Navigating the Minefield Preventing and conquering the barriers to complex injury management cases The Causal Links Between Organisational Health and Individual Injury Presented on behalf of Self Insurers of Victoria Insight SRC Pty Ltd Level 9, 34 Queen Street Melbourne VIC 3000 Phone: 03 8611 0600 Email: enquiries@insightsrc.com.au Website: www.insightsrc.com.au

About Insight SRC… Insight SRC is a highly-skilled consulting organisation capable of building the productivity and effectiveness of enterprises through innovative and empowering leadership and organisational development strategies. We deal with the problem, not the symptom, by creating the tools, knowledge and capacity that our clients can then apply to a self-managed process for cultural and organisational change. Insight SRC works as a strategic partner with our clients to develop long-lasting relationships. You have the expert understanding of your operating environment. We have the deep conceptual knowledge of HR development and the powerful statistical tools and change processes to back it up. The solutions we develop are not off-the-shelf formats. Our flexibility in thinking and deployment is a result of a holistic approach to organisational issues. Together we work to give you insight into the way your people work, and the pathways for improvement. As partners, we create knowledge – the most powerful tool of the contemporary organisation. 1

Our theoretical frameworks … Insight SRC has been instrumental in creating the knowledge and setting the standards in the HR, consulting and scientific management communities: research awards (e.g., we have received many prestigious research awards, at the national and international levels, for the quality of our organisational research, and have been rated in the top 10% of researchers worldwide) creating the knowledge that drives international thinking (e.g., we our recognised as thought leaders on the key drivers of wellbeing, motivation and performance, and have published extensively in the top-tier scientific journals in management and organisational psychology) establishing the theoretical frameworks that underpin policy and practice (e.g., we developed the organisational health framework that now underpins the policies and practices in a wide range of private and public sector organisations to build accountability and improvement in people issues) Our research highlights four fundamental truisms that build effective performance Empathy – building trust, respect, and understanding Clarity – building dialogue, discussion, focus and accountability Engagement – building teamwork, empowerment, and shared ownership Learning – building in feedback, personal growth and challenge … these underpin the key team and individual behaviours that drive wellbeing 2

Engagement is the critical path to wellbeing and performance … Our focus, on establishing and understanding the link between people and performance has clearly demonstrated that engaged employees are the foundation of effective organisations. The Russell Investment Group A study of the companies on Fortune’s annual list of “100 Best Companies to Work For” showed that these companies returned five times as much to investors as the market in general Towers Perrin/ISR Using data from 664,000 employees across 50 countries worldwide, Towers Perrin/ISR found that companies with highly engaged employees had lower turnover, lower absence, higher customer satisfaction McKinsey Lowell L. Bryan, a McKinsey Director, argues that companies focus too much on measuring returns on invested capital and not enough on measuring the contributions of their people, and believes that we should use financial-performance metrics to focus on returns on talent rather than returns on capital Insight SRC Working with a range of Australian private and public sector organisations, we have established a strong link between engaged employees and business performance: Boeing Australia – engaged employees drive business excellence (2003 Gold Award) Medium-sized Bank – engaged employees drive financial performance (2006) RACV – engaged employees drive retail and call centre customer satisfaction (2002 SIOP) Victorian Education – engaged employees drive student retention and academic achievement (2007) State and Commonwealth Public Sector – engaged employees lead to lower costs (1992-2007) 3

Typical challenges when building engagement … Building engagement can be a time consuming, costly and threatening pursuit: Getting it right (e.g., organisations often embark on engagement programs without first establishing the root cause of wellbeing and performance outcomes) Survey fatigue (e.g., organisations often implement a range of diagnostic activities, including culture and climate surveys, stress audits, 360 degree feedback surveys, pulse surveys, engagement surveys, etc) Lack of common language (e.g., embedding a common cultural language around ‘people’ is not helped by the use of different frameworks, tools and providers that all come with their own ways of talking about leadership and culture) Lack of integration (e.g., different diagnostic tools usually draw on different conceptual frameworks, resulting in fragmentation and competing messages, a lack of ownership for core issues, and time consuming development processes) The blame game (e.g., organisations sometimes struggle to build ownership of development needs at the right level, with managers blaming employees, and employees blaming managers – finger pointing is much easier than change) 4

Using organisational health as an integrative framework … Through a range of scientific and commercial projects, we have examined the key drivers of organisational health with data from over 1,000,000 employees world-wide. Public Sector Private Sector Accountants and Economists Community Services Workers Emergency Services Workers Hospital Staff Local Government Employees Police Officers Primary & Secondary Teachers TAFE Employees Transport Workers Airline Employees Engineering Employees Finance Sector Employees Information Technology Employees Insurance Employees Resource Industry Employees Retail Employees Telecommunications Employees Utilities Employees 5

