It sounds like from their perspective their jobs were really shitty for two years or as long as they've worked at the company. It sounds like this was an endemic, pervasive issue that most people experienced.

I'd hazard that if "shit" is the norm, most people aren't going to go to their managers and say "Hey what's with all this shit? It's shitty." I'd also say that because basically everyone had to deal with the shit, its all-encompassing nature would probably discourage employees from talking to their managers about it (you know, all that shit). If things suck for you, but also seem to suck for everyone, you're going to conclude "shit is the way of life around here," and/or "there is no option but shit." neither perception would lead one to believe that one direct manager would be able to alter that employee's personal amount of shit, in either quality or quantity. After all, if all it took to fix things was talking to a manager, wouldn't everyone be doing it? Wouldn't things stop being shitty very fast? If a direct manager was able to fix the shit, why would things have been allowed to get so shitty in the first place?

Bad jobs/work environments build distrust and resentment between levels.

(Side note: If I had a shitty job for two years I'd be trying to get out of there so fast.)

You say you want to make things better but I don't see how you are actually trying to do that for the employees.

If you don't believe that they are too busy, develop and launch a simple time tracking initiative to see how everyone is really spending their time. Any automated systems they use (like dialers in call centers) could also be used to build this data. Why don't you actually see where all the time is going instead of simply not believing what they see about their workload? Do a side by side with someone in the floor and see how long various tasks actually take in execution. It doesn't sound to me like you are an individual contributor but probably dept head or similar. The distance of such a role easily lets one forget, overlook, or simply never know how much work, time, attention etc, must go into each step of a process.

Instead of coming up with a project to improve things and forcing it on your employees unwillingly why don't you have a brown bag session where you discuss needs and potential ways to fill or improve those gaps. When an employee has a good idea first praise and be supportive, then ask him or her to take ownership of their proposal. They will be much more engaged, feel more valued, and work harder when they feel it is their idea which they are convinced will help them. Even if they come up with the same idea that you have.

I think you need to get more in touch with what's going on behind the scenes here.

Also I feel like anyone with any experience in corporate business would have been able to come up with and follow at least some of these steps without asking a kind of random, mildly anonymous Internet forum with no focus in business or management.

Don't you have a manager, mentor or guru who would have been better placed and more informed, probably more experienced, to turn to for advice in times like this? I also feel like some of this would be covered in people management classes as part of a decent MBA curriculum.

I don't mean to sound too negative here but there are a lot of easy ways to drive engagement, it just sounds like you aren't prioritizing that - you're prioritizing your project. If you want things to get better for the people, start by asking the people what they want and need. If you think your employees are shirkers exaggerating their time spent on current products do time tracking and touch base with managers weekly or biweekly to monitor team workloads and downtime. (That will not make anyone happier about your company, though. Time tracking always implies a lack of trust, a suspicion of dishonesty or inefficiency, and not to mention is an additional burden to complete in and of itself.)

I feel like you are thinking "fix the company, then the employee situation will right itself." But I think you need to flip it and work on the employees first. It's very expensive and time consuming to keep bringing in new hires and right now I would expect people at your company to feel almost driven away.

Also like your chosen verbiage - "victim mentality" is really dismissive. I see you mention it might not be the best phrase. I don't think it's a phrase you should ever use in the context of a business setting, honestly. Not behind closed doors, certainly not when you are "trying" to troubleshoot things. Imagine a laptop manufacturer who approached interface/user issues with the attitude that "our users are just so stupid, this is really easy, they just need to catch up to how things are done now" - vs. "this approach isn't working for our users. why not? how can we fix it?"

I've worked at a few big (global) companies in my time and employee engagements taken pretty seriously, so long as you aren't Bank of America. Good companies see disengagement and try to solve it from their end, instead of dismissing it as the lazy employees' fault.

Finally : if the sentiment that work is shit there is truly universal, why is your conclusion that your employees are universally lazy/shirking assignments? Why aren't you paying attention to the fact that everyone (but you) seems to agree there are issues with the current work environment still? You may be CEO my friend but even as CEO if your "gut" tells you 1 thing and then 100 qualified people line up and tell you that your gut is wrong, would you choose to ignore all of them and follow your gut anyway? When your gut doesn't even do anything on the ground floor of the work environment and they all do?

100% of your employees can't be lazy liars. If so you are really shitty at hiring. Trust them. Stop listening to your lonely opinion. this is like the girl who always dates assholes moaning about "why are all men assholes" and it's like "yo girl not all men are assholes, probably not even most, the problem lies with YOU and how you are interacting with everyone else." You're like "all my employees suck lie and are unhappy, none of them will do what I want." Dude I know corporate America. There's a guy willing to rim ass for a promotion on every team of 4 or more people. People want to work. People don't want to lie. Trust me dicking around for 8 hours a day for a paycheck actually sucks. So I think the problem may lie with you.