10 Employee Engagement Metrics to Track at Your Organization
Employee engagement metrics are increasing in importance as ways of working become more complex and remote. These metrics are a vital indicator of employees’ level of connectedness and motivation. It goes without saying, but an engaged employee is more productive, contributes towards the company vision more purposefully, and has higher levels of commitment.
Employee engagement is also a key driver of your organization’s performance. So what employee engagement metrics should your track to create a motivated, engaged workforce?
Contents
What are employee engagement metrics?
How do you measure employee engagement?
1. Voluntary employee turnover rate
2. Employee retention rate
3. Absenteeism
4. Employee Net Promoter Score (eNPS)
5. Employee satisfaction
6. Employee performance
7. Glassdoor.com rating
8. ROI on employee engagement
9. Customer happiness
10. UWES & Gallup Scales
What are employee engagement metrics?
Employee engagement is the extent to which employees feel a passionate connection to the organization, are committed to their work, and put in the extra effort. Employee engagement metrics, thus, indirectly or directly measure how engaged your employees are.
Based on your measurements, you’re able to understand the state of employee engagement at your organization, take action where necessary, and design interventions to improve employee engagement across your company.
How do you measure employee engagement?
There are some things that are easily quantifiable, such as how many miles you run on a daily basis or how many glasses of water you drink per day. Measuring employee engagement is not that straightforward, as it is a combination of motivation, happiness, satisfaction, and commitment, which are not as easy to measure.
Engagement, after all, is a complex topic. For example, you can be highly committed to your work but also be burnt out. You can be happy with your job but not receive feedback from your peers and manager.
There is no single employee engagement metric that tells you everything you need to know about employee engagement. A good dashboard will include a handful of metrics that help you learn about your employees, inform your decisions, and help you to have meaningful conversations with employees. Let’s take a look at some of those metrics below:
1. Voluntary employee turnover rate
Highly engaged employees are less likely to voluntarily leave – and this reflects in your voluntary employee turnover rate. Turnover is one of the highest costs for any organization, and a lower turnover leads to less disruption, greater productivity, and more cohesion. The more satisfied an employee is, the less likely they are to resign.
When employees are supported, have good relationships, are being developed, and feel challenged in their work, they are likely to have a longer tenure with the organization. To calculate employee turnover, use the below formula:
You can access this report by SHRM to gain some industry benchmarks of what a good turnover rate looks like, depending on your industry and role.
2. Employee retention rate
Similar to turnover rate, employee retention looks at people who stay at your organization, which indicates their engagement. To calculate employee retention, use the formula below:
A good employee retention rate cuts down on the costs of onboarding a new employee. It also increases productivity – the longer someone is with an organization, the better their understanding of internal processes. This allows employees to do things faster and with greater accuracy.
Finally, a good retention rate will enable you to build good teams and a solid organizational culture while developing the same group of people.
3. Absenteeism
High employee absenteeism might indicate issues with employee engagement. Measuring the absenteeism rate helps you keep track of this. Workplace absenteeism is an indicator of many things, such as poor working conditions, poor governance, bad leadership, or a lack of work-life balance. It can also be an indicator of employee satisfaction – as a high absenteeism rate correlates with low employee satisfaction.
Absenteeism is a behavior that can also have a severe knock-on effect. A higher absenteeism rate results in a greater workload for employees, which, in turn, causes more stress and job dissatisfaction rate as a result. To calculate employee absenteeism rate, use the below formula:
Different countries have various regulations for sick leave and how absenteeism is viewed, so it is essential to consider this when calculating absenteeism.
4. Employee Net Promoter Score (eNPS)
Employee Net Promoter Score (eNPS) is one of the most well-known HR metrics to measure employee engagement. Organizations often measure it through an employee engagement survey.
This metric is measured by the question “On a scale from 1-10, how likely are you to recommend this organization as a place to work?” or “Based on your experience, how likely are you to recommend our organization to a friend or colleague?” Based on the responses, you can break it down into detractors, passives, and promoters, for example:
- Promoters – Employees that respond either 9 or 10, which is an indication that an employee is satisfied.
- Passives – A score between 7 and 8 indicates the employee is neither happy nor unhappy but feels neutral. They won’t recommend the company to a friend, but they won’t bad-mouth them either.
- Detractors – Any employee that gives a score below 6, which indicates that the employee is not satisfied.
To calculate your eNPS, the formula is:
Qualtrics provides a clear benchmark of what a good eNPS is.
5. Employee satisfaction
While there is a clear distinction between employee satisfaction and engagement, they are intertwined, and both can be measured through similar metrics.
