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  1. 1. Attraction and Commitment Drivers in the State Sector Clare Bennett Note : Several slides with organisational engagement data and comparative measures have been removed as some of this information is not for wide public release at this time. I am happy to talk through the results with you if you would like to contact me [email_address]
  2. 2. <ul><li>Models of attraction and engagement </li></ul><ul><li>NZ State Sector </li></ul><ul><li>Case Study </li></ul><ul><ul><li>Recommended areas of focus </li></ul></ul><ul><ul><li>The models in practice </li></ul></ul>
  3. 3. <ul><li>Competitive employment market for the right people </li></ul><ul><li>Costs of turnover </li></ul><ul><li>Costs of Disengagement and lost productivity </li></ul>
  4. 5. Attraction and Commitment Drivers Corporate Leadership Council Manager Quality Collegial Work Environment Compensation Organisational Stability Development Opportunities Future Career Opportunities Respect TOP ATTRACTION DRIVERS TOP COMMITMENT DRIVERS
  5. 6. 0 10 20 30 40 50 60 Manager Quality Empowerment People Management Ethics/Integrity Product/service Quality Recognition Job Interests Alignment Location Respect Development Opportunity Stability Compensation Future Career Opportunity Work Life Balance % Percentage of Respondents Rating Attributes in Top 5 Most Important NZ Benchmark World wide benchmark
  6. 7. <ul><li>Two way mutual process </li></ul><ul><li>More than 50 definitions </li></ul><ul><li>Focus can be on attitude, behaviour or outcomes </li></ul><ul><li>Engaged employees stay longer and are more productive etc </li></ul>
  7. 8. <ul><li>“ The extent to which employees are psychologically connected to something or someone in the organisation, how hard they work and how long they stay as a result of this commitment” </li></ul>The Q12® items are protected by copyright of The Gallup Organization, 1992-1999 Engagement Hierarchy What do I get? What do I give? Do I belong? How can we grow? Ownership I have materials and equipment I need to do my work right I know what is expected of me at work Someone at work encourages my development Supervisor/someone at work cares Recognition last seven days Do what I do best every day I have a best friend at work Coworkers committed to quality Mission/purpose of organisation At work, my opinions seem to count Opportunities to learn and grow Progress in last six months Growth Teamwork Management Support Basic Needs
  8. 9. <ul><li>“ The level of personal 'connectedness' an employee feels towards their organisation ” </li></ul>http://www.johnrobertson.co.nz/nzworkplacesurvey/climate-engagement-survey
  9. 10. <ul><li>“ Engagement is the extent to which employees commit to something or someone in their organization and how hard they work and long they stay as a result of that commitment” </li></ul>https:// clc.executiveboard.com
  10. 11. <ul><li>Surveys tap into various aspects of engagement </li></ul><ul><li>Attitude, behaviour and outcomes are all important </li></ul><ul><li>Common themes.. </li></ul><ul><li>Ensuring employees are committed to: </li></ul><ul><ul><li>organisations goals & values </li></ul></ul><ul><ul><li>motivated to organisational success </li></ul></ul><ul><ul><li>able to enhance own sense of wellbeing </li></ul></ul><ul><li>What orgs do with the results is more important than the tool </li></ul>
  11. 12. <ul><li>Age </li></ul><ul><li>Gender </li></ul><ul><li>Ethnicity </li></ul><ul><li>Job Characteristics </li></ul><ul><li>Disability </li></ul><ul><li>Length of service </li></ul><ul><li>Work patterns </li></ul>
  12. 13. <ul><li>Job Characteristics </li></ul><ul><li>Leadership </li></ul><ul><li>Orientation to Organisational Objectives </li></ul>
  13. 14. <ul><li>Retention </li></ul><ul><li>Productivity </li></ul><ul><li>Profitability </li></ul><ul><li>Customer Loyalty </li></ul><ul><li>Safety </li></ul><ul><li>Recommend to others </li></ul><ul><li>Sick leave </li></ul>
  14. 16. <ul><li>Cambridge City Council (UK) </li></ul><ul><li>Visa (Europe) </li></ul><ul><li>DHL </li></ul><ul><li>VERO, GHD, Porirua City Council, Southern Cross Health Insurance </li></ul>
  15. 17. <ul><li>Leadership </li></ul><ul><li>Effective management </li></ul><ul><li>Open, two way communication </li></ul><ul><li>Pay and benefits </li></ul><ul><li>Fair and equal treatment </li></ul><ul><li>Employing the right workforce </li></ul><ul><li>Career development and training </li></ul><ul><li>Working hours </li></ul><ul><li>Health and Safety </li></ul>
  16. 18. <ul><li>Leaders ensure a strong, transparent and explicit culture which gives employees a line of sight between their job and the vision and aims of the organisation </li></ul><ul><li>Managers offer clarity , appreciation of employees contribution and effort , who treat their employees as individuals and who ensure work is organised effectively so that employees feel they are valued and equipped to do their job </li></ul><ul><li>Employees feel able to voice their ideas and be listened to , with joint sharing of problems and challenges and commitment to arrive at joint solutions </li></ul><ul><li>MacLeod & Clarke 2009 </li></ul>
  17. 19. <ul><li>in 2007-08… </li></ul><ul><li>Low attraction </li></ul><ul><li>Skill Shortages </li></ul><ul><li>Turnover 15-19% </li></ul>
