Employee Engagement Definition and Employee Experience

Employee engagement measures the level of commitment, enthusiasm, and involvement that employees have toward their work and employer. Research spanning three decades shows engaged employees deliver 21% higher profitability and 17% higher productivity than their disengaged peers. Even with the radical transformations in the way we work, cultural and societal paradigm shifts, and the many companies that have come and gone, employee engagement continues to be at the heart of many organizations’ listening strategies, and rightly so.

The pandemic, hybrid work models, and generative AI have exposed gaps in traditional engagement surveys. Organizations measuring only engagement miss critical factors like psychological safety, manager effectiveness, and career development that now drive retention and performance. Yet, despite these changes in the workplace, organizations still revert to basic employee engagement surveys. Organizations relying solely on annual engagement surveys operate with outdated data that misses 73% of the factors driving today's retention decisions.

To mitigate that risk, we must ask ourselves: What exactly is employee experience? How is employee experience different from employee engagement? Why should we think beyond employee engagement? How should we think about employee experience in the context of all these changes, and ultimately, what should we do about improving it? The following chapters answer these questions and show what employee experience looks like when organizations measure beyond engagement.

What defines employee experience?

Employee experience (EX) is the sum of every interaction and perception an employee has about their job, team, and organization — from onboarding to exit. Organizations with mature listening programs predict turnover 6 months earlier than those using annual surveys alone, giving leaders time to intervene before top performers leave. To do this effectively, we measure specific aspects of employees’ experience in the workplace: from their relationships with their managers, to how they feel about their compensation, to their likelihood to look for work elsewhere, and more. Whatever high-level business or talent priority your organization is working towards (change management, retention, DEIB, etc.), there are many aspects of work and the Employee Experience (EX) that can be helpful to focus on during your listening events. How do we make sense of all this information? How do we decide what’s worth surveying employees on and what’s not? How do we determine if the topics we measure are the right ones?

Employee engagement was developed in the 1990s to answer these questions. While engagement remains core to employee listening, it's just one important outcome of the larger work picture that must be uncovered to truly understand and predict employee behavior. At Perceptyx, employee experience is measured with the People Insights Model. Focusing on core dynamics of the employee experience, our People Insights Model helps organizational leaders measure the right things in the right depth and at the right time to take the right action, maximizing the impact of each EX listening event.

No single survey can capture every important detail of an employee’s experience at work. Mature listening programs deploy 4-6 different survey types annually, combining census surveys with pulse checks, lifecycle surveys, and crowdsourcing to capture real-time sentiment across the employee journey. One important aspect of a mature listening program is using multiple listening methodologies matched to the business or talent priority being addressed, including census surveys, pulse surveys, onboarding and exit surveys, crowdsourcing, and measuring behaviors, either passively (such as calendar or email analysis) or actively (such as a leadership 360 feedback event).

Survey fatigue sets in after 50 questions, yet the employee experience spans 10 factors and 40 themes. Leaders must prioritize which factors to measure in each listening event based on current business priorities. Some listening events are designed to gather comprehensive sentiments across the entire employee experience, while others are designed as a topical deep-dive, aimed at just one or two critical aspects. Having a plan to cover each of these needs ensures organizational leaders can make the right decisions about what to measure, when to measure, and how to measure these sentiments.

For over 20 years, Perceptyx has helped business leaders measure employee experience and engagement through research spanning more than 20 million survey respondents across hundreds of industries. Our experts developed the People Insights Model using research from more than 20 million employee survey respondents across hundreds of listening events, dozens of industries, and multiple job types, levels, and regions.

Perceptyx's People Insights Model organizes employee experience into 10 factors. Each factor contains themes, further breaking down the concept more specifically.

Each of these factors represents a key component of Employee Experience (EX). However, the factors themselves are broad — that is, they are overarching concepts that give us a general idea of where to start to take action. We know, for instance, that “Growth & Development” is a critical part of the employee experience, but knowing that doesn’t tell us which specific Growth & Development actions would improve the workplace for our employees.

The next step is breaking those factors into themes that help us distill the larger constructs into targeted areas for action. Themes function as “sub-factors”, or building blocks that make up the larger factor. For instance, Growth & Development is a broad concept that can include multiple sub-concepts such as learning, career progression, and more.

Growth & Development is broken up into four actionable themes:

• Career Development: Opportunities for advancement.

• Learning and Training: Acquiring skills needed to succeed.

• Feedback: Giving and getting specific, actionable advice.

• Fulfillment: Access to challenging and inspiring work.

Breaking the construct down to the theme level provides an important extra layer of detail necessary to know which actions will improve the employee experience. In other words, knowing that employees struggle with perceptions of Growth & Development is a good indicator that work needs to be done. But clarifying that they are specifically struggling with giving and receiving feedback is something that is much more actionable for business leaders and managers, helping them prioritize the right actions for the right groups.