Employee satisfaction takes into consideration external factors, such as working conditions, benefits, salary.
On the other hand, employee engagement looks at things such as how an employee is intrinsically motivated and whether they buy into the company vision. One of the easiest ways to measure employee satisfaction is through a simple survey, which contains a combination of open-ended and closed-ended questions. Some questions to include in your employee satisfaction survey include:
- Do you feel valued in your role?
- Do you feel that your job is allowing you to use your skills?
- Do you have a good relationship with your manager?
- Do you see a career path to advance your career within the organization?
- Do you feel the organization prioritizes your wellbeing?
Structure the questions in a way that you can analyze them under categories to make sense of the data. This requires each question to have a theme, such as employee wellbeing, career development, leadership, remuneration. Categorizing the questions helps make sense of a large number of responses during the post-survey analysis.
6. Employee performance
Again, highly engaged employees are likely to perform well in their jobs, so your employee performance metrics are also relevant to understanding employee engagement. We can generally divide employee performance metrics into four categories:
- Work quality metrics – Such as number of errors, net promoter score, or 360-degree feedback.
- Work quantity metrics – Such as number of sales, number of units produced, handling time
- Work efficiency metrics – Balancing the qualitative and quantitative employee performance metrics
- Organizational performance metrics – Revenue per employee, human capital ROI
An analysis of work performance vs. employee engagement would be a clear indicator that the two are highly correlated. Improving engagement would lead to an uplift in performance, and vice versa.
7. Glassdoor.com rating
Employee engagement also has a significant impact on employer branding. Namely, what people say about you online tells a lot about how they feel about working for you. Before an employee is likely to interview with an organization, the first thing they are likely to do is to ‘Google’ them. One of the most popular employer review sites that always appears is Glassdoor, which has established itself as a leading authority on reviewing workplace satisfaction and making that information publicly available. Therefore, focusing on employee satisfaction is not only an internal priority but also affects an organization’s ability to attract talent externally.
Ratings on Glassdoor are based on employee feedback, on a 5-point scale:
- 0.00 – 1.50 Employees are “Very Dissatisfied”
- 1.51 – 2.50 Employees are “Dissatisfied”
- 2.51 – 3.50 Employees say it’s “Okay”
- 3.51 – 4.00 Employees are “Satisfied”
- 4.01 – 5.00 Employees are “Very Satisfied”
Glassdoor also uses an algorithm to emphasize recent reviews to give them more weight. This is to give viewers the most up-to-date satisfaction score at the company. Former employees also post their comments about what it is or were like to work there. Poor employee satisfaction will reflect in both the quantitative and qualitative data shown on Glassdoor.
Typically, the rating you see on a company profile is the overall rating of all approved reviews that the company has ever received after applying our proprietary algorithm, which among other factors, weights recent reviews more heavily than older ones. It usually takes seven business days for a rating to update after an employee leaves a review.
8. ROI on employee engagement
It’s also important to understand the ROI of high employee engagement. After all, more engaged employees are more productive, and therefore have a higher ROI. This is not just ‘hearsay.’
BestBuy, for example, was able to precisely identify the value of its highest engaged employees and the impact on operating income. BestBuy found that an increase of 0.1% in employee engagement results in more than $100,000 in the particular store’s annual operating income. Studies by Gallup have also found that organizations that prioritize employee engagement can experience a 20% improvement in sales.
9. Customer happiness
A low employee engagement rate often causes low customer satisfaction, and the other way around. Put yourself in any scenario when you’re dealing with client or customer services, and your satisfaction level when the person you’re dealing with is calm, friendly, and goes that extra mile.
An Aberdeen Research report states, “Customer experiences don’t happen in a vacuum. They are the result of employee activities. Businesses that understand the importance of employee engagement and manage it through a formal program to align to their customer experience goals achieve far superior results”.
Of course, this is a metric that needs to take into consideration other employee engagement metrics. Oftentimes, customers can be happy, but employees can be burnt out, so it’s important to strike a balance.
10. UWES & Gallup Scales
There are also known employee engagement scales that you can use. The two most well-known and tested are the UWES or GALLUP scales. Both are very well tested. For both scales, higher scores are related to superior business outcomes.
For a full comparison between the two, together with two other methods, check this article on employee engagement measures.
Over to you
Engaged employees are motivated, productive people who truly bring out the best in their organizations. Tracking the engagement levels through employee engagement metrics will help you spot and resolve issues early on and boost the engagement of your employees.
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