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Culture, Engagement & Performance

  1. Culture & Engagement Best Practice Review 2013
  2. Catalysts In Creating High Performance, High Engagement Organisations Through Developing Leaders, Building Capacity, And Leveraging Talent Experienced team 2
  3. The Link Between Engagement And Culture Two levels of employee engagement Engagement Engagement is the emotional and intellectual commitment of an individual or group to build and sustain strong business performance. Culture The behaviours and beliefs as exhibited by the stated and unstated rules and expectations, prevailing values, norms, behaviours and systems that define an organization. Created and maintained by leadership actions, operating systems, and processes that influence employee behaviours. Deeply embedded and slow to change, as it involves fundamental human values. Adapted from: Engagement and Culture: Engaging Talent in Turbulent Times – Hewitt 2009 Values Values are deeply rooted ideals and beliefs that have a major influence on how individuals approach work and make decisions. Individual values - expressed through behaviour Organisation values – reflected through systems and processes. Values shape corporate culture, which defines an organization’s competitive advantage in terms of being resilient and adaptive; in attracting and keeping talented people; and in building and sustaining high performance. 3
  4. Organizational Culture & Engagement – the link Organizational Culture Individual Engagement Organizational Construct Individual Construct How they experience & perceive the organization How they feel about themselves and their work Predicts firm performance Predicts individual performance Organizational Culture Firm Performance Engagement Individual Performance Bottom 10 Cultures overall Engagement Factor = 11 th Percentile Top 10 Cultures Overall Engagement Factor = 83 rd Percentile Adapted from Denison’s Best Practice Forum 2011 4
  5. 5 The Denison Model Of A High-performance Culture Adapted from Denison’s Best Practice Forum 2011
  6. Engagement 2013
  7. Background The research information in these engagement studies emanated from Meta Analysis What is META-ANALYSIS Meta-analysis attempts to apply to a collection of studies the same methodological rigor and statistical precision ordinarily found in primary research. In a meta-analysis, the collection of studies test the same conceptual hypothesis, but may do so using a wide variety of methods, measures, sample, and settings. The challenge that meta-analysis answers is to provide a way to combine the seemingly disparate studies to provide a convincing overall test of the hypothesis and to explore its moderators. 7
  8. Outcomes of Engagement Engaged employees …. • Gallup, 2003, cited in Melcrum (2005), Employee Engagement: How to Build A High Performance Workforce • CBI-AXA (2007), Annual Absence and Labour Turnover Survey • Right Management (2006), Measuring True Employee Engagement, A CIPD Report • Corporate Leadership Council, Corporate Executive Board (2004)’Driving Performance and Retention through • Employee Engagement: a quantitative analysis of effective engagement strategies’ • IIpsos MORI/Improvement and Development Agency (2006). Lessons in Leadership Take an average of 2.69 sick days per year; the disengaged take 6.19 - costs the UK economy £13.4bn a year 70 % indicate they have a good understanding of how to meet customer needs; vs. 17 % of non- engaged 87 % less likely to leave the organisation than the disengaged. The cost of loss equal to annual salary Advocate their company or organisation – 67 % against only 3 % of the disengaged. Higher performing organisations have much better results in factors such as being informed and consulted, having confidence in senior managers and understanding the overall objectives 8
  9. Employee Engagement And Links To Performance – Studies The Corporate Leadership Council reported that engaged organisations grew profits as much as 3 x faster than their competitors. They report that highly engaged organisations have the potential to reduce staff turnover by 87 % and improve performance by 20 %. A Watson Wyatt study of 115 companies suggested that a company with highly engaged employees achieves a financial performance 4 x greater than companies with poor engagement. They also reported in 2008/9 that the highly engaged are more than 2 x as likely to be top performers – almost 60 % of them exceed or far exceed expectations for performance. Moreover the highly engaged missed 43 % fewer days of work due to illness. The Institute of Work Psychology at Sheffield University in 2001 demonstrated that among manufacturing companies in their study, people management practices were a better predictor of company performance than strategy, technology, research and development. PricewaterhouseCoopers, who use staff and customer engagement levels as one of their four Key Performance Indicators (KPIs) have found a strong correlation between highly engaged staff and client satisfaction. Shifting levels of employee engagement upwards also correlates with improved performance. For example, Gallup research for a UK retailer with 174 stores in a study over two years concluded that stores that improved engagement year on year grew their profits by 3.8 %. Stores that did not improve their engagement saw their profits decrease by 2 %. Companies in the Best Companies to Work For in the period 2004 – 2008 increased their turn-over by 94 % and their profits by 315%. Gallup found that engagement levels can be predictors of sickness absence, with more highly engaged employees taking an average of 2.7 days per year, compared with disengaged employees taking an average of 6.2 days per year. Development Dimension International (DDI) reported that in