What is employee engagement and why is it important?

Written by

Dan Gates


April 19, 2021

Organisations will often proclaim that their employees are dedicated and engaged. However, the reality is that the word ‘engagement’ has been used in so many different contexts its meaning has become arguably diluted.

Employee engagement is more than a mindset, it is an approach with measurable criteria and benefits. By understanding exactly what employee engagement is, leaders will be able to realise its many benefits across their entire organisation.

What is employee engagement? 

Employee engagement takes many forms, but broadly speaking it involves creating a workforce where every employee feels part of something bigger. By understanding their unique purpose in an organisation, employees feel committed to maximising the value of their role.

When an employee is engaged, they feel as though they are actively contributing to their organisation’s long term vision. They believe in what they are trying to achieve and are aligned with their company’s values. Engaged employees are committed to their company’s ethos, making them excellent brand advocates and ambassadors.

Engaged employees also relish the opportunity to participate in new projects and learn new skills. This means that they welcome constructive feedback, as it will allow them to offer even more to their organisation.

The above definition is just a glimpse into what constitutes a truly engaged employee. Many researchers and specialists have worked to create cohesive and measurable criteria for employee engagement. For example, a group of occupational psychologists at Utrecht University defined employee engagement using three main characteristics:

  • Vigour: An engaged employee approaches tasks with energy, is motivated to put in as much effort as possible and is resilient in the face of challenges and obstacles.

  • Dedication: An engaged employee wants to see all tasks through to completion, takes pride in their work and is inspired by their company’s core values.

  • Absorption: An engaged employee finds it easy to concentrate because they are intrinsically motivated to complete tasks to the best of their ability.

What is the difference between employee engagement and motivation? 

It’s understandable how the differences between employee engagement and motivation can be elided. After all, these two approaches are often implemented as a way to fix problems such as increased turnover and low workplace morale.

A term commonly used to distinguish employee engagement from employee motivation is ‘discretionary effort’ - which is essentially corporate-speak for going the extra mile! When an employee is motivated, they usually put the work in because of an incentive. Obvious examples include their monthly salary and the promise of a bonus or commission. In comparison, an engaged employee is self-motivated. They are inspired by what their organisation is trying to achieve, and will put their best foot forward regardless of any external promise or reward.

Here are some common workplace scenarios that can help you distinguish between a motivated and an engaged employee:

  • A motivated employee will effectively carry out their day-to-day tasks, but an engaged employee may make proactive recommendations as to how to improve key processes.

  • A motivated employee will likely receive a positive performance appraisal, whereas an engaged employee will request an evaluation to identify where they can improve.

  • A motivated employee may accept a promotion purely for an increased salary. An engaged employee, however, wants to take an active role in helping their organisation succeed and grow.

Why is employee engagement important to a company’s success?

It takes a village to grow a company, and more and more organisations are realising the importance of workplace culture and employee engagement. Research conducted by Harvard Business Review states that out of 568 companies, 71% of managers believed employee engagement was one of the most important factors in organisational success.

The benefits of an engaged workforce can be found in pretty much every aspect of an organisation. Here are just a few examples as to how employee engagement can make a difference between a company succeeding and stagnating:

Staff Turnover

One of the biggest reasons for staff turnover is employees feeling uninspired and unmotivated. Companies with poor retention risk racking up significant costs. These can range from recruitment fees to indirect costs such as dips in productivity and new skills gaps due to the departure of an experienced team member.

Leaders cannot always expect their best and brightest to stick around forever. However, employees are much less likely to seek out new pastures if they are truly motivated by what their company is trying to achieve.


Putting it simply, disengaged employees are significantly more likely to put in the bare minimum. In comparison, companies with higher levels of employee engagement report increases in productivity of up to 22%.

As previously mentioned, engaged employees are also much more likely to seek out opportunities for upskilling and improvement. This means there is potential for managers to gain a compelling ROI from employee engagement initiatives such as training and development, as well as reward and recognition schemes.

Talent Acquisition

Many engaged employees will become an ambassador for their organisation. This can include recommending friends and peers for job vacancies, writing positive reviews on websites such as Glassdoor, or becoming a representative for their organisation on LinkedIn or Twitter. All of these things will reflect well on a company’s employer value proposition (EVP).

Talented people will often have many organisations vying for their attention. And with remote working becoming the norm, candidates now have more and more options. Therefore, when applying for a job they will be looking not just at what the role entails, but the workplace culture as a whole. A 2017 survey conducted by the Society for Human Resources Management (SHRM) found that company culture was the number one determining factor in a candidate picking one job over another.

How can managers ensure their employees are engaged?

Throughout this article, we have referred to the traits and actions of engaged employees. This is not to suggest, however, that the onus should be completely on them when it comes to creating a positive workplace culture. After all, it is managers and company directors who are responsible for empowering and inspiring their team. Here are a few examples of things managers can do to keep their employees motivated and engaged.

Give them the tools and resources they need to succeed

Employees want technology that helps them work to the best of their ability. This is especially true in remote work environments; in the absence of a shared workspace, team members must be able to effectively communicate and collaborate.

Ultimately, cutting corners on workplace resources is a false economy. A 2019 report compiled by Insight found that UK officers waste 1.8b working hours each year due to outdated technology. By providing tools that help employees maximise their potential, managers are sending a message to their team that they are worth investing in.

Provide regular training and upskilling opportunities

Identifying and filling skills gaps is critical to successful management. Regular training has a multitude of benefits for staff performance and productivity. However, it’s also an important part of keeping employees engaged.

When people are dedicated to their work, they welcome any opportunity to improve and learn new skills. This should also reduce the risk of staff finding their work repetitive or unchallenging. Companies should encourage their employees to hold their own open learning sessions. After all, staff development needn’t be a one-way process, and many team members are sure to jump at the chance to share their knowledge and expertise with their colleagues.

Create a healthy work-life balance

This is arguably one of the most important tips for managers looking to engage their employees. When an employee regularly goes above and beyond for their organisation, this doesn’t mean that they should be milked for all they’re worth. 

Employees are at their best when they know that their managers aren’t just invested in their professional success, but also their personal wellbeing. So while managers should applaud hard work and initiative, they should also ensure that people aren’t under too much pressure. When an employee leaves their work at the door, they’ll be back the next day ready to give it their all.

At Totem, we are passionate about creating technology that helps employees remain connected. We also understand that connection is about more than shared responsibilities and goals, it’s about people being invested in the success and wellbeing of their peers.

employee engagement platform helps teams remain connected, engaged and motivated, whilst also giving managers an in-depth insight into their organisational culture. To learn more about the Totem platform, request a demo today.