Engaged employees are more than simply satisfied with their jobs. Instead, according to employee engagement literature, engaged employees are passionate about and energized by what they do, are committed to the organization, the mission, and their job, and are more likely to put forth extra effort to get the job done. take pride in their work, A number of studies of private-sector entities have found that increased levels of engagement result in better individual and organizational performance including increased employee performance, productivity, and profit margins; higher customer service ratings; fewer safety incidents; and less absenteeism and turnover. Studies of the public sector, while more limited, have shown similar benefits. For example, the Merit Systems Protection Board (MSPB) found that higher levels of employee engagement in federal agencies led to improved agency performance, less absenteeism, and fewer equal employment opportunity complaints. The FEVS measures employees’ perceptions of whether, and to what extent, conditions characterizing successful organizations are present in their agencies. OPM has conducted this survey every year since 2010. The EEI is composed of 15 FEVS questions covering the following areas: Leaders lead, which surveys employees’ perceptions of the integrity of leadership, as well as employees’ perception of leadership behaviors such as communication and workforce motivation. Supervisors, which surveys employees’ perceptions of the interpersonal relationship between worker and supervisor, including trust, respect, and support. Intrinsic work experience, which surveys employees’ feelings of motivation and competency relating to their role in the workplace. According to OPM, the EEI does not directly measure employee engagement. Instead, it covers the conditions that lead to employee engagement. Specifically, OPM noted that organizational conditions lead to feelings of engagement, which in turn lead to engagement behaviors, such as discretionary effort, and then to optimum organizational performance. Sometimes the EEI is discussed in the same context as another workforce metric, the Partnership for Public Service’s Best Places to Work in the Federal Government rankings. Although these scores are also derived from the FEVS, they were created as a way of rating employee satisfaction and commitment across federal agencies. The rankings are calculated using a weighted formula of three different questions from OPM’s FEVS: (1) I recommend my organization as a good place to work, (2) considering everything, how satisfied are you with your job, and (3) considering everything, how satisfied are you with your organization. The recent government-wide average decline in the EEI masks the fact that the majority of federal agencies sustained and a few increased EEI levels during the same period. From 2006 through 2014, government- wide EEI levels increased to an estimated high of 67 percent in 2011 and then declined to an estimated 63 percent in 2014, as shown in figure 1. The decline in the EEI that began after 2011 is the result of several large agencies bringing down the government-wide average. For example, we found that 13 out of 47 agencies saw a statistically significant decline in their EEI score from 2013 to 2014. While this is 28 percent of agencies, they employ nearly 69 percent of federal employees and include the Department of Defense, Department of Homeland Security, and Department of Veterans Affairs. Meanwhile, the majority of agencies sustained their EEI levels and a few improved them, as shown in figure 2. Between 2013 and 2014, of 47 agencies included in our analysis of the EEI, 3 increased their scores, 31 held steady, and 13 declined. The recent government-wide downward trend in employee engagement levels coincided with external events—such as sequestration, furloughs, and a 3-year freeze on statutory annual pay adjustments from 2011 to 2013—that OPM and others contend negatively affected federal employee morale. For example, in March 2014, we reported that officials from agencies—including those that furloughed employees— raised concerns about how sequestration affected the morale of current employees. Even one agency with a downward trending engagement score is not to be taken lightly and there is opportunity for improvement at all federal agencies. However, the large number of agencies that sustained or increased their levels of employee engagement during this time suggests that agencies can positively influence employee engagement levels even as they weather difficult external circumstances. For example, the FTC maintained a consistent estimated 76 percent EEI score—well above the government-wide average—throughout the period of general decline. Of the three components that comprise the EEI, employees’ perceptions of leaders consistently received the lowest score, and at times was about 20 percentage points lower than the other components. Moreover, from a high point in 2011, leadership scores saw the greatest decrease and accounted for much of the government-wide average decline in the EEI, as figure 3 shows. The questions comprising the EEI leadership component focus on integrity of leadership and on leadership behaviors such as communication and workforce motivation (see table 1). Three of the five questions are specific to senior leaders—department or agency heads and their immediate leadership team responsible for directing policies and priorities and