Updated: September 27, 2022

Employee Engagement Theory: Definition & Examples

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Employee engagement theory is the formal idea that by challenging, supporting, and inspiring employees, organizations increase the satisfaction and maximize the output of the staff. According to this theory, companies with high levels of worker motivation and loyalty enjoy employee engagement benefits such as lower turnover and less absenteeism, higher customer satisfaction, bigger bottom lines, and increased creativity and innovation.

This theory is closely related to employee engagement best practices, employee engagement frameworks and employee engagement strategies. The theories are the foundation for many employee engagement software tools, employee engagement campaigns and employee engagement activities.

This article covers:

  • What are the main employee engagement theories?
  • William Kahn’s theory of employee engagement
  • Employee engagement and goal setting theory
  • Employee engagement motivation theories

Here are the basics.

What are the main employee engagement theories?

William Kahn penned the most popular theory of employee engagement in his 1990 work “Psychological Conditions of Personal Engagement and Disengagement at Work.” Experts frequently draw on the idea that goal setting ties into worker engagement. There are also many models of motivation that leadership reference when brainstorming ways to improve employee productivity, staff loyalty, and retention. This article will briefly explore all of these concepts. See Kahn’s literature for more.

William Kahn’s theory of employee engagement

Psychologist William Kahn was one of the first experts to use the phrase “employee engagement,” defining the term as “the harnessing of organisation members’ selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances.”

Though Kahn published his work in 1990, one can trace the roots of the concept back to the early history of team building, when researcher Elton Mayo discovered that factors such as concern from upper management, more pleasant physical conditions, and social ties with coworkers influenced a worker’s mood and motivations, thus increasing both productivity and employee retention rates.

Other potential psychological influences include Mary Parker Follett, who explored the human element in industry and advocated for the role of morale and reciprocal relationships in leadership, and Frederick Herzberg, whose motivational theories we will touch on farther below.

Kahn’s work focuses on the conditions that allow employees to bring “full selves” into the workplace. The researcher identifies three main factors that affect whether an employee can meaningfully connect with the organizational mission, company culture, and daily tasks of the role: meaningfulness, safety, and availability.

Meaningfulness: Meaningfulness refers to the purpose behind the work. An employee who understands the ways in which a company’s product or service benefits society and identifies as an important contributor towards that goal is likely to make a significant effort.

Safety: An employee that feels psychologically safe in the work environment, who does not fear facing judgment or consequences from teammates or higher management, is more likely to contribute and feel positive about those contributions.

Availability: Availability refers to an employee’s capacity to perform a role both physically and mentally. Every human being has limits. While challenge is important for growth and satisfaction, a worker should feel that the demands of the position are reasonable and achievable. Work life balance is one element that falls under the umbrella of availability.

Khan also outlined three dimensions of engagement: physical, cognitive, and emotional. In other words, workers can show different kinds of commitment in actions and attitudes such as daily activity levels and confidence in regular tasks, creative contributions and decision making, and regard for the organization and company loyalty.

William Kahn’s work promoted a deeper understanding of worker needs and a more holistic approach to employee engagement. Instead of championing short-term motivational tactics, organizations turned to more cohesive strategies that sought to support staff in all areas of need.

Employee engagement and goal setting theory

Goal setting is a major component of employee engagement. Not only should employees be content with present workplace conditions, but your staff should also feel optimistic and excited about the future. The desire for progress is a driving force. Human nature strives for constant improvement, yet folks need a clear vision and a push. To perform at the highest level and achieve success, all members of your team should share a goal and an understanding of the individual responsibilities needed to achieve that goal.

Many professional writings explain why goals are important for motivation, but there are also several resources that provide guidance and guidelines for shaping objectives. Psychologist Edwin Locke’s goal setting theory is one of the most popular models of goal-setting. This theory outlines five requirements for goals:

Clarity: A goal should be clear, specific, and easy to understand.

Challenge: A goal should push employees, but not so much that workers break down. Too easy or too hard of a goal can demotivate staff.

Commitment: Employees should rally behind the goal and pursue the objective wholeheartedly from its inception.

Feedback: Leaders should provide feedback and direction throughout the process to maintain momentum or encourage improvement.

