Turning Passengers into Pilots: Lessons from 60 Years of Workplace Data - deep dive

Evolution of Employee Groups Over Six Decades (US & Europe)

Employees have long been observed to fall into three broad groups: Group 1 are the high performers who “make the difference,” Group 2 are the average contributors or “passengers” doing the minimum, and Group 3 are those actively working against the group’s goals (the disengaged or even sabotaging individuals). In modern terms, these map closely to engaged employees (Group 1), not-engaged employees (Group 2), and actively disengaged employees (Group 3). Surveys consistently find only about one-third or less of employees are truly engaged “difference-makers,” while the majority are psychologically checked out “passengers,” and a minority are actively disengaged and detrimental . Below, we explore how the prevalence of these groups has shifted in the US and Europe over the past 60 years, the factors causing these differences, their impact on productivity, and potential solutions.

Historical Evolution of Employee Engagement (1960s–2020s)

1960s–1970s: Traditional Work Culture and “Theory X” Management. In the post-WWII era, workplaces were often hierarchical and built on Theory X assumptions – the belief that workers are naturally lazy, dislike work, and must be closely controlled and incentivized with carrots and sticks . Many managers assumed a large share of employees would shirk if not watched, essentially treating them as potential “passengers” or worse. This management style led to rigid rules and micromanagement, which often fulfilled its own prophecy: employees in these strict environments were indeed unhappy, unmotivated, and did only what was required . Job security was relatively high (especially in unionized industries and public sector roles), meaning disengaged or low-performing workers could remain employed, contributing to a baseline level of Group 2 “passengers” (and some Group 3 malcontents) who were carried along. In Europe, many economies were rebuilding and featured strong labor protections; this sometimes fostered complacency among employees who had a “job for life.” Formal measures of “engagement” did not yet exist, but job satisfaction surveys started to appear by the 1970s. In general, the concept of actively cultivating high engagement was not a priority in this period – management focused more on compliance and productivity through supervision than on motivating passion.

1980s–1990s: Performance Differentiation and Rising Expectations. By the 1980s, global competition and economic changes (e.g. Reaganomics/Thatcherism, deregulation) put pressure on organizations to improve productivity. In the US private sector, companies began explicitly recognizing the distribution of performers. A famous example was Jack Welch’s “20-70-10” rule at GE in the 1980s: roughly 20% of the workforce were deemed top performers (“A players”), 70% were the vital but average core (“B players”), and the bottom 10% were “C players” who produced little and should be let go . Welch institutionalized annually firing the bottom 10%, forcing managers to address Group 3 underperformers. This “rank-and-yank” approach acknowledged that a small group drives most success while a small group holds the organization back. Many other corporations adopted similar forced ranking systems to weed out persistent low performers and energize the workforce. This era saw a drive to turn more employees into difference-makers or remove those actively dragging teams down. In Europe, the 1980s–90s brought waves of privatization and restructuring (e.g. UK public industries) and the push for efficiency. However, European companies and governments were generally more hesitant to embrace extreme ranking policies, due in part to stronger labor laws and cultural norms favoring job security. By the 1990s, employee satisfaction and morale became a bigger topic – organizations realized that simply retaining “passengers” without engagement had hidden costs. Management literature in the ’90s introduced the term “employee engagement” (William Kahn’s research in 1990 was seminal) and emphasized empowering employees (akin to McGregor’s Theory Y, which assumes employees can be self-motivated when given purpose ). Still, surveys in the late 20th century suggested many workers were disengaged. For example, by the late 1990s, Gallup and others began systematically measuring engagement levels, finding large portions of “not engaged” staff.

