employee engagement workshop
TRANSCRIPT
Symphony and HarmonySymphony and Harmony
Building an Employee Engagement Strategy
Sharlyn Lauby, SPHRITM Group, Inc.
www.itmgroupinc.com
Workshop ObjectivesWorkshop Objectives
Understand why companies want an engagement strategyLearn the steps to developing an employee engagement strategyDiscover engagement drivers that can be immediately applied in the workplaceDiscuss measurement and evaluation tools for success
What is “Employee Engagement?”What is “Employee Engagement?”
Emotional and Intellectual Commitment to the OrganizationBased upon 3 Behaviors
Say – Speaking Positively about the OrganizationStay – Desire to be a Member of the OrganizationStrive – Exerts Extra Time, Effort and Initiative
Adapted from Hewitt Associates, 2004
Levels of EngagementLevels of Engagement
Is Our Workforce Engaged?Is Our Workforce Engaged?
According to Gallup’s U.S. Employee Engagement Index:
29% of the total workforce is ‘engaged’54% of the total workforce is ‘not engaged’ (aka “the massive middle”17% of the total workforce is ‘actively disengaged’
SHRM says 79% of the workforce is job searching (actively or passively.)
The ‘Massive Middle’The ‘Massive Middle’
Focus on Tasks versus GoalsWant to be told what to do and Do the MinimumFeel They are Being OverlookedFeel Their Talent is Wasted
Profile of the Actively DisengagedProfile of the Actively Disengaged
Normal Reactions Start with ResistanceDisplays Low Trust and Isolation“I’m okay, everyone else is not.”Inability to move from Problems to SolutionsLow Commitment to Company, Work Group, and Role Won’t Speak Frankly about Negative Views but will Act Out Frustration (overtly or covertly)
Why worry about Engagement?Why worry about Engagement?
The cost to the U.S. economy by the 17 percent of the actively disengaged is between
$254 and 363 Billion annually.
Is Your Workforce Engaged?Is Your Workforce Engaged?
Write down the names of people you interact with on a regular basis at work.
Think of an example of how they have demonstrated initiative within the past year.Name a problem that they have faced and what actions they took to solve the problem.Provide an example of the results that they have achieved through the efforts of others.
Attract, Retain, and EngageAttract, Retain, and EngageCompetitive Pay and Increases
Competitive Pay
Health Care andRetirement
Satisfaction with Benefits
Work-Life Balance
Career Advancement
Skills Development
Challenging Work
Recognition of work
Management Interest
Input and Decision Making
Top 5 Drivers of EngagementTop 5 Drivers of Engagement
1. Senior Management Interest in Employees2. Challenging Work3. Decision Making Authority4. Customer Focus5. Career Advancement Opportunities
From the Towers Perrin Talent Report, 2003
1 - Management Interest1 - Management Interest
Taking Steps to Insure Long-Term SuccessBusiness Knowledge
Supports New Ideas and Ways of Doing ThingsHas Integrity
“Walking the Talk”
Communicates Clear Vision for the FutureCommunicates Openly and Honestly
Two-Way Communication, Not Just Information
2 - Challenging Work2 - Challenging Work
Supporting Employees Taking InitiativeBeing Open to ChangeCoaching and Developing New SkillsHolding People AccountableRecognizing and Rewarding Performance
3 - Decision Making3 - Decision Making
Consulting Employees Before Making DecisionsKeeping Employees Informed
They have the freedom to make decisions
Supporting Employee Decisions
4 - Customer Focus4 - Customer Focus
Being in the Business to Serve CustomersUnderstanding the Link Between Customer Service and Financial PerformanceAdapting to Customer Needs and Market DemandsProviding Leading Edge TechnologyManaging Costs
5 - Career Advancement 5 - Career Advancement
Gaining Experience/EducationProviding Clear Goals and DirectionEnsuring Access to LearningBuilding Teams with Diverse Skills and Backgrounds
Case Study – Continental AirlinesCase Study – Continental Airlines
Management InterestWorkDecision MakingCustomer FocusCareer Advancement
Developing a StrategyDeveloping a Strategy
1. Developing the Business Case2. Using an Integrated Approach3. Creating a Campaign4. Measuring Effectiveness
1. Developing a Business Case1. Developing a Business Case
DDG Companies:Connect What Employees Do with Business ResultsHave the Trust of Their EmployeesGet Positive Press from Their EmployeesTake a Visible, Active Role in Leading the OrganizationCreate Opportunities for DevelopmentSolicit Feedback on a Regular Basis
Adapted from Hewitt Associates, 2004
Engagement & PerformanceEngagement & Performance
Engaged Employees are:Committed to perform 20% better87% less likely to leave
From the Corporate Leadership Council
Engagement & Company GrowthEngagement & Company Growth
Highly Engaged EmployeesStronger orientation toward meeting Customer needsCost of goods sold tends to drop as employees become more engagedCompany is more likely to exceed industry averages in revenue growth
Least Engaged EmployeesRevenue growth 1-2 % below industry average
Adapted from Towers Perrin Talent Report, 2003
2. Using an Integrated Approach2. Using an Integrated Approach
Relationship between the Employee, Department, Company and Business Results
Integrating People and PerformanceIntegrating People and Performance
Programs Employees CustomersBusiness Results
Increased Increased TurnoverTurnover
High Cost of High Cost of Goods SoldGoods Sold
Employee Satisfaction
Increased Market Share
Higher Operating Margin
Decreased Decreased RevenueRevenue- - EngagementEngagement
Integrating People and PerformanceIntegrating People and Performance
Programs Employees CustomersBusiness Results
Increased Turnover
High Cost of Goods Sold
High High Employee Employee SatisfactionSatisfaction
Increased Increased Market Market ShareShare
Higher Higher Operating Operating MarginMargin
Decreased Revenue
++ EngagementEngagement
3. Creating a Campaign3. Creating a Campaign
Building engagement is a process that never endsEngaged environments don’t happen overnight
The Gallup Q12The Gallup Q12
1. Do you know what is expected of you at work? 2. Do you have the materials and equipment you need to
do your work right? 3. At work, do you have the opportunity to do what you do
best every day? 4. In the last seven days, have you received recognition or
praise for doing good work? 5. Does your supervisor, or someone at work, seem to
care about you as a person? 6. Is there someone at work who encourages your
development?
