Employee Engagement or Employee Happiness?

Employee engagement is on everyone’s mind as the Gallup’s recently released study, the State of the American Workplace demonstrates that 70% of the American workforce is disengaged.  The Towers Watson 2012 Global Workforce Study found similar results globally, even in the face of increased efforts to cultivate employee engagement in recent years.

In spite of its apparent elusiveness, employee engagement is worth pursuing. Gallup estimated that “active disengagement costs the U.S. $450 billion to $550 billion per year”. The study also concluded:

“Organizations with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147% higher earnings per share (EPS) compared with their competition in 2011-2012. In contrast, those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower EPS compared with their competition during that same time period.”

So, it makes a lot of sense to work on increasing employee engagement and satisfaction. It’s also worth thinking about this in terms of employee happiness. Happy employees are less likely to feel excess stress at work, and their overall mood is more upbeat. According to research conducted by the Wall Street Journal and iOpener Institute, happier workers help their colleagues 33% more often than unhappy employees. Happy employees also achieve their goals 31% more often, and are 36% more motivated in their work.

While happiness does not ensure employee engagement; happy employees generate a cycle of positive reinforcement that helps sustain their level of engagement and satisfaction even when things get tough. On the other hand, an actively disengaged employee may be happy about a particular benefit or perk, yet still fail to contribute at the level of an engaged employee. And striving to keep employees happy by simply indulging them will not necessarily increase employee engagement.

So, focus first on employee engagement and satisfaction, and employee happiness will increase, but the reverse is not always the case. Perks without purpose may provide a short term happiness boost, but most employees are more motivated by meaning and a sense of connection.

Here are five things you can do to foster engagement in your workplace. Of course, once you’ve started to see some progress in engagement, bring on the catered lunches and foosball breaks!

1. Provide Meaning and Alignment

Workers crave meaning. They want to feel like they are part of something bigger than themselves—and to understand how they contribute value to the organization. Some need to feel aligned with the company’s stance on the environment or social responsibility. Others are content to be a valued team member who understands and supports the company vision and mission.  

2. Offer Opportunities for Growth, Education and Advancement

In a study completed last year, SHRM found that jobseekers in the US rank growth and professional development as their top priority. More recently, in its annual study, Career Bliss identified the 50 Happiest Companies in America and revealed much about what contributes to employee happiness and engagement. Across the thousands of employee reviews analyzed, there were two factors that younger employees in particular identified most often as key determinants of their satisfaction and happiness at work: challenge and opportunities for learning and growth. This is especially important since keeping today’s young professionals (the most mobile workers since Tinkers travelled!) engaged is a common HR preoccupation these days.

3. Make Recognition Part of Your Culture

Recognition benefits both the giver and the receiver. There is an extensive body of research supporting the value of specific, valid recognition and employee satisfaction. What is less documented is the impact that recognition has on the giver. A growing body of research, much of it produced by Adam Grant, a professor at Wharton School, shows that employees who give recognition and reward gain as much benefit as the person being recognized or rewarded. Science supports his belief with mounting evidence that expressing gratitude and recognizing others is good for our health, productivity and happiness.

5. Build Trust

One of the single biggest contributors to employee happiness is a culture of trust: feeling trusted and being able to trust the people we work with and the organizations we work for. One Harvard University study showed that trust was a key factor in creating successful, productive workplaces. Nancy Etcoff, Ph.D., lead researcher on the study, concluded: “Workplaces that provide positive environments that foster interpersonal trust and quality personal relationships create the most committed and productive employees.”

Strive for  open communication, respect, honesty, transparency, follow-through, and accountability to help build trust in your organization.

4. Be Flexible

Flexibility is one of the factors that rank high on both employee happiness (Career Bliss, Georgetown University ), and employee engagement (Gallup). The employer, who embraces flexible work hours, locations, and policies that all help reduce employee stress and support work-life balance, will reap the benefits of happier more engaged workers.


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