Managing Finance Talent. Presented by Avi Alpert

Transcription

1 Managing Finance Talent Presented by Avi Alpert

2 Toolbox for Finance: An Online Knowledge Sharing Community Mission Toolbox for Finance helps finance professionals do their jobs better by enabling them to easily share knowledge and collaborate with experienced peers. Collaboration Tools Discussion groups Blogs Wikis Professional networking Company profiles Value of Community Make Decisions Am I about to make the right decision? Solve Problems Faster How do I? Stay Current What have my peers been learning? Manage Careers How do I become more valuable? Evaluate Companies and Products Has anyone used? 2

3 COPIES AND COPYRIGHT As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center at for any help we may provide. The pages herein are the property of The Corporate Executive Board Company. Beyond the membership, no copyrighted materials of The Corporate Executive Board Company may be reproduced without prior approval. LEGAL CAVEAT The Controllers Leadership Roundtable has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Controllers Leadership Roundtable cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Controllers Leadership Roundtable is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Controllers Leadership Roundtable or its sources, or b) reliance upon any recommendation made by the Controllers Leadership Roundtable.

4 KEY TALENT CHALLENGES IN THE ECONOMIC DOWNTURN 1 Employee Performance Is Declining The number of employees exhibiting high levels of discretionary effort has decreased by 70% since The Disengaged Are Staying The disengaged are 45% less likely to quit in 2010 than in High-Potential Employees Are More Likely to Quit One out of four high-potential employees (HIPO) plans on quitting in the next 12 months. Source: Corporate Leadership Council research; Controllers Leadership Roundtable research. 4

5 ROAD MAP FOR THE PRESENTATION Employee Engagement Role for Managers Managing Performance 5

6 Disengagement is increasing, leading to falling levels of discretionary effort. The number of highly disengaged employees has increased from 1:10 to 1:5 since the first half of DIS IS INCREASING Percentage of Employees Who Are Highly Disengaged Percentage of Employees Displaying High Levels of Discretionary Effort 24% The number of employees putting forth high levels of discretionary effort has dropped by half. 15% 22% 22% 18% 12% 8% 6% 1H H H 2009 Q % 1H H H 2009 Q Time Time Source: 2009 Manager Quality Survey; Corporate Leadership Council research. 6

7 Almost half of all employees say they will put in effort if needed, but aren t volunteering like they did. DECLINE IN EFFORT IS MOSTLY PROACTIVE EFFORT Percentage of Employees Voluntarily Expending Extra Effort Q Q Q Q Proactive Effort (Looking for Opportunities to Help) Reactive Effort (Responding to Requests for Help) Our company is going through serious organizational change. We ve laid people off, and now we are changing job requirements. A lot of our employees are disengaged and unhappy with the company, and they don t know what they should be doing. People are just not putting in as much effort as they used to. Senior Vice President Human Resources Professional Services Company Percentage of Respondents Strongly Agreeing 29% Δ (31%) 20% I Often Volunteer for Additional Duties 40% Δ (22%) 31% I m Constantly Looking for Ways to Do My Job Better Source: Employee Survey and Analysis Tool; Corporate Leadership Council research. 41% Effort Driver Δ (34%) 27% I Frequently Try to Help Others with Heavy Workloads 56% Δ (11%) 48% When Needed, I Am Willing to Put in the Extra Effort to Get the Job Done 7

8 While performance is suffering across the organization, the highly disengaged are not turning over at the same rate as in the past. THE DISENGAGED ARE STAYING Percentage of Disengaged Employees Who Are Actively Seeking a Job Disengaged employees are 46% less likely to quit now than in % Δ = 24% 29% Δ = 6% 25% Q n = 4,990 n = 24,529 n = 5,949 Source: Engagement Survey and Analysis Tool; Corporate Leadership Council research. 8

9 High-potential employees are 10% more likely to leave than the general population. ONE-IN-FOUR HIPOS PLANS ON QUITTING Percentage of HIPOs Expecting to Quit Over the Next 12 Months Most employees are less likely to leave the organization because of fewer external labor market opportunities. 25% Expecting to Quit 75% Not Expecting to Quit Note: HIPO status is determined by the organization participating in ESAT. Source: Engagement Survey and Analysis Tool; Corporate Leadership Council research. 9

