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ARTICLE 13 ORANGE PAPER

Mobilising Super-Charged Employees through Engagement to improve Corporate Performance A Global Study Jim Ormond, Jane Fiona Cumming and Neela Bettridge


ARTICLE 13 ORANGE PAPER

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Mobilising Super-Charged Employees through Engagement to improve Corporate Performance A Global Study The Case for the Sustainability / Corporate Social Responsibility Agenda

July 2008 An Article 13 publication by Jim Ormond, Jane Fiona Cumming and Neela Bettridge

Article 13 Ltd 71a The Grove, London, W5 5LL T: +44 (0) 208 840 4450 F: +44 (0) 208 566 4738 E: Info@article13.com W: www.article13.com Registered in the United Kingdom No. 03624247 Registered Office: Canada House, 272 Field End Road Ruislip, Middlesex HA4 9NA

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Contents Executive summary..............................................................................................................3 Introduction ..........................................................................................................................6 Literature review...................................................................................................................7 What is ‘engagement’?.....................................................................................................7 Previous studies...............................................................................................................8 Why engagement is important.........................................................................................9 Methodology.......................................................................................................................10 Results and Findings .........................................................................................................11 A: Drivers for engagement.............................................................................................11 B: Topics of interaction..................................................................................................13 C: Specific topics for employer – employee interaction..............................................13 C1: Health and Safety.....................................................................................................14 C2: Diversity ...................................................................................................................16 C3: Training and Development ......................................................................................18 C4: Community involvement .........................................................................................21 C5: Company’s Environmental Performance ...............................................................23 D: Methods of Interaction ..............................................................................................24 D1: Communication........................................................................................................25 D2: Employee Surveys ...................................................................................................26 D3: Employee networks .................................................................................................28 E: Emerging sources of innovation...............................................................................30 Implications and Conclusions...........................................................................................31 Appendix 1: Sample ...........................................................................................................35 Appendix 2: Findings .........................................................................................................37

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Executive summary “Companies with the highest percentage of engaged employees make more money. In a 12 month study across 50 companies, companies with the highest percentage of engaged workers had a 19% increase in operating incomes and a 28% increase in earnings per share. Over the same year, companies with the lowest employee engagement rates showed a 33% decline in operating incomes and an 11% decline in earnings per share.” (Towers Perrin 2003) As the corporate marketplace changes, demographics shift, and the ‘war for talent’ intensifies with the growth of India and China and their massive, lower-cost workforces, even the most perfunctory website search shows the emergence of engagement buzzwords such as ‘living corporate values, ‘employee champions’ and ‘employee consultations’. Article 13’s current research asks if, and how, companies are engaging with their employees. Is this providing business benefits? And how can sustainability / corporate social responsibility (CSR) be used as a topic for further engagement to release super-charged employees? When discussing the term engagement, many interpretations and definitions arise - from job involvement and satisfaction (Harter et al), to organisational commitment (Konrad 2006) and psychological empowerment (Macey and Schneider 2008). Some even distinguish between the rational and emotional forms of engagement (Towers Perrin 2003). Central to these definitions is employee engagement that is meaningful both to the employer and employee and strengthens an employee’s commitment to an organisation beyond mere job satisfaction. “An amalgamation of commitment, loyalty, productivity and ownership - engaged employees are those who work longer hours, try harder, accomplish more and speak positively about their organisations.” (Wellins and Concelman 2005) The key objective of the research is to discover which employee engagement strategies succeed in unlocking productivity and innovation, and furthermore, the reasons why. The research draws on a sample of 96 companies with proven reputations for reporting responsible business practice and employee engagement. While the majority of the information was gathered from publicly available sources, more innovative engagement strategies were followed up with questionnaires and interviews. This approach sought to enhance the wider overview of current engagement practices with key insight and examples of innovation.

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The research observed that most organisations’ employee engagement strategies are in reaction, or pre-emptive response, to general business drivers such as: o The ‘war for talent’ o Legislation (diversity, equality and health and safety as well as employee consultation requirements) o Changing demographic pressures. However more specific or individual business drivers were noted by a small proportion of the sample. The study’s principal finding was that currently the companies sampled, reported employeremployee interaction, which ranged from simply informing, through to consultation and engagement, over five key topics; health and safety (90%), diversity (94%), training (100%), community involvement (96%) and the company’s environmental performance (79%). Within these topics companies reported a variety of differing sub-topics and mechanisms for interaction: Training and development a. Employee training performance reviews b. Individual employee training and development plans Diversity a. Diversity training, consultations and networks b. Diversity champions Health and Safety a. Health and Safety monitoring b. Health and wellbeing Employee community involvement a. Employee volunteering b. Employee-matched funding Company’s environmental performance a. Employee ‘Environmental Awareness’ days b. Environmental champions or teams Emerging findings from the research implied that, through what could be seen as more ‘inclusive’ engagement strategies, companies are reporting a number of key business benefits, including; a. Decreased accident rates and increased staff empowerment, as a result of behavioural change programmes b. Improved performance and reduced staff absenteeism, as a result of employee wellbeing engagement c. Improved staff attraction and retention through more inclusive diversity engagement d. Aligning personal and corporate vision and values, through training and development.

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Significantly the study indicates that via more comprehensive engagement initiatives, which extend beyond one-way information flows towards two-way dialogue, companies are able to address multi-faceted business challenges rather than simply single measurable targets. Article 13’s research illustrates how organisations are interacting and engaging with their employees over the company’s wider CSR agenda. Significantly innovative companies are integrating personal and corporate values into the wider business strategy, through environmental champions, employee-involvement awards and value and visions training. These innovative companies are not only reporting increased employee ‘buy in’ but are transcending criticism that corporate CSR strategies are simply left on the shelf, and instead are actively encouraging employees to live the corporate values.

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Introduction “Companies with the highest percentage of engaged employees make more money. In a 12 month study across 50 companies, companies with the highest percentage of engaged workers had a 19% increase in operating incomes and a 28% increase in earnings per share. Over the same year, companies with the lowest employee engagement rates showed a 33% decline in operating incomes and an 11% decline in earnings per share.” (Towers Perrin 2003) “The foundation of the organisational ‘business case’ for employee engagement is that the more people care about these things, the more effective they will be, the more effort they will make and the more they will enjoy delivering value with and to other stakeholders.” (Keohane 2007) As illustrated in the aforementioned quotations, there is a body of evidence premising an association between employee engagement and job satisfaction, advocacy and performance. Consequently it can be contended that companies could look to add value to their position via ‘harnessing’ the energy of their people through more comprehensive and varied approaches to employee engagement. At the same time, growing scrutiny of responsible business practice has resulted in a shift in business practice (and culture) towards more comprehensive reporting and a more integrated and embedded approach to CSR, reliant on the ‘buy in’ of employees. This study’s initial aim is to establish a practical understanding of the current status quo of employee ‘engagement’ within business practice, particularly if sustainability / CSR was included. 1. What is driving employee engagement? 2. How is engagement being conducted and over which topics? 3. Which engagement strategies succeed in unlocking productivity and why? Specifically this initial strand seeks to understand which topics, and which mechanisms, are being used to engage and facilitate employee engagement and the degree to which these result in either one way, top down informational flow (communication) or two-way, employeremployee dialogue (engagement). The study’s second aim takes a more detailed view of employee engagement practices around the company’s CSR agenda. This second strand seeks to examine how organisations are involving their employees in the organisations’ wider CSR agenda, particularly, but not limited to, community involvement and environmental performance. Furthermore, what are the reported benefits of this increased employee involvement within the CSR agenda, both with respect to employee performance and the wider CSR agenda?

