hra employee engagement and disengagement 11.10.2009
TRANSCRIPT
Scott Leuchter
HRA of Greater Oak Brook
November 10, 2009
“Only
1 OUT OF EVERY 5 workers today is giving full discretionary effort on the
job, and this “engagement gap” poses serious risks
for employers because of the strong connection
between employee engagement and company
financial performance.”
SOURCE: Towers Perrin 2008 Global Workforce Study
Understanding Engagement • The Business Case
• Journey to Engagement
• Definitions
Engaging Your Organization • How to Measuring YOUR Employees’ Engagement
• Where is YOUR Organization?
• What’s Next?
Annual cost to U.S. = $292 – 355 billion*
Operating Income 32.7%**
Income Growth Rate 3.8%**
Earnings per Share 11.2%**
Operating Margin 2.01%**
Net Profit Margin 1.38%**
Disengagement’s Financial Impact
•Gallop
** 2007-2008 Global Workforce Study
38%
42%
20%
13%
17%
20%
49%
48%
27%
22%
23%
25%
74%
72%
46%
41%
42%
39%
88%
85%
63%
60%
59%
56%
Quality
Customer Satisfaction
Profitability
Innovation
Revenue Growth
Costs Engaged
Enrolled
Disenchanted
Disengaged
% Respondents who say they can positively impact:
SOURCE: Towers Perrin 2008 Global Workforce Study
15%
35%28%
15%
7%No Plans to leave
Not looking, but would consider another offer
Actively looking for another job
Made plans to leave current job
Plan to retire in the next few years
SOURCE: Towers Perrin 2008 Global Workforce Study
Engagement is a critical leading indicator of
potential productivity and retention issues.
10% increase in engagement leads to 8%
more discretionary effort which leads to 2%
improvement in performance.
Actively disengaged employees cost organizations
$3,400 for every $10,000 in salary. - Gallup, 2002
Smaller organization = Higher engagement levels.
In difficult economic times, engagement is more
important than ever.
$10,000 $3,400 loss
In which area(s) is your organization
struggling?
How would an organization’s level of
engagement impact these areas?
Cost?
Growth?
Innovation?
Profitability?
Customer Satisfaction?
Quality?
Retention?
Employee Performance?
Only those companies that win the hearts and
minds of their top talent will be able to deliver
value over both the short and long-term. – Deloitte, 2008
We are witnessing an era for business around
the world in which engaging employees makes
the difference between success and failure. -Towers Perrin, 2006
Linkage to Business Outcomes
• Employee behavior – customer behavior – financial
performance
Global Talent Age
• Innovation
• Agility
• Responsiveness to change
• Encourage creativity
Satisfaction • Satisfaction alone
is not an adequate
predictor of
performance
1980’s 1990’s 2000’s
Commitment • Positive rel. with
turnover/ retention
• Commitment does
not correlate with
customer satisfaction
• Positive rel. with
company/
organization
Engagement • Direct relationship
with customer
satisfaction, financial
performance,
individual
performance,
retention
• More job-related
The extent to which employees enjoy and
believe in what they do, feel valued for it and are
willing to spend their intellectual effort to make
the organization successful. - Human Capital Institute
Willingness and ability to contribute to company
success; is the extent to which employees go
the extra mile and put discretionary effort into
their work – contributing more of their energy,
creativity and passion on the job. – Towers Perrin
“Occurs when employees are motivated to
help the company succeed (commitment) and
know what to do to make it successful (line of
sight).” – Watson Wyatt
“The extent to which people enjoy and believe in
what they do, and feel valued for doing it.” – Development Dimensions International
Personal Engagement defined as “the harnessing of organization members’ selves to work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances – Kahn, 1990
Vigor, dedication, and absorption – Schaufeli, Salanova,
Gonzalez-Roma, & Bakker, 2002
Passion and commitment – the willingness to invest oneself and expend one’s discretionary effort to help the employer’s success – Erikson, 2005
Psychological trait, situational state, and a behavior – Macey & Schneider, 2008
Meaningfulness
• Receiving a return on investment of one’s self
• Job enrichment and work role fit is positively linked
Safety
• Ability to show and employ one’s self without fear of negative consequences
• Rewarding co-worker and supportive supervisor is positively linked
Availability
• Individual’s belief that they have the resources
to engage one’s self at work
• Resource availability is positively linked
Job
Personal
Customer
Manager
Rewards & Recognition
Burke, 2009
How do you define engagement?
What other factors do you think
influence one’s level of engagement?
Towers Perrin (2008)
Engaged Enrolled Disenchanted Disengaged
Shocks to the system that impact meaningfulness, safety or availability
Break in the psychological contract Unfolds over time
• First thoughts of quitting and actual decision to leave • Decision to leave and actual departure
Behavioral Observation
Absenteeism
Tardiness
Withdrawal
Negativity
Lengthy episodes of
distraction
Rapid task saturation
Slow tempo of activity
Poor decision-making
Lack of interest in work
Marginally productive
Six Sigma methodology • Effective framework for developing and executing an
efficient and effective engagement program
• Define
• Measure
• Analyze
• Improve
• Control
Define
• Problem Statement
• Business Case
• Purpose and Scope
• Intended Improvement
• Communication Strategy
Measure
• Collect qualitative and quantitative base-line data
Observations
Interviews
Focus Groups
Survey
Analyze
• Identify root-causes based on data
• Organize and segment by level, locations and appropriate demographics
Improve
• Engage stakeholders
• Communicate results
• Prepare the organization for taking action
• Develop, try out and implement action plans and solutions to address gaps
• Use data to evaluate both the solution and the action plans to carry them out
Control
• Maintain and institutionalize the gains
developed via the action plan
• Anticipate future improvements and preserve
the lessons learned
• Conduct periodic “pulse” checks
• Form and leverage engagement action teams
as change agents
On Your Mark
Getting Started
• Interview senior leadership
• Link to the business strategy
• Present the business case
• Secure champions
•Adapted from Blessing White, 2008
Get Set
Consideration
• Inform and educate
Just Beginning
• Engage managers
• Be transparent
•Adapted from Blessing White, 2008
Go! Stuck
• Focus on specific actions & areas for change
Along the way
• Engage leadership across the organization
• Leverage prior successes
• Revisit your data
•Adapted from Blessing White, 2008
Enjoy the journey
• Continue to educate and inform
• Link results to tangible business performance
• Refine and improve
•Adapted from Blessing White, 2008
Where is your organization in this
journey?
What 3 things will you do to help move
it forward?
Getting Started
Consideration
Just Beginning
Stuck
Along the Way
Engagement leads to organizational success
HR is in the best position to impact engagement
Time to act is NOW
