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How to Measure Employee Engagement

We detail how to develop an employee engagement measurement strategy and the main considerations...

Rodrigo Vázquez Mellado
HR and B2B software analyst and advisor, tech writer and editor, former conversational designer
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Employee engagement has been increasingly linked to positive business outcomes. It might come as no surprise, but a study from the American Psychological Association found that employee engagement is directly tied to job satisfaction, a healthy workplace, lower absenteeism, and higher retention. Of course, all this has a direct impact on the organization’s profitability. 

Now, while the importance of good employee engagement is hardly ever questioned, knowing how to measure employee engagement effectively is another matter. As this article will show, there are numerous ways to go about it. Finding the right action plan is largely a question of your specific goals, your organization’s characteristics, and even your employee’s personality traits. 

Below, we’ll detail how to develop an employee engagement measurement strategy and the main considerations you need to take into account in order to be successful at it. We’ll show you how to avoid pitfalls like focusing on the wrong methods, and how to account for things like employee personality, company and team culture, and listening strategies. 

In This Article

In case you’re looking for an employee engagement solution, complement this reading with our roundup of the best employee engagement solutions.

Step 1: Define Employee Engagement Success

As soon as they think about measuring employee engagement, many companies come up with a survey, get employees to fill it out, and then shelve it. They might get stuck because they don’t know what to do next, and they don’t know because they never defined what they hoped to achieve from the survey. 

Of course, there are many other ways to measure how engaged your workers are apart from a survey, but the same pitfall can hold true for all of them. 

So, before you design an employee engagement strategy, first define the impact you expect from the initiative. It’s like telling a story by stating the ending and then explaining how it got there from the beginning.

What Is Employee Engagement for Us?

To define this expected impact, come up with a clear picture of what employee engagement looks like at the organization. Coursera defines employee engagement as “the emotional commitment and involvement an employee has toward their organization and its goals.”

Does this definition ring true for you? If so, what does that emotional commitment look like? What do your employees look and act like at their most engaged? Of course this varies a lot depending on your industry and type of business, but it could be the level of absenteeism, whether people show up on time to meetings, whether people tend to take on more responsibilities than they’re required, if they show initiative and propose new projects or ideas, etc.

To start shaping this, you can think of desired outcomes when designing a tool like a pulse survey. These desired outcomes can be phrases, usually answers to open-ended questions, that help you gain insight into how engaged a person is with the organization, which can also be used for the actual surveys or interviews. For example: 

  • “I feel comfortable voicing my opinions and sharing my ideas.” 
  • “Our company culture resonates with who I am.” 
  • “The organization’s mission is compatible with my goals as a person”. 
  • “I’d recommend this company to a friend or family member.” 

These are just examples that can serve to get you started. In order to find the outcomes that will work for you, let’s move on to step 2: 

Employee working with engagement software

Step 2: Identify What Your Employees Care About

Through an initial survey and 1:1 conversations, you can find out what engagement means to each of your individual team members and discover the key topics that your definition of engagement will be based on.

These topics or themes could be work-life balance, workplace culture, teamwork, career development opportunities, value and recognition, communication, trust in leadership and colleagues, etc.

Once you have a set of topics that define engagement at your organization, next is to determine what to measure within them. Are you going to measure them individually? Company-wide? Or perhaps across groups and teams? Also look at vertical and horizontal relationships.

Pitfall Alert: Looking at Employee Engagement Solely on an Individual or Group Basis

A thing to avoid is to look at employee engagement only at the individual level, since a lot of it can boil down to personality. Research from the Journal of Organizational Behavior suggested that the degree to which people become engaged with their jobs is largely determined by their character traits. 

In a nutshell, personality traits like optimism and extroversion could account for almost 50% of the variability in an employee’s work engagement. This means that high engagement at the individual level is not necessarily an indicator of a healthy workplace, since proactive extroverts, for instance, are much more likely to be resilient to bad management or cultural issues. 

On the flip side, creative individuals tend to be more cynical, skeptical, and harder to please than others. While this might not be great news for your group engagement levels, this is where the best employee feedback may come—the type of feedback that lets you identify cultural issues or questionable leadership styles and do something to fix them. 

Hence, it’s tricky to look at employee engagement levels solely on an individual or group level. A comprehensive strategy should look at both in order to come up with a company-wide view of the employee experience that is accurate and reliable. 

Focus Scenery

Step 3: Choose Your Methods 

Now that we’ve established what employee engagement means at your company, what themes matter when defining this, and what you’ll be measuring, it’s time to talk about the technical aspect. There are several approaches to measuring engagement levels at work. Here are the main ones to consider: 

  • The annual employee engagement survey: While you may need to survey more often, this is one of the tried-and-tested methods of gauging employee engagement. The annual survey is good for providing a broader snapshot of how the workforce is feeling and then comparing that year by year.
  • Pulse surveys: These surveys, typically deployed electronically, should have fewer but more relevant questions. They also don’t have to be taken at a certain frequency, as long as it’s more than once a year. That means you can alter them as you go depending on what’s more important, which is almost like having an asynchronous conversation between management and employees.
  • Lifecycle surveys: These surveys are done at the individual level at key stages of the employee lifecycle. Companies typically perform them when the employee joins, when they’re about to exit, and somewhere in the middle, like after certain milestones in their progress. There are several types of these, like training feedback, exit interviews, or onboarding surveys, all of which can give you a glimpse of a person’s engagement.
  • 1:1 meetings: Private talks with managers or key colleagues can be an excellent way of knowing how engaged an employee is with their work. It’s also where insights on qualitative data are gathered best.
  • Goal tracking: Naturally, an indicator of engagement is how people are doing in relation to their goals and OKRs. This has to be studied carefully, however. Not hitting the marks often enough might be a signal of problems that are deeper than individual engagement, but that is precisely why it’s worth looking into.
  • People analytics: These days, if you’re using software to perform and keep track of work and HR processes, you can definitely pull significant data from that. HR teams can use analytics to find trends in their data and understand employee engagement on a deeper level. For instance, higher turnover from a certain department could signal an engagement problem that’s not present in the rest of the company, so it should be addressed accordingly.
  • Open door policy: Lastly, as much as technology, surveys, and scheduled meetings can help, simply having an environment where employees feel comfortable reaching out and talking about their experience is paramount. Often, your main source of new ideas on how to improve employee engagement is the workers themselves, and that shouldn’t be tied solely to a formal process. 

