In a recent blog for the Harvard Business Review, Ambiga Dhiraj, Head of Talent Management for Chicago-based Mu Sigma, a decision science and analytics services firm, made an interesting observation about her company’s talent management process:

When it comes to employee development, most companies traditionally follow the 10/80/10 rule: The top 10 percent are promoted, the middle 80 percent are nurtured, and the bottom 10 percent are let go. At my company, we followed this advice at first too. But we found that we were losing too many from the middle 80 percent: people who had great potential were leaving because they weren’t getting promoted quickly enough.

As any HR professional can tell you, Mu Sigma isn’t the only company that faces this struggle – in fact, a survey released last year showed that nearly 40% of employed adults were looking for a new job. That’s bad news for companies. According to Dr. Robert Hogan, when [engagement] is low, absenteeism, turnover, and theft go up, and productivity and customer satisfaction go down.

So how can companies address low engagement? Hogan said engagement is commonly defined in terms of four components: cognitive – the role is consistent with a person’s identity; emotional – the person likes the role; physical – the person will work at the role; and existential – the role provides personal meaning.

Dhiraj said her company changed the basic way it motivated its employees:

[Previously], our managers used promotions as carrots. Now they are challenged to motivate employees in other ways – by giving them interesting projects to work on, public praise for their work, and the right guidance and encouragement.

Fellow HBR blogger Tony Schwartz, president and CEO of The Energy Project, approaches engagement on an even more basic level:

The single highest driver of engagement, according to a worldwide study conducted by Towers Watson, is whether or not workers feel their managers are genuinely interested in their wellbeing. Less than 40 percent of workers felt so engaged.

Feeling genuinely appreciated lifts people up. At the most basic level, it makes us feel safe, which is what frees us to do our best work. It’s also energizing. When our value feels at risk, as it so often does, that worry becomes preoccupying, which drains and diverts our energy from creating value.