How Employee Engagement Impacts Productivity


I started my job as an output-based type of leader. I was more inclined to creating a workplace environment that imposes strict deadlines and a tight timetable so that I can ensure the productivity of our employees. As I worked my way up, my leadership mindset changed. I have observed that it is more useful to work on improving employee engagement also to enhance their work productivity.

How does employee engagement impacts productivity? Work productivity and employee engagement go hand in hand. Engaged employees translate to happier, more creative thinkers and more collaborative team players. These characteristics undoubtedly allow them to do work more efficiently and more effectively. Their enthusiasm to go to work every single day also contributes to improved work ethics, hence leading to an increase in their productivity.

If you are a leader who aims to capitalize on employee engagement as a way to boost organization productivity, then you have to dig deeper. With this in mind, here are some hacks that you need to know to increase your workers’ engagement.

Link of Employee Engagement and Work Productivity

Employee engagement has no direct connection with work productivity. It still passes through another process before reaching this result. Listed below are some of these in-between processes, brought about by high employee engagement, which translates to higher productivity.

High Employee Engagement Produces Happy Employees

Employee engagement creates happy employees. Those with top employee job satisfaction feel more inspired to accomplish their jobs than those who do not. These satisfied employees will most likely put additional effort into what they are doing and will have the drive to improve their overall performance and exceed what the company expects from them. This inspiration to do more work increases works productivity.

High Employee Engagement Improves Employee–Customer Relationship

Improving customer experienceOpens in a new tab. is critical when it comes to leading your business to success. Hence, it is essential to establish a customer-centric approach as a way to add value to the company.

Improving your employee engagement strategies may help you fill the gap between this employee-customer relationship. Companies with higher employee engagement tend to produce happier employees capable of providing better experiences to customers. When customers are satisfied with a company’s service, this eventually leads to higher productivity and more profit.

High Employee Engagement Leads to Lower Absenteeism

If there is high employee engagement in the workplace, workers will be more motivated to go to work every day. They won’t have to find excuses to avoid their day in the office. The lower absenteeism there is, the more productive the employees will be.

Undoubtedly, there is an indirect correlation between employee engagement and work productivity. After analyzing this strong correlation, however, it then raises two critical questions—first is whether this strong correlation is backed up by the data or not; second, what are some strategies that the senior management can adapt to increase employee productivity. Read ahead to know the answer to these questions.

By the Numbers

One disturbing thought that Gallup’s researchOpens in a new tab. showed was the still existing lack of engagement in the workplace. Its principal authors, Jim Harter, and Annamarie Mann, reported that only 32 percent and 13 percent of the workers in the United States and the world, respectively, consider themselves engaged.

The study concluded that the reason for these low levels of engagement is brought about by the failure of companies to know that there is a correlation between engagement and productivity. Instead of investing in activities which can solve this lack of commitment, managers prefer to spend money on irrelevant material things.

A study by the Harvard Business Review Analytic Services showed that in a sample of 550 executives, 71 percent of them determined employee engagement as an essential tool in achieving employee engagement. However, only 24 percent of these individuals believe that their employees are highly engaged.

“When people have the tools they need to succeed, feel good about their growth opportunities and receive the appropriate rewards and recognition for their contributions, it’s a win-win proposition for both the company and the employee,” says Mike Rickheim, Vice President of Talent Management of Newell Rubbermaid.

His statement only proves how important employee engagement is to the growth and productivity of companies and industries.

The Towers Watson 2012 Global Workforce StudyOpens in a new tab. also researched the correlation between employee engagement and company productivity and growth. The study measured approximately 32,000 people in 29 global markets. They looked at the level of involvement using some metrics in the following areas:

  • Leadership (level on how the companies make their employees feel confident and show concern over their whole well-being)

  • Goals and objectives (level of understanding of the employees on how their jobs contribute to achieving company goals)

  • Work-life balance (level of stress and time consumed by work)

  • Guidance (level of how managers appropriately assign tasks and coach their workers)

Results showed that companies with the lowest levels of engagement had an operating margin of less than ten percent while those with high levels were at approximately 27-percent operating margin. At the same time, the most engaged companies had an 82-percent two-year employee retention rate as compared to the 60-percent level of free companies.

Lastly, InnoviseOpens in a new tab. researched how high employee engagement leads to increased company profit. Listed below are some of the statistics derived from the case:

  • Companies with high levels of employee engagement showed an improved quality of work and health, showcasing fewer safety incidents by 48 percent.

  • A five-point increase in the level of employee engagement correlates with a three-point increase in revenue growth.

  • Organizations with a high engagement level are 22 percent more productive than those companies who have a low engagement level.

