Rewarding, Retaining Talent

Rewarding, Engaging, and Retaining Key Talent
Contents
Project Personnel and Copyright Sponsor and Partner Organizations Study Methodology Introduction Key Findings and Lessons Learned Case Study: 3M Case Study: Infosys Case Study: Schlumberger 2 4 5 8 16 39 51 64
2010 APQC. ALL RIGHTS RESERVED. page 1
Project Personnel
STUDY TEAM Rachel Brill, APQC Lawson Arnett, APQC SUBJECT MATTER EXPERTISE Marc Drizin, founder and chief instigator, Employee Holdem Rachele Williams, APQC
EDITOR Paige Leavitt, Editor
MEMBERSHIP INFORMATION For information about how to become a member of APQC, and to receive publications and other benefits, call 800-776-9676 or +1-713-681-4020 or visit our Web site at www.apqc.org. COPYRIGHT 2010 APQC, 123 North Post Oak Lane, Third Floor, Houston, Texas 77024-7797 USA All terms such as company and product names appearing in this work may be trademarks or registered trademarks of their respective owners. This report cannot by reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, faxing, recording, or information storage and retrieval. ISBN-10: 1-60197-158-3 ISBN-13: 978-1-60197-158-6 STATEMENT OF PURPOSE The purpose of publishing this report is to provide a reference point for and insight into the processes and practices associated with certain issues. It should be used as an educational learning tool and is not a recipe or step-by-step procedure to be copied or duplicated in any way. This report may not represent current organizational processes, policies, or practices because changes may have occurred since the completion of the study.
Sponsor Organizations
AARP ConocoPhillips Co. Deere & Co. Johnson & Johnson Occidental Petroleum Corp. U.S. Army ARDEC
Partner Organizations
3M Infosys Technologies Ltd. Schlumberger Ltd.
Study Methodology
APQCs consortium benchmarking study methodology (Figure 1) was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It was recognized by the European Center for Total Quality Management in 1995 as first among 10 leading benchmarking organizations models. It is an extremely powerful tool for identifying best and innovative practices and for facilitating the actual transfer of these practices.
Figure 1 The Rewarding, Engaging, and Retaining Key Talent collaborative research study was designed in conjunction with member and customer feedback to provide proven best practices for employee engagement. APQC employed its proven, fourphased benchmarking methodology to gather data and discover best practices. An explanation of work completed during each phase follows. Phase 1: Plan The planning phase of this study began in early 2009. APQC administered an online voice of the customer survey to members and customers, supplemented by phone interviews with key member organizations. The study topic and scope originated from these interviews, as well as from feedback from the special adviser. APQC researched organizations cited in the secondary literature for successful practices in employeeand specifically, key talentengagement. APQC generated a list of more than 80 potential organizations. The APQC project team contacted the
process owners at each of these organizations to assess qualification and interest in being showcased as a best-practice partner in this study. From this initial list of more than 80 candidate organizations, eight met the best-practice criteria and were interviewed by the APQC project team. The study consortium selected three of these for the award and for in-depth study: 3M, Infosys, and Schlumberger. The study began with a meet the sponsors phone call on November 5, 2009 to allow representatives from the sponsoring organizations to network and share their challenges, issues, and expectations with the project team. The virtual kickoff meetingattended by APQC, the special advisers, and the study sponsorswas held on December 9, 2009. Phase 2: Collect Three tools were used to collect information for this study. 1. Screening surveyShort online survey designed to determine if potential bestpractice partners met the study criteria for best-practice status 2. Site visit guideQualitative questions that structure the discussion framework for all virtual site visits 3. Quantitative surveySponsor organizations were given the option of completing the Open Standards Research Reward and Retain Employees benchmarking survey online in return for a customized report comparing results to the Open Standards Research database The three best-practice organizations hosted virtual site visits in February 2010 attended by sponsors, the study advisers, and members of the APQC team. APQC then prepared written case studies of the site visits and submitted these to the bestpractice partners for approval. Phase 3: Analyze In February 2010 APQC and the special adviser analyzed the information, concentrating on the best practices and key enablers. APQC analyzed the quantitative data, specifically with regard to metrics and practices of top performers on a balanced set of metrics. Phase 4: Adapt The presentation of key themes and leading practices took place March 31, 2010 via a virtual knowledge transfer session.
ABOUT APQC APQC is the leading resource for performance analytics, best practices, process improvement, and knowledge management. The organization's research studies, benchmarking databases, and renowned Knowledge Base provide managers with intelligence to transform their organizations. A member-based nonprofit founded in 1977, APQC serves more than 750 of the Fortune Global 1000 companies and numerous government organizations. For more information, visit www.apqc.org or call +1-713-681-4020. ABOUT EMPLOYEE HOLDEM Marc Drizin is founder and chief instigator of Employee Holdem, an HR consultancy that specializes in strategies for attracting, motivating, and retaining talent. Drizin uses the Work Force Engagement Assessment, a scientifically validated survey that creates a road map of improvement for his clients to improve employee engagement and retention. In addition, Employee Holdem conducts a biannual national work force engagement assessment and delivers 25 to 35 speeches and workshops per year around the world on employee loyalty, ethics, and customer and employee retention. Prior to founding Employee Holdem, Drizin was director of work force engagement at Performance Assessment Network Inc., where he was responsible for all aspects of employee engagement and retention research. Before this, he served as vice president and loyalty specialist for Walker Information, a market research firm. Drizin has co-authored three books on employee engagement and retention: Workforce Engagement: Strategies to Attract, Motivate, and Retain Talent (WorldatWork Press, 2007), Employee Engagement: A Guide for Managers and Supervisors (WorldatWork Press, 2008), and Designing Employee Recognition Programs (WorldatWork Press, 2009).
