Engagement Strategy Playbook

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1 CORPORATE LEADERSHIP COUNCIL HR LEADERSHIP COUNCIL A CLC SERVICE FOR MIDSIZED ORGANIZATIONS CORPORATE EXECUTIVE BOARD Engagement Strategy Playbook Ten Steps for Improving Your Employee Engagement Strategy

2 COPIES AND COPYRIGHT As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center at for any help we may provide. The pages herein are the property of The Corporate Executive Board Company. Beyond the membership, no copyrighted materials of The Corporate Executive Board Company may be reproduced without prior approval. LEGAL CAVEAT The Corporate Executive Board Company has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and The Corporate Executive Board Company cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, The Corporate Executive Board Company is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by The Corporate Executive Board Company or its sources, or b) reliance upon any recommendation made by The Corporate Executive Board Company.

3 HRLC research, including surveys of more than 11,000 employees, indicates that not all employee engagement strategies are created equal. The best approaches those with lasting impact have the following characteristics: They account for past, present, and future measures of engagement. They target engagement efforts by critical workforce segment, rather than a one-sizefits-all approach. They include actionplanning approaches with both immediate and longer-term impact. INTRODUCTION: IMPLEMENTING AN ENGAGEMENT STRATEGY WITH SUSTAINABLE RESULTS This step-by-step playbook will enable you and your organization to do the following: Build the business case for employee engagement. Demonstrate the impact of engagement on revenue, profit, and customer satisfaction to build organization-wide support and participation in engagement strategy. Assess engagement over time. Explicitly incorporate past, present, and future measures into your organization s assessment of employee engagement to improve performance and retention. Target engagement strategy by employee segment. Understand and prioritize engagement efforts by employee segment rather than using a one-size-fits-all approach. Implement action plans that rev and sustain engagement. Refocus engagement action plans away from just driving engagement in the present to building engagement over the long term. Build organization, manager, and employee capabilities to drive engagement. Incorporate employee, manager, and organizational capabilities in your engagement strategy to maximize results. 3

4 Engagement established over time leads to better discretionary effort and retention, which organizations can use to improve organizational outcomes. HRLC s ENGAGEMENT CAPITAL FRAMEWORK Engagement Capital Framework Defined: Engagement capital refers to the amount of commitment, discretionary effort, and intent to stay that employees exhibit given the combination of their past experiences, present events, and expectations about the future. The engagement capital diagnostic includes measures of employees perception of past events, present experiences, and future expectations at the organization. Engagement Capital Past Events Talent Outcomes Organizational Performance Engagement capital refers to the ability over the long run to build, spend, and deploy engagement to improve organizational performance. Employees emotional and rational commitment based on their perception of previous events with their employer Present Experiences Employees emotional and rational commitment based on their perception of present experiences Future Expectations Discretionary Effort/ Performance Intent to Stay/ Retention Revenue Profit Customer Satisfaction Employees emotional and rational commitment based on their expectations of their future employment experience View HRLC s full study on Building Engagement Capital. 4

5 HRLC offers two distinct resources for designing your engagement strategy and managing your engagement survey. RESOURCES TO DRIVE EMPLOYEE ENGAGEMENT HR Leadership Council HRLC s Employee Engagement Survey Resources for developing and implementing an engagement strategy, including: Best practice research Engagement benchmarking and trends Action-planning tools and templates Manager e-learning modules and guides Workforce survey services and engagement action planning, including: Customizable employee engagement survey Hot spot report and results presentation Manager development tools Focus group implementation support Teleconferences Visit the Employee Engagement Topic Center. Take HRLC s Employee Engagement Survey. HRLC 5

6 ENGAGEMENT STRATEGY PLAYBOOK ROADMAP Build Business Case Assess Engagement Action Plan Build Capabilities Measure Results Step One: Demonstrate the business impact of engagement. Step Two: Identify the engagement survey and reporting capabilities that are most important. Step Three: Evaluate engagement based on employees past experiences, present commitment, and future expectations. Step Four: Target action plans based on critical and at-risk employee segments. Step Five: Select initiatives that rev and sustain engagement. Step Six: Ensure accountability for action plans. Step Seven: Enhance the organization s impact on engagement. Step Eight: Improve manager effectiveness at engagement. Step Nine: Enlist employees in improving engagement. Step Ten: Use engagement data to improve business decisions. 6

