High Performing Workplace Index

Transcription

1 High Performing Workplace Index B E N C H M A R K R E P O R T XYZ Company Thursday, December 8, 2016 C o n f i d e n t i a l

2 Table of Contents P A R T O N E - EXECUTIVE SUMMARY L E A D E R S H I P E M P L O Y E E E X P E R I E N C E S I N N O V A T I O N C U S T O M E R O R I E N T A T I O N F A I R N E S S P R O D U C T I V I T Y P A R T T W O FIRM LEVEL MANAGEMENT PRACTICES Management Practices Benchmarking Results (Australia) Management Practices Benchmark Results (International) Firm Productivity & Financial Performance Benchmark Results P A R T T H R E E - PUBLIC & PRIVATE SECTOR BENCHMARKS P A R T FOUR DEMOGRAPHIC SURVEY INFORMATION Age Gender Education Type of Employment Management Level Tenure Income Background to the High Performing Workplace Index i

3 P A R T O N E - EXECUTIVE SUMMARY The High Performing Workplace Index 1

4 E X E C U T I V E S U M M A R Y How to read your High Performing Workplace Index report: Well done. Overall, you perform above average on the High Performing Workplace Index. Extra effort and hard work over the next year is required to see you move into the High Performing Workplace category. The hexagon chart above shows your overall percentile on the High Performing Workplace Index. The colours of the 6 individual hexagons indicate your performance in each area of the High Performing Workplace Index: You are high performing Good work Take notice Red needs attention The radar charts on the following pages show your benchmark results against peers in each area of the High Performing Workplace Index. Whilst overall you are within reach of becoming high performing, these results indicate there are opportunities for improvement. The number of survey responses is 64. 2

5 Introduction Your organisation has adopted the High Performing Workplace Index (HPWI) survey as a tool to support continuous improvement and implementation of its goal to becoming a high performing organisation. This reflects the high standard your organisation has set for itself and aligns with your organisation s objective to be a high performance organisation. The HPWI survey adopts an academically validated and multi-disciplinary method and has been deployed across a range of companies and public sector agencies. Importantly, the HPWI seeks employees perspectives on a range of performance measures, including productivity, innovation, culture, fairness, leadership and customer service. By participating in the survey your organisation is benchmarking itself against these organisations, assessing workplace productivity and its drivers, and identifying strengths and areas for improvement. The HPWI survey was implemented within your organisation this year. The online survey was open to all staff for a period of time and was also widely promoted through your organisation. Participation in the survey was voluntary and anonymous. This benchmark report provides an overview of the results generated from administration of the survey this year. The report covers six domains of organisational performance: Leadership Employee experiences Innovation Customer Orientation Fairness, and Productivity. The report also highlights employee perceptions of performance across management systems and processes that align with high performance. In consultation with the Senior Executive, and through organisational performance review processes such as Divisional Planning Days and the Divisional Consultative Committee, the survey results will inform a range of possible High Performing Workplace initiatives or actions over the coming year at the Divisional and Branch level. 3

6 1. L E A D E R S H I P Meaningfulness Participation in decision making Confidence Autonomy People Management Vision Trust Tension & Conflict Overall Competency Leadership Leadership is a process whereby one person exerts influence over another in an attempt to guide and influence activities and relationships towards shared organisational goals and objectives. High performing leaders make work meaningful by helping staff understand how their work fits into the bigger picture. They involve staff in decision processes, have confidence in staff, provide autonomy to staff over how to do their job and prioritise people management. With high quality leadership, there is a shared vision and shared goal amongst staff, team members trust their leader and tension and conflict between the leader and staff is low. Your Results Meaningfulness Well Done. Overall, you score above average. However, some employees are not sure how their work objectives and goals relate to those of the organisation. Not all staff have a strong sense of doing work that is worthwhile. Speak with leaders and supervisors about what they can do to improve the meaningfulness of work for their staff. Participation in decision making Well Done. Overall, you score above average. Leaders are viewed as providing some opportunities for staff to have a say in decision making processes, however some staff feel they could contribute more if given the chance. Speak with leaders and supervisors about what they can do to better involve staff in decision making processes. Confidence Take notice. Leaders are viewed by a number of employees as not having sufficient confidence in their staff to do a good job. Speak with leaders and supervisors about what they can do to improve. Autonomy Take notice. A number of employees consider they could have more freedom to undertake their work in the most efficient and effective way. They feel leaders do not always give them enough discretion to manage their work. Speak with leaders and supervisors about techniques for giving staff the full autonomy they need to do a good job. 4

