WHAT PART OF EMPLOYEE ENGAGEMENT DON T YOU UNDERSTAND:

Transcription

1 WHAT PART OF EMPLOYEE ENGAGEMENT DON T YOU UNDERSTAND: A CASE STUDY IN PARTNERING FOR PERFORMANCE TO INCREASE ORGANISATIONAL EFFECTIVENESS Johan Olwagen & Lydia Mdluli Presented at the 16 th Annual SIOPSA Conference: Partnering for Performance 22 July 2014

2 INTRODUCTION

3 INTRODUCTION The conference theme is particularly appropriate when considering the need for organisational change and the creation of a culture that will support the quest for sustainable performance To achieve this, executives need empirical data of the current state of the business and direction on what can be done, to drive this performance and growth One solution is to assess the current organisational culture and how it ensures employee engagement in the quest for performance and, to then create interventions that drive the required change Change efforts fail when companies do not anchoring change in the culture of the organisation, (Kotter, 2012) and when there is a lack of post survey action,(ervine, 2013) This paper highlights how the authors implemented an end to end solution, to ensure the findings of an employee survey were acted on and that the required changes were implemented throughout the organisation

4 DEFINITIONS

5 EMPLOYEE ENGAGEMENT: DEFINITIONS Kahn (1990) provided the first formal definition of employee engagement: [T]he harnessing of organisation members' selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances."

6 WHAT IS EMPLOYEE ENGAGEMENT? An engaged employee is a person who is fully involved in, and enthusiastic about, his or her work Truly engaged employees are: Attracted to, and inspired by their work ( I want to do this ); Committed ( I am dedicated to the success of what I am doing ); Fascinated ( I love what I am doing ) Engaged employees are willing to invest the discretionary effort exceeding duty s call to see that the organization succeeds Engaged employees are those who are emotionally connected to the organisation and cognitively vigilant Rutledge (2006)

7 WHAT IS EMPLOYEE ENGEGAMENT? A positive, fulfilling, work related state of mind, most commonly characterised by vigour, dedication and absorption Schaufeli, Salanova, González Romá & Bakker (2002)

8 WORK ENGAGEMENT CHARACTERISED BY Vigor: High levels of energy and mental resilience while working The willingness to invest effort in one s work Persistence even in the face of difficulties Dedication: Being strongly involved in one's work Experiencing a sense of significance, enthusiasm, inspiration, pride, and challenge Absorption: Being fully concentrated and happily engrossed in one s work, whereby time passes quickly and one has difficulties with detaching oneself from work

9 THE FOUR ENABLERS OF ENGAGEMENT 1. Visible, empowering leadership providing a strong strategic narrative about the organisation, where it s come from and where it s going 2. Engaging managers who focus their people and give them scope, treat their people as individuals and coach and stretch their people 3. There is employee voice throughout the organisations, for reinforcing and challenging views, between functions and externally, employees are seen as central to the solution 4. There is organisational integrity the values on the wall are reflected in day to day behaviours. There is no say do gap

10 WHAT S THE CRISIS?

11 WHAT S THE CRISIS? The Gallup Management Journal Employment Engagement Index: U.S. 29% of employees are actively engaged 54% of employees are not engaged 17% of employees are actively disengaged

12 WHAT S THE CRISIS? Towers Perrin 2005 Global Workforce Survey Involved ± people working full-time for large and midsized firms: Only 14% worldwide highly engaged in their job 62% moderately engaged at best 24% reported that they are actively disengaged. On a country-by-country basis o E.g., Mexico and Brazil highest % engaged employees o Japan and Italy largest % disengaged employees. Employee engagement has relatively little to do with macro-economic conditions

13 WHAT S THE CRISIS? Susan Sorenson and Keri Garman (2013): Baby Boomers and Gen X employees are distinctly less engaged than others -- and they make up 88% of the U.S. workforce

14 SA PICTURE: 80% of SA employees: motivation and performance would be better if more engaged 1in 5 disinterested in job 22% unsure what to focus on 4.4/10 not actively contributing 60% of companies struggle with change management 1 st ANNUAL STATE OF EMPLOYEE ENGAGEMENT REPORT: 2014

15 SA PICTURE: 58% don t have opportunity to contribute to decisions affecting them 67% want managers to communicate and lead better 75% would welcome increased communication of value even after hours 66% want managers to inspire them more 1 st ANNUAL STATE OF EMPLOYEE ENGAGEMENT REPORT: 2014

