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Second Annual Employee Engagement Study

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Amid uncertain economic times, U.S. employees expressed continued optimism about the direction of their companies and loyalty to their employers, according to the second annual employee engagement …

Amid uncertain economic times, U.S. employees expressed continued optimism about the direction of their companies and loyalty to their employers, according to the second annual employee engagement survey conducted by APCO Worldwide and Gagen MacDonald.

The survey results, however, indicate employees continue to believe their employers are not nearly as committed to them. There also is a widening gap between the perceived performance of CEOs and immediate supervisors, with employees expressing far more confidence in the performance of and communication from middle managers.

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  • 1. Building Stronger Relationships with Employees The 2nd Annual Employee Engagement Study November 30, 2010
  • 2. Overview • Employee Confidence and Connection: Despite continued economic uncertainty and high unemployment employees are still optimistic about and feel connected to their company • Employer Connection: There is a strong sense employers are not reciprocating in terms of loyalty toward employees • Connection Gap: This gap is driven by perceived poor performance by the CEO and the executive team
  • 3. Overview • Mood: Employees believe things are getting better at their company; morale has improved slightly • Job Satisfaction: Employees are generally satisfied with their current job and plan to remain with their company in the near term • Job Performance: Employees have more confidence in their supervisors’ ability to lead their company and perceive their supervisors are doing a better job than their CEO; gap is widening • Values: Company values play an important role in driving employee confidence and connection • Communication: Employees rate the quality and frequency of communication from their supervisor much higher than from their CEO
  • 4. Employee Engagement
  • 5. Employee Confidence Employee Connection Employer Connection 81.4 -2.9 83.5 -3.2 63.3 -2.6 Change from 2009 Numbers at a Glance
  • 6. Employee Confidence Employee Confidence 81.4 Significant elements Beta The executive team in my company supports and lives our values. .390 My company’s executive team clearly explains the direction the company is heading. .366 My company’s executive team shares positive and negative news openly. .323 My supervisor responds to my feedback. .107 Why do employees feel confident about the direction of their company? Employee Confidence = % right direction & % expect to be better + about the same r2 = .256
  • 7. Employee Connection Employee Connection 83.5 The executive team in my company supports and lives our values. .218 In my company, I am comfortable sharing information and ideas. .172 My company’s executive team exemplifies authentic, open and honest communication. .149 I have all the information that is necessary for me to do my job. .138 Why do employees feel connected to their company? Employee Connection = loyal to company & personally motivated to help company succeed r2 = .315 Significant elements Beta
  • 8. Employer Connection Employer Connection 63.3 What are employees seeking from their company? The executive team in my company supports and lives our values. .282 My company’s executive team exemplifies authentic, open and honest communication. .189 In my company, I am comfortable sharing information and ideas. .156 My company’s executive team clearly explains the reasons behind decisions. .156 .094My company’s values are clearly aligned with our business strategy. .094I have all the information that is necessary for me to do my job. Employer Connection = company values its employees and is loyal to employees r2 = .661 Significant elements Beta
  • 9. The Connection Gap Employee Connection 20.2 r2 = .337 The executive team in my company supports and lives our values. -.287 My company’s executive team exemplifies authentic, open and honest communication. -.208 I receive consistent information from all the leaders in my company. -.144 What explains the gap? Employer Connection 83.5 63.3 The Gap Significant elements Beta
  • 10. The Mood of the Company
  • 11. Direction of Company: Current Right direction 77% Wrong track 18% Mixed / Not Sure 5% 2009: 81% right direction More likely to say right direction 20+ years at company 29% $150K+ income 85% 10-19 years at company 83% Non-union 82% Management employee 85% More likely to say wrong track Union member 30% 6-9 years at company 82% <$50K income 26% High school or less education 24% 55+ years old 23% 10,000+ employees 23%