7 People Management Well Done. Overall, you score above average. However, some employees consider leaders could spend more time and effort managing staff and teams. People management is not always considered to be a top priority. Speak with leaders and supervisors about the importance of good people management skills. Vision Well Done. Overall, there is a shared vision by leaders. However, some employees consider leaders to be unclear about where the organisation is going. Leaders are not seen by all staff as inspiring employees with their plans about the future. Keep an eye on this area going forward. Trust Take notice. Employees do not always trust their leaders. They do not always feel they can rely upon their leaders and would not be willing to let leaders have complete control over their future in the organisation. Speak with leaders and supervisors about techniques for building trust with their staff. Tension & Conflict Take notice. There is likely to be some tension and conflict between employees and their leaders, although this might be in pockets of the organisation. At times, employees experience leaders to be disgruntled or argumentative. Speak with leaders and supervisors about being alert to tension and conflict with staff. Overall Competency Well Done. Overall, employees feel their leaders are competent in their role as leaders but there are still opportunities to improve the quality of leadership. Keep an eye on this area going forward. Investigate what can be done to keep improving leadership skills. 5

8 1. L E A D E R S H I P B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 6

9 2. E M P L O Y E E E X P E R I E N C E S Job Satisfaction Commitment Turnover intention Emotions Well-being Employee Experiences Employee experiences concern the overall job satisfaction of staff, their commitment to the organisation and their turnover intention. For high performing workplaces, it also involves staff s positive and negative emotions and their general well-being. Staff satisfaction is important to the overall performance of the organisation. Organisations with high staff satisfaction outperform those with low levels both on financial performance and customer satisfaction. Committed employees exert greater effort and consistently go beyond their formal job description to satisfy customers and solve problems. Pride in the organisation and advocating the organisation to friends is more pronounced in organisations with a highly committed workforce. Employees turnover intentions are much smaller in high performing workplaces than in lower performing workplaces. This has financial consequences for the organisation, not only due to the cost associated with hiring new staff but also due to the loss of productivity (due to loss of knowledge and expertise) that occur when an employee leaves the organisation. Emotional capital is critical to an organisation s overall performance. Research shows that positive emotions (such as feeling cheerful, loved and optimistic) are much more prevalent amongst employees in high performing workplaces, whilst negative emotions (such as feeling anxious, inadequate, worried, depressed and fearful) are more prevalent amongst employees in low performing workplaces. One in every four respondent (25%) in LPWs reports feeling depressed, whereas in HPWs it is one in every seven respondents (14%). Well-being was coined by Professor Martin Seligman, one of the founders of the field of positive psychology. He defined 5 pillars of wellbeing. The PERMA Profiler measures these five pillars: Positive emotions include feelings of joy and contentment at work. Engagement refers to being absorbed, interested, and involved in work activities. Relationships refer to feeling supported and valued by others at work. Meaning refers to having a sense of purpose at work. Accomplishment involves working toward goals, and feeling able to complete daily work responsibilities. Additional areas have been added to PERMA: 7

10 Physical health is about a person s health and vitality. Negative emotions involve feeling angry, sad or anxious at work. Loneliness is how lonely a person feels at work. Resilience In the PERMA radar chart below, you find your score on the PERMA Profiler. Your scores on positive and negative emotions are the same as reported separately in a more detailed form in the radar on emotional capital. Your Results Job Satisfaction Well Done. Overall, staff satisfaction is above average. However, not all employees are satisfied in their jobs. Investigate what is causing some staff to be dissatisfied. This is critical to the overall performance of your workplace. Commitment Well Done. Overall, staff commitment is good. However, not all employees are committed to their workplace. Some staff do not feel a strong sense of belonging. Investigate what might be causing lower levels of commitment amongst some staff. Turnover intention Well Done. Staff turnover intention is low. However, some employees may be considering leaving their jobs. Some employees might already be looking for a new job. Investigate what might be causing some staff to consider leaving. Emotions Well Done. There is a mix of positive and negative emotions amongst staff. Many employees feel excited, valued, happy, enthusiastic and proud of their work. Keep up the good work. However, some staff feel anxious, angry, depressed or worried about their work. Investigate what is causing negative emotions amongst some staff and what can be done to reduce these. Well-being Well Done. Overall, staff wellbeing is above average. However, not all employees experience wellbeing in their job. Some staff do not feel their work is meaningful and some staff miss a sense of accomplishment and strong relationships at work. Investigate what might be causing some employees to experience lower levels of well-being. 8

