The Engagement Crisis: Why Your Workforce Is Checking Out And What HRM Theory Tells Us to Do About It

During the last few months, both from experience at the workplace and through the HRM module that I am currently undertaking, there seems to be one common theme that is recurring: employee engagement has been gradually deteriorating while the pressures on managers have dramatically increased. This is related to what we are doing in our module on motivation theories, the psychological contract, and the strategic role of HRM in shaping employee experience.

A key learning, therefore, from this course is that engagement is not a benefit, but it is actually a psychological state. According to Macey and Schneider, (2008, engagement encapsulates a mix of cognitive, emotional, and behavioral commitment to work. This is furthered by personal workplace experience, whereby when employees are uncertain or lack meaning at work, no value benefits can supplement this.

Today, disengagement has become both a human and organizational crisis.

The Cold, Hard Numbers: A Global Wake Up Call

According to Gallup's global report, employee engagement has fallen to a mere 21%, which was the catalyst for some extended debate in our peer discussion forums. Some believed it was burnout; still, others claimed it could be due to weak leadership capability or outdated HR systems. Whatever the reason, the impact is huge. Organizations with high levels of engagement have 23% higher profits than those with low levels of engagement and 78% less absenteeism, according to Gallup 2024. 

This fits the AMO model of Appelbaum et al. (2000) very well, which suggests that performance will improve when employees have the Ability, Motivation, and Opportunity to contribute. If any of these dimensions is missing, engagement collapses.

The Engagement Formula: It begins with the manager

One overriding notion that came out of class materials and learning with others is that engagement is hyper-local. Yes, organizational culture may set the tone, but the day-to-day engagement occurs between managers and their employees.

There is some debate among scholars as to where engagement originates:

According to the culture-led theorists, it is the organization's culture, values, and incentives that drive engagement.

Manager-led theorists claim the immediate leader has the strongest influence over motivation, clarity, and psychological safety (Harter, Schmidt & Hayes, 2002).

This debate played out in our study group discussions comparing organizations from hierarchical cultures (e.g. East Asia) and egalitarian cultures (e.g. Northern Europe). Hierarchical cultures are typically more reliant on managerial authority, whereas in egalitarian cultures, there is more emphasis on autonomy and shared decision-making.

Evidence, however remains consistent: upwards of 70% of team energy and engagement is driven by the immediate manager (Gallup, 2024). This strongly mirrored my own organizational experience that energized managers energize their teams, exhausted managers drain them.

Managers as the Mission: Developing the People Who Develop Others

The HRM module emphasized that leaders have to be developed and should not be assumed. Best-practice HR interventions include:

• Empathy and coaching-based leadership training
• Communication and expectation-setting frameworks
• Managerial workload support
• Values-based leadership development
• Active psychological contract management EN Rousseau (1995)

Macorva adds that managers have to have the emotional capacity to support their teams before they can influence engagement. This resonates deeply with me-when the managers were overwhelmed, the clarity disappeared, and so did team engagement.

This space is also informed by best-fit HRM theories provided by Boxall & Purcell, 2016. While managers in a start-up need agile and high-autonomy leadership, their counterparts in manufacturing environments are more suited to structured, process-driven leadership. Effective HRM must consequently be context-sensitive, rather than one-size-fits-all.

Clarity and Trust: The Non-Negotiables of Engagement 

A recurring theme in both the academic literature and our module discussions is that clarity is a cornerstone of engagement. The leading drivers of disengagement cited by LumApps (2025) are unclear expectations around job roles, performance targets, and organizational direction.

This links directly to psychological contract theory, as Rousseau (1995) maintains that when employees believe there has been a breach of trust or transparency, motivational level and commitment drop sharply.

Trust is reinforced through:

• Transparent communication
• Consistency and Ethical Decision-Making
• Values-aligned leadership
• Ongoing notification of organizational direction

In my own organization, engagement improved when leaders began sharing quarterly plans openly and inviting feedback from staff practical proof of theory in action.

Flexibility versus Isolation: Navigating the Hybrid Paradox

We had some very engaging debates about hybrid working in our online peer groups. Some peers noted that there was greater autonomy and satisfaction, which is supported by Self-Determination Theory; Deci & Ryan, 2000. Others noted potential issues of isolation, blurred boundaries, and problems with communication.

This duality is supported by research. IJFMR (2024) identifies that while flexibility empowers employees, it can also heighten loneliness and erode social cohesion. 

Best-practice organizations now:

• Focus on outputs, not hours (Kelliher & Anderson, 2010)
•  Provide digital tools that support clarity and collaboration.
• Create intentional social connection rituals
•  Redesign workflows to ensure inclusivity and visibility.

These strategies reflect the SHRM principle that people systems must be aligned with the organizational strategy, workforce demographics, and cultural context.

Conclusion

Perhaps the most valuable insight from this module and strengthened through collaborative learning is the fact that engagement is not a once a year HR exercise; rather, it is a living, ongoing process molded and influenced by clarity, trust, culture, managerial behavior, and human connection.

Apply emerging theories of HRM, rather than assumptions from the past. Treat engagement as a human need as much as a business requirement. By doing so, organizations unleash a stronger performance and the deeper potential of their people. 

References

Boxall, P. and Purcell, J. (2016) Strategy and Human Resource Management. 4th edn. London: Palgrave Macmillan.

Gallup. (2024) State of the Global Workplace Report 2024. Washington DC: Gallup Press.

IJFMR (2024) ‘The Impact of Hybrid Work on Employee Motivation and Productivity’, International Journal for Multidisciplinary Research, 12(3), pp. 45–59.

Kelliher, C. and Anderson, D. (2010) ‘Doing more with less? Flexible working practices and the intensification of work’, Human Relations, 63(1), pp. 83–106.

LumApps (2025) Internal Communications and the Future of Work. LumApps Research Institute.

Macorva (2025) Manager Influence and Team Energy Index. Macorva Research.