  18. 22. <ul><li>Manager Quality </li></ul><ul><ul><li>Know what expected </li></ul></ul><ul><ul><li>Line of Sight </li></ul></ul><ul><ul><li>Valued </li></ul></ul><ul><ul><li>Development </li></ul></ul><ul><li>One size plus </li></ul><ul><li>Action Planning to effect change </li></ul>
  19. 23. <ul><li>Orientation and job induction </li></ul><ul><li>provide clear line of sight and alignment with vision and values </li></ul><ul><li>set clear expectations about roles and responsibilities </li></ul><ul><li>Coaching and career support </li></ul><ul><li>Identify development opportunities within the organisation </li></ul><ul><li>skills individuals need to develop to advance </li></ul><ul><li>How to build these skills </li></ul><ul><li>Recognition </li></ul><ul><li>consistently and regularly recognise employees for their good work </li></ul><ul><li>Accountability </li></ul><ul><li>Ensure employees understand and accept expectations </li></ul>AREAS OF FOCUS

Notes de l'éditeur

  • Study reviewed the considerable research invested in attempting to understand what attracts potential employees to organisations and what keeps them there. There has been a huge promotion of the concept of employee engagement as the driver of both employee commitment and performance over the last 10 years. A range of models and tools have been promoted as capturing this concept and NZ State Sector organisations are includes in those focused on measuring and managing employee engagement.
  • Models of attraction and commitment What the research tells us Is the Public sector “Special”? How the NZ State Sector stacks up How the tools stack up
  • Costs of turnover Replacement costs – the costs associated with advertising, interviewing candidates, pre-employment administrative expenses, travel/moving costs, etc Learning curve costs – the costs associated with training staff, the new hire’s relative lack of productivity for the first 6-12 months, etc Loss of institutional knowledge Vacancy costs – the costs associated with overtime expenses, temporary help, etc (29%) Customer service disruption Impact to staff morale Termination costs – the costs associated with severance packages, administrative functions related to the termination, etc Burnout/absenteeism amongst remaining employees In their most basic form turnover costs can be expressed as a percentage of salary, allowing the generation of simple cost estimates and remuneration levels of those leaving alongside various job functions. Even using a conservative estimate that the loss of one person is equal to their annual salary illustrates the negative financial impact of employee turnover. For example, for the State Sector with 43,000 FTE’s at an average salary of $50,000 and a turnover rate of 15 percent, the cost of that turnover equals $326.7 million. A reduction in turnover of one percent would result in savings of $25 million dollars. Not all underperforming employees leave the workforce and with unemployment roles more employees will opt to stay in roles when there are limited alternative options. Employee disengagement has recently been estimated to have risen to $NZ5.9 billion per annum in the current economic environment[1]. These trends highlight the importance of focusing on the cost, availability and retention of critical talent and value creation for long-term sustainability. Good people will be more productive (and sooner) and the potential costs associated with a lengthy recruitment search will be avoided Good performers and those with skills in high demand have a choice about what they do and who they work for Need to present an attractive employment offer that puts ahead of their competitors A strong employment brand Clear Value Proposition Synergy with consumer brands Authenticity and Consistency Loyalty and Cultural Consistency &amp;quot;A solid employment brand is a clear and compelling articulation of why an individual would want to work for an organization and give it his or her best. It’s not just about making employees ‘feel good’ or letting them have fun, but about fortifying the organization’s culture with a set of pillars as a foundation for tangible financial and competitive benefits ” Ron Lawrence
  • CLC has undertaken extensive research about EVP. The EVP consists of Rewards, Opportunity, Work, People and Organisation, which in turn and drive performance, attraction, commitment, and retention EVP also underpins employee effort level and performance and improves retention through the 38 attributes that underpin the EVP Rewards Opportunity Work People Organisation