11 2. 1. J O B S A T I S F A C T I O N B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 9

12 2. 2. E M P L O Y E E C O M M I T M E N T, T U R N O V E R I N T E N T I O N A N D N E T P R O M O T E R S C O R E B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 10

13 2. 3. E M O T I O N A L A S S E T S (H O W S T A F F F E E L A B O U T T H E I R W O R K) B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 11

14 2. 4. E M O T I O N A L L I A B I L I T I E S (H O W S T A F F F E E L A B O U T T H E I R W O R K) B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 12

15 2. 5. E M P L O Y E E W E L L B E I N G B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces Negative characteristics, such as Negative Emotions and Loneliness, are reverse scored so that larger numbers mean better performance. 13

16 3. I N N O V A T I O N Employee Creativity Team Creativity Innovation Support Innovation Outcome Innovation In high performing workplaces, innovation is taken seriously. Innovation processes are organised from idea generation all the way through to prototyping and trialling new products and taking these to the public. Creativity concerns the production of new ideas, whether individually by employees or by teams. Ideas are the first step in the innovation process. Ideas need support to be converted into meaningful outputs that are of value to the organisation. Innovation support involves: 1) capturing ideas from employees (e.g. through mechanisms, such as town hall meetings and innovation zones); 2) implementing formal processes to systematically assess and respond to ideas from employees; and 3) investing resources into new strategic initiatives. Innovation outcome is the end result of the innovation process. It measures new products and services, new organisational processes, new marketing methods and new structural innovations Your Results Employee Creativity Take notice. Overall, employee creativity is below average. Employees come up with some new ideas for how to improve their work but could do better. There is a risk that not all staff are engaged in creative thinking or are good at coming up with solutions to emerging problems. Investigate what can be done to boost creativity amongst staff. This is critical to staff motivation and performance. Team Creativity Take notice. Overall, team creativity is below average. Teams come up with some new ideas for how to improve their work but could do better. Keep an eye on this area going forward. Investigate what can be done to boost creativity amongst teams of staff. Innovation Support Well Done. Support for innovation is above average. There are some resources available to fund new strategic initiatives and for capturing ideas from employees (e.g. Town Hall Meetings, Innovation Zones, online forums) but some staff feel these could be improved. There might be a lack of formal processes in place for systematically assessing and responding to innovation ideas from employees and for transforming new ideas into new services or products. Investigate what can be done to 14

17 provide more support to staff for innovation. Innovation Outcome Take notice. Overall, innovation outcomes are below average. In the past 12 months, some new innovations have been introduced but there is still room for improvement. Investigate what might be blocking innovation outcomes from coming to fruition. 15

18 3. 1. C R E A T I V I T Y, I N N O V A T I O N S U P P O R T & I N N O V A T I O N O U T P U T B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 16

19 4. C U S T O M E R O R I E N T A T I O N Customer Orientation Meeting Customer Goals Customer Orientation Customer orientation involves taking the customer seriously. It concerns efforts made by the organisation to shape its offerings and activities around the customers needs and interests. High performing workplaces invest significant time and resources in understanding the needs of customers. They are receptive to customer feedback and staff engage in dialogue with customers and actively listen to and learn from customers Meeting customer goals measures whether the organisation has met its customer satisfaction goals in the past 12 months Your Results Customer Orientation Well Done. Overall, customer orientation is above average. However, there is still a risk that some employees are not taking the customer seriously. They might invest too little time and resources in understanding the needs of customers. They may not always receptive to customer feedback and do not always engage in dialogue with customers or actively listen to and learn from customers. Investigate what can be done to make all staff more customer focused. Meeting Customer Goals Congratulations. Customer satisfaction goals have been met in the past 12 months. Keep up the good work! You are a role model for others. 17

20 4. C U S T O M E R O R I E N T A T I O N & S A T I S F A C T I O N G O A L S B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 18

