Employee Engagement: Changing Cultures and Managing Talent

About Us I Love Rewards is an employee recogni/on solu/on that helps companies create authen/c moments of recogni/on to appreciate brilliant performance, and empowers employees to choose their own rewards. 1 Copyright © 2011 Bersin & Associates. All rights reserved. Page 1

Daniel PinkComplimentary WebcastDrive-ing PerformanceBy: Daniel Pink and Razor SulemanOn June 16th @ 1PM EST Register at h+p://bit.ly/msPoDI 3 Copyright © 2011 Bersin & Associates. All rights reserved. Page 3

Employee EngagementChanging Cultures and Managing TalentStacey HarrisDirector of Strategic HR & TM ResearchPrincipal AnalystMay, 2011@StaceyHarrisHRCopyright © 2011 Bersin & Associates. All rights reserved.

About Us§  Who We Are •  Bersin & Associates empowers HR and Learning organizations to drive bottom line impact through world class research and consulting§  Practices •  Enterprise Learning •  Human Resources •  Talent Acquisition •  Talent Management -  Leadership Development -  Performance Management -  Succession Management -  Workforce Planning§  Services •  WhatWorks® Membership •  Research-based consulting services •  IMPACT: The industry’s premiere conference on the Business of Talent Copyright © 2011 Bersin & Associates. All rights reserved. Page 5

Research for this PresentationEmployee Engagement:A Changing MarketplaceThe High-Impact HROrganization:The Top 10 Best Practices on theRoad to Excellence Copyright © 2011 Bersin & Associates. All rights reserved. Page 6

Webinar AgendaChanging Cultures and Managing Talent§  Is Assessing and Managing Employee Engagement Important?§  Drivers Behind Today’s Changing Employee Engagement Market§  Building and Connecting an Employee Engagement Strategy§  Selecting and Partnering with Solution Providers Copyright © 2011 Bersin & Associates. All rights reserved. Page 7

Growing Interest in Employee Engagement Over 75% of companies regularly assess engagement levels Experience with Employee Engagement Assessment Rigorously conducted 9% and analyzed each year 24% 14% Conducted and analyzed each year Done on an as-needed basis 22% 31% Little or no experienve with engagement assessments© Bersin & Associates - 343 Organizations2010 Measurement Research Copyright © 2011 Bersin & Associates. All rights reserved. Page 8

Leaders See Engagement as a Key Metric Over 65% of Executives Feel it is Important or Very Important Executive Commitment to Engagement Very Important, Executives Actively involved 18% Important, Most Managers 45% Involved 17% Somewhat Important 20% Not at all Important Additionally, 57% of 1,200 global companies felt Employee Engagement metrics proved the Impact of Talent Management Efforts© Bersin & Associates - 343 Organizations2010 Measurement Research Copyright © 2011 Bersin & Associates. All rights reserved. Page 9

Engagement Metrics Top the Charts They are found on 72% of Senior Leaders top HR reporting tools 72% 70% 66% 63% 60% 55% 54% 53%© Bersin & Associates - 343 Organizations2010 Measurement Research Copyright © 2011 Bersin & Associates. All rights reserved. Page 10

Are Today’s Engagement Efforts Working Only 35% Felt they were getting positive business outcomes Impact of Engagement Efforts Highly actionable, with positive business outcomes 35%Somewhat actionable, some business returns 49% Not actionable, but useful insights 12% Not useful at all 4% Copyright © 2011 Bersin & Associates. All rights reserved. Page 11

Worker’s are more Disengaged than EverWHY -- Is it what we are measuring or what we are doing?§  “Broadly, organizations face something we’ve labeled an "engagement gap."… only 21% of our sample are engaged,… Worse yet, fully 38% are either wholly or partly disengaged” Towers Perrin§  “One-Third of Companies Are Troubled by Low Employee Engagement… Employee engagement—the willingness of workers to go the extra mile at work—took a big hit during the recession and has not bounced back…” BCG and WFPMA§  “Low employee engagement is pervasive — nearly half of the worlds employees are not engaged. This means that for every employee who is contributing to the success of your organization, theres another employee not putting forth maximum effort.” Aon Hewitt Copyright © 2011 Bersin & Associates. All rights reserved. Page 12

What is Employee Engagement?4 Types of Engagement Drivers Were mentioned consistently§  Work Engagement – A connection and appreciation for the work being accomplished, and a connection to individual performance.§  Company Engagement – A connection and appreciation for the company, its goals, its leadership and its future.§  Social Engagement – A connection and appreciation for the people an employee is working for and with on a daily basis.§  Employment Fundamentals – A satisfaction level with base compensation, safety, healthcare and work environment.A growing trend is to assess not only an employee’s feelings andperceptions on these drivers, but to also assess their actual behaviors inrelation to these drivers. Copyright © 2011 Bersin & Associates. All rights reserved. Page 13