a Fortune 100 manufacturing company, turnover in low engagement teams averaged 14.5 %, compared with 4.8 % in high engagement teams. Absenteeism in low engagement teams hovered around 8 %, but was down to 4.1 % in high engagement teams. Quality errors were significantly higher for poorly engaged teams. Corporate leadership Council (CLC)’s 2004 Driving Performance and Retention through Employee Engagement report, found that companies with above average employee commitment were in 71 % of cases achieving above average company performance for their sectors. Companies with below average employee commitment found only 40 % of their organisations achieving above average company performance. The Chartered Management Institute Quality of Working Life 2007 research programme found a significant association and influence between employee engagement and innovation Towers Perrin found that broadly 75% of the highly engaged believe they can impact costs, quality and customer service; and only 25 % of the disengaged believe they can. Hewitt reported that companies with a greater than 10 % profit growth had 39 % more engaged employees and 45 % fewer disengaged employees than those with less than 10 % growth. 9
  10. Employee Engagement - The Bad News 10 13% 11% The Agnostics 76% 11% Highly Committed The True BelieversThe Disaffected 13% Highly Uncommitted 76% “up for grabs”, neither fully committed or uncommitted Strong emotional or rational non- commitment Poorer employees who put in minimal effort Have varying points of commitment & non- commitment Capable of swinging in either direction Demonstrate strong emotional & rational commitment to their jobs, team mates, managers & organisations
  11. Impact of Engagement Deficit • Accor: Reward to Engage: Rewards, Benefits and Employee Engagement in Today’s Organisations and at • PwC, Managing Change in Your Business, September 2000. • Kelsey, Alpin, Forth et al (2006) Inside the Workplace: Findings from the 2004 Workplace Employment • Relations Survey. Also at • Even though according to CLC research 97 % of business leaders say that innovation will become more important over the next three years, managers appear to be increasingly less likely to encourage and support employees to try new things. • Employees’ freedom to take decisions and organise their work –appears to be falling, according to the British Skills Survey. • No fewer than 42 % of employees would refuse to recommend their organisation as an employer to friends and family, according to a report by ACCOR. • The increasing evidence that individuals’ skills are being under- utilised at work • PWC research suggests that CEOs identify the availability of people and talent as the top barrier to growth The IES/Work Foundation report - if organisations increased investment in a range of good workplace practices which relate to engagement by just 10 %, they would increase profits by £1,500 per employee per year. • Engagement and involvement are critical in managing change at work; according to PricewaterhouseCoopers (PwC), 9/10 of the key barriers to the success of change programmes are people related; 11
  12. Case Studies – Improved Performance Through Engagement Clear communication about the need for change was essential to sustain performance improvement. The employee engagement survey provided critical data on where improvements were needed. Action plans were developed locally with employees. Managers discussed the results with their teams and collectively agreed what to do differently. The actions formed part of the manager’s performance management objectives. Managers found that the key to their success was to proactively identify, recognise and publicise great performance. Employees seeing their managers take action as a result of the survey, positively improved engagement scores. Serco A FTSE 100 international service company 12
  13. Case Studies – Improved Performance Through Engagement 1. The key was to engage with staff and to ensure that all staff policies, including those surrounding performance and attendance management, were seen to be fair and consistently applied to all. 2. Workshops were held where every team and each team leader was given the opportunity to express their views about how improvements could be made and how teams should be managed. 3. What evolved was a new way of working that was endorsed by the staff. 4. A number of things were initiated surrounding improving engagement and communication with staff underpinned by a Staff and Management Charter; describing the expectations that staff had of managers and vice-versa. 5. A network of ‘Change Agents’ was created to represent staff and provide a route for views and ideas so that they can be taken into account. The network also provides a means for information and updates from the management teams to be cascaded to staff. 6. Overall the efficiency of the unit has increased significantly and it has won many awards Department for Work and Pensions (UK) 13
  14. Engagement And The Individual  Individuals maximise their psychological well-being when they are engaged in meaningful work  strong association between motivation and personal productivity levels.  86 % of engaged employees say they very often feel happy at work, as against 11 % of the disengaged.  54 % of the actively disengaged say that work stress caused them to behave poorly with friends or family members in the previous three months, against 17 % of the engaged.  54 % of the actively disengaged say their work lives are having a negative effect on their physical health, versus 12 % of the engaged. Crabtree S. (2005), ‘Engagement Keeps the Doctor Away’, Gallup Management Journal; and Gallup Study: (2005); ‘Feeling Good Matters in the Workplace’, Gallup Management Journal. CIPD found that those who were absorbed in their work (cognitively engaged) were almost 3 x times as likely to have 6 key positive emotions at work (enthusiasm, cheerfulness, optimism, contentment, to feel calm and relaxed) as negative ones (feeling miserable, worried, depressed, gloomy, tense or uneasy). And those who were physically engaged (committed to completing work tasks) were more than 10 x likelier to feel those positive emotions than the negative ones. CIPD Reflections on Employee Engagement – White Paper (2006) 14
