Why good HR makes good business sense? Slide 1 of 9 Source: Heskett et al. (2008). Service-profit chain. (Harvard) Parasuraman & Owen Business Strategy Business Strategy Leadership Employee Engagement Employee Engagement Internal / External Customer Satisfaction, Delight and Loyalty Internal / External Customer Satisfaction, Delight and Loyalty Business Performance Business Performance

The facts…Why it’s Important… …of customers LEAVE because of poor employee attitude Source: Parkington and Buxton, Study of the US Banking Sector, Journal of Applied Psychology …of customers are LOYAL because of a good employee attitude Source: MCA Brand Ambassador Benchmark …of customer brand perception is determined by experiences with PEOPLE Source: Ken Irons, Market Leader 68%41%70% Slide 2 of 9

The linkage analysis with engagement Employee AttitudesCustomer ImpactFinancial Results Senior management interest Challenging work Decision-making Authority Customer focus Career advancement Company reputation As employer Teamwork/ collaboration Resources Decision-making input Senior-management vision Employee engagement Customer focus Revenue growth Cost of Goods sold Sales, general & Admin expense Turnover retention Operating margin Positive relationship Negative relationship Conceptual relationship SOURCE: TOWERS PERRIN Slide 3 of 9 Significance of statistical correlations: 0,25 – 0,3 – Significant 0,31 – 0,45 – Strongly significant 0,46 – 0,65 – High significance

The moment of truth…so where to focus? Source: Heskett et al. (2008). Service-profit chain. (Harvard) Parasuraman & Owen Business Strategy Business Strategy Leadership Employee Engagement Employee Engagement Internal / External Customer Satisfaction, Delight and Loyalty Internal / External Customer Satisfaction, Delight and Loyalty Business Performance Business Performance Moment of Truth The HR Management Process / Value Chain Slide 4 of 9

What the evidence say… Source: Heskett et al. (2008). Putting the service-profit chain to work. Harvard Business Review Business Strategy Business Strategy Leadership Employee Engagement Employee Engagement Internal / External Customer Satisfaction & Loyalty Internal / External Customer Satisfaction & Loyalty Business Performance Business Performance Customer Relations Management Human Resources Management Financial / Profit Retention, Repeat Business, Referral Service designed & delivered to provide consistent customer experiences Service concept: employee behaviour linked to brand promises Impacted by level of employee engagement Quality of HR Value Chain …………………………………………… …………………………………………… …………………………………………… …………………………….. ccccccccccccccccccccccccc Slide 5 of 9

StrategicResearchStrategicResearch Organisational Organisational & Work / Work / Job Job design design Organisational Organisational & Work / Work / Job Job design design HR HR Planning Planning HR HR Planning Planning Recruit, Recruit, Select, Select, Place & Place & Induct Induct Recruit, Recruit, Select, Select, Place & Place & Induct Induct People People Development Development People People Development Development Managing Managing Performance Performance Managing Managing Performance Performance Recognition Recognition & Reward Reward Recognition Recognition & Reward Reward Redeploy Redeploy & Exit Exit Redeploy Redeploy & Exit Exit Human Resources Administration Employment Relations / Employee Relations Human Resources Management System and MIS Change Management & Facilitation (Project Management) People Philosophy, Strategy & Policy Purpose, Intent, Values Generic Human Resources Value Chain Slide 6 of 9

Approach: HR ‘State of Health’ Assessment Example of assessment of Induction, On-Boarding & Engagement Slide 7 of 9

HR ‘State of Health’ Assessment (Continue) Example of collated scoring results Slide 8 of 9

HR ‘State of Health’ Assessment (Continue) Example of high-level recommendations Slide 9 of 9

Question: Based on the science and links into business value, would you participate in such an assessment approach?