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© 2013 Aon plc To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties.

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Presentation on theme: "© 2013 Aon plc To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties."— Presentation transcript:

1 © 2013 Aon plc To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Aon Hewitt HR Effectiveness, Talent and Leadership December 19, 2013

2 Today’s Speakers  Kathleen Strukoff – Partner, Pacific Southwest Market Leader  Darryl Roberts – Associate Partner, Performance, Reward & Talent  Dennis Hart – Partner, U.S. Employee Engagement Leader 1 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

3 Thought Leadership 2012 – 2013 Reports, White Papers & Publications

4 Coming in 2014: Top Companies For Leaders  Initiated in 2001, this study examines best-in-class leadership and talent strategies, practices and outcomes of companies around the world  The study explores and evaluates: –How organizations assess, select, develop and reward leaders –The execution of leadership practices, as well as the strategy that guides it –A holistic combination of factors which are fundamental to building and sustaining a strong leadership pipeline today and in the future –2014 marks the seventh iteration of the study. The Aon Hewitt Top Companies for Leaders database contains insights from more than 2,300 organizations in 40 countries using a consistent global methodology of selection and data analytics 3 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

5 What Do High Performing Companies Do Differently? Employee Engagement and Alignment are Consistent Themes For this study, “high performing” or “The Best” organizations are defined as those that achieve the highest levels of: Revenue against objectives Innovation High employee engagement Source: Aon Hewitt 2012 Total Rewards Survey 4 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

6 But Most Have Significant Room to Improve Engagement The Engagement Opportunity 5 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

7 What is a Normal Change in Engagement? We analyzed almost 1,100 organizations in our global database that conducted repeat engagement surveys between 2010 and 2012 to answer some specific questions:  What is typical improvement in engagement between survey cycles?  How do you define “really big” improvement in engagement—what is the outlier boundary?  What are the Engagement Outliers doing to achieve such big improvements?  How do some Engagement Outliers continue to improve upon top quartile scores? 6 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

8 Engagement Outliers Engagement Outliers are achieving 14%+ point improvement in 2 years or less…or improving upon top quartile engagement levels 7 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

9 Most Improved Players Most Improved Players are companies that started out in the bottom quartile of engagement, with 46% or less of their employees engaged, and were able to improve this score by 14 percentage points or more within two years or less. Only about 25% of the bottom quartile (or 6% of companies overall) achieve these type of gains.  Fix the basics  Get your culture out of the ditch  Focus on fulfilling work 8 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

10 Best Getting Better Best Getting Better companies are rare (about 10% of all organizations), and are marked by strong perceptions in several key engagement drivers, as well as continuous improvement in others.  Protect the basics and meaningful work  Lead a culture of engagement  Align rewards for performance 9 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

11 Most Improved Player Case Study Global Information Services Company Below Average Engagement at 48% Engagement pts. in 2 years 15% Clear Objectives: Improve engagement, reduce turnover and redefine the employee brand. Disciplined Actions: Career Opportunities – Intranet site modeled after LinkedIn for employees Change Management – Company branded change campaign Communication – Social media and YouTube modeled intranet Empowering Performance Focused on individual empowerment Local level manager effectiveness and recognition Focused Approach: One census survey and one pulse survey annually identifying engagement and top engagement driver priorities. Any employee walking the halls could tell you the five Senior Leader directed priorities 10 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

12 Engagement and Organizational Change Baseline Source: Aon Hewitt (2013) “Managing Employee Engagement During Times of Change.” Engagement typically takes 2 – 3 years to recover following M&A 11 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

13 Engagement and Organizational Change Source: Aon Hewitt, “Managing Employee Engagement During Times of Change.” How to Improve Engagement in Times of Change Rank Order Top 5 Drivers of Engagement for Different Types of Organizational Change Mergers/AcquisitionsRestructuringStrategy Transformation 1 Involved in decision making 2 Co-workers make personal sacrifices to help the organization Understand career path 3 Senior leadership is visible Co-workers make personal sacrifices to help the organization Company provides a two- way dialogue 4 Provided proper training to do job Company provides encouragement for development Provided proper training to do job 5Understand career pathPeople in work group are reliable Have the resources necessary to do job Highlighted drivers are unique to one type of change. 12 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

14 There can be a HUGE payoff for improving engagement Sensitivity of Lagged Operating Income to Changes in Employee Engagement for a $5B Organization (numbers in $millions) NOTE: Sensitivity based on regression beta weight from study of 94 companies controlling for regional differences in Employee Engagement. Sensitivity assumes a $5B organization with gross margin of 55% and operating margin of 15%. 13 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

15 Case Study: Wholesale and Logistics Company Engagement links to sales performance 14 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

16 Case Study: Retailer Engagement links to customer satisfaction 15 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

17 Case Study: Health Insurer Engagement links to performance rating 16 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

18 Case Study: Agriculture Company Engagement links to quality 17 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

19 Engagement Levels are on the Rise Globally but Shifting Across Regions 2 pts1 pt2 pts 18 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

20 Four Out of Ten Employees are Not Engaged – Two Out of Ten are Actively Disengaged 19 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

21 The Work Experience is Improving More than it is Deteriorating Sense of Accomplishment Customers Organization Reputation Diversity Benefits Communication BU/Division Leadership Managing Performance Innovation Recognition 2% 6% 20 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

22 Pay is one of the top drivers of engagement 21 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

23 Total rewards optimization can align pay and other rewards to maximize ROI Effectiveness can be defined in terms of engagement, retention, or other outcomes. 22 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

24 Regional Summary of Engagement Drivers 23 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

25 What Do Best Employers Do Differently? 1 pt2 pts 24 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

26 Engagement Gaps (Best Employers vs. Others) Roughly 20% more employees in Best Employers organizations are engaged than employees in other organizations Engaged employees understand the organization’s objectives and their role, and drive better financial results 25 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

27 The Best Getting Better: Best Employers Do Things Differently Proprietary & Confidential | Think Tank Webinar | December 19,

28 Focus on Engagement at the Individual Level Accelerate the Cycle and Engage People in their own….Engagement 27 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

29 Mood Ring: What is the Mood at your organization? 28 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

30 Focus on Engagement at the Individual Level Personality Selection Tests that Predict Engagement Positivity Drive Cooperation Liveliness Structure Sensitivity Achievement 29 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

31 Questions 30 Proprietary & Confidential | Think Tank Webinar | December 19, 2013

32 Think Tank Webinar Series For replays of the Think Tank Webinars, see Proprietary & Confidential | Think Tank Webinar | December 19,

33 Contacts Darryl Roberts Associate Partner, Performance, Reward & Talent Aon Hewitt Dennis Hart Partner, U.S. Employee Engagement Leader Aon Hewitt Proprietary & Confidential | Think Tank Webinar | December 19, 2013

34 Legal Disclaimer © 2013 Aon plc This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Hewitt's preliminary analysis of publicly available information. The content of this document is made available on an “as is” basis, without warranty of any kind. Aon Hewitt disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Hewitt reserves all rights to the content of this document. 33 Proprietary & Confidential | Think Tank Webinar | December 19, 2013


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