Employee engagement to enhance organisational performance by David Macleod
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Employee engagement to enhance organisational performance by David Macleod

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Presentation by David Macleod at the Acas national conference 2009 London, UK. (Acas.org.uk/summit09)

Presentation by David Macleod at the Acas national conference 2009 London, UK. (Acas.org.uk/summit09)

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Employee engagement to enhance organisational performance by David Macleod Presentation Transcript

  • 1.
    • Employee engagement
    to enhance organisational performance ACAS and CIPD 11 th June 2009
  • 2. Summary:
    • A report to Government
    • Due to publish this summer
    • About performance
    • Targeting leaders who want to know more
    1
  • 3. Our five questions:
    • 1. What is it?
    • 2. Does it matter?
    • 3. What are the characteristics of engaged organisations and what enables this?
    • 4. What are the barriers?
    • 5. What could government and its delivery partners do to help?
    2
  • 4. 1. What is it?
    • Not a great term but has currency
    • Lots of definitions but common themes
    • It is a belief, an approach.
      • It places people’s commitment, potential, creativity and capability at the heart of the effectiveness, quality and performance of the organisation.
      • It is about unlocking the potential of people, enabling people to give more of their best at work.
    3
  • 5. 1. What is it? (cont’d.)
    • A 2-way commitment
    • ‘ With’ not ‘to’
    • ‘ In the knowledge economy, we are all volunteers.’
    • LEAN – A way of engaging those doing the work.
    • SYSTEMS THINKING – If work is badly organised, engagement difficult to attain.
    • WELLBEING – Addressing employee wellbeing helps ensure employee engagement endures.
    • SMEs – Employee engagement important when organisations grow
    4
  • 6. Employee Engagement YES! SME’s Guru’s Practitioners Regional Events Academics Analysis Economists “ Society” DOES IT MATTER? TODAY: TOMORROW
    • COSTS
      • £9bn Presenteeism
      • £50bn; Low Levels
      • BENEFITS
      • 2/3 x Performance
      • Make most of opportunities in recession
    • To compete with BRICS
    • Public Services we want
    To innovate To bespoke
    • Cannot waste untapped potential
    • Must enable the best of people
    THE QUESTION TO ANSWER: NB:
    • “ Economist, rational man”
    • “ Taking charge” (RSA)
    On Organisations’ Radar? 5 Employee engagement
  • 7. Evidence
    • ISR : 664,000 employees in 50 organisations with more employee engagement increased operating income by 19.2% over 12 months. In those with less employee engagement, it shrank by 33%.
    • Corporate Leadership Council : Profits grow up to three times faster in organisations with engaged employees compared with organisational competitors.
    • Gallup : Top quartile EE organisations exceeded industry peers on EPS by 18%. Bottom quartile were 3.1% below peers.
    • Best Companies to Work For : Share price growth 50% faster for best companies.
    • Gallup : 59% of EE say “work brings out their most creative ideas” – only 3% of disengaged agree
    6 Evidence
  • 8. Further Evidence
    • Valtera : 65 firms, diverse industries. Top 25% EE have 7% ROA and 11% profitability. Bottom 25% have 2% ROA and 2% profitability.
    • Barber et al. IES : 65,000 employees over 2 years, 1 point increase in EE (5 point scale) leads to 9% increase in sales.
    • ISR : 363,000 employees in organisations with high employee engagement increased margins by 3.74% over 3 years. OM reduced by 2% with disengaged employees.
    • Corporate Leadership Council : 50,000 employees, 59 organisations, ‘Engagement accounts for 40% of observed performance improvements’.
    • Gallup, Harter et al: Meta-analysis. Top 50% EE Business Units have 27% higher profitability than bottom 50%.
    • AXA: Organisations with greater attention to employees produced greater shareholder returns.
    7 Further Evidence
  • 9. Other benefits of employee engagement
    • Engaged employees: 2.7 sick days per year Disengaged employees: 6.2 (Gallup)
    • Engaged employees are 87% less likely to leave (Corporate Leadership Council)
    • 67% of engaged advocate their organisations; only 3% of the disengaged do (Gallup)
    • 9 out of 10 of key barriers to successful change, people related (PWC)
    8 Other benefits of engagement
  • 10. LEVEL 1 & LEVEL 2 Engagement LEVEL 1 – TRANSACTIONAL; We act on employee feedback through survey LEVEL 2 – TRANSFORMATIONAL Compartmentalised Thinking It is a way of running and doing business NB:
    • Reactive engagement. About discretionary effort
    Territory, Market Sector Strategy STRATEGY FOR: IT; ESTATES; CAPITAL ETC
    • EMPLOYEE / HR STRATEGY
    • Survey & act on it
    • eg Performance management, communications, listened to etc
    “ ONE PAGE”: Market Sectors, CA, Country, Positioning Strategy AND Values/Behaviours to deliver it WE TRACK PROGRESS OF STRATEGY NB:
    • About proactive engagement
    WE MEASURE: Concerns, commitment, feedback People give continual VOICE People help shape strategy People at heart of delivery and at heart of strategy TWO-WAY 9
  • 11. Enablers
    • 1. Leadership
    • A coherent and compelling narrative of where the organisation is going and why.
    • 2. Line management
    • Employees know what is expected of them, feel appreciated, are given as much autonomy to operate as possible and receive appropriate training.
    • 3. Voice
    • The employee voice is offered and heard up and down the hierarchies (without fear), across the silos and with external stakeholders. People feel their voice counts.
    • 4. Values and behaviour
    • Most organisations espouse some values, all have behavioural norms. Any gap results in distrust. Trust is at the heart of effective engagement.
    • N.B. Must be context specific
    10
  • 12.
    • Employee engagement
    to enhance organisational performance