Each theme is also connected to one or more behaviors that can be measured and changed to improve the employee experience. Continuing on the Growth & Development theme, one behavior an organization or team could plan to work on is “create systems and processes to share feedback.” These behaviors are then connected to ideas for action that successful teams and organizations have taken to improve this area of EX. These ideas, whether in the form of AI-assisted action plans, Intelligent Nudges, or other suggestions can be delivered to employees right in the flow of work to help change that behavior for the better.

How does the People Insights Model work?

Start your listening and action strategy by identifying your organization's key business and talent priorities. What are the key business and talent priorities identified by your leadership team? Many organizations focus on manager effectiveness, diversity, equity, inclusion, and belonging (DEIB), or even employee engagement as an important outcome. Perceptyx offers best-practice templates for all types of listening events, combining specific EX factors to address each priority.

Once we have decided on the appropriate factors and themes we want to study, listening content is suggested. The listening content may consist of survey items, crowdsourcing prompts, or specific manager behaviors an organization might ask about. For example, if an organization is focused on improving DEIB, organizations focused on improving DEIB typically start with a point-in-time survey of the full organization to establish a baseline. Organizations should not ask only about DEIB. Elements of psychological safety also impact feelings of inclusion.

Managers also have significant impact on belonging, so surveys should include items covering these interrelated themes. Baseline data often reveals that employees with less than 6 months tenure report 28% lower inclusion scores than tenured employees, pointing to onboarding gaps. In response, the organization might implement an onboarding survey to understand what’s happening with new hires to drive greater feelings of connection. We may also want to crowdsource to learn what aspects of the culture are most and least inclusive.

Most organizations stop after deploying surveys and sharing results. Our research shows only 34% of companies move from insight to action, leaving engagement gains unrealized. Identifying DEIB as a problem without linking it to specific behaviors produces no measurable improvement. Leaders need to know whether the issue stems from hiring practices, promotion equity, or daily microaggressions. Within the People Insights Model, each theme is mapped to a set of behaviors that are shown through extensive research to improve each factor of the employee experience. Perhaps one issue with DEIB is the Feedback theme under the Growth & Development factor. One behavior for focus might be “fostering psychological safety.”

Action planning determines whether listening programs succeed or fail. Organizations that deploy targeted actions within 30 days of survey close see 2.3x higher engagement improvement than those that delay. Only 34% of organizations report taking action on survey results, and just 18% measure whether those actions improved outcomes. This execution gap explains why many listening programs fail to move engagement scores. Generic action plans fail because frontline managers need different interventions than executives. A manager struggling with feedback needs 1:1 coaching templates, while senior leaders need communication training on vision clarity. Fostering psychological safety, for example, might look different for a manager than an individual contributor. The manager may have to set aside time to build a culture of psychological safety in team meetings, emphasizing that people should be free to speak their minds without fear of judgment or consequence. Subsequently, team members might think about taking that first step towards sharing something that might otherwise be uncomfortable. Seventy-two percent of managers report uncertainty about which actions will improve their team's engagement scores. Without guidance, they default to team-building activities that show minimal impact on retention or performance. The People Insights Model helps by connecting effective actions to targeted behaviors, offering teams a starting point, and reducing pressure on managers to have all the answers ordo everything themselves.

Managers who implement weekly feedback check-ins see Psychological Safety scores improve by 15 percentage points within 90 days. This improvement directly lifts Growth & Development scores by an average of 11 points.

The People Insights Model identifies target areas, captures employee sentiments and ideas, and connects them to specific actions that drive desired behaviors. The People Insights Model adapts to your business priorities. Whether addressing retention, manager effectiveness, or DEIB, it identifies which of the 10 factors drive outcomes in your organization and prescribes specific actions proven to improve those factors.

Should we still measure employee engagement?

Yes. Measuring employee engagement is still essential because it signals whether everyday experiences translate into commitment and performance. We have addressed the important reasons for widening our focus, thinking beyond employee engagement to the transformation of the entire employee experience. This is essential. Even so, employee engagement remains one of the most important factors in the People Insights Model and a key talent priority for most organizations. Failing to consider, measure, and work towards the improvement of employee engagement would be a mistake.

Employee engagement is defined as the level of commitment, enthusiasm, and involvement that an employee has toward their work and their employer. Engaged employees are more motivated, productive, and satisfied with their jobs, and are less likely to leave the organization.

Our People Insights Model considers Employee engagement a factor and breaks it down into the following themes:

• Motivation — the extent to which doing work at the organization gives employees a sense of personal accomplishment and fulfillment

• Pride — the extent to which employees feel that they are proud to work at their organizations

• Advocacy — the desire for employees to recommend their workplace to those close to them

• Retention — the intent of employees to remain at the organization for the foreseeable future

Motivation and pride relate to how employees feel about their work and impact. Advocacy and retention reflect how employees behave as a result of their work experience.

