Correlation Between Employee Engagement and Performance: The Top 5

What Is The Correlation Between Employee Engagement and Performance?
The good news is that research proves that there is a positive correlation between employee engagement and performance.  Highly engaged workplaces:

• grow 16.29% faster
• have a 26% higher stock performance

It can be said with confidence that employee engagement does indeed have a measurable impact on your bottom line.

5 Employee Engagement Factors that Struck Our Research Team
As part of our continual assessment of organizational culture, we conducted a study of twenty one organizations all of which were publicly traded and have conducted a Best Places to Work Employee Engagement Survey in at least three consecutive years. Each averaged more than 2,000 employees, and they represented different industries and diverse geographical areas.  Five performance factors stood out regarding the positive correlation between employee engagement and performance.

1. Revenue Growth
   The companies in the study with the highest employee engagement ratings experienced 16.29 percentage points higher revenue growth over three years than those with lower engagement scores.  This is quite a statement considering that all survey participants are purposefully trying to win the Great Places to Work Contest as part of their talent management strategy and employee value proposition.

   While average revenue grew for all entrants over the three year period (a sign to us that engaged workers perform well), those with higher revenue growth had nearly 21% more engaged employees.  With regard to quarterly revenue growth, organizations with the highest level of engagement experienced a whopping 18% greater quarterly revenue growth during the past 12 months.

2. Stock Price Appreciation
   Organizations with the highest level of engagement also experienced 26% greater stock price growth during the past 52 weeks. The chart below illustrates the difference in stock price growth.
3. Perception of Feeling Valued
   One employee engagement survey item dealt with whether or not employees believed that the “leaders of the organization value people as their most important resource.” This is a clear measure of engagement and, indeed, showed the greatest difference in engagement scores (15.2% higher) between the two groups.
4. Opportunities for Career Growth
   Another significant factor in creating high employee engagement is the opportunity for career growth and advancement. When employees see where their career path could take them within the company, they are more engaged. Here is also reflection of that measure on overall growth with a 12.4% difference in career growth scores between high and medium growth companies.
5. Employee Retention and Trust In Leadership
   In the area of Employee Retention, the difference between the two company groups was .48 on a six-point scale. And in the area of Trust in Leadership, there was a .47 difference. Both are statistically significant enough to take notice.

The Bottom Line
If you want to grow your company, make sure your people are working with you — not against you. Start by understanding the state of their engagement. Do they feel valued? Do they see meaningful career growth ahead? Do they trust their leaders to support, challenge, and guide them? Get clear, honest answers to these questions, then act decisively. Improving engagement is a direct path to stronger performance, higher retention, and a healthier, more resilient business.

To learn more about how to more effectively engage your workforce, download The Top 10 Most Powerful Ways to Boost Employee Engagement

Tristam Brown

Tristam Brown is a seasoned business consultant and organizational development expert with more than three decades of experience helping organizations accelerate performance, build high-impact teams, and turn strategy into execution. As CEO of LSA Global, he works with leaders to get and stay aligned™ through research-backed strategy, culture, and talent solutions that produce measurable, business-critical results. See full bio.