Yet challenging economic times often mean pay freezes and sometimes increases in workload as a result of a reduction in headcount. Organisations may fear that this could lead to reduced employee engagement and subsequent declines in quality and production. However, it is important to remember some of the tenets of prominent motivational theories. Herzberg argues that motivation is determined not only by hygiene factors (salary, working conditions) but also motivators (achievement, recognition, status, promotional opportunities, responsibility). Although hygiene factors prevent dissatisfaction, it is actually the presence of motivators that increases job satisfaction, motivation and engagement. Alderfer developed the Existence Relatedness Growth theory. Existence needs constitute physiological and security needs; relatedness encompasses the need to belong and develop interpersonal relationships; self-esteem and self-actualisation needs are conceptualised as growth needs. More than one level of need can motivate behaviour simultaneously. These two theories suggest that there is an additional lever in which organisations can pull to enhance employee engagement during difficult economic times - provide staff with greater status and responsibility and they are likely to realise their self-esteem needs and reciprocate with enhanced performance.

So what is the difference between satisfied employees and engaged employees?

The important difference between job satisfaction and engagement is that the former is an attitude and the latter is considered more behavioural. A satisfied employee who is not engaged may not be committed to the organization in the long term and may not go the extra mile for the organization. Therefore engagement is about commitment and connection to the organization, as well as motivation to perform well and put your all into your work. This is what makes engaged employees, rather than simply satisfied employees, the Holy Grail for organizational performance. An engaged employee is more likely to make a sustained positive difference within their role and the organization.

Why would employees be satisfied but not engaged?

The SHRM's research suggests that training and development may play an important part in this, with only around 40% satisfied with their career development opportunities. This may lead to a decrease in motivation to perform to the best of your abilities and also a desire to move on from the organization – both of which may have negative effects on organizational performance.

Employees also seem to want a closer relationship with management and leaders, with a more open and collaborative relationship preferred to the traditional top-down structures. This may require fresh thinking and development for leaders and managers, but could help tap into the talent, skills and ideas of employees within your whole organization.

SHRM's 2011 Job Satisfaction and Engagement Research Report

Click for more information on:
Employee Engagement
Leadership Development
Top Team Development
Assessing and Developing Talent

These kinds of findings are useful in highlighting the importance of engagement work. However we don’t need to look to research to confirm this link – just think about your experiences as a customer. I was shocked to see this link right in front of my eyes this weekend when ordering a drink at a large and successful chain bar & brasserie. The barman threw my menu behind the bar before spending at least 30 seconds venting his frustration to me about the lack of communication he gets from “head office” and their lack of consideration for their front of house staff. The barman was fine in all other aspects, however this was my lasting memory of the service I received and certainly affected my perception of the organisation as a whole.

Every single employee could be the face of your brand, whether that’s to a prospect, customer, supplier, applicant or simply their friends and family. Therefore employee engagement is not just important in terms of internal harmony and performance, it is important for your brand, marketing and absolutely important for your customer experience.

The second CEO was puzzled by the results then said 'that's interesting, we've worked hard at this but clearly we are not getting it right. We need to do more thinking on this'.

Most of us tend to get a bit defensive when we get difficult feedback. I think this crucial difference in reaction illustrates very neatly the importance of having the right mindset.

The survey results revealed that faith in the leadership team had significantly dropped since their last survey. Most other factors including communication, reward and management had held up well. The question I found myself pondering driving back to the office was 'is it inevitable that when people feel insecure that they will lose faith in the leadership and ultimately their trust in the employer?' When I presented the results to the Executive team there was a feeling amongst them of "we expected this, it could have been worse, given all that is going on."

No one needs to be told that leading through difficult times with the attendant focus on cost control including workforce costs is challenging. But is it possible to maintain or even increase faith, trust and engagement in an organisation where job security is falling and colleagues may have lost their jobs? We have seen some clients' level of engagement hold up better than others, and one or two who have done this particularly well.

Clearly the way these processes of introducing change are managed will influence employees' experience and attitudes. I am more interested, in this piece, on the role of leadership and in particular how they communicate to the workforce as I think this is the critical factor that makes the difference.

What have we learned through employee feedback? Firstly there is a direct correlation between visibility /accessibility of the leadership team and confidence in them. Face to face is clearly the best and most effective form of communication. Frequency of communication is important; and it is important that it works both ways.

Change and an uncertain future is likely to impact on clarity of vision and purpose. Organisations that score well on vision and purpose are therefore more likely to score well on leadership so it is imperative that the leadership team communicates very clearly and consistently on what we are trying to achieve, why we need to change and how we are trying to achieve it- and here we are not talking about financial targets and budgets.

Most leaders will say; "yes we have done that, we get out there, we explained and yes it does make a difference but people are still worried. They might accept it needs to be done but they are not happy, maybe not hostile but they have become somewhat disengaged and distracted." Sounds to me a bit like damage limitation.

What can we learn from those that have done better? How can we move people from being somewhat disengaged to engaged? The answer to that question may be found in the quality and structure of the leadership communication. Some old-fashioned 'Churchillian' oratory and eloquence will help and it needs to provide answers to the employees' five fundamental questions:

1. Where are we now and how did we get here?

2. What is our vision and purpose going forward?

3. What do we need to do to achieve this?

4. Who will benefit from our hard work and success and most importantly will I?

5. What will be our dearly held values in meeting these challenges?

So is it inevitable that engagement, trust and faith will fall when redundancies are taking place, opportunities are scarce and rewards are less generous than normal? I think we have enough evidence to say that the answer to the question is no. There is no doubt that when confidence takes a bashing it is likely there will be at least a wobble. But with great leadership confidence, trust and engagement can be restored and maybe even enhanced.

