Employee Engagement: HR s Role in Times of Rapid Change. John Daniel, CHRO

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1 Employee Engagement: HR s Role in Times of Rapid Change John Daniel, CHRO Memphis SHRM Meeting, May 17,

2 engagement stats 1 in 5 employees highly engaged 80% of HR Execs rate engaging employees as highest priority 87% less likely to leave if highly engaged 20% Corporate Executive Board, 2004 and 2009 better performance if highly hl engaged 2

3 employee engagement is the extent to which employees commit to something or someone within in their organization, how hard they work, and how long they stay as a result of the commitment. Corporate Leadership Council, Corporate Executive Board

4 the importance of engagement gg Hewitt Associates: High engagement firms had total shareholder return that was 19% higher than average in In low engagement organizations, total shareholder return was actually 44% below average. Gallup: Organizations with high proportions of engaged employees were much less likely than the rest to see a decline in EPS in 2008, the year after the recession officially began. Wharton Business School: An analysis of the Best Companies to Work for in America indicated that high levels of employee satisfaction generate superior long horizon returns. State of Employee Engagement 2008, Blessing White 4

5 the state of employee engagement Corporate Leadership Council, Employee Engagement Survey

6 impact of the economic downturn Mergers and acquisitions Restructuring Business transformations Highly engaged stay flat or decrease slightly Activelydisengageddecrease decrease significantly 6

7 engagement model Emotional engagement is four times more valuable than rational engagement in driving employee effort. Corporate Executive Board, Corporate Leadership Council

8 top 12 engagement levers O Organizational Culture and Performance Traits D Day to Day Work Characteristics M Manager Characteristics Lever Impact Category 1. Connection Between Work and Organizational Strategy 32.8 D 2. Importance of Job to Organizational Success 30.3 D 3. Understanding of How to Complete Work Projects 29.8 D 4. Internal Communication 29.2 O 5. Demonstrates Strong Commitment to Diversity 28.5 M 6. Demonstrates Honesty and Integrity 27.9 M 7. Reputation of Integrity 27.6 O 8. Adapts to Changing Circumstances 27.6 M 9. Clearly Articulates Organizational Goals 27.6 M 10. Possesses Job Skills 27.2 M 11. Sets Realistic Performance Expectations 27.1 M 12. Puts the Right People in the Right Roles at the Right Time 26.9 M Corporate Leadership Council, Employee Engagement Survey

9 the role of HR Case Study: First Horizon National Corporation CULTURE AND LEADERSHIP ASSESSORS & ADVISORS Culture Study Training on targeted culture aspects (e.g. sense of urgency, decision making, candor, leadership) Employee Value Survey Business unit action plans Focus groups Leadership Survey Leadership Survey Feedback Sessions Targeted leadership training (e.g. coaching skills, performance management) CHANGE AGENTS Global Change Committee Change management initiatives iti (e.g. support on big $ technological lsystem upgrades) 9

10 the impact of significant change Case Study: First Horizon National Corporation, Culture History Firstpower customer focus supportive work environment high levels of loyalty low candor willingness to accept new ideas teamwork concern for employee commitment to quality sense of entitlement low accountability decision making speed hierarchical structure 10

11 the impact of significant change Case Study: First Horizon National Corporation Developed and implemented a Wellness strategy Redefined Firstpower Focused on diversity strategy Created culture/change workshops Increased company and executive communication Introduced competencies as the foundation of the talent strategy Established the Firstpower Council led by employees with executive sponsorship Implemented ongoing bonefish training (i.e. how our company makes $) Developed streamlined and consistent performance management processes focused on goal-setting, feedback and development 11

12 the role of leadership and culture Climate Flexibility I Incentives i Responsibility Standards Team Commitment Clarity The Hay Group,

13 summary The engagement level lof employees matter. HR has an important role in helping the organization navigate significant change, g, engage employees and shift the culture. A carefully planned strategy is critical ii to address the who, what, when, where and how of to impact engagement. 13

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