© 2002 HR Strategies Providing Superior Return on Human Capital Investments Robert Ebers, President Alyse Parise, Vice President Presented to LISTnet HR SIG January 9, 2002

© 2002 If you want 1 year of prosperity, grow grain. If you want 10 years of prosperity, grow trees. If you want 100 years of prosperity, grow people. - old Chinese proverb

© 2002 Purpose Provide strategic context about how to use Smart HR practices to build value in your organization.

© 2002 Process 10 minutes - Introductions and Overview 15 minutes - Dumb HR Practices 20 minutes - Strategic Employee Engagement 10 minutes - Strategic HR Context 25 minutes - "Smart HR" Practices 10 minutes - Summary and Close

© 2002 Payoff Information about how Smart HR practices can reduce costs, improve quality and increase value.

© 2002 We Help Leadership... Align people with business strategies. Deal with the "soft" factors driving human performance. We help managers deal with the toughest issue: their people.

© 2002 Our Expertise Surveys and Assessments Training and Development Strategic Planning Culture Change Team Building Coaching

© 2002 NOT ENGAGED ENGAGED ACTIVELY DISENGAGED Who Needs Motivation? Employees not engaged in their jobs. Source: Gallup Management Journal, 2001 Employees actively disengaged in their jobs. Employees engaged in their jobs.

© 2002 Do I know what is expected of me at work? Do I have the materials and equipment that I need in order to do my work right? At work, do I have the opportunity to do what I do best every day? In the past seven days, have I received recognition or praise for doing good work? Does my supervisor, or someone at work, seem to care about me as a person? Is there someone at work who encourages my development? 12 Simple Questions

© Simple Questions (continued) At work, do my opinions seem to count? Does the mission or purpose of my company make me feel that my job is important? Are my coworkers committed to doing quality work? Do I have a best friend at work? In the past six months, has someone at work talked to me about my progress? This past year, have I had opportunities at work to learn and grow?

© 2002 Iceberg of Ignorance Adapted From: Sydney Yoshida on Quality

© 2002 Employee transactions involve a million moments of truth where the firm creates an impression that is favorable or unfavorable... Moments of Truth

© 2002 Costs of Low Employee Satisfaction Direct cost Indirect costs much greater, for example, Loss of discretionary behaviors: Insight Originality Intuition Judgment Humor Inspiration Leadership Friendship Silent Majority Cost of new employees and customers

© 2002 Why Bother with Satisfaction? New employees are very expensive Current employees are very valuable Satisfied employees are very forgiving Employees respond more strongly to how you treat them than anything else

© 2002 Smart HR Practices More Productive and Engaged Workforce Loyal Customers Improved Business Performance... Service - Profit Chain

© 2002 Sustainable Competitive Advantage The ability to learn faster than your competitors may be the only sustainable competitive advantage. Arie De Geus People are the key to maximizing shareholder value and increasing profits in todays economy.

© 2002 Why Employees Top Three Non-Compensation- Related Programs High Performers Say Attract & Retain Top Three Reasons High Performers Say They Resign Opportunities for Advancement Job Redesign Learning New Skills in Current Job Dissatisfaction with Company Management Inadequate Opportunities for Promotion Dissatisfaction with Pay STAYLEAVE Source: 1999 Strategic Rewards, Watson Wyatt 79% 69% 65% 56% 50% Leave or Stay

© 2002 Smart HR Practices Strongest Links to Financial Success Collegial, Flexible Workplace Communications Prudent Use of Resources Rewards and Accountability Recruiting Source: 1999 HCI, Watson Wyatt

© 2002 Smart HR: Collegial, Flexible Workplace Flexible work arrangements Encourage teamwork and cooperation Perks do not vary with position High employee satisfaction All employees on first-name basis Low emphasis on titles Source: 1999 HCI, Watson Wyatt

© 2002 "Smart HR": Communications Easy access to communication technologies Ample opportunity to give ideas and suggestions Financial information is shared Input into how work gets done Business plans and goals are shared Source: 1999 HCI, Watson Wyatt

© 2002 "Smart HR": Prudent Use of Resources Profit-sharing based on business units success Training even during unfavorable times Training for advancement Input into peer evaluation Input into evaluating managers Source: 1999 HCI, Watson Wyatt

© 2002 "Smart HR": Rewards and Accountability Stock plan options Termination of unacceptable employees Help poor performers improve Top performers are significantly paid more Positions paid above market Link pay to business strategy Link performance appraisals to pay Profit-sharing linked to firms overall success Source: 1999 HCI, Watson Wyatt

© 2002 "Smart HR": Recruiting Hire well-equipped professionals Link recruiting to business plan Reputation as a desirable place to work Hire well-equipped hourly new employees Employee input on hiring decisions Recruiting strategy for hiring critical positions Source: 1999 HCI, Watson Wyatt

© Most Important People Issues? Leadership development Motivational pay Training and development of their workforce Source: Competing in a Global Economy 2001, Watson Wyatt

© 2002 Employee Commitment and the Bottom Line Implementing "Smart HR" practices will create an energized, enthusiastic, educated workforce. These practices provide difference between retaining a highly qualified workforce or searching needlessly and expensively for new talent.

© 2002 Knowledge is the only instrument of production that is not subject to diminishing returns. - J.M. Clark

© 2002 Peer Coaching: Smart HR What Smart HR Goals would you like to set for yourself? What would it look like if you accomplished those goals? What next steps must you take to accomplish your goals?

© 2002 Copyright Info The contents, or parts thereof, of Smart HR Practices, are provided for review purposes only and may not be reproduced in any form or by any means without written permission from Impletec. 88 Old Post Road Mount Sinai, NY Voice: (516) Voice: (631) Fax: (631)

© 2002 Dear All, Good afternoon, Some of the slides here would be of interest to you! Have a nice day, Rajesh