2. HOW ENGAGED ARE MY EMPLOYEES?
Disengaged workers cost
the economy $300B or 95% of executives are
High engagement firms more per year. concerned about retaining
experience an EPS growth -Gallup their key employees.
rate of 28% compared to a
-PriceWaterhouseCoopers
11.2% decline for companies
with low engagement.
-Towers Perrin When employees are
highly engaged, their
companies enjoy 26%
Only 17% of today’s
higher employee productivity.
workers are highly willing and
-WatsonWyatt
able to contribute to their
organizations success, and an
alarming 19% of workers FORTUNE 500 companies
have mentally checked in the lowest quartile in
out of their jobs. profitability had 50% fewer
-Towers Perrin engaged employees compared
to the top quartile.
Senior management’s -Gallup
ability to demonstrate
For the typical S&P 500
genuine interest in employees
organization, a significant
is the top engagement
improvement in employee 47% of your top performers
driver globally. are currently looking for a job.
engagement was associated
with a $95 million
-Towers Perrin -Leadership IQ
increase in revenue.
-WatsonWyatt
Employee engagement should be the #1 concern for organizations over the next 24 months
3. What is employee engagement? The three types of employees
Employee engagement is the alignment of an organization’s 1 ENGAGED Highly enthusiastic employees work
people with the overall goals and objectives of the company. smart and take pride in their contributions to the
Employee engagement is NOT the same as employee satisfaction. organization. They maintain a high morale and are
It is possible to have satisfied employees that are not aligned role models for co-workers.
with the strategic direction of the organization, ultimately
impacting efficiency and effectiveness. Often engagement 2 NOT ENGAGED Employees are “going through the
can be characterized by the level of enthusiasm or morale motions”. They lack a connection to the organization
demonstrated by the employee. The engagement of your and possibly have no passion for their company’s mission.
employees will determine how they spend their discretionary 3 ACTIVELY DISENGAGED Disconnected employees
time, the level of effort they put forth and their inclination to spread their low morale amongst co-workers. They seek
work on productive activities. out others to commiserate with in order to undermine
the organization.
Voluntary turnover
Why is employee engagement
critical to an organization?
As the statistics show, employee engagement is a critical driver
of business success. Now, more than ever, at a time when layoffs,
expense reductions and revenue declines are prevalent, employee
engagement is a must to ensure an organization is positioned to
survive the economy and flourish well into the future. A company’s
most important asset is its people.
The link between engagement & profit
Retention of Satisfied
Engaged Customer Profits drive
key employees customers
employees retention drives shareholder
drives customer remain
stay longer profitability value
satisfaction customers
Source: Rucci, Kirn, Quinn: “The Employee-Customer Profit Chain at Sears”, Harvard Business Review, 2000
4. What is an employee “Companies with a strong link between enterprise
strategy (corporate business objectives) and reward
engagement program? programs generate a return almost 40% higher
An employee engagement program, or employee recognition than competitors without such strategies.”
program, is a formal initiative in which an organization invests -Aberdeen Group
in strategies that help drive the human behaviors it needs to
achieve organizational success. The most common types are
discretionary based, engagement based and work/life based. Discretionary Engagement Work/Life
Within each of these types of programs, rule structures are Performance based
designed to reinforce and motivate positive behaviors that Manager spot awards Training/certification Health and wellness
lead to goal achievement, employee retention, demonstrations Team-based recognition Customer service and satisfaction Idea/innovation
of core values, training, healthy living, cost savings and/or
Peer-to-peer Employee referrals Safety
revenue generation. Multiple employee programs may run at
once but should be consolidated onto an integrated, central E-card Years of service Process improvement
platform. The chart to the right identifies some of the most Discretionary sales Corporate celebrations/
Best practices
initiatives/contests anniversaries, etc.
common employee programs.
How do you design an employee
engagement program? Drive
There are several steps involved in the planning of an employee
engagement program. First, you must know where you are today
and where you want to go in the future. This is not as simple as
it sounds. Second, you must orchestrate corporate objectives,
business
stakeholders, technology and reward fulfillment into a cohesive,
seamless enterprise solution. The easiest, most effective and
efficient way to design a program is to work with a proven partner
within the People Performance Management (PPM) industry.
in an
evolving
market
Involvement + Commitment = Engagement = Increased Effort = Better Results
5. How do you measure an What does an employee
employee engagement program? engagement program cost?
