A hot topic among HR and communications professionals is that of employee engagement and its possible link to business success. Investigating this relationship would require great care, and involves a number of steps:

1. The first step identifies the variables involved. The sentence above proposes a causal relationship between two variables (let us call them EE for employee engagement, and BS for business success). EE is a predictor and BS is the dependent variable in this relationship: EE ➔ BS.

2. In the second step we consider both variables in turn, and it quickly becomes pretty clear that we cannot measure either of them in a direct way. The success of a business could be assessed in a variety of ways, and the same applies to employee engagement. So both EE and BS are really latent variables, and for each one we need to specify a number of observed variables, which can be used to indicate the value of the latent variable. For example, the kinds of behaviours we might associate with an engaged employee are: putting effort into work over and above what is required; staying in the organization despite offers of better pay elsewhere; taking the initiative to solve work-related problems; praising the organization as a good place to work.