10 Organizations that improve commitment will see significant returns in discretionary effort and higher performance across the workforce. COMMITMENT DRIVES EFFORT AND Maximum Impact of Commitment on Discretionary Effort 1 Maximum Impact of Discretionary Effort on Performance Percentile 1 Moving employees from strong non-commitment to strong commitment can result in a 57% increase in discretionary effort. Moving from low- to higheffort levels can move an employee s performance rating up to 20 percentile points. Change in Discretionary Effort 1.00 Strongly Non- Committed 1.57 Strongly Committed Number of Employees 50th Percentile 70th Percentile The 10:6:2 Rule Every 10% improvement in commitment can increase an employee s effort level by 6%. Every 6% improvement in effort can improve an employee s performance by two percentile points. 1 The analysis above presents a statistical estimate of the maximum total impact on discretionary effort and performance emotional commitment will produce. The maximum total impact is calculated by comparing two statistical estimates: the predicted discretionary effort or performance rank for an employee who scores high in emotional commitment, and the predicted discretionary effort or performance rank for an employee who scores low in emotional commitment. Source: Corporate Leadership Council 2004 Employee Engagement Framework and Survey; Corporate Leadership Council research. 10

11 The much higher level of engagement at Organization A relative to Organization B results in 10 times the level of discretionary effort and five times the level of intent to stay across the workforce. WHAT A DIFFERENCE MAKES Employee Engagement Discretionary Effort Intent to Stay Percentage of Workforce Strongly Engaged 22.9% 4.9% Percentage of Workforce in Highest Category of Discretionary Effort 23.5% 2.5% Percentage of Workforce in Highest Category of Intent to Stay 42.9% 8.7% Organization A Organization B Organization A Organization B Organization A Organization B Source: Corporate Leadership Council research. 11

12 The two types of employee commitment act through four focal points which impact the level of discretionary effort and intent to stay and can translate to increased performance and retention. THE ROUNDTABLE MODEL OF Two Commitment "Types" Four Focal Points of Commitment The Outputs of Commitment Discretionary Effort and Intent to Leave Employee engagement is defined as the extent to which employees commit to something or someone in their organization, how hard they work, and how long they stay as a result of that commitment. Rational Commitment The extent to which employees believe that managers, teams, or organizations have their self-interest in mind (financial, developmental, or professional). Emotional Commitment The extent to which employees value, enjoy, and believe in their jobs, managers, teams, and organizations. Day-to-Day Work Team Organization Direct Manager Discretionary Effort Employee willingness to go "above and beyond" the call of duty, such as helping others with heavy workloads, volunteering for additional duties, and looking for ways to perform the job more effectively. Intent to Stay The extent to which employees value, enjoy, and believe in their jobs, managers, teams, and organizations. Performance Retention Source: Corporate Leadership Council research. 12

13 SOLVING FOR Employee Engagement Role for Managers Managing Performance 13

14 The four most important drivers of discretionary effort are based on emotional commitment, with emotional connection to the job being the most important component. EMOTIONAL COMMITMENT STILL SUPREME Change in Impact of Employee Commitment on Discretionary Effort Comparing Global Sample of Employees from 2004 to 2009 Average Impact of Emotional Commitment 2009 = 46%, 2004 = 43% Average Impact of Rational Commitment 2009 = 14%, 2004 = 13% Employees are now more likely to provide effort due to their enjoyment and belief in their organization and colleagues. Rational commitment to the organization is now more important than other rational commitment variables. 56% 56% 51% 43% 44% 39% 32% 34% % 18% 14% 11% 9% 8% Emotional Job Emotional Organization Emotional Team Emotional Manager Rational Organization Note: The maximum total impact is calculated by comparing two statistical estimates: the predicted discretionary effort level for an employee who scores high on the focal point and the predicted discretionary effort level for an employee who scores low on the focal point. Rational Team Rational Manager Source: Engagement Survey and Analysis Tool; 2008 Multigenerational Workforce Survey; Corporate Leadership Council research. 14