Changing View of Employee EngagementShifting from Employee Engagement Initiative to a People Philosophy Employee Engagement Initiative Employee Engagement PhilosophyNo connection between individual engagement Full engagement strategy with a goal forevents, i.e. Surveys, Rewards, Communication engaged employees, connected to a Talent and Business StrategyNo ownership of employee engagement efforts and Defined ownership and governance to manage,outcomes implement, and sponsor the engagement visionOnce a year, annual surveys with simple analysis. Annual, quarterly, and/or pulse surveys, focusWith a focus on Benchmarking, and Total Index groups, and external data monitoring (LinkedIn,increases GlassDoor) with advanced segment analytics Engagement efforts incorporated into talentFocus on one-size fits all engagement activities management; customized reward, feedback, &and rewards/recognition models evaluation process focused on the individual Engagement scores viewed as part of talentEngagement scores viewed as individual metrics metrics, correlated to performance goals Copyright © 2011 Bersin & Associates. All rights reserved. Page 17

Business and Talent ChallengesTop 3 Business ChallengesFinancial pressures to cut costs DecreasingNeed to accelerate innovation IncreasingRapid Changing Market IncreasingTop 3 Talent ChallengesGaps in leadership pipeline DecreasingImproving organizational learning IncreasingIncreasing innovation Increasing© Bersin & Associates, Corporate TalentWatch®Research, Senior HR and Business Executives, 2/2011 Copyright © 2011 Bersin & Associates. All rights reserved. Page 19

Global Talent Deficit India Graduates Millions, but Too Few Are Fit to Hire 75% of technical graduates and 85% The Cultural Revolution of general graduates in India are created a “missing unemployable by India’s high-growth generation” of talent between industries, including IT and call 40-55, so expatriates fill most centers. jobs at the top Regional Leadership Young workers flooding the marketplace, yet most have BofA’s retail wealth management Country Leadership inferior preparation, language arm, Merrill Lynch, plans to hire skills, and technical skills. 2,400 trainees in 2011, a 50 percent increase over last year. Middle Management Entry Level “We are entering the era of China unparalleled talent scarcity, which will put a brake on economic growth around the world, and will fundamentally change the way we approach workforce challenges.” Copyright © 2011 Bersin & Associates. All rights reserved. Page 20

Workforces Demographics Today Four Generations Working Side by Side 41.5% of Workforce Baby Boomers Born: 1946—1964 29% of Workforce Idealistic, competitive Generation X and striving to achieve. 24% of Workforce Born: 1965—1977 Generation Y Born: 1978—2001 Self-reliant, willing to 6% of Workforce Change rules, tribal and community-oriented Confident, socially- Traditionalists conscious, Born: Pre-1945 family centric and technology savvy Hierarchical, loyal, motivated by financial rewards and security. 3.3 – Average # of 4.1 – Average # of 8.8 – Average # of 9.8 – Average # of years with a single years with a single years with a single years with a single employer employer employer employerBureau of Labor Statistics US, 2010 Copyright © 2011 Bersin & Associates. All rights reserved. Page 22

Workforce Demographics 2018 New talent gaps emerging and increasing diversity The Inevitable Exodus Gaps in entry level Gap in Emerging workers Leadership Diverse: +33% Hispanic +27% Asian +7.5% Black +11% Women Lack of mobility: Under-skilled. Only 7% of new workers (US) 22% of college able to relocate, vs. grads need additional 18% in 2008 skills to start work 25-34 35-44 45-54 55-64 65+Bureau of Labor Statistics US, 2010 Copyright © 2011 Bersin & Associates. All rights reserved. Page 23

Employees Understand their Own ValueThey are looking for a new value proposition§  Respect and Partnership§  Transparency and Sincerity§  Communications§  Clearly Defined Expectations§  Feedback and Recommendations§  Work that is Engaging§  Social Environments that are Engaging§  Balance in Life and Work§  Empowerment§  Opportunities and Development§  A Focus on their Resume Copyright © 2011 Bersin & Associates. All rights reserved. Page 24

Financial Reporting and Valuation§  European Union Laws Require Some Disclosure "To the extent necessary for an understanding of the companys development, performance or position, the analysis [in the annual review] shall include both financial and, where appropriate, non- financial key performance indicators relevant to the particular business, including information relating to environmental and employee matters" (Directive 2003/51/EC)§  Financial analysts are more likely to look at non-financial performance indicators in their valuations when companies are already trending up§  Business leaders are looking for ways to show the overall strength of their talent in their financial evaluations. Succession Planning and Engagement are the key metrics. Copyright © 2011 Bersin & Associates. All rights reserved. Page 25