2000s: Measuring Engagement and Global Comparisons. The early 2000s ushered in widespread use of employee engagement surveys (Gallup’s Q12, etc.) to quantify Group 1 vs Group 2/3. In 2000, Gallup’s first national survey found only 26% of U.S. workers were engaged (highly involved and enthusiastic), about 56% were “not engaged”, and 18% were actively disengaged . In other words, only about a quarter were true “difference-makers,” while the majority were essentially passengers, and nearly one in five were actively negative – validating the existence of the three groups at a macro level. Over the 2000s, U.S. engagement inched upward as many companies invested in culture, leadership development, and performance management. By the end of the decade and into the early 2010s, engagement had improved modestly. Europe, meanwhile, generally lagged. By the 2000s, European workers reported declining job satisfaction over the prior 30 years, and significantly lower satisfaction compared to Americans . The phrase “Europeans work to live, not live to work” became common, reflecting a cultural attitude that perhaps work was less central to identity . Indeed, Gallup’s data showed European engagement levels in the 2000s were very low – often under 15% engaged – indicating a large majority of European employees were “checked out” or unhappy at work. This was partly attributed to poor people management practices in many European workplaces (as discussed below) rather than simply cultural preference . Throughout the 2000s, public sector organizations also started measuring engagement, often finding government and nonprofit workers less engaged than private-sector workers (with a higher share of Group 2 “just putting in time”) .

2010s: Peak Engagement and Persistent Disparities. The 2010s saw a strong focus on improving engagement on both sides of the Atlantic. Companies implemented initiatives for employee recognition, development opportunities, and better communication, aiming to convert “passengers” into active contributors. In the U.S., engagement steadily rose during this decade: Gallup recorded roughly 30% of U.S. employees engaged in the early 2010s, climbing to a peak of 35–36% by 2019–2020 . Actively disengaged numbers fell slightly (to ~13% by 2019) , indicating some progress in shrinking Group 3. This positive trend was attributed to widespread adoption of engagement best practices and better economic conditions. Europe also saw some improvement in certain countries, but overall engagement remained much lower than in the U.S. Even by the end of the 2010s, Western Europe had among the world’s lowest engagement: e.g. only ~14% of European employees were engaged vs ~33% in the U.S. by 2022 . European job satisfaction and engagement had not significantly improved from their earlier lows, suggesting many workplaces still had a large proportion of indifferent or demotivated staff. Public sector vs Private: Throughout the 2010s, data consistently showed private-sector employees reporting slightly higher engagement than public-sector employees. For instance, one survey found 38% of U.S. public-sector employees were fully engaged vs 44% in the private sector . Similarly, a Gallup poll found only 27% of U.S. federal government workers engaged, compared to 31% among other workers . This gap, while not enormous, was statistically significant and persistent, reflecting structural differences in these sectors (explored shortly).

2020s: Disruptions and “Quiet Quitting.” The early 2020s brought new challenges. Interestingly, U.S. engagement hit a record high (36%) in 2020, perhaps as organizations rallied and communicated closely during the first phase of the COVID-19 pandemic . However, subsequent upheavals – remote work, rapid change, burnout, and shifting employee priorities – led to a backslide. By 2022–2024, engagement in the U.S. fell to ~31% (a decade low), and actively disengaged rose to 17% . Younger workers in particular saw engagement drop, and the term “quiet quitting” became popularized to describe those doing only the bare minimum (essentially Group 2 “passengers”) rather than going above and beyond. Gallup’s 2023 global report framed this starkly: about 62% of employees worldwide are not engaged (“quiet quitting”) and 15% are actively disengaged (“loud quitting”), leaving only 23% engaged . In other words, nearly eight in ten workers globally are either coasting or actively unhappy at work. The economic cost is enormous – Gallup estimates that low engagement costs the world ~$8.8–8.9 trillion in lost productivity annually (about 9% of global GDP) . Europe in 2023 remained the lowest-engagement region (only ~13–14% engaged) , indicating little change in its distribution of Group 1/2/3 employees from prior decades. Meanwhile, the public vs private gap persists: government agencies often report lower engagement and more “checked-out” staff than their private counterparts, due to factors like limited accountability and incentive structures. Overall, despite some cyclical improvements, the fundamental breakdown (a minority of truly engaged vs a majority of moderate or low contributors) has proven surprisingly persistent over 60 years. The difference is that today we have much more data and awareness of these groups than in the 1960s, and organizations are actively seeking ways to boost the proportion of Group 1 and reduce Group 3.