7 ENGAGEMENT STRATEGY PLAYBOOK ROADMAP Build Business Case Assess Engagement Action Plan Build Capabilities Measure Results Step One: Demonstrate the business impact of engagement. 7

8 Step 1: Demonstrate the business impact of engagement. HIGHER ENGAGEMENT LEVELS IMPROVE PROFIT AND REVENUE Effective employee engagement by business leaders positively impacts revenue and profit. Maximum Impact on Revenue Maximum Impact on Profit Business leaders who score high on ability to engage employees can have 6% higher impact on revenue and profits as compared to business leaders who score low on ability to engage employees. = 6% = 6% Business Leaders Effective at Engaging Their Teams Business Leaders Ineffective at Engaging Their Teams Business Leaders Effective at Engaging Their Teams Business Leaders Ineffective at Engaging Their Teams Additional Potential Outcomes of a Highly Engaged Workforce See how other leading companies have made the case for employee engagement, and customize The Business Case for Employee Engagement presentation for your own organization. Employees who work 57% harder and are nine times less likely to leave Average three-year revenue growth of 20.1% compared to industry average of 8.9% Higher stock price over a period of three years compared to a sample of 500 leading companies in a variety of industries Three times higher EBITDA growth compared to industry average 8

9 ENGAGEMENT STRATEGY PLAYBOOK ROADMAP Build Business Case Assess Engagement Action Plan Build Capabilities Measure Results Step Two: Identify the engagement survey and reporting capabilities that are most important. Step Three: Evaluate engagement based on employees past experiences, present commitment, and future expectations. 9

10 Step 2: Identify the engagement survey and reporting capabilities that are most important. SELECTING THE RIGHT ENGAGEMENT SURVEY PROVIDER IS CRITICAL Supplement formal employee engagement surveys with additional forms of feedback through multiple channels: Conduct focus groups to collect qualitative feedback on current engagement levels using HRLC s Conducting Employee Focus Groups Topic Center. Collect exit interview feedback from departing employees to identify root causes of disengagement through our sample exit interview template. Track and benchmark employee turnover by type and cause using the Turnover Benchmarking Database. Review Area Survey Questionnaire Benchmarking Pre- Implementation Support Importance Level Moderate Low Moderate High High Moderate Moderate High High High High Vendor Capabilities The vendor is able to provide language translation support for survey questionnaires. The survey can be customized to track engagement levels of different workforce demographics. The survey questions can be customized for an organization-wide survey. The survey questions can be customized for different business units and/or geographies. Participating employees will remain anonymous. The vendor has a global database and can benchmark by by all all segments important to my organization. The vendor can benchmark my organization s engagement levels against other organizations engagement levels. The vendor can benchmark engagement levels by most relevant segments, such as function and industry. The vendor has a global database and can benchmark by all segments important to my organization. The vendor promotes the survey by designing communications to increase buy-in, employee involvement, and response rates. The vendor assists in planning change management before the engagement survey launch. Access the Engagement Survey Vendor Comparison Tool, and Learn more about the HR Leadership Council Engagement Survey included in membership. Technical Requirements High Moderate Moderate The vendor uses reliable methods for data intake and collection. The vendor is able to secure survey data from external threats. The vendor is able to provide language translation support for survey questionnaires. 10

11 Step 3: Evaluate engagement based on employees past experiences, present commitment, and future expectations. ENGAGEMENT ESTABLISHED ACROSS TIME DRIVES BETTER PERFORMANCE AND RETENTION Employees perceptions of past events, present experiences, and future expectations provide a more complete diagnostic for engagement levels. Sample Questions PAST EVENTS PRESENT EXPERIENCES FUTURE EXPECTATIONS Including measures of employees perceptions of employment over the past two years provides information on employees baseline engagement and receptivity to engagement initiatives or organizational change. Over the past two years my organization has been the best employer for me. my organization has consistently treated me fairly. Today I am proud to work for my organization. I enjoy working for my organization. Over the next two years my organization will consistently treat me well. my organization will consistently treat me fairly. Since current engagement initiatives cannot change past events at the organization, focus on measures of present experiences and future expectations to understand engagement initiative effectiveness. I was confident in the stability of my organization. I am excited about my work. I am confident about the direction of the organization. Note: See Appendix for a complete listing of Employee Engagement Survey Questions. 11

