The Psychology of Team Engagement

Co-authored with Dr. Brian Williamson

Team engagement has become a fundamental determinant of organizational success. The complexities of modern work—remote teams, digital transformation, shifting employee expectations—make it challenging for leaders to maintain team motivation, engagement, and enthusiasm.

Sustained high levels of team engagement directly affect productivity, creativity, and business performance; while disengagement can lead to costly employee turnover, diminished team morale, and lost opportunities. In a competitive landscape where technology, strategy, and resources are often evenly matched, the true differentiator is an empowered workforce that feels connected and aligned with the company’s mission. Engaged teams are not just more productive—they are the driving force behind growth and competitive advantage.

Why Team Engagement Matters

The impact of team engagement is profound. A Gallup study revealed that companies with highly engaged employees are 22% more profitable (Gallup, 2023). Furthermore, a report by Willis Towers Watson, a global consultancy, found that organizations with high engagement levels achieve 19% higher operating income (Willis Towers Watson, 2023).

Disengaged employees, on the other hand, contribute to significant losses. As further reported by Gallup, companies with low engagement levels experience turnover rates 50% higher (What Is Employee Engagement and How Do You Improve It?, 2024).

The Key Question: Why Are Some Teams More Engaged than Others?

Understanding and addressing employees' psychological needs is key to boosting motivation, based on self-determination theory (SDT). The theory highlights three primary drivers: autonomy, competence, and connection.

Autonomy: When employees have control over their work and the freedom to explore areas of personal interest, they become more engaged and productive. Companies such as 3M, Facebook, and Google have embraced this concept with their own initiatives: 3M’s 15% Rule and Google’s 20% Time, whereby employees can work on personal projects that may benefit the company. Such autonomy fosters creativity, innovation, and personal growth, leading to success stories like Post-it Notes and Gmail.

Competence: Feeling competent boosts engagement and satisfaction. Organizational psychologist Adam Grant highlights the importance of genuine competence, which involves listening, learning, and adapting. To cultivate it, organizations should support continuous learning, provide feedback, and set challenging yet achievable goals. Companies such as Tesla encourage employees to solve complex problems, ensuring constant skill development and motivation.

Connection: A sense of connection and belonging is a powerful motivator. Research shows that employees who feel connected to their organization and their colleagues are more engaged, loyal, and productive. Google’s Project Aristotle demonstrated that teams perform better when members feel safe to speak up. Patagonia fosters connection by aligning its environmental values with those of its employees, creating a strong sense of community and shared purpose.

Leadership’s Role in Engagement

Effective leaders understand that their behavior directly influences how connected employees feel to their work. A great example is Ed Bastian, CEO of Delta Airlines, who transformed the company’s culture by focusing on employee well-being. Bastian introduced resources to help employees manage stress and maintain mental health, improved communication, feedback, compensation, and benefits. Additionally, he implemented a profit-sharing plan, which resulted in a $1.6 billion payout to Delta employees in 2020. The culture shift not only boosted engagement but helped Delta weather industry challenges such as the COVID-19 pandemic.

As a frequent traveler, I observed this culture shift firsthand on Delta’s inaugural flight from Munich, Germany to New York’s JFK, where Matteo Curcio, senior vice president for Europe, the Middle East, and Africa, was on hand to welcome passengers and congratulate the team. From the enthusiastic welcome passengers received onboarding to the meticulous attention to detail throughout the flight, every team member embodied Delta’s commitment to delivering a remarkable travel experience. The pride and enthusiasm of the leadership team and flight crew were evident in their interactions with passengers.

Cross-Cultural Psychology Essential Reads

Partitioning the Rainbow: The Influence of Culture on Color

The Achieving Peers: To Resent or to Emulate?

The Science Behind Emotional Engagement

Neuroscience reveals that oxytocin, the bonding hormone, plays a significant role in building trust and collaboration within teams. Leaders who create a supportive, inclusive environment can trigger the release of oxytocin in their employees, strengthening bonds and engagement. We frequently advise organizations on the advantages of hiring individuals based on their potential and ability to fit with the company culture, rather than just their ability to fill a role.

Zappos is a prime example of a company that has achieved remarkable success by prioritizing employee happiness and engagement and focusing on the person. Under Tony Hsieh's leadership, Zappos created a unique company culture by emphasizing hiring for cultural fit, even over technical skills, ensuring that employees shared the company’s core values.

The company invested heavily in training and development, empowering employees to excel in their roles and grow professionally. Zappos also fostered a fun and creative work environment, complete with casual dress codes and vibrant office spaces, which contributed to high levels of job satisfaction. By offering generous benefits and encouraging autonomy in decision-making, Zappos not only motivated its staff but also delivered exceptional customer service.

On the contrary, companies that foster high-stress, competitive environments often see disengagement. For example, WeWork’s meteoric rise and subsequent implosion can be attributed, in part, to the company’s toxic work culture under former CEO Adam Neumann. Unrealistic expectations, a relentless work pace, and a lack of emotional support led to widespread employee burnout, which ultimately contributed to the company’s downfall.

Conclusion: Building a Culture of Engagement

The psychology of team engagement is multifaceted, but the underlying principles are clear: People want to feel empowered, competent, and connected. Leaders who prioritize these needs through empathetic leadership and fostering a sense of belonging are better equipped to build high-performing, motivated teams.

When employees are engaged and feel valued, they are more productive and innovative, leading to improved performance and efficiency. The enhanced performance translates into better customer service and product quality, which can significantly boost market share, consumer loyalty, and a deep emotional connection to the brand.

Companies with highly engaged teams often see a positive impact on their profitability. By investing in team engagement, organizations not only strengthen their internal culture but enhance their competitive edge and financial success.

Are you cultivating an environment in which your team feels genuinely engaged, or are you missing out on the immense potential of a motivated workforce?

Dr. Brian Williamson is executive director of PMO Advisory and a visiting lecturer in leadership and management studies at the University of Oxford. A global authority in business transformation, employee experience, and purpose-driven project management, he has authored multiple books.