Factors Driving Differences in Employee Groups

Why do some employees become high-performing, engaged “difference-makers” while others turn into passive passengers or even obstructive influences? Research points to several key factors that determine these group differences, many of which have evolved over time and vary between the private and public sectors:

• Quality of Leadership and Management: Perhaps the most decisive factor is the manager. Gallup finds that 70% of the variance in a team’s engagement is explained by the manager (who the boss is) . A good manager who sets clear expectations, supports their people, and recognizes effort can inspire more employees to engage (Group 1) and prevent disengagement. Conversely, bad managers – those who ignore, mistreat, or fail to develop their staff – virtually guarantee more employees will mentally disconnect . Europe’s engagement problem, for example, is largely attributed to poor people-management; surveys found a high incidence of untrained or ineffective managers in European companies, correlating with more disengaged workers . In contrast, organizations that invest in manager training and select leaders with strong people skills tend to have far more engaged teams . In short, leadership style (e.g. empowering and trusting vs. authoritarian micro-management) heavily influences whether employees become motivated contributors or apathetic passengers.

• Recognition, Purpose and Trust: Intrinsic motivation drivers differentiate engaged vs disengaged employees. Studies of engagement consistently highlight factors such as trust in leadership, feeling valued and appreciated, clarity of purpose, and pride in one’s company as critical . Group 1 employees often report that they understand how their work connects to the organization’s goals and feel their contributions matter. By contrast, Group 2 “passengers” frequently lack this line of sight – they don’t see a larger purpose beyond a paycheck, and they receive little recognition for extra effort. When employees feel undervalued or see no meaningful impact of their work, their motivation fades . Communication is also key: if management clearly communicates goals and listens to employees, people are more likely to buy in. Lack of communication or unclear expectations is a known cause of disengagement . Trust and integrity in management (i.e. “walking the talk”) further affect whether employees give their best – environments rife with distrust or unfair treatment breed more actively disengaged individuals. In summary, when fundamental psychological needs at work (purpose, achievement, appreciation) are unmet, employees slide into Group 2 or 3. When those needs are met, they are far more likely to engage and excel.

• Opportunities for Growth and Autonomy: Another factor separating high performers from the rest is whether employees have opportunities to learn, grow, and use their strengths. Engaged employees typically feel they can do what they do best and advance in their careers . Providing training, challenging assignments, and career paths can motivate Group 2 employees to step up. Without such opportunities, workers stagnate – they may do only routine work and become “checked out.” Autonomy also plays a role: granting employees some control over their work (backed by Theory Y philosophy) can boost engagement, whereas excessive bureaucratic control (Theory X style) can sap motivation. Notably, public sector roles often offer less flexibility to reward merit or promote quickly, which can dampen engagement. Constraints on financial incentives in government (few bonuses or performance raises) mean that managers must rely on mission and recognition alone to motivate staff . Where those non-monetary motivators are not handled well, many public employees lapse into complacency, widening the private-public engagement gap.

• Accountability and Performance Management: The ease of dealing with underperformers greatly affects the proportion of “passengers” and “resistors” in an organization. In the private sector, especially since the 1980s, there has been a stronger culture of “up-or-out”: low performers (Group 3) face a risk of termination or performance improvement plans. This can either push some to improve or result in their exit, thereby reducing the ranks of actively disengaged over time. For example, Jack Welch’s policy at GE explicitly removed the bottom 10% annually , sending a message that actively counterproductive behavior wouldn’t be tolerated. In contrast, public sector and many non-profits have strong civil-service protections that make it notoriously difficult to remove poor performers . As one government HR expert noted, when some employees are seen “getting away with not pulling their weight” and cannot be disciplined, it drags down the morale of others . Thus, public organizations often end up carrying a higher percentage of entrenched Group 2 and Group 3 employees. Over decades, this difference in accountability shows up in engagement stats – public-sector surveys show a higher share of not-engaged staff than the private sector . Frequent and abrupt leadership changes in government (e.g. shifts with each election) can also disrupt engagement efforts and make sustained accountability harder . In summary, organizations that set clear performance expectations and address chronic underperformance tend to cultivate more engaged, effective teams, whereas those that tolerate or cannot address underperformance breed more disengagement.

