2012 Employee Job Satisfaction and Engagement How Employees Are Dealing With Uncertainty

Transcription

1 A Research Report by the Society for Human Resource Management (SHRM) 2012 Employee Job Satisfaction and Engagement How Employees Are Dealing With Uncertainty

2 Media Contacts Kate Kennedy Julie Malveaux USA SHRM 1800 Duke Street Alexandria, VA Phone: Fax: shrm@shrm.org China SHRM China 11th Floor, Building A Gateway Plaza No.18 Xiaguangli, North Road East Third Ring Chaoyang District Beijing, China Tel: Fax: India SHRM India 702, 7th Floor Raheja Towers Plot C- 62, G Block Bandra Kurla Complex, Bandra (E) Mumbai Maharashtra Tel: Fax: SHRM Online: SHRM Research: SHRM Survey Findings: SHRM Research on To order printed copies of this report, visit or call

3 2012 Employee Job Satisfaction and Engagement A Research Report by the Society for Human Resource Management (SHRM) Table of Contents About This Research Report 1 Executive Summary: Employees Are Focused on Meeting Goals and Using Their Skills at Work 2 Survey Results: Employee Job Satisfaction 8 Career Development...9 Opportunities to Use Skills and Abilities...9 Career Advancement Opportunities Within Organization...10 Organization s Commitment to Professional Development...11 Job-specific Training...12 Career Development Opportunities...12 Paid Training and Tuition Reimbursement Programs...13 Networking...13 Employee Relationship with Management Communication Between Employees and Senior Management Relationship with Immediate Supervisor Management s Recognition of Employee Job Performance Autonomy and Independence Compensation and Benefits...24 Compensation/pay Benefits Flexibility to Balance Life and Work Issues Work Environment...32 Job Security Organization s Financial Stability The Work Itself Feeling Safe in the Work Environment Overall Corporate Culture Relationships with Co-workers Meaningfulness of Job...35 Contribution of Work to Organization s Business Goals Variety of Work Organization s Commitment to Corporate Social Responsibility...37 Organization s Commitment to a Diverse and Inclusive Workplace Organization s Commitment to a Green Workplace Survey Results: Employee Engagement 40 Engagement Opinions... 41

4 Engagement Behaviors...42 Conditions for Engagement...43 Conclusions 48 About the Research 51 Methodology Notations About the Respondents...53 Appendix 56 Endnotes 75 Additional SHRM Resources 76

5 About This Research Report The following report presents the results of the 2012 SHRM Employee Job Satisfaction and Engagement survey of U.S. employees. The objective of this annual survey is to identify and understand the factors important to overall employee job satisfaction and engagement. This knowledge helps organizations better understand and appreciate employee preferences when developing programs and policies designated to influence job satisfaction and engagement. The survey examined 35 aspects of employee job satisfaction and 34 aspects of employee engagement. The job satisfaction and employee engagement aspects are divided into seven topic areas career development, relationship with, compensation and benefits, work environment, engagement opinions, engagement behaviors, and conditions for engagement. The overall results, illustrated in figures, are included throughout the report along with corresponding text. More in-depth analyses are shown in tables found in the Appendix; these include the following: A comparison of the level of importance of certain aspects to job satisfaction, including statistically significant differences. A comparison of the level of employee satisfaction with certain aspects of job satisfaction. An analysis of the top five job satisfaction aspects by demographic variables, including organization size, employee job tenure, age, race, education and gender. An analysis of the top five engagement aspects by demographic variables, including employee age and gender. Additional analyses by demographic variables, including employee job tenure, gender, race and age. Overall results for every year the survey was conducted to determine if there have been significant changes in the span of a decade Employee Job Satisfaction and Engagement 1

6 Executive Summary

7 Employees Are Focused on Meeting Goals and Using Their Skills at Work Several internal and external factors can influence employee job satisfaction and engagement, and these factors may change over time. In the 10 years that the Society for Human Resource Management (SHRM) has been conducting its job satisfaction survey, there has been a noticeable fluctuation in employees overall satisfaction with their jobs. This fluctuation could be attributed to changes within the workplace as well as economic, demographic and social trends. According to this study, in % of U.S. employees reported overall satisfaction with their current job, with 38% of employees indicating they were very satisfied and 43% somewhat satisfied. Employees overall satisfaction with their jobs is down five percentage points from its peak of 86% in 2009 and four percentage points above its low in 2002 (77%). Figure 1 illustrates the data on overall employee job satisfaction from 2002 to In 2012, 81% of U.S. employees reported overall satisfaction with their current job, with 38% of employees indicating they were very satisfied and 43% somewhat satisfied. When it comes to employee engagement at work in 2012, on average, employees were only moderately engaged (3.6, on a scale of 1 to 5, where 1 is highly disengaged, 3 is moderately engaged and 5 is highly engaged). Employee engagement levels have not changed in the two years that SHRM has been collecting this metric. Figure 1 Overall Employee Job Satisfaction Over the Years 86% 80% 79% 82% 84% 83% 81% 77% 77% 77% 2002 (n = 604) 2004 (n = 604) 2005 (n = 600) 2006 (n = 604) 2007 (n = 604) 2008 (n = 601) 2009 (n = 602) 2010 (n = 605) 2011 (n = 596) 2012 (n = 600) Note: Figure represents those employees who answered somewhat satisfied or very satisfied Employee Job Satisfaction and Engagement 3

