Workplace. State of the American. The State of the American Workplace ANNAMARIE MANN. Workplace Analytics Practice Manager

The key to an organization s growth has been and always will be its workforce. - Gallup s State of the American Workplace report 3

Inside the State of the American Workplace Report U.S Workers: Increasingly Confident and Ready to Leave Do Employees Want What Your Workplace Is Selling? The Real Truth About Benefits and Perks The Competitive Advantage of Engaging Employees A Shift in Managing Performance A Closer Look at the 12 Elements of Engagement Making Sense of Matrixed Teams The Changing Place and Space of Work Employee Engagement: A Snapshot 4 Copyright 2017 Gallup, Inc. All rights reserved.

Discussion Take a moment to talk with a neighbor What has changed in your in the last five years? - organization - workforce - self 10-Second Introduction 1. Name 2. Hospital or Organization 3. Role or Area of Focus 4. Biggest change in last five years 6 Copyright 2017 Gallup, Inc. All rights reserved.

Employee Expectations are Shifting What employees want and need THE PAST LEADER AS COACH OUR FUTURE My Paycheck My Satisfaction My Boss My Annual Review My Weaknesses My Job My Purpose My Development My Coach My Ongoing Conversations My Strengths My Life 7

An Urgent Need for Leadership Action Only 22% of employees strongly agree that the leadership of their organization has a clear direction for the organization. Only 15% of employees strongly agree that the leadership of their organization makes them enthusiastic about the future. Only 13% of employees strongly agree that the leadership of their organization communicates effectively with the rest of the organization. 8 Copyright 2017 Gallup, Inc. All rights reserved.

Engaged Employees A Crisis of Engagement 100% 90% 80% 70% Best Practice Orgs 70% 60% 50% 40% 30% 26% 30% 30% 28% 29% 38% 30% 30% 29% 28% 28% 29% 30% 30% 31% 32% 33% U.S. 20% 26% 12% 13% 14% 14% 15% 17% 10% 0% Gallup Daily Tracking 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 10 Copyright 2017 Gallup, Inc. All rights reserved.

Workers Are Feeling More Optimistic Employees Are Hyper Connected Workforce Demographics Are Changing The Workplace Is Changing Performance Management Is Evolving 11 Copyright 2017 Gallup, Inc. All rights reserved.

Americans Are Feeling Better About the Job Market and What It Has to Offer Gallup U.S. Job Creation Index Now Is a Good Time to Find a Quality Job 2012 2016 2012 2016 +18 +32 19% 42% 13 Copyright 2017 Gallup, Inc. All rights reserved.

Employees Are Looking and Leaving 51% of employees say they are actively looking for a new job or watching for openings. 35% of workers report changing jobs within the past three years. 15 Copyright 2017 Gallup, Inc. All rights reserved.

Employees Are Looking and Leaving 51% of employees say they are actively looking for a new job or watching for openings. 35% of workers report changing jobs within the past three years. 91% of employees say they left their employer the last time they switched jobs. 16 Copyright 2017 Gallup, Inc. All rights reserved.

Employees Look for Fit to Role, Culture and Life Five most important attributes employees consider when deciding whether or not to take a job with a different organization % WHO SAY THESE FACTORS ARE VERY IMPORTANT 1. the ability to do what they do best (60%) 2. greater work-life balance and better personal well-being (53%) 3. greater stability and job security (51%) 4. a significant increase in income (41%) 5. the opportunity to work for a company with a great brand or reputation (36%) 17 Copyright 2017 Gallup, Inc. All rights reserved.

Development is A Critical Key in Retaining Employees Career pathing and career trajectories help paint a vision for the future, but many employees aren t willing to wait for that future. When offering opportunities to learn and grow, don t just offer training courses. Co-develop career and personal development goals Help employees identify the growth they are experiencing on the job Provide opportunities to grow within the role Advocate for your employees Managers have a unique opportunity to help their employees visualize both current and future growth opportunities. 18 Copyright 2017 Gallup, Inc. All rights reserved.