  • The figure above presents a comparison of these for New Zealand and the worldwide benchmark. These preferences were found to be consistent for most demographic characteristics. Some age related differences were found, with younger generations (23-29 years) more focused on future career opportunities and older groups (50-59 years) more interested in retirement related benefits. The CLC research also found that the relative importance of attraction drivers vary somewhat in importance by geography. The top 4 in New Zealand (work-life balance, future career opportunities, compensation, organisational stability) were the same as those for the Australian workforce. Compensation is one attraction driver that differs in importance across the different regions. Subsequent research also found that low compensation and a weak product brand were able to be compensated by doing other things such as focusing on offering future career opportunities and levels of respect (perceived) for employees. The importance of work-life balance as an attraction driver has also been identified in other studies. Whether it be for a Generation Y employee who puts a great emphasis on their lifestyle, a parent to look after young children or a mature worker wanting to semi-retire, flexible working arrangements such as part-time work or remote working are increasingly sought after[1].
  • No one size fits all explanation of what drives engagement In a recent review of the literature McLeod and Clarke (2009) found more than 50 definitions of engagement. Differences in these definitions between attitude, behaviour and outcomes; an employee might feel pride and loyalty (attitude), be a great advocate of their company to clients or go the extra mile to finish a piece of work (behaviour) or outcome focused definitions may promote lower accident rates, higher productivity, fewer conflicts, more innovation, lower numbers leaving and reduced sickness rates. Range of models and measures purporting to tap into the concept have been proposed, along with a range of ideas about where organisations should focus to improve employee engagement Once over of some of the popular models which will refer to later
  • Gallup is one of the more widely used models and survey tools. Gallup propose that employee engagement can be captured through four themes (What do I get?; What do I give?; Do I belong?; and, How can I grow?). These are measured using 12 items The tool is supported by a range of action planning resources. According to Gallup, by focusing on the 12 areas identified through the Q12 survey, corresponding improvements in engagement will impact on the organisation’s bottom line through improved productivity and higher levels of employee retention.
  • The model developed by John Robertson and Associates is the other widely used tool in New Zealand. JRA have developed a 6-item engagement measure to assess cognitive, emotional and behavioural engagement in the Overall Perceptions section of their Workplace Climate Survey Each of the items in the three components is underpinned by a range of work attributes linked to engagement captured through the climate survey. JRA research identified three factors that affect employee engagement more than any other and taken together, explain 60% of the variations in employee engagement levels. There are: [1] A strong sense of personal achievement Perceived career opportunities Sense of belonging In a review of engaged organisations JRA found that these organisations all share the following four characteristics: Vision and Values that clearly define the organisation’s purpose and the things that are important in the organisation A strong sense of community where people look to the future with optimism A commitment to developing people to realise their full potential A performance culture where high standards of performance are set and demanded. [2] [1] Based on statistical analysis of the survey responses to more than 20,000 employees from over 200 orgainsiations.
  • The Corporate Leadership Council define two types of employee commitment—rational (the mind) and emotional (the heart) that act through four “focal points” (day-to-day work, the team, the manager, and the organisation) to drive engagement and the outcomes of performance and retention. Rational commitment forms when employees believe they will personally benefit—financially, developmentally, or professionally. Employees can also commit emotionally by believing in, valuing, or enjoying their day-to-day work, teams, managers, or organisations. CLC also found that one of the most important contributors to employees’ emotional commitment emerging from the research is an employee’s sense of connection to the organisation’s mission According to the model commitment drives value to the organisation and its business objectives through discretionary effort and organisational commitment. Discretionary effort is the degree to which individuals will go above and beyond in their jobs. This is one of the major outcomes of engagement, and CLC suggest this could be seen as a measure of productivity. Lower levels of discretionary effort mean people are doing the bare minimum to get by without attracting the attention of managers and performance management procedures. According to CLC increased discretionary effort and improved intent to stay translate into increased performance and retention for the organisation overall. In a four year analysis of more than 100,000 employees around the world, the Corporate Leadership Council found that although workers join companies for rational motives (better compensation, benefits, and career opportunities), they stay and work hard for emotional ones. To better pick up on the warning signs of any emotional disconnect, the organisation must communicate a clearer mission and the contribution individual employees will make to it to help workers to feel their work is more meaningful.
