Employee Engagement

Where Have We Been? Where are We Going?

Lewis GarradManaging Director, Sirota Consulting

16%Difference in stock performance of a highly engaged company vs. their matched comparisons

25 years

…since the term “employee engagement” was coined

7,261

Employee engagement related books on Amazon.com

1 in 5Proportion of disengaged people in the global workplace

• Founded in 1972 by a team of organisational psychologists

• We survey 1-1.5 million employees every year in companies like these:

WE HELP FIND PEOPLE

SOLUTIONS TO BUSINESS CHALLENGES

1

EMPLOYEE ENGAGEMENT

: WHAT IS IT?

Employee engagement is the extent to which employees think, feel, and act in ways that represent high levels of commitment to their organization.

2Engaged employees are motivated to contribute 100% of their knowledge, skills, and abilities to help their organization succeed.

3Engagement is not merely about making employees happier at work; it is about bringing out the best in people and tapping their full potential on a day‐to‐day basis.

We’re Living in the Era of Employee Engagement

Top Challenge for CEOs

Human Capital: Attracting, retaining, engaging employees

An Abundance of Advice Exists

7,261+ employee engagement related books on Amazon.com

Spending is on the Rise

Employers are investing millions annually on Engagement Programs

18th Century 19th Century 20th Century 21st Century

IndustrialAge

Efficiency

KnowledgeAge

Analysis&

Computing

ConceptualAge

Synthesis&

Sense making

AgriculturalAge

Manpower

ServiceAge

Connection&

Empathy

Adapted from Daniel Pink’s Whole New Mind

Volatility

Uncertainty

Complexity

Ambiguity

Perhaps because Engagement speaks to our challenges

Disruptive

2008 2009 2010 2011 2012 2013 201460

75

9089

77

81 78 76

61 64

Rate XYZ on Being Responsive to Customers

2008 2009 2010 2011 2012 2013 201465

75

85

7779

7674

79

74

69

I Understand my Company’s Business Strategy

2008 2009 2010 2011 2012 2013 201465

75

85

75

68 69 67 6669 69

I Have the Opportunity to Learn and Grow

2008 2009 2010 2011 2012 2013 201450

70

90

5569

74

80 7984 85

XYZ is Knowledgeable About Customer Needs

About performance?

About leadership?

About managers?

About employees?

So what have we learnt over the last 25 years?

EfficiencyInnovationCustomer ServiceSales PerformanceTurnoverTeam PerformanceStock Prices

Employees’ satisfaction ratings explained 22% of the difference in turnover.

Customer focused retail stores demonstrated a 10% greater year over year sales increase.

Stock prices in high morale companies increased 16% in one year. Low morale companies only increased 3% in the same year.

An increase in employee attitudes was linked to 28 million dollars in revenue due to increased customer satisfaction.

Engaged steel mill employees required 34% fewer labor hours to produce a ton of steel.

National Weather Service meteorologists working on highly engaged teams were more accurate at predicting tornadoes.

Financial services employees who felt supported by their bosses were significantly more intellectually invested in their work.

40% Leadership & Mgmt Behaviour/

Style

30% Organisational Factors

30% Individual Employee Factors

How is Engagement influenced?

Leaders

Managers

Engagement Performance

About 15% of Engagement is related to this

About 25% of Engagement is related to this

We know that leaders are critical

“This company is a great place to work. It’s meaningful and

I’m proud of it”

“I am motivated to do whatever it takes

, every day”

Individual Fit & Fulfillment

• Company cares about me, I fit in• What I do matters (job itself matters, sense of

challenge and achievement)• I have a future with a company that has a

future (career and development opportunity)

Senior Leadership

Fosters climate of . . .• Company as a “winner”

with positive future• Great “deal” for employees

(relationship with the company, roles, future)

Local Management

Fosters climate of . . . • Partnership and trust, “we’re in

this together”• Openness, involvement• Higher performance

(expectations, feedback)

Analysis of 68 companies varying in size and global scale

What? Who?