Introduction
In spring 2009, as we talked to our members and clients about their key challenges and issues in HR, one clear need for best-practice information emerged at the forefront: how to engage and ultimately retain employees, particularly amid an economic downturn. During a downturn, employees tend to suffer from disengagement and fear as they witness rounds of layoffs and high unemployment rates. Employees are stressed out because they are expected to do more work with fewer resources. In addition, loyal customers become scarce, so everyone has to work harder to generate profits. And employees often take financial hitsvia a reduction in salary, a withdrawal of their traditional retirement matching program, a suspension in pension benefits, and/or unpaid short-term furloughsas their employers struggled to manage labor costs. Secondary research conducted by APQC in spring 2009 revealed that many highpotential employees are planning their exodus once the economy improves and organizations begin hiring again. With little loyalty to employers that have not visibly appreciated them, such employees will jump ship for the first better offer that comes their way (often for the same job at a competitor, for only slightly more pay, as subject matter expert Marc Drizins research data shows). Clearly, organizations need help fulfilling employees sense of job security, career growth, and appreciation for a job well done. Best-practice partner Infosys calls this back-to-the-basics HR. Best-practice partner 3M considers this treating people fairly through accountability and rewards, a respectful work environment, empowering work procedures, and by remembering to recognize and celebrate the accomplishments of employees. This study finds that employees want a challenging job at a fair pay; in return, they are willing toand even want towork very hard. APQC found that this desire for challenging work at a fair wage is universal, regardless of culture, industry, or location. As APQCs research confirms, providing this opportunity does not have to be inordinately expensive. Employee engagement can be as simple as emphasizing job rotation, internal mobility, and placement in a succession plan for key talent. And fair compensation can be a matter of regularly benchmarking what is considered fair for different types of key talent and ensuring a competitive pay rate. The bottom-line advice from this study is eye-opening in its simplicity. That is, engaging key talent involves 1) listening to employees, gathering their feedback, and acting on it and 2) paying attention to job satisfaction through regular performance management, regular recognition, fair compensation and benefits, and the opportunity for employees to develop themselves personally and professionally. Rachele Williams, program manager, research services, APQC
Ive spent the last 25 years consulting with world-class organizations in their work to improve the satisfaction, loyalty, and retention of their customers. Over time, my interests shifted to a critical driver of customer loyalty: the after-sales care and support provided by employees. Simply put, employees are assets with feet. They make the decision every day to go back to their place of employment. But more important to an organization than their tenure is employees desire and likelihood to work hard, to be active team members, and to go the extra mile for customers. No matter the size of the organization, the industry they serve, their geographic location, or the demographic make-up of their employees, it comes down to the golden rule. Nearly 15 years ago, I gave a series of workshops related to my companys first national benchmarking study on employee loyalty and referenced the golden rule. A colleague of mine said: Marc, my family has a different definition of the golden rule. In our house, he who has the gold makes the rules. I laughed but quickly realized the implication of the statement, not only to that benchmarking study but also to the state of the employer-employee relationship at that time and in the future. Today around the globe, unemployment rates are at record highs. Even with unemployment rates in the United States at or near double digits, 2.7 million jobs remained unfilled in January 2010. Just as telling, nearly 5,000 U.S. employees voluntarily quit their job every day. During this same time, many products and services have been commoditized to the point that quality, convenience, availability, and price differences are almost nonexistent among competitors. Customers can now demand better, cheaper, and faster, instead of seeking just one of those differentials. That leaves two clear points of differentiation for organizations today: their people and the investment they make in them. Lee Iacocca once said: Start with good people, lay out the rules, communicate with your employees, motivate them, and reward them. If you do all those things effectively, you can't miss. Our best-practice organizationsInfosys, 3M, and Schlumbergerlive these words every day through their deeds and actions. Marc Drizin, founder and chief instigator, Employee Holdem
WHY THIS RESEARCH? Ultimately, APQC conducts collaborative research in response to member need: the need to solve real-world business challenges and the need for best practices, metrics, and measures to help study participants validate their current practices and/or get to the next level within their organization. For each project, APQC works with premier subject matter experts or special advisersthought leaders in academia, research, or consultingto provide content expertise and guidance. We scan the globe for bestpractice organizations to learn from, regardless of whether or not they are APQC members and regardless of industry, organization size, or geography. Our research is aligned with APQCs Process Classification Framework (PCF), an organizationwide taxonomy of operational and support process groups, processes, and activities. PCF 6.0 represents the process group Develop and Manage Human Capital. The Rewarding, Engaging, and Retaining Key Talent study most closely aligns with PCF 6.4, the process to reward and retain employees. All of APQCs research is governed by its Benchmarking Code of Conduct, which provides a platform for efficient and ethical benchmarking. STUDY SCOPE As implied by its title, this study was about rewarding, engaging, and retaining key talent, with the emphasis on employee engagement (because recognition and reward practice influence employee engagement, and retention is considered an outcome of engaging employees). We were interested in exploring the topic with regard to all employees, and key talent (e.g., high value, high potential, technical, and/or leadership) in particular. Whereas the topic and specific questions for exploration in the qualitative research were driven by member and customer feedback and input from study sponsors and the special advisers, the scope categories for the study follow a general, holistic framework of 1) strategy, 2) processes, 3) practices, and 4) outcomes and measures. After a brief introduction to each of the best-practice partners and key definitions, the report follows this outline. APQCs history of collaborative research in human capital has spanned the spectrum of topics across the HR life cycle over the past decade in response to member interest and need (Figure 2, page 11). The Rewarding, Engaging, and Retaining Key Talent study fills an important gap in a body of research that has heretofore examined talent management broadly over the years but not yet drilled down into employee engagement best practices.
