Workforce engagement: What it is, what drives it, and why it matters for organizational performance

Abstract

SummaryBased on a review of the history of the employee engagement construct and its measurement, we define workforce engagement as the aggregate of the work engagement experiences of individual employees in an organization. In contrast to most research on employee engagement, we study companies rather than individuals and the companies represent a diverse set of industries. We hypothesize and demonstrate on a sample of (up to) 102 publicly traded companies that workforce engagement significantly predicts organizational financial (adjusting for industry: Return on Assets, Net Margin but not Tobin's q) and customer metrics (the American Customer Satisfaction Index and the Harris Reputation Quotient) 1 and 2 years after the workforce engagement data were collected. In addition, using a split‐sample approach to avoid method bias, we hypothesize and show that (a) company organizational practices (the strongest correlate), supervisory support, and work attributes are significant correlates of workforce engagement and (b) that workforce engagement mediates the relationship between these correlates of engagement and the organizational performance metrics. Implications of the findings for research and practice are discussed.