Employee engagement: Improving retention and performance

Employee engagement is an often discussed topic within the Human Resources fraternity, and with good reason.

The research has been clear for decades that employee engagement drives both higher levels of performance and retention of staff.

For example, research by the Corporate Leadership Council in 2004 (Corporate Executive Board) revealed that engaged employees perform 20% better and are 87% less likely to leave the organisation. Research in 2013 by Dale Carnegie Training (Dale Carnegie Training) indicated that 69% of disengaged employees would leave their current job for just a 5% pay increase. Further research by AON (Aon) in 2013 showed that employee engagement is a leading indicator of company growth; second only to economic forces.

Many industries suffer from low retention rates. For example, hospitality (63%), mining (66%), retail (77%), and call centres (63%). My observations are that at least a large minority of organisations accept these retention rates as being what they have to deal with and that there is little that they can do to have an impact on retention rates, other than to offer salary rewards.

Nothing could be further from the truth.

Many organisations try to drive performance through the payment of bonuses.

They rarely work over the long term.

So what is it that we need to do to improve engagement, to drive improvements in retention and performance?

Research by the Corporate Leadership Council indicates that both rational commitment and emotional commitment are required to drive increased intention to stay, and discretionary effort. Further, the research indicates that the rational and emotional commitment is delivered through four focal points:

  • The organisation
  • Teams
  • Direct managers
  • Day-to-day work.

In my experience, the actions to create the environment where the four focal points deliver the desired rational and emotional commitment are reasonably simple to describe, but seemingly difficult to execute.

The organisation

Employees immediately feel engaged when they can see an alignment between what they are passionate about and what the organisation seeks to achieve.

To align people with the organisation’s view of its future requires two prerequisites:

  • The organisation has a clear view of its future, which is communicated often and clearly with no ambiguity in the way it is communicated by different members of the leadership team, and by the way leaders act. Often, this is done through vision, mission and strategy;
  • That individuals have a clear view of what they want to achieve in their life and who they want to be. This is often something that individuals find difficult to articulate.

If you have managers who are empathetic with regard to the organisation’s future and that of their people, then you will indeed be fortunate. My observation is that managers too need help to align their future with the organisation’s future. It is worth the cost to run workshops across the organisation to facilitate alignment whenever major changes in strategy occur. To generate true alignment takes effort and insight into how people behave. If you do not have those skills “in-house”, get professionals to help design workshops and ongoing communication to gain and maintain alignment.


Employees working in a team culture are engaged with the team. As long as the team is aligned with the organisation, they will be engaged with the organisation, too.

Weekly team drinks at the pub, espoused “common values” and overusing the word “team” in emails does not create a team.

Teams form when they coalesce around a shared goal.

Leaders are responsible for creating the environment in which teams are able to form. They can do this by means including, but not limited to:

  • Being clear about the goal of the department and cascading the team goals from that goal;
  • Forming project groups with high degrees of autonomy;
  • Recruiting people who have mastery over their role and healthy respect for differences in capability;
  • Working on improving the emotional intelligence of people;
  • Clearing obstacles to clear communication;
  • Rewarding team behaviours.

Direct managers

Direct managers can create a sense of loyalty in employees by tapping into what motivates people. Whist what motivates people changes from organisation to organisation; there are a few elements which seem to always be required:

  • Being direct in what is expected of people, consistently promoting the cause of the organisation and encouraging others to get on board;
  • Recognising and addressing the personal and emotional elements of changes being undertaken by the organisation, including their own emotions and reactions;
  • Taking action when necessary to keep things rolling in the organisation and alternatively knowing when and how to slow the pace down to allow time and space for people to cope and adapt;
  • Making the difficult decisions about issues and people with little hesitation or second-guessing;
  • Taking others’ perspective into account when making decisions and taking action;
  • Being optimistic;
  • Being comfortable with allowing others to do their part of a task or project;
  • Willingness to learn and try new things.

Day-to-day work

People who are motivated by their day-to-day work are more than likely to be engaged with the organisation and making discretionary effort the norm.

In my experience working with or in organisations, there is nothing that motivates people in their day-to-day work more than clearly understanding their purpose and believing that they have the capacity and capability to do the work, the authority necessary and the ready access to information to make any decisions required in executing their role.

Purpose comes from being clear about the accountabilities and responsibilities of a role. That comes in two parts. In general terms, it comes from the job description and is supplemented by the performance and development plans for the year.

Capability comes from having the right attitude, skills and knowledge to undertake the role. Most people do not have the full requirements of attitude, skills and knowledge for their role.Therefore, what is needed to maximise the feeling of capability is coaching, where required, and a plan for personal development.

Ready access to information required to make decisions requires good processes and procedures, and systems to deliver the information at the point of need.


Aon. (n.d.). Retrieved November 10th, 2013, from Aon: Risk, Reinsurance, Human Resources

Corporate Executive Board. (n.d.). St Cloud State University. Retrieved November 16th, 2013, from http://www.stcloudstate.edu/humanresources

Dale Carnegie Training. (n.d.). Retrieved November 16th , 2013, from Business Wire

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