8 Top Aspects Contributing to Employee Engagement in 2012 Employee engagement, which may or may not be aligned with employee job satisfaction, is about the employee s connection and commitment to the organization. The top five aspects contributing to employee engagement in 2012 were very similar to the 2011 results; the main difference among the lists was that the aspect employees frequently feel that they are putting all their effort into their work made the top five list in % of employees reported that they are determined to accomplish their work goals and confident they can meet their goals. 83% of employees reported that they are determined to accomplish their work goals and confident they can meet their goals. 79% of employees reported satisfaction with their relationship with their co-workers. 75% of employees were satisfied with opportunities to use their skills and abilities at work. 72% of employees were satisfied with how their work contributed to their organization s business goals. 71% of employees reported that they frequently felt that they were putting all their effort into their work and that they were satisfied with their relationship with their immediate supervisor. Table 1 Top Five Employee Engagement Aspects 2011 (n = 600) 2012 (n = 600) I am determined to accomplish my work goals and confident I can meet them 83% (1) 83% (1) Relationship with co-workers 76% (2) 79% (2) Opportunities to use skills/abilities 74% (3) 75% (3) Contribution of work to organization's business goals 71% (5) 72% (4) Relationship with immediate supervisor 73% (4) 71% (5) I frequently feel that I m putting all my effort into my work 70% 71% (5) The top five aspects contributing to employee engagement were also analyzed by employee gender and age. Respondents from the Veterans generation and older were the only group that placed relationship with their immediate supervisor as the top factor contributing to their engagement. These data are shown in the Appendix. Top Five Contributors to Employee Job Satisfaction in 2012 Although many factors contribute to employee job satisfaction, only two have remained among the top five aspects since In a recovering economy, none of the aspects employees selected as the top five contributors to their job satisfaction was a surprise. 1 Opportunities to use skills and abilities (63%) displaced job security (61%) for the number one spot of aspects most important to job satisfaction, placing job security second in the list. Other aspects that rounded off employees top five very important factors contributing to job satisfaction were: Employee Job Satisfaction and Engagement

9 Compensation/pay (60%). Communication between employees and senior (57%). Relationship with immediate supervisor (54%). For the ranking of other aspects most important to employee job satisfaction, refer to Figure 2 on page 7 and Table 6 in the Appendix. Table 2 Top Five Aspects of Job Satisfaction Most Important to Employees: 2002 to (n = 604) 2004 (n = 604) 2005 (n = 601) 2006 (n = 605) 2007 (n = 604) 2008 (n = 601) 2009 (n = 601) 2010 (n = 600) 2011 (n = 600) 2012 (n = 600) Opportunities to use skills/abilities 47% 44% 51% (5) 44% 50% (4) 55% (4) 56% (3) 62% (2) 63% (1) Job security 65% (1) 60% (4) 59% (4) 59% (3) 53% (2) 59% (1) 63% (1) 63% (1) 63% (1) 61% (2) Compensation/pay 59% (4) 63% (2) 61% (2) 67% (1) 59% (1) 53% (3) 57% (3) 53% (5) 54% (4) 60% (3) Communication between employees and senior 62% (3) 54% 50% 48% 51% (4) 50% (4) 51% 47% 53% (5) 57% (4) Relationship with immediate supervisor 49% 49% 46% 47% 48% 47% (5) 52% 48% 55% (3) 54% (5) Note: A dash ( ) indicates that this question was not asked that year. The top five aspects of employee job satisfaction were also analyzed by several employee demographics. Opportunities to use skills and abilities were the top concern among employees, and in most cases, this aspect ranked among the top two very important aspects of job satisfaction, regardless of employees tenure, age, gender or organization staff size. Opportunities to use skills and abilities were the third most important contributor to job satisfaction for respondents employed at organizations with 500 to 2,499 employees and for employees with three to five years and 11 or more years of tenure. For nonexempt employees, opportunities to use skills and abilities were ranked as the fifth most important aspect of job satisfaction. These data are shown in the Appendix. What Do These Findings Mean for Organizations? Develop Existing Employees: Recent research has revealed that organizations are having difficulty recruiting employees with the right skills for their open positions. The SHRM Leading Indicators of National Employment (LINE ) show that HR professionals in manufacturing and service sectors have reported a trend toward increased difficulty recruiting key candidates in One of the top contributors to job satisfaction and engagement among employees is having the opportunity to use their skills and abilities at work. Employees frequently have skills and abilities beyond the position for which they were hired. HR professionals can help their organizations train and promote their employees to fill positions that require higher-level skills. This will then open up positions that require lower skill levels, which, in turn, may be easier to fill. Communicate About the Total Rewards Package: Employees rate compensation/pay as the third most important aspect of their job satisfaction. This aspect received a low rating when it came to employees actual level of satisfaction: Only 22% of employees were very satisfied with compensation/ pay. There are several ways HR professionals can address compensation: share information about the organization s compensation philosophy, help employees 2012 Employee Job Satisfaction and Engagement 5

