Why does employee engagement make good business sense?

Marks and Spencer’s HR Director needs no convincing about the benefits of employee engagement. Speaking at the end of last year, she said: “If the 25% of M&S stores with the lowest engagement scores performed as well in sales terms as the top 25%, M&S would increase its sales by £104 million a year.” This may not be surprising since evidence shows that engaged employees act as advocates for the organisation and, in the case of M&S and others, this contributes to customer satisfaction and business success.

So what exactly is employee engagement? And how do you create a work environment in which your staff want to go the extra mile? 

What exactly do we mean by employee engagement?

The CIPD defines employee engagement as “a combination of commitment to the organisation and its values and a willingness to help out colleagues… It goes beyond job satisfaction and is not simply motivation. Engagement is something the employee has to offer: it cannot be ‘required’ as part of the employment contract.”

How can organisations engage employees?

Because engagement is discretionary – that is, it’s something that people choose to give (or withhold) – building an engaged workforce depends on creating the conditions under which employees will want to give their best.

There is no magic formula for securing staff engagement. But workplaces that have high levels of engagement will do some or all of the following:

  • provide opportunities for staff to feed views upwards
  • keep staff well-informed about what is happening in the organisation
  • offer opportunities for professional and personal development
  • have managers who demonstrate their commitment to the organisation
  • promote communication and visibility in senior leadership
  • enable staff to exercise choice in how they carry out work
  • create a work environment in which people feel able to give their best
  • have fair and just management processes for dealing with problems
  • demonstrate care and concern for employees’ well-being

What part does reward play in engagement?

Reward can play an important part in creating an environment in which employee engagement can flourish. Trends from global engagement surveys show that employees want to understand how their contribution makes a difference to the organisation’s success. While this relies on effective people strategies that are aligned to business goals, where does reward fit into this equation? It is central to practices such as performance management; career development and the role of line managers, all of which influence the levels of employee engagement.

By its very nature, an effective engagement strategy will take account of the tangible and the intangible aspects of reward. Take fair pay, for example. Senior management may believe that your pay structure is fair and transparent. But how do your staff perceive it? The issue here may not be how much an individual is paid, but how they perceive their remuneration relative to what others receive.

Identifying factors that really matter to staff in your organisation is the first step towards engaging them more fully. They can also play an important role to help minimise the risk of ‘say-do’ gaps that undermine motivation and engagement.

Engaging for Success: enhancing performance through employee engagement, this government report is packed with useful information and case studies. You can also find more suggestions in our tips section .

And if we can help you with any aspect of creating or refining your engagement programme, do get in touch






This entry was posted in News, Newsletter July 2012.