  15. Barriers to Engagement • Lack of awareness • Some leaders are not aware of employee engagement. Others do not believe that it is worth considering, or do not fully understand the concept and the benefits it could have for their organisation. Some view it as a soft and fluffy issue. • Lack of know how • Others who are interested in the topic do not know how to address the issue. • Lack of belief • Even when leaders place great emphasis on the idea of employee engagement, managers may not share the belief, or may be ill-equipped to implement engagement strategies. As a result the organisational culture is unable to deliver engagement. • Lack of understanding • Among those leaders who are concerned with employee engagement, there is great variability in their views and commitment to it. Often the potential of employee engagement is underestimated. For some, engagement is an annual staff survey whose results may be acted on; for others a survey is no more than one tool in an overall approach that places employee engagement at the core of the organisation’s strategy. 15
  16. Barriers to Engagement • Accor report that 75 % of leaders have no engagement plan or strategy even though 90 % say engagement impacts on business success. • Accor: Reward to Engage: Rewards, Benefits and Employee Engagement in Today’s Organisations • Accenture’s finding that over half of Chief Financial Offers surveyed had nothing more than a minimal understanding of the return on their investments in human capital. Lack of awareness The ACCOR Services Reportfound that although nearly 75% of leaders rate their levels of staff engagement as above average, it appears that the vast majority of them are guessing. “There is a sense that while employers recognise the importance of engagement they don’t quite know what to do about it. The issue seems to lie in their unwillingness to talk the talk and truly relinquish command and control styles of leadership in favour of a relationship based on mutuality. As a result many organisations have tapped into what they want from employees as a result of employee engagement – that is high performance – but they haven’t tapped into what’s in it for the individual who goes the extra mile.” Uncertainty about starting 16
  17. Barriers to Engagement (cont..) There are many barriers which if not addressed can stymie attempts to introduce engagement. Kingston Business School identified these practices as: • Reactive decision-making that fails to address problems in time • Inconsistent management style, based on the attitudes of individual managers which leads to perceptions of unfairness; • Lack of fluidity in communications and knowledge sharing, due to rigid communication channels or cultural norms; • Low perceptions of senior management visibility and quality of downward communication; • Poor work-life balance due to long hours culture. 33% of employees have confidence in or trust their senior management team. Only 40% say that directors and senior managers treat employees with respect.” 40 % satisfied with mgr./staff relations 27 % satisfied with the way the organisation is managed; 32 % say that their manager rarely or never discusses their training and development needs with them, 30 % rarely or never got feedback on their performance 25 % are rarely or never made to feel their work counts. Managers and organisational culture • Keeping employees engaged is an on-going process that needs to be hard wired into an organisation’s DNA – not just a to do list that can be delegated or “fixed” for KPI purposes. • Engagement surveys may be a useful means of testing out levels of engagement, but often engagement is defined in the ivory tower with little consultation. • Very few people feel listened to via completing an online survey”. We need to “move away from transactional two-way communications to listening and demonstrating that you have heard; trusted dialogue rather than two-way communications.” Underestimating engagement 17
  18. Two Levels Of Employee Engagement Set of transactional activities or targets • compartmentalised thinking • individual strategies for their product positioning in the market place, their geographic focus, their IT renewal – and a human resources strategy. • annual survey to measure engagement levels and the views of staff are sought • HR are then tasked to follow up the survey results. This is transactional engagement Integral part of overall strategy - transformational • Defined values and behaviours that are required to deliver the company’s position in the market place, its territorial focus and so on. • Employees are at the heart of strategy development and delivery. • The insights of the front line constantly inform the development of the strategy and continuous improvement. They are harnessed, listened to and acted on. This is transformational engagement. 1 2 Two levels of employee engagement 18