Discretionary Performance The Organisational Health Framework … Emotionality Stress Leave + + + Non certified Sick leave Emotion Focused Coping + Negative Experiences + Stress _ _ _ _ _ Turnover Intentions Org. Climate + + Job Satisfaction + + Discretionary Performance + _ + Problem Focused Coping + Positive Experiences + Morale Customer Experience + + + Profitability Sociability Based on Hart & Cooper (2001) 6

Individual Characteristics Organisational Characteristics Distress Simplifying the Organisational Health Framework … Individual Characteristics Organisational Characteristics Distress Organisational Performance Morale we actually control those things that make the most difference to wellbeing and performance … 7

Emotion Focused Coping Research evidence … Individual Morale Individual Distress Workplace Morale Organisational Climate Sociability Emotionality Positive Work Experiences Negative Work Experience 51 30 -30 28 -18 Climate Negative Sociability Emotion Focused Coping 67 -36 23 -10 05 03 Climate 85 -29 15 Climate Emotionality -60 45 25 04 Workplace Distress 8

Workers’ Compensation Noncertified Sick leave Even more research evidence … Job Satisfaction Workers’ Compensation Noncertified Sick leave Organisational Climate Emotionality Positive Work Experiences Negative Sociability 77 -36 34 -23 11 Individual Distress Individual Morale Emotion Focused Coping 55 28 -28 -26 13 12 -11 Workplace Distress -19 -16 11 06 -06 Workplace Morale 40 -39 -34 22 -14 -10 09 Turnover Intentions 9

Improving service delivery … Linking wellbeing and service delivery in a call centre environment Innovation 23 Organisational Climate Staff Well-Being Customer Experience Leadership 52 Retention 10

Organisational climate and safety behaviours … Neal, Griffin & Hart (2000) Safety Science 11

Organisational Climate Days compensated after back injury … 23 Catastrophise Pain Severity Impact On Life 23 Days Compensated 42 48 42 -22 -20 Organisational Climate Claims Management 67 Hart, Norris, Wearing, McMurray, Disler & Malinovskaya (1997) University of Melbourne 12

Organisational Climate Return to work after back injury … Catastrophise Pain Severity Impact On Life 23 Days Compensated 50 48 47 41 -28 -31 Organisational Climate Claims Management Return to Work 80 -38 Hart, Norris, Wearing, McMurray, Disler & Malinovskaya (1997) University of Melbourne 13

? Putting the pieces together … There are no magic silver bullets when it comes to improving organisational health. Nevertheless, we can develop a set of principles and practical tools that enable us to structure our thinking and improvement activities. Leadership Behaviours Cultural Behaviours Employee Wellbeing Organisational Performance Concerns and/or Opportunities ? Core Business Change Management Development People Empathy Clarity Engagement Learning Energy Enthusiasm Pride Passion Symptoms a strategic approach focuses on the causes, not the symptoms… 14

Dynamic equilibrium theory of stress … Stress is a systemic concept that may be observed when two conditions are met: a state of disequilibrium exists within the system of variables relating people to their environment; and this state of disequilibrium brings about change in people’s normal levels of psychological well-being. 15

(e.g., anxiety, depression, frustration, worry) Practical definitions … Distress refers to the negative feelings that people experience as a result of their work (e.g., anxiety, depression, frustration, worry) Morale refers to the positive feelings that people experience as a result of their work (e.g., energy, enthusiasm, pride, team spirit) 16

Emotion is the key to staff wellbeing … Employee Satisfaction Quality of Work Life Employee Wellbeing Job Satisfaction Low High L o w H i g h Distress M o r a l e Utopia Go, go, go ... #$*!#! Presenteeism 17

Police experiences and their wellbeing … Negative Experiences Victims Danger Dual Careers Personality Clashes Activity Insecurity Frustration Complaints External Career Opportunities Coworkers Outside Support Work & Home Life Workload Resources Communication Supervision Administration 22 24 35 47 48 49 50 52 56 61 62 66 67 71 83 84 Positive Decision-Making The Job Itself Management Customer Service Amenities Work Schedule Equip. & Resources Family Offenders 73 68 65 58 57 54 29 18 78 18

Organisational Health Consulting through balloons and weights … By focusing on the actual experiences that an employee has had over the past 1-2 months, it is possible to identify the key factors that contribute to staff wellbeing and overall performance – without ‘loading’ the dice through a checklist or questionnaire. Organisational Health 19

Key drivers of motivation and wellbeing… Causes Employee Development Co-worker Interaction Feedback Goal Alignment Participative Decision-Making Role Clarity Supportive Leadership Work Demands 50% of Individual Morale 85% of Workgroup Morale 80% of Workgroup Distress 45% of Individual Distress Explains 20