12 Step 3: Evaluate engagement based on employees past experiences, present commitment, and future expectations. (Continued) PRIORITIZING ENGAGEMENT DATA BY CRITICAL SKILLS ENABLES BETTER STRATEGY EXECUTION Sample Engagement Survey Questions by Related Strategy Enabler 1 Illustrative Align engagement assessments with critical skills to understand your greatest engagement risks. Strategy Enablers Cross-Silo Collaboration Engagement Questions Respondents are asked to rank questions on a scale of 1 to 5, with 5 being strongly agree and 1 being strongly disagree. Communication between peers in this organization is excellent. My group gets the cooperation it needs from other work groups to achieve its goals. Strategic Relevance Lack of cooperation across operating units can derail capability-based solutions or strategies. Assess the results of survey questions that provide insight into critical soft capabilities; to help strengthen employees skills in areas integral to the strategic plan s success. Extremely low scores signal capability gaps that may require the business leader to adjust the plan or delay implementation; for less extreme scores, a red flag is determined based on the business leaders judgment. Risk Tolerance Customer Focus Process Excellence Flexibility Team Stability My organization supports new ways of doing things. I feel free to take informed risks to get my job done. Customer satisfaction is a high priority in my group. Customer feedback is used to improve our products and services. The actions of leaders within my business unit/functional group demonstrate a commitment to customer satisfaction. My organization encourages me to improve on its methods. My organization is always moving toward improved ways of doing things. My organization can be described as flexible and continually adapting to change. Communication between peers in this organization is excellent. My group gets the cooperation it needs from other work groups to achieve our goals. Risk aversion may inhibit breakthrough innovations required for new business or discontinuous new product launches. Customer focus will be particularly important for strategies predicated on tight customer feedback loops or value-add sales. Non-value-added process complexity can be especially troublesome for a strategy aiming to cut costs or improve productivity. Inability to adapt to change puts at risk initiatives that have high uncertainty or operate in fast-changing markets. High retention risk for key talent critical for execution can derail an otherwise good strategy; avoid piloting initiatives in unstable groups. Problem Solving My organization encourages me to find new ways to solve old problems. A culture that does not encourage innovative problem solving can stall an initiative for which there is no explicit strategy execution playbook. Commitment to Strategic Direction I believe in what my organization is trying to accomplish. I understand how my work projects or assignments are connected to my organization s overall strategy. Lack of commitment to strategic objectives, particularly in a changing environment, can cause internal disruptions that affect team/ group performance. 1 Questions compiled from multiple sources. Source: Corporate Strategy Board, Capabilities Proxies Composite, Washington, DC: Corporate Executive Board,

13 ENGAGEMENT STRATEGY PLAYBOOK ROADMAP Build Business Case Assess Engagement Action Plan Build Capabilities Measure Results Step Four: Target action plans based on critical and at-risk employee segments. Step Five: Select initiatives that rev and sustain engagement. Step Six: Ensure accountability for action plans. 13

