How Engaged Are My Employees Exec R R Guide


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How Engaged Are My Employees Exec R R Guide

  2. 2. HOW ENGAGED ARE MY EMPLOYEES? Disengaged workers cost the economy $300B or 95% of executives are High engagement firms more per year. concerned about retaining experience an EPS growth -Gallup their key employees. rate of 28% compared to a -PriceWaterhouseCoopers 11.2% decline for companies with low engagement. -Towers Perrin When employees are highly engaged, their companies enjoy 26% Only 17% of today’s higher employee productivity. workers are highly willing and -WatsonWyatt able to contribute to their organizations success, and an alarming 19% of workers FORTUNE 500 companies have mentally checked in the lowest quartile in out of their jobs. profitability had 50% fewer -Towers Perrin engaged employees compared to the top quartile. Senior management’s -Gallup ability to demonstrate For the typical S&P 500 genuine interest in employees organization, a significant is the top engagement improvement in employee 47% of your top performers driver globally. are currently looking for a job. engagement was associated with a $95 million -Towers Perrin -Leadership IQ increase in revenue. -WatsonWyatt Employee engagement should be the #1 concern for organizations over the next 24 months
  3. 3. What is employee engagement? The three types of employees Employee engagement is the alignment of an organization’s 1 ENGAGED Highly enthusiastic employees work people with the overall goals and objectives of the company. smart and take pride in their contributions to the Employee engagement is NOT the same as employee satisfaction. organization. They maintain a high morale and are It is possible to have satisfied employees that are not aligned role models for co-workers. with the strategic direction of the organization, ultimately impacting efficiency and effectiveness. Often engagement 2 NOT ENGAGED Employees are “going through the can be characterized by the level of enthusiasm or morale motions”. They lack a connection to the organization demonstrated by the employee. The engagement of your and possibly have no passion for their company’s mission. employees will determine how they spend their discretionary 3 ACTIVELY DISENGAGED Disconnected employees time, the level of effort they put forth and their inclination to spread their low morale amongst co-workers. They seek work on productive activities. out others to commiserate with in order to undermine the organization. Voluntary turnover Why is employee engagement critical to an organization? As the statistics show, employee engagement is a critical driver of business success. Now, more than ever, at a time when layoffs, expense reductions and revenue declines are prevalent, employee engagement is a must to ensure an organization is positioned to survive the economy and flourish well into the future. A company’s most important asset is its people. The link between engagement & profit Retention of Satisfied Engaged Customer Profits drive key employees customers employees retention drives shareholder drives customer remain stay longer profitability value satisfaction customers Source: Rucci, Kirn, Quinn: “The Employee-Customer Profit Chain at Sears”, Harvard Business Review, 2000
  4. 4. What is an employee “Companies with a strong link between enterprise strategy (corporate business objectives) and reward engagement program? programs generate a return almost 40% higher An employee engagement program, or employee recognition than competitors without such strategies.” program, is a formal initiative in which an organization invests -Aberdeen Group in strategies that help drive the human behaviors it needs to achieve organizational success. The most common types are discretionary based, engagement based and work/life based. Discretionary Engagement Work/Life Within each of these types of programs, rule structures are Performance based designed to reinforce and motivate positive behaviors that Manager spot awards Training/certification Health and wellness lead to goal achievement, employee retention, demonstrations Team-based recognition Customer service and satisfaction Idea/innovation of core values, training, healthy living, cost savings and/or Peer-to-peer Employee referrals Safety revenue generation. Multiple employee programs may run at once but should be consolidated onto an integrated, central E-card Years of service Process improvement platform. The chart to the right identifies some of the most Discretionary sales Corporate celebrations/ Best practices initiatives/contests anniversaries, etc. common employee programs. How do you design an employee engagement program? Drive There are several steps involved in the planning of an employee engagement program. First, you must know where you are today and where you want to go in the future. This is not as simple as it sounds. Second, you must orchestrate corporate objectives, business stakeholders, technology and reward fulfillment into a cohesive, seamless enterprise solution. The easiest, most effective and efficient way to design a program is to work with a proven partner within the People Performance Management (PPM) industry. in an evolving market Involvement + Commitment = Engagement = Increased Effort = Better Results