(continued) The Gallup Q12
(continued) The Gallup Q12
7. At work, do your opinions seem to count? 8. Does the mission/purpose of your company make you
feel your job is important? 9. Are your associates (fellow employees) committed to
doing quality work? 10. Do you have a best friend at work? 11. In the last six months, has someone at work talked to
you about your progress? 12. In the last year, have you had opportunities at work to
learn and grow?
Predictors of EngagementPredictors of Engagement
CultureManagementJob DesignEmployee Satisfaction
CultureCulture
Customer-FocusedCompany ReputationPrograms Align and Support Culture
ManagementManagement
Rainmaker Thinking Survey10,000 Employees at 700 OrganizationsManager Communication has more Impact than any other Single Factor on:
• Productivity• Quality• Morale• Retention
‘Most Influential People in the Workplace’‘Most Influential People in the Workplace’
Key Element is ManagementBeliefs, Passion, and AbilityDrives the Motivation of Employees
CommitmentConsistencyStrong LeadershipDaily Management
Job DesignJob Design
Challenging WorkSkill VarietyTask SignificanceAutonomyFeedback
Employee SatisfactionEmployee Satisfaction
Work – Life BalanceTraining and DevelopmentResourcesMentoring/CoachingCareer AdvancementSense of “Community”
4. Measuring Effectiveness4. Measuring Effectiveness
Linking Engagement to OutcomesEmployee RetentionCustomer RetentionProductivityProfitability
Employee RetentionEmployee Retention
An engaged workforce is a stable workforceCaution in a disengaged workforce:
Openings in key positionsRetaining the disengaged
Example #1 - Turnover CostExample #1 - Turnover Cost
Staff Level: Entry1x Annual Salary and Benefits per replacementWorkforce of 1,000 employeesAverage Salary and Benefits: $30,000Turnover 10%
Turnover Cost $3,000,000
Example #2 – Turnover CostExample #2 – Turnover Cost
Staff Level: Middle Management or Technical Personnel
1.5x Annual Salary and Benefits per replacementWorkforce of 1,000 employeesAverage Salary and Benefits: $50,000Turnover 10%
Turnover Cost $7,500,000
Example #3 – Turnover CostExample #3 – Turnover Cost
Staff Level: Executive Level or Highly Skilled Professionals
2x Annual Salary and Benefits per replacementWorkforce of 1,000 employeesAverage Salary and Benefits: $85,000Turnover 10%
Turnover Cost $17,000,000
Customer Retention CalculationCustomer Retention Calculation
$ _____ (# of lost customers x avg revenue per customer)
$ _____ (cost of appeasing a frustrated customer)
$ _____ (cost of concessions to fix a customer relationship)
$ _____ (cost of lost goodwill)
ProductivityProductivity
Amount of Goods/Services Produced (Output)÷
Inputs Used in Production
Example:
Units Produced=
1000= 4 units per hourLabor Hours Used 250
Gross ProfitGross Profit
Total Revenue – Cost of Goods Sold = Gross Profit
Gross Profit Margin = Gross Profit/Total Revenue
Example – Greene’s Golf SupplyExample – Greene’s Golf Supply
9/30/05* 9/30/04*Total Revenue 405,209 315,000
Cost of Sales 243,125 189,000
Gross Profit 162,084 126,000
*In thousands
Calculation: Gross MarginCalculation: Gross Margin
$162,084 (Gross Profit)÷
$405,209 (Total Revenue)
= .40 (40%) Gross Margin
If the average golf supply company has a gross margin of 30%, what does this tell you?
ResultsResults
Understanding what drives engagement
How engagement factors impact the organization
Allocating resources to motivate the workforce
Engagement increases and company growth increases accordingly
Any Questions?Any Questions?
Thank you!
Sharlyn Lauby, SPHRITM Group, Inc.
www.itmgroupinc.com