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Employee engagement, we’ve been told for decades, is an imperative key to business success. It’s the extent to which employees feel passionate about their jobs. It’s the level of their commitment to the organization. It’s the discretionary effort they devote to their work. It’s all about psychological ownership.

This not just “feel good” stuff. High levels of employee engagement and wellbeing are closely associated with productivity, customer loyalty, profitability, lower turnover and many other measures of business outcomes.

The Gallup organization has collected employee engagement data for more than 80 years across 160 countries. The average level of engagement among Gallup’s U.S. clients hovers around 35%. Obviously, this means that around two thirds of employees surveyed are less than fully engaged with their work. In the U.S. alone, disengaged employees cost the American economy an estimated $400 billion per year in lost productivity.

But what if engagement turned out to be the wrong metric to follow? What if something else has a greater influence on people’s productivity in the workplace?

Those are questions asked and answered by Eric Karpinski, author of Put Happiness to Work: 7 Strategies to Elevate Engagement for Optimal Performance.

Karpinski, a scientist who focuses on workplace achievement, has brought positive psychology tools to companies ranging from Intel, IBM and T-Mobile to Kaiser Permanente, Deloitte and Eli Lilly. His book provides a powerful vision of what work could be: deeply connected groups of dedicated, energized people who find meaning in what they do and support each other to achieve challenging goals. 

Rodger Dean Duncan: More than 70% of executives say employee engagement is important to organizational performance. Yet more than a third of workers are actively or casually searching for a new job. Why the disconnect?

Eric Karpinski: The ties between work engagement and increased productivity and profitability are rock solid, so of course leaders are interested in increasing engagement. But even with billions of dollars invested over the last decade, we aren’t moving the needle. Gallup’s engagement data in the U.S. has stayed stubbornly within a few percentage points of 30% for 20 years.

The problem is that leaders think and talk about engagement all wrong. They focus almost exclusively on the benefit to the organization of increased productivity and profitability or on the outcomes they want to see from their people—loyalty, commitment, and a willingness to go the extra mile. Of course, to the individual contributor this sounds suspiciously like a request to work harder without any clear benefits in terms of pay or improved work conditions. The result is folks looking for other job opportunities.

Eric Karpinski

Duncan: You cite a survey of 2,000 employees across North American that asked “Which of the following would you be more likely to invest time and energy in—your happiness or your engagement?” More than 80% chose happiness. For the sake of discussion, let’s assume something close to that strong preference were to prevail with much larger numbers of respondents in multiple industries. What’s the cost of focusing on engagement at the expense of happiness?

Karpinski: Most people don’t wake up in the morning and think, “Gosh, I hope I’m an engaged employee today!” But they do care deeply about the amount and frequency of positive emotions they feel (which I shorthand as “happiness”). The great—but unfortunately under-reported—news is that when people are engaged, they feel all kinds of these “activated positive emotions” like inspired, enthusiastic, proud, or having a sense of belonging, well-being or purpose. Focusing on the positive emotional outcomes of engagement taps the intrinsic motivation your people have for increasing their own happiness and those activated positive emotions drive engagement that helps reach important team goals. Everybody wins.

Duncan: We have a pretty good idea of what engagement looks like in the workplace. What does happiness look like?

Karpinski: For the most part, they look similar. There’s a huge overlap between certain types of happiness—those activated positive emotions I mentioned—and engagement.

It’s also important to be clear what types of positive emotions do not drive engagement. Many tech companies are famous for their outsize perks like free gourmet meals, fancy coffee machines, nap pods, pool tables and massage therapists. These help with recruiting and boosting certain positive emotions, such as satisfaction, contentment, and comfort. While these rest-and-digest emotions feel good, they don’t provide the energy and activation that drive engagement. So, if an organization is trying to invest in engagement, it’s better to invest time and effort into strategies that are known to increase both happiness and engagement such as appreciation, social connection, helping people discover and use their energizing strengths and find meaning in the work they do.

