Skip to main content

What Is Employee Engagement And Why Is It Important

As a Business Coach, I often speak at events, and it amazes me that most business leaders in the room have no handle on team member engagement. That’s crazy! Numerous studies have shown a direct link between high team member engagement and positive business outcomes. Engaged employees believe in the company’s purpose and give you up to 40% of extra effort.

In its latest State of the Global Workforce report, Gallup found that only 9% of the UK workforce is engaged. That’s phenomenal. Most people are going through their working life on autopilot. What a waste of an existence! I feel so passionately about this. The kick I get out of coaching is seeing how much faster everything happens when you have highly engaged employees. And it’s much more fun – for me and my clients!

If you’re not getting the desired business outcomes, you must foster team member engagement. Here’s why.

    What is team member engagement?

    Gallup defines team member engagement as “the involvement and enthusiasm of employees in both their work and workplace.” Engaged team members are highly motivated, productive, and loyal. They feel a sense of ownership and pride in their work and are likelier to go above and beyond their job requirements to contribute to the organisation’s success. Team member engagement is essential for creating a positive and productive workplace culture, reducing turnover, and improving overall organisational performance. 

    Based on their level of engagement, commitment, and how employees relate to their work and the organisation, there are three types of people:


    These are employees who are fully involved and enthusiastic about their work. They are committed to the organisation’s goals and values, and they’re willing to go the extra mile to contribute to its success. Engaged people are passionate about what they do, feel valued and supported by their senior leaders, and have a strong sense of connection with their colleagues and managers.

    Not engaged 

    These are team members who are essentially “checked out” at work. They may show up and do their job, but they’re not emotionally invested. There’s not a sense of pride. This group of team members may feel disconnected from their colleagues and managers and lack a sense of purpose or meaning in their work. They are unlikely to go above and beyond what their job requires. And their lack of satisfaction and emotional commitment makes them much more likely to leave for better opportunities.

    You need to pay close attention to this type of people in your business; there might be A-players who feel undervalued by their direct supervisors. If you don’t have regular check-ins with them, you risk losing them, which will directly impact your business success.

    Actively disengaged 

    This type of team members are actively hostile and negative towards their work and the company. They are what we call C-Players: actively disengaged, disruptive and unproductive team members that will undermine the efforts of your top performers. Perhaps, they feel undervalued by their managers, which translates into a negative attitude towards their team and customers.

    We spend a third of our lives working. If your staff think nobody cares about them at their workplace, that’s heartbreaking. We’ve all worked in toxic environments where praise and recognition are not the norm, and it makes for a miserable existence with deficient levels of team member engagement and no discretionary effort. Actively disengaged employees are the most damaging to your business’ culture and performance and the most likely to leave.

    The key drivers of employee engagement

    If you want to increase team member engagement in your business, you need to understand what drives your team. What makes them want to go to work every day?

    One of the key drivers is having a sense of purpose, knowing that you are doing meaningful work and contributing to your organisation’s mission. Are you offering opportunities for growth and development? Recent research by McKinsey shows that a primary driver for employees leaving their jobs is not having opportunities to learn new things or develop their careers. Another critical driver is leadership, including the quality of management and the extent to which employees feel valued and supported by their senior leaders.

    Fair compensation and a positive work environment are essential drivers of engagement. Focusing on building an environment of open and transparent communication, praise and recognition for good work, and a culture of teamwork and collaboration will also translate into higher retention. Finally, having a work-life balance and an organisational commitment to your team’s wellbeing can contribute to high satisfaction and engagement levels.

    But how do you know if you have an engagement problem if you don’t measure it? How will you know if your actions are making a difference?

    Why is it important to measure engagement?

    measure employee engagement

    Regular, systematic engagement measurement is essential to your company’s future growth and prosperity. Putting in place decent metrics will give you an efficient early warning system to alert you of any issues with staff or customers before they do too much damage. Instead of waiting for your annual performance reviews or customer surveys, you can sort things out quicker.

    Developing a team member engagement strategy helps you remove corrosive attitudes. You’ve probably worked somewhere where you felt you were doing a good job, but people around you didn’t care. Or you were working harder than someone but being paid the same. How did that make you feel? It’s so easy for resentful, destructive attitudes to set in and spread like wildfire.

    This is why you need input/output metrics to measure performance against the values you think are important. And everybody needs to know and understand these metrics. They encourage clarity and transparency. If you share KPIs, everyone knows what everyone else’s goals are. It will help motivate team members who now understand what they need to do to get more money or develop further. Suddenly, the resentment and tension melt away.  

    And make recognition and celebration part of your operating mode; it is an excellent way of maintaining team member engagement. Start every meeting with good news. Encourage people to call someone out for doing something great. Systematise it. Even cynical buggers like me like praise!

    Measuring engagement will also help you identify areas for improvement and issues with management. When we merged ServerBeach into Peer 1, we asked all the staff, ‘If you could run the business for a day, what would you do differently?’ We thought they’d say they wanted more money or training. But you know what? They overwhelmingly said they’d like to work with better people. We knew we had work to do around our middle managers!

