Employee Engagement What managers need to know? Brenda Wilson Business Leader Human Capital Hong Kong

Overview Section I: What is ‘Employee Engagement’? Employee Engagement Defined What Managers Can Do to Improve Engagement Section II: How to improve employee engagement in your department? Key Drivers of Engagement Section III: A case study in the public sector Experience Sharing with our Project with Singapore Government Section IV: Key Takeaways

Section I Employee Engagement What is it? Does the HR infrastructure (compensation program, communication program etc) at your department support employee engagement? Does a committed employee necessarily engaged?

Let’s vote: what’s your view? Q: What is the definition of employee engagement? Select one answer: A new management technique to get your employees to do what you tell them … the first time. When two employees plan to get married. An internal party for employees: “Hey Joe, are you going to that employee engagement at 2:00 p.m.?” All of the above (they all sound good)

What is employee engagement? Engagement Defined What is employee engagement? A psychological state in which employees feel a vested interest in the company’s success and are both willing and motivated to perform to levels that exceed the stated job requirements. Engagement fosters and drives discretionary behavior, eliciting employees’ highest productivity, their best ideas and their genuine commitment to the success of the organization.

Engagement Defined Enjoys the job 1960 1980 2000 TIME Satisfaction Motivation Commitment Engagement Morale Enjoys the job Is not dissatisfied with terms and conditions Not necessarily a team player Strives to achieve personal goals Contributes energetically Values achieving personal goals more than team/ organizational goals Loyal to organization, optimistic for the future Collaborates to achieve team goals Has a sense of belonging to organization Proactively seeks opportunities to serve the mission of the organization Willing to go the “extra mile” Is willing to withhold criticism and/or be constructively critical for the good of the organization

Engagement Defined: How’re you doing? Check your level of engagement Are you… Getting satisfaction from the tasks required in their job? Feeling valued by management? Contributing energetically, not in isolation, but collaboratively? Positive about the work experience – your employer, its leaders, the work and the environment? Ambitious for the organization? Speaking positively about the organization’s goods and services? Planning to continue to work for the organization? Going beyond the stated requirements of the job and contribute ‘discretionary effort’? Yes No Are you engaged?

From Satisfaction to Engagement Mercer’s Employee Engagement Model© Advocate Committed They freely contribute discretionary effort – a willingness to go the extra distance in executing projects and their regular duties. They see a mutuality of interest between his or her values and aspirations and those of the organization. Committed employees have thoroughly internalized the values and behaviors represented by the earlier stages of the engagement model, but have also forged a strong identification with the organization. Advocate Committed Motivated Motivated Satisfied In addition to sharing some of the attributes of satisfied employees, motivated workers contribute energetically and are highly focused individual contributors to the organization. Satisfied employees perform their jobs and are satisfied with the terms and conditions of employment. However, they tend not to go “above and beyond” in their efforts. Satisfied

Let’s vote: what’s your view? Q: What can manager’s do to improve employee engagement? Select one answer: Act like cupid: every one loves a good engagement. Give more work, hard work, and lots of it! Use fear to scare your employees into being very satisfied at work. None of the above – there is nothing a manager can do.

From Satisfaction to Engagement What can managers do? Satisfied Motivated Committed Advocate Satisfied: Provide work tools, resources and equipment Enhance the work environment Reward (reward level and understanding of the rationale for reward change) Recognize work efforts

From Satisfaction to Engagement What can managers do? Satisfied Motivated Committed Advocate Motivated: Establish fair performance goals Communicate clear expectations Regularly clarify priorities and feedback Provide support by removing obstacles to optimal performance Recognize and reward performance Delegate work to theses employees Support skill development

From Satisfaction to Engagement What can managers do? Committed: Help employees build meaningful long-term careers Ensure recognition and reward for long term commitment Listen to employees, share insights and experience Ensure fairness, consistency and transparency Develop understanding of long-term vision and business plans Promote organization values and reinforce them through management behaviors Satisfied Motivated Committed Advocate

From Satisfaction to Engagement What can managers do? Advocate: Communicate the organization's progress and challenges Relate business results to team and individual roles Endorse strong customer focus Share understanding of customer needs with team Challenge and grow through delegation Establish comprehensive career development plans Encourage upward communication Encourage innovation Recognize and reward Satisfied Motivated Committed Advocate

