You can require attendance. You cannot require ownership. You can require that a task be done. You cannot require that anyone care whether it is done well. That gap is discretionary effort. The most valuable people look around, see what needs to be done and who they need to work with, and they own solutions. No policy produces it. No incentive guarantees it. It is given or withheld.
Engagement is a measure of discretionary effort, and Gallup has measured it at scale. In its 2024 meta-analysis, Gallup compared top and bottom quartile engagement across 183,806 work units and 3.3 million employees in 90 countries. The top quartile ran 78% less absenteeism, 63% fewer safety incidents, 32% fewer quality defects, 23% higher profitability, and 18% higher sales productivity.
The exact level of average engagement moves every year and they differ by country. The rough shape has been stable for decades. Here’s the understatement of the day. There is massive room for improvement. In the United States, roughly 30 percent of employees are engaged. Roughly 50 percent mail it in. Roughly 20 percent are actively disengaged.
What would increase engagement? Pro-social technology.
Virtue is the most pro-social technology humans have ever invented, and it has not needed an upgrade in twenty-five centuries. It has seven parts. Trust, compassion, courage, justice, wisdom, temperance, and hope. Virtue means excellence. Together they define character.
Every one of the seven virtues requires other people: trust needs someone to trust, compassion needs someone to serve, and justice defines what we owe one another.
When it comes to performance virtue is not nice to have. It is a must have. Mike Matthews at West Point calls it the 25/75 rule. Cognitive skills such as intelligence account for perhaps 25% of the variance in academic grades and job performance. Noncognitive skills such as character account for the rest. Virtue is the part of that 75% a leader can learn and practice.
Matthews measured individuals. Engagement is measured in teams. Gallup has studied 27 million employees and more than 2.5 million work units over two decades. Managers account for at least 70% of the variance in team engagement. Not the strategy. Not the pay. The manager.
That raises the obvious question. What is it about a manager that moves seventy percent? It is not technical skill. A manager can be the most competent person in the building and still run a disengaged team. What moves a team is how the manager behaves under pressure. Whether they can be trusted. Whether they put the needs of others before themselves. Whether they do the hard right rather than the easy wrong. Those are virtues, and they are the part of the 75% a leader can practice.
Despite that impact this has on engagement and performance, few leaders receive training in how to strengthen engagement by integrating virtue into daily operations.
Pay might buy attendance. Virtue earns ownership.
When leaders do receive training, the results follow. We studied two Parker Hannifin locations, both starting with low engagement. After leaders were trained to integrate virtuous leadership into daily operations, engagement dipped. Our read is that people were waiting to see whether the commitment was real. Then it climbed past where it started, rising more than 20% year over year. We tracked results across three years and published them in the Journal of General Management.
That was two locations, and the study measured one thing: the effect of virtuous leadership on engagement, before and after, across three years. It found a causal link.
Enterprise wide, Parker’s engagement level compared to peers moved from fourth quartile to first quartile. Over the decade from 2016 to 2026, Parker’s share price went from $124 to more than $1,000. The relationship between engagement and share price is correlational. Acquisitions, market forces, and sector growth all go into a ten-year run. That said, what are the chances this level of growth could occur with disengaged teammates?
There are multiple tools that leaders can deploy into daily operations. Here is just one example. Take a virtue and ask three questions. What is trust? Why does trust matter to our work? How do we strengthen it? Where we put our attention and what we practice is who we become.
Where we put our attention and what we practice is who we become.
Who is hired and who is promoted reflects where an organization puts its attention. Two questions pressure test what an organization stands for:
1) Do leaders with high competence but low character get a pass?
2) Do leaders with high character and threshold competence get a chance?
The implication is hire for character, train for competence. Hiring people of character who have threshold competence is a good bet since part of being a person of character is the commitment to getting better.
Better humans. Better performance.