  • 12. Direction of Company: vs. One Year Ago About the same 44% Better 33% Worse 22% 2009: 27% better More likely to say better Management employee 45% $150K+ income 44% 6-9 years at company 41% African American 52% Female 45+ years old 29% More likely to say worse Union member 30% 35-44 years old 40% College graduate 38% 10-19 years at company 36% Indicates significant difference from 2009
  • 13. Direction of Company: One Year From Now About the same 46% Better 40% Worse 13% 2009: 44% better More likely to say better 18-34 years old 53% Female 18-44 years old 50% 1-5 years at company 48% Management employee 54% Northeast 58% More likely to say about the same Union member 60% Non-union 44% Female 45+ years of age 53% Non-management employee 53%
  • 14. Company Morale: Current Neutral 18% Positive 57% Negative 23% 2009: 59% positive More likely to say positive 100-249 employees 64% 18-34 years old 64% African American 63% 500-999 employees 65% Post graduate degree 28% More likely to say negative Union member 34% Management 62% Not sure 2% West residents 62% Non-union 61%
  • 15. Company Morale: vs. One Year Ago About the same 47% Better 24% Worse 28% 2009: 20% better More likely to say better 6-9 years at company 35% Male 18-44 years old 34% $150K+ income 34% 18-34 years old 40% <$50K income 37% More likely to say worse Union member 37% 3-5 years at company 31% Female 34% High school or less education 36% 10,000+ employees 30% Management employee 29%
  • 16. Job Satisfaction & Commitment
  • 17. Job Satisfaction: Current Satisfied 79% Unsatisfied 11% Don’t know or refused 10% 2009: 78% satisfied Why are employees satisfied? Significant elements Beta The quality of the communication you are receiving from your immediate supervisor. .342 The quality of the communication you are receiving from your CEO. .309 r2 = .302
  • 18. Job Satisfaction: Current Satisfied 79% Unsatisfied 11% Don’t know or refused 10% 2009: 78% satisfied Who is most satisfied? Non-union 83% 500-999 employees 86% College graduates 84% Management 84% 6-9 years at company 87%
  • 19. Job Satisfaction: vs. One Year Ago About the same 60% Higher 17% Lower 23% 2009: 78% higher / same More likely to say higher 250-499 employees 68% $150K+ income 29% Northeast 24% 10,000+ employees 21% 6-9 years at company 29% More likely to say about the same $75-100K income 68% Northeast 32% More likely to say lower Post graduate 32%
  • 20. Plan to Be at Job in 6 Months Yes 87% No 11% Not sure 2% 2009: 88% yes More likely to say yes 3-5 years at company 18% 35-44 years old 93% 6-9 years at company 92% 10-19 years at company 90% 500-999 employees 98% More likely to say no 18-34 years old 20%
  • 21. Commitment & Perceived Reciprocity Statement 2010 % 8-10 2009 % 8-10 2010 Mean 2009 Mean I am loyal to my company 77% 82% 8.5 8.8 I am personally motivated to do all I can to help my company succeed. 73% 80% 8.2 8.6 My company values its employees 38% 48% 6.5 6.7 My company is loyal to me 37% 42% 6.2 6.4 Indicates significant difference from 2009 • Decline in strong agreement on each the four elements from 2009 to 2010 • Major gap in employee commitment to their company vs. perceived commitment of the company to them • College graduates are more likely to give the company credit for being committed to them • Biggest gaps exist among union and non union, management and non-management employees – union and non-management more likely to believe the company is not committed to them
  • 22. Job Performance Perceptions
  • 23. Ability to Lead Your CEO’s ability to effectively lead your organization Your immediate supervisor’s ability to effectively lead your team Very Confident Confident More confidence in supervisors on ability to lead Key differences in CEO and supervisor ratings between: • Management and non- management • Union and non-union • Education – high school or less vs. more education Non-management, union, and high school educated or less all rate both supervisors and CEOs less positively on ability to lead 20% 25% 52% 46% 72% 71% 2010 Mean 7.0 6.9 2009 Mean 7.1 7.1
  • 24. CEO Performance Rating Good 62% Fair 15% Poor 17% 2009: 66% good, 16% poor Don’t know or refused 6% What impacts this rating? Significant elements Beta My company’s executive team exemplifies authentic, open and honest communications. .266 My company’s executive team clearly explains the reasons behind decisions. .235 My company’s executive team clearly explains the direction the company is heading. .208 r2 = .442