16 IMPACT OF EMPLOYEE ENGAGEMENT

17 IMPACT OF EMPLOYEE ENGAGEMENT? Employee engagement also affects the mindset of people. Engaged employees believe that they can make a difference in the organizations they work for. Confidence in the knowledge, skills, and abilities that people possess (in both themselves and others) is a powerful predictor of behavior and subsequent performance. 84% of highly engaged employees believe they can positively impact the quality of their organization s products, compared with only 31% of the disengaged. Kenexa, 2009

18 IMPACT OF EMPLOYEE ENGAGEMENT? 72% of highly engaged employees believe they can positively affect customer service, versus 27% of the disengaged 68% of highly engaged employees believe they can positively impact costs in their job or unit, compared with just 19% of the disengaged Companies that do a better job of engaging their employees do outperform their competition Employee engagement can not only make a real difference, it can set the great organizations apart from the merely good ones

19 IMPACT OF EMPLOYEE ENGAGEMENT?

20 COMMON PITFALLS OF EMPLOYEE ENGAGEMENT SURVEY EFFORTS

21 COMMON PITFALLS OF ENGAGEMENT SURVEYS 1. Annual surveys do no capture specifics 2. Even after the survey, you don t know what the employees meant exactly and hence not sure what kind of improvements you need to make as an organization 3. Annual surveys are too late to prevent people from leaving, increase productivity and engagement 4. Action planning is a lengthy process which can take months and even overlap with the next annual survey which can make things even worse Source: annual employee engagement surveys are ineffective/

22 COMMON PITFALLS OF ENGAGEMENT SURVEYS 5. Implementation of tasks needs to be monitored and communicated which requires additional resources 6. The whole process of conducting the surveys, action planning and implementation is expensive and resource intensive 7. Most importantly managers have no incentive to implement tasks based on action planning 8. If action is not taken, employees might become more dis engaged and might loose trust in this process Source: annual employee engagement surveys are ineffective/

23 CONSEQUENCES OF ENGAGEMENT

24 THE CONSEQUENCES OF ENGAGEMENT Palmer 2013

25 METHODOLOGY & MEASURES

26 METHODOLOGY & MEASURES An Organisational Effectiveness and Employee Engagement Survey was sent electronically to 5,500 employees at all levels in the organisation In the survey, employee engagement was defined as: the collective level of intellectual and emotional commitment employees have toward their work and organisation Palmer (2013)

27 METHODOLOGY & MEASURES Employee Engagement was measured by asking employees to indicate the extent to which they: Praise their organisation to others Perform beyond what is expected of them Persist in the face of adversity Perfect what they do Absolutely Strongly Moderately Slightly Slightly Moderately Strongly Absolutely Disagree Disagree Disagree Disagree Agree Agree Agree Agree

28 METHODOLOGY & MEASURES The tipping point where there is a critical mass of engaged employees positively impacting the performance and culture of the business was set as an Engagement Score of 60% or higher Companies with an engagement score of 60% or higher have an average five year shareholder return of more than 20%, while companies with engagement scores of less than 40% usually have a negative return of 10% to shareholders (source: Gallup) Disengagement at a 10% level was deemed to be detrimental

29 METHODOLOGY & MEASURES The survey provides information on four score ranges: Engaged Nearly Engaged Not Engaged Disengaged For ease of interpretation by management and employees these were reduced to three levels and reflecting language used in the Organisation: Engaged (True Believers) Nearly Engaged (Agnostics) Disengaged (Disaffected)

30 METHODOLOGY & MEASURES Scores on the questionnaire are collated and reflected in the Example below

31 METHODOLOGY & MEASURES To identify what can be done to improve performance and engagement, the survey also measured a number of organisational effectiveness factors Correlations between scores on these factors and engagement scores provide an empirical view on how to improve performance and levels of engagement in your business

32 METHODOLOGY & MEASURES A total of 72 items measured employees' views on the following: Role Clarity Performance Management Direct Manager Remuneration Interdepartmental Collaboration Continuous Improvement / Innovation Executive Leadership Career Development and Opportunities Role Enjoyment Working Conditions Strategy Communication Learning and Development Vision and Mission Dealing With Change Responsibility and Ethics Human Resources Equality The response scale used for each item was as follows: Strongly Disagree Disagree Agree Strongly Agree Don't Know or Not Applicable

33 METHODOLOGY & MEASURES The results were split to provide information at the following levels: Organisation wide Divisional Regional Departmental All in all 94 areas Further breakdowns included: Gender Age: (<21; 21 30; 31 40; 41 50; 51 60; 61+) Job Level Employment Status (Temporary; Full Time) Tenure (Yearly Breakdown) Race

