Creating Engagement through Employee Needs Cindy Gordon CA CPCCCulture Shock Coaching

The Changing Face of the Workplace

What is Employee Engagement

•The employee’s willingness and ability to contribute to the success of the Company.

www.towerswatson.com

•Level of discretionary effort an employee is willing to contribute.

Why Engagement Matters

• The lost productivity of actively disengaged employees costs the US economy $370 BILLION annually. (Gallup)

• 78% would recommend their company’s products of services, against 13% of the disengaged. (Gallup)

• Engaged employees generate 43% more revenue. (Hay Group)

Why Engagement Matters• 69% of employees would work harder if they

were better recognized.• Those companies with a highly engaged

workforce improved operating income by 19.2% over a period of 12 months, while those companies with low engagement scores saw operating income decline by 32.7% over the same period. (Towers Watson)

• Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19. (Gallup)

Benefits of Engagement

•Better performance;•Better communication;•Greater customer satisfaction;•Better team work;•Greater commitment;•Lower employee turnover and a greater

ability to recruit top performing people.

Employee Productivity

•Highly Engaged 125%

•Engaged 100%

•Somewhat engaged 75%

•Disengaged 50%

The Jack Welsh Theory

20% are high performers (highly engaged)

10% should be out of the company (disengaged)

The rest are somewhere in between (engaged and somewhat engaged)

Happy Place Company The Cost of Lost Productivity

•Scenario 1: 20% highly engaged 10% disengaged 35% engaged 35% somewhat engaged Annual payroll of $10,000,000

The Cost of Lost Productivity – Happy Place Company

Level of Engagement

% within Organization

(A)

% Performance Level

(B)

Performance Impact

(A x B)

Highly 20% 125% 25%

Engaged 35% 100% 35%

Somewhat 35% 75% 26%

Disengaged 10% 50% 5%

CURRENT PERFORMANCE POTENTIAL (C) 91%

% OF LOST PERFORMANCE (100% – C) 9%

TOTAL ANNUAL WAGES AND SALARIES $10,000,000

VALUE OF LOST PRODUCTIVITY DUE TO ENGAGEMENT

$900,000

Happy Place CompanyThe Cost of Lost Productivity

•Scenario 2:▫Employee engagement shifts the

engagement level of the middle 70% 20% of the 35% engaged employees become

highly engaged 20% of the 35% somewhat engaged

employees become engaged

The Cost of Lost Productivity – Happy Place CompanyLevel of

Engagement% within

Organization(A)

% Performance Level

(B)

Performance Impact

(A x B)

Highly 27% 125% 34%

Engaged 35% 100% 35%

Somewhat 28% 75% 21%

Disengaged 10% 50% 5%

CURRENT PERFORMANCE POTENTIAL (C) 95%

% OF LOST PERFORMANCE (100% – C) 5%

TOTAL ANNUAL WAGES AND SALARIES $10,000,000

VALUE OF LOST PRODUCTIVITY DUE TO ENGAGEMENT

$500,000

VALUE OF PRODUCTIVITY IMPROVEMENT $400,000

Happy Place CompanyThe Cost of Lost Productivity

Assuming -150 employees:Scenario 1 Scenario 2

Highly engaged 30 40

Engaged 53 53

Somewhat engaged 52 42Disengaged 15

15Total employees 150

150

The Cost of Lost Productivity

•Conclusion:▫By improving the engagement level of just

20% of the middle 70% of your workforce, a 5% improvement in overall productivity was achieved.

▫This effectively improved the value of productivity being generated by the company’s workforce by $500,000.

MASLOW’S HIERARCHY OF NEEDS

PHYSIOLOGICAL

SAFETY

SOCIAL

ESTEEM

SELF- ACTUALIZATION

HIERARCHY OF EMPLOYEE NEEDS

SAFETY AND SECURITY

FINANCIAL

RELATIONSHIP

RECOGNITION

PERSONAL GROWTH & FULFILLMENT

I nt r

i ns i

c

Mot i

vat o

r s

E

xtri

nsic

M

otiv

ator

s

Types of Motivators

•Extrinsic Tangible rewards e.g.: pay raises; bonuses;

benefits. Other people control their size and whether

or not they are granted.

•Intrinsic Psychological rewards that employees get

from doing meaningful work and performing well.

HIERARCHY OF EMPLOYEE NEEDS

SAFETY AND SECURITY

FINANCIAL

RELATIONSHIP

RECOGNITION

PERSONAL GROWTH & FULFILLMENT

Safety and Security• Mission Statement – James Madison University Protecting the health and safety of employees, students,

guests, and the environment is the primary concern of all of us at James Madison University. This goal can be met through the development of a comprehensive and effective environmental health and safety plan that endeavours to eliminate unsafe conditions and minimize the impact of hazardous situations. Such a program can benefit the university community by reducing illness and injury to students and personnel, preventing property damage, and preserving the environment.

(http://www.jmu.edu/safetyplan/overview/mission.shtml)

HIERARCHY OF EMPLOYEE NEEDS

SAFETY AND SECURITY

FINANCIAL

RELATIONSHIP

RECOGNITION

PERSONAL GROWTH & FULFILLMENT

HIERARCHY OF EMPLOYEE NEEDS

SAFETY AND SECURITY

FINANCIAL

RELATIONSHIP

RECOGNITION

PERSONAL GROWTH & FULFILLMENT

HIERARCHY OF EMPLOYEE NEEDS

SAFETY AND SECURITY

FINANCIAL

RELATIONSHIP

RECOGNITION

PERSONAL GROWTH & FULFILLMENT

HIERARCHY OF EMPLOYEE NEEDS

SAFETY AND SECURITY

FINANCIAL

RELATIONSHIP

RECOGNITION

PERSONAL GROWTH & FULFILLMENT

Applying the Hierarchy of Needs•Retail grocery chain

• Full time employees – relatively low turnover• Part-time employees – mostly teens and students with high level of turnover• Direct contact with customers by many employees• Some employees work during the day, some nights or weekends

Making Monday the Best Day of the Week