Business Leadership Today

The 7 Factors of Employee Engagement


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

With so many different factors influencing employee engagement, it can be a challenge to craft engagement strategies that resonate with all workers. 

However, there are certain common factors that significantly affect employees at any level of an organization, in any field, that are well-recognized drivers of engagement.

The seven factors of employee engagement are strong leadership, a caring culture, meaningful work, regular feedback (including recognition), professional growth opportunities, the autonomy to work independently, and an inclusive work environment where employees feel free to be their authentic selves. 

This article will explore the vital role these seven factors play in growing and maintaining employee engagement, how they meet employee needs, and the ways in which they can lead to a culture of reciprocity. 

Employee Experience: Planting the Seeds of Engagement

In a nutshell, employee engagement is the level of passion employees have about the work they do, the enthusiasm they bring to their work, and their emotional commitment to the organization they work for, including its mission, vision, and core values. 

An employee’s level of engagement is linked to an employee’s feelings about their work, how they are treated in the organization, whether or not they feel a sense of purpose in the work they do, and whether or not they feel that the organization is dedicated to an authentic vision. 

Engagement grows organically out of employee experience, which consists of the totality of a worker’s experience in a job, including what the worker encounters and observes over the course of their employment with an organization, starting at recruitment.

Whether in their personal or professional lives, people have certain needs that must be met to be engaged, enthusiastic, motivated, and committed. How well an organization meets its employees’ needs determines how positive the employee experience will be for them, and, therefore, also determines their level of engagement. 

Since employee engagement is inextricably linked to retention, many organizations frequently measure engagement to identify ways to improve it in an effort to reduce turnover. It also has an effect on performance and how much effort employees put into their jobs, which has a direct impact on profitability. 

When the employee experience is positive, engagement is likely to be high and turnover rates are likely to be low. 

Engagement in Crisis: Disengagement, The Great Resignation, and The New Normal

According to recent research by Gallup, the percentage of engaged workers in the U.S. dropped in 2021 for the first year in over a decade. This unfortunate trend continued into early 2022, with only 32% of full- and part-time employees engaged and 17% actively disengaged—an increase of one percentage point from the previous year.

Low engagement can have a truly devastating effect on a company’s profitability because it is tied to an employee’s performance, productivity, absences, safety on the job, retention, and customer satisfaction. It can also impact a company’s ability to innovate and improve processes, which makes it less adaptable in times of change.

Here are a few statistics that demonstrate just how much engagement can impact profits.

  • Organizations that score in the top 25% on employee experience report double the return on sales compared to organizations in the bottom quartile. 
  •  82% of employees at companies that perform well financially are “highly” or “moderately” engaged, compared to just 68% at under-performing companies.

Lower engagement and higher disengagement have played a part in “The Great Resignation” phenomenon, with workers leaving their jobs in record numbers in search of more competitive compensation, more meaningful jobs, and organizations with cultures that support more flexibility and a better work-life balance. 

Early on in this trend, the workers who were quitting were mostly younger, less-tenured employees working predominantly in the retail, food service, and healthcare industries. It is now apparent that older, more tenured employees are quitting their jobs in growing numbers. 

These employees are in higher-paying jobs in finance, tech, and other knowledge worker industries. They are seeking more meaning and flexibility in their work now, rather than the more tangible monetary benefits associated with jobs in these fields.

It is clear that many workers’ priorities have changed during the COVID-19 pandemic, and, as a result, the engagement landscape has changed. Engagement strategies going forward will need to be informed by these changes.

The Seven Factors of Engagement

While compensation will always play a pivotal role in employee engagement, it is certainly not the only factor, or even the most important factor, that motivates workers. 

We’re going to focus here on the other, less tangible benefits employees seek that give their day-to-day activities meaning and help them connect the dots between the work they do and the success of the organization.

Strong Leadership

Leadership is the cornerstone of engagement because of the central role leaders play in shaping organizational culture, which, in turn, shapes employee experience. 

According to Business Leadership Today contributor Laurie Sudbrink, “Leaders affect employee engagement the most. A leader’s ability to authentically build relationships with team members, their level of self-awareness, their sense of accountability, as well as their health and well-being, can all have a significant impact on employee engagement.”

A 25-year study by Gallup revealed that the duration of an employee’s tenure is primarily determined by the relationship they have with their direct manager. About 50-70% of an employee’s perception of their work environment is linked to the actions and behaviors of management.

We know disengaged employees can negatively impact the overall success of an organization and adversely affect the engagement of other employees, but disengaged leaders can also do much harm to an organization’s culture and overall success.

To see a real boost in employee engagement, leaders should also be engaged in leading their teams and authentically demonstrating their dedication to the organization’s core values through real, impactful actions and behaviors.

Caring Organizational Culture

Culture, like leadership, plays a prominent role in driving employee engagement. This is why having a caring culture is one of the best ways to maintain high levels of employee engagement.

Demonstrating care for employees and helping them feel that the work they are doing is essential for the success of the organization will create a positive employee experience that boosts engagement.

Businesses with strong, positive cultures have highly engaged and loyal employees who deliver excellent work and take superior care of customers. Organizations with a dysfunctional culture often drive away employees and customers.

Making employees feel valued is key to keeping them engaged. When employees don’t feel valued by upper management, they will not be as loyal to an organization that views them as expendable and easy to replace, and they will leave.

A caring organizational culture that values people over profits will provide employees with the flexibility they need to thrive and a work-life balance that is good for their overall well-being. 