“ We’ve always had a policy of trying to put our staff first. The staff should come first, the customers (the public) second and your shareholders (stakeholders/ tax payers) third. If you take that approach you’ll find that everyone wins. Happy staff result in happy customers, lots of happy customers result in happy shareholders. ” Richard Branson, CEO Virgin Group

Section II Key Drivers of Employee Engagement Apart from pay, which ONE driver do you think is the most engaging? Sense of personal accomplishment Benefits Career Opportunity Respect

National Differences in Engagement Drivers Over the last several years, the Mercer’s What’s WorkingTM studies have been tracking the drivers of engagement across countries China What’s working in Hong Kong? United Kingdom Sense of personal accomplishment Sense of personal accomplishment Paid fairly, given performance Confidence in senior management Comparable benefits to industry Opportunities for training Engagement Confidence in senior management Paid fairly, given performance IT systems support business needs Good reputation for customer service Opportunities for training Regular performance feedback Regular performance feedback Comparable benefits to industry Cooperation between groups

Let’s Vote: What’s your view? Q: Apart from pay, which ONE element do you think is the most important driver of employee engagement? Select one answer: Sense of personal accomplishment Benefits Career opportunity Sufficient channels for communication Confidence in senior management Training and development opportunities

Key Drivers of Employee Engagement Although there are some country-specific drivers, a consistent set of engagement drivers is emerging globally Employee Engagement 2007 The work itself, including opportunities to develop Confidence and trust in leadership Rewards & recognition Communication

Key Drivers of Engagement Drivers of engagement vary by … Industry High technology Retail Financial services Professional services Civil Service Organizational Context Growth Privatisation Restructuring/downsizing Merger and integration Employee demographics Country

Section III Case Study – Singapore Civil Service

? Singapore Civil Service Why Engagement is so Critical… The economic landscape is changing… Strong year-on-year growth in GDP in Singapore The implications on the employment market… Increased growth across sectors Competition for talent intensifying Increasingly becoming an employee’s market How do we continue to retain employees in the Public Sector? Compensation is critical, but it’s not everything Needed to understand the drivers of employee engagement in the public sector for talent retention

Approach In 2005, Mercer established an employee engagement survey, The Singapore Public Sector Employee Engagement Survey (PS EES) for 20+ agencies The survey yielded 3,743 data points, sampled from 46 individual public sector agencies Regression analysis was conducted to identify key drivers to engagement Overall engagement was measured by the following four questions: I am proud to work for my organization I would recommend my organization to others Given a choice, how much longer will I be working for my organization How satisfied am I with my organization at the present time 11 engagement categories Leadership / Climate Supervisory Practices Career Advancement Job Growth Job Motivation Learning & Development Teamwork Workload Engagement Rewards Performance Management & Feedback

Results Compensation almost never rated in top three drivers at over 20 agencies for senior and mid-level staff but was within the top three drivers for junior staff 2007 Key Drivers 2005 Key Drivers Job Motivation pr = .34 Employee Engagement Leadership/ Climate pr = .44 Leadership/ Climate pr = .27 Career Advancement pr = .38 Career Advancement pr = .26 Job Motivation pr = .25 Workload pr = .08 Definition of 11 key category drivers Leadership / Climate – refers to the senior management team as a whole and perceived clarity in communicating organizational strategy, ability in confronting issues, demonstrating organizational values and concern for employees as well as management of the organization as a whole Supervisory Practices – refers to respondents’ immediate supervisor in terms of perceived competence, availability for consultation, honest communication and frequency of feedback Career Advancement - refers to perceived opportunities in career development as well as long-term career prospects in the organization and the public sector in general Job Growth – refers to staff perceived value of activities outside their scope of work contributing to their personal development of organizational excellence Job Motivation – refers to perceived levels of personal satisfaction, adequate autonomy, interesting challenges and relevant use of their skills and abilities Learning & Development – refers to staff perceived value of activities outside their scope of work contributing to their personal development of organizational excellence Teamwork – refers to respondents’ attitude towards people in the organization and perceived levels of cooperation within the work group and across divisions/ institutions Workload – refers to perceived reasonable levels of work, adequate manpower and ability in maintaining balance between work and personal life Performance Management & Feedback – refers to employee level of understanding, perceived equity and flexibility of the PM system, ability to recognize and reward deserving staff and the level of feedback and communication Rewards - refers to perceived fairness of compensation and other issues of external competitiveness and internal equity Engagement – refers to staff level of satisfaction and pride for the organization as well as intent to stay and recommendation of the organization as a good place of employment Rewards pr = .06 R²=.67 R²=.64 pr = partial correlation, a measure of statistical relationship R² = coefficient of determination, denotes variation of dependent variable explained by independent variables