APQCs History in Human Capital Collaborative Research: The Last Decade
Figure 2 BEST-PRACTICE PAR TNERS OVERVIEW After a comprehensive screening process by the APQC project team, beginning with more than 80 organizations cited in secondary literature and/or nominated by the special advisers and study sponsors, APQC narrowed down the list to eight organizations that met the best-practice criteria and were willing to participate and share their practices. Three organizations were then selected for the best-practice partner designation by the consortium sponsors. These three organizations have strong brand names and corporate reputations, purposely represent a variety of industries, and most importantly exhibit exemplary practices for engaging their key talent. These organizations have also been able to explicitly link their work in employee engagement with specific positive business outcomes. This link will be of great interest to those readers seeking to establish a business case for conducting formal employee engagement work. This section includes an overview of each best-practice partner and why they were selected for the study.
3M Best known for its innovative products like Scotchgard fabric protectors and Post-it Notes, 3M is a diverse manufacturing conglomerate headquartered in St. Paul, Minn. In 2008 the organization generated more than $25 billion in revenue and employed roughly 80,000 employees in more than 60 countries. Although formal employee engagement measurement is relatively new to 3M (work began at the corporate level in 2007), corporate HR has now committed itself to employee engagement with vigor; the organization is as passionate about employee engagement as it is to excellence in new product development and innovation. Since 2007, 3M has developed a common corporate definition, strategy, tools, and processes for employee engagement, complemented by individual engagement plans within each business unit. The organization measures employee engagement via three survey instruments: a worldwide leadership survey, a worldwide business unit survey (administered once every two years), and customized employee engagement surveys (conducted on an as-needed basis). Employee engagement scores from the worldwide business unit survey are analyzed, compiled, and reviewed by the senior vice president of HR and the CEO, and those business units with the ten highest and lowest scores are visible throughout the organization. 3M has also implemented some notably successful engagement practices, including an employee value tool discussion guide for managers that helps facilitate in-depth, regular conversations with individuals about what motivates them in the workplace, while they are still employed. 3M also offers a 10-minute video series for managers and supervisors on various employee engagementrelated topics. Ultimately, 3M has seen great success from its efforts and has correlated employee engagement to positive business outcomes, most notably innovation. The case study provides more insights and best practices offered by 3Ms vice president of talent solutions and manager of HR measurement. Infosys Infosys Technologies Ltd. is one of the worlds leading technology services firms and provides engineering and software development; data management; project management; IT systems integration, support, and maintenance; and strategic consulting services to customers around the world. This organization ranks No. 330 on the Financial Times Global 500, with 109,000 employees and $4.6 billion in revenue in 2009. According to the Infosys virtual site visit hosts, employment at the organization has a high prestige factor. As the first Indian company to offer an employee stock option plan, many employees have shared in the wealth as the organization has grown. The primary role of HR at Infosys is to facilitate the employees state of being at work from one of obedience and diligence to one characterized by initiative,
creativity, and ultimately passion. To that end, the organization has a positive and challenging work environment with state-of-the-art training facilities, an unwavering commitment to training and development, customized career paths, a values-based rewards system, and a culture of meritocracy where key talent can earn a significant percentage of their total compensation based on performance. There is a strong commitment to employee engagement. For example, an employee satisfaction survey (called LITMUS) takes the pulse of the work force every 18 months. Every manager has a LITMUS scorecard based on the results, and he or she is measured on progress against a set of defined parameters. The case study details Infosyss employee philosophy and practices, presented by the senior vice president and head of HR development and the group manager of business partner HR. Schlumberger Schlumberger Ltd. is a global oilfield services provider supplying technology, information solutions, and integrated project management that optimize reservoir performance for customers in the oil and gas industry. It employs 79,000 people of 140 nationalities working in approximately 80 countries. Schlumberger is committed to internal development and organizationwide global talent mobility. The organization leverages a number of mechanisms to gather feedback and understand employees, including eight to ten global, annual HR audits; an employee satisfaction survey; and regular HR open houses and field visits between personnel staff and other employees. HR routinely schedules in-depth discussions with high-value employees and their managers. These career orientation reviews focus on goals and expectations, what truly motivates that employee, training and development, and other engagement and retention factors. During the recent economic downturn and during any time of organizational change such as the acquisition of another organization, Schlumberger applies creative practices to retain its valued talent, such as chartering an integration manager responsible for employee retention and offering incentivized leaves of absence during slow times to select valued employees. The case study details Schlumbergers emphasis on internal employee development and career paths in order to engage key talent.
