1. To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. 2008 Hewitt Best Employer Research Engagement and Culture What Differentiates Hi-Performing Organisations

2. 2March 2009 Todays Topics Combining Engagement & Culture for Greater Insight What is Engagement? Best Employer research collaboration Examples of insights from the research

3. 3March 2009 Engagement is…about Results Satisfaction Commitment Engagement Hewitts Employee Research Over Time Positive Correlation to Business Performance Business Results The extent to which people will act and intervene to improve business results The extent to which people want to contribute to business success The extent of peoples approval of their employer Higher Lower

4. 4March 2009 2008 Best Employers Australia & NZ Emerging Findings Best Employers build cultures that increase productivity. They: Create strong alignment between the current culture and the desired culture required for success Hold employees accountable to high standards – build a High Performance Culture Much more effective at focusing employee energy on productive work Best Employers create organisation alignment: Alignment between different organisation layers – from the C-suite down to middle managers, team leaders, and all employees At Best Employers almost all employees understand and are motivated by the values, vision and strategy of the business Best Employers develop talent through effective and committed leadership: Invest time in recruiting and developing talent Manage entire workforce almost all employees can see their future career path, and are equipped and supported with the information and processes for ongoing learning and growth

5. 5March 2009 Relationship Between Engagement and Entropy

6. 6March 2009 Engagement and Culture Hewitts Best Employers Study in Asia, Australia and New Zealand 2008 Leading Performers Mid Tier Bottom Organisations Engagement 86% 51% 31% Alignment Personal & Current Values 3 3 2 Alignment Current & Desired 9 7 6

7. 7March 2009 Engagement & Cultural IndicatorsTop Company Organisation Score Assessment Engagement65% H-Performance Zone – engaged employees outnumber disengaged 2:1 This has a high positive impact on KPIs and business performance Entropy12% Still need some improvements in processes e.g. bureaucracy creating some inefficiencies and lack of info sharing Alignment Personal & Current Values 3 Employees are comfortable in the workplace See some alignment, e.g. accountability and employee fulfillment Alignment Current & Desired 5 Moderate alignment, room for improvement Engagement Improvement Drivers Career Opportunities Performance Management Employees are looking for more clarity around Career Opportunities e.g. Fairness, transparency, view beyond the next promotion Performance Management needs to be an ongoing process, not a point in time exercise Engagement Maintenance Drivers Recognition Manager Employees receive sufficient and timely recognition Manager supports employees and holds them accountable for strong performance, which is aligned with their personal values Culture Focus Areas Reduce Bureaucracy Efficiency Work processes need to be streamlined to improve efficiency Greater collaboration and better info sharing

8. 8March 2009 Engagement & Cultural IndicatorsAverage Company Organisation Score Assessment Engagement46% The Indifferent Zone for Engagement i.e. percent of engaged and disengaged employees is similar This directly impacts value creation across the business Entropy22% Organisation typified by caution and control Decision making is restricted to certain levels in the organisation Alignment Personal & Current Values 1 Employee personal values not aligned with organisation values This makes employees less productive and less likely to stay Alignment Current & Desired 2 Low alignment: values only match in collaboration and client focus Engagement Improvement Drivers Leadership Recognition Employees are looking for more direction and communication from leaders, e.g. vision, values and strategy (both current and future) Recognition is inconsistently applied across the organisation, if at all Engagement Maintenance Drivers Colleagues Work Employees experience a strong sense of teamwork and accountability within their immediate team Employees enjoy the variety and challenge of their roles Culture Focus Areas Employee Fulfillment Empowerment Employees find the work interesting but are frustrated due to lack of recognition and leadership support Theres a perceived lack of ability to make and implement decisions

9. 9March 2009 What do employees observe? Percentage of employees who observe these behaviors in their organisation (note, these percentages are NOT the entropy scores)

10. 10March 2009 How can the bottom move up? ValueBest EmployersBottom Employers Employee fulfillment*51%622% Employee recognition(1)%298% Coaching/mentoring16%164% Leadership development44%109% Balance (home/work)3%70% These percentages represent the Value Jumps for each value: *e.g. in Best Employers 200 employees observed Employee Fulfillment in current and 300 desired as a value (example calculation only)

11. 11March 2009 Results of Engagement + Low Entropy Creates higher revenue that either alone % Revenue Growth