Transcript No Slide Title

FINDING THE PATH
and taking you there
CORPORATE
HEALTH GROUP
Employee
Engagement: Does
It Really Add Value?
Catherine Baumgardner, Corporate Health
Group
Brandon Melton, Lifespan
ASHHRA Annual Conference
October 16, 2006
2
The Context for Employee Engagement
• A key part of the organization’s overall customer
experience strategy
• Not stand alone
• Leadership must understand the connection
How do you define employee engagement?
3
Definitions
• Employees feel a strong emotional bond to the
organization that employs them
• People demonstrate a willingness to recommend
the organization
• People are willing to commit time to help the
organization to succeed
Source: Wikipedia
4
Why Should We Care?
 Strong relationship between employee satisfaction,
customer loyalty and store profitability. Source: Harvard
Business Review (1998)
 Sales force engagement linked to physician loyalty.
Source: PeopleMetrics (2002)
 “Fully engaged” employees had higher portfolio
holdings. Source: PeopleMetrics (2004)
 Employees who were “fully engaged” produced
significantly fewer “defects” than those who were
“disengaged.” Source: PeopleMetrics (2005)
5
Relevance to Today’s Workplace
•
•
•
•
Increased employee, patient satisfaction
Engaged employees mean a better bottom line
Enhanced employee retention
Identifies key drivers of employee engagement
6
Is it enough to have satisfied
employees?
Traits of a Satisfied Employee
Pleasant
Satiated
Content
Gratified
Low absenteeism
Low turnover
Low substance abuse
Source: Leadership Excellence, August 2006
Traits of an Engaged Employee
• View their work as a part of enhancing the overall
organization
• Are willing to do what it takes to exceed customer
expectations
• Believe in their organization
• Want to make it work better
• Trust their managers
Behaviors of an Engaged Employee
•
•
•
•
•
Build relationships
Anticipate customer needs
Support co-workers to provide excellent service
Take initiative
Find answers
Source: Leadership Excellence, August 2006
Today’s Objectives
• Share practices most highly
correlated with engagement
• Discuss where to best
expend resources to impact
engagement
• Show correlation between
employee engagement and
organizational performance
7
Today’s Deliverables
• Criteria for calculating engagement
index
• Categories of effective people
practices that drive engagement
• Measurement tools
8
Case Study--Lifespan
• Health System Founded: 1994
• Hospitals (Founded):
• Rhode Island Hospital (1863)
• Newport Hospital (1873)
• The Miriam Hospital (1926)
• Bradley Children’s Psychiatric Hospital (1931)
• Hasbro Children’s Hospital (1994)
10
Lifespan Facts
 Employees: 11,400
 Physicians: 2,519
 Residents: 510
 Patient Discharges: 52,680
 Emergency Department Visits: 198,447
 Revenues: $1.26B
 Research: $66.8M
11
Why Did Lifespan Pursue
Engagement?
The mission of Human Resources is to assist Lifespan and
its Partners to become the Employer and Provider of Choice
in the communities we serve.
Our vision is to be at the forefront of human resources
practice to achieve the sustained success of Lifespan and
its Partners.
12
Lifespan Employee Engagement
Initiative
People Practices
Worklife
Values
Leadership/Management
Supervision
Career Development
Employee
Engagement
Advocacy
Retention
Job Satisfaction
Organizational
Performance
Patient Satisfaction
Financial Performance
Employee Retention
13
Participation
•
All but one Lifespan location conducted the Employee Engagement
Survey in August and September 2005
•
All five Lifespan locations used the same core questions – allowing
comparison across the health system
•
More than two thirds (69%) of Lifespan employees participated in the
Employee Engagement survey
•
All but one location has an Engagement Index of 70% or higher – fully
engaged and engaged employees
•
All Lifespan locations have the same top overall driver of engagement –
“Lifespan cares about its employees”
14
Measuring Employee Engagement
• Response Scale (Likert )
• An engagement index includes respondents
answering 4 or 5 on all three outcome questions
1
2
Strongly Disagree
Disagree
3
Neutral
4
Agree
5
Strongly
Agree
15
Engagement Index
• Advocacy: I would recommend Lifespan as a great
place to work
• Retention: I intend to be working at Lifespan two
years from now barring retirement
• Satisfaction: Overall, I am satisfied with Lifespan as a
place to work
16
Engagement Segment Definitions
•
Fully Engaged
“5’s” on advocacy, retention and job satisfaction
•
Engaged
“4 or 5” on advocacy, retention and job satisfaction
(but at least one “4”)
•
On the Fence
“3, 4 or 5” on advocacy, retention and job satisfaction
(but at least one “3”)
•
Disengaged
At least one “2” on advocacy, retention or job satisfaction
17
Engagement Index Results
Engagement Index
(% favorable on Adv.,
Ret., Sat.)
