Best Leadership Practices for Boosting Employee Engagement

Employee engagement is not a new topic. In fact, it has been present in the academic literature and under the corporate leaders’ radar for a long time. Yet, Gallup’s most recent survey shows that most employees (62%) are not engaged with their work, while 15% are actively disengaged and only 23% report to be engaged¹. In addition, Gallup estimates that low engagement costs the global economy US$8.9 trillion. 

This data highlights that boosting employee engagement should be on every manager’s to-do list. This is especially important since research shows that engaged employees tend to be more productive, creative and proactive (Bošković, 2021). Moreover, organizations that foster high employee engagement can  expect better financial results in the long run (Macey, Schneider, Barbera & Young, 2009). 

Now that we have established the positive impact of an engaged workforce, let’s explore how managers can promote and sustain that engagement. We’ve outlined 5 leadership best practices, backed by scientific research, to help boost your team’s engagement levels. Read on to discover it!

Providing Feedback 

Menguc et al. (2013) defined supervisory feedback as employees' perception of receiving clear information about their performance outcomes, along with suggestions for improvement. The researchers questioned almost 500 service employees and customers in 66 retail stores, asking employees about the feedback they received from their supervisor and clients regarding their performance. The results showed that employees who received more regular feedback were more engaged, and, at the same time, achieved higher levels of customer satisfaction. 

So, how and when can managers give such feedback? Here are two common approaches: 

• If the feedback is structured and scheduled, we are talking about formal feedback. Performance reviews are, for instance, an excellent setting for managers and employees to discuss the employee’s performance and behaviors, while also setting future goals and development plans. 

• ‍Informal feedback, on the other side, is usually spontaneous and more frequent, and can take place in day-to-day situations.  

While both are important and beneficial for employees, managers should learn to differentiate them to make the most of it. 

When we talk about feedback as a best practice, it is not only about quantity, but also the quality. Gallup’s 2023 survey shows that only 23% of employees had received meaningful feedback in the last week. Good leadership means providing constructive feedback in a timely manner, while always considering the employee’s individual needs (Mone et al. 2011). 

Promoting Autonomy 

Amongst the best leadership practices to boost employee engagement, encouraging employees to be more autonomous is one of the most common. 

Autonomy refers to the level of independence and self-direction granted to an employee. Autonomous employees can determine how to perform their job responsibilities and make work-related decisions.

There are two kinds of employee autonomy, and, as we will see, leadership can impact both. 

• First, job control, which refers to employees’ autonomy over task and work conduct. For instance, leaders can encourage employees to define a plan of action to solve a particular topic. 
• Secondly, schedule control, which refers to letting employees  control the timing and location of their work, which is especially associated with work-life balance (Wheatley, 2017). A good example of schedule control is allowing employees to choose which days of the week they want to work remotely instead of imposing specific days. 

Leaders can thus give employees freedom to design their work  in terms of how, what and with whom (job control), but also when and where (schedule control). 

Providing such autonomy to employees can be difficult in a traditional structure, as decisions are mostly made at the top of the hierarchy. Indeed, research has shown that in flatter organizations (with less hierarchical levels and more decentralization), employees tend to have more autonomy (Lee & Edmonson, 2017). This is the case for example in organizations that practice self-management using models like Holacracy, Sociocracy or Teal.

Whether you’re looking to implement this kind of organizational model or simply give your employees more autonomy, several tools can help you achieve this. Among them is Holaspirit: a self-management tool that helps clarify roles, responsibilities, processes and policies. With this level of transparency, employees can make informed decisions on their own, without always needing to seek approval from their manager. 

Curious to know more? Schedule a demo with our team to discover the full benefits of our platform:

Supporting Employee Participation in Decision-Making 

Another leadership best practice to increase employee engagement is to have a workforce that actively participates in decision-making (Hinkel & Allen, 2013). Meetings are, for instance, a great place to encourage the team’s participation in solving challenges. Research from Yoeger et al. (2015) even shows that teams with greater participation in meetings are usually more engaged.

Other studies (e.g., Stohl & Cheney, 2008) showed that if employees perceive that the opportunity to participate is not genuine (for instance, their opinions are not really considered), engagement will not increase. Thus, it is important that leaders learn not only to encourage employees to participate but also to use and benefit from their inputs. 

