What s the Difference Between Organizational Culture & Employee Engagement?

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1 What s the Difference Between Organizational Culture & Employee Engagement? Daniel Denison CEO & Founding Partner Lindsey Kotrba Director of Research & Development

2 What s the Difference Between Organizational Culture & Employee Engagement? 2

3 Engagement Surveys Most employee attitude surveys today are called engagement surveys The core is about the individual s reaction to the environment in the workplace But there are often many other additions Vision & values Satisfaction and commitment Custom content Rewards Leadership & strategy Best Places to Work 3

4 Organizational Culture & Engagement Organizational Culture Organizational Construct How they experience & perceive the organization Predicts firm performance Individual Engagement Individual Construct How they feel about themselves and their work Predicts individual performance Organizational Culture Firm Performance Engagement Individual Performance 4

5 Culture & Engagement Culture Firm Performance Engagement Individual Job Performance 5

6 Organizational Culture 6

7 What Counts Adaptability Pattern..Trends.. Market Translating the demands of the business environment into action Are we listening to the marketplace? Mission Direction..Purpose.. Blueprint Defining a meaningful long-term direction for the Company Do we know where we are going? Involvement Commitment... Ownership Responsibility Building human capability, ownership, and responsibility Are our people aligned and engaged? Consistency Systems Structures Processes Defining the values and systems that are the basis of a strong culture Does our system create leverage?

8 Culture Links to Performance Growth Innovation & Customer Satisfaction Stable Performance Over Time Profitability ROI, ROE Operating Performance Quality Employee Satisfaction 8

9 Customer Satisfaction Firms with higher culture scores have higher customer satisfaction ratings. 9

10 Employee Engagement 10

11 Defining Employee Engagement Engagement: the degree to which the individuals in an organization are involved, committed and psychologically invested in their work, their job, and their organization Employee engagement is an individual-level construct which is a good predictor of individual-level outcomes like job satisfaction, loyalty, discretionary effort, and job performance We measure engagement several ways; Our engagement module Our additional modules Client custom questions 11

12 Employee Engagement How engaged are your people in their work? Are they putting forth the extra effort to make your organization successful? This module can help you understand the impact that your culture has on your employees attitudes toward their job and organization. 1. My work drives me to go the extra mile. 2. I am enthusiastic about working for this organization. 3. I am proud to work for this organization. 4. I am passionate about my work. 5. My work energizes me. 12

13 Employee Engagement Benchmark 104 organizations; 12,869 respondents 73% headquartered in North America; 27% of the respondents are from outside the US; 13% listed as Multinational Wide variety of industries represented Collected June 2009 through September 2010; updated quarterly Validation report is available 13

14 Custom Engagement Items Our system easily allows us to accommodate client specific items R&D team provides help in: item creation item mapping internal benchmarking predictive modeling 14

15 Employee Commitment Employee commitment is the strength of employees commitment to the organization in terms of (a) their personal attachment to the organization, and (b) their need and/or desire to remain with the organization. Below are the 10 items we use to capture Employee Commitment. 1. I am committed to this organization. 2. This organization is where I belong. 3. I am glad to work for this organization over any others. 4. I would recommend working for this organization to others. 5. I feel a strong personal connection to this organization. 6. It would be difficult for me to leave this organization. 7. It would not benefit me to leave this organization. 8. I continue to work here more out of choice than necessity. 9. I plan to continue working in this organization for a long time. 10. I rarely think about looking for a job with another organization.

16 Trust Trust requires honesty, openness, and integrity as well as compassion or benevolence. 1. In this organization, decisions are made with employees best interests in mind. 2. People in this organization have good motives and intentions. 3. This organization conducts business with integrity. 4. The people who work here are honest. 5. There are few secrets in this organization. 6. Employees consider this organization to be trustworthy. 16

17 Innovation Innovation requires support for the development, and implementation of new ideas. This module directly asks questions about creativity, the implementation of new ideas, and about the role that innovation plays in the organization. 1. People are encouraged to be creative. 2. We are able to implement new ideas. 3. New ideas are continually evaluated and improved upon. 4. Support for developing new ideas is readily available. 5. Innovation is a large part of our business activities. 17

18 Understanding the Link Between Culture & Engagement 18

19 Culture & Engagement Bottom 10 Cultures Overall Top 10 Cultures Overall Engagement Factor = 11 th Percentile Engagement Factor = 83 rd Percentile 19

20 Items Best Predicting Engagement The four strongest predictors of engagement include: Our vision creates excitement and motivation for our employees. (Vision) R =.54* There is a clear mission that gives meaning and direction to our work. (Strategic Direction & Intent) R =.48* Everyone believes that he or she can have a positive impact. (Empowerment) R =.46* The leaders and managers practice what they preach. (Core Values) R =.46* 20

21 Indexes Best Predicting Engagement 21

22 Conclusions Clarify the importance of the individuallevel and organizational-level issues Benchmark wherever you can Plan the feedback & action planning process at the beginning Long-term we need to build the system, but short-term we need to understand the reaction of the individuals

23 23

24 Thank You! Any Questions?

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