Culture Trends FOR 2016

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1 RELEVANT TRENDS, TOPICS, AND ISSUES FOR YOUR BUSINESS. STAY SMART. STAY CURRENT. octanner.com/institute FROM THE O.C. TANNER INSTITUTE... WE ARE COMMITTED TO RESEARCHING AND SHARING INSIGHTS THAT HELP ORGANIZATIONS INSPIRE AND APPRECIATE GREAT WORK.... Culture Trends FOR 2016 PRESENTED BY THE O.C. TANNER INSTITUTE What trends should you be tracking in the year ahead? Drawing on data from more than 9.4 million recognition moments along with the latest research on onboarding, great work, overall well-being, and executive alignment we ve compiled 6 actionable insights.

2 INSIGHT NUMBER 1: New hires experience varying emotions and expectations throughout the critical first year. Effective onboarding strategies will help managers and organizations get employees up to speed and doing great work faster. Recent focus group research reveals onboarding strategies should address new hire feelings of belonging, include clear expectations for day one through the first year, and provide more communication and feedback than is currently given. Employees share what would help them fit in and belong in the organization: Receive frequent, one-on-one feedback from their manager and further reinforce the feeling that both the company and employee have made the right choice Provide opportunities to get to know team members on a personal level Have one-on-one meetings with different people in the company Set career path goals and talk about career development and growth Employees share what would help them start doing great work sooner in their organization: Provide a holistic picture of their work and why what they do is important Ensure the team is on the same page Publicize priorities/goals and talk about them from senior leaders down to direct managers Reward great work when it is happening 8/10 Deliver ongoing feedback on how the new hire is doing and how to improve Set clear expectations for pre-boarding, the first day, and on an ongoing basis for the individual s role. Use a variety of recognition tools day-to-day, peer-to-peer, and more formal awards (monetary and non-monetary) to reinforce goals met, provide feedback, and communicate your personalized appreciation in having the new hire as part of the team.

3 INSIGHT NUMBER 2: Regardless of location, generation, or company size, employees struggle with the five skills that produce truly great work. A study highlighted in the New York Times bestseller, Great Work: How to Make a Difference People Love analyzing 1.7 million cases of award-winning work across all industries, positions, and pay grades, has proven great work is a product of five activities people do. The study shows great work is not a product of who you are (your traits) but an outcome of what you do (your skills). When people practice these five skills (ask the right question, talk to your outer circle, see for yourself, improve the mix, and deliver the difference) unexpectedly better results are achieved. A more recent study, however, showed that employees around the globe struggle putting into practice these five skills to deliver great work. Figure 1: How many employees are doing the five skills well? 18% 13% 24% Asking the right question Talking to your outer circle Seeing for yourself 19% 22% Improving the mix Delivering the difference Source: 2015 Great Work Study, commissioned by the O.C. Tanner Institute. Next time you start a project, educate team members on what the five skills are and how to use them to better ensure success. Leverage the insights and tips found in Great Work: How to Make a Difference People Love or visit octanner.com/greatwork.

4 INSIGHT NUMBER 3: If you want to empower employees to practice the great work skills, meaningful recognition makes all the difference. The same study looked at the impact of recognition on each of the five skills and found the more often employees feel appreciated and valued for what they ve done, the more likely they ll repeat the behavior. With meaningful recognition employees are: 1. More than 1.5x more likely to ask the right question % better at interacting and talking with their outer circle. 3. Over 150% more likely to go see for themselves. 4. Nearly 3x better at improving the mix. 5. Deliver the difference more than 2x more than unappreciated employees. Figure 2: How often, on average, do you receive recognition at work? 50% 45% 40% 40% 35% 37% 30% 22% 20% 12% 6% 8% 6% 16% 12% 12% 8% 17% 9% 10% 0 Asking the right question Talking to your outer circle Seeing for yourself Improving the mix Delivering the difference Often/always Sometimes Rarely/never Source: 2015 Great Work Study, commissioned by the O.C. Tanner Institute. As a leader, make sure you re checking in at each point of the process, providing meaningful recognition along the way. This will reinforce the importance of each step and serve as a great feedback tool during the project.