Meaningful Work

Meaningful work is essential for employee engagement because it gives employees a sense of purpose, and they will feel passionate about the work they do and perform their jobs with greater enthusiasm.

When employees feel a shared sense of purpose with their co-workers and a strong commitment to an organization’s mission, vision, and values, it doesn’t just improve engagement. It improves morale, performance, trust, and overall job satisfaction.

It’s also a major driver of retention, and it plays an increasingly important role in recruitment efforts. 

According to a recent study, almost 70% of employees say they would not work for an organization without a strong purpose, 60% would take a pay cut to work at a purpose-driven company, and 90% of employees who work at organizations with a strong sense of purpose say they’re more inspired, motivated, and loyal.

Having a sense of purpose and finding meaning in their work can help employees look beyond their daily job duties and see how their work impacts the organization, their co-workers, and the community they serve. 

Leaders who recognize the contributions of employees and show them the ways in which their work is helping the organization realize its vision contribute to and encourage their employees’ sense of purpose. This helps to build strong, trusting relationships between employees and leadership.

Regular Feedback and Recognition

Good communication between employees and management is an essential component of engagement, and establishing a system of feedback in your organization is a good way to hone those communication skills.

One of the ways feedback boosts engagement is that it builds trust between leadership and employees, creating a safe, trust-based environment where employees feel that their opinions are valued and help drive decision-making.

In organizations that emphasize feedback as an important part of their culture, employees receive regular, helpful feedback from direct supervisors and are empowered and encouraged to provide meaningful feedback to co-workers and leadership. This helps both employees and management know when to course correct or where improvements can be made. 

This feedback loop lays the groundwork for a sustainable high-performance environment where employees have an improvement mindset and think about creative and innovative ways to help the company succeed.

Recognition should always be part of the feedback leaders provide to employees. Recognition is such a powerful tool for building engagement because it meets a core human need for both the employee and the manager. 

For recognition to be most effective, it should be given often, and it should be specific so employees know the work they do in their individual roles is seen and appreciated. Recognizing employees for their accomplishments shows them not only that leadership is paying attention, but that they also value the work employees do. 

Professional Growth Opportunities

Research compiled by LinkedIn has shown that employees who spend time learning on the job are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more able to take on additional responsibilities, and 21% more likely to feel confident and happy.

The perfect recipe for engagement!

These statistics indicate that employees are much more likely to be engaged in jobs with organizations that make learning and professional development part of their culture. Fostering personal growth opportunities helps employees achieve their personal goals and leads to greater satisfaction, dedication, and engagement. 

Employees need to feel that they are growing professionally and developing their skills and intellectual capabilities for engagement. Creating an atmosphere that champions learning and development helps employees grow and develop new knowledge and skills that will help them engage and excel in their jobs. 

The Autonomy to Work Independently

Employees crave autonomy. In his book Drive, Daniel Pink lists autonomy—the desire to direct our own lives—as one of the three most important motivators, along with mastery and purpose, for employees.

Autonomy has been identified as a major factor in the job-seeking habits of workers, with 42% of millennials indicating they would opt for a job that allows them to work independently on projects of their choice. It has become increasingly important for workers in remote and hybrid work environments. 

Think about it as the opposite of micromanagement. When leaders trust employees enough to give them the tools they need to work with autonomy and trust them to do their work well, it actually motivates them to perform well. 

One of the best aspects of autonomy is the trust-building potential it brings to an employee’s experience. It not only demonstrates management’s trust and belief in employees, but it also helps to build employees’ trust in management. This sort of reciprocity fuels engagement. 

Inclusive Work Environment

Inclusive work environments that foster honesty and transparency are becoming increasingly critical factors for engagement. 

In the past, people have struggled to split their time between the professional/at-work version of themselves and the personal/not-at-work version of themselves. Times have changed.

While workers are more focused than ever before on achieving a good work-life balance and definitely seek a strong line of demarcation between work time and non-work time, they also want to feel comfortable bringing their authentic selves to work.

This doesn’t mean they want to be less professional. But workers, especially those who have recently joined the workforce, are looking for opportunities with companies that value their diversity, unique qualities, and the different backgrounds, experiences, and perspectives they can bring to a team. 

Engagement and the Reciprocity Principle

One of the most amazing parts of incorporating these factors into your organization’s engagement strategies is the way it facilitates reciprocity:

  • When employees have strong leaders who respect and value them, they reciprocate that respect.
  • When employees are doing work that is meaningful, purpose-driven, and vision-centered, it inspires enthusiasm for that purpose and a dedication to helping the organization achieve that vision. 
  • When employees are regularly given feedback and recognized for their achievements, accomplishments, and contributions, they will provide management with useful feedback and recognize the accomplishments of their co-workers. 
  • When employees are offered professional development and learning opportunities and encouraged to grow, they will develop a growth mindset that is focused on helping the organization grow and will seek ways to constantly improve processes and practices that benefit the organization and make it more successful. 
  • When employees are given the tools they need to work autonomously and given the trust they need to succeed, it increases their trust in leadership.
  • When organizations ensure that the work environment they are providing for employees is both diverse and inclusive, it makes them comfortable enough in their roles within that environment to provide useful feedback and offer different perspectives that can improve innovation and problem-solving for the organization.

Because engaged employees see themselves as valued members of the organization, the time they spend at work is more impactful. Their emotional investment in the organization helps them perform well and makes the jobs they do more fulfilling, while they help make the organization more successful.

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

Others Recent Articles and Podcast Episodes

Would you like to dramatically improve employee engagement?

Get a free training video that will show you how to double the number of engaged, motivated employees in just a few months.