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Article 13’s initial hypothesis is that more comprehensive and inclusive engagement processes, aiming beyond a single measurable target, can start to address the multi-faceted challenges facing business today. Article 13’s supplementary hypothesis is that a company’s CSR agenda can and does provide an integrative framework to achieve successful and meaningful employee engagement.

Literature review At the start of the study, Article 13 reviewed existing literature to assess the current state of academic and professional research within the employee engagement topic. This review had two clear objectives. Firstly to provide the reader with a comprehensive understanding of what is meant by employee engagement and secondly to map recent research within the topic. More specifically this research sought, throughout the literature review, to offer significant prior evidence that employee engagement can provide clear business benefits. What is ‘engagement’? The process of defining what engagement means in practice is complicated by whether the definition seeks to explain the goals of engagement, its processes or its agenda / topics. While the processes of engagement can be seen to encompass a diverse web of interpretations and definitions, the fundamental goal in the case of this research is the simple desire to access employees’ discretionary effort - in which ‘discretionary effort’ is viewed in the form of extra time, brainpower and/or energy invested by an employee. The literature around employee engagement builds on earlier research and discussion on issues of commitment and Organisational Citizenship Behaviour (OCB) (Scottish Executive Social Research 2007). The defining distinction here, from earlier work being that employee engagement is a “two-way interactive process, in contrast to earlier one-way information flows”. One of the simplest definitions of engagement is offered by Harter et al (2002) in ‘The Gallup Work Place Audit’ who cites a direct correlation between an employee’s engagement and their satisfaction, defining engagement as an individual’s ‘involvement and satisfaction’. Erickson (2005) furthers this definition of mere satisfaction to include ‘passion and commitment’. Job involvement is also prominent in Cooper-Hakin and Viswesvaran’s (2005) definition. Other practitioners disagree with these ‘individualistic’ definitions of engagement, which focus solely on job involvement, arguing that they disregard the role the wider business context plays in fostering engagement. Practitioners such as Wellins and Concelman (2005) contend that to be engaged is “to be actively committed, to a task or issue, with the wider business objectives firmly in view”. These types of definition view engagement as a form of “psychological empowerment, equated with feelings of meaning (sense of purpose), 7


competence (self-efficacy), determination (control) and impact (belief one can make a difference)” (Spreitzer 1995). Perrin Towers’ definition argues that engagement needs to encompass both the emotional and rational factors relating to work and the overall work experience. Emotional factors are evoked from an employee’s sense of inspiration and passion for their work and the wider organisation. While, in contrast, rational factors relate to the employee’s relationship within the broader corporation, for example “the extent to which an employee understands their role and its relation to the company objectives” (Perrin Towers 2003). For the purpose of this research, which emphasises the specific role of employee productivity, while it is recognised that the term engagement encompasses both emotional factors and rational factors, engagement here is fundamentally defined as: “An amalgamation of commitment, loyalty, productivity and ownership - Engaged employees are those who work longer hours, try harder, accomplish more and speak positively about their organisations.” (Wellins and Concelman 2005) Previous studies The Towers Perrin ‘Talent Study’ (2003) is widely viewed as the benchmark. The study represented the views of 35,000 employees throughout the US. The key findings of the study show that despite sharp economic downturn, corporate fraud and continuing job layoffs, employees’ work ethic and desire have not diminished as expected. The study proposed two factors contributing to this positive position: o An increased desire amongst anxious employees for job and financial security o A shift in corporate behaviour which had facilitated a more visible connection between day-to-day work and the organisation’s large goals. Other corporate studies into employee engagement focus on the relationship between productivity and engagement. Two prominent examples being those conducted by the Chartered Institute of Personnel and Development (CIPD) (2007) and the Corporate Leadership Council (2004). The study by the Scottish Executive (2007) provides additional insight into the role of employee engagement within the public sector. In their national study of 2000 employees’ attitudes and engagement, CIPD found that levels of engagement are significantly lower in employees aged 35 or younger and that women and more senior managers are generally more engaged in their work than their counterparts. The CIPD study highlights that despite employee feedback being cited as a key role in fostering engagement only two in five respondents indicated they receive regular feedback. The 2004 Corporate Leadership Council (CLC) study, conducted amongst 50,000 global employees, contends that company strategy and policy determines employee engagement levels. The study found that while “rational commitment, generated by financial, development or professional rewards, is critical for attracting and retaining talent”, “emotional commitment, associated with pride, enjoyment and inspiration, was seen as four times more valuable in increasing effort level and driving discretionary effort”. 8


The study by the Scottish Executive (2007), whilst focused on public sector employees, introduces further insight into the topic. A key aspect of this study is the recognition that engagement topics vary between those that tend to be taken as given, explicitly written into the contract (i.e. pay and benefits) and those that are organisational-dependent and require the organisation to take the initiative (i.e. promoting a clear strategic vision). This study paid particular emphasis to the role of strong leadership and vision in creating the conditions for engagement. Notably, the CLC study found that the highest-impact driver of engagement, from a list of 25, was the connection between an employee’s job and their understanding of how important their job was to the organisation’s success. This finding links employee engagement to the wider body of work on organisational design, heavily featured in the writings of Naomi Stanford. Organisational design can be defined as a process which affects an alignment of vision, values, business strategies, structure, people, processes, and culture and performance measures (Stanford 2004). From this brief review it can be contended that the process of employee engagement can prove integral to facilitating this alignment process, which both contributes to keeping a business adaptable in its operating context and also releases ‘super-charged’ employees. Why engagement is important Modern business is currently in a period of radical change. The internet, for example, has transformed business practice by bringing stakeholders into closer contact. In contrast, acquisition, mergers and outsourcing have permitted businesses to rapidly expand their geographic reach both in terms of ownership and also operational location. At the same time, broad demographic changes are occurring; the ‘developed’ world is in a period of retirement while ‘developing nations’ are coming of age. Consequently businesses are being challenged to manage a radically different workforce and workplace, seeking to achieve more with less, while simultaneously caught in a global ‘war for talent’. Bottom line indicators Building on their earlier work, Perrin Towers (2007) found that firms with the highest percentage of engaged employees collectively increased: o Operating income 19.2% o Earnings per share 27.8% year to year. The Study also found that companies with engaged employees reported a reduction in sales, general and administrative expenses (SG&A) and the cost of production. The Bank of Scotland’s study reiterates Perrin Towers’ findings noting that in retail banking, a 10% increase in leadership effectiveness ripples into a 3% boost to customer satisfaction. By contrast, those companies with the lowest percentage of engaged employees showed year-to-year declines of 32.7% in operating income and 11.2% in earnings per share. Engagement and Retention Perrin Towers (2007) notes that a highly engaged workforce is a more stable workforce, with 2/3 of highly engaged employees having no plans to leave in contrast to a mere 12% of 9


disengaged employees. Furthermore while half of the disengaged employees are seeking other employment, the other half are not actively looking but are spreading their negative views. This study built on their early studies (Perrin Towers 2003) which observed the relationships between engagement and components of operating margins, such as costs of goods sold (COGS) and sales, general and administrative expenses (SG&A).

