In our rapidly changing economic, political and social environment, organisations need to be more agile and innovative than ever before. We know that when employees are both engaged and thriving, they are more likely to be agile and resilient, able to navigate major organisational changes as well as disruptions in their personal lives without being thrown off course.
Employee engagement is measured by many, if not most, organisations, and some organisations also measure wellbeing. Some who measure engagement follow up with interventions to try to improve engagement; others don’t. Many organisations are implementing initiatives to improve wellbeing; some are measured to track effectiveness, others aren’t.
How can we improve and integrate measurement with intervention? What matters more – employees who are engaged, or employees who have high levels of wellbeing and are thriving? Can you have one without the other? What is the value for organisations in measuring and investing in improving both?
The relationship between wellbeing, engagement and productivity is complex and has been the focus of sustained organisational scholarship.
In broad terms, the research has found:
- Poor engagement is associated with lower productivity, i.e. those who are less engaged are likely to put in less effort.
- Lower wellbeing is also associated with lower productivity, i.e. those who are struggling physically, mentally or emotionally are less able to perform their job well.
- Engagement and wellbeing are linked – healthy employees are more committed, and committed employees are more healthy.
Let’s explore these findings in a little more depth.
Wellbeing and productivity
There is clear research evidence that when people experience poor health and wellbeing, their productivity declines, with a direct hit on the bottom line for the business.
Productivity losses from poor wellbeing occur via a combination of:
- absenteeism (employees being absent from work because they are unwell), and
- presenteeism (employees present at work but working at a sub-optimal level—below 50% capacity).
The reverse is also true. High psychological wellbeing leads to positive individual outcomes such as commitment, morale and health, which in turn lead to improvements in organisational performance in areas such as productivity, customer satisfaction, attractiveness to recruits, and lower turnover and sickness absence.
Engagement and wellbeing
Both academic research and organisational case studies have shown that:
- There is a strong correlation between high wellbeing and engagement level.
- Healthy employees with robust wellbeing are more likely to be productive and engaged with their organisation.
- Highly engaged people have also been found to have high levels of wellbeing.
The UK Engage for Success group (E4S) found that at each level of the organisation – individuals, teams and organisations as a whole – people work most productively for sustained periods where there are high levels of engagement and wellbeing.
Many researchers have suggested that these two states are “mutually reinforcing” and that therefore both are essential for optimal individual and organisational performance.
However, some have placed more emphasis on wellbeing as a stronger contributing factor. Academic research has found that wellbeing significantly strengthened the relationship between employee engagement and performance (Robertson & Cooper 2010; Soane et al. 2013). Gallup has also reported that adding high wellbeing to high engagement had a beneficial effect on key organisational outcomes over and above the correlational relationship (http://www.gallup.com/businessjournal/186386/enhances-benefits-employee-engagement.aspx).
Another survey, of 28,000 employees in 15 countries and 10 industries, conducted by the World Economic Forum and Right Associates, found that 55% of employees in companies that actively promoted wellbeing felt engaged, as opposed to only 7% in companies that were not promoting wellbeing.
The difficulty with unpicking the exact nature of the relationship between engagement, wellbeing and job performance is methodological. Most research to date has been cross-sectional and has mainly relied on one-off surveys, making it hard to be conclusive about the direction of these relationships.
OK, so it’s complicated! What now?
We have shown the likely relationship between engagement, wellbeing and productivity in Figure 1. Ideally, employers would want their employees to be in the high wellbeing/high engagement quadrant, as this is likely to be associated with greatest productivity.
Figure 1. Relationships between engagement, wellbeing and productivity.
The degree of productivity in the “moderate productivity” quadrants depends on the relative importance of engagement vs wellbeing on productivity. If wellbeing is more important, the low engagement/high wellbeing group will outperform the high engagement/low wellbeing group; vice versa if engagement is key. Also, the relative importance of engagement and wellbeing will depend on the nature of the job and organisational climate.
The risks of high engagement and high wellbeing
It is important to note that high levels of engagement may not always be benign for employees. In particular, high engagement without wellbeing can be problematic. You may be so engaged with your organisation or your job that you overwork, and potentially neglect your health and life outside of work in the process. We also know that where there is high engagement but low wellbeing, there is a risk of burnout over time. We have seen this recently with a highly successful company experiencing fast growth. Their people are so engaged and excited about their work that they are working long hours and neglecting their health in the process. The company is subsequently noticing higher levels of sickness and signs of stress.
Engagement is therefore important for performance but unlikely to be sustainable without wellbeing.
The opposite can also be a problem—where there is high wellbeing but low engagement, with employees feeling generally engaged and well, but disconnected to the organisational purpose. This poses a risk from reduced productivity and potentially from employees exiting the organisation.
Link the measures to strategic action
Employers need to measure engagement and wellbeing, to know how their staff are doing on these important drivers of organisational performance. However, simply measuring engagement and wellbeing is not enough―employers and staff also need to identify the issues that are affecting engagement and wellbeing, and be committed to doing something about them. It would be great to see more organisations taking a more strategic and coordinated approach―linking the measurement of engagement and wellbeing, and linking initiatives to improve both.
We’ll discuss how best to do that next month!