14 Step 4: Target action plans based on critical and at-risk employee segments. ACTION PLANS SHOULD TARGET CRITICAL AND AT-RISK EMPLOYEE SEGMENTS Seventy-eight percent of organizations effectively identify engagement challenges, but only 46% select the right strategies to effectively address those challenges. This mismatch occurs because of a one-size-fitsall approach of applying the same engagement tactics across the organization. Tailor engagement action plans to address the unique needs of workforce segments critical to your organization s business goals. Evaluating Employee Segments Guide to Prioritizing Critical Employee Segments for Workforce Planning This template helps you individually assess the criticality of each employee segment using the criteria below. To score the segment, rate each criterion on the scale shown below. Scale for Evaluating Criticality of Each Segment: 1-Very Low, 2-Low, 3-Moderate, 4-High, 5-Very High Evaluation Criteria Questions to Assess Criticality of Employee Segment to Business Performance Level (or expected level) of impact of the employee segment on bottom-line results Extent to which roles within this segment are involved (or will be involved) in developing growth opportunities in the organization Extent to which roles within this segment are involved (or will be involved) in developing business strategy Extent to which roles within this segment are involved (or will be involved) in designing new products Extent to which roles within this segment optimize (or are expected to optimize) business processes Extent to which roles within this segment impact process outcomes that improve revenues Level of risk to business performance if roles within this segment are left vacant Extent to which roles within this segment influence other business critical positions in the organization Questions to Assess Difficulty of Sourcing and/or Training Employees Level of difficulty of sourcing for the skills/roles within this segment Level of costs involved in hiring employees within this segment Level of costs involved in training the employees within this segment Level of future availability of the roles/skills within this segment Degree of specialized skills or knowledge required for roles within this segment Level of current market value (compensation offered) of the roles within this segment Degree of competition for this segment in the marketplace Score Score Add up the scores for each criterion to calculate the total criticality score. Access HRLC s Guide for Prioritizing Critical Segments. Total Criticality Score for Employee Segment (HRBPs will need to calculate individual criticality score for each employee segment using separate evaluations): 14

15 Step 5: Select initiatives that rev and sustain engagement. ACTION PLANS SHOULD INCLUDE BOTH SHORT- AND LONG-TERM DRIVERS OF ENGAGEMENT Maximize engagement investments by focusing on tactics that both rev engagement in the short term and sustain engagement over time. Maximum Initial Impact on Engagement Capital by Decay Rate Maximum Initial Impact on Engagement Capital 12% 11% 10% 9% 8% 7% 6% 5% HIGHER REV, FASTER DECAY Inspiring Communication from Senior Leader Leader Meeting Inspiring Communication from Manager Organization Communication Thank You from Manager Promotion Resources from Manager Noncash Award Peer Recognition Event Cash Bonus Publicly Representing Organization Receiving Organization Chart Help from a Colleague HIGHER REV, SLOWER DECAY Thank You from Senior Leader Minor Base Pay Increase Development Opportunity Career Discussion with Manager Organization-Sponsored Celebration Volunteer Opportunity Training Formal Review Significant Base Pay Increase LOWER REV, FASTER DECAY LOWER REV, SLOWER DECAY 4% 9% 8% 7% 6% 5% 4% 3% 2% Fast Percent Decline in Maximum Impact per Month Slow Note: Engagement capital outcome measure includes employees perception of present experiences and future expectations. Source: CLC HR Engagement Research Survey. 15

16 Step 5: Select initiatives that rev and sustain engagement. (Continued) FOCUS ON DRIVERS THAT REV AND SUSTAIN ENGAGEMENT Maximum Impact of Drivers on Engagement Capital Many organizations invest in engagement initiatives that provide immediate impact but do not sustain engagement. Instead, prepare the foundation for your organization s engagement initiatives by focusing action-planning initiatives on seven critical areas: Organizational values Work environment Networking Career management Rewards Performance management Role clarity Role Clarity Articulating/Translating Organizational Goals 13.5% Explaining Connection Between Job and Organization 11.6% Helping Understand Role 10.1% Explaining Job Importance 8.5% Helping Understand Job Responsibilities 8.4% Career Management Ensuring Job Interests Alignment 11.1% Putting the Right People in the Right Roles 9.8% Demonstrating Commitment to Development 9.7% Developing Current Skills 8.8% Developing New Skills 6.2% Development Opportunity 5.9% Providing Career-Pathing Information 5.5% Training 4.8% Career Discussion with Manager 4.7% Promotion 4.5% Publicly Representing Organization 4.1% Performance Management Providing Adequate Resources 15.2% Setting Realistic Performance Expectations 14.9% Providing Informal Feedback 10.0% Clearly Communicating Performance Expectations 7.7% Help Obtaining Resources from Manager 5.2% Managing Low Employee Performance 4.1% Formal Review 3.4% Providing Formal Performance Reviews 2.3% Networking Providing Opportunities for Networking with Peers 7.9% Encouraging Collaboration 5.1% Rewards Above-Market Base Pay Increase 6.1% Noncash Award 5.2% Organization-Sponsored Celebration 4.7% Cash Bonus 4.5% Peer Recognition Event 4.3% Below-Market Base Pay Increase 3.3% Work Environment Encouraging Innovation 9.7% Encourage Work Life Balance 7.2% Protecting Employees from Hostile Work Environments 6.8% Openness to New Ideas 6.6% Inspiring Communication from Senior Leader 6.0% Thank You from Senior Leader 6.0% Encouraging Autonomy 5.9% Inspiring Communication from Manager 5.8% Help from a Colleague 5.8% Providing Opportunities for Employee Feedback 5.2% Thank You from Manager 5.1% Encouraging Collaboration 5.1% Organization Communication 5.0% Addressing Employee Grievances 4.7% Sharing Relevant Information with Employees 3.7% Leader Meeting 3.3% Receiving Organization Chart 2.9% Values Future Orientation 13.0% Reputation for Integrity 10.6% Adaptability 9.5% Commitment to Social Responsibility 9.4% Volunteer Opportunity 8.1% Commitment to Diversity 7.0% Customer Orientation 4.1% n = 11,063. Note: The maximum impact on engagement capital is calculated by comparing two statistical estimates: the predicted impact when an employee scores relatively high on a driver and the predicted impact when an employee scores relatively low on a driver. The effects of all drivers are modeled using a variety of multivariate regressions with controls. Engagement capital outcome measure includes employees perception of present experiences and future expectations. Source: Corporate Leadership Council, 2010 Engagement Management Survey. 16