10 understand how their compensation/pay is determined and frequently communicate to employees what their total rewards package includes. Build a Bridge Between Employees and Senior Management: Employee engagement and job satisfaction should not be something that HR professionals and their organizations measure once a year. They need to be built into an organization s day-to-day activities. Employee engagement and job satisfaction should be the shared responsibility of both employees and the organization. How can this be achieved? Two of the top five contributors to employee job satisfaction were relationship with immediate supervisor and communication between employees and senior. These two aspects were also high on employees list of engagement aspects. Clearly, employees value their relationship with, and they are looking for ways to make this relationship more effective, which, in turn, will likely increase employee satisfaction, engagement and productivity. Employers can build a bridge between employees and senior by training their line managers regularly and involving them in strategy meetings and activities. Doing so will enable line managers to better understand the organization s vision and share it with their direct reports. These managers can complete the information-sharing loop by sharing with senior feedback from the employees. Line managers who are encouraged to be open to what their employees say and then push this feedback up are key in ameliorating the communication gap. Employers can build a bridge between employees and senior by training their line managers regularly and involving them in strategy meetings and activities Employee Job Satisfaction and Engagement

11 Figure 2 Very Important Aspects of Employee Job Satisfaction Opportunities to use skills and abilities (1) 63% Job security (2) 61% Compensation/pay (3) 60% Communication between employees and senior (4) 57% Relationship with immediate supervisor (5) 54% Benefits (6) 53% Organization s financial stability (7) 52% The work itself (7) 52% Management s recognition of employee job performance (8) 50% Autonomy and independence (9) 48% Feeling safe in the work environment (10) 47% Overall corporate culture (10) 47% Flexibility to balance life and work issues (11) 46% Career advancement opportunities (12) 42% Relationships with co-workers (13) 40% Meaningfulness of job (14) 39% Organization s commitment to professional development (15) 36% Job-specific training (15) 36% Contribution of work to organization s business goals (16) 34% Career development opportunities (16) 34% Variety of work (17) 33% Organization s commitment to corporate social responsibility (18) 28% Paid training and tuition reimbursement programs (18) 28% Networking (19) 27% Organization s commitment to a diverse and inclusive workplace (19) 27% Organization s commitment to a green workplace (20) 17% Note: n = 600. Figure represents those who answered very important. Percentages are based on a scale where 1 = very unimportant and 4 = very important Employee Job Satisfaction and Engagement 7

12 Survey Results: Employee Job Satisfaction

13 Career Development Career development is an opportunity for employees to continually take part in more advanced or diverse activities (e.g., training, networking) that result in improving skills, gaining new skills, taking greater responsibility at work, improving their status and earning higher income. Employees rated only one of the factors in the career development category opportunities to use skills and abilities at work in the top five very important contributors to job satisfaction; in 2012, it was rated as the top aspect for the first time since Opportunities to Use Skills and Abilities Sixty-three percent of employees rated opportunities to use their skills and abilities at work as the most important contributor to their job satisfaction, displacing job security for the number one spot (see Table 1). This is the highest that this category has been since 2004, when it was first added to the list of aspects important to employee job satisfaction. Seventy-five percent of employees were satisfied (responded somewhat satisfied or very satisfied ) with this aspect. This level of satisfaction placed opportunities to use skills and abilities at work third on the list of factors contributing to employee engagement. 63% of employees rated opportunities to use their skills and abilities at work as the most important contributor to their job satisfaction, displacing job security for the number one spot. According to the September 2012 results of SHRM Leading Indicators of National Employment (LINE), 2 there has been an ongoing trend of steady job growth in both the manufacturing and service sectors. While the economy continues to recover, albeit slowly, employees may be feeling more secure about their jobs. This sense of job security may be leading them to look for opportunities within their organizations to demonstrate their skills and abilities to prepare themselves for career advancement within their organization or elsewhere. When employees feel that they are using their skills and contributing fully to the success of their organization, they are more satisfied with their jobs and more engaged. This element of job satisfaction appeared to be especially important to employees with college and post-graduate degrees compared with employees with a high school diploma (Table 9). This aspect was also a higher priority for employees in middle than for nonexempt employees Employee Job Satisfaction and Engagement 9

