The topic of employee engagement is ubiquitous in HR conversations from independent professionals to the C-suite. It’s no wonder that companies are taking note. Studies consistently show that employees work more efficiently, are less likely to leave their jobs, and more likely to take pride in their work and that of their company, when they are engaged. Engagement has also been linked to a number of important business outcomes, including higher levels of customer service, customer satisfaction, an environment of better collaboration and creativity, and fewer workplace accidents. Thus engagement is the best single diagnostic measure of an organization’s wellbeing and potential: engaged organizations are happy and likely to be productive; disengaged organizations need help.

Unfortunately, engagement is far from the work place norm. Surveys indicatethat no less than 70% of the global workforce is either not engaged or actively disengaged. Although these data are often contested – it classifies people as “engaged” only if they agree with every statement of an engagement survey – it is based on organizations who actually bother asking their employees how they feel at work. Most companies in the world still don’t, so there is arguably a significant amount of selective sampling here: the most miserable employees in the world are probably not even included in these data!

In addition, it is estimated that 70% of the employed workforce in most developed economies consists of passive job seekers; that is, people who are not actively looking for a job but passively waiting for an offer or opportunities. For example, LinkedIn estimates that 2/3 of its 350 million members are passive job seekers. And, self-employment and start-up activity rates have been increasing for over a decade. In the US alone, by 2020, 40% of the workforce will be self-employed. Although people enter self-employment and launch their own business for many different reasons, there is a common cause that determines most of these decisions over and over again: the desire to be your own boss, or, rather, the desire to avoid working for someone else. Bad leadership, then, is the most common cause for the disengagement epidemic.

Where’s the disconnect?
Engagement is not merely about making employees happier at work; it is about bringing out the best in people and tapping their full potential on a day-to-day basis. As managers, we are often unaware of our disengaging behaviors. A leader’s personality and values have tremendous impact on an individual’s ability to meet three basic psychological needs:

• The need to have good relationships with others.Good leaders foster teamwork, friendship, and collaboration through modeling healthy conflict and good relationships; inept leaders tend to divide and isolate employees through manipulation, micromanaging, or command-and-control leadership.
• The desire to be successful.Good leaders promote employee contributions and champion their successes; they are seen as fair and clearly set out the rules of the game for every team member. In contrast, bad leaders blame their employees for their own failures and compete with them, often by taking credit for others’ accomplishments.
• The desire to find meaning, both in work and life.Good leaders provide their subordinates with a clear sense of purpose and a meaningful mission. Through a clear mission, they explain to subordinates why their work and the long-term strategy of the organization matter. Conversely, bad leaders alienate employees by depriving them from meaning.

Take a look in the mirror 
While the overall strategy to drive employee engagement may vary by organization, the discussion must always begin and end with leadership. HR departments rely on annual survey results while looking for exciting ways to enhance employee happiness. Lavish amenities are thrown at employees. But these efforts are moot without an understanding of one of the best ways to improve employee engagement: by taking a look in the mirror.

Leadership and effective management are crucial to employee engagement. Indeed, our data indicates that around 20-30% of the variance in employee engagement can be attributed to factors directly related to leadership, particularly employees’ direct line manager. Great leaders engage followers and harness their energy to perform to their highest ability. They create synergies and turn average individual players into an A-team. Who you are (your personality), determines how you behave, the decisions you make, and the culture you instill, and these three consequences of your character will have a substantial impact on your team’s performance and morale.

If you are a leader, ask yourself the following questions: Do you set goals and establish clarity? Do you create effective team processes? What sort of climate are you creating? Is there a clear alignment between what you say and what you do? Do you provide employees with critical, but constructive, feedback? Do you push your team to perform to the highest possible level? Finally, do you know what your team’s mindset is right now?

The extra mile
When people are engaged, they find meaning at work and are proud of what they do; they are willing to go the extra mile and work beyond their formal roles or responsibilities. The bottom line is that leadership creates engagement, higher employee engagement equals better organizational performance, and lower employee engagement equals worse organizational performance. Thus, engagement is the ultimate metric for evaluating leadership effectiveness.