Description
Relative measure of employees’ engagement at work.
Formula
Survey results.
Interpretation
Organisations typically measure employee engagement using survey results. Each survey will likely have a different set of questions or methodologies for measuring employee engagement.
The Employee Engagement Index measures employees’ engagement with their jobs or day-to-day work. It is based on survey questions that assess factors such as the effort and enthusiasm they put into their daily activities. It is designed to measure the extent to which employees contribute their discretionary effort to the firm.
Employee engagement is thus distinct from employee retention, which measures intent to leave and job search behaviour. This measure is also distinct from employee commitment, which measures attachment to the firm and views of the firm as a great place work.
Engagement is influenced by employees’ perceived offer fit and directly impacts their likelihood to stay with or leave the firm. Thus, declining Employee Engagement Index results are likely to drive eventual turnover, especially if employees perceive a disconnect between the organisation’s employment offer and their own needs.
Organisations can study undesirable results further to understand whether lack of engagement is driven by issues with reward systems, expectation setting, personnel management, cultural environment or other aspects of employment.
Survey results can often be difficult to interpret if they are presented as question-by-question detail without aggregated indices. An index measure such as Employee Engagement Index can provide a more strategic view of one major aspect of employee perceptions.
Most employers find that there is no one overall ‘satisfaction’ figure that can take the pulse of the workforce in a way that is actionable by the organisation. Rather, the organisation needs a collection of these aggregations or indices to grasp a holistic perspective of employee opinions and take action to improve the weakest areas.
Data Sourcing
Organisations typically source data for this measure from the responses to one or more questions from employee surveys.
Analysis
Where possible from data sets, this measure can be analysed by a wide variety of dimensions, including demographic, structural, geographic and others. Such analysis is necessary if the employer wishes to make decisions or take action to better understand and improve the engagement of low result employee groups.
Note, however, that analysis by employee characteristics is only possible when those fields are captured within the survey itself or when an individual’s responses can be linked back to characteristics in other data sources through an employee identifier.
Limitations
As with all survey-related metrics, the value provided by this measure depends heavily on the effectiveness of survey design and delivery in accurately reporting employees’ opinions. Additionally, all survey measures represent employee perceptions at a point in time and can reflect temporal events (e.g. a recent unsuccessful project).
Engagement is but one aspect of the employee’s relationship with and opinions about the organisation. Commitment, likelihood of retention, perceived market opportunity, offer fit and perceived manager quality are also important dimensions not represented by this measure.
Targets
Targets for this measure will depend on the scale used for the index or survey question responses. Targets based on benchmark groups will only apply if other organisations use sufficiently comparable survey questions and survey methodology. Organisations would aim for as high a level of employee engagement as is reasonably achievable given the organisational context.