THE REWARD AND RECOGNITION ROAD MAP Developed in part from the work of author Gary Hamel, Employee Holdem uses a Reward & Recognition Roadmap to assist clients in determining the messages they inadvertently send employees and supervisors (Figure 3). The road map is divided into three segments, showing the progression from training talent to educating talent to developing talent and correlating these progressions to the appropriate reward and recognition practices of an organization. The Employee Holdem Reward and Recognition Road Map
Figure 3 Employees new to an organization, their job, or their daily activities are in the training stage, and it is the employers responsibility to provide these new workers with the opportunity to become proficient through instruction and practice. Supervisors and managers often measure and reward obedience and diligence during this training phase, using factors like error rate and attendance as reference points. Simply put, the organization is interested in getting a person who can adequately do the job. As employees acquire the basic skills, experiences, and competencies to perform their jobs, they may be ready to progress to the next level and learn additional information about the organization, its products and services, and the organizations mission, vision, and values. Best-practice organizations use development assessments and career paths to better understand the interests, talents, values, and beliefs of these employees. They may also encourage employees to make decisions that assist both internal and external customers. During this phase, performance management begins to move away from rewarding basic action to rewarding an
overall understanding. In this phase, organizations are interested in having the right person who can do the job. Employees who have demonstrated advanced initiative, skills, and aspirations then advance to a development stage. Managers move from a role as trainers and teachers to a role as coach, with the intent to develop the unique capabilities and possibilities of each high-potential employee. These high performers are encouraged to provide input to enhance the customer experience through product and process improvement and to work with peers to meet the organizations goals. The organizations expectations of these employees expand, and an employees expectations that their rewards and recognition for a job well done increase. Organizations take a more active role in understanding what drives this key talent by assisting them in fulfilling their dreams, both personally and professionally. In this phase, organizations want the person who wants to excel in the job.
Key Findings
Before discussing the study findings gleaned from the best-practice partners with regard to their employee engagement philosophy and strategy, it may be helpful to first understand how the HR function is structured at each best-practice partner and how each organization defines employee engagement within the context of its specific organizational culture. HR STRUCTURE AND DEFINITION OF EMPLOYEE ENGAGEMENT 3M corporate HR is comprised of various centers of expertise and a centralized information services organization, complemented by business HR partners dedicated to each business. Central employee engagement strategy and process responsibility reside with the engagement and measurement center of excellence within the talent solutions department. The engagement and measurement team is responsible for conducting the leadership survey, standard employee opinion surveys, prehire testing, developmental assessments, executive assessments, employee engagement, and the employment brand. All talent solutions processes are applied consistently to the global 3M organization. 3M partnered with a professional services firm to develop its formal, organizationwide definition for employee engagement. The key aspect of this definition is the focus on alignment between the employees behavior and action with overall organizational goals and objectives; without this alignment, an employees initiatives and efforts may be counterproductive, or even detrimental, to the organization. This formal definition for employee engagement provides a common language and focus. As summed up by the vice president of talent solutions, the formal definition for employee engagement gets everyone on the same page and provides a shared sense of purpose. The HR function at Infosys is comprised of corporate HR and business partner HR. Corporate HR is centrally responsible for talent planning, recruiting, organizational development, geographic HR, compliance and immigrations, compensation and benefits, and employee relations. Business partner HR is decentralized to support the business lines. Each business line has a business partner HR team that serves as relationship managers to the business. These business partner HR teams report to both the business line leaders and the corporate HR function. Infosys defines employee engagement for each individual employee as possessing passion for the work he/she performs at the organization. This definition was adapted from author Gary Hamels hierarchy of human capability to achieve competitive success. The role of HR at Infosys goes beyond performance management by fostering this culture of initiative, creativity, and enthusiasm. Nandini Nathan, group manager of business partner HR, said: It is all about the passion. Employee engagement is then a given.
Schlumberger is organized into a matrix structure comprised of business segments and regional markets. As a matrix organization, HR representatives are present in each of the regions, as well as each business segment and technology center. Along with the matrix of HR representatives, Schlumbergers regional HR support centers consolidate HR data and administration, thus allowing the personnel function and HR professionals out in the field to focus on face-to-face strategic support of their internal customers. Although Schlumberger has not developed a formal definition of employee engagement, the organization views the motivation of its employees as a core value, along with a commitment to technology and a determination to produce superior profits. Employee motivation and engagement are intrinsic to its organizational culture. The employee value proposition is characterized by borderless careers, extensive development and training opportunities, a challenging job with high levels of autonomy and responsibility early in a career, progression based on performance rather than seniority, diversity and true meritocracy across all nationalities, and a competitive salary and benefits package. STRATEGY Among the best-practice partners, employee engagement responsibility resides with managers and supervisors. That said, senior executive championship is necessary. The study also found that successful employee engagement is not a set of practices or a program but rather a journey woven into organizational culture and integrated with other key aspects of talent management. Partner with line managers and the business on employee engagement, with championship from senior leaders. When it comes to crafting a strategy for employee engagement, HR should serve as a key facilitator of employee engagement within the organization and provide centralized tools, templates, and processes. But the responsibility for employee engagement resides with front-line supervisors and managers. All three best-practice partners agree. Senior leadership should provide executive championship for the effort and act as role models at the highest level. Accountability for employee engagement at the managerial, supervisory, and senior leadership levels is integrated into the performance management process at best-practice organizations. At 3M, corporate HR partners with its business units to drive growth through people. Engaging employees and strengthening the employment brand is a key HR strategy for 2010, which is in turn aligns with HR critical success factors, its overarching vision and mission of HR, and its overall organizational strategy via a goal tree. The goal tree graphic visually depicts four overarching corporate strategies, which cascade into the HR vision and mission that support the corporate strategy, the corresponding five HR critical success factors that support the HR