  • M &amp; C concluded that all three are part of the engagement story with these three aspects triggering and reinforcing one another. Surveys - It is generally agreed that surveys are useful in identifying levels of engagement across an organisation, comparing groups within an organisation to one another and measuring trends across time. Aspects of engagement that surveys tap into varies; some describe levels of engagement within the organisation on a scale or as a percentage (for example the Gallup tool), and some enable the identification of the prime drivers of engagement for an organisation through regression analysis (for example the JRA and IES survey tools). Other surveys focus on the preconditions for engagement, and/or outcomes of engagement while other emphasise employee attitudes The real value in such surveys lies in the extent to which the results are used as a basis to identify the organisation’s strengths and weaknesses so that the necessary corrective actions can be taken. MacLeod and Clarke suggest that it is most helpful to see employee engagement as a workplace approach designed to ensure that employees are committed to their organisation’s goals and values, motivated to organisational success, and able to enhance their own sense of well-being.
  • A number of studies have produced quantitative research findings that demonstrate the impact that biographical and job characteristics can have on employee engagement. IES 2003 - 14 public sector organisations[1]. The key findings were: Gender – the difference in engagement scores between men and women was not significantif doing the same kind of work E thnicity – minority ethnic employees had higher engagement levels Age – engagement levels go down slightly as employees get older until age 60 and over, where the highest engagement levels were found Caring responsibilities –those employees with caring responsibilities for children had significantly lower engagement levels In a national survey of 2,000 employees across a wide spectrum of public and private sector employers CIPD (2006c) found broadly similar findings to the IES survey, although some differences were found[2]: Gender – women were found, in general, to be more engaged than men, but they also tended to be doing different kinds of jobs Age – Employees aged under 35 are were significantly less engaged with their work than older workers; this is in contrast to the IES results where it was found that engagement levels go down as age increases, although both surveys find that workers in the 55+ or 60+ bracket are more engaged Disability – employees with a disability are less engaged CIPD (2006c) also noted the following regarding job characteristics: Job group – the nature of the job makes a big difference to engagement levels. In general, managers and professionals have higher levels of engagement than do their colleagues in supporting roles Working pattern/hours – full-timers are significantly more engaged than part-timers, while employees who work days are more engaged than those on shifts or on a roster Length of service – engagement levels go down as length of service increases – an indication to employers that they need to ensure that longer-serving employees continue to be exposed to new and interesting challenges These findings highlight that different groups have varying levels of engagement distinguished by demographic characteristics and that one of the keys to building an engaged workforce is giving consideration to the different priorities or emphasis placed on various drivers the research suggests are important contributors to overall employee engagement. While a targeted approach for different demographics would likely prove unmanageable (especially when employees have more than one differentiating demographic) the research does suggest that a targeted approach may be useful when attempting to build productivity or retention in particular critical groups.
  • From an analysis of the various models of engagement Scottish found nothing in the literature to suggest that models relevant to the private sector do not have a direct applicability to the public sector[1]. They noted subtle differences between the sectors : public sector employees tended to be more satisfied with their job characteristics, but less satisfied with key drivers of employee engagement compared to the private sector (including effective leadership, and orientation to organisational objectives) private sector tended to perform less well on the direct influences on employees (with public sector workers found to be happier with job security, being paid fairly, and training and development ) Similarly research by Ipsos MORI (2006) research highlighted a range of areas in which public sector staff are usually more critical than their private sector counterparts: Receiving recognition for good performance and providing opportunities for employees to let the organisation know how they feel about things that affect them in their work Having adequate /sufficient facilities or resources to do their work effectively The belief that their organisation puts customers first Confidence that they are working for a successful organisation. The study found that public sector employees are more likely to feel that the work they do is interesting and, in general, perceive a greater feeling of morale where they work. [2] In contrast however, the public sector was reported to usually trail the private sector in two key areas: Change management and leadership capability[3]. The constraints around managing change are at least partly bureaucratic. The Scottish review concluded that the positive factors impacting on employee engagement apply with equal weight to the public and private sectors. In particular this includes:5] The importance of providing high quality management, especially at supervisory and immediate line management level The importance of having a strong organisational vision and clarity in goals that are clearly articulated and communicated to staff at all levels The importance of engaging in effective two-way communication between the organisation and its staff he Ipsos MORI (2006) research found that whilst around three-quarters of employees in both sectors understand the need for change, there is a large disparity in terms of those who support the need for change – with 75 per cent of employees in the private sector supporting the need for change, compared to 65 per cent in the public sector. Moreover, public sector employees are significantly more likely to feel that some of the changes being implemented are unnecessary: they believe that “ there is too much change for change’s sake ”.