34 METHODOLOGY & MEASURES Survey Launch Bi Weekly communication from CEO Results sharing Communicatio n to EXCO Communicatio n from CEO to all Communicatio n to MANCO Communicatio n to staff in the various business units Action Planning Organisational Business Unit Specific Focus group sessions Action Planning workshops Responsibility/ Accountability assignment of roles Sustainability reporting Organisational ly: Scorecard Business Unit: Built into KRA Implementation Action Plans implemented Review Ongoing review sessions to monitor progress Re Survey To monitor shifts & reevaluate

35 METHODOLOGY & MEASURES SURVEY LAUNCH Bi Weekly communication from CEO

36 FINDINGS

37 EMPLOYEE ENGAGGEMENT IS SERIOUS BUSINESS 2013 SUSTAINABILITY REPORT

38 2011 MAIN CHALLENGES The issues raised through survey and focus group sessions pertaining to Direct Managers are: Autocratic leadership style Lack of support form manager when not meeting the expected performance rating Lack of respect. People spoken to as though in a manner that is not respectful Ineffective communication. Delayed communication on new processes that impact the work one does, or communication that is not clear, and when clarity is requested managers seem not to have answers, instead they revert to Do as I tell you Micro management. Managers who work levels below their own, thereby interfering unnecessary on what their staff is to do

39 2013 PICTURE main challenges from the Bank shifted significantly from the issues relating to Direct Manager to issues pertaining to: Equality and Fairness Change Management This was as a result of the main business units which constitute 75.6% of the total African Bank workforce going through the process as per framework presented earlier

40 2013 PICTURE... The next slides shows the comparison of some of the regions in the business unit which constituted 55.5% of the total African Bank workforce against business performance. Region A (highlighted) embarked in the entire process, which resulted in the employee engagement results in 2013 improving significantly, and as such can be linked to its overall performance in the business unit as compared to the rest of the other regions.

41 FINDINGS: & INTERVENTIONS Engagement Nearly Disengaged Distribution Engaged True Believer African Bank 9% 32% 59% Business Unit A 8% 34% 58% Region A 6% 31% 63% Region B 10% 36% 55% Region D 10% 34% 56%

42 FINDINGS: & INTERVENTIONS PRAISE PERSIST PERFORM PERFECT Area Absolutely / Strongly Agree Moderately / Slightly Agree Moderately / Slightly Disagree Absolutely / Strongly Disagree Absolutely / Strongly Agree Moderately / Slightly Agree Moderately / Slightly Disagree Absolutely / Strongly Disagree Absolutely / Strongly Agree Moderately / Slightly Agree Moderately / Slightly Disagree Absolutely / Strongly Disagree Absolutely / Strongly Agree Moderately / Slightly Agree Moderately / Slightly Disagree Absolutely / Strongly Disagree AB 60% 27% 7% 5% 46% 35% 14% 5% 77% 18% 3% 2% 77% 17% 3% 3% BU A 59% 28% 8% 5% 45% 35% 15% 5% 76% 19% 3% 2% 77% 17% 3% 2% Region A Region B Region D 64% 25% 7% 4% 52% 33% 11% 5% 80% 17% 2% 1% 82% 14% 2% 2% 56% 29% 9% 6% 42% 37% 15% 5% 76% 19% 3% 2% 75% 18% 4% 3% 58% 28% 9% 4% 45% 35% 16% 4% 71% 23% 5% 2% 70% 22% 4% 3%

43 Drivers of Organisational Effectiveness Region A: Direct Manager

44 Drivers of Organisational Effectiveness (Cont) Region A: Role Enjoyment

45 INTERVENTIONS

46 INTERVENTIONS RESULTS SHARING Communication to EXCO Communication from CEO to all Communication to MANCO Communication to staff in the various business units

47 INTERVENTIONS ACTION PLANNING Organisational Business Unit Specific Focus group sessions Action Planning workshops

48 INTERVENTIONS 1. Cascading Sharing of Data The data was shared with executives Then with all employees in their natural groupings. 2. Focus Groups Management and employees were supported to interpret the data appropriately and to generate solutions 3. Synthesis These solutions were integrated with the Business and Human Capital strategies

49 INTERVENTIONS 4. Design of Interventions Interventions aimed at ensuring employee involvement and engagement Designed with line management 5. Interventions Included: Executive road shows Buzz sessions throughout the organisation Supervisory skill development programmes Pre employment assessment centres (to ensure people would fit with the organisational culture) Academic qualifications for those already in the organisation Experiential skill development

50 INTERVENTIONS 5. Interventions Included (Cont.): Coaching Mentoring programmes Flexible working hours Creating permanent roles Career paths Job shadowing opportunities

51 INTERVENTIONS RESPONSIBILITY/ ACCOUNTABILITY ASSIGNMENT OF ROLES Sustainability reporting Organisationally: Scorecard Business Unit: Built into KRA