vision and mission, and the six HR strategies that support the critical success factors. The organizations engagement and measurement team developed a common corporate definition, strategy, tools, and processes for employee engagement leveraged organizationwide, complemented by individual engagement plans within each business unit. The manager of HR measurement at 3M has responsibility for the overall employee engagement strategy, including training, education, and coordination of central, worldwide employee engagement processes; and she and her team support specific engagement tactics at the business level. But ultimately, employee engagement stems from trust in senior leadership, and the real influencers of day-to-day employee engagement are line managers and supervisors. 3M has found that the conditions necessary to engage employees are trust in leadership, supervisors and managers, and in the work group environment. Business managers lead the efforts to engage people at Infosys. As stated by Nathan: Engagement is ultimately a line manager responsibility. It is not HRs job to do. Yet leaders at Infosys are key to the employee engagement strategy. The corporate leadership team serves as role models who demonstrate an ability to relate, genuineness, accessibility, approachability, humility, and a results orientation. According to Nathan, the Infosys senior leadership team drives an open culture and constantly inspires the employees. At Schlumberger, line management is responsible for employee engagement, and corporate HR supports line management. Although corporate HR is heavily involved in administering and measuring engagement and in creating and implementing rewards and retention practices, ultimate accountability for employee engagement resides with line management. A commitment to employee engagement at Schlumberger begins with visible commitment and support from senior leadership. In order for any endeavor to be successful in business, the focus has to come from senior leadership, said Benoit Barbier, HR manager, reservoir management group. Without a clear, consistent, and persistent message from the senior leadership team, employee engagement and retention will not be successful. Integrate the employee engagement strategy with the overarching talent and employment branding strategy. All three best-practice partners closely integrate employee engagement strategy with other elements of talent management strategy, such as employee recruiting and selection, training and development, rewards and retention, performance management, and overall employment branding. Karen Paul, manager of HR measurement at 3M said, Integration of employee engagement with other HR processes is key.
Employee engagement is by no means a stand-alone endeavor or even a specific set of activities at best-practice organizations. It is a journey ingrained in their organizational cultures. Figure 4 summarizes the key elements of talent management that organizations should integrate with employee engagement strategy and processes. (The processes for integrating employee engagement strategy with recruitment, selection, and employment branding strategy are summarized in this section; employee engagements integration with the other elements of talent management is detailed in subsequent findings.) Integrating Employee Engagement with Other Aspects of Talent Management
Figure 4 Integrate engagement with the selection strategy. Creating a cadre of engaged employees begins with selecting the best individuals for specific positionsthat is, individuals who fit within the larger organizational way of life. Individuals who feel comfortable in their role and who feel like they fit into the organizational culture will certainly have a higher level of engagement than individuals placed in the wrong position or who simply do not fit in. Best-practice
organizations leverage their high-potential and high-value talent to identify other potential candidates. Infosys hires for attitude and passion and trains for talent. In order to assess the cultural fit, passion, and engagement of potential new hires, Infosys has a panel of high-potential supervisors and managersvarying between 800 and 2,000 individuals at any one point in timethat recruit and represent Infosys on college campuses. This panel undergoes extensive training and coaching to appropriately communicate with candidates, showcase careers at Infosys, and gauge applicant fit for the organization. Schlumberger uses field recruiters and other technical experts sourced from its highvalue employee population to recruit and select new technical talent. These recruiters ensure that an enthusiasm for working at Schlumberger and core organizational values are well-communicated to applicants. By leveraging like-talent to recruit like-talent, factual information about job opportunities is wellcommunicated to prospective employees and the engineers-turned-recruiters are able to identify applicants who will also fit the Schlumberger culture. Integrate engagement with the recruiting and employment branding strategy. Best-practice organizations also recognize that their employment brands and corporate reputations are critical factors in engaging current employees (as well as recruiting and selecting future engaged employees). 3M has an internal employment brand and tag line: Technically brilliant, endlessly innovative. Thats you. Thats us. The engagement and measurement team at 3M believes employee engagement leads to customer engagement, which in turn leads to increased customer share and increased sales revenues. 3M has created an integrated employment brand model comprised of external branding vehicles (such as external Web sites and community activities) and internal branding vehicles including internal Web sites and an internal commercial. Infosys brands itself as a premier organization for leaders, with only the best of the best accepted and with application criteria and selection rates more stringent than Harvard University. In fact, more than 97 percent of applicants are screened out during the selection process at Infosys. The organization has aggressive annual recruiting goalsas a technology company, it highly leverages technology and shared services to meet these goalsand therefore employs extensive and early outreach to potential employees to create brand awareness, including a global internship program that attracts top talent across the world, outreach to communities local to development centers (the Rural Reach program), a program to train young high school students (the Catch Them Young program), and strong relationships with hundreds of universities globally.
