HOW ENGAGED ARE MY EMPLOYEES?

HOW ENGAGED ARE MY EMPLOYEES?

High engagement firms experience an EPS growth rate of 28% compared to a 11.2% decline for companies with low engagement.
-Towers Perrin

Disengaged workers cost the economy $300B or more per year.

-Gallup

95% of executives are

concerned about retaining their key employees.

-PriceWaterhouseCoopers

Only 17% of todays workers are highly willing and able to contribute to their organizations success, and an alarming 19% of workers have mentally checked out of their jobs.
-Towers Perrin

When employees are highly engaged, their companies enjoy 26% higher employee productivity.
-WatsonWyatt

Senior managements ability to demonstrate genuine interest in employees is the top engagement driver globally.
-Towers Perrin

FORTUNE 500 companies in the lowest quartile in profitability had 50% fewer engaged employees compared to the top quartile.
-Gallup

For the typical S&P 500 organization, a significant improvement in employee engagement was associated with a $95 million increase in revenue.
-WatsonWyatt

47% of your top performers

are currently looking for a job.

-Leadership IQ

Employee engagement should be the #1 concern for organizations over the next 24 months

What is employee engagement?

Employee engagement is the alignment of an organizations people with the overall goals and objectives of the company. Employee engagement is NOT the same as employee satisfaction. It is possible to have satisfied employees that are not aligned with the strategic direction of the organization, ultimately impacting efficiency and effectiveness. Often engagement can be characterized by the level of enthusiasm or morale demonstrated by the employee. The engagement of your employees will determine how they spend their discretionary time, the level of effort they put forth and their inclination to work on productive activities.

The three types of employees 1 ENGAGED Highly enthusiastic employees work

smart and take pride in their contributions to the organization. They maintain a high morale and are role models for co-workers. motions. They lack a connection to the organization and possibly have no passion for their companys mission. spread their low morale amongst co-workers. They seek out others to commiserate with in order to undermine the organization.

2 NOT ENGAGED Employees are going through the

3 ACTIVELY DISENGAGED Disconnected employees

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 companys most important asset is its people.

Voluntary turnover

The link between engagement & profit

Engaged employees stay longer

Retention of key employees drives customer satisfaction

Satisfied customers remain customers

Customer retention drives profitability

Profits drive shareholder value

Source: Rucci, Kirn, Quinn: The Employee-Customer Profit Chain at Sears, Harvard Business Review, 2000

What is an employee engagement program?

An employee engagement program, or employee recognition program, is a formal initiative in which an organization invests 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. Within each of these types of programs, rule structures are designed to reinforce and motivate positive behaviors that lead to goal achievement, employee retention, demonstrations of core values, training, healthy living, cost savings and/or revenue generation. Multiple employee programs may run at once but should be consolidated onto an integrated, central platform. The chart to the right identifies some of the most common employee programs.

Companies with a strong link between enterprise strategy (corporate business objectives) and reward programs generate a return almost 40% higher than competitors without such strategies.
-Aberdeen Group Discretionary
Manager spot awards Team-based recognition Peer-to-peer E-card Discretionary sales initiatives/contests

Engagement
Performance based Training/certification Customer service and satisfaction Employee referrals Years of service Corporate celebrations/ anniversaries, etc.

Work/Life
Health and wellness Idea/innovation Safety Process improvement Best practices

How do you design an employee engagement program?

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, 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.

Drive business in an evolving market

Involvement + Commitment = Engagement = Increased Effort = Better Results

How do you measure an employee engagement program?