14 Figure 3 Importance of Opportunities to Uses Skills and Abilities 63% Career advancement was a higher priority for employees in middle than for those in positions. 32% 2% 3% Very unimportant Unimportant Important Very important (n = 600) Career Advancement Opportunities Within Organization As illustrated in Figure 4, 42% of employees reported that this factor was very important to job satisfaction. Career advancement opportunities within the organization have continued a gradual trend upward since 2007, when this aspect was at a low of 27%. The increased importance of career advancement opportunities could be attributed to employees feeling that they ve mastered the responsibilities of their current positions and therefore are looking for more challenging positions within their organizations. The increase in the importance of this aspect may also be related to employees uncertainty about the economy, making it more likely for them to desire advancement within their organization rather than taking the risk of moving to a new employer. Career advancement was a higher priority for employees in middle than for those in positions. Employees with some college education found this aspect to be more important than did employees with a high school diploma. This aspect was also more important to younger employees (age 47 and younger) than for employees years of age. These data are shown in Table 9. As this aspect continues to trend up in importance, organizations need to pay attention to employees satisfaction level with career advancement opportunities. Employees are not particularly satisfied; only 46% of employees said they were satisfied (18% were very satisfied and 28% were somewhat satisfied) with this aspect. Career advancement opportunities could become a critical aspect of employee engagement in the workplace. Employees who are using their skills and abilities in their work and contributing fully in their organization could become disillusioned if opportunities to advance in their career are not available within the organization. These employees will be more likely to look for opportunities outside of their organization as the economy improves. According to this study, 44% of employees indicated that they are likely to look for work outside their organization in the next 12 months, whereas in 2011, this percentage was 36%. HR professionals are in a position to help their organizations develop coaching or mentoring programs to promote knowledge sharing and internal networks between experienced and more junior employees. HR professionals also can identify positions for which succession planning is practical. These often include key positions, positions with direct impact on strategic practices and those with lengthy learning curves. HR can also be creative with the organization s compensation and rewards programs to motivate and retain top performers Employee Job Satisfaction and Engagement

15 Figure 4 Importance of Career Advancement Opportunities 40% 42% 15% 4% Very unimportant Unimportant Important Very important (n = 600) Organization s Commitment to Professional Development Professional development opportunities (e.g., attending training or conferences, obtaining certifications) are meant to develop or enhance employees skills and knowledge so that they can use this information in their current position, meet their professional and personal goals and build their résumé for future jobs. Figure 5 depicts the relationship between the organization s commitment to professional development and employee job satisfaction. While only 36% of employees rated this aspect as very important to job satisfaction, 54% of employees reported being satisfied with their organization s commitment to professional development. This aspect of job satisfaction was valued more by employees in middle- positions than by hourly employees. During the current recession, professional development was among programs affected by budget cuts. Though budgets are still lean, investing in the development of their employees will help organizations fill their mission-critical positions. With the ongoing economic recovery, organizations are reporting difficulty finding qualified candidates for their open positions, according to the September 2012 SHRM LINE. 3 In addition, a December 2011 SHRM survey showed that 23% of organizations believe that they are facing global competition for talent. 4 One way organizations can continue to make sure their employees grow and develop is to take advantage of web-based training, which is more cost-effective than face-to-face training such as seminars or conferences. Employees can be trained at their desks without incurring the travel-related cost of professional development. Figure 5 Importance of Organization s Commitment to Professional Development 50% 36% 4% 10% Very unimportant Unimportant Important Very important (n = 600) 2012 Employee Job Satisfaction and Engagement 11

16 Job-specific Training Employers may offer job-specific training to provide employees with the relevant skills to enable them to perform their duties efficiently. Job-specific training is also necessary to fill a newly hired employee s skills gap. The immediate application of skills acquired through such training may boost employee confidence and productivity. Similar to the organization s commitment to professional development, 36% of employees viewed job-specific training as very important to their job satisfaction (see Figure 6) and 57% were satisfied with it. There were no significant differences among employee demographic variables. Employees with some college education viewed career development opportunities as more important than did employees with a high school diploma. Figure 6 Importance of Job-specific Training 50% 36% 3% 12% Very unimportant Unimportant Important Very important (n = 600) Career Development Opportunities Through on-the-job learning experiences, cross-training opportunities, stretch goals and other mechanisms to use skills beyond what is required by their position, employees can enhance their skills and competencies. These prospects help employees determine the next step in their career, either within or outside the organization. One-third (34%) of employees indicated that career development was very important (see Figure 7), and 48% were satisfied with this aspect. In 2012, employees viewed career development as a less important contributor to job satisfaction compared with It was a higher priority for employees in large organizations (25,000 or more employees) compared with employees in smaller organizations (fewer than 100 employees). Employees with shorter job tenure (less than two years) were more concerned with career development than were employees employed at their organizations for 16 or more years. Employees with some college education viewed career development opportunities as more important than did employees with a high school diploma (Table 9). Figure 7 Importance of Career Development Opportunities 47% 34% 4% 15% Very unimportant Unimportant Important Very important (n = 600) Employee Job Satisfaction and Engagement