  • 25. CEO Performance Rating Good 62% Fair 15% Poor 17% 2009: 66% good, 16% poor Don’t know or refused 6% More likely to say good Female 45+ years old 22% 45-54 years old 76% Management employee 75% $100-150K income 72% $150K+ income 82% More likely to say poor 55+ years old 22% Some college or less education 23% 500-999 employees 71% College graduate 70% Union member 30%
  • 26. Supervisor Performance Rating Good 72% Fair 11% Poor 14% 2009: 73% good, 16% poor Don’t know or refused 3% What drives this rating? Significant elements Beta My supervisor provides clear direction and priorities for our work group. .516 My supervisor responds to my feedback. .295 r2 = .592
  • 27. Supervisor Performance Rating More likely to say good High school or less education 18% $150K income 81% Management employee 80% Post graduate degree 79% 6-9 years at company 86% More likely to say poor Union member 22% 45-54 years old 76%Good 72% Fair 11% Poor 14% 2009: 73% good, 16% poor Don’t know or refused 3%
  • 28. The Performance Gap Supervisor Good Job 10 CEO Good Job 72% 62% Supervisor- CEO Job Rating Gap This is a significant gap between CEO and supervisor College graduates, $150K+ earners, and management employees all rate CEO and supervisor equally positively Big rating gap among those with some college education or less as supervisors are rated much more positively
  • 29. Company Values
  • 30. Company Values My company’s values are clearly aligned with our business strategy My company has a set of clearly defined values that drives all of our behavior The executive team in my company communicates regularly about our company values [n=495] The executive team in my company supports and lives our values [n=495] Strongly Agree Agree Note the significantly lower agreement between 2009 and 2010 on the executive team supporting and living corporate values. Biggest gaps in agreement occur between: • Management and non-management • Union and non-union • College educated and high school or less education • $150K+ earners and those earning less than $100K There is also directionally less agreement that the company’s values are aligned with the business strategy 19% 19% 21% 21% 58% 55% 45% 47% 77% 74% 66% 68% 2010 Mean 7.5 7.3 6.8 6.8 2009 Mean 7.5 7.7 7.4 6.9 Indicates significant difference from 2009
  • 31. Communication
  • 32. Communication Rating The communications you receive from the CEO about the state of your company The communications you receive from your immediate supervisor about the state of your company Very Confident Confident More confidence in supervisors on the communication they receive vs. CEO Key differences in CEO and supervisor ratings between: • Management and non- management • Union and non-union • Education – high school or less vs. more education Non-management, union, and high school educated or less all rate both supervisors and CEOs less positively on communication 22% 25% 47% 40% 69% 65% 2010 Mean 6.8 6.4 2009 Mean 6.7 6.5
  • 33. Frequency & Quality of Communication The frequency of the communication you are receiving from your CEO The frequency of the communication you are receiving from your immediate supervisor The quality of the communication your are receiving from your CEO The quality of the communication you are receiving from your immediate supervisor Excellent Good 18% 25% 21% 24% 56% 37% 51% 42% 74% 62% 72% 66% 2010 Mean 7.3 6.2 7.1 6.7 2009 Mean 7.4 6.5 7.1 6.4 Note that both the frequency and quality of communication from supervisors are more highly rated than are CEO communication. In particular, there is a large gap between the supervisor and CEO communication frequency. Also note that the gap increased from 2009 to 2010 due to declines in CEO communication ratings. Union and non-management employees rate CEO communication significantly lower than their supervisor’s
  • 34. Communication Elements: Importance Each communication element is rated as highly important Generally speaking, extremely important ratings above 35% indicate a very strong resonance, a level met by each element Note, though, that supervisor interactions are generally viewed as more important than executive management’s interactions Is this because they don’t see senior management as engaged so they have lower importance on their interactions? Mean 8.3 8.3 8.2 8.2 7.9 7.8 7.7 7.7 7.5 7.3 A company's executive team exemplifies authentic, open and honest communication A company's executive team clearly explains direction the company is heading People are comfortable sharing information and ideas in their company People have all information necessary for them to do their job A company's executive team clearly explains reasons behind decisions People receive consistent information from all leaders in their company A supervisor responds to feedback [N=495] A company's executive team shares positive and negative news openly A supervisor takes time to listen to opinions and ideas of others [N=495] A supervisor provides clear direction and priorities for their work group [N=495] 74% 12% 72% 14% 73% 11% 71% 16% 67% 17% 66% 16% 65% 14% 65% 16% 60% 17% 57% 21% Extremely important Somewhat important 86% 86% 84% 87% 84% 82% 79% 81% 77% 78%