15 Managers obtain greater employee performance and retention through both directly managing employee performance and managing the employee s relationship with the broader organization. TEN IMPERATIVES TO MAXIMIZE AND RETENTION Imperatives for Maximizing Employee Performance and Retention Role #1: Managing Employee Work and Performance Managers must first center their day-to-day employee interactions on activities with the highest impacts on performance and engagement. Role #2: Managing the Employee's Relationship with the Organization To ensure maximum performance and retention, managers must build employee engagement with the broader organization, thereby increasing employee discretionary effort and intent to stay. 1. Provide Fair and Accurate Informal Feedback 2. Emphasize Employee Strengths in Performance Reviews 3. Clarify Performance Expectations 4. Leverage Employee Fit 5. Provide Solutions to Day-to-Day Challenges 1. Provide Fair and Accurate Informal Feedback 2. Emphasize Employee Strengths in Performance Reviews 3. Clarify Performance Expectations 4. Leverage Employee Fit 5. Provide Solutions to Day-to-Day Challenges 6. Amplify the Good, Contextualize the Bad 7. Connect Employees with the Organization and Its Success 8. Instill a Performance Culture: Communication, Flexibility, and Innovation and Risk Taking 9. Connect Employees with Talented Coworkers 10. Demonstrate a Credible Commitment to Employee Development 15

16 SOLVING FOR Employee Engagement Role for Managers Managing Performance 16

17 Organizations have two imperatives to improve HIPO retention and their own supply of HIPOs. OVERINVEST IN HIGH-POTENTIAL TALENT STRATEGIES Two HIPO Imperatives Imperative 1: Deliver on Key HIPO Retention Drivers Imperative 2: Offer Key Attraction Drivers to Attract HIPOs from Talent Competitors Average Percentage of HIPOs Satisfied with Delivery of Top HIPO Retention Drivers 1 32% Satisfied Top Attraction Drivers of HIPOs Percentage of HIPOs Choosing 68% Neutral or Disagree 1. Compensation 56% 2. Future Career Opportunities 42% Top Drivers of HIPO Retention Impact on Intent-to-Stay 3. Work Life Balance 40% 1. Meritocracy 39% 2. Future Career Opportunities 3. People Management 32% 31% 4. Development Opportunities 5. Job Interest Alignment 35% 23% 1 Satisfaction is measured as the top two on a seven-point satisfaction scale for each attribute. Source: Women in Science and Technology (WIST) Survey; Corporate Leadership Council research. 17

18 Detailed employee segmentation provides greater potential for creating customized, targeted solutions to retention issues. FOCUS RETENTION INVESTMENTS ON KEY TALENT Evaluating Position and Individual Risk Position Risk Criteria The level of risk that an organization would be exposed to from the loss of any employee holding a given position Individual Risk Criteria The level of risk that an organization would be exposed to from the loss of a specific, named employee Factors to consider: Critical to maintaining external relationships and partnerships Critical to product development Critical to revenue generation Critical to strategy development and execution Difficulty of quickly hiring an external replacement Difficulty of identifying an appropriate internal successor Seniority of job level within organization Factors to consider: One or more of the following Individual is considered a high potential or high performer Individual is a named successor on the succession plan Individual is heavily networked in organization and serves as a critical conduit for information and knowledge Individual possesses a particularly high degree of valuable institutional knowledge or functional expertise plus one or more of the following: Compensation package not equitable with internal peers or external market Lack of access to development opportunities Long period of time since last promotion Dissatisfaction with most recent performance review Poor relationship with direct manager Known personal risks (e.g., long commute, health factors, family-related factors) Noticeable decline in performance or engagement levels Source: Corporate Leadership Council research. 18

19 Duke Energy evaluates retention risk for selected individuals and positions and develops targeted retention plans for high-risk talent. IDENTIFY AND TARGET CRITICAL POSITIONS AND CRITICAL TALENT Duke s Web-Based Retention-Criticality Matrix The matrix identifies five individuals as having a low retention outlook and occupying a high criticality position. Step 1: Assess Position Criticality Duke Energy assesses the criticality of positions within the organization, using the following criteria: High experience or competence requirements Degree to which critical business processes would be interrupted if a position were left vacant Barriers of entry to position, stemming from specialization or educational requirements Position s impact on customers, revenue, or productivity Criticality Retention Outlook Low Medium High High Medium Low Step 3: Create Targeted Retention Plan Step 2: Assess Retention Outlook for Individuals in Critical Positions Duke Energy uses the following criteria to identify individuals who present the greatest retention challenge: Total compensation versus market compensation Future career opportunities within and outside of Duke Energy Exposure to senior managers and the degree to which that exposure has been favorable By clicking on the number in the box, executives can view the profiles of at risk individuals and prepare customized retention and succession plans. Source: Corporate Leadership Council, High-Impact Succession Management, 2005; Corporate Leadership Council research. 19