• Work Culture and Attitudes: Broad cultural attitudes toward work influence these groups too. For example, in Europe a certain cynicism toward employers and a “work-to-live” ethos has been cited as a reason many employees are less engaged . However, Gallup argues culture is not destiny – the low engagement in Europe is more a reflection of poor workplace practices than an inherent lack of work ethic . In the U.S., a culture of individual ambition and less job security may contribute to relatively higher engagement (employees know performance is rewarded and job loss is possible, spurring effort). Generational values also play a role: younger generations (Millennials, Gen Z) tend to demand meaningful work and work-life balance. When they don’t get it, they disengage quickly – this partly explains why under-35 workers showed rising disengagement in recent years . An aging workforce in some public institutions (with many nearing retirement) can also dampen engagement, as older employees may be less inclined to change routines or pursue new initiatives . Additionally, external perceptions can affect morale: for instance, prevailing negative public attitudes about government employees can further demotivate public servants , nudging some toward disengagement if they feel underappreciated by society. In sum, cultural and generational contexts modulate engagement levels, but leadership and organizational practices often override these when done well.

• Mission and Sector Differences: Interestingly, one might expect mission-driven public or non-profit work to inherently engage employees (since the work often ties to social value rather than profit). Indeed, a strong organizational mission can boost engagement – many people are energized by a clear, noble purpose. However, in practice the public/non-profit sector often fails to capitalize on this advantage. Bureaucracy, hard-to-measure long-term goals, and limited rewards can dull the inspirational aspect of the mission . Meanwhile, private firms can rally engagement by tying individual performance to tangible business outcomes and incentives (sales targets, bonuses, stock options, etc.). As a result, despite lower pay at times, private-sector workers often report higher engagement because their organizations have more flexibility to recognize and reward stellar performance and to craft agile workplaces. Public entities are catching up by emphasizing their public service mission and finding creative ways to recognize employees, but the gap remains.

In summary, employees become “passengers” or “resistors” primarily when their workplace fails to meet core needs – competent leadership, fair recognition, personal growth, and a sense of purpose – or when poor structures allow apathy to fester. On the flip side, those who excel and “make a difference” tend to be in environments that empower them, trust them, and align their efforts to meaningful goals. Over the decades, these factors have shifted somewhat (e.g. today’s workers expect more development and voice than those in the 1960s), but the fundamentals of human motivation remain consistent.

Impact on Productivity and Effectiveness

The distribution of these employee groups has major consequences for organizational performance. High concentrations of engaged Group 1 employees can supercharge a company’s success, whereas a workforce laden with “passengers” and disengaged detractors will suffer in output and innovation. Key impacts include:

• Higher Productivity and Profitability: Engaged employees are far more productive than their disengaged peers. Extensive meta-analysis by Gallup finds that companies with highly engaged workforces outperform those with low engagement by up to 17–18% higher productivity and 21–23% higher profitability on average . Engaged team members work harder and smarter – they take initiative, solve problems, and propel projects forward. By contrast, disengaged employees accomplish less and often require more oversight. One analysis noted engaged employees “outperform their non-engaged counterparts by upwards of 25%” in performance metrics . At the macro level, this translates into huge gains or losses: Gallup’s 2023 report calculated that disengaged employees worldwide cost an estimated $8.8 trillion in lost productivity (through lower output, errors, and idle time) . In the U.S. alone, the cost of disengagement is around $450–550 billion per year in lost productivity, absenteeism, and turnover costs . Clearly, having more Group 3 “saboteurs” or many Group 2 “coasters” on payroll is a direct drain on efficiency and profit.