21 5. F A I R N E S S Distributive fairness Procedural fairness Fairness Fairness is related to employee perceptions of distributive and procedural justice in the organisation. A lack of fairness in the workplace can cause staff turnover and conflict and reduce employee s motivations to do a good job. Distributive fairness concerns the implementation of reward systems to ensure employees are fairly recognised and rewarded for their efforts, responsibilities and contributions. Procedural fairness is whether supervisors implement organisational procedures and policies in a manner that is fair and equitable to all employees. Research has found that employees in lower performing workplaces are less fairly rewarded for their work efforts and contributions than employees in high performing workplaces (42.3% lower), and that supervisors in lower performing workplaces are less likely to implement policies in a manner that is fair and equal to all employees (16.6% lower than HPWs). In other words, high performing workplaces are those who take steps to implement distributive and procedural fairness for all employees. Your Results Distributive fairness Well Done. Overall distributive fairness is above average. Many employees feel they are fairly recognised and rewarded for their efforts, responsibilities and contributions. However there is still some room for improvement to ensure all staff feel their work efforts are recognised and rewarded in a fair manner. Investigate by speaking to HR about issues of fairness. Procedural fairness Well Done. Overall, procedural fairness is above average. Most employees perceive their supervisors as implementing organisational procedures and policies in a manner that is fair and equitable to employees. There is however room for improvement to ensure supervisors treat all staff equally. Investigate by speaking to supervisors about issues of fairness. 19

22 5. D I S T R I B U T I V E & P R O C E D U R A L F A I R N E S S B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 20

23 6. P R O D U C T I V I T Y Employee Productivity Team Productivity Meeting Stated Goals Productivity Employee Productivity measures how productive employees are. It asks Compared to what is possible (100%), estimate how productive you are at your job. 100% means employees perform to their fullest potential. Team Productivity measures how productive teams are. It asks Compared to what is possible (100%), estimate how productive your team is. 100% means teams perform to their fullest potential. Meeting goals measures whether the organisation has met its goals in key performance areas in the past 12 months. This includes innovation, financial and human resources goals. It also includes goals for meeting delivery schedules on time. Your Results Employee Productivity Well Done. Compared to what is possible (100%), employees perform closer to their full potential than the average employee. There is potentially a gap in productivity performance for some staff. Investigate what is blocking some staff from realising their full potential. Team Productivity Well Done. Compared to what is possible (100%), most teams perform close to their full potential. Meeting Stated Goals Well Done. Stated goals have largely been met in the past 12 months. 21

24 6. P R O D U C T I V I T Y B E N C H M A R K R E S U L T S How to read your benchmark scores You Average High Performing Workplaces 22

25 P A R T T W O FIRM LEVEL MANAGEMENT PRACTICES 23

26 7. Management Practices Benchmarking Results (Australia) Management practices are systems, processes and programs that the organisation puts into place to achieve its performance goals. As an example, a talent management program will encourage staff to exert extra effort and become more committed, which in turn reduces employee turnover and costs. The bar chart on the following page shows your performance on the Top 10 Management Practices (Australia). These 10 practices have the highest correlation with the High Performing Workplace Index. Responsiveness to Change These questions measure how difficult it is for the organisation to change its plans and activities to adjust to shifts in the external market, such as a change in customer needs, economic conditions or the competitive landscape. The more responsive the organisation is to shifts in the external market, the better its performance is likely to be. The antithesis is a lack of responsiveness, which results in the organisations being out of sync with the market and its stakeholder needs. Skills Utilisation Skills utilisation concerns the extent to which employees are allowed or enabled to fully utilise their skills and abilities at work. Skills utilisation consistently proves to be of high importance to employees, more so than other issues such as good pay. Maximising the utilisation of employee skills is important to employee commitment, job satisfaction and productivity. Organisations maximise skill utilisation by asking employees to engage in problem solving and in the design of creative solutions to emerging problems. Participation in Strategy, Planning and Setting Targets Participation in decision making is important to high performing workplaces because it ensures knowledge is shared and power is distributed amongst employees. Low levels of participation in decision making have been proven to slow down workplace efficiency and responsiveness. It can also reduce employees motivation and commitment to the organisation. In contrast, higher levels of participation can improve the speed of decision processes. It also gives employees a greater sense of authority, fairness and voice and can lift staff commitment and motivation. Effectiveness of Training in Helping Employees do a Better Job These questions ask if the training provided by the organisation helps employees do their job better. These questions explore the premise that organisations with employees with enhanced skills (as a result of training) are more productive and perform better. For training to be effective, it has to assist the employee do his/her job better Use of Accounting Controls (e.g. Strategic Plans, Budgets, KPIs). Accounting controls are put into place to achieve organisational objectives. They include budgets, targets, plans, scorecards etc. Controls are used to track progress towards 24