20 Compensation is not a top 50 driver of engagement, but its impact on retention is still significant and tying pay to performance has the greatest impact on discretionary effort. PRESERVE PAY FOR Maximum Impact on Discretionary Effort and Retention Due to Satisfaction with Base Pay 1 Maximum Impact of Individual Compensation Levers on Discretionary Effort Employee satisfaction with compensation has a greater impact on intent to stay than on employee effort. Although compensation has a limited impact on effort, connecting pay to performance will maximize its impact. Change in Discretionary Effort and Improvement in Intent to Stay 7.6% 19.0% Change in Discretionary Effort 11% 10% 9% 8% 7% 6% 5% Change in Discretionary Effort Improvement in Intent to Stay 1 Each bar represents a statistical estimate of the maximum total impact on discretionary effort or intent to stay each lever will produce through its impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates: the predicted discretionary effort or intent to stay for an employee who scores high on the lever and the predicted discretionary effort or intent to stay for an employee who scores low on the lever. The impact of each lever is modeled separately. Connection Between Performance and Raise Connection Between Performance and Bonus Total Compensation Satisfaction Base Pay Satisfaction Cash Bonus Satisfaction Stock Bonus Satisfaction Profit-Sharing Satisfaction Source: Corporate Leadership Council, Driving Employee Performance and Retention Through Engagement, 2004; Corporate Leadership Council research. 20

21 Business leaders often are unable to manage out the disengaged without disrupting other employees. According to Senior Leaders, 63% of managers are ineffective at managing the disengaged. Managers need tools and resources to effectively manage disengaged employees. THE DISENGAGED Process for Managing the Disengaged 1 2 Identify Roles of Employees That Are Disengaged Identify which employee segments are most at risk. Develop Strategy Develop a workforce strategy to determine where to allocate the most resources to improve employee engagement. 3 4 Rebuild Engagement Build an engagement plan. Improve managers capabilities to re-engage employees. Manage Out Poor Performers While Keeping Survivor Engagement High Plan layoffs. Build effective internal communications around layoffs. Source: Corporate Leadership Council, 2008 Talent Champions Survey; Corporate Leadership Council research. 21

22 Stryker s Controller analyzes the common characteristics of top performers to create a job posting designed to attract candidates with similar traits. THE IDEAL CANDIDATE Stryker Top Performer Behavior Assessments Illustrative Nick Bourgeois Behaviors Assessment Gallup Top Performer Behavior Compilation Service Commitment Responsibility Discipline Mastery Analytical Skills Courage Mastery Service Commitment Responsibility Discipline Analytical Skills Courage Stryker s top 20 finance performers exhibit similar behaviors, which the Controller seeks to replicate in new staff. Recruits for overall skill level instead of job-specific capabilities Eliminates time-to-fill pressure of recruiting for an existing open job Attracts candidates with the skills to perform outside the limits of a specific role Source: Stryker Corporation. 22

23 Leading organizations are reconnecting employees rationally through experiential development and emotionally by using managers to reinforce organizational values. Monetary incentives may no longer be viable to connect employees rationally. COMMITMENT THROUGH DEVELOPMENT OPPORTUNITIES AND ORGANIZATIONAL CONNECTIONS I Will Be Rewarded for My Loyalty to My Organization % Neutral or Disagree 22% Agree Tactics to Improve Rational Commitment to the Organization 1. Create career paths that include experiential development for all employees, not just highpotential employees. 2. Unlock solid performer contributions through challenging roles and projects aligned with strengths. 3. Ensure rewards and recognition programs apply to a large number of employees, even as the organization invests more in high performers. "Organizations Have the Best Interest of Their Employees in Mind" % Neutral or Disagree 16% Agree Tactics to Improve Emotional Commitment to the Organization 1. Ensure CEO and line leader communications specify how employees can contribute to business goals. 2. Reinforce organizational values and messages through managers, not just centralized initiatives. 3. Create opportunities for two-way exchanges between business leaders and employees. n = 13,110 Source: 2008 Multigenerational Workforce Survey; Corporate Leadership Council research. 23