20 What happens internally spreads externally

Employees Rely on the Opinions of Others to Inform Their Employment Decisions PLEASE INDICATE THE EXTENT TO WHICH YOU USE OR HAVE USED THE FOLLOWING RESOURCES TO LEARN ABOUT JOB OPPORTUNITES. SOMETIMES, OFTEN OR ALWAYS USE % Websites of the organizations you have interest in 77 Referrals from current employees of an organization 71 Suggestions from family members or friends 68 Online job sites (e.g., Monster, CareerBuilder) 58 Publications or online sources in your professional field 57 General web search (e.g., using Google, Bing, Yahoo) 55 Professional network site (e.g., LinkedIn) 47 Professional or alumni organization 41 News media (e.g., ads in newspapers or magazines, TV or radio ads, news reports) 39 21 Copyright 2017 Gallup, Inc. All rights reserved.

Majority of Employees Are Indifferent About Their Work and Workplace 18% 21% 33% of employees strongly agree that employees who perform better grow faster at their organization of employees strongly agree that their performance is managed in a way that motivates them to do outstanding work of employees are engaged in their work 22 Copyright 2017 Gallup, Inc. All rights reserved.

Engagement Elements That Drive Performance Q01. Q04. Q07. Q10. I know what is expected of me at work. Q02. I have the materials and equipment I need to do my work right. In the last seven days, I have received recognition or praise for doing good work. Q05. My supervisor, or someone at work, seems to care about me as a person. At work, my opinions seem to count. Q08. The mission or purpose of my company makes me feel my job is important. I have a best friend at work. Q11. In the last six months, someone at work has talked to me about my progress. Q03. At work, I have the opportunity to do what I do best every day. Q06. There is someone at work who encourages my development. Q09. My associates or fellow employees are committed to doing quality work. Q12. This last year, I have had opportunities at work to learn and grow. 24 Copyright 1993-1998, 2017 Gallup, Inc. All rights reserved.

Ongoing Changes Affect the Role of Management in Meeting Basic Needs Needs Clear expectations Materials and equipment Do what I do best Recognition Cared about as a person Development Opinions count A mission or purpose Committed coworkers Strong social bonds Progress discussions Learning and growth Changes Digitization Mobile technology Matrix Flexible scheduling Remote working Job hopping Contingent workers 25 Copyright 1993-1998, 2017 Gallup, Inc. All rights reserved. The Gallup Q 12 items are Gallup proprietary information and are protected by law. You may not administer a survey with the Q 12 items or reproduce them without written consent from Gallup.

Publicly traded organizations that received the Gallup Great Workplace Award experienced 4 TIMES HIGHER GROWTH IN EARNINGS PER SHARE (EPS) than that of their competitors over the same period of time. 26 Copyright 2017 Gallup, Inc. All rights reserved.

The Staggering Cost of Active Disengagement Gallup estimates that actively disengaged employees cost the U.S. $483 billion to $605 billion each year in lost productivity. 27 Copyright 2017 Gallup, Inc. All rights reserved.

Divide in Approaches to Employee Engagement CONVENTIONAL THINKING: STRATEGIC THINKING: Survey or program Emphasis on data and scores Favorability Isolated Happiness vs. Ongoing performance management Developing employees and managers High-bar performance predictor Integrated Ownership and well-being 28

Group Discussion Discuss the following questions: How are the changes in your workplace impacting the engagement and performance of your employees? What adjustments have you made to replicate best practices in and across your organization? 29 Copyright 2017 Gallup, Inc. All rights reserved.

The Workplace is Becoming Increasingly Diverse Millennials account for the largest generation in the workforce. 38% of the U.S. Workforce This percentage will continue to climb as baby boomers retire. 31 Copyright 2016 Gallup, Inc. All rights reserved.

Understanding Millennials Unattached Unconstrained Idealistic Connected Everything in your organization, from performance to servicing your customers to stock price, depends on deepening your understanding of how millennials live, work and spend their money. 32 Copyright 2017 Gallup, Inc. All rights reserved.

Millennials Are The Most Racially and Ethnically Diverse Generation Organizations are not as homogenous as they once were MILLENNIALS GEN XERS BABY BOOMERS TRADITIONALISTS Identify as Non-Hispanic White 54% 64% 77% 85% Identify as Hispanic, Non-Hispanic Black, Asian, Other and Undesignated MILLENNIALS 47% GEN XERS 36% BABY BOOMERS 23% TRADITIONALISTS 15% 33 Copyright 2016 Gallup, Inc. All rights reserved.

