Key Drivers of Employee Engagement and How to Improve Them
In the modern workplace, employee engagement has become a common strategic imperative. Companies with highly engaged employees report higher productivity, better customer satisfaction, and lower turnover. For founders and executive leaders, understanding the key drivers of employee engagement is not just a matter of HR best practice—it's essential to sustaining business growth, enhancing workforce motivation, and improving employee retention.
At Founded Partners, we work closely with founder-led companies to build cultures where people perform at their best. Of all the topics I study in the field of business psychology, employee engagement is the one I find most fascinating. It sits at the intersection of leadership, motivation, and culture—and it has tangible impacts on business success. It’s also the primary focus of my upcoming research as I pursue a Masters and Doctorate in Psychology.
This blog serves as a playbook for founders looking to implement proven strategies to improve engagement in their organizations.
What Is Employee Engagement?
Employee engagement refers to the emotional and cognitive connection an employee feels toward their work and organization. Engaged employees are enthusiastic, committed, and invested in both their day-to-day tasks and the company’s larger goals. As defined by William Kahn (1990), engagement is "the harnessing of organization members' selves to their work roles."
Disengaged employees, on the other hand, may still complete tasks, but they lack energy, commitment, and initiative. Over time, this leads to burnout, underperformance, and turnover.
Why Engagement Matters: The Business Case
According to a Gallup report, businesses in the top quartile for employee engagement experience:
21% higher profitability
17% higher productivity
59% lower turnover (in high-turnover organizations)
Engagement isn't just about employee satisfaction—it's about organizational performance.
The Key Drivers of Employee Engagement
Understanding what drives engagement allows leaders to take focused action. The following are the most commonly cited and research-backed engagement drivers:
1. Meaningful Work
According to the Harvard Business Review, employees who find their work meaningful are more engaged and resilient. Meaning is derived from alignment with personal values, a clear sense of purpose, and a connection to the organization's mission.
How to implement:
Ensure every employee understands how their work contributes to broader company goals.
Regularly communicate the company’s mission and values.
Create opportunities for employees to take on projects that align with their strengths and passions.
2. Autonomy and Empowerment
Self-determination theory (Deci & Ryan, 1985) highlights autonomy as a core psychological need. Employees who feel they have control over how they do their work are more likely to be engaged.
How to implement:
Shift from micromanagement to coaching.
Involve employees in goal-setting and decision-making.
Offer flexibility in work schedules and methods where possible.
3. Recognition and Feedback
People want to know that their work matters. Recognition—both formal and informal—boosts morale and reinforces positive behavior. Feedback, meanwhile, helps employees grow and stay aligned with expectations.
How to implement:
Create a culture of continuous feedback.
Recognize achievements publicly and frequently.
Train managers to give constructive, clear, and empathetic feedback.
4. Growth and Development
Employees who see a path for advancement and skill development are more likely to stay engaged. Organizations that invest in employee learning signal a commitment to long-term growth.
How to implement:
Provide access to courses, workshops, and coaching.
Establish clear career progression pathways.
Encourage cross-functional projects that build new capabilities.
5. Trust in Leadership
Trust is foundational to engagement. When employees trust leadership, they feel safer, more aligned, and more committed to the organization’s success.
How to implement:
Be transparent about company performance and direction.
Involve employees in key conversations where appropriate.
Demonstrate consistency and integrity in leadership decisions.
6. Psychological Safety
Coined by Amy Edmondson, psychological safety refers to a work environment where people feel safe to take interpersonal risks. It’s essential for collaboration, innovation, and engagement.
How to implement:
Encourage curiosity and questions without fear of embarrassment.
Address incivility or toxicity immediately.
Model vulnerability at the leadership level.
7. Fair Compensation and Benefits
While not the only factor, compensation is still a foundational element of engagement. It signals that the organization values the employee’s contributions.
How to implement:
Conduct regular compensation benchmarking.
Offer benefits that support well-being (mental health, flexibility, etc.).
Be transparent about how compensation decisions are made.
How to Measure Engagement
You can’t improve what you don’t measure. Engagement should be monitored regularly through:
Anonymous employee surveys
One-on-one check-ins
Pulse surveys on specific topics (e.g., recognition, workload)
Use this data to spot trends, adjust strategy, and create action plans.
Creating a Culture of Engagement: What Founders Can Do Today
Founders play a unique role in shaping culture. Unlike large corporations with layers of management, founder-led companies often have a more direct line to employees. Use that influence to:
Role model continuous learning
Celebrate effort as well as outcomes
Invest in leadership development at all levels
By building a culture grounded in motivation, trust, and growth, founders create environments where people thrive.
Final Thoughts: Engagement as a Leadership Discipline
Employee engagement isn't a "nice to have." It's a strategic lever for growth, innovation, and retention. By understanding and improving the key drivers of employee engagement, leaders build workplaces that attract and retain top talent.
At Founded Partners, we bring a business psychology lens to every engagement. Through our Executive Coaching & Leadership Advisory work, we help founders and executives design cultures that inspire, empower, and retain high-performing teams.
If you’re ready to build a more engaged, motivated, and high-impact workforce, let’s talk.