24 Leading Finance departments use a number of innovative development opportunities to drive engagement. LOW-RESOURCE DEVELOPMENT OPPORTUNITIES CREATE HYBRID POSITIONS Allow lawyers to split time between legal and nonlegal roles, creating new challenges and developing additional skill sets. PEER CONSULTING COHORTS Organize cross-company business networks for emerging leaders to provide targeted job support and leadership development opportunities. EXPERIENTIAL LEARNING Help team members fully leverage developmental opportunities within their work rather than waiting for big experiences which may be limited. 24

25 Splitting time between core and non-core roles has created exciting learning opportunities for Cummins staff to expand their knowledge of business functions. LEVERAGING TALENT AT CUMMINS Hybrid Profiles Name Background Legal Position Legal Reporting Nonlegal Position Nonlegal Reporting Current Work Split Hybrid Positions at Cummins have served to: provide career stretch for capable staff, further integrate functions with the rest of the business, keep headcount and the company s costs to a minimum, and provide staff with varied experiences without forcing them to leave. Paul Malone John Rubino David Wright Worked at a law firm and with the Indiana Attorney General s Office for a total of six years. Joined Cummins in Worked as a pilot at Cummins before obtaining MBA. Worked in a business role at Cummins until obtaining J.D. Has been a Cummins attorney for the past 10 years. Worked in-house at another company. Has been a Cummins attorney for more than 15 years. Corporate Counsel Corporate Counsel Corporate Counsel General Counsel General Counsel General Counsel Director of Government Affairs Director of Environmental Affairs Director of Benefits Design and Strategy VP, Business Services VP, Environmental Affairs VP, Human Resources 70% Legal, 30% Nonlegal 80% Legal, 20% Nonlegal 90% Legal, 10% Nonlegal Marya Rose Worked at a law firm and with the Indiana Governor s Office for a total of seven years. Joined Cummins in Corporate Counsel General Counsel Director of Public Relations General Counsel 30% Legal, 70% Nonlegal In-Depth Profile Marya Rose Exposure: I have the grand fortune of interacting at a very high level with the Chairman, the President, the CFO, and all the executive officers. As a result, I know that my career has probably progressed faster because of the PR position than it would have if I had only been a lawyer. Integration: There is no sentiment that once you become a lawyer at Cummins your only value is to give legal advice. Stretch: I am glad I have this public relations role, because I see a slice of corporate life that is so different from my role as a corporate lawyer. Compensation and Workload: I did receive a raise when I took on this other position, but my workload increased exponentially. Source: Cummins, Inc.; General Counsel Roundtable research. 25

26 Bombardier creates a forum for managers to (re)build cross-business networks designed to provide targeted job support. CLC 1 research shows that high quality job-focused peer networks have a powerful impact on leadership development. Many organizations fall short on helping employees to activate and maintain networks beyond the immediate team. Bombardier created line manager peer consulting cohorts; with minimal time and budget investment from HR and the line, managers can benefit from ongoing guidance and support from their peers. BOMBARDIER S PEER CONSULTING COHORTS Bombardier Aerospace s Peer Consulting Cohorts For Supervisors and Managers from Diverse Functions Managers take turns playing the role of consultants Managers also take turns playing the role of the client Learning Facilitator CONSULTING COHORT MECHANICS Bombardier convenes groups of seven managers from different business units monthly for eight months to advise each other on leadership and management challenges. Each manager plays the role of the client at least once across the eight-month time period; otherwise they are consultants. The client presents a management challenge and directs the type of consulting he or she wants from the group. Consultants contribute based on the objective and approach set by the client. A learning facilitator ensures that the client and consultants adhere to a pre-defined contract. Success Factors For Reestablishing Disrupted Networks Using Peer Cohorts Optimize Network Quality Cross-functional participation builds networks beyond the immediate team that are valuable for obtaining knowledge and resources Connecting managers with peers at a similar stage in the careers with similar challenges fosters empathy and relationship building Optimize Network Interaction Clearly defined roles and agenda help set expectations and ensure constructive, solutions-oriented discussion A report-back element at the start of each session enables reflection on what worked or did not and contributes to learning Optimize Network Maintenance The eight-month duration provides sufficient time for networks to be developed and consolidated The focus on job-specific challenges drives relevance of the network for participants 1 Corporate Leadership Council. Source: Learning and Development Roundtable, Bombardier s Peer Consulting Cohorts 2007; Corporate Leadership Council research. 26