  • There is a growing body of research that supports the contention that employee engagement has significant and measurable effects on organisational outcomes. Studies have found positive relationship between employee engagement and organisational performance outcomes: employee retention, productivity, profitability, customer loyalty and safety. Research also indicates that the more engaged employees are, the more likely their employer is to exceed the industry average in its revenue growth. Employee engagement is found to be higher in double-digit growth companies The Corporate Leadership Council (CLC) completed a study of engagement levels of over 50,000 employees and found that employees who are most committed perform 20% better and are 87% less likely to leave the organisation CIPD (2006) research shows engaged employees perform better than others, are more likely to recommend their organisation to others, take less sick leave, and are less likely to quit. They experience increased job satisfaction and have more positive attitudes and emotions towards their work. This suggests that enhanced levels of engagement benefit both individual and employer. In a meta-analysis study of more than 23,000 business units the Gallup Management Group found that engaged employees have 51% lower turnover, 27% less absenteeism, 18% more productivity, and 12% higher profitability ] In an analysis of data collected from more than 200 Australasian organisations employing around 32,000 staff JRA found that organisations with a more engaged workforce outperformed those organisations whose people were less engaged by a large margin (Turnover - 15% for highly engaged vs 22% low engaged; Return on assets - 23% highly engaged vs 11% low engaged; Sales - $285k highly engaged vs $209k low engaged; Acceptable levels of stress 75% vs 55%; and Experiencing work-life balance 79% vs 67%) ]
  • As these studies suggest, organisations can also harbour a large body of unproductive disengaged staff who have no intention of leaving. This means that while organisations can potentially lose key employees through not engaging them, there is also a risk to the organisation from the disengaged who are not actively looking for other employment but are disaffected and unproductive. Recent literature also suggests that the number of disengaged employees in the workforce is increasing. Rather than walk as the majority would have done in the past, in the current economic environment the disengaged are increasingly staying. According to Corporate Leadership Council research the percentage of employees exhibiting high discretionary effort has decreased by more than a half since 2005. [1] With the exception of high potential employees where it has dropped by 21% in the first half of 2009, overall intent to stay has generally held steady according to CLC research [2] . In a recent poll of Australasian employees however suggest that many people are biding their time in the current climate, keeping an eye on opportunities that may arise. ] Gallup have estimated the costs of disengagment in New Zealand to be $3.6 billion a year in lost productivity [4] . In the UK these have been estimated as between 59 and 65 billion pounds per year and in the US $300 billion dollars per year in lost productivity. [5] IES calculate that if organisations increased investment in a range of good workplace practices which relate to engagement by 10% they would increase profits by 1500 pounds per employee per year. [6] Gallup also point to the negative effects of disengagement with 54% of the actively disengaged saying that workplace stress has impacted on their wider lives in comparison with only 17% of the engaged. Fifty four percent of the disengaged also report this is having a negative effect on their health compared to 12% of the disengaged engaged workforce. [7] Reaching the disengaged presents a new challenge to organisations at a time where productivity and performance of the workforce has become ever more critical. On a more positive note, research by Blessing White indicates that employees will re-engage with their jobs if organisations encourage good management, where managers empower staff to have greater active input and decision-making in their work. [8] [1] Corporate Leadership Council 2009 Rebuilding the Employment Value Proposition Four Strategies to Improve Employee Effort and Retention, July 2009 At the same time globally CLC report that satisfaction with delivery has dropped across all 38 EVP attributes, with the biggest declines in rewards occurring as layoffs, restructuring, and budget-cutting mean that employees are being asked to make financial sacrifices. [2] Ibid [3] De Bier, P. Talent Tightrope: Managing the Workforce Through the Downturn, Hudson Report 2009 p8. A Hudson survey of Australasian organisations found that 47% of the workforce surveyed indicated that they are actively seeking new roles or scanning the employment market for potential opportunities [
  • The body of research quantifying the benefits of improving employee engagement is quite limited to date. One of the challenges to demonstrating that improved engagement levels directly impact on organisational outcomes is the difficulties controlling for the influence of other independent variables (such as economic and business factors). Nevertheless there are several good practice examples where organisations investments in building employee engagement have paid off. Most employers that measure and manage employee engagement have concluded that introducing initiatives to build engagement has significant performance benefits for them. Some examples reported in the literature include : In the UK the Cambridgeshire County Council reported that improved employee engagement results led to time savings and improvements in employee turnover, satisfaction and absence levels [1] . The Council moved to the top quartile performance in terms of absence, coupled with bottom quartile