52 INTERVENTIONS IMPLEMENTATION Action Plans implemented

53 INTERVENTIONS REVIEW Ongoing review sessions to monitor progress

54 METHODOLOGY & MEASURES RE SURVEY To monitor shifts & re evaluate

55 CONCLUSIONS

56 MITIGATING THE COMMON PITFALLS OF EMPLOYEE ENGAGEMENT SURVEYS: THE AFRICAN BANK WAY NEGATIVE SIDE Annual surveys do no capture specifics Even after the survey, you don t know what the employees meant exactly and hence not sure what kind of improvements you need to make as an organization MITIGATION STRATEGY The GENOS survey is very specific. Apart from the value creating employee engagement factors, it also offers engagement drivers specific to the organisational objectives. As such the outcomes of the survey can be further drilled down to the drivers Over and above the engagement drivers from the survey, focus group sessions are facilitated for the employees where necessary to get to the root causes

57 MITIGATING THE COMMON PITFALLS OF EMPLOYEE ENGAGEMENT SURVEYS: THE AFRICAN BANK WAY NEGATIVE SIDE Annual surveys are too late to prevent people from leaving, increase productivity and engagement Action planning is a lengthy process which can take months and even overlap with the next annual survey which can make things even worse MITIGATION STRATEGY The survey used has statements that provide insight on the retention risks of people, as such the action plans that follow are tailored to address the identified risks Because the whole process is insourced, action planning workshops take at most a day to facilitate, with focus on identifying quick wins and the 5 most burning challenges whose implementation will not overlap with the next survey roll out, this challenge becomes mitigated

58 MITIGATING THE COMMON PITFALLS OF EMPLOYEE ENGAGEMENT SURVEYS: THE AFRICAN BANK WAY NEGATIVE SIDE Implementation of tasks needs to be monitored and communicated which requires additional resources MITIGATION STRATEGY Additional resources come from the team members of the department, who are assigned tasks coming out of the action planning sessions, and are mandatedtoreportonprogressona monthly basis at the management meetings. The reason to use team members is to drive involvement and accountability from all so that this is not viewed as a management intervention. It is actually part of engaging the people further. They remain accountable to implementation of the agreed upon action plans

59 MITIGATING THE COMMON PITFALLS OF EMPLOYEE ENGAGEMENT SURVEYS: THE AFRICAN BANK WAY NEGATIVE SIDE The whole process of conducting the surveys, action planning and implementation is expensive and resource intensive Most importantly managers have no incentive to implement tasks based on action planning MITIGATION STRATEGY This is done in house, and the monitoring of action plans is management responsibility in the respective business units, and accounted for at EXCO level There is no direct incentive linked to this, however, the target engagement score is built into the company s scorecard which impacts the incentive structure, same is cascaded down to business unit level

60 MITIGATING THE COMMON PITFALLS OF EMPLOYEE ENGAGEMENT SURVEYS: THE AFRICAN BANK WAY NEGATIVE SIDE If action is not taken, employees might become more disengaged and might loose trust in this process. MITIGATION STRATEGY Because engagement scores are built into the Investor Relations and Sustainability reports, action planning happens with plans having to be implemented as there is a bigger impact on the organisation s strategy and its sustainability.

61 VALUE PROPOSITION/CONCLUSION 1. Business Units that followed the entire process have shown a significant improvement in the engagement of staff 2. A Business Unit that is at the customer interface (profit generating) which has shown an increase in the engagement of the staff, has also shown an improvement on performance in all of the three areas mentioned below: Customer Service Minimum 10% improvement on the customer service measures Error Rate Decrease in error rate to below 3% against a general standard of 5%. This translates into a decrease in losses for the Bank Sales Increase in sales performance of 10% above target

62 VALUE PROPOSITION/CONCLUSION It is incumbent upon Human Capital to prove that they are business strategic partners especially in the light of Charan s, statement that CEO s across the globewhoaredisappointedintheirhrpeople.theywouldliketobeabletouse their CHROs the way they use their CFOs as sounding boards and trusted partners and rely on their skills in linking people and numbers to diagnose weaknesses and strengths in the organization, find the right fit between employees and jobs, and advise on the talent implications of the company s strategy (Charan, July 2014)

63 VALUE PROPOSITION/CONCLUSION Through the process followed an Employee Engagement Survey exercise becomes an Employee/Management Engagement exercise throughout. Process beats event any day Engagement of staff leads to tangible business results and impacts on business performance measures People support that which they participate in To ensure business success there has to be alignment between business goals and delivery as much as there should be attunement with the hearts and minds of people