  • 35. Communication Elements: Performance Performance on these elements is generally more moderate. The intensity is certainly lower for many of the elements. Note that 2 of the 3 most highly rated elements are employee-driven feelings, things they can directly control. Again, supervisors are rated as doing a better job than executive team members. My company's executive team shares positive and negative news openly My supervisor responds to my feedback [N=495] My company's executive team clearly explains direction the company is heading I have all the information that is necessary for me to do my job My company's executive team clearly explains the reasons behind decisions I receive consistent information from all the leaders in my company My supervisor provides clear direction and priorities for our work group [N=495] My company's executive team exemplifies authentic, open and honest communication In my company, I am comfortable sharing information and ideas My supervisor takes the time to listen to the opinions and ideas of others [N=495] Mean 7.4 7.3 7.3 7.2 7.1 6.7 6.4 6.3 6.0 6.0 82% 73% 77% 76% 75% 71% 64% 65% 60% 59% 55% 27% 57% 16% 55% 22% 56% 20% 54% 21% 46% 25% 39% 25% 38% 27% 33% 27% 33% 26% Describes perfectly Describes somewhat
  • 36. Communication Importance & Performance My company's executive team shares positive and negative news openly My supervisor responds to my feedback My company's executive team clearly explains the direction the company is heading I have all the information that is necessary for me to do my job My company's executive team clearly explains the reasons behind decisions I receive consistent information from all the leaders in my company My company's executive team exemplifies authentic, open and honest communication In my company, I am comfortable sharing information and ideas My supervisor takes the time to listen to the opinions and ideas of others My supervisor provides clear direction and priorities for our work group Importance Performance Core strengths Opportunity
  • 37. Conclusion & Methodology
  • 38. Conclusion • Hooray for middle managers! • Employee confidence and connection remain high, but senior leaders aren’t doing enough to sustain these levels • It is critical for senior management to live company values and communicate with their employees to reduce the connection gap and build loyalty • There is a real opportunity for visionary leaders to build meaningful relationships with their employees by being transparent about where they see the company headed, the decisions they make and the implications
  • 39. Implications for Senior Management • Live the company values: supporting and living the company values is a key driver in improving employee confidence and closing the employee/employer connection gap • Share the vision: employees who know where the company is going and how they can help get the company there are by nature more engaged with their company • Be an information ambassador: authentic, open and honest communication seems to be missing for many employees • Encourage feedback: it is important for senior leaders to solicit feedback as well as communicate what is happening; employees indicate that being able to freely share information and ideas is important in making them feel more connected to the organization • Take care of immediate supervisors: middle managers are perceived to be performing at a higher level than senior managers and appear to be the glue holding many organizations together
  • 40. Research Methodology APCO Worldwide and Gagen MacDonald jointly sponsored a telephone survey among U.S. adults who have been employed full-time at least one year at a company with at least 100 employees. The purpose of the study is to determine the state of the U.S. workplace as viewed by America’s workforce. Survey Population: U.S. full-time employees Sample Design: Random digit dialing Eligibility Criteria: Employed at least one year at a company with at least 100 employees Sample Size: n = 503 Margin of Error: ± 4.4% (at 95 percent confidence level) Data Collection Methodology: Telephone Field Dates: October 1-8, 2010

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