Effectively Functioning Teams

• Openly discuss barriers to effectiveness, make improvements

• Do whatever it takes, “there for each other” as a team

• Higher performing (if no extra-team barriers)

But we need to be clear about roles

Employee EQ Employee Engagement

Employee Performance

Manager EQ Manager Engagement

Manager Performance

Multinational Hospitality Group: N=1034, 245 Managers, 799 Employees. 9 month time frame

30 Day 90 Day 180 Day 365 Day60

65

70

75

80

85

90

95 91

86

7675

Motivated to go above and beyond

We need to stop de-motivating them

We need to stop trying to motivate people

Leaders know how to build a culture of employee engagement.

Good job of taking action on our employee engagement data.

EE program has had positive impacts on business outcomes.

Leaders understand the role they play in improving engagement and performance.

Leaders work hard to create an environment of employee engagement.

Effective at measuring employee engagement.

Effective at analyzing our employee engagement data.

Effective job making the business case for engagement.

Snr leaders: engagement to be a key business driver and performance indicator.

Snr leadership: recognizes the value of employee engagement.

50

52

59

61

65

71

71

73

79

90

%Favorable

Research with The Engagement Institute

Where is the impact?

Even after all this time, only half feel they

know how to act on the data

70%

30

64%

48

52%48 43%48

Managers Individual Contributors

I believe the results of this survey will be used constructively by management.

The results of the last employee survey were used constructively by management.

Focus on performanceDevelop Engaging leadersBuild Engaging CulturesMake better use of the data

So what needs to happen?

Archite

ct Enable

Elevate Unlock

First, engagement isn’t an end in itself

TOOLS & RESOURCES

INNOVATIVE TEAMS

EXCELLENT PROCESSES

CLEAR STRATEGY

CLEAR GOALS

ACCOUNTABILITY

ENGAGED

COMMITTED

ENTHUSIASTIC

STRONG VALUES

POSITIVE MANAGEMENT BEHAVIOURS

Performance

Strategy

Employees

Managers

Leadership

Second, we need to develop Engaging Leaders

Leader Personality

Decisions and

Behaviors

Climate and Culture

Employee Engagement Performance

How You BehaveHow You Affect Your TeamWho You Are

Competence Competencies Character

Ability to get results

KPIs

Performance Management

KSAs & Behaviors critical to mission

360s and Surveys

Leadership Development

Personality & Values

IndividualAssessments

Selection & Coaching

What makes for an Effective Leader?

Based on George Hollenbeck’s (2009), “Executive Selection—What's Right … and What's Wrong” Industrial Organizational Psychology article

DNA of Engagement: How Organizations Create and Sustain Highly Engaging Cultures

Third, make it happen every day

Alignment

Philosophy

Policies & Practices

Communication

Collaboration

Assessment

Leadership

Business Impact

1. Engagement is a business imperative

2. Engagement is part of accomplishing the mission

3. Engaging employees is part of HR practice decisions

4. Open, transparent, 2-way communication

5. Structure and space that promotes collaboration

6. Regular assessment & feedback

7. Managers empowered to build Engagement

8. Engaged teams are shown to perform better

OnboardingSurveys

EngagementSurveys

ExitSurveys

PerformanceData

• Manager Support at Day 10 Employee Engagement at Day 180

• Non-Financial Rewards in 2010 Engagement Increases in 2011

• Awareness of Career Growth Opportunities 2x Likely to Stay

• 1% Increase in Store Engagement $1,444.29 in quarterly sales

Last, start connecting the dots

What am I saying?Engagement is an important business measure

Over the last 25 years, we have learnt a lot

But many organisations want to see more impact

The next phase is about innovating what we DO rather than what we measure

EE PPerformance

driverLeaders matter

EQ matters Natural motivation

52%48Good job of taking action on our employee engagement data

Performance Data

Culture Leadership

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