Even if leaders are aware of this good practice, sometimes they don’t have the right structure and tools to implement it. Holaspirit helps simplify thanks to two features:

• Meetings: Use customizable meeting templates to help structure meetings into clear steps (e.g., review recurring actions, share project updates, discuss agenda items). At the end of each meeting, an automatic report is generated to summarize what was discussed.
• Proposals: Empower any team member to suggest changes to roles, policies or processes. Proposals can be submitted asynchronously through a voting process or brought into a meeting for discussion. 

Giving Incentives 

 Breevaart el al. published a very impactful paper in 2014 where they examined if leadership behaviors contributed to employee engagement. Amongst leaders' actions, they examined contingent rewards – when employees receive incentives after successfully completing their tasks. 

Contingent rewards come in two different forms: 

• Material (e.g., bonus) 
• Psychological (e.g., praise)

The study took place aboard a sailing ship, where 61 cadets were asked to fill out a daily questionnaire measuring their work engagement and their leaders’ behaviors. The results showed that both material and psychological incentives contribute to the cadets' work engagement, which in turn increased their sense of autonomy. 

While material incentives can be challenging to implement in a team, psychological ones are cost-free and can yield similar outcomes. In their 2022 study, Tao et al. explored the impact of leaders’ motivational communication on employees. Their findings suggest that, particularly in times of crisis (e.g. Covid 19 crisis), daily motivational communications had a positive effect on employee engagement. 

One way for leaders to motivate employees is to share knowledge. For instance, sharing industry insights that may not be directly relevant to their work but could be of interest for them. Another one, as previously mentioned, is informal praise. However, leaders should ensure that such praise is meaningful and sincere, otherwise it can be counterproductive. If done correctly, this is an excellent leadership tool that can improve employee engagement and overall organizational morale.

Also read: 50 Effective Employee Engagement Strategies

Adopting the Right Leadership Style  

Leadership is not homogenous, and how employees perceive their leaders can have a great impact on their work experience. As we will explore below, some leadership styles can foster employee engagement, while others can be detrimental. 

A leadership style refers to the characteristic approach and methods a leader uses to guide, motivate, and manage a group or organization. The way a leader behaves affects employees in many ways, one of them being their level of engagement (Strom et al. 2014).  

Here are some leadership styles and their effect on employee engagement: 

• ‍Abusive Supervision: On the negative side of the spectrum we find abusive supervision, which undermines employee engagement (Liu et al. 2021). Several studies have shown that subordinates may decrease their work effort when they feel treated unfairly by their supervisors (Liu & Wang, 2013). As a result, abusive supervision is negatively related to employee well-being (Tepper, Simon, & Park, 2017). 

Also read: How Do You Tactfully Handle a Micromanaging Boss ?

• ‍Laissez-faire: This style is characterized by non-involvement, showing indifference, being absent when needed, overlooking achievements and problems (Koech et al. 2012). While this leadership style may not necessarily decrease employee engagement (decreasing it), research shows that it does not enhance it either (Liu et al. 2021).

• ‍Transactional Leadership: This style includes an exchange process between the leader and the follower, resulting in compliance with the leader’s demands (Trottier et al., 2008). As discussed in the section on incentives, this style can help increase engagement, although the long-term benefits remain uncertain (Breevaart et al., 2014)

• Transformational Leadership: This approach involves leaders who inspire and motivate their followers by communicating a compelling vision, shared goals, and values, while modeling the desired behaviors (Vincent-Höper et al., 2012). Research shows that transformational leadership has the strongest correlation with employee engagement (Gemeda & Lee, 2020).

A best practice is thus to adopt a transformational leadership style, which aligns with organizational frameworks such as Holacracy and Sociocracy, where employees are empowered to share responsibilities, and managers take on a coaching role. 

PS: want to discover more leadership styles that can have a positive impact on employee engagement? Download our white paper full of expert insights 👇

En conclusion

Employee engagement offers long-lasting benefits for individuals, teams, and organizations. However, traditional managerial approaches often overlook this and focus too heavily on performance (Gruman and Saks, 2011). To avoid this, leaders need to implement effective employee engagement strategies. This includes promoting autonomy and participation, providing clear feedback and appropriate incentives. Several organizational models can help support these leadership best practices, and thus boost employee engagement in the process. Download our white paper to know more about them 👇

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In our white paper "The Ultimate Guide to Organizational Models", you'll get: a comprehensive overview of innovative organizational models (like Agile, Teal, Holacracy, Constitutional Management, and more), testimonials from pioneer organizations that have successfully adopted it, best practices for choosing, implementing and measuring the effectiveness of our model, as well as digital tools to facilitate the transition.

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References 

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