What is an Engagement Strategy?§  Defined goals and expectations what Employee Engagement will drive;§  Defined roles of ownership and governance in managing, implementing and sponsoring the employee engagement strategy;§  A clear definition of employee engagement, defined in terms of the impact an engaged employee will have on your organization;§  An employee engagement theory and model that your organization follows;§  A process for assessing and analyzing employee engagement, and its impact on your business§  Plans for communicating the findings from the employee engagement assessment process and executing on a clear action plan for improvements; and,§  Plans for integrating improvement action plans into hiring process, development, performance assessments, leadership approach, and rewards strategies Copyright © 2011 Bersin & Associates. All rights reserved. Page 30

Case in PointsEngagement Strategies§  Phillips •  Engagement is the highest visible HR Metric in their organization. Every leadership position has an engagement score on their own personal scorecards.§  WellPoint •  Rethinking their standard Engagement approach and focusing on changing their culture and management behaviors.§  Lowes •  Engagement is a performance driver. Tied store level engagement and performance metrics to a single leadership role in the store.§  Credit-Suisse •  Engagement is seen as a Key Indicator for forecasting performance. Engagement from high potential and high performers is evaluated regularly, and is used to identify possible future performance problems. Copyright © 2011 Bersin & Associates. All rights reserved. Page 31

Case in Point, Marriott CalgaryDriving Engagement for EveryoneCompany:•  Fortune:12th Yr. Ranked Most Admired Lodging•  2,800 Hotels World-Wide•  Philosophy – “If we take care of our associates, they’ll “ Associate engagement and take care of our guests” satisfaction is just as heavily weighed as financials andGoals: guest satisfaction, on our•  Increase Employee Engagement Scores of 67% in 2007 balanced scorecard.“•  Increase focus on company Core Values•  Increase rewards for the entire organization, even back HR Leader of the house roles (improve peer & manager feedback)Outcomes:•  Employee Engagement Scores increased 2008,- 72%, 2010 - 83% (15% increase in Total Rewards Score)•  Increased “Back of the House” Recognition•  Increase in incentivized upselling - $50,000 increase in upselling revenue Copyright © 2011 Bersin & Associates. All rights reserved. Page 34

55% Obtain Help in Engagement Efforts How Do you Implement Employee Engagement 11% Consulting Firm Internally Developed 34% 55% Other© Bersin & Associates - 343 Organizations2010 Measurement Research Copyright © 2011 Bersin & Associates. All rights reserved. Page 36

This is a Long Term RelationshipSelect CarefullyMake sure to look at:§  Their experience and background – both breadth and depth;§  Science behind their engagement theories;§  Services offered prior to assessment efforts;§  Assessment services and tools – data gathering methods;§  Analysis approach, services, tools, and outputs;§  Communication and planning services§  Cultural fit! Copyright © 2011 Bersin & Associates. All rights reserved. Page 38

People Culture and Performance NeedsCulture is set by behaviors and behaviors create desired performance§  Corporate Values –Vital few beliefs regarding what is important, which all members of the organization are expected to live by and demonstrate daily,§  Corporate Principles – Principles are beliefs about what is always true. For example, “The customer is always right,” is a statement of principle.§  Global Awareness – The level of multicultural and global understanding and appreciation within your organization.§  People Brand – People brand is the concept of the “brand” of people who work for your organization.§  Business Performance Expectations – Business results that can be directly attributed to the culture and people within the organization. Copyright © 2011 Bersin & Associates. All rights reserved. Page 40

Key Take Away’sRethinking Employee Engagement§  Before starting ensure readiness to invest resources and time to manage the process, and take action recommendations.§  Create a cross-organizational team to define the strategy and goals§  Identify a clear definition of employee engagement and expectations§  Identify solution providers based on partnership, and strengths in top priorities§  Conduct an RFP process, as extensive as an enterprise-wide system§  Consider the organization’s culture, work environment and geography before selecting primary assessment methods and delivery tools.§  Communicate often ensuring everyone understands goals and outcomes§  Share findings at all levels, with clearly prioritized actions and expectations§  Develop a dynamic process that works with your business and is owned by the organization’s leadership Copyright © 2011 Bersin & Associates. All rights reserved. Page 42

Questions & CommentsFeel free to contact Stacey Harris withQuestions or Comments at:Stacey.harris@bersin.comOr Connect on LinkedIn:http://www.linkedin.com/in/staceyharrisOr Follow at @StaceyHarrisHR Copyright © 2011 Bersin & Associates. All rights reserved. Page 43

Employee Engagement: Changing Cultures and Managing Talent

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