How does employee engagement affect employee loyalty?

What is employee engagement?

Committed employees are extremely profitable for the company - keeping them should therefore be a matter of course. But what are the most important requirements for employee engagement? And how can it be promoted? Those who love their company and are enthusiastic about what they do develop new ideas, advocate the optimization of work processes and a better working atmosphere.

Last updated: 24.09.2018

Employee commitment as a success factor

Committed employees perform better and are therefore an important success factor in the company. This is confirmed by numerous studies, above all the Gallup Engagement Index, which annually examines the emotional connection between employees and their company and links them to productivity. The results are always frightening - around 70 percent of employees only do their work according to regulations. The consequences: There are no innovative ideas, performance sinks, and sooner or later the company suffers a competitive disadvantage. Well thought-out retention management, i.e. measures for employee loyalty, is therefore essential for ambitious companies.

Employee Engagement: An Explanatory Model

Dedicated employees put their hearts into it, they like to develop new ideas and are passionate about their job. The company can do a lot for it.
But which factors promote the engagement of your employees and which dampen it? Michael S. Christian, Adela S. Garza and Jerele E. Slaughter have used these questions to develop a model that aims to track down employee engagement. Accordingly, there are three categories that influence engagement:

  1. the workplace and the organization
  2. the leadership style
  3. personal characteristics

Workplace: factor for more commitment

The equipment of the workplace is one side: A pleasant atmosphere, space for quiet work and communication and furniture that supports the workflow show that the company values ​​its employees. On the other hand, there is cooperation with colleagues and superiors. Being able to make your own decisions, receiving support from the team and the boss, varied activities and meaningful work are the most important points for committed cooperation.

Source: Michael S. Christian, Adela S. Garza and Jerele E. Slaughter: Work Engagement: A Quantitative Review and Test of its Relations With Task and Contextual Performance. Personnel Psychology, 64 (1/2011)]

Management style: show me your boss and I'll tell you how you work

The supervisor shapes the workplace and thus the factors that are necessary for satisfaction and commitment. How the boss behaves and what style of leadership he practices is decisive for commitment - or for his absence.

Personal characteristics: attitude matters

The workplace can be as beautiful as he wants and the boss can be a dream. If the employee is by nature a pessimist and dissatisfied with his or her life, that is of little use. According to the scientists, whether an employee is committed depends strongly on his or her personality.

The perfect job

Michael S. Christian and his colleagues found two factors without which employee engagement hardly works: The work should make sense and be varied. This fits in with the results of the Manpower Group's 2018 study on work motivation: 73 percent of those surveyed do not want to work in a job that seems boring and pointless. Around 65 percent it is important that colleagues are nice and that the content of the work is correct.

The relationship between employee engagement and satisfaction

Are your employees satisfied with their job, their workplace and their company, are they more committed and are performing at their best? Numerous studies, including the Global Report “Employee Engagement and Jobs Around the World” by the office furniture manufacturer Steelcase, have already addressed the topic of “Employee Engagement”. But what actually makes employees satisfied - and consequently committed?

This is how engagement arises

Those who work hard for their company are more productive, have more ideas that move the company forward and are happy to try new things. No wonder that those who are committed are in great demand on the job market. However, they do not come from a vacuum. Commitment arises above all when the employee finds that his company suits him and his goals well, when he can identify with the corporate culture, the working atmosphere is appealing and the contacts with colleagues are characterized by openness and friendliness. The work environment also plays a role: the Steelcase study reports that very committed employees are also satisfied with the equipment in their workplaces. Factors such as lighting play a role, furniture that is ergonomically and optically pleasing and acoustics that are tailored to the respective activity.

Appreciation is another important point when it comes to employee satisfaction, with Steelcase reporting that 93 percent of those surveyed in their study see genuine employer interest in their wellbeing. Their health and safety are also important to the company.

The dissatisfied complain about this

It also works the other way around: dissatisfied employees complain about the organization of their job and the work environment as well as about the employer's interest in themselves. Only ten percent of them think that their company sees and appreciates them. If you look at the results of the Global Report, companies that employ a high proportion of unmotivated employees lose in all areas: only 43 percent feel well networked with their colleagues, 24 percent enjoy going to work, 25 percent are proud of theirs Company to work, 23 percent are motivated. On the other hand, the satisfied employees stand: 97 percent of them are satisfied with the networking among colleagues, enjoy going to work, are proud of their company and are motivated.