    Similarly, a regular feedback mechanism for customers will encourage better loyalty. When I first joined IT Lab, our NPS was -5. Two years later, we’d got it up to +55. Every quarter, we’d write to customers about the feedback we’d received and what we’d done about it. This showed that we were listening and improving instead of paying lip service. Closed-loop feedback meant they were more likely to engage in giving further feedback.

    How to measure employee engagement

    If you’re serious about growing your business, you need to clearly understand where you are now and where you’re going. This requires regular and systematic measurement to track your progress and make informed decisions. 

    Gallup Q12 survey

    One of the best team member engagement surveys is the Gallup Q12 survey. I love it. It’s a fantastic metric based on 12 questions in a pyramid that measure the most critical elements of engagement. Wherever I’ve been MD, I’ve used it, and it helped me scale two UK companies from zero revenue to over £25 million in five years. 

    The Gallup Q12 Employee Engagement Survey aims to identify the 12 elements of good management. Gallup can run it for you, or you can manage it yourself. It gives you information about where you need to focus your effort, and it’s invaluable for building high-performing teams and driving team member engagement, ultimately creating a happy company culture and a productive working environment.

    I’ve written an entire blog about Gallup’s survey questions that give you insights into this. At Rackspace, we were growing fast. We needed something to help us maintain the clarity of communication and satisfaction levels we enjoyed as a small start-up. So we ran the Gallup Q12 annually across the whole company and quarterly within teams. This enabled us to keep a close eye on all areas of the business.

    Some of the Gallup questions relate particularly to managers. Although the surveys are anonymous, respondents can say where they fit into the organisation. You’ll get a sense of whether engagement is being hindered or driven by frontline management. And then you can do something about it!

    Employee Net Promoter Score (eNPS)

    Many businesses use eNPS, the employee version of Fred Reichheld’s Net Promoter Score. This survey asks the team ‘Would you recommend company X to a friend or colleague?’ on a scale of 1-10. However, we can’t find evidence suggesting a correlation between high scores for eNPS and employee engagement. One of our guests on Mind Your F**king Business Podcast, Julian Birkinshaw, Professor of Strategy and Entrepreneurship at the London Business School, suggested changing the question to ‘Would you recommend your manager to a friend or colleague?’

    The answer to that question reflects the profound influence that the managers and the team they work with have on the team member experience of culture. Another podcast guest, John Ratliff, former founder of Appletree Answers, said that when he changed the question to ‘How happy are you at Appletree Answers’, he got a correlation with engagement.

    Having A-Player managers has a substantial impact on team engagement. They will act like coaches for their teams. Instead of telling people what to do, they will listen, observe and be supportive. And in turn, their teams will be happier and more productive.

    So, how do you measure team member happiness?

    Friday Pulse surveys

    What if I told you I’ve seen data showing that happier teams are 20% more productive? And that top companies that consistently outperform their competitors are the ones that genuinely care about the wellbeing of their staff. What’s more, they obsess about measuring happiness levels. They’re not doing this because it’s soft. They’re doing it because it drives economic advantage.

    We believe these so-called ‘soft’ aspects of business culture are the most challenging areas to get right. And they’re the most important. Your team’s happiness should be your top 1 priority – without a doubt. Happiness leads to engagement which strongly links to profitability. These things can’t be separated. So it’s fundamental to the future growth of your business.

    That’s why at the beginning of our relationship with clients, we recommend they use Friday Pulse to measure happiness. Why? Because it’s simply the best tool in its market. It will glue your finger to the heartbeat of your business, giving you real-time data that will inform every aspect of your strategy.

    This platform measures happiness at the team and company levels. It gives your team a voice by asking them to rate their experience at work every week and share their frustrations and successes. I first came across it when I was introduced to Nic Marks, the founder, by some clients sharing the same tech accelerator space.

    The beauty of Friday Pulse is that it’s being used regularly by 6000 teams in various sectors. As a result, it gives you a comparison set that will tell you where you’re strong or weak as a business. Then, every quarter, there’s a deeper survey similar to the Gallup Q12, which generates strategic input. Nic has a team of psychologists that can look at your data, compare it to similar businesses, and advise on what team member engagement initiatives you can take to improve your happiness score.

    Having an engaged workforce is critical for attracting and retaining top talent in your business. Ultimately, organisations that prioritise team member engagement can create a virtuous cycle, with happy and engaged people leading to happier customers. Engaged team members are more invested in delivering a positive customer experience. They’d go above and beyond their needs resulting in increased customer satisfaction and loyalty, which will translate into increased revenue and profitability for the company.

    Overcome the challenges stopping you from reaching your full potential. Learn more about...

    Written by business growth coach Dominic Monkhouse. Find out more about his work here. Read his new book, ‘Mind Your F**king Business’ here.

      Fantastic! Give us your details and we'll call you back

        Enquiry | Scaling Up Master Business Course