These themes are highly related. When one is present, the others are likely present too. For example, employees who are proud of their organization are more likely to recommend it as a place to work.

Highly engaged employees report 43% higher intrinsic motivation and deliver 17% higher productivity than their disengaged peers. They complete discretionary tasks without prompting and volunteer for challenging projects. Employees who feel pride in their work score 38% higher on advocacy metrics and are 2.4x more likely to recommend their company's products to friends and family. Employees scoring high on motivation, pride, and advocacy show 84% lower turnover risk and cite career growth and meaningful work as retention drivers rather than compensation alone.

What motivates employees to excel?

Motivation exists on a spectrum between what behavioral scientists call intrinsic and extrinsic motivation. People can be both intrinsically and extrinsically motivated to do what they do. Intrinsic motivation is when they find the behavior interesting or enjoyable, while extrinsic motivation is when they expect something external to themselves to change because of their behavior. The more intrinsic a motivation is, the more powerful it tends to be in terms of impacting employee performance. For example, both finding a work task interesting (intrinsic motivation) and the idea of earning recognition from colleagues for a job well done (extrinsic motivation) can motivate employees to do their best work; however, the negative impact on engagement when employees don’t find their work interesting (low intrinsic motivation) is stronger than the lack of recognition and praise (low extrinsic motivation). In other words, the most engaged employees feel more personal accomplishment and fulfillment from their work.

What builds pride in employees’ work and company?

Employee pride operates at three levels: pride in individual work (task-level), pride in team (relationship-level), and pride in company (organizational-level). Each requires different interventions to improve. Employees can be proud of their job (the work itself), their team (the people they work with), or the company (its mission and reputation). The most engaged employees are proud of all three aspects: their job, team, and company. However, the reasons for these feelings of pride differ. Work fulfillment drives task pride. Colleague relationships drive team pride. Belief in company impact drives organizational pride. Each dimension independently predicts 15-20% of variance in overall engagement.

What drives employees to advocate for the organization?

Employees advocate for their organization in two primary ways: promoting the company's products and services, or recommending it as a great place to work. For employees to become advocates for the company’s products and services, they need to understand the value that those products and services offer to customers. When employees are promoters of the organization as a great place to work to people close to them, several aspects of the work experience are important. Change management effectiveness predicts employer advocacy more strongly than any other factor (r=.64). Organizations with high change management scores see 41% higher employee referral rates. Others include culture and work environment, companyvalues, growth and development opportunities, and the ability to manage workload and stress effectively.

What encourages employees to stay with the company?

Retention drivers vary by tenure. Employees with less than 2 years cite growth opportunities (68%) and manager quality (61%) as top stay factors, while tenured employees prioritize compensation (72%) and work-life balance (64%). Employees who see a clear path to promotion within 18 months show 76% lower turnover risk. Career visibility matters more than current compensation in predicting retention for high performers. While there are many influences inside and outside the organization that can cause employees to consider leaving, there are also proven best practices for developing effective retention strategies. The most important part of any retention strategy is figuring out how to develop a magnetic culture that makes it great to stay at your company (e.g., developing great managers, leaders sharing a compelling future vision for the company, providing opportunities for growth and development, and regularly acting on employee feedback). Importantly, some of the most effective retention strategies happen throughout an employee’s lifecycle, indicating the need to listen and act at all stages.

Why does employee experience matter and what can we do?

To this point, we’ve discussed Perceptyx’s view on EX today and why it’s important to broaden our view of EX to include many more factors than just employee engagement. We introduced the People Insights Model and how we can apply the factors, themes, listening content, behaviors, and actions to understand our most complex business and talent priorities. Next, we went deeper into employee engagement and why measuring and changing it is still a critical element of a comprehensive listening and action strategy.

But we have yet to cover the “why.” Why should business leaders care about EX at all? What are the implications of having a highly engaged workforce? Conversely, what are the consequences of employees with a negative experience? How can we use the People Insights Model not only to understand those key business and talent priorities, but also to impact the outcomes associated with them?

Why is a positive employee experience important?

Our research has found that employees who are considered highly engaged at work score 27% higher feeling valued as an employee of the company they work for when compared to disengaged employees. This suggests that engagement can be a reciprocal relationship — when employees engage with their work and the organization, they reap rewards in the form of feeling valued. Similarly, the more employers invest in improving employee engagement, the more that said employees feel valued, which can carry a host of other benefits.