The freedom of the satisfied

What exactly are the companies doing that can look forward to a high proportion of committed employees? The study also found that:

  • You can choose where to do your work yourself.
  • You make social contacts with colleagues.
  • They work in teams and are not constantly torn out of their work.
  • They share successes.
  • You receive transparent information about the company.

Where do you stand?

Where is your company based? Are your employees happy and engaged, or have they chosen to go by the rules? If you find yourself in the points of the dissatisfied, it is time to act. With kununu engage you can find out what the mood is in your team.

The human factor: this is how employees put a company on the road to success

If you stand still, you fall by the wayside: companies have to develop further, with innovative ideas and products. This is the only way to stay marketable and to be at least one step ahead of the competition. The ability to innovate comes from within, from among the employees. Only when they think ahead and think ahead do new ideas emerge that lead the company towards the future. However, that also needs to be managed.

Standstill is the death of every company

How can processes be renewed, how does the company break new ground, how can customers be won and retained? Dedicated and motivated employees have the answer to all questions - if you let them. A team that thinks for itself, that comes around the corner with its own ideas and would like to implement them immediately, should be a dream for every company. Unfortunately, in many cases it is not, on the contrary: ideas are ignored, arguments such as “we've always done it this way” are brought up and valuable potential is wasted. Changes mean effort and many companies shy away from it. And make a big mistake. This creates no innovation, but stagnation - and a frustrated workforce that will be careful not to continue contributing their ideas.

Creating spaces for ideas

An innovative environment does not come about by itself, it has to be created. And that requires effort. For example, with structures that leave room for ideas. Just like with the design thinking method. It looks at the chance of an innovation from a different point of view: that of the user. Initially, assumptions or prototypes are created that are discarded until the solution has been determined. That costs time - but it is worth it.
The environment also plays a role: Anyone who sits in front of the computer in the office all day will hardly develop new ideas, no matter how motivated they are. The solution is: get out of the office. Companies that offer flexible workplaces, home or decentralized offices are often more successful than others for at least two reasons: their employees are more satisfied because they feel valued and free and they are much more likely to develop ideas on the green field that will advance their company .

Create a culture of innovation

The entire company does not necessarily have to be switched to a culture of innovation. It is often enough if individual departments are given time and space to develop their ideas. The spirit that arises in this way will also motivate other departments and teams. Because they notice: The employee can make a difference here - and that ultimately promotes everyone's commitment.

Employee engagement: This is the role played by the boss

What role does the supervisor play in ensuring that employees are committed and perform at their best? An inventory.

The superiors harm the company

German companies would generate around 105 billion euros more annual sales if their executives did not fail: This is how the management consultancy Gallup sums up the results of its 2015/2016 study. It bears the telling title “If I don't care about my company, I don't care about it”. Bad superiors therefore mean that a large proportion of German employees only do their work according to regulations. Motivation - nil. Absenteeism increases, productivity declines, innovative ideas are not even thought about - and the company ultimately loses its competitiveness. Only 21 percent of the employees surveyed rate their manager as positive and motivating.

Happy workers

But are the boss and his management style really so crucial for the commitment - and what should the boss do? A look at another study gives more clues. In 2012, the StepStone job portal wanted to find out what makes employees happy. The results:

Many of these factors have a lot to do with colleagues and the job itself - but they are also controlled by the boss. If punching and stinging instead of teamwork prevails in the department, only stupid work is assigned to a highly qualified employee and if the management team is behind the mountain with important results, it is the boss's turn to remedy these conditions. Praise and recognition also come from him. And those who are happy at work are also motivated and committed - because they notice that their company wants to do them good.

What employees really want

Commitment does not come from within - even if so-called intrinsic motivation plays a major role. In its 2017 job study, the Manpower Group Germany found that superiors can score points primarily through appreciation, feedback and interest in people. This increases job satisfaction - and thus also the willingness to get involved in the company.

The economic importance of committed employees

Employee commitment pays off, as numerous studies show. You will have already noticed for yourself: A team that is passionate about what it does brings more and better performance. But what is the specific economic impact?

More of that!

If the work results exceed expectations, the sick leave is pleasantly low, sales are growing and customers are full of praise - then you have a dedicated team behind you. Committed employees are beneficial to the company in several ways:

  • They perform better
  • You change companies less often
  • You generate more sales - also through higher customer satisfaction
  • You are sick less often
  • They are happy to recommend their company - and thus bring new, committed employees and new customers.

These include the results of the Gallup Engagement Index 2016. The employee engagement study also gives figures: German companies could earn up to 105 billion euros more if all their employees are fully committed.