17 Paid Training and Tuition Reimbursement Programs Only 28% of employees believed paid training and tuition reimbursement programs were very important to employee job satisfaction (Figure 8), and 47% said they were satisfied with this aspect. Through paid training and tuition reimbursement programs, employers support employees who want to reach their career goals by continuing their education. In a 2012 SHRM study, many HR professionals reported that their organizations offered educational assistance to their employees: 61% offered undergraduate educational assistance and 58% offered graduate educational assistance. 5 Female employees deemed this aspect to be more important than did their male counterparts. Employees with some college education also placed more importance on this factor than did employees with post-graduate or high school education. In addition, this aspect was more important to employees in larger organizations (500 to 2,499 employees) compared with employees in smaller organizations (fewer than 100 employees), and black employees viewed this aspect as more important than white employees did (Table 9). Figure 8 Importance of Paid Training and Tuition Reimbursement Programs 43% 21% 28% 8% Very unimportant Unimportant Important Very important (n = 600) Networking Employees viewed networking as one of the least important contributors to their job satisfaction, as shown in Figure 9. Only 27% of employees said networking was very important to job satisfaction. However, networking was viewed as more important in 2012 than in 2004, when it was first added to the list of job satisfaction aspects. The upward trend of networking could be a result of improved technology and the use of social networking in the workplace through sites such as LinkedIn, Facebook and SHRM Connect. HR professionals in a SHRM study indicated that only 31% of organizations track employee use of social networking services on company-owned computers or company-owned handheld devices. 6 Networking may not be particularly important to employee satisfaction, but building alliances can be valuable when looking for job leads or clients. Through networking, employees can obtain career-related guidance and benefit from the experiences and perspectives of others. Fifty-three percent of employees reported their satisfaction with networking as a contributor to job satisfaction. Employees with some college education placed more importance on this aspect than did employees with a high school diploma, as did employees in middle- position compared with professional and nonexempt employees (Table 9) Employee Job Satisfaction and Engagement 13

18 Figure 9 Importance of Networking 46% 21% 27% 6% Very unimportant Unimportant Important Very important (n = 600) Employee Job Satisfaction and Engagement

19 Employee Relationship with Management The relationship an employee has with his or her supervisor is a central element to the employee s affiliation to the organization, and it has been argued that many employee behaviors are largely a function of the way they are managed by their supervisors. One of the components of a good relationship is effective communication. When there are open lines of communication (e.g., encouraging an open-door policy), supervisors can respond more effectively to the needs and problems of their employees. Effective communication from senior can provide the workforce with direction. In addition, s recognition of employees performance through praise (private or public), awards and incentives is a cost-effective way of increasing employee morale, productivity and competitiveness. As organizations emerge from the recession, it is important for the senior team to communicate effectively about the organization s business goals, policies and vision. Communication Between Employees and Senior Management As shown in Figure 10, 57% of employees reported that communication between employees and senior was very important to employee job satisfaction. This aspect has been in the list of top five contributors to employee job satisfaction five times since Among employees with tenure of 11 to 15 years, this aspect was rated first out of all aspects (Table 11). Figure 10 Importance of Communication Between Employees and Senior Management 57% 38% 2% 4% Very unimportant Unimportant Important Very important (n = 600) As organizations emerge from the recession, it is important for the senior team to communicate effectively about the organization s business goals, policies and vision. This will help actively engage employees, provide employees with direction and foster trust and respect. Frequently, employees are concerned about the repercussions of bringing forth suggestions and concerns to 2012 Employee Job Satisfaction and Engagement 15

20 . Employees need to be encouraged to do so without fear; otherwise, creativity and innovation may be stifled. Organizations use different methods to encourage feedback and communication between employees and senior for example, employee surveys, focus groups, town hall meetings and suggestion boxes. The relationship employees have with their supervisors is directly connected to their success and growth at work. Employees in middle- positions and nonexempt employees perceived this aspect to be more important than did professional employees (Table 9). Fifty-nine percent of employees indicated that they are satisfied with communication between employees and senior, suggesting that this may be an area for improvement in organizations. Relationship with Immediate Supervisor Employees rated their relationship with their immediate supervisor as more important to their job satisfaction than benefits. This is the third time employees rated this aspect among the top five contributors to job satisfaction (Tables 2 and 6). Figure 11 Importance of Relationship with Immediate Supervisor 40% 54% 2% 4% Very unimportant Unimportant Important Very important (n = 600) The relationship employees have with their supervisors is directly connected to their success and growth at work. Supervisors who develop a positive relationship with employees may be more likely to learn their employees strengths and weaknesses, making it easier for supervisors to use their employees talents for the good of the organization. Employees who have a favorable relationship with their supervisors a relationship in which they feel safe and supported may be more likely to go above and beyond what is required of them. They also may share with their supervisor job-related problems or even personal problems, which can be barriers to employee productivity. It is important that supervisors set clear expectations and provide feedback about work performance so as to avoid any potential frustrations. Nearly three-quarters (71%) of employees were satisfied with this aspect of job satisfaction. The relationship with one s immediate supervisor was cited as important more frequently by middle- employees than by professional and nonexempt employees (Table 9). Management s Recognition of Employee Job Performance Management s recognition of employee job performance is one of the ways that organizations use to keep employees satisfied and engaged. According to a 2012 SHRM/Globoforce poll, 76% of employers report that they have an employee rec Employee Job Satisfaction and Engagement