Discretionary Effort The 2004 study by Robinson et al offers other substantive areas in which engaged employees can impact business success. Key to Robinson et al’s work is the role engagement plays in accessing discretionary effort, which is defined as “types of behaviour not normally part of the reward system”. More explicitly, seven themes of discretionary effort have been identified which can broadly be seen as supporting Perrin Towers’ work:1. Helping behaviour – voluntarily helping others 2. Sportsmanship – setting aside personal interests for the good of the group 3. Organisational loyalty – promoting the organisation to the outside world 4. Organisational compliance – following organisational rules even when not

monitored 5. Individual initiative – demonstrating performance over and above what is expected 6. Civic virtue – macro-level interest in the organisation as a whole 7. Self-development – voluntarily improving one’s own knowledge, skills and abilities in such a way as to be helpful to the organisation

Methodology As previously indicated, the research and subsequent methodology adopted two phases. The initial objective of the research was to establish a practical understanding of the current status quo of employee engagement within business practice. In order to discover this, a sample of companies, recognised for their corporate social responsibility (CSR) reporting, was identified. The sample was drawn by cross-checking three global sustainability indexes - Dow Jones Sustainability Index (DJSI), FTSE4Good and Business in the Community (BITC) - and three pieces of research previously conducted by Article 13. The three sustainability indexes provided a comprehensive overview of those organisations which have attained global recognition for their CSR reporting practices. Meanwhile, the three pieces of previous research from Article 13 provided an alternative indicator towards those organisations which have previously displayed an innovative approach to reported responsible business practice. The final sample population of 96 companies was obtained by cross-checking those companies which appeared on three lists or more. For details on the final sample, see appendix 1.

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Phase 1 The methodology for this first phase was principally web-based. Current CSR reports for all 96 organisations were reviewed and all reference to employee engagement was noted. This information was further overlaid with information drawn from company websites. Principal sources of information were found within the company’s ‘vision and values’ and ‘our people’ sections of annual / CSR reports and websites. To provide a quantitative measure the data was then systematically analysed by content creating a detailed breakdown of engagement practices (see appendix 2). Phase 2 From the analysis of this information, twenty companies were identified as ‘best in class’ and potential innovators, by virtue of either the range, or depth, of their engagement process. The companies selected were purposely identified in order to reflect a range of business sectors, encompass a range of business sizes (measured by employee numbers) and demonstrate the range of employee engagement topics. The twenty companies were then approached with a request for further information and a potential interview. Meanwhile, to limit web-bias, a short questionnaire was sent to the remaining 76 companies. This questionnaire served two purposes; firstly it provided additional research material unavailable electronically, and secondly it ensured that potential ‘best in class’ examples were not overlooked. The research is vastly reliant upon the information the 96 companies chose to report which introduces a clear bias. While the rise in awareness of responsible business practice is expected to ensure that companies actively acknowledge all areas in which they are ‘leading the field’, bias may be introduced via non-reporting and non-audited claims. While appreciative of this bias, the study believes the stringency of the cross-checking process and the thoroughness of the web-based research introduced a level of consistency between all 96 companies. Furthermore the second phase of the research introduced a personalised approach which was designed to ensure web-based information was analysed in context.

Results and Findings This section provides the key findings and associated commentary emerging from the research. The section begins with a broad overview of the reported drivers for, and the topics of, engagement.

A: Drivers for engagement The reported drivers for employee engagement can broadly be categorised into either universal or company/sector drivers. Universal drivers o Existing and new, more stringent, legislation, particularly with relation to health and safety, diversity and communication.

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o o

o

o

Attempts to address historical legacies, particularly with regards to diversity and health and safety. Recognition that companies are increasingly being judged by new matrices, as apposed to merely bottom line, such as diversity composition, fatalities, environmental performance etc. Competitive global ‘talent’ market place – or the ‘war for talent’, specifically the corporate desire to: • Ensure a strong pipeline of talents • Reduce employee turnover • Attract and retain the best available talent. Pressure from stakeholders.

Specific drivers o Specific sector skills shortages. o Changing demographic pressures. o Recognition that health and safety acts as a measure of business success. o Engagement being part of wider ‘reassurance’ campaigns, pre-empting or immediately following, business changes such as outsourcing or redundancies. o Engagement being used to create a corporate ‘climate of trust’ in which employees feel valued and involved. Of those companies reporting specific sector skills shortages, heavy industries, particularly the mining industry, were particularly prominent. Alternatively while a majority of the sample recognised the broad importance of attracting and retaining staff, those companies based within countries faced by acute demographic changes, were particularly expressive of the need to engage with employees. With companies based in mainland Europe, particularly Germany which faces a severe age gap deficit, making explicit reference to challenges faced by demographic change. Particularly noteworthy were references towards the global war on talent, a phenomenon strongly associated with research published by McKinsey in 1997 and 2001. McKinsey’s updated study in 2001 reported that 89% of managers in US companies thought it more difficult to attract talented people than three years ago. 90% thought it more difficult to retain talented employees and just 7% of the survey’s respondents strongly agreed that their companies had enough talent to pursue all or most promising business opportunities. Within the sample it was observed that forty eight companies (50%) made reference to a policy or scheme in place which sought to develop a pipeline of talent. The descriptions of these programmes fell within three broad categories: fast track programmes for high potential candidates, graduate schemes or apprenticeship programmes.

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B: Topics of interaction Figure 1: Reported topics of employer-employee interaction. Topics of Engage me nt 100% 90% Percentage of Sample

80% 70% 60% 50% 40% 30% 20% 10% 0% Environment

Community

Training

Diversity

Health and Safety

Topic

The study’s principal finding was that the sampled companies reported employer-employee interaction, which ranged from informing, through to consultation and engagement, within five key topics: health and safety (90%), diversity (94%), training (100%), community involvement (96%) and the company’s environmental performance (79%) Within the sample of ninety six companies, sixty one (64%) reported interaction with their employees for all five of the aforementioned areas. While a further thirty (31%) companies reported interaction with their employees on four of the five topics. Only five companies reported interacting with their employees in less than four of the areas. C: Specific topics for employer – employee interaction Within each of the five aforementioned topics, the study observed sub-topics of interaction and varying mechanisms by which interaction was achieved. These varying mechanisms encompassed interaction from simply one-way information flows through to deeper engagement. The following sections will provide a more detailed analysis of the research’s findings. Article 13’s initial hypothesis is that more comprehensive and inclusive processes, aiming beyond a single measurable target, can start to address the multi-faceted challenges facing business today. 13


C1: Health and Safety Figure 2: Companies reporting interaction with employees over health, safety and wellbeing. 100% 90%

Percentage

80% 70%

Report interaction with employees

60%

W orkplace safety

50%

Health - well being

40% Behavioural change

30% 20% 10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Se ctor

As illustrated in Figure 2, of the ninety six companies within the sample, a significant majority (90%) reported interacting with their employees over the topic of health and safety. Key subtopics reported were workplace safety and employee health and wellbeing. Forty five companies reported interaction with their employees over both topics, while fourteen failed to report interaction in either workplace safety, or employee health and wellbeing. This study noted that interaction with employees over workplace safety was particularly prevalent amongst utilities (all twelve companies) and mining companies (nine of the ten companies) - see extract 1. Alternatively mining, communication and food and drink companies were observed to have high levels of reporting on employee wellbeing - see extract 2. Aspects of well-being engagement included stress (forty one companies), cardio issues (thirty one companies), HIV/AIDS (eighteen companies) and musculoskeletal complaints (seventeen companies). Interestingly one company reported that the return on employee health and wellbeing investment was around £3.70 for every £1 invested; the study was also published in the American Journal of Health Promotion. Notably a significant proportion of the sample (twenty eight companies) reported implementing behavioural change programmes. While a majority of these companies’ behavioural change programmes were explicitly aimed at addressing health and safety at 14


work, the study also observed examples which sought to achieve behavioural change in wellbeing or out of work safety - see extract 3. Extract 1: Example of reported employer-employee interaction over workplace safety Mining Company G: A Group Safety Risk Management Program was set up in 2007. The program aims to radically improve workplace safety by ensuring that all our people make the right decisions affecting their own safety, and that of others, all the time.

Extract 2: Example of reported employer-employee interaction over employee health and wellbeing Food and Drink Company A: In the UK, to help increase employees' wellbeing both at home and in the workplace, the company has introduced the Fit for Life program. Fit for Life focuses on four key areas of health and wellbeing: Activity, Balance and Relaxation, Nutrition and Personal Wellbeing. The program includes lunch time walking groups, charity runs and cycling events, lifestyle medicals, nutritionally balanced menus, cafeterias, and courses in relaxation and stress relief.

Food and Drink Company E: “We believe that healthy employees contribute to a healthy company. In 2006 we introduced our People Vitality program to enhance the personal wellbeing and effectiveness of our people at work. This program has clear benefits with evidence showing that it can lead to more productive and engaged employees and lower levels of absence due to ill health. A study carried out by our UK business, and published in the American Journal of Health Promotion, found that the return on investment for such programs was around £3.70 for every £1 invested”. Extract 3: Example of reported employer-employee interaction over behavioural change initiatives Financial company F: “We run a number of workshops with the central theme “live life safe” – these help our people avoid getting into difficult or dangerous situations, the workshop is practical, interactive and bespoke to our culture and our people’s work and home lifestyles. Feedback indicates that attendees emerge better prepare to deal with threats to their personal safety”.

Utilities Company I: “Safe work observation is an employee driven process of ‘safety observations’ of individuals or groups used to assist in ensuring that work is performed safely, efficiently and in compliance with our safety standards. It is used to assist us in reducing the number of behavioural related safety incidents and accidents.” Generally observations will be focused on work, but may also include other situations, e.g. compliance with driving rules, use of PPE and safety rules etc. 15


C2: Diversity Figure 3: Companies reporting interaction with employees over diversity. 100% 90% 80% Percentage

70% 60%

Reported interaction

50%

Consultation / work shops

40%

Training

30% 20%

Link with recruitment

10%

Flexible worklife

0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

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Figure 4: Companies reporting business benefits by addressing diversity and interacting with employees through diversity champions. 70% 60%

Percentage

50% 40%

Diversity Champions

30%

Report Business benefits

20% 10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Se ctor

As Figures 3 and 4 illustrate, a significant majority of the sample report interacting with their employees over the topic of ‘employee diversity’. This form of interaction was particularly evident within the banking, insurance, food and drink, and communication sectors. Only a small minority restrict this interaction solely to measuring and benchmarking levels of diversity. Indeed, as the two figures indicate, many organisations have expanded the topic of diversity to incorporate additional aspects of employer-employee interaction, through recruitment (forty seven companies), training (forty four companies) and consultation or workshop exercises (forty four companies). Thirty four (35%) companies reported explicitly, the recognition that in order to operate successfully in a global marketplace a diverse workforce was a business imperative. The reported business benefits included the assertion that a workforce which reflects the company’s diverse client-base provides business advantage - see extract 4. An additional driver reported was demographic change, with companies reporting differing diversity-specific initiatives to attract and retain staff, for example policies to ease and encourage women back to work following childbirth. Overall the study observed thirty seven companies linking diversity with providing employees with a flexible work-life balance - see extract 5.

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Extract 4: Example of reported recognition of diversity’s business benefits Banking Company J: Study after study has shown, a more diverse workforce is a more creative workforce, and one better able to adapt to change. As the company becomes more international, it becomes more important that we should reflect the many communities we serve. Extract 5: Example of linking employee diversity with flexible work-life initiatives Food and Drink Company B: “To enhance diversity, we aim to create opportunities that are attractive to a wide range of suitably qualified candidates and make working for our company as compatible as possible with a variety of lifestyles. In many businesses we offer possibilities such as career breaks, flexible locations, school term-time working, compressed-time working, flexible retirement and job sharing� C3: Training and Development Figure 5: Reported employer-employee interaction over training and development. 100% 90% 80%

Percentage

70% 60% Report interaction

50% 40%

Performance review

30% Personalised development plans

20% 10%

Coaching / Mentoring

0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

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Figure 6: Reported employer-employee interaction over training 90% 80% 70%

Percentage

60% Community / Environmental topics

50% 40% 30%

Visions / Values

20% 10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

Despite the absence of a legal obligation, the entire sample reported some degree of interaction with their employees over employee training and/or development, as illustrated by figures 5 and 6. The mechanisms by which companies reported this interaction included performance reviews (sixty five companies), personalised development plans (fifty five companies) and coaching and mentoring (twenty three companies). The banking sector reported the highest level of interaction via these mechanisms, with thirteen of the fourteen companies in the sample offering both performance reviews and personalised development plans. The reported prevalence of personalised development plans within the sample indicates a shift from one-way interaction to two-way dialogue, with regards to employer-employee interaction over training. Personalised development plans were reported to encourage employees to contribute to the achievement of both personal and business objectives, in contrast to performance reviews in which pre-defined performance and targets were reviewed. This result may reflect a move beyond communication towards engagement - see extract 6.

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In addition to direct work-based training, companies also reported interacting with their staff via training on additional topics, for example linking employee training and development with their wider CSR agenda through using employee-community volunteering - see Extract 7. A significant proportion of the sample, forty four companies, reported providing training over the vision and values of the company - see extract 8. Employer-employee interaction over training and development was often reported as part of a wider skills campaign, with companies reporting the objectives of a) ensuring a strong pipeline of talent, b) reducing employee turnover, c) attracting and retaining the best of available talent and d) keeping pace with global competitors as workplace of choice. Extract 6: Example of personalised employee training and development Banking Company G: “Every individual’s annual objectives and performance measures are linked through the Balanced Scorecard to the Group’s core business strategy. People development planning is intended to support the self management of personal progression. The process is focused around regular meetings between employee and line manager”. Insurance Company D: The company invests heavily in personal and career development, with all managers attending a workshop to assist with the personal development of their staff, and employees perform a self-assessment Personal Development Scan to identify their characteristics and competencies. Extract 7: Example of companies linking wider CSR agenda to training Banking Company C: It is important that employees are aware of the company’s corporate responsibility efforts and processes. Apart from the general information published on the firm’s intranet and website, in 2007, the company directly provided nearly 3,000 employees in all businesses with information on the approach taken by the firm towards corporate responsibility through a range of training & awareness-raising activities. Banking Company J: Employee involvement is a key consideration in the development of any charity partnership, with a particular focus on developing new skills and experiences, the chance to feel proud of themselves, or simply feel supported to put something back. Extract 8: Example of value and vision led training Pharmaceutical Company C: All new starters on joining the Company are given a fourhour corporate governance training session, with line management follow up. In addition to the induction of 245 new starters during 2006, 301 first-line managers were given fullday refresher training in corporate governance.

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C4: Community involvement Figure 7: Employee-community involvement 100% 90% 80% Report Interaction

Percentage

70% 60%

Company Donations

50% 40% 30%

Employee match funding

20% 10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Report Business benefits

Sector

A significant majority of the sample, ninety two companies, reported interaction with their employees over community involvement. Mechanisms reported included corporate charitable foundations and donations, employee matched funding and company Community Days - see extract 9. The study observed that while all insurance and media companies reported matched funding initiatives, only five (50%) of mining companies noted this as a form of employee interaction. A sizeable proportion of the sample reported explicit business benefits from encouraging, facilitating and/or embedding employee-community involvement, with reported benefits including enhanced corporate reputation, employee development and team building - see extract 10. However a smaller proportion of the sample made explicit reference as to how employee-community involvement was embedded with within company culture. One exception was through creating and presenting awards, particularly within the Banking sector, for notable employee-community involvement - see extract 11. 21


Extract 9: Examples of employee-encouraged community involvement Communications Company F: During 2006, employees volunteered 25,000 hours in 35 countries. The activities included nature clean-ups, blood donations, raising funds for various good causes, mentoring, and collections for clothing, school supplies, and toys. Additionally, the company matched funding.

Media Company D: Our Make a Difference (MAD) initiative has been running for just over two years. All permanent Sky people can claim up to 16 hours of paid leave for volunteering and receive matched funding for payroll giving and any money they raise for charity. Extract 10: Examples of reported benefits of employee community involvement Utilities Company F: “Benefits of our community involvement program include increasing the profile of and trust in the company’s brand; motivating employees through volunteering programs and supporting recruitment of new employees”

Insurance Company A: The group’s commitment to promoting volunteer work is longstanding. An excellent instrument for uniting people, volunteer work is driven by the personal involvement of employees. For more than fifteen years, employees have been taking part in clearly identified volunteer initiatives, and have received financial, logistical and material support from the company in the process Extract 11: Example of how companies are embedding and integrating employee-community involvement into corporate culture Banking Company J: The twelfth annual Chairman's Awards will recognise and celebrate the fantastic achievements of employees in their local communities around the world. It's important to us to encourage and inspire colleagues to get involved in the causes that they care about most. Nominations came from 26 different countries and from every business area. The global winners were announced at a ceremony in London– you can read their stories and be inspired by their passion, energy and the positive impact they are making in their communities.

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C5: Company’s Environmental Performance Figure 8: Employer-employee interaction over company’s environmental performance. 100% 90%

Percentage

80% 70%

Report Employee interaction

60%

Awareness Days

50%

Poster / booklet material

40%

Training

30% 20%

Champions / teams

10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

While it is not a legal requirement to engage with employees over their environmental performance, a high proportion, seventy six companies, of the sample reported some form of interaction with their employees. This trend can be seen as reflective of the increasing pressure and scrutiny, both legal and stakeholder, companies are under to monitor and address the environmental impact of their business activities. Reported mechanisms included ‘Employee Awareness Days’, making informational material, such as posters and leaflets, available and providing employee training - see extract 12. A particularly noteworthy mechanism, because it indicates a shift towards employee-led interaction, is the appointment of environmental champions and teams, with the retail, media and insurance sector reporting higher than the sample average - see extract 13.

23


Extract 12: Example of companies interacting with their employees over their wider environmental performance Finance Company F: The Company runs a carbon programme for employees and their families. The programme can be broadly divided into six main parts: Workshops; Climate change micro-site (including the ‘carbon footprint calculator’); Selecting offset projects; Optional home eco audit; CO2 mentor programme; Biodiversity link for children; Environmental supplement.

Extract 13: Example of the use of environmental champions Media Company G: Our Environmental Champions network, in conjunction with the Environment and Health and Safety Coordinator are charged with carrying out the company’s EMS. To help advance environmental goals by key facilities we developed an Environmental Workbook to aid Environmental Champions in gauging yearly usage figures. D: Methods of Interaction In addition to a variety of sub-topics for employer-employee interaction, this study also observed a range of methods of interaction. These methods span the employer-employee interaction spectrum ranging from one-way, top-down interaction (informing and communication) through to two-way dialogue (consultation and engagement). Methods observed are: communication channels such as company intranet, newsletters and magazines; employee surveys; and employee networks. The following section provides a more detailed analysis of reported methods for interaction with employees.

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D1: Communication Figure 9: Reported communication channels between employers and employees. 100% 90% 80% Communicate

Percentage

70% 60% 50%

Surveys

40% 30%

Intranet

20% 10%

News letter Magazine

0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

Ninety three companies made explicit reference to embedded information channels utilised to communicate with their employees. Channels included company intranet, employee surveys and corporate newsletters / magazines. Media companies were observed as reporting a particularly high use of corporate intranet, while retailers were noted as reporting significant use of corporate newsletters, see extract 14. Companies reported using these mechanisms both to communicate ongoing programmes and to update employees on company news. One notable topic for these communication channels was to update employees on changes to the company structure, sometimes as part of a reassurance campaign during such business changes as outsourcing or redundancies.

25


Extract 14: Example of communication mediums between employees and employers Food and Drink Company D: The role of the intranet is to: provide a single source of reliable, up to date Group information, provide access to timely news & announcements at Group level and to encourage the sharing of information across Group.

Finance Company C: “Improved internal communications about information security, with tailored training, roadshows, magazine articles and emails sent out to our staff.”

Retailer Company B: “We have explained our CR strategy to our 53,000 employees in a way that is relevant to their everyday work, in language they understand, using our internal newsletters, intranet and management briefings.” D2: Employee Surveys Figure 10: Reported employer-employee interaction via employee surveys.

100% 90% 80%

Percentage

70% 60% 50% Employee Survey

40% 30%

Feedback Mechanism Reported

20% 10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

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A significant percentage (84%) of the sample reported conducting / implementing employee surveys, particularly evident within three sectors; retail, finance and communication. Topics for employee surveys were predominantly limited to employee satisfaction, although a small minority reported company-specific themes or topics, such as diversity. As a result of employee surveys, companies reported a range of additional ‘follow up’ mechanisms, including benchmarking against competitors or feeding results back into business operations, see extract 15. Twenty six companies reported supplementing annual or biannual surveys with ‘pulse checks’ through mini-surveys and/or focus groups; the pulse checks were reported to assess and appraise business priorities and objectives - see extract 16. Drivers reported for implementing employee surveys included the desire to keep employees involved and informed, particularly with regards to business change, and/or to create a climate of trust. Through the feedback processes companies sought to demonstrate the value of their employees’ views. Extract 15: Example of using employee surveys to feedback into the wider organisation Food and Drink Company D: The team survey report provides an opportunity for teams to discuss the results and address the main issues impacting on them. We had a response rate of 71 per cent and were delighted that such a significant proportion of our people took the opportunity to feedback their views on what it’s like to work here. Our Brand advocacy score, significantly above the external European benchmark, also shows that our employees really believe in the products that we sell.

Banking Company I: Results of the survey were made available at all levels of the organisation and used to drive the development of actions.

Extract 16: Example of supplementing employee surveys with ‘pulse-check’ or ‘snap shot’ surveys Pharmaceutical Company C: “During 2007, to ensure that we stay in tune with employee perceptions between Global Surveys, particularly in the light of the recent business changes, we piloted a Snapshot Survey of a representative cross-section of employees that aims to provide a regular employee pulse-check for senior management against key people objectives.”

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D3: Employee networks Figure 11: Reported employer-employee interaction via employee networks. 60% 50%

Report Employee networks

Percentage

40%

Disability

30%

Ethnicity

20%

Gender

10%

Champion

0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sexuality

Sector

Thirty companies reported the creation of employee networks. Specific networks included those for women (twenty two companies); ethnic minorities (ten companies); sexuality (seven companies) and disabilities (six companies). The banking sector was observed to have a particularly high proportion, with eight companies reporting at least one network, while four banks reported at least three separate networks - see extract 17. Of these thirty companies, the study found sixteen with networks championed or sponsored by senior management, who helped the network achieve goals and objectives. This is in contrast to the other employee networks which can be seen to exist to provide a forum for people from similar backgrounds to meet and discuss shared experiences. A notable driver observed by the study was that companies are increasingly viewing these networks as valuable sources of marketing insight, with innovative companies engaging with employees via networks to better understand their diverse customer and stakeholder base in a bid to improve their marketing, recruitment and community relations.

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Extract 17: Example of employee diversity networks Banking Company K: At the end of 2004, the Group HR function launched an initiative which brings together about ten female senior executives from across the spectrum of the Group’s businesses. In 2005, this group presented a series of suggestions to the HR function on how best to facilitate the inclusion of women in senior management positions.

Pharmaceutical Company D: “Employee networks are an important element of our diversity and inclusion program. They support professional growth and provide a forum where people from similar backgrounds can meet, discuss shared experiences and address any problem areas. This helps engage and empower employees. The Company has networks for Asian, African American, Hispanic, gay, lesbian, bisexual and transgender employees. We also have networks for mature employees, young people and women in leadership. Each network has an executive sponsor who helps to set and achieve goals, obtain resources and promote the network’s objectives amongst senior management.”

Food and Drink Company B: A mentoring program has been introduced in Nigeria to encourage women to develop their careers within the company and help continue this trend. The program connects high performing female managers with role models from outside the business – successful women at the top of their industries who are willing to share their experiences.

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E: Emerging sources of innovation Figure 12: Reported employer-employee interaction to promote ideas and innovation.

80% 70%

Percentage

60% 50% 40%

Ideas and innovation initiatives

30%

Q + A with CEO etc

20%

Awards

10% 0% Other (N=16)

Communications (N=6)

Finance (N=6)

Food and Drink (N=6)

Media (N=6)

Pharmaceutical (N=6)

Insurance (N=7)

Retailer (N=7)

Mining (N=10)

Utilities (N=12)

Banking (N=14)

Average (N=96)

Sector

Notably half of the sample (forty nine companies) reported employer-employee interaction to encourage and promote the flow of ideas and innovation. Examples included ‘Ask the CEO’ question forums (twenty seven companies), ‘idea forums or focus groups’ and awards for innovation or ideas which improve business performance - see extract 18. These initiatives broadly build on the traditional concept of an ‘ideas box’ (either physical or metaphoric) for employees to make suggestions on how the company, or aspects of the company’s performance, can be improved. Topics covered ranged from sharing of best practice through to employees’ gathering to share ideas and experience on important subjects facing the company. 30


The most obvious driver for this form of interaction is the desire of companies to access the ideas and innovation of their employees. Additionally, through Q&As with senior management, this form of open two-way communication can be seen as an attempt to reduce the hierarchy of an organisation, allowing senior management to appear more accessible and creating an atmosphere where employees feel valued. Extract 18: Examples of ‘ideas and innovation’ communication channels Insurance Company 8: “In 2007 we launched ‘World Cafes’ – internal engagement events to gather ideas and share opinions.” Mining Company I: “We run an award programme to encourage and recognise the achievements of people who put our brand values into practice – a vast amount of knowledge is generated through entry submission sharing creativity and best practice across the group.”

Implications and Conclusions The preceding analysis confirms the research preposition, that companies are increasingly Communications Company B: “Let’s have coffee: a direct communication activity where company directors invite the employees to breakfast. The breakfasts last for 2 hours, during which concepts are debated and transmitted to the employees. This represents an important channel for employees to ask questions of people representing the Executive Committee. During 2006, the 21 breakfasts held were attended by 380 people.” seeking to engage with their employees, and provides strong guidelines to address the specific focus of the research. What is driving employee engagement? The study observed that employee engagement is being driven by reactive, proactive and innovative factors. Reactive drivers observed included: a. Existing and new, more stringent, legislation relating to health and safety, diversity and communication b. Attempts to address historical legacies, particularly with regards to diversity and health and safety – this followed recognition by these companies that they were increasingly being judged by new matrices, as opposed to merely bottom line, such as diversity composition and fatalities c. Engagement being part of wider ‘reassurance’ campaigns pre-empting or immediately following business changes such as outsourcing or redundancies. 31


Proactive drivers observed included: a. Recognition of the growing ‘war on talent’, and using engagement as a means to a) ensure a strong pipeline of talents, b) reduce employee turnover and c) attract and retain the best available talent b. Demographic change, particularly within mainland Europe, which has radically altered the composition of the workforce and labour pool, inspiring companies to take alternative approaches to attract and retain staff c. Engagement being used to create a corporate ‘climate of trust’ and two way / multiway dialogue in which employees feel valued and involved. Innovative drivers observed included: a. Potential business benefits inspiring companies to act b. The desire for employees to act as brand magnets or ‘live the company’s values’ c. The desire for employees to take the responsibility to act in their companies’ interests. How is engagement being conducted and over what topics? The study found that five key topics for employer-employee interaction were reported by the sample. Within these topics, companies reported a variety of differing sub-topics: Training and development a. Employee training performance reviews b. Individual employee training and development plans c. Coaching and Mentoring Diversity a. Employee diversity monitoring b. Diversity training, consultations and networks c. Diversity champions Health and Safety a. Health and Safety monitoring b. Health and wellbeing c. Employee behavioural change Employee community involvement a. Corporate donations b. Employee volunteering c. Employee-matched funding Company’s environmental performance a. Employee ‘Environmental Awareness’ days b. Distribution of relevant material, i.e. posters, information booklets c. Environmental training d. Environmental champions or teams

32


In addition to the five key areas of interaction, the study also observed a variety of interaction methods, which ranged from: a. One-way information flows (posters, intranet) b. Employee surveys c. Employee networks d. Ideas and innovation communication channels. Which engagement strategies succeed in unlocking productivity and why? Notable trends from the study include: a. Early vanguard companies are starting to use behavioural change programmes to address how employees view, and act towards, areas of traditional risk such as health and safety. These companies reported greater involvement by employees, decreased accident rates and increased staff empowerment. b. Companies which interact and engage with employees over their own wellbeing, report improved performance and reduced staff absenteeism. For example one company reported that for £1 invested in employee wellbeing it generated £3.70. c. By incorporating employee-diversity interaction into the wider business approach, via topics such as training, recruitment and work-life balance, companies are reporting improved staff attraction and retention. d. Companies are using employer-employee interaction over training and development to address the global ‘war on talent’. e. Training and development is also being used by companies to align personal development and corporate vision, both via personalised development plans linking employee development with companies objectives, and explicitly through training on company values and visions. Are companies engaging with their employees over their sustainability / CSR agenda? If so, how? The study confirms the relevance of this research focus, illustrating emerging patterns of engagement by companies, with their employees, over the wider corporate sustainability agenda. Ninety three companies reported some form of engagement with a slightly higher proportion of companies reported community involvement (96%) in comparison to environmental issues (79%). Employee community involvement a. Corporate donations b. Employee volunteering c. Employee-matched funding d. Employee community awards or recognition mechanisms Company’s environmental performance a. Employee ‘Environmental Awareness’ days b. Distribution of relevant material, i.e. posters, information booklets c. Environmental training d. Environmental champions or teams 33


Notably the study observed that half of all companies implementing employee community involvement reported additional business benefits, such as employee training and development alongside the expected benefits such as improved corporate image. To conclude, this study observed that through employee engagement, innovative companies are increasingly recognising that regulation and obligation need not simply represent a challenge but instead an opportunity. These companies are implementing engagement strategies to increase job satisfaction, employee involvement and more importantly to facilitate employee ‘buy in’ to the wider corporate CSR agenda. The study provides new evidence illustrating the key role employee engagement can play in harnessing the discretionary efforts of employees. Specifically, emergent findings indicate that more comprehensive engagement initiatives, which extend beyond one-way information flows towards two-way dialogue, can address multi-faceted business challenges rather than simply address single measurable targets. This has been exemplified by certain innovative businesses in their approach to diversity engagement. By increasing employer-employee interaction, with regards to diversity, through mechanisms such as employee networks and linking diversity to work-life balance, companies were able to conform to new legislation, improve staff attraction and retention, and draw upon employee networks for marketing purposes. Article 13’s research also illustrates how organisations are interacting and engaging with their employees over the company’s wider CSR agenda. Significantly innovative companies are integrating personal and corporate values into the wider business strategy, through environmental champions, employee-involvement awards and value and visions training. These innovative companies are not only reporting increased employee ‘buy in’ but are transcending criticism that corporate CSR strategies are simply left on the shelf, and instead are actively encouraging employees to live the corporate values.

34


Appendix 1: Sample Organisation 3i ABB Abbey National (Banco Santander Centreal Hispano) Allianz SE AMEC Anglo American AstraZeneca Aviva BAA (Ferrovial) BAE Systems Barclays Bank BASF BHP Billiton BNP Paribas BP British Sky Broadcasting Group BT Group Cadbury Schweppes Carrefour Deutsche Bank DSG International FirstGroup Friends Provident GlaxoSmithKline Hammerson HBOS HSBC ING Group CVA International Power Kelda Group Kingfisher

Code Finance Utilities Banking Insurance Construction Mining Pharmaceutical Insurance Transport Defence Banking Chemical Mining Banking Mining Media Communications Food and Drink Retailer Banking Retailer Transport Insurance Pharmaceutical Construction Banking Banking Finance Utilities Utilities Retailer

Organisation United Utilities Veolia Water Volkswagen AXA Banco Bilbao Vizcaya Argentaria BG Group British American Tobacco Centrica Credit Suisse Group Deutsche Telekom Diageo ENI Experian Fortis NV Home Retail Group Imperial Chemicals Industries ITV J Sainsbury Liberty International Lloyds TSB Marks & Spencer Novartis (REGD) Pearson Provident Financial Rentokil Initial Reuters Group Rio Tinto Group Rolls-Royce Group Royal Bank of Scotland Group Royal Dutch Shell RWE npower

Code Utilities Utilities Car Manufacturer Insurance Banking Mining Tobacco Utilities Banking Communications Food and Drink Utilities Support Services Banking Retailer Chemical Media Retailer Real Estate Banking Retailer Pharmaceutical Media Finance Support Services Media Mining Defence Banking Mining Utilities 35


Organisation Land Securities Group Legal & General Lonmin Man Group National Grid Nokia Reed Elsevier F Hoffman - La Roche Ltd Royal & Sun Alliance Insurance Scottish and Southern Energy Severn Trent Sodexho Telecom Italia Ord Telefonica Tesco Toyota Manufacturing UK Unicredito SpA

Code Real Estate Insurance Mining Finance Utilities Communications Media Pharmaceutical Insurance Utilities Utilities Food and Drink Communications Communications Retailer Car Manufacture Banking

Organisation SABMiller Sanofi-Aventis SAP Schroders Scottish & Newcastle Scottish Power (Iberdrola) Shire Pharmaceuticals Group Standard Chartered Bank Standard Life StatoilHydro ASA Total UK UBS AG Unilever Vodafone Xstrata Yell Group Zurich Financial Services (UK)

Code Food and Drink Pharmaceutical Software Finance Food and Drink Utilities Pharmaceutical Banking Finance Mining Mining Banking Food and Drink Communications Mining Media Insurance

36


Appendix 2: Findings Reported employer-employee interaction over training and development

Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Corporate responsibility / volunteering / Environment 51% 86% 42% 40% 57% 57% 33% 50% 33% 83% 33% 38%

Performance review 68% 93% 67% 50% 57% 71% 83% 50% 50% 67% 67% 69%

Personalised Fast track / development Potential plans 47% 57% 57% 93% 50% 42% 50% 40% 86% 29% 57% 71% 50% 67% 33% 50% 33% 50% 0% 67% 50% 67% 38% 50%

Coaching Mentoring 24% 29% 8% 30% 0% 43% 33% 33% 17% 33% 17% 25%

/ Visions Values 46% 71% 33% 40% 29% 29% 67% 50% 50% 50% 50% 38%

37

/


Reported employer-employee interaction over diversity

Diversity

Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 94% 100% 83% 100% 100% 86% 100% 83% 100% 83% 100% 94%

