Labour productivity in the UK has been exceptionally weak since the 2007-08 financial crisis. To respond to this, companies are looking for ways to mobilise their employees toward the organisation’s success. And as we move out of recession, more and more companies are experiencing a shortage of skilled labour. This is coupled with a younger workforce that is increasingly willing to move on to a new job if their own expectations aren’t met. So companies are looking for ways to attract and retain the best talent.

In this environment, there is a lot of discussion about employee engagement.  But as ubiquitous as the term is, there seems to be little agreement about just what it means. And as soon as a business concept becomes commonplace, there are pundits who will say that it is all wrong, while of course providing their own new-fangled solution to the problem.

Get it right and an engaged workforce will deliver success. Engaged employees will stick with you during the tough times, go the extra mile when it really matters, and serve as ambassadors for your company.

Research by Gallup shows that an engaged workforce can have 21% better productivity, 37% lower absenteeism, and 22% higher profitability.

Get it wrong and hard-working employees will become disillusioned. Let them become disengaged, and your employees can become toxic, spreading their negativity internally and externally. And that will really cost you.

Isn’t engagement the same as employee satisfaction?

Simply, No. For many years, employers have conducted annual employee satisfaction surveys. Too often, this process has failed to deliver meaningful business performance results, while frequently creating discord in the workplace. Part of the problem has been in the implementation, which I will come to shortly. But mostly, it is because employee satisfaction was only half of a good idea.

It seems logical enough. Happy employees, or happy in their jobs at least, are less likely to hate being at work, less likely to be watching the clock, more likely to be doing a good job. And there is some evidence that productive employees are generally happier at work than others. So it follows… Make your employees happy, and they will do a better job. Right?

Well, not necessarily.

Other research shows that, while productive employees are often happier, happy employees aren’t always more productive. Were we measuring the wrong type of happiness? Is it merely that satisfaction with the job is a prerequisite but not a guarantee of performance? Or is the correlation even more nuanced than that? That’s the thing about correlations…Watch your assumptions about causation!

So what is really going on?

Professional researchers know that correlation doesn’t imply causation. But as business people, we want quick answers. And we have become accustomed to making decisions with incomplete information. But this is the age of big data. To stay ahead, we need to make more informed decisions.

When we start asking the right questions, the answers are fascinating. And actionable!

When you think about it, it was always a leap: happy employees will work hard? Maybe they are happy because they can get away without working hard? If we want to know what motivates employees to succeed, we need to research their motivations, not rely on looking at the characteristics of good employees and make assumptions.

If you want to understand what motivates your most successful employees, you need to start by defining success. And recognise that this can be multifaceted. Is it simply about productivity? What about the productive employee who creates a toxic culture, impeding all their colleagues’ work?

A successful employee will mean different things to each company. It will depend on your business strategy, your organisational culture and values. But generally, all businesses want employees who do the job well, stay in the job, give that extra effort when it really matters, contribute to a successful work culture, and advocate for the business.

Once you have decided what success is and what are the most important aspects of success for your business, you can then begin to ask what will motivate your employees to act in ways that will achieve it.

It is the actions – taken individually and collectively by your employees to achieve success – that constitute engagement.

So, asking if your employees are happy, and what might make them happy, can contribute to an understanding what will motivate them to succeed. But it can only be part of the answer.

What gets employees engaged?

Today’s workforce is more diverse than ever before. We have more generations working together than in any time in history. So the first thing we need to understand is that different employees will be motivated by very different things. But we can understand what are the most important concerns for most people.

First come the hygiene issues: a fair wage, a decent office environment, health and safety. These things we learned in the nineteenth century, or at least we hope we did. These things won’t make anyone particularly satisfied or motivated. But get them wrong, and you can bet your employees will be unhappy and unmotivated.

At the heart of engagement is, well… the heart. If your employees don’t share the core values of the organisation – or if they find their work to be meaningless – you can hardly expect them to do more than the minimum required. And we know that today’s younger workers actively seek out employers and products that align with their personal values. Getting this right means getting your leadership right. The company’s leaders need to model the values and behaviours they expect from their employees.

Most employees also value a degree of autonomy. They want the freedom to make their own decisions. And this is increasingly important to a workforce with unprecedented access to information, technology, and the ability to work in diverse places and ways. Similarly, most employees want an opportunity to stretch and grow in their jobs. This can mean access to training, continuous learning, and increased responsibility. Recognition is also important. Employees want positive and negative feedback. And they want it quickly.

The working environment matters too. But this means much more than comfortable chairs and some plants. It means a workplace culture that fosters connections among colleagues. What this looks like will differ greatly for difference companies and different employees. For some companies, it may mean a pool table in the office and regular social events. Or it may mean opportunities to work in a team of like-minded individuals on projects that they are all passionate about.

Wellness is also key. This goes beyond health and safety in the workplace. It encompasses all of an employee’s health and fitness. These issues blur the lines between the workplace and your employees’ life outside work. But to keep your employees engaged and productive, you need to give them an environment that promotes health and wellness – and gives them the tools to develop and maintain healthy habits.

In the end, engagement is about the contribution that your employees make to the company, their colleagues, the culture, and your clients. Do they go the extra mile? Do you give them opportunities to do so? And do you give them the motivation?

When the company is doing well – providing meaningful, challenging, interesting, rewarding work – employees dig in and deliver results.  Both performance and engagement increase in a virtuous circle. If you want your employees to be engaged you have to give them the opportunities to be engaged.

And there’s the rub. Engagement doesn’t just drive company performance, performance drives engagement!

So how do we do it?

Communicate. You need to know what your company’s vision and values are.  You need to be able to share them in a clear and consistent way that attracts employees that relate to them and helps keep everyone aligned to the same goals.

Listen. You need to find out what matters to and what motivates your employees. You need to ask the right questions at the right time. Be prepared to act on what you hear. This is where so many companies got the implementation of employee satisfaction wrong. They asked lots of questions about things they weren’t able – or willing –  to change. Doing this raised expectations that were inevitably disappointed. The result was to create further dissatisfaction –  and disillusionment. If it is not in your gift to change then make that very clear from the beginning.

Continue. Communication needs to be constant and consistent. Things change. The economy, the company’s business performance, staff changes, and previous employee satisfaction initiatives can all work to shift the goalposts about what will motivate your employees. You wouldn’t set your business strategy once and then not check the financial performance for a whole year.

Does that mean the annual survey is dead?

Of course not. Just as you do a thorough set of audited accounts at the same time each year you should do a thorough engagement audit annually. This allows for a more complete and holistic review and lets you compare change over time. But just as you do monthly or quarterly accounts – and probably monitor cash flow even more regularly – you should do short pulse surveys or polls to keep on top of progress through the year. This can alert you to changes that need to be made quickly. And the process of the communication is part of a programme for engaging your employees. After all, engagement requires both sides to be engaged. The company – that means you –  needs to engage with the workforce in a meaningful way.

It’s a two-way street!

Engagement is not just about squeezing that last bit of discretionary effort out of your employees. Make it one-sided and today’s employees will see right through you. And the good ones will head for the door. The rest will head for social media and tell the world what kind of company you run.

Your relationship with your employees today has to be a true partnership. If you can build that partnership – based on a common set of values and goals – where everyone gets what they need to make a real commitment then your company will reap the benefits.