Employee Engagement: Are We Engaged or Just Going Steady? Joseph Marth, PhD Vice President of Business Solutions Slide 1
Session Overview Foundation in understanding Employee Engagement Definition and background of Employee Engagement The national averages Engagement at the Individual Level Engaged employee behaviors The 8 Drivers Engagement at the Organizational Level The organizational outcomes of engagement Ties to Organizational Culture The common elements of Highly Engaged Organizations Slide 2
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Remember when Recall a time in your career when you were highly satisfied and engaged in your job. What were the reasons you were so happy? In your pair/triad: Have each member describe their experience and the supporting reasons Identify common themes Slide 4
Remember when Recall a time in your career when you were highly dissatisfied and disengaged in your job. What were the reasons you were so unhappy? In your pair/triad: Have each member describe their experience and the supporting reasons Identify common themes Slide 5
Will They Leave? Job Searching 51% of employees are searching for new jobs 63% of employees believe that t is very likely or somewhat likely that they will find a job as good as the one they have Voluntary Quits 91% of employees say that the last time they changed jobs, they left their company to do so; Managers are trending out 31% are looking for other opportunities National unemployment rate: 4.3% The Question: not if, but when? Slide 6
Employee Engagement at the Foundation Level Slide 7
Employee Engagement Employee Engagement Defined: A heightened emotional and intellectual connection that an employee has with his/her job, organization, manager, or co-workers that influences the amount of discretionary effort that employee puts into his/her job. John M Gibbons, Employee Engagement: A Review of Current Literature and Its Implications, (2006) Concept of Engagement: First introduced by William Kahn in 1990 in academia, later refined by Alan Saks, Wilmar Schaufeli, and others Proliferation of non-academic sourced research and tools to measure it in the 2000s (Gallup, Aon Hewitt, Towers Watson, Blessing White, The Conference Board, etc) Slide 8
Employee Engagement Video link: https://youtu.be/y4nwoz02ajm Slide 9
Where are workers today? EMPLOYEE ENGAGEMENT Actively Disengaged 16% Engaged 32% Disengaged 52% Source: Gallup, 2017 Slide 10
Comparisons & Contrasts 2016 Engagement by Management Level: 45% Executives vs. 29% Managers 2016 Engagement by Gender: 36% Females vs. 30% Males 2016 Engagement by Generations: Millennials: 31% vs. 33% Gen Xers vs. 35% Baby Boomers 2016 Engagement by Occupation: Professional Workers 34%vs. 25% Manufacturing Workers 2016 Engagement by Company Size: 41% if less than 25 employees vs. 29% if 5,000 or more employees Slide 11
Employee Engagement Model The Conference Board, 2014 Slide 12
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Engagement at the Individual Level Slide 14
Engaged Employee Behaviors Demonstrate high levels of effort Persist at difficult tasks over time Help others Go beyond the norms or expectations Voice recommendations for changes and improvements Expand their role or responsibilities in response to a team or organizational need Adapt to or facilitate change to improve work, the workplace, and the organization s effectiveness Source: Schneider, Macey, Barbera, Young, Lee (2006) Slide 15
Eight Primary Drivers 1. Trust and Integrity 2. Nature of the Job 3. Line-of-Sight Between Individual Performance & Company Performance 4. Career Growth Opportunities 5. Pride About the Company 6. Coworkers/Team Members 7. Employee Development 8. Relationship with One s Manager Source: The Conference Board, Employee Engagement: A review of Current Research and It Implications by John Gibbons (2006) Slide 16
Eight Primary Drivers 1. Trust and Integrity perception that management cares about employee well-being, is truthful, communicates difficult messages well, listens, follows through, and demonstrates values through their own behavior. 2. Nature of the Job degree to which employee derives emotional/mental stimulation from the job, has opportunities for autonomy and participation in decisions affecting the job. Slide 17
Eight Primary Drivers 3. Line-of-Sight Between Individual Performance and Company Performance how well employees understand company goals and overall performance, and know how individual contributions impact company performance. 4. Career Growth Opportunities perception that future opportunities for career growth and promotion within the company exist; clearly defined career path. Slide 18