The billion euro trap

And it is not just a lack of commitment that burns money. The follow-up costs are also high: sick days alone, which are much more common among demotivated employees, cost the economy around 113 billion euros. The federal government calculated this in its report "Safety and Health at Work" as an example for 2015. Employees who leave their company with waving flags - and all the know-how - are another cost factor: According to the 2016 fluctuation study by the IOGW Consulting Group calculates a total of at least 43,069 euros per employee. Of course, this also includes costs for any incorrect appointments in the event of a new hiring, entry costs for the new and direct exit costs such as severance payments, continued wages in the event of leave. Nevertheless, it remains: terminating costs. Better not let it get that far in the first place.

What are German companies doing to motivate their employees?

Companies that want to keep their employees have to do something about it. The best minds are coveted and if they are dissatisfied, they just look for a new one. What exactly do companies do to motivate their workforce and thereby retain them - and does that even fit what employees expect?

What the companies offer

The Jobtrends 2017 study by the consulting firm Kienbaum brings it to light: A total of 297 companies revealed the benefits they offer their employees. In the forefront landed:

  • flexible working hours
  • employer-funded pension
  • Home office

The majority of companies offer further training opportunities - 96 percent stated that they offer their employees professional training, while 86 percent impart soft skills. Trust-based working time is also a big factor: 71 percent of companies think it is more important that the work is done and less when and where it happens. 58 percent of the companies surveyed offer health and sports activities.

What the employees want

According to the results of the job trends study, German employees are by and large likely to be satisfied with their employer and correspondingly motivated - because they match the wishes of the employees. This sums up another study: In 2016, the Stepstone job portal published the trend study “Customized Jobs”, in which specialists state their expectations of their company.
A pleasant working atmosphere as well as sports and health offers are at the top of the wish list. The ability to combine work and private life also increases the company's attractiveness considerably. The most important thing for skilled workers is that they feel comfortable at work. A pleasant group of colleagues is the most important thing.

Action is the order of the day

If you don't offer all of that, sought-after professionals may be gone faster than you can set up engagement strategies. They don't have to look long for a job: According to the Stepstone study, 69 percent have a new job after a maximum of six months.

Feedback is the top priority of the employees

How can this be prevented and how can employee engagement be sustainably increased? One thing is certain: the task is incumbent on the management team. It determines the climate in the company and sets the course for the corporate philosophy. The Gallup Engagement Index 2016 confirms this: Only 21 percent are satisfied with their manager. However, these are the most important part for the emotional bond to the company. Above all, the respondents complained about a lack of feedback and the willingness to find out how the performance potential of each individual can be optimally released. Many employees fall short of their potential - and the company is wasting valuable resources.

What drives committed employees?

A committed team is more successful, has new ideas more often, likes to take on responsibility and is therefore an asset for the company. This potential can be used - for example to get a stagnating project back on its feet or to boost company-wide profits. But how does commitment come about and how can motivation for the job be maintained?

External and internal triggers

Motivation can arise from intrinsic (internal) sources or from extrinsic (external) sources. The former describes acting out of an inner drive.Often these are employees who are passionate about their job, who love what they do and want to get ahead successfully. Extrinsic motivation arises because there is a reward: a high salary or certain goodies, but also praise and recognition. The fear of being “punished”, for example because the career ladder could end abruptly or a warning is threatened, can be a trigger for extrinsic motivation.

The activity counts

Here we are already on the trail of the answer to the question of what drives committed employees: First and foremost, it is enthusiasm for what they do. A good salary isn't bad either - but there are more important things. The 2017 EY job study by the consulting firm Ernst & Young found that exciting work and a good relationship with colleagues are at the forefront of motivational factors. Right behind: a high salary.

Love your job - and not the company

Anyone who thinks that love for the company also plays a role in commitment is wrong. The occupational psychologists Michael S. Christian, Adela S. Garza and Jerele E. Slaughter commissioned a meta-study in 2011 that showed a result that might be sobering for bosses: commitment therefore relates directly to the activity that is being carried out - and to it it doesn't matter whether it's a job at reception or on the board. Commitment can very well be present, even if the employee does not feel connected to the company.

No either - or

Even those who love their job do not take it out for air and love. And if you just want to avoid a warning or work for the money alone, you will never be successful in a hated job. A healthy mix of internal and external motivation is therefore the order of the day. For companies, this means: committed employees are rewarded - with promotions, salary increases, but also with flexible working hours or a pleasant workplace. And every employee, every team member is entrusted with tasks that they can and appreciate. This becomes possible when bosses know their team. This can be achieved with regular feedback discussions - by the way, another expectation that satisfied employees have of their company and their superiors.

