Why Employee Engagement Is in Decline and What to Do About It

By Gareth L Shackleton


Despite employee engagement being a theme in leadership and management for more than twenty years, engagement levels are at an all time low and falling further.

Employee engagement as a term has been around since the early 90s. Before that it was employee satisfaction and then employee commitment in the 70s and 80s. The change in leadership and management circles to “engagement” followed a recognition that it wasn’t just about the employee. Employee engagement requires a two-way commitment and inter-dependence.

Employee engagement has various definitions but usually involves commitment to the goals of the company and a willingness to go the extra mile to achieve them.

Interest in employee engagement was fuelled by studies in the nineties and early part of the 21st century showing that improving employee engagement increased customer satisfaction and loyalty, impacting directly on bottom line results and return on capital.

Around this time, Sears created an internal survey that correlated engagement with bottom line financial results to measure management effectiveness at improving engagement. Bonuses for executives were based on their success at improving engagement levels.

From research and case studies in specific companies, it is clear that a focus on employee engagement is an important driver of commercial success. It is also clear that it is possible to influence employee engagement levels positively with good leadership.

Why then, is overall employee engagement declining even though it is not a new concept in leadership?

Let’s look at four reasons.

    1. In some cases, employee engagement has become a means rather than an end. When employee engagement initiatives are introduced to improve corporate results, these initiatives often fail. Employee engagement initiatives have to be introduced with a genuine desire to improve the working environment and relationships of every employee first. It has to be about employee welfare, self-esteem and significance first and foremost. Better bottom line results make the business case for investing in engagement initiatives but they must not be the goal. Otherwise it is perceived as manipulation, even exploitation, and inevitably it fails.
    1. Employee engagement initiatives often centre around one of two things: (a) giving rewards (perks) to employees or (b) training. Neither of these work particularly well in isolation. Reward systems can offer a short-term boost to commitment. However, after a while they become normal. They can often be seen to be trivial in the scheme of things too – offering a free meal, cinema tickets or amazon vouchers may not seem very fair when the company has increased its bottom line by several hundred thousands or millions. Training doesn’t work either. Employee engagement requires consistent leadership behaviours to develop trust based on a mutual respect and a genuine concern for every employee’s welfare and development. This can’t be achieved by training. It requires creation of leadership habits based on a deep understanding of human psychology. New methodologies are appearing that address this, such as Engage & Grow’s Group Activation System.
    1. Large corporates have the leadership expertise and resources to go after and influence employee engagement. Almost two thirds of the workforce employed by private organisations is within small and medium sized businesses (SMEs). In most cases, SMEs have neither the expertise or the resources. However, having a dramatic impact on employee engagement is not complex. With an awareness of the value and a will to make changes, It is well within the ability of all employers to dramatically improve the commitment of employees to their company and their job. Methodologies like that of Engage and Grow is suitable for even the smallest of SMEs, as illustrated by their case studies.
  1. There is often a disconnect between company results and employee reward for the effort they expend. The word “ownership” is used a lot in employee engagement. The aim is often to “create an attitude of ownership in employees” – ownership of their role, of their team and of the results of the company. But a real ownership attitude will never be achieved when there is a perception that the benefit to the company is disproportionate to the effort and rewards of the individuals creating those results. In fact, this is one of the things that creates disengagement in the first place. If you need evidence that this is true, just talk to people who start their own business in competition with their previous employer. They often say they were fed up of working hard and lining the pockets of someone else. If they were going to work that hard, they may as well work for themselves and line their own pockets. The reality is often different, but that’s another story. There has to be a more equitable distribution of the rewards. But even more than that, there has to be a programme of education so that everyone knows what a more equitable distribution means in practice, otherwise misperceptions will remain of the way profits are distributed.

Over the last forty years, employee engagement has evolved as a concept from ideas of employee satisfaction in the 70s and 80s to employee commitment in the 80s and 90s. It’s interesting to speculate, what’s next. Some say “Sustainable Engagement”. Others talk about employee entanglement – whereby the development of a person’s self-image, self-worth and growth is intricately tied to the company and its achievements. But the ultimate in entanglement is to take the “attitude of ownership” to it’s literal conclusion. If you want a true ownership attitude, make your employees actual owners of the company and show them how their efforts increase the value of their shareholding.




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