• Reduced Innovation and Quality: Group 1 employees not only produce more, they also drive innovation and quality improvements. They are willing to expend discretionary effort – “go the extra mile” – to improve products, serve customers, and refine processes. When a firm has many engaged people, it often enjoys a culture of continuous improvement and creativity. Conversely, disengaged employees tend to do the bare minimum and avoid initiative, meaning opportunities for innovation are missed. They may also be less careful or passionate about quality, leading to more mistakes and lower service levels . A workforce filled with passengers who merely “meet the checklist” can stagnate, while one with engaged talent will find new ways to excel. In Europe, Gallup observed that even highly successful companies leave “wealth and innovation on the table” if their employees are disengaged, whereas engaged European teams were significantly more productive and profitable than their disengaged counterparts . This highlights that engagement is a competitive differentiator: companies winning on talent and engagement tend to outpace those that neglect it .

• Effect on Team Morale and Collaboration: The presence of disengaged individuals can poison team dynamics. Actively disengaged employees often exhibit negative behaviors – cynicism, resistance to changes, dragging down colleagues with complaints . This negativity can be contagious, creating a poor atmosphere that reduces overall team morale. High-performing employees (Group 1) may become frustrated or burned out covering for disengaged coworkers, potentially leading to their eventual exit . When a critical mass of a team is “checked out,” collaboration suffers – people withdraw into silos and stop leveraging each other’s strengths . On the other hand, teams full of engaged members tend to be cohesive, supportive, and resilient, which reinforces even greater effectiveness. Gallup data shows engaged teams have significantly lower absenteeism (as much as 78% less) and much lower turnover than teams with low engagement . This means fewer disruptions and more continuity on projects. In short, Group 2 and 3 employees not only contribute less themselves, they can actively hamper the output of Group 1 employees by eroding team spirit.

• Customer Satisfaction and Organizational Reputation: There is also an external impact. Engaged employees deliver better service and take pride in their work, leading to higher customer satisfaction and loyalty. Studies link higher engagement to greater customer engagement and loyalty metrics (+10% on customer metrics in highly engaged organizations) . Disengaged staff, by contrast, may treat customers poorly or inconsistently, damaging a company’s reputation. For public sector agencies, disengaged employees can result in slower, less effective public services, eroding public trust. In aggregate, nations or regions with chronically low workplace engagement may experience lower economic growth and innovation. (This has been a worry for Europe, which, despite high quality of life, sees work productivity potentially constrained by widespread “on the job retirement” mentality in some workplaces.) Thus, the composition of these employee groups has effects scaling from the micro (team performance) to the macro (national productivity and GDP).

• Safety, Errors, and Absenteeism: Multiple studies also find that high engagement correlates with better safety records (fewer accidents) and fewer quality defects, since engaged employees are more vigilant and care about outcomes. Disengaged workers are more likely to be absent – one analysis found they have 37% higher absenteeism rates – and absenteeism directly reduces effective staffing and output. They are also more prone to mistakes or violations, which can be costly (especially in fields like healthcare or manufacturing). In sum, a higher proportion of Group 3 employees can manifest in more workplace incidents and errors, whereas engaged Group 1 employees tend to uphold standards diligently.

To put it simply, engagement is tightly linked to effectiveness. An organization with a large engaged cohort (Group 1) enjoys better productivity, profitability, retention, and customer outcomes, whereas an organization overloaded with “passengers” and “hostile hitchhikers” will lag behind. This is why more and more leaders treat engagement as a strategic priority, not a fluffy HR metric – it is directly tied to the bottom line and mission success.

Solutions and Strategies to Shift the Balance