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How to Measure Employee Engagement Well in 8 Simple Steps

March 14, 2024

Learn how to measure employee engagement to boost productivity and organizational success.

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Table of Contents

  1. Why Measure Employee Engagement?
  2. How to Measure Employee Engagement
  3. Key Employee Engagement Metrics
  4. Employee Engagement Measurement Best Practices
  5. What Next? How to Act on Employee Engagement Insights
  6. Leverage HR Technology to Measure Employee Engagement

Maximizing your workforce’s capabilities begins with navigating the labyrinth of employee engagement.

At its center lies a pivotal question: Are your employees as invested in your organization's success as you are?

Yet, charting a course through the intricate maze of surveys and metrics to unearth this truth can be a complex endeavor. This guide serves as your compass, offering clear directions to traverse the twists and turns, allowing you to not only measure but also elevate the spirit of your workforce.

Join us as we venture through this maze, uncovering the keys to invigorate your team and unlocking your business’s full potential.

 

Key Takeaways

  • Measuring employee engagement on a regular cadence is a cornerstone of any engagement strategy. This data serves as a weathervane for steering and assessing the effectiveness of your initiatives.
  • To capture the full spectrum of employee engagement, use a combination of tactics, including tailored surveys and workforce data.
  • It’s equally as important to act on the results. Set clear goals, develop targeted action plans, and continuously monitor and adjust strategies.

Why Measure Employee Engagement?

Measuring employee engagement isn't just a nice-to-have — it's essential for any organization looking to thrive.

Low engagement costs the global economy $8.8 trillion, or 9% of global GDP.

What’s more, unengaged employees cost their company the equivalent of 18% of their annual salary.

But before you can go about improving engagement at your organization, you need to measure it. You must understand how engaged (or disengaged) your workforce is, and only then can you take more strategic and meaningful next steps to improving engagement levels.

You can measure engagement in many ways, and it’s best to take a combination approach. Here are a few strategies to get a better understanding of your workforce.

How to Measure Employee Engagement

To really get a handle on employee engagement, it’s about looking in the right places and using the right tools.

But unfortunately, there’s no one silver bullet — it’s best to use a combination of a few tactics. Better yet, blend both quantitative and qualitative methods to get the most value.  

To get you started, here are a few ways to measure engagement:

1. Engagement Surveys

Employee engagement surveys are the cornerstone of an engagement program, and one of the more common tactics for capturing your employees’ voice.

Conduct regular surveys using well-designed questionnaires to gather quantitative and qualitative data on various aspects of employee engagement. You should tailor your survey questions to address a wide range of topics, including job satisfaction, work-life balance, inclusivity, communication, and perceptions of leadership.

Conduct these types of surveys every so often and monitor results to understand the efficacy of your engagement initiatives.

Pulse Surveys: Your Quick Insight Tool

  • The bite-size version of an engagement survey is known as a pulse survey. These short and sweet inquiries are great for capturing real-time feedback on specific issues or events.
  • And because they’re usually only a handful of questions, they’re easier to administer more frequently, and track engagement over time.
Paylocity’s Employee Voice survey platform uses data-backed questions designed to tease out the most valuable insights, so you can quickly identify areas of opportunity. Paylocity’s Employee Voice survey platform uses data-backed questions designed to tease out the most valuable insights, so you can quickly identify areas of opportunity.

2. Performance Metrics

You can also understand engagement by examining the byproducts.

Monitor performance metrics such as productivity, quality of work, and if deadlines are consistently met. Typically, employees who are highly engaged also demonstrate elevated levels of performance. Delving into these performance indicators can reveal underlying levels of engagement.

However, when looking at these types of performance metrics, remember to consider the bigger picture. External factors like market trends or personal events can sway performance numbers, so they may not accurately represent engagement levels.

Key Metric: Discretionary Effort

Though hours worked might be one sign, there are many ways your employees are going above and beyond the basic requirements of their jobs.
 
Keep an eye on what’s called “discretionary effort,” the “level of effort people could give if they wanted to, but above and beyond the minimum required. That willingness is a strong indicator of engagement but must be balanced with the risk of burnout.