Advocacy
(% Favorable)
Satisfaction
(% Favorable)
Retention
(% Favorable)
BH
71%
89%
93%
75%
LCS
71%
83%
91%
80%
NH
72%
83%
89%
82%
RIH
61%
69%
81%
80%
TMH
70%
84%
89%
78%
Overall
69%
82%
89%
79%
18
The Not So Good News…
Almost 1/3 (31%) of Lifespan employees are “On the Fence” or “Disengaged”
Segment
Percentage
Fully Engaged
26%
Engaged
43%
On the Fence
20%
Disengaged
11%
19
The Unengaged: Who Are They?
•
•
•
•
Employed 1-2 years
Under 40 years of age
Work nights and evenings
Mostly knowledge workers, not production workers
20
Categories of Effective People Practices
•
•
•
•
•
Work Life Balance
Values
Leadership/Management
Immediate Supervisor
Career Development
21
Top Engagement Drivers
•
•
•
Bradley Hospital
 Bradley Hospital cares about its employees
 My immediate supervisor demonstrates a positive leadership style
 I feel my career is developing at Bradley Hospital
Lifespan Corporate Services
 Lifespan Corporate Services cares about its employees
 Lifespan Corporate Services treats employees with respect
 I have confidence that senior management is leading Lifespan Corporate Services in
the right direction
Newport Hospital
 Newport Hospital cares about its employees
 Newport Hospital is a socially and ethically responsible organization
 I am able to maintain an appropriate balance between my personal and work life
22
Top Engagement Drivers
•
•
Rhode Island Hospital
 The Rhode Island Hospital cares about its employees
 There are excellent job opportunities available for me at Rhode
Island Hospital
 Rhode Island Hospital provides quality patient care
The Miriam Hospital
 The Miriam Hospital cares about its employees
 My contributions are appropriately rewarded and recognized
 The Miriam Hospital provides quality patient care
23
Overall Engagement Model
Section*
1. Work Life
2. Values
Survey Item**
% Favorable
1. Bradley Hospital cares about its people
83%
4. My contributions are appropriately rewarded and recognized
60%
5. I have the resources to get things done at Bradley Hospital
79%
6. I feel comfortable in reporting issues concerning patient safety,
including patient care errors
88%
7. In my department, we take time to discuss how we can do
things better
81%
8. Bradley Hospital provides quality patient care, as compared to
other healthcare organizations
91%
3. Immediate
Supervisor
2. My immediate supervisor demonstrates a positive leadership style
4. Career
Development
3. I feel my career is developing at Bradley Hospital
5. Leadership/
Management
9. Bradley Hospital takes employee interests into account when
making important decisions
78%
EMPLOYEE
ENGAGEMENT
(71%)
Satisfaction
Retention
Advocacy
65%
58%
* Sections are listed in the order of their impact on Employee Engagement
** Survey items are listed in order of individual impact on Employee Engagement
Items that score below 65% are highlighted in Red and Bold text.
24
Follow-up/Action Planning
•
Communicate survey findings to executive management and governing boards
•
Distribute site and department level reports to middle managers
•
Communicate survey findings and next steps to employees
•
Clarify major issues and concerns with employees
– E-Focus Groups
– Department Meetings
Develop action plans to address issues with key milestones, accountabilities
and timelines
– Overall site plans
– Department specific plans
•
25
Follow-up/Action Planning
•
Implement needed improvements – site and department specific
•
Communicate specific follow-up actions taken to employees
•
Measure progress through employee ‘pulse’ surveys
•
Conduct Correlation Study
26
Gap to Perfection
Baseline
1999
Gap to
Perfection
Results
2001-2004
Results
2005
Absolute
Change
Site
Weighting (1)
Gap
Reduction
Bradley
4.0
1.0
4.5
4.5
0.5
6%
50%
LCS
3.8
1.2
4.3
4.2
0.4
6%
33%
Newport (1)
4.0
1.0
4.3
4.3
0.3
8%
30%
RIH
3.2
1.8
3.9
4.0
0.8
60%
44%
TMH
3.4
1.6
4.4
4.3
0.9
20%
63%
Average
3.7
1.3
4.3
4.3
0.6
100%
46.4%(2)
(1)
(2)
Newport Hospital Survey was conducted in Nov, 2004.
