lies at the core of both of those hugely important insights as it starts and stops with how absorbed people are in their work.

Engagement is the attention and absorption that we bring to the job.

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Adam Grant

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Organizational Psychologist

Why employee engagement is important

When you understand staff engagement, you can forecast better, improve decision-making, and your employees can enjoy the simple (yet significant) joy of working in an atmosphere of appreciation. Positive employee engagement improves overall individual and team productivity and performance, employee wellbeing and psychological safety, innovative thinking and collaboration, and – the big one – staff retention.

In fact, we know that an engaged, included, and empowered team is also often the highest performing team and that taking a human approach to managing your people, embracing diversity at every level, and protecting psychological safety are 3 of 5 key characteristics of a high-performing team strategy.

FREE RESOURCE: Mental health toolkit – Understanding and improving wellbeing at work

Employee engagement can be measured through objective, quantitative data collection. It can also be measured in qualitative ways to provide a more nuanced understanding. Here’s our breakdown of different metrics that contribute to employee engagement:

Quantitative employee engagement metrics (the numbers)

• Retention rate

• Absenteeism

• Voluntary employee turnover rate

• Customer satisfaction

• Glassdoor rating

• eNPS

Qualitative employee engagement metrics (the nuance)

• Engagement surveys and pulses (this one is a hybrid qual/quant metric)

• Employee performance reviews

• Happiness and motivation

• Friendship levels within the team/s

• Glassdoor comments

• Customer testimonials

READ MORE: 10 Employee engagement metrics for HR

Which employee engagement metrics should you use?

You’ll want a combination of the above metrics for best results. Employee engagement is complex, just like humans. Bringing together quantitative and qualitative measures will give you a well-rounded idea of how an individual is contributing and if there are opportunities for improvement. If you look at metrics in isolation, you can end up with a skewed picture of your employee engagement.

Consider these scenarios:

1. Phillip is highly engaged and loves coming to work but performs poorly.

2. Emma is highly motivated and a top performer but is suffering from burnout.

3. Jimmy is frequently off work (high absenteeism) but is highly engaged when he comes to work.

Bringing multiple metrics together builds a meaningful picture of how your people are doing – which feeds up into how your teams are doing, and ultimately, how your workforce is doing.

Measuring so many metrics may start to feel a bit like rocket science — but we promise this is much simpler than it sounds. Using a people-savvy platform is your best option to aggregate (and drill down into) employee engagement metrics and gain a complete view of what this looks like for your organization, where there are issues, and changes that need to be made. (intelliHR is the people platform that brings together your quantitative and qualitative people data into one single source of truth that’s layered with depth and insights).

RELATED: Ask these 5 questions when choosing HR software

How to measure employee engagement: 3 tools to start with

Let’s explore three tools to measure employee engagement using people management software. Combining these together will set you up for success.

1. Automate a regular eNPS

Employee Net Promoter Score is a measure of how your employees feel about your company – and provides a good indication of their engagement. A clever HR software will enable you to automate a regular eNPS survey to your employees and give you a wealth of valuable insights. Our eNPS feature will measure, calculate and visualize your employees’ eNPS scores in real time.

Benefit? You can identify true advocates of the company and understand why some peoples’ loyalty and commitment may be lagging. This can help you raise important conversations with employees who may be feeling disengaged at work.

RELATED: eNPS explained: Why Employee Net Promoter Score is a quick-win with big impact

2. Set up a continuous feedback system

Building a healthy workplace culture is your foundation for employee engagement. When your people feel heard, seen and appreciated, you’re setting yourself for success. A continuous feedback system is your go-to tool when seeking candid, regular feedback about how people are doing. Rather than an annual performance review, switch to an agile tool that fosters engagement, trust and care for your people.

Benefit? You’ll never miss a beat. With a combination of check-ins, wellbeing pulses and real-time analytics, you will see what’s engaging people — just as much as what’s disengaging people. These continuous insights give you an excellent reading of your internal culture.

RELATED: Why pulse surveys may be the key to ensuring employee emotional wellbeing

3. Analyze employee retention metrics

Getting cosy with your retention metrics prevents regrettable turnover. Re-engagement tools, survival analysis and exit interviews are part of the toolkit to keep your company kicking goals. Visualizing these metrics (see below) helps you identify opportunities to introduce better ways of working, provide additional training and adapt to your team’s month-by-month needs.

Benefit? Peace of mind knowing that your team’s engagement is monitored and supported wherever needed. When you’re across the numbers and the nuanced insights, you can worry less about top performers leaving. People may even be queuing up to work for you.

READ MORE: 8 Ways to measure employee engagement with HR analytics

How to improve employee engagement: Research-backed insights

There are a few research-backed ideas to consider when designing your employee engagement strategy. These concepts are from modern organizational psychology pioneers like Gallup, Adam Grant and Thomas Chamorro-Premuzic. Combine these strategies for employee engagement with your HRIS metrics and watch the magic happen.

Connection to customers

Organize an opportunity for employees to interact with those who benefit from your company’s products. This connection to the end user builds empathy and engagement among your employees. You can even foster “water cooler” moments between hybrid and remote employees.

One five-minute interaction with those who benefit from the organization’s products and services can produce up to a 500 percent increase in employee productivity

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Adam Grant

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Organizational Psychologist

Promote friendship

Promoting friendship at work builds connection and healthy bonds between employees. Research shows that having people to celebrate your wins (both personal and professional) contributes significantly to engagement.

We’ve consistently found that for women and men, having a best friend at work leads to better performance.

Gallup

Avoid hiring for high engagement

People who are extroverted, agreeable and optimistic tend to be more engaged — regardless of the circumstances. Don’t be drawn to hire people who are more easy to engage because of their personality over people who may be more introverted or pessimistic. A diverse mix of personalities is important to build an inclusive culture and reduce blind spots caused by monocultures.

Hiring naturally happy people to (artificially) inflate engagement scores does not result in improved productivity or performance; but it does involve unfairly excluding people who are more pessimistic, introverted, demanding, or moody.

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Dr. Tomas Chamorro-Premuzic

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Organisational Psychologist

Employee engagement is best achieved with a continuous, agile approach — rather than a checkbox performance review at the end of the year. People’s engagement at work ebbs and flows with the seasons, life stages and ever-evolving personal lives. Someone may be feeling 10/10 engagement one month and then have a run of personal challenges hit them the next month.

An engaged workforce accommodates for these natural ebbs and flows in life — celebrating diverse talents, backgrounds, motivations and engagement levels. Keeping this delicate mix of personalities and emotions working together can be equal parts frustrating and magical.

Go lightly, keep an open dialogue with your team and lean on clever technology to support you along the way.