PROCESSES What processes do best-practice organizations use to collect feedback from their employees, how often do they gather this feedback, and how is the information used? The best-practice partners employ a variety of listening posts beyond standard employee satisfaction or opinion surveys to capture employee feedback information. As a result, their employees feel empowered and that they have a voice in the direction of the organization. They have the ability to communicate with senior leadership. And management at all levelsfrom senior executives to line managersare held accountable for action plans resulting from the feedback and for developing, engaging, and teaching others as a key competency. This section details the processes by which best-practice organizations gather satisfaction, opinion, and engagement information from their employees. Gather employee feedback from multiple listening posts. Communication is a critical piece of any successful engagement strategy. Each employee expresses opinions in a different way. It is important to offer a variety of methods, such as anonymous surveys and in-person meetings, to allow employees to express feedback in their own way. In addition, welcoming employees opinions shows them their opinions matter. Each best-practice partner has multiple avenues to collect employee feedback. Infosys has several lines of communication for positive and constructive exchanges between employees and management. Methods to collect employee feedback include: My Voice@Infosys, a separate communication platform for employees to share inputs and suggestions surrounding various policies; HRD Blog, a platform for employees to communicate issues of importance with the head of HR; and a managers portal used to collect and share relevant business information. One of Infosys formal feedback mechanisms, Lets Interact on Themes that Matter to Us (LITMUS), is an online employee engagement survey of issues that matter to its employees. After the survey is administered, the data is interpreted and action items are created. Employees have access to a LITMUS portal where the progress of each action item is shared. In addition to collecting employee opinions, this survey also gauges manager performance and measures progress against specific parameters. 3M administers four employee surveys. Its diagnostic survey is a customizable catchall used by the business units at their own discretion. Its standard employee opinion survey undertakes a full census delivered every two years at the business unit level. 3M also has a leadership survey for supervisor levels and above, as well as exit interviews for both retirees and future alumni. Both the diagnostic survey and the standard opinion survey can be tailored to fit the needs of each individual business unit. In addition, 3M offers an employment value tool, a structured and open-ended
interview guide used by supervisors to guide conversations through several issues including personal satisfaction. Schlumberger also offers several methods to collect employee feedback. Its reservoir management group leverages an annual employee satisfaction survey to keep a pulse on employee opinion. And HR audits are conducted on a global basis to provide rich information exchange among all levels of employees. Schlumbergers HR department also conducts regular open houses with employees in a variety of regions. The trade showlike atmosphere at the open houses allows employees to walk around with their families and ask questions on topics such as payroll, pensions, benefits, and careers. PRACTICES The studys third key scope area is understanding the tangible and intangible practices that best-practice organizations employ in order to engage their employees in general and key talent in particular. Study sponsors wanted to explore whether or not these practices vary across cultures, regions, and generations and also how organizations continue to engage their critical talent despite economic fluctuations. Referring back to Figure 3 on page 14, the findings and examples presented in this section detail post-hire elements of talent management (i.e., training and development, rewards and retention, and performance evaluation and management) and the practices that contribute to increased employee engagement within each. Provide meaningful and challenging work opportunities to all employees. Although business units and regions within an organization should have the flexibility to customize employee engagement initiatives to their cultures and needs, the fundamental tenets of what comprise an engaged employee should be the same regardless of age, gender, position in the organization, region, or culture. And although job profiles invariably differ, engaged employees want meaningful and challenging work. What makes work meaningful and challenging? Such work allows employees to view their job as a means to an end, as enriching their life skills, and as an opportunity to develop both personally and professionally. The employee engagement and measurement team at 3M has found that the fundamentals of employee engagement are universal, varying little by generation, years of service, or region. Sandra Tokach, vice president of talent solutions, said, The desire for meaning and purpose in the workplace knows no borders. On the other hand, the team has found that how 3M capitalizes on the fundamentals of engagement is local and contextual. Communication about employee engagement initiatives and engagement training, for example, takes into account local cultures and languages. A picture or phrase that may be appropriate in one country may be considered offensive or not have the intended meaning in
another. The implementation of rewards and recognition programs is also contextspecific; employees in one country may consider a cash award more attractive, whereas employees in another country may be much more motivated by a signed congratulatory letter from a senior executive recognizing their achievements. 3M engages employees through three fundamental tenets. 1. Treat people fairly, through accountability and rewards, respect and warmth, and procedural fairness (by keeping promises, involving people in decision making, creating an operational rhythm, and distributing work equitably). 2. Pay attention to the seemingly mundane, such as technology, support, and internal battles. 3. Recognize and celebrate employee successes. Schlumberger sees few differences country by country in key motivation factors. The concepts of a good job and fair pay, regular recognition by management, a good work environment, and a clear path ahead seem to transcend cultural boundaries. Customize key talent management practices, where appropriate, to maximize engagement and retention. Although it would appear that the basic prerequisites for employee engagement are common across cultures and generations, in some caseslike with high-value or high-potential talentit may be appropriate to customize talent management practices in order to increase engagement levels and retain this valued talent. As Infosys has found, it is not only external customers who are increasingly more sophisticated, knowledgeable, and demanding of individualized service but also internal employees who desire a self-determined, customized approach to their careers. Career paths and employee training and development are strong, positive influencers of employee engagement. Best-practice organizations allow employees to customize and take ownership of their own careers and express their individuality. They make efforts to understand valued talent and groups of individuals with like preferences, and they tailor talent management efforts accordingly. One of the ways Schlumberger engages and retains its in-demand specialized technical talent is through technical career ladders whereby employees can selfmanage, to a large extent, their careers at Schlumberger. Career maps housed on a dedicated career management Web site identify the conditions for promotion from one level to the next. Technical employees take charge of their training and development based on what they have agreed to with management will be their primary career path within the organization. Employees can access all of the maps on the career Web site, where they can view job descriptions, the requirements necessary to move to another position with a higher level of responsibility, the associated knowledge and competencies, and the training and development they would need in order to get the next level or position. This online career management tool has proven to be a key retention factor for technical talent at Schlumberger.
