Engaging for Success. The Macleod Review and the implications for the NHS. Nita Clarke, Director IPA

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1 Engaging for Success The Macleod Review and the implications for the NHS Nita Clarke, Director IPA

2 The MacLeod Report on Employee Engagement - Report to Government, published 16 July 8 months 30 consultation events 5 regional events 60+ case studies 300 on-line responses to call for evidence 255 submissions and reports What is it; does it matter; what enables it and what gets in the way 3 key recommendations

3 What is engagement? A workplace approach designed to ensure that employees are committed to their organisation s goals and values, motivates to contribute to organisational success and able at the same time to enhance their own sense of wellbeing Professor David Quest It s a way of running a company or delivering a service which maximises the input, commitment and voice of employees to maximise the effectiveness, quality and performance of the organisation it s how we do things around here It s a partnership

4 An example of active disengagement

5 Does it matter? Employee engagement levels correlate with: better financial performance better outcomes in the public sector Other benefits include: higher levels of innovation more employees advocating their organisation lower rates of absenteeism employee well-being Critical for getting through recession and taking advantage of the upturn

6 Engaged employees generate 43% more revenue (Hay Group) Engaged employees: 2.7 sick days per year Disengaged employees: 6.2 (Gallup) Engaged employees are 87% less likely to leave (Corporate Leadership Council) 67% of engaged advocate their organisations; only 3% of the disengaged do (Gallup) 9 out of 10 of key barriers to successful change, people related (PWC) 59% of EE say work brings out their most creative ideas only 3% of disengaged agree (Gallup)

7 What proof have we got? Impact of Engagement on Financial Performance 19.2% 13.7% 27.8% -3.8% -11.2% -32.7% 12-Month Change in Operating Income 12-Month Net Income Growth Rate 12-Month EPS Growth Rate Based on 12-month global study conducted by Towers Perrin ISR involving 664,000 employees from 50 global companies across a range of industry sectors.

8 So what s the problem. A 2007 IPA survey found that most organisations were aware of a need for employee engagement; less than half knew how to implement it 66 per cent of CEOs believe their HR department and practices are not equipped adequately to deal with new emphasis born out by Recent research from Kingston University found only 35 per cent of employees actively engaged main factors in disengagement include: way organisation managed, chances for promotion, pay, recognition for good work, attention paid to suggestions, opportunity to use abilities

9 What are the characteristics of an engaged organisation? Better performance Absenteeism lower Creativity/innovation higher Customer service better Shrinkage lower (retail) Fewer accidents Attraction retention Greater advocacy

10 Key enablers Leadership provides a strong strategic narrative giving a line of sight between the job and the organisation s vision Engaging Managers, who offer clarity and training, who treat people as individuals, who listen and encourage and who ensure work is organised efficiently There is employee voice in the organisation, for reinforcing and challenging views; between functions and externally There is organisational integrity such that espoused values are reflected in behavioural norms

11 Public services: the engagement gap Just as important in the public sector for ensuring quality of service and performance Research (2006) shows public sector workers have a more negative experience of work, with more bullying and harassment Public sector workers are less satisfied with opportunities to use their abilities Reform something done to staff rather than with staff Stronger trade union presence in public sector. Need to ensure industrial and employee relations strategies are aligned

12 Public sector lags on awareness of strategic direction and clear vision Quality of management Trust and confidence in leadership Belief in organisational messages Change for change s sake Identification of often with team rather than organisation as a whole

13 Research in mental health sector (Alimo Metcalfe) found that engaging leadership styles had greatest impact on staff attitudes to work and wellbeing and showed it is how people are treated that really acts on organisational performance.

14 DoH research shows that engagement critical issue for NHS staff support in doing job, chance to develop and opportunity to improve way we work highlighted in What Matters to Staff Staff engagement key theme in NHS Constitution

15 Healthcare Commission correlations between results of 2006 NHS staff survey and patient survey results from NHS acute trusts in England showed working conditions and staff morale have impact on patient experience: - Intention to leave associated with work-related pressures and stress - Well structured staff appraisals associated with managerial support, job satisfaction and good working environment

16 - Working extra hours and stress associated with a poorer patient experience across a range of factors - Managerial support, error reporting and availability of hand-washing materials associated with a more positive experience for patients

17 Ipsos MORI/IDeA lessons in leadership showed staff in excellent councils (Audit Commission) had much better results than those in weak or poor councils on issues such as being informed and consulted, having confidence in senior management and understanding the overall objectives of their organisation Staff in excellent councils twice as likely to be advocates for their organisation than those in weak of poor councils.

18 The 2008 NHS staff survey 39 per cent of staff were satisfied with the recognition they got 31 per cent were satisfied with the extent trust valued their work 21 per cent said they would probably look for a new job

19 51 per cent said they were involved or consulted on decisions that might affect their work area/ team department 27 per cent agreed senior managers involved staff in important decisions 33 per cent thought staff were encouraged to suggest new ideas Fewer than a third reported that senior managers acted on feedback from staff

20 Fewer than half of staff felt their trust communicated what it was trying to achieve effectively Only 55 per cent said they knew how their role contributes to what the trust was trying to achieve 51 per cent would recommend their trust as a place to work

21 Disengaged employees Leave more frequently and take more time off are not effective advocates for their services - at exactly the time when public services need all the public support they can get Reduce the effectiveness of new policies and initiatives Will react badly to new financial pressures

22 The challenge ahead In times of difficulty, your people are your best allies Staff know how to cut costs, how to work smarter and more productively Public sector employees need to engage all their employees and all their employees understanding, effort and commitment to getting through the next period Engagement provides a means of doing just that The services that come of the recession best will be those who endorse and embed it

23 Employee engagement: ensures all parts of the public service work towards the same strategic goals ensures the whole community recognises challenges and opportunities ensures proper dialogue between staff (including their representatives) and management at all levels to address problems and develop positive solutions Builds on a social partnership approach Hugely benefits staff Impacts positively on service users

24 Macleod recommendations: the thinking behind them Exemplar organisations exist in all sectors we just need more of them It s not about: regulations and targets just doing a survey It needs: culture change in organisations leaders interpreting it for their context

25 Recommendations 1. A national awareness campaign 2. Aligning government products and support and press ahead with engagement in the public sector 3. Produce more and better advice especially for small and medium enterprises

26 Employee Engagement Report & Recommendations: