Transcript Introduction to Behavioural Competencies

Measuring the Success and Returns of
Employee Engagement
Getfeedback with RWE npower
Alison Gill & Jon Cowell
http://www.getfeedback.net
Who Are Getfeedback?
 In the Business of Talent
 Shaping and measuring investment in people
 Best in class consultants and technology – delivering to global
organisations
It’s not JUST about engagement
Agenda
 Who is RWE npower?
 What is the problem?
 The missing link - the people agenda
 Our challenge
 Our response
 Measurement and analysis - defining the model
 The people agenda - putting the model to work
 The case for measuring and managing engagement
 Conclusions
Who is RWE npower?
 CEGB  National Power: Privatisation
 National Power  National Shower: Internationalisation
 National Power  Innogy: Focus on Transformation and Integration
 Innogy  RWE npower - Focus on Growth through Excellence…
 … in two very different fields
What is the problem?
 Technology is key vs customer is king
 We work to keep the lights on vs we work to keep our customers
 Employees are committed vs employees have transferable skills
 Engagement with job content vs engagement with job context
 Knowledge workers vs production workers
The missing link - the people agenda
 Q: How do you develop a people strategy which meets
the demands of two very different bedfellows?
 A: Not by trying to create a single strategy…
Drivers of Engagement
Engagement Knowledge
Production
Drivers*
Workers
Workers
Manager
#4
#1
Senior
#2
#4
Leadership
Values
Work Life
#3
#1
Values
Values
Manager
(#2)
(#2)
Values
Senior
Values
(#2)
Leadership
(#2)
#3
#2
* Based on PeopleMetrics’ proprietary research on employee
engagement among knowledge workers and production workers at
40+ global 2000 companies
Senior
Senior
Values
Leadership
Values
Leadership
(#3)
(#3)
Direct
Manager
Direct
WorkManager
Life
(#4)
(#4)
EMPLOYEE
EMPLOYEE
EMPLOYEE
ENGAGEMENT
ENGAGEMENT
ENGAGEMENT
Satisfaction
Job
Satisfaction
•••Overall
Overall
Satisfaction
Advocacy
•••Advocacy
Advocacy
• Retention
The missing link - the people agenda
 Q: How do you develop a people strategy which meets
the demands of two very different bedfellows?
 A?: By really understanding the key drivers of value
creation in each part of the business, and focusing on
the things you can do something about
The Employee Engagement and
Customer Satisfaction Cycle
The Profit Chain
Internal
Service
Quality
Employee
Satisfaction
Employee
Retention
External
Service
Quality
Customer
Satisfaction
Customer
Retention
Profit
From “Achieving Breakthrough Service”. Sept/Oct 1997 Harvard Business Review
 Profit and growth are stimulated primarily by customer loyalty
 Loyalty is a direct result of customer satisfaction.
 Satisfaction is largely influenced by the value of services provided to customers.
 Value is created by satisfied, loyal and productive employees.
 Employee satisfaction, in turn, results primarily from high-quality support services
and policies that enable employees to deliver results to customers.
Our Challenge
Q. For which of these do you think that you will change provider in the next 12
months
27/3-23/4/06
Car insurance
17
Gas supplier
13
Electricity supplier
13
Home insurance
10
Mobile phone network provider
9
Home telephone
8
Credit card account
8
Mortgage
4
Bank account
3
Base:
(223)
Our Response
 npower Retail vision: Turning Customers into Fans
 npower ‘wheel’: integrated performance measures
Measure
Example
Metrics
I only ask once
A customer moving
home, who wants to
stay with npower
New address etc.
right first time
Our Response - a worked example
 Switching is now less supplier event driven (door-
knocking), and more customer event driven
(moving house).
 Many triggers for customers to switch: poor service
experience - we can do something about.
 ‘Right first time’ rate is an obvious metric to watch
as an indicator of service performance.
Building the model for registering a new
address
Internal
Service
Quality
Employee
Satisfaction
Employee
Retention
External
Service
Quality
Customer
Satisfaction
Customer
Retention
Profit
 Direct impact of rework costs on cost to serve reduces profitability
Building the model for registering a new
address
Internal
Service
Quality
Employee
Satisfaction
Employee
Retention
External
Service
Quality
Customer
Satisfaction
Customer
Retention
Profit
 Poor service experience reduces satisfaction and increases risk of
customer defection, and hence reduces profitability
Building the model for registering a new
address
Internal
Service
Quality
Employee
Satisfaction
Employee
Retention
External
Service
Quality
Customer
Satisfaction
Customer
Retention
 Frustrated customers are often unpleasant to deal with, reducing
employee satisfaction and retention …..
….. which in turn erodes competence and hence service quality
Profit
Building the model for registering a new
address - ‘straw man’
Systems
Capability
Management
Capability
Training
Investment
Employee
Engagement
Employee
Tenure
% right
first
time
Cost to
serve
Employee
Competence
Customer
Satisfaction
Customer
Retention
Profit
Building the model for registering a new
address - ‘straw man’
Fully engaged
Employee
Engagement
Engaged
Disengaged
%
right
first
Expert
Employee
Competence
Competent
Not yet competent
time
Putting the model to work
 Linkages are articulated empirically.
 By measuring competence and engagement, we
can develop a monetized value for each shift in a
particular metric (e.g. ‘not yet competent’ to
‘competent’) and hence an ROI curve.
This sits at the core of our people strategy
 Provides us with a very clear definition of what
constitutes good managerial performance,
e.g, outcomes rather than processes
Competence
Performance = Competence X Engagement
Knowledge
workers
Expert
Competent
Terrible
twos
New
starts
Not yet
competent
Not engaged
Somewhat engaged
Engagement
Newly
promoted
Engaged
Why do we believe in this approach?
 General case for link between engagement and
productivity is now well established.
 The model provides predictions, which can be
tested and the size of effects can be determined
with high levels of confidence due to large data
set.
 There are precious few other levers we can access
directly to impact performance.
Top 100 listed firms v FTSE 100
Linking Human Capital to Business Results
Business Results
Economic
Value
Added
Revenue
Growth
Tier 1
Market Share
Stock Performance
Key Performance Drivers
Productivity
Quality
Innovation
Tier 2
Customers
Human Capital Capabilities
Leadership
Workforce
Proficiency
Workforce
Performance
Tier 3
Employee Engagement
Workforce
Adaptability
Human Capital
Efficiency
Human Capital Processes
Tier 4
Competency
Management
Career
Development
Performance
Appraisal
Succession Planning/
Leadership
Development
Recruiting
Workforce
Planning
Rewards and
Recognition
Employee
Relations
Human Capital
Strategy
Learning
Management
Knowledge
Management
Human Capital
Infrastructure
Workplace
Design
Source: Accenture Institute for Strategic Studies
Engagement Logic
 An engaged employee is someone who cares and
will “go the extra mile”.
 Strong leadership, opportunities for personal
development, good management, decent pay and
benefits, a reasonable work-life balance, fun
activities which help build close-knit teams, and
staff believing the firm to be ethical
= levels of engagement will tend to be high.
Engaged/Disengaged Analysis: Example
On the Fence  Engaged
Key factors are:
• I have a sense of accomplishment in my job
(1.67*)
• My manager provides the information I need to do
my job (1.54*)
• Senior leaders’ actions are consistent with their
words (1.48*)
• ABC cultivates an environment where each of us
can excel (1.48*)
• ABC values outstanding people (1.33*)
* Increase in odds of an employee moving from a lower segment to higher segment (e.g., On the
Fence to Engaged) if his/her rating on that item is increased by one unit (e.g., from 4 to 5)
Fully Engaged
(24%)
Engaged
(38%)
Engaged  Fully Engaged
Key factors are:
• ABC cultivates an environment where each
of us can excel (1.75*)
• ABC is a socially and ethically responsible
organization (1.50*)
On the Fence
(26%)
Disengaged
(12%)
•
Disengaged
 Engaged
No significant drivers were found
Impact of employee engagement
Employee engagement has been empirically linked to business
outcomes through its impact on workforce productivity
Engaged
Employees
• More satisfied
• Less likely to leave
• More likely to
recommend
Enhanced
Productivity
• Enhanced quality
• Better performance
reviews
Business
Outcomes
• Increased revenue
growth
• Increased EPS
Conclusions
 A focus on engagement enables us to drive up the
motivational aspects of our performance.
 It is the combination of engagement and
competence which drives performance.
 Demonstrating not only that the links exist, but the
size of the effects enables the creation of an
effective ROI model for investment in competence
and engagement.
This defines the people strategy.
Challenges
 Getting clarity of vision has been essential to gaining
buy-in of HR community and senior management.
 Establishment of Retail Survey Action Group
provided the mechanism for educating the business
and HR function.
 Not all that common to find HR people (or senior
managers) with good experience of employee
research …
… hence we work with Getfeedback