  • Highly engaged businesses have half the number of absenteeism and employee turnover than low-engagement organizations.

How To Increase Employee Engagement

Know Your Employees

Before entering various employee engagement strategies, it is essential to know your employees first. This way, you will be able to pattern your engagement plan with what they need and want. Asking the following questions can help you familiarize yourself with your team:

  • What are the pros and cons of our recurring company culture?

  • What kinds of rewards and benefits will make them work harder? Are they seeking for monetary bonuses and material gain or are they performing to increase their societal welfare?

  • Is the employee-employer relationship handled well? Is there a way to improve this?

  • Do you feel valued by the company?

  • Are there enough training and development given by the company?

  • Do you see yourself evolving in the company?

Once you know the answers to these questions, it will be easier for you to draft your engagement strategy.

Improve Communication and Collaboration

Managers often measure communication exchange depending on the informational content included in the two-way interaction. However, studies show that it is better to focus on the frequency of exchange (signals) and the context of how these exchanges were given and received (belonging cuesOpens in a new tab.) instead.

Companies can improve their communication by sending a higher volume of shorter messages to their staffs more frequently. Doing this is a better approach than sending long essential messages. It promotes team collaboration since there is an avenue for everyone to talk to everyone, in roughly equal measure. Sending short messages also encourage those who do not speak up to take part in a minimal conversation.

Always remember, however, that collaboration does not happen naturally. The top management has a crucial role in providing direction, coaching, and creating a reward system as a way to remove actual or perceived personal barriers. Once managers have done their part, the employees will slowly advance eventually under their momentum.

Recruit the Right People

It is essential to think about your company culture during the recruitment process. Make sure to hire someone that will fit in well with the culture of the business. Adjusting and engaging themselves with the office happenings will be more comfortable for them.  

During interviews, analyze first the social nature of the applicant. Do you think he or she will get along well with the people in the office? Are they open-minded individuals just in case their social beliefs do not align with others? Once you have determined their social nature, consider their work ethics next. Do you think they can adhere to the pressure-packed deadlines of the department? Are they flexible and solution-oriented?

Aside from relying on interview results, you can also add some innovative recruitment process to determine the personality of the applicant further. Some companies even adopt the gamified onboarding solutionOpens in a new tab..

For example, hiring individuals require applicants to go out in the field and complete interactive challenges through tablets. It will show the hirers the journey of the applicant into solving real-life problems. Their solving process will bring out their real personalities, away from their interview persona.

After analyzing all these factors, decide whether hiring them will bring more benefits than costs. Ensure that they will fit well to the culture of the company and will offer a varied skill set, personality, and creativity which can help in promoting employee encouragement.

Conduct Regular Socials

Studies show that friendship has a crucial role in happiness and productivity. Getting your employees to talk with one another through an office social is the best way to establish these relationships. Office socials do not necessarily have to be costly and grand as a big party. It can be as simple as a meal out, a few drinks, or team building activities in the office.

To be effective, make sure to do these office socials regularly. This way, they will be more relaxed to work in a fast-paced business environment. 

To illustrate what I am talking about, let me share to you a strategy which my work colleague implemented in their department. This manager assigns an employee in-charge per week to spearhead these office socials, and they set aside two hours every Friday to attend these small gatherings. She gives them a specific budget ranging from $50 to $70 per week. These employees then have discretion on how to spend this amount of money.

One activity they had was a bracelet workshop. The employee-in-charge decided to buy different bead designs, and she taught her co-workers on how to create friendship bracelets. Another employee, on the other hand, chose to use the money to conduct a cheese-tasting activity. He brought different kinds of cheese, and he let his colleagues taste the different varieties of cheese. He also gave them a bottle of wine to complement the taste of cheese!

The moment the manager implemented these regular social sessions, she noticed how the friendship in her department blossomed. It made her employees work more comfortably with one another which translates to more excellent output and improved work productivity.

Set Up a Common Social Area in the Office

Yes, some offices have a common lobby where employees and outside visitors can interact. However, it is also essential to set up a common social area in the office where employees can get together and relax during breaks.

Your social areaOpens in a new tab. does not have to feature a grand room filled with colorful bean bags and massage chairs. It can be as simple as placing comfortable sofas, board games, pool tables, or dart boards. Just create a room which will promote social interaction and create some competition for your staff. Just create a chilled-out atmosphere, and you’ll be fine.

Conduct Sports Activities

Some employees feel less engaged because they don’t do anything aside from sitting at a desk and crunching numbers on the computer all day. Conducting sports activities once in a while can awaken the work spirit of your staff. These sports activities do not have to be as intense as a Tough Mudder course or a military exercise. Casual ball games and physical parlor games may be enough.

