SEVEN WAYS TO INCREASE EMPLOYEE ENGAGEMENT

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1 SEVEN WAYS TO INCREASE EMPLOYEE ENGAGEMENT Without Giving a Raise Dr. Joe Folkman Co-Founder and President Zenger Folkman

2 Poll #1 Would a Raise Make You Happy? If you got an unexpected raise today would it make you: A. More happy B. Less happy BUT Would you work harder? Would you be more committed?

3 So What s So Great about Engaged Employees Employee Customer Engagement Satisfaction Store Revenue Growth Sears: For every 5-point improvement in employee attitude, customer satisfaction goes up 1.3%, which in turn increases revenue 0.5%, or $250 million per year. Best Buy: If employee engagement rose 2%, that store increased its sales $100,000 annually. JCPenney: Employee engagement scores rose from 67% in 2005 to 80% in 2009; earnings per share grew 5 times the industry average. Marriott, Starbucks

4 Would Employees Leave the Company for a Comparable Job? Percent who would stay The problem with turnover is that you lose talent! 5 47 Bottom 10% 11th - 35th 36th - 65th Top 35% 33,000 employees in a Financial Services Company Engagement 86 99

5 Discretionary Effort Percent Highly Committed 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 47% 33% 11% 6% 2% Bottom 10% 11th - 35th 36th - 65th 66th - 89th Top 10% Engagement 4,000 employees in a Transportation Company

6 Peter Drucker The Value of Discretionary Effort A 10% increase in productivity would double the profits of most organizations.

7 What Can a 10% Increase in Productivity Get You? Let s do the math 10 employees productivity by 10 % = the work of 1 free FTE Pay? Vacation? Office Space? Health Care benefits?

8 What Factors Will Drive Up Engagement More Than Pay? Found a very consistent theme over multiple datasets Factor analyzed the top dimensions Looked at results from 94,000 employees in multiple companies Identify the top dimensions that correlated to engagement ahead of fair pay

9 Seven Ways To Increase Employee Engagement 1. Great Leaders 2. Right Jobs for the Right People 3. High Performance on Critical Values 4. Speed and Agility 5. Opportunities for Development 6. Powerful Communication 7. Clear Vision and Direction

10 1. Great Leaders Employee Engagement / Commitment Percentile st - 9th 10th - 19th 36 20th - 29th 41 30th - 39th 47 40th - 49th 53 50th - 59th 58 60th - 69th 64 70th - 79th 71 80th - 89th 82 90th - 100th Great Leaders Make a Great Difference Good Leaders Have an Adequate Impact Poor Leaders Create Dissatisfaction Leadership Effectiveness Based on 29,906 Leaders 10

11 Employee Engagement/Commitment Versus Leadership Effectiveness Across the World Employee Engagement Percentile Bottom 10% 11th - 35th 36th - 65th 66th - 90th Top 10% United States Canada Europe Latin America Middle East Asia Africa Leadership Effectiveness

12 2. Satisfaction with Job and Career Right Job Right Person Have you ever been in a job that fit like a glove? A job where you loved what you did? A job you enjoyed every day? The Job from Hell! Have you ever been in a job where you could never succeed? A job where it was hard to come to work? A job that drained all your energy?

13 Two Problems with Jobs and Careers People sometimes are unaware of their passions Judith assesses her passion Promotions can be both positive and negative You ve been promoted! The good news is The bad news is

14 What s Your Attitude Toward Yard Work? Hate it Necessary Evil Love it Fulfilling and life enhancing Oftentimes our attitude about a job substantially impacts our performance

15 The Right Time For A New Assignment High Competence Low When we stay too long Chore World passes us by Day Prison Gain experience Extraordinary Moments New hire Novice Low Passion High

16 3. High Performance on Critical Values Impacts Individuals Personally Valuing differences and diversity Being appreciated for a contribution Trust Quick to praise and careful to criticize Rewards for high performance Being treated with dignity and respect Honestly dealing with all employees Company Culture Company acts as a good corporate citizen Company is considered one of the best places to work Company strives to be one of the most responsible companies in our industry Management "walks the talk" and keeps their commitments to employees

17 The Critical Question Is What does your organization stand for?

18 4. Speed and Agility Worst Organizations Problems have to become a crisis before they are addressed Decisions get stalled Difficult or touchy issues are never addressed People guard and protect their people and budgets Best Organizations Problems are resolved quickly Make decisions quickly Management is effective at making the tough calls Quick to apply resources (people, money, systems) to new ideas

19 5. Opportunities for Development Job Go to work every morning Work hard Accomplish objectives Get a pay check every two weeks Career Go to work every morning Work hard Accomplish objectives Get a pay check every two weeks Learn something new and GROW

20 Impact of a Learning Environment on Discretionary Effort 90% 84% 80% Percent Highly Committed 70% 60% 50% 40% 30% 20% 10% 0% 13% 3% Poor Average Exceptional Organization Supports a Learning and Development

21 Development Not Only Helps Those Coached But Also the Coach How do you feel about a person who has been a coach or mentor? How does it feel to help someone learn a new skill?

22 6. Powerful Communication How Open, honest, consistent from top to bottom Multiple channels Focused and relevant to me people well informed What Inspiring and motivating Clarifies the vision, direction and goals future focused Personal performance and feedback Why Talk leads to action Motivates employees to contribute more People are engaged and productive Study of 50,000 employees on key correlates to effective communication

23 7. Clear Vision and Direction Have you ever been on a long hike?

24 What Do You Tend to Look at While Walking? Your Feet

25 It is Important to Stop and Look at the Vista

26 Impact of a Meaningful Vision on Engagement Percentile Engagement Poor Average High Organizations Vision is Meaningful

27 Visions that are Valued We studied the key factors that that led to a company vision being valued and embraced by employees. 1. Vision is Inspiring and Motivating 2. Employees Engagement/Satisfaction is High 3. Communication of Vision through Multiple Channels 4. Innovation is Used to Create Improvement 5. People Believe that Words Lead to Action 6. Leaders are Viewed as Open and Honest 7. Company is Quick to Respond 8. People See the Greater Good the Vision Creates

28 In Summary While good pay is important to everyone, this research validates that there are several factors that have an even greater impact on engagement. While all the factors are important the number one factor Great Leaders has the capacity to impact the 6 other factors. Our research clearly demonstrates that leadership capability can be developed.

29 Announcing Our 2014 Leadership Summit Join Us! Zenger Folkman s 5 th Annual Leadership Summit July 28 Aug 1 Park City, UT The Chateaux Resort in Deer Valley Experience Zenger Folkman s award-winning, strengths-based Leadership Development Programs, and learn from today's top talent development experts from some of the world's most successful companies. Client Presentations: Register:

30 Our research clearly demonstrates that leadership capability can be developed.

31 Zenger Folkman helps organizations flourish by increasing the effectiveness of leaders at all levels. Our unique, strengths-based development methodology enables leaders to move faster and higher. Each offering is solidly grounded in research, utilizing our extensive empirical database. The end results are statistically significant improvements in how leaders lead, how their employees engage and how their companies profit; allowing both leaders and organizations to soar to new heights. THANK YOU Contact us at or

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