Duncan: You say happiness creates a series of virtuous cycles. What does that mean?

Karpinski: Virtuous cycles are situations where putting a little effort into change makes further change easier and more automatic. Happiness feels good, which creates a desire and motivation to do that activity again. That’s a virtuous cycle for an individual.

Virtuous cycles also work between people. Thankfully, this means you don’t need your whole team on board to see benefits. Start with the team members most excited about these happiness ideas, those I like to call your co-conspirators. Once you get a good head of steam going, the increased positive emotions they feel and express will often intrigue other teammates who will get curious to learn more. And because positive emotions are infectious, the whole team will start to feel increased happiness.

Virtuous cycles work between strategies, too. For example, when we get good at appreciating one another, it helps with our ability to build strong social connections, or when we learn about people’s signature strengths, it makes recognition more powerful. So, making progress on one strategy can create happiness and engagement benefits in other areas.

Duncan: What role does an “attitude of gratitude” play in boosting workplace happiness?

Karpinski: Showing recognition and appreciation is one of the simplest, cheapest and most effective ways to increase both happiness and engagement in the workplace. But while most leaders agree that appreciation is important, they are not providing enough effective positive feedback. A recent survey of 800 organizations showed that 80% of senior leaders believe employees are recognized at least on a monthly basis, but only 22% of individual contributors reported their peers are recognized that often.

To be effective, you have to notice things to appreciate. Start a simple gratitude practice where you spend two minutes each day writing down three people you appreciate and what specifically you appreciate about them. This will not only give you good items to use in your recognition, but it will rewire your brain to notice the good stuff more often. And specificity is critical because humans are great authenticity detectors. Empty expressions of “thank you” and “good job” without details don’t help anyone feel valued and can in fact backfire by signaling that you didn’t pay enough attention to know how the person contributed.

To spread the attitude of gratitude, start your one-on-one meetings by asking, “What is one good thing you’ve seen one of your team members do this week?” This will both increase your awareness of good things happening on your teams and it will help your colleagues become better at recognizing the good stuff too.

And good recognition creates a virtuous cycle as well. Research by Shawn Achor and LinkedIn found that when employees received four or more touchpoints of praise in a quarter, it doubled the amount of praise those employees provided to their peers. Once you establish a culture of gratitude, your job as a leader becomes easier as others take on the role of appreciators.

Duncan: What do you see as the most important building blocks of personal connection in the workplace?

Karpinski: Being socially connected with others is the most essential factor for our happiness and a large driver of our success and engagement. But the social distancing caused by the Covid pandemic wreaked havoc on connections between colleagues. As we start to build toward a new normal, boosting social connection is probably the biggest and easiest win in most workplaces.

Start by building opportunities for high-quality connections, those short experiences where you feel connected and in sync with another person, where you both feel seen and listened to and get energy from the interaction. To optimize these opportunities, you need to bring your full attention to the interaction. Look the other person in the eye, lean in, put away your phone. Get curious, ask questions, and repeat back what you hear.

Ensuring psychological safety is another important building block. Any efforts to create high-quality connections will backfire if your team feels like they will be humiliated, rejected or punished for speaking up, sharing ideas or asking for help.

Finally, getting to know teammates’ lives outside of work is key to building trust and social connection. Start meetings with a quick check-in question asking folks to name their non-work superpower, first job, favorite place, or best advice they’ve received. Mix it up by opening team meetings with a Pecha Kucha presentation (an idea from Scott Crabtree at Happy Brain Science, from Japanese for “chit-chat”) where one person shares 10 photos from their non-work life—family, pets, interests, hobbies, communities—with only 10-20 seconds to talk about each photo. With no time for full stories, this exercise helps people quickly learn about one another and plants seeds for other conversations after the meeting.

This column was first published by Forbes, where Dr. Duncan is a regular contributor.