Measure employee engagement

Is your team committed - or is it just pretending to be? Measuring employee engagement provides valuable clues as to whether you should take measures to keep you motivated and satisfied. Here's how it works.

Questions can help: the Employee Net Promoter Score (eNPS)

How is your team's commitment? If you want to know whether something can still be optimized, it's time to talk - or rather: ask. There are a number of ways to measure employee engagement. One of them is the Employee Net Promoter Score. The variant of the Net Promoter Score, which is used to measure customer loyalty, asks exactly one question:
How likely are you to recommend your company to friends and relatives?
The answers can be graded on a scale from 1 to 10. Loyal and enthusiastic employees recommend their company with a value of 9 to 10. Passive people rate it with 7 to 8. They are more or less satisfied, but have no special bond with the company and would therefore not necessarily recommend it to others. The dissatisfied answer with a value from 0 to 6 and tend to express themselves negatively about their employer. Recommendation - negative.
The Employee Net Promoter Score helps to identify tendencies in terms of employee engagement and can also reveal which measures are motivating - and which are not.

Detailed analysis

The Employee Net Promoter Score is clear and simple, but it cannot reflect all factors of employee engagement. If you would like to know more, there are some indications that provide information about the actual commitment of the team or the individual employee:

Efficiency: Does the employee keep deadlines and work productively within the deadlines?
Caution: The line between sensible measurement and monitoring is narrow. Make sure that you do not pay attention to presence and work results with eagle eyes.
Quality: Committed employees like to do a good job. A high quality is an indication of motivation - and vice versa.
Service: How is the service concept in contact with customers and suppliers? Satisfied employees like to do more in this respect too.
Work-life balance: Is the relationship between work and free time in your company right? Employees who are allowed to work from home, flexible working hours and time off tend to be more satisfied.

Regularity is the order of the day

Satisfaction and commitment fluctuate. Regular measurement is therefore important in order to be able to take countermeasures if the worst comes to the worst. With kununu engange you get a tool with which you can get regular feedback from your employees and thus increase motivation. By the way, the fact that they are asked how they like it at the company already contributes to this. You will receive weekly status reports with which you can regularly check whether it is time to increase motivation.

Source: State of the global workforce 2017, Gallup.

Increase satisfaction, encourage employee engagement: what can the company do?

Employee engagement doesn't come out of nowhere. The environment has to be right. There is no magic formula for motivating employees, because everyone has different goals and needs. Various studies provide some pointers.
A working atmosphere in which the employee can develop freely, in which his ideas are heard and in which working hours are designed as flexibly as possible according to the needs of the company: The Steelcase Global Report lists these wishes. In 2016, the manufacturer of office and contract furniture asked 12,480 office workers from 17 countries about their working environment and their wishes. The result is clear: those who are satisfied with their job are more committed. However, according to Steelcase, this only applies to 13 percent of employees. Salary, social benefits or the number of vacation days are important points for employees, but they have no influence on the emotional bond with their company, says Gallup. The employment agency Manpower reported in the summer of 2015 that a good relationship with the boss and colleagues are the most important motivators. Flexible working hours, the frequent opportunity to work in a team, an attractive office environment and health offers are further important factors. A Stepstone study conducted research on happiness at work and came to the conclusion that respect for employees, an interesting job and a good working atmosphere are the factors that make people happy.

Promote engagement in practice

In practice, what can HR do to encourage employee engagement? One possibility are events in and outside of working hours: team building measures, incentives, benefits, celebrating project successes and recognizing performance promote togetherness. Company health management and high-quality, beautiful office equipment show that the company's employees are worth something. Above all, however, corporate management can do something: It determines the company's mission statement, which ideally is characterized by respect and recognition.

Committed employees: this is how they benefit the company

Motivated or, as the Stepstone study puts it, happy ones Employees are indispensable for the company if it wants to survive in the market. Because if you are not engaged, you are ready to quit more quickly and that is problematic for several reasons: The employee takes valuable know-how with him and uses it profitably with the competition. The current good economy does the rest: It is easy for qualified employees to find a new job. In addition, it costs the company a lot of time and money to recruit and train qualified staff. It often takes months for a new person to work productively. Frequent layoffs also drag the remaining workforce down and lower the threshold to resign yourself.
Happy employees, on the other hand, remain loyal to their company, have fewer absenteeism and speak positively about their company. This serves the reputation and establishes a positive image. In addition, word of mouth attracts qualified employees. The company can only win if it invests in the commitment of its employees.