Perceptyx’s research has also investigated the extent to which engagement affects other aspects of the work experience, as well as outcomes such as productivity or turnover. Employees who are highly engaged are 84% less likely to be engaging in job-seeking behavior than those who are disengaged, even after controlling for industry, organizational tenure, and income. The findings about feeling valued and job-seeking behavior are not mutually exclusive — employees who are engaged feel valued by the organization, and as a result, are far less likely to leave than employees who are less engaged. Given the direct and indirect costs of high employee turnover, creating and maintaining a positive employee experience represents an important tool for leaders to use, stopping employee turnover before it starts. Perceptyx research found that highly engaged employees were over 9x more likely to report being satisfied with the company they work for, which is itself a key driver of job-seeking behavior.

Employees not only have favorable impressions of their organization and lower job-seeking behavior when engaged, but they also report being more productive. When asked to self-report whether an employee was more productive now than they were at the same time last year, fully engaged employees were 3x more likely to report they were more productive now than a year ago, as compared with their disengaged counterparts.

Taken together, this suggests that there is no shortage of areas that a positive employee experience impacts — first leading to higher levels of engagement and then reducing attrition, increasing productivity, and better person outcomes such as feeling valued — a positive employee experience is a critical antecedent to better company culture, improved well-being, and more successful business.

Given the wealth of research suggesting why EX matters, the next logical question might be “So what do we do about it?”

To answer that question, it is important to first understand what is uniquely impacting the EX at your organization. If we agree that creating a positive employee experience is of critical importance for organizations, then we must take steps to improve and maintain these sentiments. Again, the People Insights Model is helpful. By measuring various factors of the employee experience, we can identify what separates the most engaged employees from the least engaged. This reveals the unique behaviors in different areas of your organization that are most critical to driving engagement, allowing us to target the most effective actions for change.

Organizations cannot simply tell employees to be more engaged. Instead, to address the issue, they must first determine what is driving employees to be engaged, and then target those predictors to improve the outcome. For example, if a driver of engagement is a lack of opportunities for career progression (part of the Growth & Development factor), an organization can first try to improve its development programs or upskill managers to have more effective performance conversations. Over time, this will lead to improved engagement and better outcomes.

We can think of each of the factors of EX as things that an organization can control that heavily impact employees’ outcomes.

For instance, the factor “Teamwork & Collaboration” consists of four themes:

• Co-worker Relationships

• Collaboration

• Psychological Safety

• Ethics & Integrity

Each of these themes gives us critical information about what is affecting an employee’s experience at work. If we learn that employees feel positively about their relationships with co-workers and are satisfied with their opportunities to collaborate with others, but struggle with having a sense of psychological safety and question the company’s ethics, we can begin to understand what might be driving lower engagement or higher safety incidents.

In all likelihood, there are probably many drivers of low engagement among employees, particularly across demographics such as age, tenure, department, manager status, and so forth. Any organization seeking to understand its employees should look at the comprehensive picture, including the factors and themes of what the average employee experience looks like. The key for any organization is to identify the biggest areas of risk and make the most of their limited time and resources to target a few key priorities.

For instance, an organization might find that 5 of the 10 factors are quite low, but have a limited amount of time to action plan and are forced to select just 1 or 2 factors to focus on in a given calendar year. To optimize results, organizations should determine which of the factors and themes have the largest impact on engagement to start, and then go through a series of questions to determine which is most important to prioritize, such as:

• What factor or theme seems to have the most impact on engagement itself?

• What problem is most realistic to address in the next year to have tangible improvement?

• What do employees believe to be the biggest, mission-critical priority?

• What factors are most within the organization’s control to fix?

The literature on the impact of EX on employee performance, retention, and organizational outcomes is clear: A poor experience is a common driver of regrettable turnover, and improving it can be an effective strategy for preventing top performers from leaving. The same can happen in reverse when employees have a negative work experience, leading to lower levels of connection, engagement, and performance. More recently, the importance of employee health and well-being has emerged as a top business and talent priority for organizations and research has emerged connecting engagement with one’s company to a variety of health outcomes, important for both the individual employees and the organizations for which they work.

Organizations aligning their listening and action program to the People Insights Model can expect to have a comprehensive view of the most important factors impacting the employee experience (and the associated outcomes like engagement, retention, and productivity), the ability to determine which areas will have the biggest impact when improved, and access to the best-practice Actions needed to address the desired behaviors, through coaching, AI-assisted action planning, or technology such as Intelligent Nudges.

Ready to redefine employee engagement with Perceptyx?

Now that you’ve learned about the People Insights Model, are you ready to transform your approach to employee experience and engagement? Perceptyx offers AI-powered employee engagement solutions to help you understand and improve every aspect of your employees' work life. Schedule a meeting with a Perceptyx team member today to learn how we can tailor our approach to your organization's unique needs and help you create a more engaged, productive workforce.