creating engagement through employee needs … 23, 2012...creating engagement through employee needs...
TRANSCRIPT
What is Employee Engagement
• The employee’s willingness and ability to contribute to the success of the Company.
www.towerswatson.com
• Level of discretionary effort an employee is willing to contribute.
Why Engagement Matters
• The lost productivity of actively disengaged employees costs the US economy $370 BILLION annually. (Gallup)
• 78% would recommend their company’s products or services, against 13% of the disengaged. (Gallup)
• Engaged employees generate 43% more revenue. (Hay Group)
Why Engagement Matters • 69% of employees would work harder if they were better
recognized. • Those companies with a highly engaged workforce
improved operating income by 19.2% over a period of 12 months, while those companies with low engagement scores saw operating income decline by 32.7% over the same period. (Towers Watson)
• Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19. (Gallup)
Benefits of Engagement
• Better performance; • Better communication; • Greater customer satisfaction; • Better team work; • Greater commitment; • Lower employee turnover and a greater ability to
recruit top performing people.
The Jack Welsh Theory
20% are high performers (highly engaged) 10% should be out of the company (disengaged) The rest are somewhere in between (engaged and somewhat engaged)
Happy Place Company The Cost of Lost Productivity
• Scenario 1: 20% highly engaged 10% disengaged 35% engaged 35% somewhat engaged Annual payroll of $10,000,000
The Cost of Lost Productivity – Happy Place
Company Level of Engagement
% within Organization
(A)
% Performance Level
(B)
Performance Impact
(A x B)
Highly 20% 125% 25%
Engaged 35% 100% 35%
Somewhat 35% 75% 26%
Disengaged 10% 50% 5%
CURRENT PERFORMANCE POTENTIAL (C) 91%
% OF LOST PERFORMANCE (100% – C) 9%
TOTAL ANNUAL WAGES AND SALARIES $10,000,000
VALUE OF LOST PRODUCTIVITY DUE TO ENGAGEMENT
$900,000
Happy Place Company The Cost of Lost Productivity
• Scenario 2: ▫ Employee engagement shifts the engagement level
of the middle 70% 20% of the 35% engaged employees become highly
engaged 20% of the 35% somewhat engaged employees
become engaged
The Cost of Lost Productivity – Happy Place
Company Level of Engagement
% within Organization
(A)
% Performance Level
(B)
Performance Impact
(A x B)
Highly 27% 125% 34%
Engaged 35% 100% 35%
Somewhat 28% 75% 21%
Disengaged 10% 50% 5%
CURRENT PERFORMANCE POTENTIAL (C) 95%
% OF LOST PERFORMANCE (100% – C) 5%
TOTAL ANNUAL WAGES AND SALARIES $10,000,000
VALUE OF LOST PRODUCTIVITY DUE TO ENGAGEMENT
$500,000
VALUE OF PRODUCTIVITY IMPROVEMENT $400,000
Happy Place Company The Cost of Lost Productivity Assuming -150 employees: Scenario 1 Scenario 2 Highly engaged 30 40 Engaged 53 53 Somewhat engaged 52 42 Disengaged 15 15 Total employees 150 150
The Cost of Lost Productivity
• Conclusion: ▫ By improving the engagement level of just 20% of
the middle 70% of your workforce, a 5% improvement in overall productivity was achieved.
▫ This effectively improved the value of productivity being generated by the company’s workforce by $500,000.
Types of Motivators
• Extrinsic Tangible rewards e.g.: pay raises; bonuses; benefits. Other people control their size and whether or not
they are granted.
• Intrinsic
Psychological rewards that employees get from doing meaningful work and performing well.
Safety and Security • Mission Statement – James Madison University
Protecting the health and safety of employees, students, guests, and the environment is the primary concern of all of us at James Madison University. This goal can be met through the development of a comprehensive and effective environmental health and safety plan that endeavours to eliminate unsafe conditions and minimize the impact of hazardous situations. Such a program can benefit the university community by reducing illness and injury to students and personnel, preventing property damage, and preserving the environment.
(http://www.jmu.edu/safetyplan/overview/mission.shtml)
Applying the Hierarchy of Needs
• Retail grocery chain • Full time employees – relatively low turnover • Part-time employees – mostly teens and
students with high level of turnover • Direct contact with customers by many
employees • Some employees work during the day, some
nights or weekends