27 goals and to identify emerging opportunities. High performing workplaces use accounting controls diagnostically to increase productivity and interactively to innovate. Use of Information, Communication and Technology to be Productive ICT is a key resource in high performing workplaces. ICT reduces the service delivery costs, supports an organisation s operational processes and improves productivity and profitability. ICT is likely to be a key resource for employees to carry out their daily tasks. The use of ICT in HPWs has little to do with the types of technology used (e.g. intranets, blogs, social networking sites). This suggests that what counts is how the technology is used rather than simply having more (and different kinds) of it. Flexible Work Arrangements Flexible work arrangements include flexibility in the hours of work (such as changes to start and finish time) and location of work (such as working from home). Flexibility is beneficial to working parents with responsibility for the care for a child who is school aged or younger. Flexibility can increase job satisfaction and commitment. Job Autonomy Job autonomy concerns the degree of autonomy employees have in carrying out their work. In a high performing workplace, employees have significant autonomy in determining how they do their jobs and opportunity for independence and freedom. Autonomy has been shown to foster creativity and innovation and improved staff morale as employees feel trusted to do a good job and exert extra effort to this end. Unpaid Overtime Hours This measures the number of hours that employees work overtime but is not paid for that additional work. Critics point to work intensification and a lack of proportionate reward for additional effort reduce organisational outcomes like productivity and innovation. This is true for high performing workplaces, where unpaid overtime is negatively correlated with performance outcomes on the High Performing Workplaces Index. In other words, it does not pay off to not pay workers fairly. Tension and Conflict with Colleagues These questions measure the degree of conflict and tension faced by the employees in their workplace. Researchers have indicated that tension and conflict is inevitable at work. There can be various sources of tension and conflict. These questions gauge the extent to which the employee faces tension and conflict with colleagues. Interpersonal conflict in the workplace has been shown to be one of the most frequently reported job stressor. Disagreement brings about stress, poor staff morale and negative emotions. In high performing workplaces, tension and conflict is negatively correlated with performance outcomes on the High Performing Workplaces Index. 25

28 M A N A G E M E N T P R A C T I C E S (AUSTRALIA) How to read your benchmark scores You Average High Performing Workplaces 26

29 8. Management Practices Benchmark Results (International) The bar charts below show your organisation s performance on two Management Practices (International). The benchmark data comes from the Management & Organisational Practices Survey collected from approximately 32,000 organisations. Data Driven Performance Monitoring These questions asked responding organisations about the number, frequency and extent of performance monitoring. Organisations with high scores on these questions measure a wide range of performance indicators (e.g. production, cost, waste, inventory, defects, energy use, absenteeism, deliveries on time etc.). Organisations with high scores reviewed these performance indicators with managers and non-managers on at least a daily basis, and displayed these measures prominently around the organisation. Organisations with low scores collect very little performance data, evaluate this infrequently, and typically do not publicly display this information. How to read your benchmark scores You Average High Performing Workplaces Incentives and Targets These questions asked responding organisations about incentives and targets, which focus on management practices around pay, promotions, hiring and firing, alongside the range, depth and effectiveness of targets. Organisations with high scores on these questions set stretched targets, have a combination of short and long term targets, base promotions on employees performance and ability (not tenure), reassign or dismiss non-performing staff, and pay performance-based bonuses to managers and staff. Organisations with low scores on these questions do not set targets, base promotions on tenure (rather than performance), fail to manage non-performing staff, and do not pay performance based bonuses to managers and staff. How to read your benchmark scores You Average High Performing Workplaces 27

30 9. Firm Productivity & Financial Performance Benchmark Results The charts below show your organisation s productivity and financial performance benchmarked against the Australian averages for your industry. The financial data used for these benchmarks have been collected by the Australian Bureau of Statistics from approximately 2,000,000 Australian organisations (2014/15). Profit Margin Profit Margin is calculated as Earnings Before Interest and Tax / Revenue (%) How to read your benchmark scores Your organisation Industry Average Average for all industries Labour Productivity Profit Margin (%) Labour Productivity is calculated as Value Added 1 / Full Time Equivalents ($) How to read your benchmark scores Your organisation Industry Average Average for all industries Labour Productivity ($) 1 Value added is calculated as total labour costs plus earnings before interest and tax. 28