Building a quality organisational culture … Research in a wide variety of private and public sector organisations demonstrates that the following four cultural pillars underpin wellbeing, motivation and performance in all organisations: Empathy (Supportive Leadership) Clarity (Role Clarity) Engagement (Teamwork, Empowerment, Ownership) Learning (Feedback, Employee Development) Importantly, the relative strengths and weaknesses across these four pillars differs across teams. This indicates that improvement strategies have to be tailored to the specific needs of individual teams. Clarity Empathy Engagement Learning 21

Building the culture that underpins high performance … Supportive Leadership 20 Feedback Service Delivery Retention Stress Claims Absenteeism Discretionary Effort 40 Employee Development 30 Individual Morale 24 72 Role Clarity 47 22 33 40 45 Teamwork 56 Workplace Morale 44 38 33 39 -41 Empower- ment Ownership Workplace Distress 40 59 66 29 33 -42 -55 Excessive Work Demands 30 Individual Distress -21 Engaging Clarity Learning Empathy Leadership and Management Culture 22

Supportive Leadership Understanding what is most important … Workgroup Morale Workgroup Distress Individual Morale Individual Distress Supportive Leadership Coworker Interaction Role Clarity Goal Alignment Participative Decision-Making 74 45 39 15 Excessive Work Demands 66 -60 -41 -19 -14 -18 Employee Development Appraisal & Recognition 52 48 30 16 13 12 -42 23

Effectively Manages Change Values Training & Development What is behind supportive leadership – a transformational approach… Focus on Core Business Builds Own Skills Is Entrepreneurial Creates a Quality Environment Provides Direction Effectively Manages Projects Focus on People Manages People Seeks Feedback Builds Relationships Supports Staff Focus on Development Coaches Staff Effectively Manages Change Values Training & Development Supportive Leadership being approachable knowing the problems staff face supporting staff communicating well with staff can be relied upon 24

Moving toward an emotional intelligence framework … Research in a wide variety of private and public sector organisations demonstrates that the following four cultural pillars underpin engagement and performance in all organisations: Empathy the extent to which workgroup leaders understand the needs of workgroup members Clarity the extent to which workgroup members have a sense of purpose and know what is expected of them Engagement the extent to which workgroup members collaborate, share ideas and solve problems together, leading to shared Goal Alignment of workgroup goals Learning the extent to which workgroup members feel their efforts are being recognised and their capability is being developed through appropriate learning and development opportunities These four pillars underpin Goleman, Boyatzis and McKee’s (2002) emotional intelligence approach to leadership - their six styles of leadership include visionary, coaching, affiliative, democratic, pacesetting and commanding. 25

Why are the four pillars of culture so important? Wellbeing & Motivation Loyalty Behaviours Absence Cost Customer Experience Sales Performance Retention 85% 60% 25% 15% 50% 55% the leader and cultural behaviours that form the foundations of engagement and performance Clarity Empathy Engagement Learning Four Pillars of Leader and Cultural Behaviour 26

Behaviour change – the difficult part when improving wellbeing … Bringing about a change in the factors that contribute to employee wellbeing is not straightforward. Pre and post-test evidence, from a range of different improvement programs over the past 17 years, has demonstrated that action-learning programs that focus on behaviour change have the greatest chance of success. Minimum chance of success: Building knowledge (e.g., sharing ideas, reflection, one-off training days, etc) Maximum chance of success: Changing behaviour (i.e., if behaviour does not change, improvement does not occur) People can see and experience behaviour change in others, but they can’t always see and experience change in other people’s knowledge! 27

Key questions of leaders coming into the program … Improvement in organisational health should be strategic and holistic! Engagement: Do staff have a shared view about the organisation’s strengths and weaknesses? Are staff on board with the proposed improvement process? Clarity: What are the organisation’s improvement goals? How do these goals fit in with the strategic plan for the organisation? Empathy & Engagement: Do we need to implement an action learning process? How should we create project teams and champions? Learning: What learning activities do we need to build into the process? Do we need to review the leadership structure and roles? Do we need to develop a vision and strategic plan? Do we need to build empathy among leaders? Do we need to improve meetings? … what can I do personally to make a difference? 28

Improving the four pillars will reduce workers’ compensation costs … $1,378,783 saving over three years in one worksite of 80 people! Change Program 29

Key learnings … Distress and morale are central to staff well-being There is no ‘magic silver bullet’ that will enable us to improve wellbeing and performance. However, there are common factors in the leader and cultural behaviours that underpin success in all organisations: Distress and morale are central to staff well-being The quality of the organisational climate you create is critical to staff well-being and organisational performance Empathy, Clarity, Engagement, and Learning is the key to success High performing workgroups can only be established by working ‘collaboratively’ to build an engaging environment that motivates employees and delivers core business results Action-learning is the best way to create new behavioural habits 30

Our contact details… Dr Peter Hart Managing Director Insight SRC Level 9, 34 Queen Street Melbourne, 3000 Phone: +61 3 8611 0600 Email: hart@insightsrc.com.au Roger Dingle Senior Consultant Email: dingle@insightsrc.com.au 31