Task Complexity: Leaders should set reasonable expectations and should divide larger projects into smaller, easier to tackle tasks with steps, milestones, and regular reviews.

Locke asserted that goals should be concrete and non-vague. For example, instead of urging staff to “improve the customer experience,” a leader may challenge the team to increase five star reviews by 20% by the end of the quarter.

Providing incentive for employees to reach the target is another best practice. Though prizes can be helpful motivators, material rewards are not the only performance drivers. Explaining the importance and reasoning behind a goal can make a powerful impression. For example, the general manager of a restaurant may inspire waitstaff to embrace service standards and prioritize customer satisfaction by pitching the dining experience as a treat that the guests might save up for and look forward to.

The goal-setting process is not the sole responsibility of the leader or the staff, but rather a collaborative effort that involves all parties imagining and working towards a common aim in tandem.

Defining objectives is a critical component of employee inspiration and fulfillment. When you connect your teammates to the organization’s mission and lay out a clear plan of action together, you motivate your team to commit to the outcome and invest in the company’s success.

Check out this list of goal setting exercises for employees.

Employee engagement motivation theories

While the term employee engagement gained traction in the 90’s, the concept draws from many older psychological theories of motivation, including:

Maslow’s hierarchy of needs: Psychologist Abraham Maslow created the famous pyramid that ranked human necessities in order of importance. At the bottom of the pyramid sit basic needs such as food & shelter, while at the top of the pyramid are less urgent needs such as self-actualization. To meet the needs at the top of the pyramid, one must first need the most basic needs. Meaning without support and safety, an employee cannot reach full potential.

Hertzberg’s two factor theory: Hertzberg’s theory, also called the motivation-hygiene theory and dual-factor theory, breaks down workplace conditions into two basic categories: elements that cause workplace satisfaction and elements that cause workplace dissatisfaction. Hertzberg explains that motivators, or psychological and emotional factors such as autonomy, potential for growth, challenging work, and recognition, influence employee satisfaction.

Meanwhile, hygiene factors, or physical conditions such as workplace atmosphere, pay and benefits, and management style, contribute to worker dissatisfaction. According to Hertzberg’s theory, an employer must consciously tend to both motivators and hygiene and not assume that improving one area will automatically impact the other.

Vroom’s theory of expectancy: Expectancy theory says that an individual chooses to behave in a certain way based on the expected result of that action. Victor Vroom outlined three parts of the theory:

  1. Effort → Performance (E→P): The belief that effort can bring about a certain outcome. This element depends on the worker’s self-confidence, the perceived difficulty of the goal, and the sense of autonomy and control.
  2. Performance → Outcome (P→O): The idea that the individual will receive a reward for achieving the goal, such as money, acknowledgement, status, or self-satisfaction. The worker must trust that the awarders will make good on promises and evaluate and distribute rewards fairly.
  3. Valence V(R): Valence is the importance that the individual assigns to the goal. A worker must feel that the reward merits the extra work, or that the payoff is worth the effort. The individual may also evaluate whether the company objective aligns with personal goals and needs.

Vroom conceived of these factors of parts of an equation that multiplied to equal up to a score he called motivational force. This researcher essentially broke down motivation into a math problem where individuals would choose behaviors based on which action produced the answer with the highest value.

While there are countless other scientific works that inform ideas about motivation, the above are some of the most often referenced and trusted theories.

Final Thoughts

The fact that some of the ideas in this article may seem like common sense is a testament to the extent of which leaders and society embraced these theories and incorporated the ideas into the work environment.

Many of these concepts are second nature now, but only because organizations have implemented these practices regularly on a large scale for decades. Still, revisiting the work and understanding the basic principles is important because these theories provide a framework for an educated, smarter approach to employee engagement.

For more information, check out this list of books on employee experience, books on employee engagement, and this collection of virtual employee engagement ideas.

We also have a list of ideas for employee resource groups, examples of employee engagement benefits, and this list of books on motivation.

Plus, a list of employee engagement statistics and facts and a list of the best employee motivation tips.

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Marketing Coordinator at teambuilding.com.
Team building content expert. Angela has a Master of Fine Arts in Creative Writing and worked as a community manager with Yelp to plan events for businesses.

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