Eight Primary Drivers 5. Pride About the Company enhanced self esteem from being associated with the company. Likely to recommend the company to prospective customers and employees. 6. Coworkers/Team Members recognizes the significance of the influence that colleagues have on employee s level of engagement. Slide 19
Eight Primary Drivers 7. Employee Development the degree to which an employee feels that specific efforts are made by the company or manager to develop the employee s skills. 8. Relationship with One s Manager the degree to which an employee values the relationship with his/her direct manager. Also relates to the degree to which the employee sees his/her manager as competent. Slide 20
Engagement at the Organizational Level Slide 21
Employee Engagement and Organizational Outcomes Positive link between employee satisfaction and engagement and organizational outcomes: Higher Customer Satisfaction Higher Productivity Higher Profit Higher Employee Retention Higher Safety Higher Quality Slide 22
Employee Engagement and Organizational Outcomes Employees who are more engaged in their work: more satisfied with their jobs less likely to leave their companies more likely to attain their performance objectives Transformation of workforce from low to high engagement translates into a $4,200 per employee annual impact in increased performance. Source: DDI (2005), Employee Engagement: They Key to Realizing Competitive Advantage Slide 23
Employee Engagement and Organizational Outcomes According to Gallup (2013) Organizations with an average of 9 engaged workers for 1 actively disengaged employee (9:1) experienced 147% higher earnings per share compared with their competition. In contrast, those organizations with an average of 3 engaged employees for 1 actively disengaged employees (3:1) experienced 2% lower earnings per share compared with their competition. Slide 24
The Magic Formula (Strategy x Processes x Infrastructure) Engagement Slide 25
The Magic Formula Engagement (Strategy x Processes x Infrastructure) Where 1=Poor, 2=Okay, and 3=Great (2 x 2 x 2) 1 = 8 (3 x 3 x 2) 1 = 18 (3 x 3 x 2) 2 = 324 (3 x 3 x 2) 3 = 5,832 Slide 26
Denison Culture Model Adaptability Pattern, Trends, & Market Translating the demands of the business environment into action Are we listening to the marketplace? Involvement Commitment, Ownership, & Responsibility Building human capability, ownership, and responsibility Are our people aligned and engaged? Mission Direction, Purpose, & Blueprint Defining a meaningful long-term direction for the Company Do we know where we are going? Consistency Systems, Structures, & Processes Defining the values & systems that are the basis of a strong culture Does our system create leverage? Slide 27
Organizational Culture and Employee Engagement Bottom 10 DOCS OVERALL Top 10 11 th Percentile ENGAGEMENT FACTOR 83 rd Percentile Slide 28
Strongest Predictors of Employee Engagement Slide 29
Highly Engaged Organizations Common Elements 1. Alignment of business and engagement strategies 2. Emphasis on Core Purpose 3. Engagement programs and policies 4. Open communication about engagement 5. Structure that promotes collaboration and inclusion 6. Regular assessment and follow-up 7. Leaders who build engagement 8. Engagement data correlated to business outcomes Source: The Conference Board, The DNA of Engagement: How Organizations Create and Sustain Highly Engaging Cultures by Rebecca Ray et al. (2014) Slide 30
Strategy Alignment 73% of the high engagement companies Integrate engagement in business decisions Expect organization members to embrace it Weave it throughout the business Recognize how engagement brings tangible benefits Slide 31
What Does It Look Like? Whole Foods Market Everyone is responsible for engagement Team members are expected to work well together and so they decide collectively who gets hired After a new hire works for a 30 to 90 day trial period, the team takes a vote on whether or not to continue their employment Slide 32
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Core Purpose More than half of high engagement companies Describe their engagement culture as being heavily defined by their values, mission and vision Slide 34
What Does It Look Like? Quicken Loans New employees attend an 8-hour session on company values and behaviors, led by the Company founder and chairman and the CEO. Zappos We have 10 core values, and when we hire people, we make sure they have similar values. For example, one of our values is to be humble. If someone comes in and is really egotistical, even if they are the greatest, most talented person technically and we know they could do a lot for our top or bottom line, we won t hire them, because they re not a culture fit. Tony Hsieh CEO, Zappos.com Slide 35