  19. What Has To Happen To Make Engagement Work – 4 Enablers? LEADERSHIP  Leadership provides a strong strategic narrative which has widespread ownership and commitment from all levels.  The narrative is a clearly expressed story about what the purpose of an organisation is, why it has the broad vision it has, and how an individual contributes to that purpose.  Employees have a clear line of sight between their job and the narrative, and understand where their work fits in.  These aims and values are reflected in a strong, transparent and explicit organisational culture and way of working.  Organisations which are successful in the long haul are characterised by stretch, discipline, trust and support; they were ‘both tough and tender’. INTEGRITY  Behaviour throughout the organisation is consistent with stated values, leading to trust and a sense of integrity. ENGAGING MANAGERS  Engaging Managers are at the heart of culture  They facilitate and empower rather than control or restrict  They offer Clarity, Appreciation, Positive Feedback And Coaching  They treat their staff with appreciation and respect and show commitment to developing, increasing and rewarding the capabilities of those they manage.  “The line manager is the lens through which I see the company and the company sees me.” VOICE  An effective and empowered employee voice;  Employees’ views are sought out;  They are listened to and see that their opinions count and make a difference;  They speak out and challenge when appropriate;  A strong sense of listening and of responsiveness permeates the organisation, enabled by effective communication. 1 2 3 4 19
  20. The 3 Motivators • Autonomy • Autonomy is not the same as independence, independence is about go it alone, rely on nobody individualism. Autonomy means acting with choice where we can be autonomous and interdependent on others • Autonomy in the workplace requires people to have autonomy over four essentials, Task, Time, Technique, Team • Mastery • Mastery is the desire to get better and better at something that matters • Mastery is a mind-set • Mastery is a pain • Mastery is an asymptote • Purpose • “One cannot lead a life that is truly excellent without feeling that one belongs to something greater and more permanent than oneself” Mihaly Csikszentmihalyi Traditional organisations are profit maximizers not purpose maximizers Adapted from: Daniel Pink – Drive 2011 20
  21. The Truth About Extrinsic Motivation • The Carrot and Stick approach – 7 deadly flaws • They extinguish intrinsic motivation • They can diminish performance • They can crush creativity • They can crowd out good behaviour • They can encourage cheating, short cuts and unethical behaviour • They can become addictive • They can foster short term thinking As long as tasks involve only mechanical skill, bonuses work exactly as expected: The higher the pay, the better the performance Once a task calls for “even rudimentary cognitive skill,” a larger reward leads to poorer performance. Concentrate on building a healthy long term motivational environment that pays people fairly and fosters autonomy, mastery and purpose. Avoid “if-then” rewards. Consider non-contingent, unexpected “now that” rewards Provide praise and feedback, rather than things people can touch or spend Provide useful information rather than an attempt to control Adapted from: Daniel Pink – Drive 2011 21
  22. Revenue And Profit Are Directly Impacted By Culture And Leadership Style 22 70% of variance in organizational culture can be explained by differences in Leadership Style 70% Products and Services Organizational Structure/Job Design/Policies Revenue, Profit, Shareholder Value Organizational Culture/Climate MANAGEMENT COMPETENCIES Business Strategy Leadership Style 28% of variance in revenue and Profit can be explained by differences in organizational culture 28%
  23. Working With Leaders To Understand And Apply The 3 E’s • Creating purpose and meaning • Understanding engagement • Actively managing retention risks • Really knowing your people – needs, motivations, lifestyle, expectations, personalities, generations • Harnessing energy Engagement (Purpose) • Clear competency standards, gap analysis & PDP process • Creating opportunities for identifying and developing talent - projects, action learning, exposure • Turning insight into action - real growth • Building coaching capability • Cultivating high performance teams -alignment, cohesiveness Enablement (Mastery) • Crafting an empowerment leadership style • Transforming mindsets - shift from … To • Learning to let go and trust • Taking talent risks • Holding people accountable • Building autonomy • Aligning and clarifying roles • Accelerated learning for talent pools Empowerment (Autonomy) Engagement conversation (care, connect, involve) Enablement conversation (coaching, devmt, feedback) Empowerment conversation (build confidence, stretch projects, letting go) 23
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Notes de l'éditeur

  1. The Denison Model of High Performance serves as the basis for the Culture work we are doing at Petronas. Dr. Daniel Denison conducted research to identify the common characteristics of High Performing organisations. His research revealed that high performers have 4 core traits – Mission, Consistency, Involvement and Adaptability. These 4 traits are explained in more detail on the following pages.
  2. Watson Wyatt, Continuous Engagement: The Key to Unlocking the Value of Your People During Tough Times,Work Europe Survey – 2008-2009.58 Harter, J. K., Schmidt, F. L., Kilham, E. A., Asplund, J.W. (2006) Q12 Meta-Analysis, The Gallup Organisation59 Hewitt Associates (2004) Employee Engagement higher in double digit growth companies. Research Brief.60 Wellins, R. S., Bernthal, P. and Phelps, M (2005). ‘Employee engagement: the key to realising competitiveadvantage’, DDI and at:[accessed 1 July 2009]
  3. Try 20% time – apply training wheels if uncomfortableEncourage peer to peer “now that” rewardsConduct an autonomy audit based on Task, Team, TechniqueTake 3 steps towards giving up controlPlay “Whose purpose is it anyway?”Use Reich’s pronoun testDesign for intrinsic motivationPromote Goldilocks for groupsTurn your next team build into a FedEx day