Millennials Have Received the Most College Education Level of Education Some College MILLENNIALS GEN XERS BABY BOOMERS TRADITIONALISTS 26% 23% 24% 21% College Graduate MILLENNIALS* GEN XERS BABY BOOMERS TRADITIONALISTS 21% 20% 17% 11% *Based on millennials ages 21 and older 34 Copyright 2016 Gallup, Inc. All rights reserved.

The Least Engaged Generation 71% 55% of millennials are simply not engaged in the workplace. of millennials are either not engaged or actively disengaged in the workplace. 16% of millennials are actively disengaged in the workplace. 35 Copyright 2017 Gallup, Inc. All rights reserved.

21% 6 in 10 50% have changed jobs within the last year. are open to different job opportunities. plan to be with their company one year from now. Millennials as Job-Hoppers 36 Copyright 2017 Gallup, Inc. All rights reserved.

Clarify Expectations and Priorities Have Ongoing Feedback and Communication Provide Opportunities to Learn and Grow How to Engage and Leverage Your Millennial Workers Create Accountability and Purpose 37 Copyright 2017 Gallup, Inc. All rights reserved.

21% of employees strongly agree their performance is managed in a way that motivates them to do outstanding work.

A Disruption in Traditional Performance Management Two Forces DISAPPOINTING RETURN ON INVESTMENT CHANGES IN THE WORKFORCE Costly to the organization Disengaging Does not improve performance Serves as a barrier to development Constant changes in technology Globalization Overwhelming information flow Changes in the workforce 40 Copyright 2017 Gallup, Inc. All rights reserved.

Traditional Approaches Rely Too Heavily on The Annual Evaluation The Five Pitfalls of the Annual Review As Gallup studied the annual review, it found five flaws in the traditional annual performance review approach. Gallup s analysis reveals that employees aversions to ratings, rankings and manager judgment are strongly tied to five obstacles: 1 Infrequent Feedback 2 3 4 5 Lack of Clarity Manager Bias Adverse Reactions to Evaluation and Feedback Misplaced Focus on Pay Incentives 41 Copyright 2017 Gallup, Inc. All rights reserved.

The Current State of Performance Management UNIFORMED MANAGERS 34% of employees strongly agree that their manager knows what projects and tasks they are working on INEFFECTIVE PERFORMANCE COACHING DISENGAGING PERFORMANCE REVIEWS 23% of employees strongly agree that their manager provides meaningful feedback to them 14% of employees strongly agree that their performance reviews inspire them to improve 42 Copyright 2017 Gallup, Inc. All rights reserved.

Key Reasons Why Performance Management is Suffering Many employees are not motivated to perform to their full potential. 1 Unclear and misaligned expectations 2 Ineffective and infrequent feedback 3 Unfair evaluation practices and misplaced accountability 43 Copyright 2017 Gallup, Inc. All rights reserved.

The Shift to Performance Development Traditional Performance Management Occurs annually Evaluations are based on performance ratings Focused on fixing or addressing weaknesses Top-down cascading of goals from leaders to individual contributors Primarily evaluates past behaviors Top down, led by manager Aimed at comparing employees for sake of compensation Gallup s Approach to Performance Development Continual performance conversations Progress reviews based on clear expectations and accountability Focused on leveraging strengths Aligning individual goals with team goals and organization s objectives Coaching focused on recognizing successes and reaching future achievements Collaboration between manager and employee Aimed at individualizing expectations and development 45 Copyright 2017 Gallup, Inc. All rights reserved.

Coaching Conversations Roadmap Five Conversations That Drive Performance Establish Expectations Lead Ongoing Coaching Conversations Create Accountability 1 Role and Relationship 2 Quick 3 4 5 Orientation Connect Check-In Developmental Coaching Progress Review CULTIVATING INDIVIDUALIZED DEVELOPMENT Ongoing Coaching Conversations should be frequent, focused, and future-oriented. Conversations should address expectations, successes and barriers. 47 Copyright 2017 Gallup, Inc. All rights reserved.

Examples of How Organizations Are Beginning the Transformation Assessing the current state within the company Introducing new manager development curriculum and expectations Multiple Paths Adjusting performance metrics and management practices for critical roles Full Scale Transformation 48 Copyright 2017 Gallup, Inc. All rights reserved.

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