Weighted Average Based on number of Full-Time and Part-Time employees at each Lifespan Site. Straight Average: 44%
27
Correlation Study
• Relationship Between the Level of Employee Engagement
and Organizational Performance
• Organizational Performance Measures
– Patient Satisfaction
– Labor Costs
» Overtime Usage
» Contract Labor Usage
– Employee Retention/Turnover
• Engagement Levels
– Lowest Engagement (<50%)
– Middle Engagement (50%-70%)
– Highest Engagement (>70%)
28
% Overall Rating of Care by Engagement
Index
100%
% Highest Care Rating
80%
65%
66%
73
%
Lowest
Middle
Highest
60%
40%
20%
0%
Engagement Index
Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.
29
Percentile Rank Overall Rating of Care
by Engagement Index
100%
95%ile
80%
Percentile Rank
65%ile
60%
50%ile
40%
20%
0%
Lowest
Middle
Highest
Engagement Index
Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.
30
% Highest Recommendation Rating
% Likelihood to Recommend Hospital
100%
by Engagement Index
80%
75%
65%
65%
Lowest
Middle
60%
40%
20%
0%
Highest
Engagement Index
Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.
31
Percentile Rank Likelihood to Recommend Hospital
by Engagement Index
100%
90%ile
Percentile Rank
80%
60%
50%ile
50%ile
Lowest
Middle
40%
20%
0%
Highest
Engagement Index
Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.
32
% Overtime by Engagement Index
30%
RIH Total Overtime Budget: $22,178,510
Potential Savings*: $5,544,628
21%
% Overtime
20%
This 9 percentage point
difference costs an
additional $4,158,471
15%
This 3 percentage point
difference costs an
additional $1,386,157
12%
10%
0%
Lowest
Middle
Highest
Engagement Index
Note:Potential Savings assumes all employees move to the Highest Engagement Level.
33
30%
% Contract Labor by Engagement
Index
RIH Total Contract Labor Budget: $11,343,926
Potential Savings*: $4,003,738
22%
% Contract Labor
20%
This 11 percentage point
difference costs an
additional $2,446,729
18%
This 7 percentage point
difference costs an
additional $1,557,009
11%
10%
0%
Lowest
Middle
Highest
Engagement Index
Note:Potential Savings assumes all employees move to the Highest Engagement Level.
34
% Voluntary Turnover by Engagement Index
15%
Total Voluntary Turnover during time period: 694
% Voluntary Turnover
Potential Savings*: $1,645,120 (based on 40 employees)
10.1%
10%
9.0%
74% increase
in turnover
55% increase
in turnover
5.8%
5%
0%
Lowest
Note: Potential Savings assumes employees that would have
stayed if Hospitals were in the Highest Engagement Level.
Each Nurse has a replacement cost of $42,400
Middle
Highest
Engagement Index
35
Next Steps and Tools
• Agree upon an organizational motivation and
commitment to employee engagement
• Determine what you would like to achieve
• Define the goals of your effort and how to measure
• Develop engagement questions based around the
criteria for measurement
• Conduct Correlation Study: Employee Engagement
and Organizational Performance Measure
• Build accountability into the performance appraisal
process, starting with leadership
• Develop an action plan to address issues
36
Employer of Choice Objective
•
Engagement: Increase percentage of respondents in “disengaged” and “on
the fence” categories to the “engaged” and “fully engaged” categories in the
Employee Engagement Survey.
Minimum: 2.5%
Midpoint: 5%
Maximum 7.5%
•
Diversity: Decrease the gap of racial/ethnic diversity between RI population
and Lifespan employees in Technical, Professional, and Managerial Job
Categories.
Minimum: 15%
Midpoint: 25%
Maximum 35%
•
Retention: Increase retention rates in first 12 months of employment of full and
part time employees (voluntary separations only).
Minimum: 5%
Midpoint: 10%
Maximum 15%
37
Management Scorecard
•
Purpose
•
Retention, Diversity, Engagement
•
System, Site, Division, Department
•
Distributed Quarterly
–
–
–
–
Measure Progress
Recognition and Reward
Accountability
Best Practices
38
Resources
Brandon Melton
Sr. Vice President, Lifespan
[email protected]
401.444.3774
Jonathan Honibal
Research Director
PeopleMetrics, Inc.
[email protected]
215.979.8032
Catherine Baumgardner
Associate Consultant
Corporate Health Group
[email protected]
717.285.2240
www.corporatehealthgroup.com
Sean McDade, Ph.D
President & CEO
PeopleMetrics, Inc
[email protected]
(215) 979 – 8040
www.people-metrics.com
39
FINDING THE PATH
and taking you there
CORPORATE
HEALTH GROUP
1-888-334-2500
www.corporatehealthgroup.com