21 ognition program. 7 However, when employees were asked about the importance of s recognition of employee job performance, only 50% indicated that this aspect was very important to their job satisfaction (see Figure 12). What about employees satisfaction with this aspect? Employees may feel more committed to their organization if they believe that their efforts are valued. More than half (57%) of employees reported they were satisfied with s recognition of employee job performance. Acknowledging and rewarding employees job performance is important. Equally important are the behaviors that rewards, which manifest the norms and culture across the organization. For example, is rewarding competition instead of teamwork? Are managers that retain top performers recognized? Does the organization reward employees who adhere to organizational values and ethics over those who do not? There were some differences in the assessment of this contributor to job satisfaction among employee demographics. Employees who have been with the organization for two years or less were more likely to connect s recognition of employee job performance to their overall job satisfaction compared with more tenured (16 or more years) employees. Middle- and nonexempt employees deemed this aspect more important than did professional employees (Table 9). Autonomy and Independence Almost one-half (48%) of employees stated that autonomy and independence were very important job satisfaction factors (see Figure 13). Providing employees with increased freedom, flexibility and discretion to make decisions on the job (e.g., scheduling of work and determining how it is to be done) can give them a greater sense of responsibility for the outcomes of their work. Sixty-nine percent of employees were satisfied with their level of autonomy and independence. Employees in executive and middle- positions valued autonomy and independence more than employees in nonexempt positions did (Table 9). Autonomy and independence were rated as the fourth most important job satisfaction factor by executive-level employees (Table 14). Figure 12 Importance of Management s Recognition of Employee Job Performance 40% 50% 2% 7% Very unimportant Unimportant Important Very important (n = 600) 2012 Employee Job Satisfaction and Engagement 17

22 Figure 13 Importance of Autonomy and Independence 47% 48% More than half (57%) of employees reported they were satisfied with s recognition of employee job performance. 1% 5% Very unimportant Unimportant Important Very important (n = 600) Employee Job Satisfaction and Engagement

23 Expert Q&A Bruce Tulgan, founder, RainmakerThinking, and author of Managing the Generation Mix Many workplaces today include members of four or five different generations. What advantages and potential challenges does this scenario present for HR professionals? There has always been generational diversity in the workplace. But nowadays, there are three things that are different about generational diversity. Number one: Due to the growing age bubble on one end and the youth bubble on the other end, all of the ordinary human capital issues that track with life and career stage issues are exaggerated. On the oldest end of the spectrum, the key issues to grapple with are flexible retention, knowledge transfer and succession planning. The advantage is that there is a tremendous amount of skill, knowledge, wisdom, institutional memory, relationships and maybe the last vestiges of the old-fashioned work ethic that organizations can try to mine for value while the older, more experienced people are still active. The disadvantage, of course, is that all that value is going to retire at some point. Overall, the key advantages in the youth bubble are the energy and perspective of the new, young talent, while the challenge is recruiting, leveraging and retaining them. On the youngest end of the spectrum, the primary issues are attraction, selection, onboarding, up-to-speed training, performance and a different kind of retention issue, what we call the development investment paradox: An employer must develop new, young talent, but the more you invest in developing them, the more you have to worry that they will sell your investment in the free market. Overall, the key advantages in the youth bubble are the energy and perspective of the new, young talent, while the challenge is recruiting, leveraging and retaining them Employee Job Satisfaction and Engagement 19