results for HR delivery costs. All of these results were up on the previous year, some as much as 15%. [2] Figures at Visa Europe showed that customer satisfaction increased over a five year period in parallel with levels of employee engagement. [3] In DHL, Deutsche Post employee turnover decreased by 27% by the use of rewards and recognition to enhance employee engagement, attract and retain employees, boost overall productivity, and drive successful business results. [4] In a review of engagement research in the UK, the Scottish social research review reported transformational results in performance as a consequence of improved engagement reported by many organisations(Tesco, London Ambulance Service, Sainsbury’s, Standard Chatered Bank, Toyota, Google and many more) [5] In New Zealand John Robertson and Associates reported that significant improvements in the pillars of engagement resulted in improvements in organisational performance (Vero, GHD, Porirua City Council, Southern Cross Health Insurance, AMI). [6] While robust research in the New Zealand environment is still limited there are also other examples of where organisational initiatives focused on concepts accepted as underpinning employee engagement have had results on the ‘bottom line’.
  • The range of models of engagement package the drivers of engagement and resulting approaches for building engagement differently. Some directly target behaviours or attitudes, while others focus on the underlying tools, systems, structure and / or culture to build employee engagement. However essentially, as was identified by MacLeod and Clarke, focusing on one aspect will likely trigger and reinforce other aspects. From a review of the literature Scottish concluded that leadership, effective management, open, two-way communication, pay and benefits, fair and equal treatment, employing the ‘right’ workforce, career development and training, working hours, and health and safety are all aspects of the work environment that organisations can control and influence that have been found to impact upon engagement levels. In a review of the concepts presented in other writings on employee engagement Markos proposes ten tactics for organisations to adopt to build and maintain employee engagement:[1]
  • A crucial enabler of employee engagement emerging from all of the research is effective leadership and management. Research reported by Rice found that people are generally unhappy with the way they are managed: employees see their line managers as being poor at many of the basic things needed to support positive attitudes. Responding to surveys, employees say their managers don’t discuss their training and development needs, don’t give feedback on how they are performing and don’t make them feel their work counts. Those employees with positive views about their managers and senior managers were found to be the most engaged with their work, perform better and be less likely to quit. [1] In a review of engagement literature MacLeod and Clarke 2009 highlighted the commonly agreed management led drivers behind engagement as: [2] Leadership which ensures a strong, transparent and explicit organisational culture which gives employees a line of sight between their job and the vision and aims of the organisation Engaging managers who offer clarity, appreciation of employees’ effort and contribution, who treat their people as individuals and who ensure that work is organised effectively so that employees feel they are valued, and equipped and supported to do their job Employees feeling they are able to voice their ideas and be listened to, both about how they do their job and in decision-making in their own department, with joint sharing of problems and challenges and a commitment to arrive at joint solutions MacLeod and Clarke conclude that there are three particular things required from managers to become engaging managers: [3] They must provide clarity about what is expected from individual staff, which involves some stretch, and much appreciation and feedback/coaching. They must treat people as individuals, with fairness and respect and with a concern for employee’s well being. Finally they must ensure that work is designed effectively and efficiently. Cultural change will be necessary to build engagement in many organisations. As Rice notes in a review of the leadership challenges, if organisations want to build an engagement agenda on secure foundations, they need to be looking to create a management culture based on mutual trust and respect. [4] This will be particularly important as organisations embrace change and build the innovative and autonomous work environment that underpin the way they will need to operate into the future. Having a clear organisational purpose and values are also critical to gaining effective employee commitment. Having a clear ‘line of sight’ means that employees’ energies will not be directed towards irrelevant or low priority targets, but to meeting business priorities [5] . None of the concepts around employee engagement presented are complex or promote any different types of behaviour other than those already promoted in the raft of literature on effective management and leadership practice. However using an engagement lens reinforces the importance of effective management and the linkage between these and the organisation’s bottom line (rather than just things that might make employees feel good). Being able to show the relationship between the importance of these aspects to employee engagement and ultimately organisation performance and productivity outcomes is particularly important in times where organisations are looking for opportunities to cut costs (for example through investment in training and leadership development). On an encouraging note in the current environment, most of the areas to focus on to help build employee engagement are within the control of managers and many have little associated cost.