17 Step 6: Ensure accountability for action plans. Forty-nine percent of HR leaders indicate that their greatest challenge with engagement is taking action with survey results. Effectively communicate action plans with critical stakeholders and ensure leaders follow through on action plans by supplementing hard accountability measures with soft accountability tactics, such as using peer relationships to encourage action. HR MUST HOLD STAKEHOLDERS ACCOUNTABLE FOR ACTION PLAN FOLLOW-THROUGH Engagement Communication Planning Guide Use the considerations and guiding questions below to build a communication plan for your engagement strategy. Communication Design Considerations Considerations Guiding Questions Notes Message Content Context What is the central message we want the audience to remember? What words or phrases capture the message most clearly? What should the message accomplish? What kind of tone should be used to communicate the message? Is there a hierarchy that should be respected in message delivery? Are there any natural linkages to other events/topics/themes? Barriers/Risks Are there legal or regulatory issues associated with the communication? What are the obstacles to achieving the communication plan? What can be done to mitigate barriers/risks? Channels Will communication be one-way or two-way? Do we want to leverage multiple channels? Do certain channels have a higher risk of misunderstanding/inaccuracy? Should we customize channels for different segments? Do we have the necessary infrastructure for certain channels? Use HRLC s Action- Planning Template to work with line managers to ensure action plan follow-through. Budget What is the budget for this communication? What department is responsible for the budget? Who will support the communication initiative? 17

18 ENGAGEMENT STRATEGY PLAYBOOK ROADMAP Build Business Case Assess Engagement Action Plan Build Capabilities Measure Results Step Seven: Enhance the organization s impact on engagement. Step Eight: Improve manager effectiveness at engagement. Step Nine: Enlist employees in improving engagement. 18

19 Multiple agents play important roles in building engagement. BUILD ORGANIZATION, MANAGER, AND EMPLOYEE CAPABILITIES TO DRIVE ENGAGEMENT Organizations should continue to fulfill traditional responsibilities related to workforce planning, which demonstrates investment in employees future at the organization. By explaining the connection between employees individual jobs and the organization, managers can build employees pride in and motivation toward their dayto-day work. Organization Forty-one percent of top drivers of engagement capital Employee Manager Twenty-three percent of top drivers of engagement capital Organizations can support employees immediate motivation by encouraging coworkers to help one another understand how organizational goals and roles translate into day-today work. Peers Thirty-six percent of top drivers of engagement capital The average employee interacts with 42% of coworkers in their business unit or department on a regular basis. In a business unit of 50 employees, 21 individuals could substantially influence an employee s engagement. 19