3. Utilization and Participation

Take a look at how much employees take advantage of what the company offers to support their professional growth, well-being, and work-life balance.

When you see high levels of participation and utilization among these types of programs, it's a good sign employees feel valued and genuinely buy into the company's vision. They're not just there for the paycheck — they're actively contributing to the culture and aiming to make a difference.

There are a variety of participation rates you can examine, but here are a few fruitful areas:

  • Recognition programs
  • Benefits enrollment
  • Culture and team-building events
  • Survey response rates
  • Social collaboration hub engagement

4. Feedback Sessions and One-On-One Interviews

Feedback doesn’t only need to come through a survey. You can also hold regular one-on-one or group sessions to encourage open dialogue. This lets employees share their thoughts, concerns, and suggestions directly with management, providing valuable qualitative insights.

The chief benefit of this strategy is that it allows you to ask follow-up questions and drill down into more detail when needed. If you’re trying to problem solve a particular engagement issue, this can be a helpful measurement tool. 

There are a few drawbacks, however.

This approach can be difficult to scale depending on the size of your workforce. And depending on who’s conducting the feedback session (and the company culture), you might not get the most candid responses.

Start with “Stay”

Starting feedback sessions can be tricky, but here's a tip: look to your top performers.

Initiate a conversation with high-performing employees to determine what they like about their role and what they'd change. The stay interview can reveal what keeps an employee engaged in their work.

Key Employee Engagement Metrics

Beyond directly assessing employee engagement, it's important to monitor a range of key workforce metrics that often signal engagement levels.

Here are a few key employee engagement metrics to keep an eye on for a more holistic overview of organizational health and employee morale.

1. Employee Net-Promoter Score (eNPS)

Employee net-promoter score is a commonly used employee engagement KPI that indicates how likely an employee is to recommend working at their organization to a family member or friend on a scale of 0-10.

Employees who are engaged are more likely to recommend working for the organization, according to Fred Reichehld, who developed this method.

2. Turnover Rate

High turnover can suggest low job satisfaction. When employees are engaged, they typically feel more connected to their work and the company, leading to higher satisfaction and lower turnover.

You can quickly calculate the employee turnover rate by dividing the number of separations by your organization’s average number of workers and multiplying by 100.

3. Successful Hires

Identifying who among your employees was a successful hire can reflect employee engagement.

There are many ways to measure whether an employee was a successful hire, including the new hire 90-day failure rate, which is the percentage of employees who leave your organization in the first 90 days.

You can also look at the average time to fill a job vacancy. This metric looks at how long it takes from job requisition to accepted offer. Not only does this number reflect how efficient your recruiting process is, but it also shows how engaged prospective employees are.

4. Internal Promotion rate

Employees who are engaged may be inclined to continue growing their skill levels, which can lead to promotions.

Your organization can find its internal promotion rate by taking the total number of internal promotions it’s rewarded, dividing it by the total number of employees, and multiplying that by 100.

5. Employee Satisfaction Index (ESI)

Employee satisfaction index is a survey that measures employee satisfaction at work.

 By conducting an ESI, your organization can better understand their everyday life and attitude to the job. ESI focuses on three questions: “How satisfied are you with your current workplace? How well does your current workplace meet your expectations? And, how close is your current workplace to the ideal one?”

Learn More: What is Employee Sentiment and How Do You Analyze It?

6. Absenteeism

High absenteeism rates could indicate a lack of motivation or low morale. It can be challenging to determine whether the employee is taking time off for a specific reason or experiencing burnout, which could indicate that they aren't engaged with their job.

