alignment drives employee engagement and prod-taleo research

8/9/2019 Alignment Drives Employee Engagement and Prod-Taleo Research

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Alignment Drives Employee Engagement and Productivity

Taleo Research White Paper


2/11

Contact or Taleo Research:

[email protected]

Contacts or Taleo:

U.S. 888.836.3669

International: 888.922.5665

[email protected]

Table of Contents

Alignment Drives Employee Engagement and

Productivity .............................................................. 1

Alignment .......................................................... 2

Aligning Business Goals to Talent Goals ...... 2

Management Commitment ........................... 2

HRs Role ...................................................... 3

Developing a Clear Line o Sight .................. 4

Review and Modiy Goals ............................. 4

Technology Tools ........................................... 4

Reporting ...................................................... 4

Automating Goals Management ................... 5

Launch Goals-based Reviews ...................... 6

Cascading Goals........................................... 6

Summary ........................................................... 7


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Algnment Drves Emploee Engagement

and Productvt

By a two to one margin, companies surveyed ina Taleo Research study reported the largest riskto their companys bottom line and brand is lowemployee engagement and productivity. Why are lowengagement and productivity1 an increasing threat?Because, in an economic downturn companies are doingmore with less and cannot afford to have suboptimalperformance from any employee.

In 2006, the cost of lost productivity in the USwas estimated at $554 billion dollars.2 This loss ofproductivity was calculated when the US had arelatively strong economy: employment was up,

salaries were high, and the economic climate wasupbeat. Now, consider the state of this down economyin which employees face signicant pressuresincluding fear of losing their homes, worries aboutlosing their jobs, and concern that their retirementsavings will be wiped out. With these anxieties, theloss of productivity in 2009 will likely be even greater.

1 Recessionary Management: The Dos and Donts o a Down Economy, Taleo Re-

search and Human Capital Institute, 2009.

2 Price Tag or Lost Productivity:$544B, Inc.com Magazine, Leslie Taylor Aug 21, 2006

There is a direct correlation between engagement and

productivity. Studies have quantied it by measuringthese interrelated factors.

1. One study found that when employees are highlyengaged, their companies enjoy 26 percent higherrevenue per employee.3

2. Another study showed that highly engagedemployees are twice as likely to be top performers,thus more productive.4

3. Companies with highly engaged employees alsoearned 13 percent greater total returns to shareholders

over the last ve years.5

Alarmingly, a global survey focused on employeeengagement found on average fewer than one inthree employees (29%) are fully engaged, 52 percentare moderately engaged, and 19 percent areactually disengaged.6

3 Driving Business Results through Continuous Engagement, Watson Wyatt 2008/2009

4 Playing to Win in a Global Economy, Watson Wyatt 2007-2008

5 Driving Business Results through Continuous Engagement, Watson Wyatt 2008/2009

6 The State o Employee Engagement, Blessingwhite, 2008

Source: The State o Employee Engagement, BlessingWhite 2008.

Copyright 2009 Taleo Research Alignment Drives Employee Engagement and Productivity PAGE 1


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Many drivers affect employee engagement andproductivity. In fact it is hard to separate the two.Highly engaged employees are more productive,

but, how do you keep employees engaged tomaintain high levels of productivity on the job,even in a down economy?

Goals alignment is the rst step in the process.Aligning employee goals and giving them a clearline of sight to their contribution to business resultswill help drive improved engagement and therebyimprove productivity.

A clear linkage can also be made between alignmentand bottom line results. Consider a study by Dr. JacFitz-enzan expert in HR metricsthat showed

of 40 companies studied: 44 percent of the strongerperformers had almost 100 percent aligned goals atthe managerial level. None of the weaker performers did.7

Algnment

Algnng Busness Goals to Talent GoalsAligning goals starts with a companys strategic plan.

All successful businesses have a clear understandingof their strategy. The strategy is then reected inbusiness goals that align to the strategy. This requiresManagement Commitment at all levels since allmanagers not only have to develop the business goalsbut also have the ability to develop a Clear Line ofSight from those business goals to employees goals.

7 LRP Publications, Dr. Jac Fitz-enz 2007

These plans are living, breathing documents that arerevised when and if the business plans change. Whiletechnology will help facilitate, manage, and report

progress, it starts with a committed managementteam and a solid process for execution.

Management CommtmentSenior management needs to articulate the corporatestrategy and create the environment to drive thatstrategy down through the business. Managementmust align business goals with the strategy and createaccountability and responsibility in the execution ofthose goals.

Next, a system of rewards and recognition shouldbe developed to ensure those goals are met and

stipulates accountability when goals are not attained.This requires a company-wide effort. There aredistressing examples in which employees attaintheir goals and are even paid large bonuses whilethe company was losing money. This disconnect isrecounted in the news. Consider the Merrill Lynchreports that cite this large nancial institution paidout millions of dollars in bonuses as the companywas going under. How does this happen? There ismisalignment between strategy, business goals, andemployee goals.