5 INSIGHT NUMBER 4: Recognition has a positive impact on your personal well-being both in and outside of work. A recent well-being global study (where well-being was defined as an all-inclusive view of your overall social, mental, and physical health inside and outside of work), found 30% of employees who felt appreciated over the past month considered themselves to have the best possible life at work. While 43% of employees who felt appreciated over the past month considered themselves to have the best possible life outside their place of work. Looking then at those who did not feel appreciated at work the number drops to 8% and 31% respectively. Recognition, therefore, is highly correlated with how an employee perceives their standing at work and is correlated with how an employee perceives their life outside of work, which impacts their overall well-being. Figure 3: Thinking specifically of about the the last past month, month, have have you felt you felt appreciated at work? at work? 50% 43 % 40% 30 % 31 % 30% 20% 8 % 10% 0 Inside your place of work Outside your place of work Yes No Source: 2015 Employee Health and Well-Being study, commissioned by the O.C. Tanner Institute. Appreciating employees impacts their overall well-being. Find ways to give meaningful recognition and say thank you, often, to help employees feel more positive at work and when they go home.

6 INSIGHT NUMBER 5: Early engagement with tangible recognition (in the form of points or awards) predicts program longevity, while recognition activity frequency results in those being recognized to recognize others (the ripple effect). Using advanced analytics against our database, we looked at characteristics of programs that grow over time and are sustainable. When a program is launched and people get awards or points towards awards, early and often and in big numbers, the program tends to sustain. In fact, enduring programs average 60% more events per month than fading programs. The optimal window to get someone to take action following the individual having a recognition experience is seven days. This is the ripple effect that causes them to reengage with the recognition program and give recognition to others. Figure 4: Average points per award Average business unit Sequence from inception Enduring Sporadic Source: O.C. Tanner client data. If you re launching a program, or looking to reengage employees in your program, amp up the points and awards in the beginning. Makes sure you re also tracking whether recognition is happening weekly throughout your organization, consider targeted campaigns throughout the year to continue to keep recognition top of mind.

7 INSIGHT NUMBER 6: A gap exists between what HR executives are spending their time on and where CEOs think HR leaders should focus time and effort. A U.S. national survey conducted online in April 2015 among CEOs (among a broad cross section of companies with at least $50 million in revenue) and HR executives (also from a broad cross section of companies with at least $50 million in revenue and with the titles of CHRO, VP of HR, SVP of HR, and HR Director) reveals that CEOs think their HR executives are spending their time on training and development, diversity and inclusion, and running employee programs. The reality: HR executives are spending their time on compensation and benefits, employee relations, recruiting, and onboarding. The gap exists due to varying priorities and a lack of both communication and resources. Figure 5: Please rate how much time your organization s HR leaders spend on each of the following tasks at your organization currently. 47% 20% 53% 30% 61% 41% 32% 20% Internal communication/employee 43% 32% Other 55% 49% Managing HR consultants Diversity and inclusion 55% 38% Employee programs 0 20% 40% 60% 80% 100% HRIS Training/learning and development 51% 31% Employee rewards and recognition 47% 30% Employer brand 48% 37% Compliance/policy making/legal 63% 59% Compensation and benefits 56% 54% 55% 56% Employee relations Recruiting/onboarding CEOs HR Executives The research further reveals CEOs would like their HR Executives to spend more time on talent management, employee rewards and compensation and less time on employee brand, internal communication, and HRIS. Source: CEO And HR Executive Gap Study by Harris Poll. In order for HR executives to be more strategic and effective, they need to understand what is most important to senior leadership and ensure alignment with priorities and resources.

8 O.C. Tanner and the O.C. Tanner Institute O.C. Tanner, number 40 on the 2015 FORTUNE 100 Best Companies to Work For list, helps organizations create great work environments by inspiring and appreciating great work. Thousands of clients globally use the company s cloud-based technology, tools, awards, and education services to engage talent, increase performance, drive goals, and create experiences that fuel the human spirit. Learn more at octanner.com. The O.C. Tanner Institute regularly commissions research and provides a global forum for exchanging ideas about recognition, engagement, leadership, culture, human values, and sound business principles. DISCOVER MORE RECOGNITION BEST PRACTICES AT OCTANNER.COM/INSTITUTE.