Employee engagement can be measured in a variety of ways. The investment you make to improve the performance of
Quantitative, qualitative and operational metrics can all be your organization will vary depending on scope. Investment
applied to measure the level of engagement within your considerations must be given to your starting point, your
organization. Regardless of the type of benchmarks you choose, culture, your demographics, the type of communications you
it’s important to ensure the metrics you utilize allow you to implement, the complexity of the program rules and the size
analyze the performance of your program in relation to your of the team necessary to administer the program.
goals and objectives.
However, as a general rule of thumb, you can expect to invest
QuANTITATIVE – metrics that provide quantitative data about between 1-5% of total payroll on a successful employee
the levels of engagement amongst your people are ideal for engagement program. As with most enterprise-wide initiatives,
measuring the success of your program. In order to measure you will need to allocate up to 25% of the total budget for
the ability of your program to improve engagement levels, you communications, technology, administration and measurement
should analyze data related to absenteeism, employee turnover, of the program. The good news is that these programs pay for
client retention and other definitive data on a pre- and post- themselves. Recognition is for accomplishments and achievements
program level. The difference in the two numbers will help that have improved the company financially. Engaged employees
define employee engagement levels within your employee base increase your employee lifetime value (ELTV) while they work
and determine the overall success of your program. smarter on a daily basis. When choosing a PPM partner, ensure
that they have a methodology to return on this investment.
QuALITATIVE – these metrics provide you a snapshot into the
mindset of your employee base from which you can start to
define levels of engagement and the impact your program
has on that level. Qualitative data is key to understanding the Fixed costs of commonly used
overall level of engagement amongst your people. There are sales and marketing strategies
several qualitative ways to measure engagement including
surveys, focus groups, interviews, performance appraisals, etc. 100% The fixed cost
of incentive
Once you have the data collected on a pre- and post-program
PUBLIC RELATIONS
programs, unlike
PROGRAMS
80%
INCENTIVE
PUBLICATIONS
level, you will need to conduct an analysis of the trends to other sales
ADVERTISING
CONSULTING
DIRECT MAIL
and marketing
determine overall program success. 60% strategies, is 20
to 30% of the
program. The
OPERATIONAL – these metrics include such things as ease of use 40% remaining 70
of the technology platform, redemption trends, customer service to 80% is paid
20% only when the
reports, participant earnings reports, etc. These metrics, when program’s goals
coupled with the quantitative and qualitative data, provide are reached.
an excellent look into the engagement of your people and the (Source: Incentive Research Foundation)
overall impact your engagement program is having on your
employees’ performance.
6. Not sure an employee engagement strategy is right for your organization?
unsure whether or not your current program is returning a benefit to your
organization?
Ask yourself the following questions:
Are you running disparate internal Are your people all on the same page?
recognition programs? You have had success, so a majority of your people may be
If so, you’re wasting money and limiting effectiveness. aligned with the strategic objectives of the organization. But
Aligning all of your employees is done one way — through as you add staff, how do you ensure that alignment continues
consistent and repeated communications. If you have separate across your workforce? The worst thing that could happen is
internal programs, how are you ensuring the communications to hire a number of new employees who do not align with the
are consistent? direction or objectives of your organization. Instead of helping
your business, they hinder it. By becoming a disturbance
within your walls and altering the alignment of others around
Are you concerned with employee turnover? them. It takes years to develop a culture of success. It takes a
It can cost upwards of 150%+ of base salary in recruiting and
lot less time to tear it down.
training fees, loss of productivity and loss of relationships. This
number can reach 250% for sales and management positions.
Don’t lose your momentum because of employee turnover. Can you guarantee your success will last?
While you may have the right people in place and the correct
strategic plan today, what happens if something goes against
Are you paying your people for the work and your plan? What happens when the growth curve flattens or
results they are delivering? the attitude of success starts to recede? Ensure your people are
Sooner or later money will not satisfy an employees needs being motivated for demonstrating behaviors that will endure
and the employee will wear out and look to move onto a good times, as well as bad. It is much easier to encourage and
more manageable work load. While cash is important, if your groom the proper behaviors during the good times than it is
people are highly compensated where is the motivation in to force the proper behaviors during down times.
cash? Provide them with a reward that will stay engrained in
their mind and help drive the behaviors you want repeated.
7. ITAGroup is a full-service people performance To learn more about ITAGroup and how we
management company. Since 1963, we have can help motivate and engage your people to
driven powerful and proven results through: greater performance, visit our Web site at
> Sales incentives www.itagroup.com. We guarantee our results
> Employee Recognition and Reward Initiatives with the industry’s only pay for performance
> Business-to-Business Loyalty Solutions financial guarantee model. Contact us to learn
> Product Launches more about how we truly invest our own money
> Meetings and Events in the success of your organization.