Of course, these are only the main methods for measuring the effectiveness of an employee engagement program. You could also consider a dedicated feedback channel, an ideas box, or certain times within town hall or smaller group meetings. The trick is to mix and match between them, stay alert for new ideas, and even try your own. There’s no surefire method here, but what is sure is that you’ll need to think of KPIs, which is what we’ll cover in the next section. 

A final word here, however, is that you shouldn’t rely solely on survey results to improve engagement. Also, when doing surveys, you can’t apply them to a sample population or focus groups within the company and expect that alone to be an accurate depiction of employee engagement. That’s why a combination of methods is so important. 

Step 4: Determine Your KPIs

Unlike sales and production, it’s not that easy to measure the workforce’s level of engagement with quantitative data. However, with the right key performance indicators, you can get pretty close to producing measurable engagement scores. 

Much like the measurement methods above, your KPIs should be a reflection of your business and their particular needs, but here are some of the main ones to get you started: 

  • Absenteeism: Consistently not showing up without notice is a strong indicator of disengagement, as it speaks to a low motivation and little commitment to the job.
Turnover rate = ( employees who left / total employees at the beginning of the period ) x 100

  • Employee turnover: Likewise, having a high turnover rate reveals the organization’s ability to retain talent. If this rate gets lowered over time, it’s a good way to measure improvement on employee engagement.
Turnover rate = ( employees who left / total employees at the beginning of the period ) x 100

  • Time taken off: A healthy work-life balance is another indicator of employee engagement. While it may seem counterintuitive, the fact that people feel comfortable taking time off is a good sign of engaged employees. It means they aren’t overloaded and trust their colleagues to help out if they’re away.
  • Employee Net Promoter Score (ENPS): This metric started as a way to measure customer satisfaction. It was then applied to employees as well. The idea is to find out how likely a person is to recommend working at the company to a friend. This can be answered on a scale from 0 to 10. Anyone answering 0 to 6 would be considered a detractor, 7-8 are considered passive, and 9-10 answers are considered promoters. Then, you apply the following formula:
Turnover rate = ( employees who left / total employees at the beginning of the period ) x 100

  • Internal Promotion Rate: How often do employees grow within the organization? This metric can also be an indicator of employee engagement and is usually measured as follows:
Internal Promotion Rate = ( number of promoted employees / number of employees ) x 100

  • Employee satisfaction index: In a manner similar to the ENPS, this metric is calculated by having employees answer one or several questions on a scale of 1 to 10. The math is similar, but you have to use the outcomes we talked about in step 1.
  • Active tool usage: Through the software that your employees use, whether it’s messaging tools, an intranet, an employee portal within an HRMS, or an employee recognition platform, it’s likely that you can get stats on the company-wide usage. You can look at how many active users there are for each tool, how often people log in, how quick people adopt new software, etc.
  • New hire failure rate: A low score here should signal a healthy overall engagement. A substantial number of recently onboarded employees should be staying on after their first 3 months. If the opposite is true, it’s an alarm for many fronts: recruiting, onboarding, and also workplace health. 
A screenshot of eloomi, an engagement, training, and performance management platform.

Step 5: Find the Right Tool

Now that you likely have a better-shaped idea of what employee engagement means at your workplace and how you can go about measuring it, it’s time to decide whether you need a special tool for this or not.

Smaller companies may do just fine by following a rudimentary approach and keeping everything on a spreadsheet. However, as your needs and headcount grow, it can quickly become too much to handle. As with many human resources processes, there is specialized software you can use to alleviate these tasks and automate or streamline what is just too time-consuming to do manually.

Employee engagement software helps collect data through the various forms we discussed and take the pulse of the organization. These tools allow HR and People Analytics teams to understand what’s happening with their company culture and put it into shareable insights that can drive decision making. 

This type of software also helps the employee experience, since everything related to feedback efforts, and in some cases even performance management, can happen in the same place. These tools are often social, mobile, smart, and connected to the tools your people already use, making it much easier for them to get around answering that pulse survey or request for feedback. 

As one last note, an employee engagement platform doesn’t need to be very expensive or hard to use. If you’re ready to start browsing tools and see which might be right for you, take a look at our roundup of the best employee experience software.


Key Features of the Best Employee Engagement Software

Rodrigo Vázquez Mellado
HR and B2B software analyst and advisor, tech writer and editor, former conversational designer
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Rodrigo has worked in tech since 2015 across various marketing and product roles. All the while, he's stayed active as a journalist, musician, and avid traveler. He's been a writer and editor at SSR since 2020, covering software niches like payroll, HCM, workforce planning, AI Recruiting, and whatever spikes his interest. He's always on the lookout for the right software and tools—whether it's for managing business processes or to fuel his many hobbies. Rodrigo studied Journalism at the University of North Texas and Marketing and Communications at Tec de Monterrey. You can see more of his writing at: http://rvmrosas.com/

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