Another customized talent management tool at Schlumberger is career orientation reviews. Managers periodically conduct in-depth, one-on-one reviews with highvalue talent. The reviews cover the gamut of employees careers to date, their technical and functional skills, and soft skills they have mastered. The objectives of the reviews are to thoroughly explore the employees desired long-term goals and desired career path within the organization and then to align employee expectations with organizational requirements. These individual conversations encourage longterm retention of valued employees and foster a calibration between the needs of employee and the employer for a mutually beneficial relationship. The outcome of each review is captured in an HR intranet database and can be viewed on-demand by line managers and the HR function. Employees at Schlumberger are also encouraged to express their individuality, which in turn contributes to their increased engagement as they appreciate an organization that appreciates them. This can be seen on employee career networking profiles, which are housed on the company intranet, similar to personal Facebook pages (but within the corporate firewall) that the employees themselves manage. These internal employee biographies allow individuals to present themselves to their colleagues in a structured manner but with freedom about the content that they choose to share. Infosys has developed a customized online career pathing system called Infosys Role and Career Enhancement (iRACE), which uses a career transformation architecture to map out career progression paths at Infosys. Employees can customize a path that works best for them by choosing from more than 25 paths. Infosys customizes talent management approaches for critical technical and highpotential talent in order to engage and retain these key resources. Approximately 20 percent of Infosys employees are considered to have niche skills. These specialized skills cut across different technologies and lines of business. Infosys has created customized reward practices in order to ensure that such skills are not lost to competitors. High-potential talent are identified by the board of directors and its Leadership Institute and given a personal development plan, training, mentors, and executive development. 3M has conducted a conjoint analysis of high-potential employees to determine their unique engagement and retention motivators. Through this analysis, the organization identified eight specific clusters of employees with similar preferences based on their main motivators for working with 3M (including in it to win it, in it to experience it, and in it for their family groups). These findings help 3M tailor HR messages, programs, and policies toand adapt to the ever-changing needs oftheir high-potential employee population. Use virtual collaboration and social media to create a sense of community between employees and the employer. Globalization has required organizations to spread their employees all over the world in order to meet the needs of customers. Organizations must find a way to
bring employees together regardless of physical distance. Employees want to feel a sense of community and belonging within the organization. Social media can help employees more easily collaborate with each other, bridge distances, and get to know each other in a casual environment. Social media can come in many forms, such as a blog, a wiki, a Facebook group, or a Linked-in community. Company-sponsored social media allow employees to talk with each other and encourage innovation among them. Both Infosys and Schlumberger offer a YouTube equivalent that allows employees to create videos that display their own unique life experiences or sketches about their life in the work place, even allowing employees to have best video contests among various field locations. 3M sponsors Ideadirect, a tool that allow employees to more easily communicate with each other. Ideadirect encourages employees to submit ideas for new products in a structured environment that is easy to use while ensuring the employees feel their ideas are valued and appreciated. There are several different social media offerings available to Infosys employees. Infy TV is an external television channel that connects internal events, initiatives, and updates to the general public. Infy TV allows employees to feel connected to each other, as well as to friends, family, and fans of Infosys. Infosys also offers Ask Kris, a monthly interactive column where the CEO answers employees questions on a variety of topics. In addition, a wiki platform allows employees to communicate and collaborate on a topic of their choosing. Schlumberger uses online bulletin boards to resolve employee, product, and support issues, primarily in their technical communities. These bulletin boards can also be useful in bringing together special interest groups, such as women in the workplace. Schlumberger allows for individual employee blogs, which encourage employees to show their creative side. These blogs serve as a nice complement to the more structured bulletin boards and the CNPs discussed earlier. Train employees in order to increase their engagement and magnify engagement efforts. That is, provide training and development from the point of hire, train managers and leaders to be engagement experts, and continuously develop high-potential and leadership talent. Best-practice organizations recognize the critical role training and development, career paths, and the opportunity for career advancement play in employee engagement. As demonstrated by the best-practice partners, training does not have to happen in a classroom or be a vendor product to be effective. Training and development often involves some combination of formalized on-the-job training, structured job rotations, effective mentoring programs, and e-learning. In order to improve employee engagement, organizations must make a strong effort to train and develop
employees and provide them with a meaningful career path in order to keep employees excited, challenged, productive, and motivated. No matter their title, position, or tenure, employees are energized by new experiences, new challenges, and the opportunity to learn new things. Onboarding and New-Hire Training Nothing is more powerful than a first impression, and this concept extends from interpersonal communications to the broader realm of employee engagement when an employee is new to an organization. Best-practice organizations extensively train new hires via formal onboarding and entry-level training programs. The investment that best-practice organizations make in employee training and development, regardless of economic up or downswings, is significant (as is the payback on that investment). Infosys, for example, has a world-class training infrastructure for its employees, according to Nandita Gurjar, senior vice president and head of HR development. The organization is committed to employee training and development even in economic downturns. Best-practice organizations have extensive, formal new-hire onboarding and entrylevel training. For example, recently graduated new hires at Schlumberger enter three-year technical or sales training