Sports activities build strong relationships within your team and create lifelong friendships. These also encourage skill sharing, boost confidence, and establish a light work environment. Once they have acquired all of these benefits, they will most likely be more engaged in other work activities, be it job-related or not.

Give Performance Feedback

Most employees engage less with the company when they feel that they don’t grow in the company anymore. Hence, the role of performance evaluation and feedback is essential. These pieces of feedback make an employee that he or she is appreciated and that the company values their growth.

These performance evaluations also empower them to do better in their jobs. This way, they would be able to improve their weaknesses and prove to their colleagues that they can do more.

Invest in Employee Development and Training

Another way to show them that the top management values their growth is to invest in employee development and training. It is also an opportunity for the bosses to engage your employees with the operations of the business continuity. If you give them regular sessions on the development and improvement of skill set, employees will most likely feel more inspired to apply these learnings to their current jobs.

Measure Employee Engagement

Measuring employee engagement is vital. Engagement metrics may include indices on program reach, budget spent, performance ratings, and reward recognition. Once you have these data, use them to create the best employee engagement strategies for your team.

Remember, however, to consistently measure employee engagement. Start with establishing a baseline and use this as the basis whether your projects are active. Do not just rely on the first batch of results since this is not enough basis for your company strategy. Depend your activities on the latest measurement, be it on a monthly or quarterly interval. This way, you will be able to continually improve your employee engagement plan as an answer to the latest trends, feedback, and employee performance.

The Role of Technology in Employee Engagement

With the rise of the digital world, technology has indeed contributed many things to businesses. The expansion of business technology led to more efficient and quick processes, easier instant communication, and higher customer reach. Aside from this, technology also became a tool to increase employee engagement. Listed below are some ways employers can incorporate technology into their respective employee engagement strategy.

Performance Management Tools

As mentioned above, it is crucial for employees to know their current performance as a way to boost their motivation. Managers can take advantage of these kinds of tools to set up their company goals and track and review employee performance. This way, it would be easier for the bosses to give their feedback depending on the data and trends gotten from the results from these performance managementOpens in a new tab. tools.

Aside from just providing feedback, the information gotten from this tool can be used to recognize their employees for a job well done. To illustrate how this goes, let us use GloboforceOpens in a new tab. as an example.

Globoforce is a social recognition solution which uses the power of thanks to building a stronger culture in the company. This tool collects crowd-sourced recognition data which displays the impact of an employee to the whole organization. Hence, the bosses who adopt this technology easily recognize the employees who have a significant contribution to the company.

Aside from tracking the employees’ performance, these tools also offer a variety of services. These include being a platform for job openings, a data bank to manage company data, and an avenue for reviewing and responding to work feedback and evaluations.

Employee Education

The presence of training and development is essential for businesses for their employees to stay engaged and for the company itself to remain competitive. Aside from physically-based seminars, more and more businesses are adopting the blended learning approach.

Blended learningOpens in a new tab. is a combination of virtual learning (virtual classrooms and e-learning tools) and in-person sessions. This kind of approach is beneficial for both employers and employees since it easily maintains a flexible schedule.

If most of the employees are busy with their work, the top management may opt to provide a link of these e-learning tools which they can watch and read on their free time. Once they find their regular schedules, they can use this as an avenue to personally share their learnings and insights from their virtual classrooms.

Blended learning allows the workers to become more engaged since they have the flexibility to train at their own pace. They don’t have to conform to regular training sessions where they feel the management imposes learning on them. The engagement brought about by this kind of learning style leads to better employee work performance and increased productivity.

Another strategy to use in employee education is the use of gamificationOpens in a new tab.. One of the critical issues in requiring training and seminar is that the employees feel compelled to invest their time and effort. Gamification provides a more natural desire to learn. This technique offers a more exciting and competitive learning environment.

Collaboration Tools

Collaboration is essential when it comes to tackling employee engagement. If the employees do not feel that they have proper communication within their teams and between other departments, they might feel more detached to both their work and the company.

Collaborative efforts allow individuals to establish better relationships with their workmates and translate to a more relaxed working environment.

The use of Intranet services and in-house networking allows the workforce to stay connected and informed even if they work in different areas. These collaboration tools can be used to view data, share files, message one another, and work on one output together.

There are even platforms which provide cloud-based services where you can share information easily. These kinds of software also allow you to see the progress of your staff in real time.

Automation

Surveys show that employees feel less engaged when they are annoyed. This annoyance is brought about by the lags they face in the operations. Hence, it is vital for a company to automateOpens in a new tab. those tasks which are time-consuming so that everyone and everything will be more effective.