typically members of the Senior Executive Service or equivalent (career or political). Two are specific to managers—those in management positions who typically supervise one or more supervisors. In our 2003 work on transformations, we found that leaders are the key to organizational change—they must set the direction, pace, and tone, and provide a clear, consistent rationale that brings everyone together behind a single mission. The relative strength of the supervisors component of the EEI suggests that the employee-supervisor relationship is an important aspect of employee engagement. These questions focus on the interpersonal relationship between worker and supervisor and concern supervisors’ support for employee development, employees’ respect, trust, and confidence in their supervisor, and employee perceptions of an immediate supervisor’s performance. This is consistent with MSPB research, which suggests that first-line supervisors are key to employee engagement and organizational performance. Intrinsic work experience was the strongest EEI component prior to 2011, but fell during the period of government-wide decline in engagement levels. These questions reflect employees’ feelings of motivation and competency related to their role in the workplace, such as their sense of accomplishment and their perception of utilization of their skills. Understanding how employee engagement varies within differing populations of employees can enable agency leaders to consider how different cohorts experience their environment and thus can help leadership determine how to focus engagement efforts. For example, knowing that employees with fewer supervisory responsibilities could be less engaged—and could be having a negative effect on organizational performance—could spur agency leaders to direct additional resources to understanding the needs of this subset of the workforce and improving their sense of engagement. We found that government-wide, the greatest variation in EEI levels was related to pay category and supervisory status. For example, respondents in progressively lower General Schedule (GS) pay categories had progressively lower levels of engagement government-wide. In contrast, employees in the SES pay category reported consistently higher engagement levels—at least 10 percent more than any lower pay category. While there was less difference between the EEI levels of other pay categories, employees in the GS 13 through 15 categories consistently had higher EEI levels than employees in all other lower GS pay categories. Employees in the Prevailing Rate System, commonly known as the wage grade system, consistently had the lowest EEI levels. For example, in 2014, EEI levels for respondents in the SES pay category were an estimated 84.2 percent compared to an estimated 54.7 percent for respondents in the wage grade pay category. Similarly, respondents with fewer supervisory responsibilities had progressively lower EEI levels government-wide. Because employees in higher pay categories are likely to have more supervisory responsibilities, responses by pay category and supervisory status represent similar populations. Variations in EEI levels by supervisory status are shown in figure 4. With respect to other populations of employees, agency tenure, federal tenure, age, and race consistently resulted in some variation but less than pay category and supervisory status. For example, in 2014, American Indian or Alaska Native respondents reported the lowest engagement for any race category with an estimated EEI of 57.6. Asian respondents reported the highest levels of engagement with an estimated EEI score of 68.4. Gender, ethnicity (Hispanic/non-Hispanic), and work location (headquarters/field) consistently had the least variation. For example, in 2014, males had an estimated EEI of 63.2 percent and females an estimated EEI of 63.3 percent. For results of our analysis of employee population groups, see appendix II. Overall we found that what matters most in improving engagement levels is valuing employees—that is, an authentic focus on their performance, career development, and inclusion and involvement in decisions affecting their work. The key is identifying what practices to implement and how to implement them, which can and should come from multiple sources— FEVS and other data sources, other agencies, and OPM. The lessons learned from our three case study agencies were that the goal should not be to just increase a number—that is, have a high EEI—but should also include a focus on improving the organization. Of the various topics covered by the FEVS that we analyzed, we identified six that had the strongest association with higher EEI levels compared to others, as described in figure 5. We used regression analysis to test which selected FEVS questions best predicted levels of employee engagement as measured by the GAO-calculated EEI, after controlling for other factors such as employee characteristics and agency. Constructive performance conversations. We found that having constructive performance conversations was the strongest driver of the EEI. For the question “My supervisor provides me with constructive suggestions to improve my job performance,” we found that, controlling for other factors, someone who answered “strongly agree” on that FEVS question would have, on average, an engagement score that was more than 20 percentage points higher than someone who answered “strongly disagree” on the 5-point response scale.