Yet, alignment is seen by many as a difcult task.Taleo Research conducted a global survey of morethan 900 HR and line of business executives tounderstand the challenges and priorities of talentmanagement. When asked how difcult it is to linktalent goals to business goals, 85 percent ofcompanies reported it to be Challenging orVery Challenging.8

8 Global Unifed Talent Management Survey, Taleo Research with Human Capital Insti-

tute (HCI), Business Intelligence, Markess International, Quantum Market Research 2008

Review andRevise Plans

Clear Line of Sight

to Employee Goals

DevelopBusiness Goals

StrategicPlan

The Alignment Process

Copyright 2009 Taleo ResearchAlignment Drives Employee Engagement and ProductivityPAGE 2


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HRs RoleHR is key in driving the process and selecting thetools needed to achieve alignment. How well is HRrated in driving this process? A McKinsey study askedboth HR and line of business (LOB) executives DoesHR lack the capabilities to develop talent strategiesaligned with business objectives? Only one-quarterof the HR participants agreed with this statement,while the majority (58%) of line managers agreed.This is a gap of 33 percent. Clearly LOB managers donot see HR as being up to the task.

Successful HR executives would agree that aligningtalent to business, dening roles, recruiting,developing, and measuring performance creates anenvironment where peoples passion for the businesscan grow and drive overall business performance.

Alignment, nonetheless, is not just an HR issue.Although HR may facilitate the process andimplement the systems to help ensure a talent strategyaligns to the business, HR cannot execute this strategywithout the commitment of the line managers.

How well are you doing?

58 33

Gap

% of interviewees in each categorywho agreeHuman-resources

(HR) professionals

HR lacks capabilities to develop talent strategiesaligned with business objectives

HR is administrative department, not strategicbusiness partner

HR relies too much on best practicessome ofwhich are inappropriatewhen designing systems

HR is not held accountable for success orfailure of talent-management initiatives

HR lacks authority/respect to influence the waypeople are managed

Talent Management is viewed as responsibility of HR

HR doesnt provide enough support to line managers

Source: McKinsey study

LineManagers

9

8

28

9

22

15

60

38

64

47

58

5843

36

38

36

30

60

25

02 55 07 5 100

Linking Talent Management Goals to Corporate Goals

Challenging

Not Challenging

Very Challenging

15%

26%

59%

85% find linking talent management goals to corporate goals challenging



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HRs responsibility is to understand the corporatestrategyperhaps even help shape it. Then HRneeds to develop a process to track and measure the

progress. But all managers must be committed to thealignment of goals throughout the organization.

Developng a Clear Lne of SghtAccording to research from Bersin and Associates,only 29 percent of organizations create employeegoals which are aligned to the organization.9 This lackof alignment not only impinges on business outcomes,but it also negatively affects employee engagementand motivation. Employees feel valued when they seethe link between what they do and the success of thedepartment and the organization.

Managements role does not end with understandinghow to translate corporate strategies into businessgoals. Next, managers must develop the goals fortheir employees that link to that strategy. Key in thisprocess is the ability to develop a clear line of sight fortheir employees so employees understand how theycontribute to the overall business.

People may sit in a meeting and agree on the goalsand a course of action, but once back to their routine,they risk becoming diverted. Companies need toreview progress and provide an ongoing system of

measurement to sustain alignment from initiationthrough execution to delivery.

When employees have a clear line of sight to theircontribution to corporate goals and strategies, notonly are people working on the right things, but theyare also more engaged in their work.

Revew and Modf GoalsAlthough an organizational strategy should notchange in the short term, business and economicconditions can certainly require reshaping businessplans. In a Recessionary Management survey

conducted by Taleo Research and The Human CapitalInstitute (HCI), 59 percent of 345 companies surveyedsaid they needed to revise their work plans inorder to achieve alignment given the currenteconomic environment.10

9 High Impact Talent Management and High Impact Perormance Management

research, Bersin & Associates 2006 and 2007

10 Recessionary Management: The Top Dos and Donts or Managing Talent in the Cur-

rent Downturn, Taleo Research and Human Capital Institute, 2009

Periodic health checks should be built into the processat least on a quarterly basis to ensure the alignment isstill on target. Companies need to examine whether:

There have been changes in the economic climate.

There have been changes in the competitivelandscape.

They have the right talent pool needed to

execute the plan.

Technolog ToolsTechnology is now available to give companies theability to automate, manage, and measure the goalsalignment process. Automation can provide greatercontrol over business outcomes by automating the

creation, alignment, and monitoring of organizationalgoals. Now goals can be set at any level and employeedirectives adjusted to support initiatives.

A goals management software solution automates theprocess of creating, cascading, and monitoring theprocess of company-wide goals. These technologytools provide the ability to set goals at any level ofthe organization and align employee efforts withorganizational initiatives.

Reportng

Without a clear process and metrics in place tomonitor the progress of achievement to those goals,even employees with the best intentions can losetheir line of sight and alignment breaks down.Reporting and analytical tools should assist companiesin tracking:

How many employees have goals in place (not

just managers)?