Employee Engagement Measurement Best Practices

Measuring employee engagement is important, but avoiding pitfalls and ineffective methods is crucial to success. Here are some common best practices:

  1. DO: Conduct frequent surveys. Conduct employee engagement surveys regularly for more up-to-date and accurate data. Timely assessments provide a better reflection of evolving workplace dynamics.
  2. DON’T: Using a single metric. Big no-no. Engagement is multifaceted, so relying solely on a single metric, such as employee satisfaction scores, can provide a narrow and incomplete view.
  3. DO: Communicate Results: Sharing results and action plans fosters trust and accountability. If you fail to communicate survey results and insights to employees, it can create a perception of secrecy and undermine transparency.
  4. DON’T: Ignore Qualitative Feedback. Focusing just on quantitative data and neglecting qualitative feedback can overlook important employee experiences and sentiments.
  5. DO: Consider the Employee Experience. Employee engagement is more than just “job satisfaction.” Measure engagement through the lens of the overall employee experience, including career development, workplace culture, and work-life balance, to get a complete picture.
  6. DON’T: Ignore External Factors. Failing to account for external factors such as industry trends, economic conditions, or global events can lead to misinterpretation of engagement trends.

What Next? How to Act on Employee Engagement Insights

So, the data is in. What now?

After measuring employee engagement, it’s crucial to take strategic actions based on your insights. Here's a step-by-step guide on what to do:

1. Analyze the Results

Thoroughly analyze the survey or assessment results. Identify patterns, trends, and areas of strength or concern, remembering to pay attention to quantitative and qualitative data.

2. Set Clear Goals

Establish clear and measurable goals for improvement and define key performance indicators (KPIs) to track progress over time. Having specific goals always provides a framework for success.

3. Develop Action Plans

The next step is to create specific and targeted action plans based on the identified areas of improvement. Collaborate with relevant teams, managers, and employees to design initiatives that address the root causes of disengagement.

Paylocity’s Employee Voice tool automatically generates meaningful next steps based on best-practice action items. Paylocity’s Employee Voice tool automatically generates meaningful next steps based on best-practice action items.

4. Communicate Your Findings

Share the results transparently with employees, as this fosters trust and demonstrates a commitment to improvement. Communicate key findings, trends, and any action plans that'll be implemented.

5. Involve Your Employees

Get your employees involved in developing and implementing solutions. Ask them for their input, feedback, and suggestions to ensure that initiatives resonate with their needs and concerns.

6. Provide Resources and Support

Allocate necessary resources, whether financial, time, or personnel, to support the implementation of engagement initiatives. You must ensure your workforce has the tools and support needed for success.

7. Track Progress

You can generate the most scintillating insights and the most brilliant action plan, but if there’s no follow-through, it’s all for naught. Clearly communicate specific next steps to the necessary parties. Maintain accountability by tracking progress and holding regular engagement meetings, if need be.

8. Continuously Monitor and Adjust

Fact: fostering employee engagement is an ongoing process. You must continuously monitor engagement levels, gather feedback, and adjust strategies as the organization evolves.

Remember that adaptability is key to maintaining a positive workplace culture.

9. Repeat Surveys

Repeat engagement surveys on a regular cadence to assess progress and identify any new areas of concern. Continuous employee measurement ensures that the organization remains responsive to worker needs and evolving dynamics.

Leverage HR Technology to Measure Employee Engagement

Deciphering the enigma of employee engagement can feel like navigating a labyrinth of variables, metrics, and survey data.

Thankfully, Paylocity’s Employee Voice tool helps slice through complexity with agile feedback systems and sharp analytics.

Employee Voice enables HR leaders and managers to listen, analyze, and respond to employee ideas, feedback, and concerns. The tool keeps your finger on the pulse of employee engagement and retention with features like:

  • Automatic and Scalable Employee Feedback. Based on key employee journey milestones, automatically send out best-practice pulse and engagement surveys.
  • Robust Data Visualization. Leverage dashboards and heatmaps to better understand what bubbles up in feedback and filter for deeper insights.
  • Generate Meaningful Insights. Employee Voice insights curate customizable best-practice action plans that can be tracked directly within the platform.

Want to learn more? Request a demo of Paylocity today!

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Capture Your Employees' Voices

Your employees want to be a part of creating your company's culture. Make sure they're heard through engaging surveys. Using our questionnaire tool, you can gather invaluable feedback from your entire workforce - remote, hybrid, in-office, contractors, and more. Get the insights you need to make improvements, anticipate any problems, drive strategic decisions, and keep your employees engaged.

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