24 Meanwhile, in the middle of the spectrum, hiding below the radar, is the under- problem. So much of the supervisory burden falls on mid-level leaders, who tend to be in the middle of the generational spectrum, and for numerous reasons there is an epidemic of under- coming from mid-level leaders down the chain of command, resulting in a cascade of problems. The key opportunity for HR leaders is to zero in on the under problem and help mid-level leaders get back to the basics of strong, highly engaged. The key opportunity for HR leaders is to zero in on the under- problem and help mid-level leaders get back to the basics of strong, highly engaged. Number two: Since the logic of seniority has been on the decline in the workplace, seniority alone has not been sorting out age difference as a cause of interpersonal issues among co-workers and between employees and supervisors. It used to be that the older, more experienced people were typically senior to the younger, less experienced people, and this did a lot of the work of sorting out age difference as a source of issues. Of course, everyone wants a custom deal nowadays. Nobody wants to pay their dues and climb the ladder the old-fashioned way. The advantage is that people of all ages can now work harder, smarter, faster and better, and try to compete for the special rewards they want. The challenge is that the younger, less experienced people often lack context, are in a hurry for responsibility and reward, and are impatiently resentful of the older, more experienced people in their way. Meanwhile, the older, more experienced people often resent the young upstarts for not being willing to pay their dues and wait their turn. This can be particularly challenging when the younger, less experienced people are in positions of greater authority than some of the older, more experienced people. (The military has dealt with this challenge for a long time, with young second lieutenants who outrank older, much more experienced NCOs. For this reason, I sometimes call this the young lieutenant problem. ) Number three: Because we are living through the most profound changes in our economy, society and workplace since the Industrial Revolution, all of the ordinary advantages and challenges that normally come along with any diversity issue are intensified and also confused because of the temporal nature of generational issues. Everybody is dealing with tremendous change and uncertainty. Globalization and technology are going through historic iterations multiple times in a decade. Institutions are in a state of constant flux. Information is in a constantly growing tidal wave. Immediacy is accelerating with no end in sight. And individuals are constantly rediscovering the need for self-reliance. The oldest, most experienced people feel over and over again like the rug is being pulled out from under them. The youngest, least experienced people have never known it any other way. Instead of the older folks knowing it all, everything is always new. The obsolescence curve has become so steep that the learning curve for all is constant all the time, thus removing many of the advantages of age and experience. Meanwhile, the old-fashioned basics like poise, judgment and wisdom remain the kind of knowledge on which the learning curve cannot be accelerated, and yet many younger, less experienced people simply cannot be made to appreciate. As a result, it is more important that we address some of the basic diversity issue components of generational difference: We need to help folks better understand where people of different generations are coming from and where they are headed, learn to better appreciate those differences, and learn to leverage them Employee Job Satisfaction and Engagement

25 Job security and compensation are traditionally among the most frequently cited factors for employees job satisfaction. What do workers from different generations value more (or less) when determining their happiness on the job? Among those of all generations, most workers have in common a growing sense that their employment relationships are primarily transactional in nature. The older Boomers sometimes have an uneasiness admitting that money (as opposed to mission or professional commitment) is the primary quid pro quo in the employment relationship. The younger the person, the less likely they are to manifest that uneasiness. Less experienced workers are least likely to believe any claims or offers of job security. On the flip side, the younger, less experienced workers Generation Z and Generation Y are least likely to believe any claims or offers of job security. Boomers may be the ones who have been burned by offers or claims of longerterm security, but they still want to believe when such offers or claims are made to them. To Gen Yers and Gen Zers, job security is not a meaningful concept. What is more, security and long-term employment are not part of the same equation. For people of all ages, increasingly, a much more meaningful concept is career security, and that comes from cutting-edge technical skills, highly developed transferable skills, relationships with decision makers, and tangible results that prove an individual s ability to add value. Beyond that, it should be noted that the older the employee, our research shows, the more likely the individual is to think that financial compensation should align with seniority and experience. The younger the employee, the more likely he or she is to think that financial compensation should align with short-term measures of productivity and quality or value of goods/services in the marketplace. When it comes to rewards determining happiness, outside of compensation and security, we find that people of all generations tend to cite most often the same five nonfinancial conditions of work: schedule, relationships, task choice, learning opportunities and location (or work space). Where we see generational differences on this, in our latest research, is as follows: First, the younger the person, the more likely he or she is to rank learning opportunities and relationships at work higher. The older the person, the more likely the employee is to rank task choice higher. Second, the younger the person, the more likely he or she is to want variable arrangements in some or all of these factors. The older the person, the more likely the employee is to want fixed arrangements. Third, the younger the person, the more likely he or she is to want greater control of these factors tied to performance measures. The older the person, the more likely the employee is to accept less control of these factors, but control not tied to performance measures. Financial difficulties connected to the Great Recession are partly to blame for older workers delaying their retirement and remaining in the labor force. Do you think this is a temporary trend, or do you see working longer as the new normal, and why? Of course, economic conditions fluctuate, although the current economic downturn has been deeper and more protracted than any since the 1930s. This comes at a different life and career stage for each generation. This sort of accident of history and at what life and career stage it hits is precisely what 2012 Employee Job Satisfaction and Engagement 21

