Here is an excerpt from an article written by Susan LaMotte for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

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Companies spend over $720 million each year on employee engagement, and that’s projected to rise to over $1.5 billion. And yet, employee engagement is at record lows — 13% according to perennial engagement survey leader Gallup. What’s wrong here? Perhaps human resources leaders are spending their money in the wrong places. Or the modern workforce is demanding more. Either way, our models and surveys aren’t working, and we’re making very little progress.

As a former HR leader for a Fortune 500 company, I’m all too aware of how flawed the system is. There are just too many external influences that affect employees’ performance. In fact, as my current team at exaqueo reviewed client data to help them address their problems with engagement, we confirmed that most employee engagement models are centered around the work experience and not on the employees.

That’s the core problem. When we only try to understand and affect what happens at work, we ignore the most basic tenet of person-organization fit: employees bring their whole selves to work. What happens after the workday may be just as important as what happens during it.

To better learn how to measure this, exaqueo developed what we call the Whole Self Model and applied it to ethnographic research we were already doing for a number of different clients. Specifically we used interviewing and focus groups to find out whether many of the root causes of engagement are actually found outside the workplace. The answer? A resounding “yes.”

In addition to the “work” part of engagement, we broadened our data set to include three additional components to round out the whole self: the internal self, the external self, and relationships. Each involves a different, specific question:

o Work: What preferences and patterns do employees exhibit in performance, engagement, and job satisfaction?
o Relationships: What people and relationships most influence employees inside and outside of work?
o Internal self: What are the values that govern the lives and decisions of employees?
o External self: Where do employees expend their energy outside of work?

As you might expect, employees don’t always commingle work and life. In fact, we found a strong correlation between increased age and an increased desire to keep work and life separate. Most Gen Xers and Baby Boomers are anxious to finish work for the day and focus on their home lives and families.

We also found that the behaviors and values employees cultivated outside work had an intense impact on how they behaved at work. When employees pulled into their driveways at the end of a commute, the events and activities that happened next governed their behaviors the following day.

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Here is a direct link to the complete article.

Susan LaMotte is the founder of exaqueo, a workforce consultancy that uses data to address clients’ workforce challenges and develops cultures, employer brands and talent strategies. A veteran of brands including Marriott International, The Ritz-Carlton Hotel Company and CEB, Susan’s been practicing HR for 17 years.