20 Step 7: Enhance the organization s impact on engagement. HELP EMPLOYEES REACH PERSONAL DEVELOPMENT GOALS TO IMPROVE ENGAGEMENT LEVELS Match contribution opportunities arising from organizational strategy with an employee s personal development goals. Helping employees reach their goals shows investment in their future with the organization and improves engagement. While organizations recognize that evolving strategies create stretch roles for the workforce, few systematically match these with individual employees development plans. Signal a credible commitment to employees and improve engagement levels by tailoring the developmental process to provide opportunities that meet their personal development goals. Step 1: Identify and Analyze Employees Strengths and Development Areas Schedule development discussion with supervisor and employee. Consider available assessment data on employee during development discussion (e.g., performance evaluations, 360-degree feedback). Examine strengths that can be further used in the organization. Review development areas within current or future roles. Step 2: Determine Employees Contribution Opportunities Analyze how employee can increase contribution to the organization using existing strengths. Identify solutions to address development areas and consider development opportunities targeted at specific skill gaps. Step 3: Match Organizational Strategy with Employees Individual Development Plans Map organizational strategy, the time needed to achieve it, required skills, and available opportunities with employees career goals, individual strengths, and development needs. Select development activities arising from organizational strategy that are most relevant to individual skill gaps, considering employees career goals, strengths, and development needs. Step 4: Define Measures of Success to Ensure Development Establish specific development goals and communicate explicitly to employee. Identify the impact of development areas on business results. Illustrate potential gains to the business resulting from successful completion of development plans. Step 5: Administer Ongoing Organizational Support Determine organizational support needed for employees during development experiences (e.g., mentors, training classes, peer groups). Schedule sessions to update on progress and coach through difficulties. Provide regular formal and informal feedback to employee throughout development process. 20

21 Step 8: Improve manager effectiveness at engagement. MANAGERS DRIVE ENGAGEMENT BY CONNECTING EMPLOYEES TO THE ORGANIZATION Eighty-one percent of managers fail to achieve superior talent outcomes because they lack commitment to and are ineffective at engaging employees. Instead of over-investing in manager training, focus on helping managers apply their existing business skills to their most effective lever of engagement: connecting employees individual roles to the organization. Align engagement initiatives to managers workflow, and provide managers with resources to understand and improve engagement: Engagement E-Learning Modules for Managers Manager Guide for Improving Employee Engagement Manager Guide for Connecting Employees with the Organization Guide for Managing the Employee s Relationship with the Organization Amplify the Good, Filter the Bad: The manager s unique role as conduit requires him or her to strengthen employee engagement by amplifying organizational traits that positively impact performance and filtering those with negative effects. Connect Employees with the Organization and Its Success: Managers must take time to explain the big picture ; employees who feel connected to the organization and see how their effort contributes to its success engage with the organization and do their best work. Instill a Performance Culture: Managers who promote open communication, flexibility, innovation, and risk taking create an environment that fosters employee engagement and enables employees to perform at their best. Connect Employees with Talented Coworkers: Helping employees build a high-quality network of colleagues is one of the manager s most important roles, as exposure to talented coworkers develops employees in nearly all aspects relevant for high performance. Demonstrate a Credible Commitment to Employee Development: Engagement grows in a climate of organizational commitment to employee development, requiring managers to implement development plans with the resources and support necessary to credibly convince employees of the organization s commitment to their development. 21

22 Step 9: Enlist employees in improving engagement. THE MOST EFFECTIVE PEER ENGAGEMENT STRATEGIES OCCUR WITHIN EMPLOYEES DAY-TO-DAY WORK The most important peerled drivers of engagement enable work rather than build camaraderie. Maximize the impact of peer interactions on employee engagement in three ways: 1. Set group, not just individual, expectations. Alpha Company s 1 Group- Owned Diagnostic 2. Boost knowledge of peers work, not just their personal characteristics. Webster Bank s Job Shadowing Program 3. Build opportunities within, not outside of, workflow. Invensys Peer Partnerships Most Important: Work-Enabling Peer Interaction Translating goals into day-to-day work Providing informal feedback Providing career path information Least Important: Camaraderie Building Participating in social events Participating in work-sponsored volunteer activities Attending company celebrations 1 Pseudonym. Source: 2011 CLC HR Work Environment Survey. 22