Employee engagement can be measured in a variety of ways. Quantitative, qualitative and operational metrics can all be applied to measure the level of engagement within your organization. Regardless of the type of benchmarks you choose, its important to ensure the metrics you utilize allow you to analyze the performance of your program in relation to your goals and objectives. Quantitative metrics that provide quantitative data about the levels of engagement amongst your people are ideal for measuring the success of your program. In order to measure the ability of your program to improve engagement levels, you should analyze data related to absenteeism, employee turnover, client retention and other definitive data on a pre- and postprogram level. The difference in the two numbers will help define employee engagement levels within your employee base and determine the overall success of your program. 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 overall level of engagement amongst your people. There are several qualitative ways to measure engagement including surveys, focus groups, interviews, performance appraisals, etc. Once you have the data collected on a pre- and post-program level, you will need to conduct an analysis of the trends to determine overall program success. Operational these metrics include such things as ease of use of the technology platform, redemption trends, customer service reports, participant earnings reports, etc. These metrics, when coupled with the quantitative and qualitative data, provide an excellent look into the engagement of your people and the overall impact your engagement program is having on your employees performance.

What does an employee engagement program cost?

The investment you make to improve the performance of your organization will vary depending on scope. Investment considerations must be given to your starting point, your culture, your demographics, the type of communications you implement, the complexity of the program rules and the size of the team necessary to administer the program. However, as a general rule of thumb, you can expect to invest between 1-5% of total payroll on a successful employee engagement program. As with most enterprise-wide initiatives, you will need to allocate up to 25% of the total budget for communications, technology, administration and measurement of the program. The good news is that these programs pay for themselves. Recognition is for accomplishments and achievements that have improved the company financially. Engaged employees increase your employee lifetime value (ELTV) while they work smarter on a daily basis. When choosing a PPM partner, ensure that they have a methodology to return on this investment.

Fixed costs of commonly used sales and marketing strategies

100%
The fixed cost of incentive programs, unlike other sales and marketing strategies, is 20 to 30% of the program. The remaining 70 to 80% is paid only when the programs goals are reached.

PUBLIC RELATIONS

60% 40% 20%

(Source: Incentive Research Foundation)

PUBLICATIONS

ADVERTISING

CONSULTING

DIRECT MAIL

80%

INCENTIVE PROGRAMS

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 recognition programs? Are your people all on the same page?
If so, youre wasting money and limiting effectiveness. Aligning all of your employees is done one way through consistent and repeated communications. If you have separate internal programs, how are you ensuring the communications are consistent? You have had success, so a majority of your people may be aligned with the strategic objectives of the organization. But as you add staff, how do you ensure that alignment continues across your workforce? The worst thing that could happen is to hire a number of new employees who do not align with the 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 them. It takes years to develop a culture of success. It takes a lot less time to tear it down.

Are you concerned with employee turnover?

It can cost upwards of 150%+ of base salary in recruiting and training fees, loss of productivity and loss of relationships. This number can reach 250% for sales and management positions. Dont lose your momentum because of employee turnover.

Can you guarantee your success will last?

Are you paying your people for the work and results they are delivering?

Sooner or later money will not satisfy an employees needs and the employee will wear out and look to move onto a more manageable work load. While cash is important, if your people are highly compensated where is the motivation in cash? Provide them with a reward that will stay engrained in their mind and help drive the behaviors you want repeated.

While you may have the right people in place and the correct strategic plan today, what happens if something goes against your plan? What happens when the growth curve flattens or the attitude of success starts to recede? Ensure your people are being motivated for demonstrating behaviors that will endure good times, as well as bad. It is much easier to encourage and groom the proper behaviors during the good times than it is to force the proper behaviors during down times.

ITAGroup is a full-service people performance management company. Since 1963, we have driven powerful and proven results through: > Sales incentives > Employee Recognition and Reward Initiatives > Business-to-Business Loyalty Solutions > Product Launches > Meetings and Events

To learn more about ITAGroup and how we can help motivate and engage your people to greater performance, visit our Web site at www.itagroup.com. We guarantee our results with the industrys only pay for performance financial guarantee model. Contact us to learn more about how we truly invest our own money in the success of your organization.

4800 Westown Parkway West Des Moines, IA 50266-6770