Statistically significant drivers of engagement – by category A total of three items were uncovered as statistically significant key drivers employee engagement at the category level Employee Engagement Leadership/ Climate pr = .44 The strength of leadership in the organization Opportunities for growth, development and long-term career potential Being intrinsically motivated by the work you do Career Advancement pr = .38 pr =.25 Job Motivation These items accounted for 67% of the variance in Employee Engagement (R²=.67)

Statistically significant drivers of engagement – by item Item Level Drivers A total of five items were uncovered as statistically significant key drivers of Employee Engagement at the overall level The key drivers of Employee Engagement center around: The work itself giving them a feeling of personal accomplishment Employees’ belief that they have opportunities for growth and development in their organizations Employee perceptions that senior management proactively confronts issues before they become major problems Employee perceptions that the values of their organisation are evident in people’s actions Employee perceptions that their organisation has established a good reputation for customer service Job Motivation Q. Feeling of personal accomplishment Employee Engagement pr = .36 Career Advancement Q. Opportunity for growth & development I am proud to work for my organization I would recommend my organization to others Given a choice, how much longer will I be working for my organization How satisfied am I with my organization at the present time pr = .33 Leadership/ Climate Q. Snr Mgmt does a good job of confronting issues pr = .24 Leadership/ Climate Q. Org values are demonstrated by employees pr = .18 Leadership/ Climate Q. Org has established a good reputation for customer service pr =.16 R²=.61 pr = partial correlation, a measure of statistical relationship R² = coefficient of determination, denotes variation of dependent variable explained by independent variables

Section IV Closing remarks

Key takeaways Compensation is important, but it isn’t everything and for the Singapore Civil Service it didn’t factor significantly in the results for most levels of the workforce. In order to increase levels of engagement, managers need to understand the drivers of engagement. Are your employees satisfied, motivated, committed or an advocate for the Hong Kong Civil Service? What can you do to help improve your employee’s engagement? Key drivers of engagement may vary from industries, organization contexts, and from country to country: do you know what is driving or eroding your employee engagement? Managers can take an active role in engaging the workforce through various non-financial means leading to better performance and happier employees who advocate for the government and the public.

Contact Brenda Wilson Human Capital, Hong Kong Tel +852 2115 3312 Brenda.Wilson@mercer.com

Employee engagement categories Leadership / Climate – refers to the senior management team as a whole and perceived clarity in communicating organizational strategy, ability in confronting issues, demonstrating organizational values and concern for employees as well as management of the organization as a whole Supervisory Practices – refers to respondents’ immediate supervisor in terms of perceived competence, availability for consultation, honest communication and frequency of feedback Career Advancement - refers to perceived opportunities in career development as well as long-term career prospects in the organization and the public sector in general Job Growth – refers to staff perceived value of activities outside their scope of work contributing to their personal development of organizational excellence Job Motivation – refers to perceived levels of personal satisfaction, adequate autonomy, interesting challenges and relevant use of their skills and abilities Learning & Development – refers to staff perceived value of activities outside their scope of work contributing to their personal development of organizational excellence Teamwork – refers to respondents’ attitude towards people in the organization and perceived levels of cooperation within the work group and across divisions/ institutions Workload – refers to perceived reasonable levels of work, adequate manpower and ability in maintaining balance between work and personal life Performance Management & Feedback – refers to employee level of understanding, perceived equity and flexibility of the PM system, ability to recognize and reward deserving staff and the level of feedback and communication Rewards - refers to perceived fairness of compensation and other issues of external competitiveness and internal equity Engagement – refers to staff level of satisfaction and pride for the organization as well as intent to stay and recommendation of the organization as a good place of employment