For example, automating logistical and financial requests may reduce process lag. Instead of the employees processing the paper office-to-office, they can instead devote this time to their other tasks at hand.

Both the workforce environment and technology will continue to evolve and expand in the future. Hence, it is essential to tap into these resources to help improve employee engagement inside the company. Introducing them to these digital tools will enhance innovation, encourage ideas, boost creativity, and strengthen company performance.

Companies with the Best Employee Engagement Practices

Arguably, Google is one of the companies with the best employee engagement initiatives. One practice that they promote to their employees is what they call 20-percent time. Employees spend 20 percent of their total work time every week on the creation of projects that inspire them.

The company gives freedom to its workers to pitch any project that they feel will help the company and society in general. These projects do not strictly have to be in line with their work. If they think that there is a project that caters to data management, they are free to present the idea even if they work in the finance department.

This practice shows your employees that you don’t just value their creativity and input, but trust them with the operations of the company.

Zappos has been the forefront company which has been to said to have incredible customer service and experience. However, according to the CEO, this fantastic customer experience is brought about by the company’s high employee engagement. Here are three of the best strategies they are implementing to build engagement.

– Zollars: ZollarsOpens in a new tab. are Zappos’ currency. They give these as a reward to employees who have exceeded their bosses’ expectation. The Zollars that the employees have collected can be used to get company benefits, use as a raffle entry in company events, or donate to charity.

– Coworker Bonus Program: This initiative also uses Zollars as a “payment for appreciation.” If a certain co-worker has pleased and helped an individual in their jobs, the receiver may opt to award this co-worker worth 50 Zollars.

– Shadow Sessions: It is normal in an office that employees talk behind the backs of their colleagues. To avoid any misunderstanding within the employees, they spearheaded a program where the employees can “shadow” their coworkers. It means that they have to step into the shoes of each other to be able to gain a better grasp of what these individuals face daily.

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Full ContactOpens in a new tab. is a software firm which pays their best employees with a “paid vacation” worth $7,500 each. The company pays them to go on a holiday in a foreign land. The only catch is that you can’t do anything work-related, mainly answer work emails and calls.

This initiative is a prize for those individuals who have exerted effort into their jobs. They also want this to serve as an avenue for these people to relax and return in a better state so they can once again fully commit themselves to the company. Results showed that those who came back from this paid vacation trip develop a heightened sense of trust for their colleagues and returned with a fresher and better outlook in life.

If your company still cannot afford giving out these massive amounts of reward, there are still other ways to go about this. You can instead give them long weekends or a couple of paid leave so that they can disconnect from their jobs and responsibilities even for just a while.

Southwest Airline’s banks on tapping the employee’s creativity as a way to boost employee engagement. They allow their employees to design their company uniform and give them autonomy when it comes to some areas of their work life they’d typically do not have a say about. Their CEO even gives a public “shout out” as a way to recognize and send praises to their employees who have been excellent at their jobs that week.

The goal of Southwest Airlines is to encourage their employees to stay motivated to do things effectively by doing it differently. According to their workers, the new uniform designs reflect the experience they have acquired in the company and displayed the company culture as well. It also enabled them to release their creativity and capability outside their job descriptions.

Believe it or not, they even had a viral video where one of their flight attendants was caught rapping the safety information instead of discussing it annoyingly. This strategy gave both the employees and customers the best service experience ever imagined.

“Companies cannot simply adopt the levels of commitment and engagement found in the company. It takes a special kind of employee and company culture. They can buy all the physical things. The things you can’t buy are dedication, devotion, loyalty—the feeling that you are participating in a crusade,” says Southwest Airlines Founder, Herb KelleherOpens in a new tab..

Remember, one engaged employee is worth ten disengaged employees when it comes to organizational productivity. So, if you are a company who wants to stay in the business industry for a long time, make sure to invest in your people, and everything will follow.

Related Questions

Who is in charge of improving employee engagement—is it the Human Resource Department or the members of the top management?

One can enhance employee engagementOpens in a new tab. through the collaboration of these two groups. The Human Resource Department is more in touch with the employees.

Hence, their central role is to listen to what the employees have to say, understand the current state of the workforce, and report this to the bosses. On the other hand, the role of the top management is to spearhead the implementation of these engagement strategies since they are more knowledgeable when it comes to financing and overall company culture.

Is there a study which quantifies the cost of disengagement?

A report by Gallup entitled 2013 State of the American Workplace showed that 68 percent of US workers are not engaged in their roles and 17.5 percent of this group consider themselves as actively disengaged.

Actively disengaged means that these individuals are working to contribute to the downfall of their companies. Using these numbers, the researchers of the study estimated that the disengagement of American companies ranges from $450 to $550 billion per year due to lost productivity.

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