Consultation work shops 44% 79% 42% 40% 43% 43% 33% 17% 17% 67% 33% 38%

/ Training 46% 64% 33% 20% 29% 71% 33% 67% 50% 33% 50% 50%

Link with recruitment 49% 50% 33% 70% 57% 29% 50% 33% 50% 67% 67% 44%

Flexible work-life 39% 57% 17% 30% 29% 43% 50% 33% 67% 17% 50% 38%

Champions 30% 36% 17% 30% 29% 14% 50% 33% 67% 17% 17% 31%

Business benefits 35% 57% 8% 10% 43% 57% 33% 33% 50% 17% 67% 31%

38


Reported employer-employee interaction over employee networks

Employee Networks

Code Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 31% 57% 25% 10% 43% 14% 17% 33% 50% 33% 17% 31%

Disability 6% 29% 0% 0% 0% 0% 0% 0% 0% 0% 17% 6%

Ethnicity 10% 29% 8% 0% 0% 0% 17% 0% 17% 17% 17% 6%

Gender 23% 43% 8% 10% 43% 14% 17% 17% 33% 17% 17% 25%

Sexuality 7% 14% 0% 0% 0% 14% 17% 0% 0% 17% 17% 6%

39


Reported employer-employee interaction over employee surveys

Employee surveys

Code Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 84% 79% 75% 90% 100% 86% 67% 100% 67% 100% 100% 81%

Trade union consultation 43% 43% 42% 40% 57% 57% 33% 0% 50% 0% 83% 50%

/ Pulse checks 27% 29% 8% 10% 29% 57% 33% 33% 17% 0% 83% 25%

Bench marked 57% 71% 42% 50% 57% 43% 50% 67% 67% 67% 67% 56%

Feedback 58% 64% 58% 50% 57% 43% 17% 83% 67% 67% 67% 63%

40


Reported employer-employee communication channels

Communication

Code Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 95% 100% 100% 100% 100% 100% 66% 100% 83% 100% 100% 100%

Intranet 72% 93% 75% 40% 71% 71% 50% 100% 33% 67% 83% 81%

Road shows / Share Forums practice 32% 16% 21% 21% 50% 8% 20% 10% 29% 0% 14% 29% 17% 0% 50% 33% 33% 33% 67% 0% 50% 17% 25% 19%

best News letter - Q&A with Magazine CEO etc 58% 28% 50% 43% 50% 42% 60% 10% 86% 29% 14% 29% 50% 0% 67% 50% 50% 17% 67% 17% 100% 50% 63% 19%

41


Reported employer-employee interaction for ideas and innovation Ideas and innovation Code

YES / NO

Awards

Total (N=96)

36%

13%

Banking (N=14)

36%

0%

Utilities (N=12)

42%

17%

Mining (N=10)

40%

30%

Retailer (N=7)

43%

14%

Insurance (N=7)

57%

14%

Pharmaceutical (N=6)

33%

33%

Media (N=6)

33%

17%

Food and Drink (N=6)

17%

0%

Finance (N=6)

0%

0%

Communications (N=6)

67%

17%

Other (N=16)

31%

6%

42


Reported employer-employee interaction over community involvement

Community

Code Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 96% 100% 100% 90% 100% 100% 83% 100% 83% 100% 83% 100%

Corporate Donation 89% 100% 83% 80% 100% 100% 83% 83% 67% 100% 83% 88%

Employee match funding Awards 75% 11% 93% 29% 67% 17% 50% 10% 86% 14% 100% 14% 67% 0% 100% 17% 33% 0% 83% 0% 67% 17% 75% 0%

Reported Business Benefits 48% 71% 33% 10% 57% 86% 50% 67% 33% 33% 50% 44%

43


Reported employer-employee interaction over corporate environmental performance

Environment

Code Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 79% 93% 67% 60% 71% 86% 83% 100% 50% 100% 100% 75%

Awareness Days 42% 43% 33% 10% 43% 71% 17% 50% 17% 83% 50% 50%

Poster / booklet material Training 48% 38% 71% 50% 33% 33% 20% 30% 57% 57% 57% 14% 50% 33% 50% 33% 17% 50% 83% 67% 67% 33% 38% 25%

Champions teams 35% 29% 33% 20% 43% 43% 33% 67% 17% 33% 50% 38%

44

/


Reported employer-employee interaction over health, safety and wellbeing

Health Safety and Wellbeing

Total (N=96) Banking (N=14) Utilities (N=12) Mining (N=10) Retailer (N=7) Insurance (N=7) Pharmaceutical (N=6) Media (N=6) Food and Drink (N=6) Finance (N=6) Communications (N=6) Other (N=16)

YES / NO 90% 71% 100% 100% 86% 71% 100% 83% 100% 83% 100% 94%

Deaths 23% 0% 25% 80% 14% 0% 50% 0% 50% 0% 0% 25%

Workplace safety 73% 29% 100% 90% 71% 29% 83% 83% 83% 67% 83% 88%

Stress 43% 36% 50% 40% 29% 71% 50% 33% 50% 33% 50% 38%

Cardio 32% 21% 42% 50% 0% 71% 50% 33% 0% 33% 33% 25%

HIV Aids 19% 7% 25% 60% 0% 14% 17% 0% 33% 0% 0% 25%

Ergonomics / Health / Musculo well Skeletal being 18% 59% 21% 64% 8% 67% 50% 90% 0% 14% 14% 71% 33% 50% 0% 33% 0% 83% 17% 50% 17% 100% 19% 38%

Behavioural change 29% 21% 42% 50% 0% 14% 33% 17% 50% 17% 17% 38%

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References Chartered Institute of Personnel and Development (CIPD) (2007) Employee engagement Factsheet. CIPD: UK. Corporate Leadership Council (2004) Driving performance and retention through employee engagement. Corporate Leadership Council. Washington. Harter, J.K., Schmidt, F.L. and Keyes, C. L.M (2002) Well-being in the workplace and its relationship to business outcomes: A review of the Gallup Studies in C.L. Keyes and J. Haidt (eds) Flourishing: The positive Person and the Good Life (pp 205 – 224) Washington DC: American Psychological Association. Konrad, Alison M. (March 2006). "Engaging Employees through High-Involvement Work Practices". Ivey Business Journal. Retrieved on 14.11.2006. Macey, W. H. Schneider, B. (2008) The meaning of employee engagement. Industrial and Organisational Pyschology. 1. McKinsey (2001) War for talent, part two. The McKinsey Quarterly 2001. Number 2. Robinson, D., Perryman, S. and Hayday, S. (2004) The drivers of employee engagement. Brighton: Institute for Employment Studies. Scottish Executive Social Research (2007). Employee Engagement in the Public Sector: A Review of Literature. Stanford, N (2004). Organisation Design; The collaborative Approach. ButterworthHeinemann, US. Towers Perrin (2003) Working Today: Understanding What Drives Employee Engagement. The Towers Perrin Talent Report. http://www.towersperrin.com/tp/getwebcachedoc?webc=hrs/usa/2003/200309/talent_2003.p df Towers Perrin (2007) Confronting Myths, what really matters in attracting, engaging and retaining your workforce. Towers Perrin: UK. Wellins, R and Concelman, J. (2005) Creating a culture for Engagement. Workforce performance Solutions.

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Mobilising super-charged employees through engagement to improve corporate performance