  • In 2006 a review of perceptions about the State Sector as a preferred employment option found that the State Sector did not usually rate strongly as a preferred employment option[1]. Low attraction rates compounded wider skill shortage issues, resulting in difficulties finding suitable people for many roles. In the 2007 Human Resources Capability Survey, five or more departments reported skill shortages in the following roles or areas: policy analyst/senior policy analyst, project managers, information technology, human resource advisers, finance and accounting roles. These roles were also considered to be skill shortages in previous years, and were also in occupational groups where SSC was experiencing higher than average turnover[2]. Remuneration was the most commonly reported cause of recruitment difficulties. Working conditions were also noted as a common factor, including the high workload and long hours required, the lack of career development prospects, and negative perceptions of the organisation and the Public Service
  • In 2008 Inland Revenue launched the IR Cohort Study [1] . The population that the Cohort sample was drawn from was all employees who joined Inland Revenue in 2008. The survey was completed by 652 new starters (a response rate of 69.0% and a margin of error of 2.14%). The long-term aim of the Cohort Study was to track new employees across their careers to better understand the reasons people came to work at IR and why they then stay or leave. The initial ‘New Starter’ survey captured information to understand what attracts new starters to joining IR and how well their initial expectations have been met. These expectations and their ongoing satisfaction with aspects of working at IR and their ongoing organisational commitment continue to be tracked over time using follow up surveys.
  • The Cohort Study surveys recent starters to Inland Revenue (in their first 3 months) and tap into initial perceptions (only). The follow-up cohort survey results (for those who have been with Inland Revenue between 12 and 28 months) will provide an indication of how well employees perceived Inland Revenue to deliver on these post the initial ‘honeymoon period’. Results of the recent Corporate Leadership Council study suggests that while initial expectations are well met, that IR does currently fail to deliver on many aspects of the EVP The EVP factors of Stability and Location are perceived to be well delivered within Inland Revenue across these three tenure groups. A drop in how well IR delivers stability of the organisation is possibly due to the ongoing nature of restructuring (both large and small) over the last few years. Corporate Leadership Council research found decreases of approximately 10% in the perceptions of how well IR delivers on Future Career Opportunities, Development Opportunities, and Work-Life Balance from the &lt;1 year group to the 1 to 2 year group of respondents. This suggests a degree of a ‘honeymoon’ period where individuals have perceived that these factors are available within Inland Revenue (they are the top three factors influencing the initial consideration of employment) but by the time they have been here for a year, individuals perceive things differently. A recent refresh of IR’s Orientation programme has been undertaken to improve understanding about what IR does. This is being complemented by manager led induction that sets realistic expectations about roles and responsibilities. A Management 101 toolkit has recently been developed to provide clearer guidelines to managers and, along with a more structured on-boarding process and procedures for managers to apply to new employees. These should improve employee satisfaction in these areas and have longer term benefits to the engagement of these employees over time.
