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How Do You Measure Employee Engagement?

employee engagement

It’s the age-old question…How do you measure something that is, at its core, intangible? The area of Employee Engagement is often categorized as a “soft area,” or a form of positive psychology in which hard and fast measurement is impossible and unquantifiable since engagement is – at the end of the day – a feeling. As Forbes describes it, “Engagement refers to one’s emotional commitment to their organization and the organization’s goals. It leads to discretionary effort. A sales person who feels engaged will work just as hard on a Friday afternoon as she does on a Monday morning. A customer service professional who feels engaged will go the extra mile to resolve problems and complaints. An assembly line worker who feels engaged will work a little faster and is less likely to have an accident.”

However, as with most areas and metrics in business, we must find a way to measure it. After all, if you can’t measure it, then you can’t manage it. If you can’t manage it, how can you tell if you have improved or declined?

So, although it is true that employee engagement can’t be given a precise numerical value or score, we can correlate it to tried and true measurements that align with high or low employee engagement.

  1. Productivity: For certain industries, productivity can be a great measurement of employee engagement. In fact, Gallup estimates that disengaged workers cost companies approximately $500 billion per year in lost productivity.
  2. Customer Satisfaction: Particularly for service-related fields, customer satisfaction can often be attributed to the level of employee engagement. Energized employees who understand the company mission and want to achieve it are the ones who, as Forbes notes, “will go the extra mile.”
  3. Turnover Rates: For numerous companies, turnover rates are sometimes the best indicator of engagement amongst their employee base. One study found a correlation rate of 43% between employee engagement and company turnover, which turns into a costly matter when the average cost of replacing an employee is 20% of the employee’s annual salary.
  4. Absenteeism: It’s not rocket science: Disengaged employees are going to be less present at work, both mentally and physically. Gallup reports that companies with high employee engagement report 37% lower absenteeism.
  5. Overall Revenue: In the end, overall revenue is highly correlated with employee engagement since engagement is so tied to employee morale, creativity, productivity, presence, and retention.
  6. Feedback Assessments: And, of course, the best way to truly measure employee engagement is by going directly to the source through an assessment feedback process.