How to Measure Employee Engagement With 2 Meaningful Metrics

This article is an excerpt from the Shortform book guide to "When They Win, You Win" by Russ Laraway. Shortform has the world's best summaries and analyses of books you should be reading.

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What’s the difference between job satisfaction and workplace satisfaction? Why are both so important?

Employee experience expert Russ Laraway says that employee engagement is at an all-time low and that ineffective management is the culprit. He explains what employee engagement means and how to measure it in a meaningful way that helps managers know how to draw the best out of their employees.

Keep reading to learn how to measure employee engagement and, as a result, measure your effectiveness as a manager.

Measuring Employee Engagement

According to Laraway, bad managers are everywhere, creating disengaged, unhappy, and unproductive employees. How do you know whether you’re part of the management problem? According to Laraway, the best way to judge your effectiveness as a manager is to see how engaged your employees are.

(Shortform note: Laraway makes it clear that high employee engagement comes from good management, but he doesn’t provide a numerical benchmark to aim for. Some experts say a good rule of thumb is to have at least half of your workers actively engaged (happy and enthusiastic) while at work.)

To help you know how to measure employee engagement, Laraway breaks down the nebulous concept of “engagement” into two concrete elements: job satisfaction and workplace satisfaction.

Metric #1: Job Satisfaction

Job satisfaction refers to how much an employee gets a sense of pride and fulfillment from their work. Job satisfaction is often related to how important the employee feels their job is, either to the company specifically or to the world as a whole. Notably, employees with high job satisfaction are often willing to put in extra work beyond what their job roles strictly require.

Metric #2: Workplace Satisfaction

The second element is workplace satisfaction—how the employee feels about the company itself. This includes whether the employee feels proud to work there and how satisfied they are with their workspace, pay, and the company culture.

According to Laraway, an employee with high job satisfaction and workplace satisfaction is an engaged employee—and, therefore, they’re someone who’s likely to be hardworking, conscientious, and interested in remaining with the company.

Factors of Intrinsic Motivation

When Laraway discusses “engagement,” it’s another way of saying intrinsic motivation; in other words, when employees work because they want to, rather than just for external rewards such as a paycheck. In Drive, Daniel Pink writes that people seem to be motivated by countless different things (such as job satisfaction and workplace satisfaction), but in reality, intrinsic motivation boils down to just three factors.

1. Autonomy. People want to have a sense of control over their lives. They desire the freedom and trust to make their own decisions and be held accountable for the outcomes of those decisions (whether good or bad). In short, they want to feel like their decisions matter.

2. Mastery. People want to be recognized for their skills and have chances to keep improving those skills. In the workplace, this generally means that keeping people engaged requires regularly offering them new challenges and opportunities.

3. Purpose. People want to know why they’re doing something. In other words, they want to know how their work is making a difference.

These factors do tie into Laraway’s ideas—for instance, autonomy would likely increase someone’s job satisfaction, and a clear purpose would boost their workplace satisfaction—but Pink is making the case that these are the three foundational needs for intrinsic motivation. Therefore, anything else that contributes to intrinsic motivation is just a subset of one of these three factors.

How to Measure Employee Engagement With 2 Meaningful Metrics