23 ENGAGEMENT STRATEGY PLAYBOOK ROADMAP Build Business Case Assess Engagement Action Plan Build Capabilities Measure Results Step Ten: Use engagement data to improve business decisions. 23

24 Step Ten: Use engagement data to improve business decisions. ENGAGEMENT DATA CAN HELP DETERMINE FEASIBILITY OF STRATEGIC PLANS Align engagement assessments with specific, critical skills to identify capability strengths and gaps for successful strategy implementation. Rather than testing generalized management capabilities, assess the results of specific questions that provide insight into critical soft capabilities; to help strengthen employees skills in areas integral to the strategic plan s success. View Intuit s approach to applying engagement data to strategy execution. 1. Determine critical talent s willingness to execute by assessing whether strategy-critical employees engagement levels impact their willingness to execute strategy. 2. Assess ability to execute by mapping survey questions to capabilities that are integral to the strategy plan s success. Intuit s Capability Gap Assessment Based on Engagement Survey Questions Illustrative Business Strategy Customer Solutions Strategy Develop a new, integrated financial management software to enter the sophisticated up-market segment requiring high-quality customer support. Key Success Factors for Strategy Execution Cross-functional, cross business unit collaboration Risk-tolerant managers uncomfortable with uncertainty Best-in-class customer service Relevant Survey Questions My group gets the cooperation it needs from other work groups to achieve its goals. I feel free to take informed risks in getting my work done. The actions of leaders within my business unit/functional group demonstrate a commitment to customer satisfaction. Survey Score (Percent Agree or Strongly Agree) Source: Corporate Strategy Board, Engagement-Based Execution Tests, Washington, DC: Corporate Executive Board, Execution Risk? 46% Yes; lack of cooperation will delay launch and diminish value. 54% Yes; risk aversion may inhibit innovation required for breakthrough product. 86% No Low survey scores surface capability gaps that require plan adjustment. 24

25 Step Ten: Use engagement data to improve business decisions. (Continued) Rather than focusing on increasing engagement levels only, use employee engagement information as an input for business decision making. To increase the likelihood of success, use engagement data to assess employees willingness and ability to execute a strategic plan and identify potential execution roadblocks before strategic initiatives are launched. APPLY ENGAGEMENT DATA TO BUSINESS STRATEGY TO IMPROVE STRATEGY EXECUTION Implementation Steps Determine ability to support strategy execution assessments with engagement data. Assess ability to segment engagement data (e.g., what segmentations are possible, estimated time frame for producing specified data cuts). Align specific engagement survey questions to strategy execution capabilities. (Customize our Table of Engagement Questions by Strategy Enabler by including additional capabilities and using questions specific to your survey.) Determine benchmarks for various group-specific engagement data segmentations (e.g., similar subgroups or year-over-year comparisons). Designate an engagement data owner and ensure he or she has the necessary quantitative skills and access to all relevant data. Determine what degree of ongoing support you will be able to provide for strategy execution assessments (will you provide on-demand consulting, how many hours, for what parts of the process, etc.). Meet with key business leaders, strategists, and/or HR business partners prior to the strategy-setting process to discuss the benefits of utilizing engagement data as an input. Walk key stakeholders through the process of identifying groups of talent that are critical to the strategy at hand. Discuss implications of engagement levels for employees willingness to execute strategy; provide examples of suggested responses/considerations based on engagement scores. Teach stakeholders how to identify critical capabilities for strategy execution (e.g., cross-group collaboration, risk taking) and explain how engagement survey questions align to identified capabilities (reference your customized Table of Engagement Questions by Strategy Enabler). Set survey question thresholds aligned to critical execution capabilities to determine when a capability gap may be considered a red flag. Follow up with leaders after strategy implementation to gather feedback, particularly regarding: Interpretations of various engagement results, Thresholds used to determine when capability gaps should be considered execution risks, and Additional capabilities that they would like to assess in the future using engagement data. Document and compile key learnings to guide future strategy setting. 25