26 makes for generational differences. So it is significant that the Great Recession is hitting around retirement age for older workers. Indeed, many older people will work to later ages than they otherwise would for purely financial reasons. This may or may not be temporary in and of itself. If we are at the beginning of a long-term economic decline, it may be that private and public resources are simply not sufficient to support retirement at ages as young as we have come to expect. Add to this presumably increasing life spans, shifting perspective on age, as well as protracted time frames for resource amortization, and the numbers alone could make working longer a longer-term trend. My advice to anyone of any age trying to break into a new career right now is...get really good at managing yourself. Beyond the economics, there are two additional factors to consider, both of which suggest a longer-term trend. First, many organizations are expanding flexible part-time employment opportunities as a way to retain older and more experienced employees, especially those with significant skill, knowledge and experience and, most of all, long-time employees with important institutional memory and relationships. As this sort of flexible retention strategy is on the rise, it figures that an increased number of older people will take advantage of these opportunities to move up their retirement ages. Second, many Boomers in the older ( birth years) and younger ( ) cohorts talk explicitly or implicitly in our interviews about reinventing retirement. There is a significant majority who cite an intention to try to career downshift in their current role in their current organization but continue to work, or to leave their current employer and then begin a part-time or full-time career endeavor or pursue as a career endeavor an interest that has previously been an avocation or interest. On the other end of the spectrum, young adults today are not only facing limited job opportunities, but lower compensation in many industries compared with the recent past. What advice would you give to younger workers who are trying to break into a new career? Again, for Generation Z, it will be a generation defining accident of history to live through the Great Recession at the opening stages of their working lives. What makes it particularly challenging for the youngest, least experienced people right now is that by virtue of their life stage, by definition, they have less experience, context and wisdom. These are the elements for which one cannot accelerate the learning curve. On the other hand, they have their whole lives ahead of them. Plenty of time is what they have that their older colleagues, by definition, do not have. My advice to younger people in particular is to acknowledge and appreciate and take account of those advantages and disadvantages of youth. My advice to anyone of any age trying to break into a new career right now is, first, the first person you have to manage every day is yourself. Get really good at managing yourself. And then, second, be really good at managing complex shifting authority relationships In other words, get really good at managing your bosses. Step one: Once you really understand your role in any work context, then your number one responsibility is to play that role to the absolute best of your ability. That means contribute your very best and put in more time and effort no matter how lowly, mundane or repetitive your tasks and responsibilities might seem in relation to the overall mission of your organization. Attitude matters a lot. Effort, too, matters a lot. Be high quality, high integrity and adaptable. Approach every relationship by staying focused on what Employee Job Satisfaction and Engagement

27 you have to offer the other person. Take personal responsibility for everything you say and do, hold yourself accountable and never make excuses. Don t take yourself too seriously, but always take your commitments and responsibilities seriously. Extend personal vulnerability, but never undermine your own credibility. Attitude matters a lot. Effort, too, matters a lot. Listen carefully. Exhibit respect and kindness. Celebrate the success of others. Be on time, or a little bit early. Don t take long breaks. Don t leave early, and even stay a little late sometimes. Underpromise and overdeliver. Don t badmouth others and try not to speak of others unless they are present. Keep your word. Keep confidences. Don t keep other people waiting. Practice oldfashioned good manners. Get lots of work done very well, very fast, all day long! Be a problem solver, not a complainer. Once you get really good at managing yourself, then step two is to get really good at managing your bosses. That means creating highly engaged relationships with every single manager with whom you need to work for any period of time. That means you need to have an ongoing dialogue with every boss about exactly what that boss needs and expects from you. What are the concrete actions within your control on which you will be measured and rewarded? You need to know, every step of the way, exactly what you are supposed to be doing and how you are supposed to be doing it. Then you need to get regular, honest feedback every step of the way. If you get coursecorrecting feedback, double and triple check to make sure you know exactly what you are supposed to be doing and exactly how you are supposed to be doing it. Every time you get course-correcting feedback, you will need to triple check to make sure you are correcting in the right direction Employee Job Satisfaction and Engagement 23

28 Compensation and Benefits To attract the best employees, companies must research the market in their area as well as their industry to ensure that their total rewards package salaries and benefits is in line with their talent strategy. Benefits for employees can include a wide array of perks and other offerings; however, of primary importance to many employees are health care, paid time off, retirement and family-friendly benefits. Compensation/Pay In 2012, six out of 10 employees indicated that compensation was very important to their overall job satisfaction, putting it only three percentage points below opportunities to use skills and abilities and only one percentage point below job security. Compensation, along with job security, has consistently remained on the list of the top five job satisfaction factors most important to employees. Compensation was rated the most important factor by employees with three to five years of tenure, 16 or more years of tenure and employees in organization with 500 to 2,499 employees. As the economic climate continues to warm up and hiring rates increase, attractive compensation packages will be one of the strategies organizations competing for talent will use to recruit and retain the best employees. The SHRM LINE report for September 2012 indicated that in August 2012 fewer manufacturers increased compensation for new hires compared with August How do organizations retain the employees who helped them weather the recession? Organizations might not be financially ready to significantly increase their salary budget, but the best organizations take the time to find creative ways to reward and engage their employees. Compensation was rated as the most important factor by employees with three to five years of tenure, 16 or more years of tenure and employees in organization with 500 to 2,499 employees (Table 9). Fifty-eight percent of employees were satisfied with compensation/pay overall. When employees were asked if they had received a pay raise (e.g., merit increase, cost of living increase) within the last 12 months, 50% reported receiving a raise (Figure 15) and 39% indicated that they received bonus. These numbers are higher than in 2011, when 45% of employees reported receiving a raise and 35% indicated that they received a bonus Employee Job Satisfaction and Engagement