27 State Farm s L&D function helps leaders to identify sources of development in their work and to create specific opportunities for addressing development needs supplemented by a robust inventory of competency-aligned experiences. HELPING LEADERS HELP THEMSELVES State Farm s Learning Experience Continuum New Project New Job New Role Case in Point: Constructing Development Opportunities in Work Illustrative Situation Kathy needs to improve her oral communication skills. Assessment Root-cause analysis reveals that Kathy s main challenge is influencing and persuading others in small group settings. Through this framework, the L&D function encourages leaders to mine their work for existing developmental opportunities rather than searching for big experiences such as work rotations or regional assignments that are scarce, expensive, and difficult to execute. New Task Current Project Current Task Current Job Examples from State Farm s Experience Library Development Actions Step 1: Kathy provides a five-minute presentation to her direct manager every week to discuss the progress of one of her major projects. (Feedback and Addition of Stretch) Step 2: Kathy provides the same five-minute presentation to her peers, who are not as familiar with her formal presentation. (Feedback and Addition of Stretch) Step 3: Kathy provides the same five-minute presentation to managers and peers in other teams. Skills Addressed Serve as an adjunct professor for a local university Passion Senior Executives Volunteer as a professional facilitator outside State Farm Relationship Building Participate in an internal leadership forum Communication Functional Leaders Engage in formal dialogue with 10 industry peers on a non-competitive topic Serve as a board member for a local community group Influencing Learning Vision Middle Managers Have leaders, peers, and direct reports assess your performance in externally administered 360-degree feedback Self-Awareness Coaching Participate as a small group teacher to State Farm Teamwork associates First-Line Managers Organize a small networking group of first-line managers to discuss challenges Shadow a middle manager experienced in coaching and performance feedback Self-Awareness Learning Relationship Building Source: State Farm Insurance Co.; Learning and Development Roundtable research. 27

28 State Farm s L&D function provides leaders with a list of debrief questions to facilitate (constructive) reflection on key lessons learned from developmental experiences. By providing a structured means for thinking about and synthesizing experiences, State Farm hopes that leaders will be more intentional in their approach and execute against what they have learned from development in work, especially critical given that 90% of leaders come from inside the organization. INCREASING LEADERS ACTION-TO-REFLECTION RATIOS State Farm s Debrief Question Inventory Initial Leader Reaction Doing Things Differently Skills and Behaviors What surprised me about this experience? What met my expectations? What did not meet my expectations? How did I feel before, during, and after the experience? What would I do differently if I were going to do this experience over again? What would I have done, what would I have read, and who would I have met with to better prepare myself before the experience? What would I have done, what would I have read, and who would I have met with to better prepare myself during the experience? What skills and behaviors did I display most effectively during the experience? What skills do I wish I had demonstrated more effectively in completing the experience? How can I gain these skills? What did I learn that I can apply to my current and future work responsibilities? Potential Debrief Participants Individual Leaders Direct Managers Development Advisors Mentors Reflect on key lessons learned during and after developmental experiences Help leaders understand performance differences before and after developmental experiences Provide advice and support tools to leaders to help synthesize key lessons learned Share tips and lessons learned for effectively reflecting on developmental experiences Source: State Farm Insurance Co.; Learning and Development Roundtable research. 28

29 KEY TAKEAWAYS Focus on Employee Commitment Focus on improving employee commitment (both rational and emotional commitment) through day-to-day employee interactions on activities with the highest impacts on performance and engagement and building employee engagement with the broader organization to significantly increase staff discretionary effort. Explicitly Address the Impact of Resource Reductions Prioritize everyone s workload, including your own, and establish clear objectives, measure them frequently, and provide positive, corrective feedback as necessary. Reinforce a culture of small productivity wins, e.g., time-saving adjustments, cost savings, removal of roadblocks, etc. Create Space for Employees to Discuss the Downturn Even if there are no major cuts in the department budget, the economy s continued weakness creates a level of concern about the company s health and potential for cutbacks. Allowing employees to raise concerns as well as providing them with ongoing updates about the company s financial stability is critical to maintaining morale and focusing staff efforts. Build Employee Engagement with the Company To ensure maximum performance and retention, build employee engagement with the broader organization through increased CEO, line leader and manager communication, experiential development opportunities for all employees, and appropriate rewards and recognition to a large number of employees, thereby increasing employee discretionary effort and intent to stay. Overinvest in High-Potential Talent Strategies Aggressively manage performance to create headroom for emerging Tax leaders and budget room for new hires. 29

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