26 CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD Appendix Employee Engagement Sample Survey Questions 26

27 EMPLOYEE ENGAGEMENT SAMPLE SURVEY QUESTIONS Engagement Capital (Past) My organization has consistently treated me well. I trust my organization. Engagement Capital (Present) I enjoy working on my day-to-day tasks and assignments. I look forward to going to work. Engagement Capital (Future) I am confident about the future performance of my organization. I am confident I will have a successful career at my organization. Discretionary Effort I frequently try to help others with heavy workloads. When needed, I am willing to put in the extra effort to get a job done. Intent to Stay I am actively looking for a job with another organization. I have recently made phone calls or sent out my résumé to find a job with another organization. Employee Commitment I am proud to work for my organization. I would recommend this company as a great place to work. I am strongly committed to helping my organization achieve its vision and goals. Manager Quality My manager communicates well with me, giving me clear feedback on my work and performance. My manager helps me understand my responsibilities. My manager helps me develop my network within the organization. My manager helps me further develop my performance strengths. My manager enables me to get my work done by providing the right balance of direction, organization, and resources. My manager recognizes me for my contributions on the job. My manager helps me understand how my work contributes to the organization s overall success. Role Clarity I understand the connection between my work and my organization s strategy. 27

28 EMPLOYEE ENGAGEMENT SAMPLE SURVEY QUESTIONS (CONTINUED) Career Pathing My job makes good use of my skills and abilities. I understand career opportunities at my organization. Performance Management I have adequate resources to fulfill my responsibilities. Networking The people I work with cooperate to get the job done. Rewards I am fairly compensated for my work. I am satisfied with how frequently my company recognizes employees individual performance and work contributions. Benefits I am satisfied with the benefits program offered by my organization. I believe my benefits are comparable to benefits offered by companies similar to my organization. My organization has effectively communicated all benefits options available to me. Culture and Values I believe in my organization s values. My organization s values have been clearly communicated. I understand my organization s corporate values. I believe my organization acts in accordance with our corporate values. I believe my organization is committed to upholding our corporate values. My organization provides me with the opportunity to help shape and maintain our corporate values. Work Environment Employee feedback influences decisions at my organization. My organization encourages work life balance. I feel enabled to offer ideas to improve my organization s outcomes. My organization demonstrates openness to new ideas. I feel that my organization allows me to balance my work and personal responsibilities. I have the freedom to make decisions on my own to get my job done. My manager helps to ensure I have a balanced workload. 28

29 EMPLOYEE ENGAGEMENT SAMPLE SURVEY QUESTIONS (CONTINUED) Communication Communication between departments at my organization is good. Employees are encouraged to share their thoughts and views with their managers and senior leadership at my organization. Senior leaders clearly communicate my organization s long-term goals and strategy. Communication between peers in my organization is excellent. Career Development and Performance Management I receive feedback from my team regarding my work and performance, which helps me do my job better. I feel I have been provided with realistic and achievable performance goals. My organization encourages me to develop my skills. I am able to perform my job well because of the training my organization has provided me. I understand how my performance is evaluated. Compensation and Rewards I understand the process by which my total pay (base + bonus) is determined. My organization pays employees in line with their performance. I believe my current pay is comparable to what companies similar to my organization pay. My organization effectively uses rewards other than remuneration to award employees efforts. My organization recognizes high-achieving employees. Leadership I have confidence in the decisions made by the senior leadership at my organization. Senior leadership clearly communicates the direction in which the company is moving. Senior leadership acts in accordance with the values of my organization. I believe senior leaders at my organization act as effective role models to employees. Safety Environment I am satisfied with my physical working conditions. I have the training and knowledge I need to do my job safely. Most employees in my area follow the company s safety rules. Employees are encouraged to offer ideas and suggestions on how to improve safety. My organization responds promptly to safety concerns raised by employees. Customer Service My company is committed to customer satisfaction. I understand how I contribute to the satisfaction of our end customers. I have the resources available to provide quality products and services. Customer feedback is used to improve our products and services. I am proud of our company s reputation and the products and services we provide to our customers. 29

30 CORPORATE LEADERSHIP COUNCIL HR LEADERSHIP COUNCIL A CLC SERVICE FOR MIDSIZED ORGANIZATIONS CORPORATE EXECUTIVE BOARD

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