  • Overall engagement levels in Inland Revenue are at the Gallup 50th percentile and Inland Revenue also compares favourably with the wider State Sector. Gallup data identifies a number of areas where Inland Revenue is doing well, along with areas for continued focus. Similarly CLC research identifies areas of strength and opportunity and provides more in-depth analysis to inform a more targeted approach to building engagement in employees across Inland Revenue. One limitation of the CLC data is that while the CLC research suggests there will be a strong link between commitment attributes and overall engagement and outcome measures, there is no internal longitudinal research yet available to validate this. Gallup engagement data identified a continued need to focus on ensuring employees have the tools and equipment to do their jobs. Employees also indicated the need to improve technology and tools as the thing most identified as getting in the way of doing their best work. The main issue around materials and equipment identified was the technology (computer systems) either breaking down / operating slowly or because they are outdated. Another area identified by employee that also emerges in the CLC research, underpins many of the engagement drivers in the Gallup research and is also reinforced through engagement research, is the importance of enhancing overall management and leadership practices across Inland Revenue. Managers are critical to ensuring that people know what is expected of them, have the opportunity to do what they do best, and have a line of sight between what they are doing and the organisations objectives. They are also a critical to creating the workplace culture (innovation, empowerment, trust) that supports both the needs and aspirations of individuals and the strategic direction of Inland Revenue. The research suggests that the impact of perceived manager quality is the most critical in the first five years of employment. However manager quality directly impacts on other variables that are identified as becoming more important including meaningful work, recognising and valuing performance, development opportunities and work-life balance and it would be misleading to conclude that manager quality becomes unimportant. The engagement findings confirm that a ‘one-size-fits-all ‘ approach to building and sustaining employee engagement will build engagement to a certain level (using the Gallup model) but that other models such as the CLC focus on EVP can inform a more tailored approach important to maintaining employee commitment and engagement in particular groups. The demographic variations in engagement reinforce the value of considering a more targeted approach to building employee engagement. While this is not practical for all segments of the workforce it is something for managers to be aware of when managing a diverse workforce. Furthermore there may be times when a more targeted approach may be justified when considering hi-performing and critical role segments.
  • There are some consistent themes emerging from all of the engagement research in Inland Revenue. Clearly Inland Revenue does do a number of things that contribute to the engagement and ongoing commitment well (including flexibility in work, and opportunities for training and development). there are also a number of areas linked to key drivers of engagement and retention where Inland Revenue can improve. Most of these can be affected by immediate managers. One of the s trongest drivers of commitment has been found to be having a sense of feeling valued and involved. Within the context of the CLC model this has several components: involvement in decision making; extent to which employees feel able to voice their ideas and managers listen to these views and value contributions; opportunities to develop their roles; and, the extent to which the organisation is concerned for employees health and well-being (workload / pressures was the fifth highest ranking area for improvement identified by IR employees). Strategies Inland Revenue managers can adopt that will build retention and engagement include: Orientation and job induction which provides a clear line of sight and alignment with organisation vision and values and sets clear expectations about roles and responsibilities. Coaching and career support. Managers must be clear about the opportunities within the organisation, the skills individuals needed to be developed to advance and how to build these skills. Recognition – managers must consistently and frequently recognise employees for their good work. Accountability – Ensuring managers must be clear about expectations and that employers understand and accept these expectations. The key findings from the research about engagement in Inland Revenue are consistent with wider research models, reinforcing the importance of leadership (indirectly through manager action impacting the Gallup Q12; through manager quality according to CLC) and action planning to effect change. The research also confirms that there is no one-size fits all model for building engagement and while there are a range of common drivers for building commitment and engagement, that there may be value in considering a more targeted approach for some groups.
  • Key Implications and Recommendations for the New Zealand State Sector There are a range of common themes underpinning models of attraction and engagement and a growing body of research confirming the linkage between employee engagement and key organisation outcome measures including productivity. In the current environment where research suggests the proportion of the workforce who are disengaged is increasing, attracting and retaining a talented workforce and addressing drivers of disengagement must be a key area of focus for organisations who are committed to building performance and productivity. In the State Sector current fiscal pressures mean that less money is available to invest in attracting top talent and providing financial incentives to retain employees (such as training and performance related salary increments). The research suggests that a reduction in investment in these areas had the potential to result in many traditionally committed and hard working employees becoming less engaged. With the demand for good employees still reported to be quite strong even in the current employment market, and with the currently tight economic environment forecast to ease, the New Zealand State Sector risks losing the very people so important to long term sustainability. Subsequent engagement data will provide a clearer indication of whether this is the case in the New Zealand State Sector, and if as overseas trends would suggest is likely to be the case, there are challenging times ahead to create an environment high performing people want to be a part of. The IR case study research and wider SSC findings are consistent with wider research findings about what potential employees are looking for when considering employment options and in maintaining their ongoing commitment. Now is the time for the State Sector to be proactive in building attraction and engagement. While this will require a commitment of resources (effort and money) to do this effectively, the benefits of this investment are well documented as drivers to maintaining and building the performance of the Sector in the current environmental context.