An interesting piece of research has been published by Globoforce and the Society of Human Resource Management linking employee engagement with employee recognition.

One of the themes of the report is that although almost every employer (99%) in their global survey of 700 see employee engagement as a key challenge, and that the vast majority do some sort of tracking of employee engagement (86%), surprisingly employee recognition programmes are tied to corporate values and financial goals in less than half. The survey also said that more than half of HR Leaders felt that their managers and supervisors did not acknowledge and appreciate their employees enough. They also struggle to measure the ROI on employee recognition programmes- not surprising really.

In our experience organisations that benefit from very high levels of employee engagement have not achieved this through employee recognition programmes. Whilst this could be part of the mix, high levels of employee engagement are achieved when employees are really into what they are doing, have a belief in the organization, are encouraged to contribute fully and feel supportive of its purpose. They trust the organisation to look after them fairly and generously. The relationship with the employer is less mercenary than it is for employees with lower levels of engagement for whom reward and incentive is more important.

I wonder if the research failed to recognise this.

This is a fascinating finding and the explanation for this phenomenon could stem from Social Comparison Theory (Festinger, 1954). This is the idea that we compare ourselves to other people, often those with whom we can readily identify with, in order to evaluate our own opinions and abilities. Such comparisons can be the source of satisfaction and dissatisfaction. If, through our evaluations, we conclude that we are better off (i.e., "I have a job but there are thousands of people of my age who have similar skills and are out of work"), then we are likely to feel more satisfied. Our satisfaction could be enhanced further because there is also the tendency to look for evidence to support our beliefs ("my work is actually really interesting", "I am paid fairly for what I do").

Yet there is ample evidence to suggest that the greater the job uncertainty, the greater the dissatisfaction among workers. Again psychological theory sheds some light on this reaction. Festinger (1957) also developed the Theory of Cognitive Dissonance which is an uncomfortable feeling caused by conflicting beliefs and actions simultaneously. Humans are motivated to resolve such discrepancies often by refining their beliefs. So in the context of potentially losing your job, negatively evaluating your job and the organisation for which you work makes such an outcome much easier to accept.

If you list the factors that would influence shop floor staff's ability to provide great customer service you might be struck by a big overlap with factors that influence employee engagement, e.g. job interest and fulfilment, how they are managed, relationships with colleagues, training and development and so on. So might it be that the best chance you have to improve customer service is through building employee engagement?

However, in engagement studies top of the list as the most important driver is the actual role that you play in the organisation and the amount of freedom, autonomy and responsibility that you have to do it well. This, coupled with a clear sense of purpose beyond that of simply making money for the shareholders, is the key to the hearts and minds of most employees.

Putting that into the retail context made me think - have we got an intrinsic problem here? Retail chains, in my experience, regard themselves by necessity as command and control organisations. All the key decisions are made centrally, i.e. what to stock, what price to sell it at, what to promote, how to layout the store, when to open and close and so on. Even store managers have their wings well and truly clipped as far as decision making is concerned. Shop floor staff have even less.

So are high levels of employee engagement in command and control organisations unattainable? I am sure that there are many employees working in retail command and control organisations who are great employees, great with customers and colleagues and highly motivated. The question is how many are fully engaged in the complete sense of how we now define the term?

It could be an interesting project.

Trust in senior leadership has also fallen to its lowest recorded point, again owing to the economic downturn and its effects on people's work environments and standards of living.

Claire McCartney, CIPD Resourcing and Talent Adviser, comments: "The survey findings highlight the importance of senior leaders in organisations putting even more emphasis during tough times on how they communicate, consult and involve staff where major changes such as restructuring or redundancies are being proposed.

"Evidence suggests that where employees benefit from effective communication and feel their views matter, and are taken into account before decisions are made, they are more likely to remain engaged in their work and committed to the organisation.

"The survey underlines the importance of the Employee Engagement Taskforce launched by David Cameron last month to support and encourage organisations in building the leadership and management capability needed to boost morale and increase the number of high performance workplaces."

We wholeheartedly support these findings. Business leaders now have the related challenges of improving employee confidence and satisfaction in order to keep engagement levels and therefore business performance up.

Results from their survey of C-suite executives, senior directors and managers suggest that the c-suite and less senior directors/managers think very differently about levels of engagement and the drivers behind it, with almost half of C-suite executives believing that they are the largest determinant of engagement, compared to just 16% of non-board senior directors with the same view.

The C-suite also tended to have a much more positive view than senior directors and managers of the levels of engagement in their organisation as compared to rival organizations.

Other headlines from the report were:

"Middle managers are not deemed responsible for employee engagement" by C-suite. This could be a potentially damaging view in terms of the affects it could have on the motivation of managers to develop people-management skills. In contrast to the C-suite view, around 40% of non-board level executives believe that line managers do have a considerable impact on employee motivation.

Despite the recession managers in Britain are more positive in terms of their views on engagement levels within their organisations than managers in other European countries.

"Long-serving staff pose the greatest engagement challenge" according to respondents. The C-suite also believe that under-25s are a problematic group of employees with regards to engagement. This is unsurprising given recent worries within the senior management sphere over Generation Y employees who, it is suggested, have too great expectations of the workplace.

This research indicates that our goal in respect to making leaders of organisations aware of the importance of employee engagement may well have been achieved. However it appears that our next challenge is to move Boards further into discussing engagement issues within their organisation, building strategy around it and acting upon it.