The Value of Values Slide 36
The Value of Values Video link: https://youtu.be/5cclipauz3e Slide 37
Policies and Programs 82% of the high engagement companies Promote engagement in programs and policies throughout the employment lifecycle Integrate engagement practices with leadership development, and diversity and inclusion programs One size does not fit all no common programs or policies across all companies programs are tailored to unique cultures and engagement strategies Slide 38
What Does It Look Like? Development Dimensions International (DDI) Culture fit is a key determinant during candidate selection Immediately following orientation, new hires create a development plan for their first 6 weeks After 6 weeks, the supervisor works with them to create a performance/development plan for the year Plan is aligned with at least one DDI strategic priority Slide 39
Open Engagement Communication All of the high engagement companies Are diligent about keeping employees at all levels informed about organizational priorities and objectives Keep communication about engagement at the forefront Share specific plans for organizational improvements that will increase engagement Slide 40
Alcoa What Does It Look Like? The CEO at Alcoa holds regular town hall meetings to share engagement survey results US Patent and Trademark Office (USPTO) Provides a variety of methods: blogs, town halls, Q&A sessions Whole Foods Market Annual wage disclosure report is available to any employee who wants to review it Slide 41
Structure for Collaboration and Inclusion All of the high engagement companies Recognize the profound impact of the physical work space on behavior, productivity and engagement Those with geographically dispersed teams know the importance of an engaging virtual work environment Slide 42
Deloitte What Does It Look Like? Their Leadership Center built to provide a space for dispersed workforce to come together for connection and learning Quicken Loans Work space designed for fun and functionality Colorful décor Materials that dampen sound Spaces to go relax Slide 43
Regular Assessment and Follow-up Over 80% the high engagement companies Have formal processes for surveying engagement Those without formal processes still track engagement All have defined practices for making the data actionable Slide 44
Alcoa What Does It Look Like? Annual Global Voices Survey (GVS) Voluntary, anonymous participation Survey Champions communicate survey results to business managers, promote participation, encourage action planning and follow through GVS results from 100 s of locations become locationspecific action plans for improving engagement Slide 45
Leader Expectations 91% of the high engagement companies Hold executives and senior management accountable for acting on survey results 92% of the high engagement companies Require managers and front-line supervisors to hold forums to share results with their employees and collaboratively create action plans Slide 46
DDI What Does It Look Like? Analyzes data for themes and trends Generates business unit and team reports Distributes detailed plan from the President describing expectations for sharing/acting upon results Department managers submit action plans to the President Slide 47
Engagement Data Correlates to Business Impact All of the high engagement companies Use employee feedback and engagement data to drive their business results Track engagement scores year over year Measure impact on specific performance indicators: Turnover and retention Diversity and inclusion Business unit performance Brand and reputation Well being Customer satisfaction Slide 48
Whole Foods What Does It Look Like? Uses data from annual survey to identify specific aspects of morale that correlate to performance outcomes such as higher productivity and sales US Patent and Trademark Office (USPTO) Leader in teleworking programs Avoided in excess of $30 million real estate costs Inclement weather has no effect on office hours Saved 6 million gallons of gas / 27,000 tons of emission into the atmosphere Slide 49
Leadership is Key Leaders are the enablers of highly engaged cultures Authorize programs and practices Approve award systems Articulate the Vision Decide on strategy Are accountable for business success Slide 50
Q & A Slide 51
Thank You! Contact Information: Joseph Marth, PhD Vice President jmarth@archbright.com 206.664.7165 Slide 52