Employee Experiences, NOT Engagement, Found to Impact Outcomes 100% of the Time

If your organization is solely focused on employee engagement, you’ll want to read on. If you aren’t focused on management, job fit, or senior leadership, you’ll want to read on. If you want to find the secret to improving your organization’s bottom line (e.g., sales revenue, percent to budget metrics, and customer and patient satisfaction), you’ll want to read on. Spoiler alert: it’s NOT by having tunnel vision on just employee engagement.

In a nutshell, SMD conducted a study to examine key drivers of busi­ness outcomes, as well as highlight which types of out­comes are most influenced by employee experiences. Key findings are below:

  • The top drivers of outcomes were Management, Job Fit, and Senior Leadership – with Management being the most consistent driver of outcomes.
  • Engagement was not a strong driver of customer satisfaction nor Employee Performance measures.
  • While Engagement was predictive of outcomes 32% of the time in this analysis, this was largely driven by the connection with Voluntary Turnover (67%). When turnover is removed from the equation, Engagement was a driver on average only 21% of the time. The connection to turnover is not surprising given that the Engagement metric consists of items that rate the employees’ level of commitment to the organization (e.g., I would like to be working here three years from now). Commitment (or lack of) has long been found to be linked to subsequent turnover.
  • These results highlight the fallacy of the common notion that Engagement equals performance, be that at the organizational level or even the individual employee level.

The results are in table 1. Read all about the study here.

criterion table

Engagement’s Role & Best Use

Are we saying Employee Engagement doesn’t matter? No. SMD strongly recommends clients use Engagement in a realistic and appropriate way though. Cer­tainly, measure it in an employee survey, but use it as a leading indicator of potential turnover, or as an outcome that can provide a good gauge of employee morale. However, SMD highly encourages clients to utilize key business metrics that matter to the organization as the focus of their survey analytic work. This allows for an accurate and business-focused approach to priori­tizing the follow-up from an employee survey in a way that will benefit not only the employee experience, but also the whole organization (i.e., improve your organization’s bottom line, don’t just check the employee-survey box).