What percentage of those goals is aligned to the

corporate strategy?

Which of those goals are critical?

How are employees progressing in achieving

those goals?

Commitment plus technology to measure the progressare necessary to keep managers on the right track.



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Example of Goals Alignment Reporting

Automatng Goals ManagementGoals management supported on a technologyplatform should provide the ability to dene:

Themes or categorization of goals that can be

reported on or used in a Balanced Scorecard or

for reporting goals related to nance, customers,

or development.

Business goals that are qualitative or quantita-

tive statements of an organizations intent or

objectives such as Increase operational

efciency 5%. Projects that are discrete efforts by the organiza-

tion such as Evaluate, select, and implement

talent management solution.

Project milestones as elements that mark the

completion of a specic work package or phase.

Much work today crosses the traditional departmentalor cost center structures of an organization. Goalsmanagement software needs to provide the ability toestablish an alternative to traditional organizationalhierarchy thats used for goals management. For thepurpose of goals management, multiple departmentsor cost centers may share the same goals. These goalsneed to be summarized and managed across multiplegroups. Just as business strategy is overarchingand not siloed by department, the goals alignmentplatform should be exible and congurable to matchbusiness operations.

45

56EmployeeHas Goal

Plan

No

Yes

# Employees

42

3

1

Employee GoalPlan Approval

Status

Approved

In Progress

Not Approved

# Employees

Goal

Criticality

Critical

Not Critical

# Employees

28

33

No

Yes

8

98

Employee

Goal IsAligned

# Employees

Goal

Percentage

Complete

0-25%

25-50%

50-75%

75-100%

52

25

19

28

# EmployeesMonth Goals Are Due

Goals Due By Month

03-Mar0

20

40

60

80

100

04-April 05-May 06-June 07-July 09-Sep 10-Oct 12-Dec

#Employees

Employee/Business Goal Alignment



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Launch Goals-based RevewsIndividual employees can also have goals, whichlike business goals, are qualitative or quantitative

statements of the employees intent or objectives.Individual goals require collaboration between themanager and employee to develop goals for a givenperiod. Employee and manager need the abilityto collaborate on the employees goal plan andacknowledge when both are satised with the plan.

Instead of an obligatory annual or semi-annual view,the agreed upon goals and progress should be easilyaccessible and visible throughout the work year.

Cascadng GoalsCascading goals form the basis of alignment, and

provide the employee with the clear line of sight toview how work efforts benet the organization. Forexample, for a business goal of Increase operationalefciency 5%, a call center employee might have agoal of Resolve 80% of rst level support callswithin 5 minutes.

When an employee is aligned with a project,individual efforts directly contribute to thecompletion of the project. In other words, the project

and the employees goal should be 100% completesimultaneously.

Goals management software can now show in realtime how the goals are aligned and executed fromthe strategy to the business goals and from thedepartments to the manager and employees.

31%

Strategy

BusinessGoals

Department Goals

Managers Goals

Source: Taleo Research

Employee Goals

Sum

marizean

dR

eport

Complet

ion

Casca

dingGoalsD

own

2009 Copyright, Taleo CorporationCopyright 2009, Taleo Corporation



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When talent management applications and practices

align with corporate strategies, goals are met and

sustained.

David Ulrich, The HR Value Proposition (modifcationo quote)

Summar

Studies have proven that goals alignment andengagement improve productivity and companyperformance. When employees are engaged andaligned they can have a major impact on the bottomline of a business.

Achieving and maintaining alignment requires

management commitment, a clearly dened processand the discipline to stay on course. Technology canprovide the tools to measure and monitoryour progress.

Steps to Acheve Algnment

1. Obtain senior management commitment.

2. Set the corporate strategy.

3. Develop business goals rom the strategy.

4. Obtain consensus on business goals.

5. Set departmental and/or manager goals rom busi-

ness goals and enter into system.

6. Set employee goals with a clear line o sight up to

business goals and strategy (cascading goals).

7. Set measurements, accountability, and responsibility.

8. Develop reporting structure to review progress

through reporting and analytics.

9. Hold regularly scheduled meetings to review progress.

10. Adjust plans based on external or internal actors.

Value from Engagement and

Alignment



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CONTACTwww.taleo.com [email protected]

1.888.836.3669 U.S.1.888.922.5665 International1.888.561.5665 Customer Service

ABOUT TALEOLeading organizations worldwide use Taleo on demand talent management solutions toassess, acquire, develop, and align their workorce or improved business perormance.

Copyright 2009 Taleo Corporation. All rights reserved. No portion o this document may be reproduced in any orm withoutthe prior written permission o Taleo Corporation.

Taleo and all Taleo product and service names mentioned herein are trademarks or registered trademarks o Taleo in theUnited States, France, The Netherlands, U.K., Canada, Australia, and several other countries. All other product and companynames mentioned herein may be the trademarks o their respective owners.


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