Organizations spend billions of dollars on tools to bolster employee engagement, but the return on those investments is unclear. According to the Gallup State of the Global Workplace report, only 15 percent of workers are engaged with their employers.

Why should you care? For starters, engaged workers are more likely to stick around and to recommend their companies as good places to work. That’s no small thing for manufacturers desperate for skilled workers. What’s more, an engaged workforce is more productive and more apt to learn new skills.

To address issues of employee engagement, market research firm Chadwick Martin Bailey (CMB), a subsidiary of global engagement agency ITA Group, conducted a study to understand the psychological benefits that drive employee loyalty. CMB surveyed nearly 1,500 full-time employees at U.S. companies across a range of industries.

The study found that:

  • Five types of psychological benefits are critical to employee engagement: functional, emotional, personal identity, social identity and cultural identity.
  • Identity benefits are particularly important, highlighting the need to foster employees’ pride, self-esteem and sense of belonging.

By identifying the key psychological benefits that should be their top priority for improvement, companies can be strategic in their use of engagement initiatives and focus resources on programs likely to work best.

“This is in line with what social science teaches us about the kinds of things that motivate behavior,” says Erica Carranza, Ph.D., vice president of consumer psychology at CMB and co-author of the study. “Employees across tenure, level and role are motivated by the psychological benefits we identified in this research—and the companies with programs in place to deliver these benefits will reap the rewards of a dedicated workforce.”

Interestingly, the study found that personal identity benefits and emotional benefits were more important to engagement than functional benefits. In other words, taking pride in one’s work, feeling a sense of belonging, and having workdays that evoke overall positive emotions are more important than pay and perks.

“This research shows that companies can’t stop at benefits like compensation packages and work-life balance to truly inspire and engage their workforce,” adds Christina Zurek, insights and strategy leader at ITA Group. “And while making a bigger push for wellness programs and similar initiatives can help, the most powerful investment a company can make to engage employees is to nurture emotional and identity benefits.”

How can you do that on assembly lines? Foster communication; be open-minded and encourage workers to express ideas without criticism. Support employees in their work and growth; provide learning opportunities and cross-training. Collaborate on problem-solving. When employees get the idea that management must solve every problem, it decreases their sense of empowerment. Finally, share information. Let employees know how the company is doing and the reasoning behind decisions.