31 P A R T T H R E E - PUBLIC & PRIVATE SECTOR BENCHMARKS 29

32 Public & Private Sector Benchmark Results The radar chart overleaf shows the benchmark results for public and private sector organisations on the six categories and key performance indicators of the High Performing Workplace Index. Your results are shown on the blue line. The chart shows significant differences between public and private sector organisations in the following areas: Leadership Private sector managers have slightly better leadership skills in the areas of people management and articulating a vision when compared to public sector managers. Employee Experience Employees in private sector organisations are more committed to their workplace, more satisfied in their job and report lower turnover intention when compared to employees in public sector organisations. However, employees in private sector organisations report lower levels of well-being and positive emotions, which related to things such as feeling less excited and proud and more anxious and nervous about their jobs. Innovation The biggest difference between public and private sector organisations is in the level of support for innovation. Private sector organisations are better at capturing ideas from employees (e.g. through town hall meetings and innovation zones), implementing formal processes to assess and respond to ideas, and investing resources into new strategic initiatives. Fairness Public sector organisations are fairer workplaces both in terms of distributive fairness (recognising and rewarding staff for their efforts) and procedural fairness (implementing policies in an equitable manner). 30

33 P U B L I C & P R I V A T E S E C T O R B E N C H M A R K R E S U L T S How to read your benchmark scores You Average Score of Private Sector Average Score of Public Sector 31

34 P A R T FOUR DEMOGRAPHIC SURVEY INFORMATION 32

35 Demographic Survey Information Age This represents a breakdown of the age brackets of the survey respondents. For your workplace: Across all workplaces surveyed: 33

36 Gender This represents a breakdown of the gender of the survey respondents. For your workplace: Across all workplaces surveyed: 34

37 Education This represents a breakdown of the educational qualifications of the survey respondents. For your workplace: Across all workplaces surveyed: 35

38 Type of Employment This represents a breakdown of the full-time/part-time/casual staff of the survey respondents. For your workplace: Across all workplaces surveyed: 36

39 Management Level This represents a breakdown of the management levels of the survey respondents. For your workplace: Across all workplaces surveyed: 37

40 Tenure This represents a breakdown of the tenure of the survey respondents. For your workplace: Across all workplaces surveyed: 38

41 Income This represents a breakdown of the income of the survey respondents. For your workplace Across all workplaces surveyed: 39

42 Background to the High Performing Workplace Index In 2010, the Australian Commonwealth Government funded a 3 year project on High Performing Workplaces. In line with international trends, the project sought to identify ways of increasing productivity in Australia by focusing on the characteristics and behaviours of High Performing Workplaces. Labour Productivity Growth in some Australian industry sectors, such as Property and Business Services, had been poor for three decades: at -1.6 ( ), -2.0 ( ) and 0.9 ( ). The High Performing Workplace Index (HPW Index) measures an organisation s performance in 6 categories, featuring 25 performance measures. The 6 categories are: Leadership (L) Employee Experiences (E) Innovation (I) Customer Experiences (C) Fairness (F) Productivity & Financial Performance (P) The HPW Index is an academically validated and multi-disciplinary research method developed in collaboration between Australian universities, public and private organisations, policy makers and industry associations over a 5 year period. The methodology is unique in that it captures employee voices across 4 levels of staff: senior executives, middle managers, front line managers and non-managerial employees. This is a benefit when compared to surveys such as Management Matters, which only captures one executive response from participating organisations. Where possible, the HPW methodology collects firm level financial data allowing an objective calculation of firm level Total Factor Productivity. 2 Today, the High Performing Workplaces database consists of 1,170,481 employee and 59,475 firm level question responses, totalling approximately 80,000 pair wise relations. The HPW Index has proven to have significant power in predicting financial performance. High Performing Workplaces are up to 3 times more profitable than their peers. In dollar terms, this difference equates to High Performing Workplaces earning on average $40,051 2 Total Factor Productivity is the proportion of output not explained by the use of tangible capital and labour. 40

43 more in earnings before interest and tax per full time equivalent per annum (industry adjusted). The HPW Index classifies workplaces as High Performing Workplaces, Mid Performing Workplaces and Low Performing Workplaces. Organisations that are more than one standard deviation above the mean are considered to be higher performing. Organisations that are more than one standard deviation below the mean are considered to be lower performing. The HPW Index is calculated by averaging the scores for the 6 categories to an overall score for each workplace. The six categories are weighted equally. The resulting Index is converted to a z-score (a mean of zero and a standard deviation of 1). 41