  5. 5. How do you measure an What does an employee employee engagement program? engagement program cost? Employee engagement can be measured in a variety of ways. The investment you make to improve the performance of Quantitative, qualitative and operational metrics can all be your organization will vary depending on scope. Investment applied to measure the level of engagement within your considerations must be given to your starting point, your organization. Regardless of the type of benchmarks you choose, culture, your demographics, the type of communications you it’s important to ensure the metrics you utilize allow you to implement, the complexity of the program rules and the size analyze the performance of your program in relation to your of the team necessary to administer the program. goals and objectives. However, as a general rule of thumb, you can expect to invest QuANTITATIVE – metrics that provide quantitative data about between 1-5% of total payroll on a successful employee the levels of engagement amongst your people are ideal for engagement program. As with most enterprise-wide initiatives, measuring the success of your program. In order to measure you will need to allocate up to 25% of the total budget for the ability of your program to improve engagement levels, you communications, technology, administration and measurement should analyze data related to absenteeism, employee turnover, of the program. The good news is that these programs pay for client retention and other definitive data on a pre- and post- themselves. Recognition is for accomplishments and achievements program level. The difference in the two numbers will help that have improved the company financially. Engaged employees define employee engagement levels within your employee base increase your employee lifetime value (ELTV) while they work and determine the overall success of your program. smarter on a daily basis. When choosing a PPM partner, ensure that they have a methodology to return on this investment. QuALITATIVE – these metrics provide you a snapshot into the mindset of your employee base from which you can start to define levels of engagement and the impact your program has on that level. Qualitative data is key to understanding the Fixed costs of commonly used overall level of engagement amongst your people. There are sales and marketing strategies several qualitative ways to measure engagement including surveys, focus groups, interviews, performance appraisals, etc. 100% The fixed cost of incentive Once you have the data collected on a pre- and post-program PUBLIC RELATIONS programs, unlike PROGRAMS 80% INCENTIVE PUBLICATIONS level, you will need to conduct an analysis of the trends to other sales ADVERTISING CONSULTING DIRECT MAIL and marketing determine overall program success. 60% strategies, is 20 to 30% of the program. The OPERATIONAL – these metrics include such things as ease of use 40% remaining 70 of the technology platform, redemption trends, customer service to 80% is paid 20% only when the reports, participant earnings reports, etc. These metrics, when program’s goals coupled with the quantitative and qualitative data, provide are reached. an excellent look into the engagement of your people and the (Source: Incentive Research Foundation) overall impact your engagement program is having on your employees’ performance.
  6. 6. Not sure an employee engagement strategy is right for your organization? unsure whether or not your current program is returning a benefit to your organization? Ask yourself the following questions: Are you running disparate internal Are your people all on the same page? recognition programs? You have had success, so a majority of your people may be If so, you’re wasting money and limiting effectiveness. aligned with the strategic objectives of the organization. But Aligning all of your employees is done one way — through as you add staff, how do you ensure that alignment continues consistent and repeated communications. If you have separate across your workforce? The worst thing that could happen is internal programs, how are you ensuring the communications to hire a number of new employees who do not align with the are consistent? direction or objectives of your organization. Instead of helping your business, they hinder it. By becoming a disturbance within your walls and altering the alignment of others around Are you concerned with employee turnover? them. It takes years to develop a culture of success. It takes a It can cost upwards of 150%+ of base salary in recruiting and lot less time to tear it down. training fees, loss of productivity and loss of relationships. This number can reach 250% for sales and management positions. Don’t lose your momentum because of employee turnover. Can you guarantee your success will last? While you may have the right people in place and the correct strategic plan today, what happens if something goes against Are you paying your people for the work and your plan? What happens when the growth curve flattens or results they are delivering? the attitude of success starts to recede? Ensure your people are Sooner or later money will not satisfy an employees needs being motivated for demonstrating behaviors that will endure and the employee will wear out and look to move onto a good times, as well as bad. It is much easier to encourage and more manageable work load. While cash is important, if your groom the proper behaviors during the good times than it is people are highly compensated where is the motivation in to force the proper behaviors during down times. cash? Provide them with a reward that will stay engrained in their mind and help drive the behaviors you want repeated.
  7. 7. ITAGroup is a full-service people performance To learn more about ITAGroup and how we management company. Since 1963, we have can help motivate and engage your people to driven powerful and proven results through: greater performance, visit our Web site at > Sales incentives We guarantee our results > Employee Recognition and Reward Initiatives with the industry’s only pay for performance > Business-to-Business Loyalty Solutions financial guarantee model. Contact us to learn > Product Launches more about how we truly invest our own money > Meetings and Events in the success of your organization.
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