programs. And Infosys enrolls new hires in a three- to six-month new employee finishing school that uses benchmarks against best-practice standards. Training New Managers and Leaders as Engagement Experts Best-practice organizations recognize that the manager or supervisor is the ultimate influencer of individual employee engagement. These organizations consider supervisors, managers, and senior leaders as employee engagement ambassadors. Since employees leave bosses and not jobs, best-practice organizations train new managers/supervisors in the principals of engaging their employees. Furthermore, those in leadership roles have employee engagement as a critical competency they are managed against and expected to exemplify. In rolling out its formal corporate processes and standards for employee engagement, 3M focused on leaders and supervisors as a key constituents in the effort. In 2007 3M integrated employee engagement into the responsibilities of leaders. In 2008 the organization educated its supervisors and managers on the importance of engagement and incorporated engagement into its leadership classes. In 2009 3M began producing and disseminating short, targeted videos to supervisors and managers. These videos provide training and development on various topics related to employee engagement. In 2010 3M plans to do additional work to engage its supervisors as developers of their people. HR professionals at Schlumberger recognize the critical nature of managers in engaging their employees. To that end, the organization offers programs that teach
people management skills to new, mid-level, and more senior-level managers. For example, its management essentials program covers key behaviors Schlumberger expects from its managers as they progress through their careers, including effective communication (new manager training); preparing subordinates to become managers (mid-level manager training); and leading change, building effective teams, and developing leadership throughout the organization (senior manager training). Continuously Developing High-Potential Talent and Leaders Leadership development and succession planning can be, and have been in past APQC studies, individual areas of focused research in their own right. Therefore, these topics were not examined in-depth in this study. However, the logic follows that engaged leaders continuously receive and support training and development. That is, leaders should engage employees as a key leadership competency. And employees who are invested in by their organizations via training and development programs are more engaged. Therefore, leaders should receive continuous training and development in order to engage others, as well as to stay actively engaged themselves. Although the terms high potential and leader are used synonymously in this section, often high potentials are future leaders. Therefore, it is even more important to involve high potentials in training and development programs, not only to satisfy, engage, and retain them in their jobs but also to train them for their next job, perhaps as a supervisor or manager. The best-practice partners use their leaders to teach other leaders, focus on realworld business challenges and business-critical content, leverage action learning, and offer opportunities for networking with executives in leadership training. Each of the best-practice partners have structured programs in place for high-value or highpotential talent identification, succession planning, and leadership development. For example, 3M offers formal training programs for supervisors and managers, directors, general managers, and managing directors. Infosys follows a tiered leadership model. (Tier I leaders are future top management and those next in line for the board, Tier II leaders are function heads and leaders that have been chosen for future business function leadership roles, and Tier III leaders are employees anticipated to take on a leadership role in the next three to five years.) High-potential leaders are identified by the board of directors and its Leadership Institute. Each high-potential leader has a personal development plan, which includes action learning, assigned mentors and coaches, and executive development provided by top business schools. In addition, formal succession planning takes place for key positions in the organization. Create a rewards and recognition culture. Recognize efforts and reward success. Rewarding employees appropriately is a vital part of any work force engagement strategy. If employees arent shown they are
appreciated for the work they do, then there is a good chance they will leave the organization. The best-practice partners have shown that it is important to go beyond the typical rewards strategy. Rewards should come in different packages, whether it be a cash award, spot awards, a certificate, or even a company t-shirt in order to appeal to every type of employee. Each of this studys best-practice organizations offer awards given on the spot that need little to no approval from supervisors, peer-to-peer awards, and informal and formal rewards. They also allow the flexibility (and budget) for managers to award employees as necessary, for business units to offer appropriate awards, and for regions to offer awards appropriate for their cultures. The best-practice organizations are also beginning to incorporate rewards into training and career opportunities, such as offering promotion ladders or career lattices. Rewards might also include improvements in work/life balance, additional training and development opportunities, or even the ability to pursue dreams through approved leaves of absence. 3M ensures that all of its financial incentives are grossed-up to ensure that the taxes do not affect the amount of the reward. 3M aims to make every employee feel important and recognized (e.g., through length of service awards). At Schlumberger, formal rewards are part of an awards hierarchy; basic cash compensation appears at the bottom, followed up the hierarchy with larger cash incentives and job bonuses, fringe and mobility benefits (the ability for employees to move positions as desired), deferred compensation and enhanced insurance benefits, employee stock purchases, and finally stock grants at the top. Infosys engages its high-potential talent through compensation enhancements, career paths, and customized reward packages. Infosys reward system, the Employee Reward Tree, is based on customer delight, leadership by example, integrity, fairness, and the pursuit of excellence. Reward your employees based on performance, not tenure. All of the best-practice organizations recognize that the key element in engaging employees is ensuring fair, competitive total compensation. Karen Paul from 3M said: We think in terms of total compensation (for example, base pay, variable pay, stock options, and restricted stock units). Fair total compensation is a key foundation for all employees. Without it, learning, growth, and development are irrelevant. Benoit Barbier from Schlumberger also stated the importance of fair pay in keeping employees engaged: Having the right salary for retention is fundamental. People wont leave the organization because of their salary; but if they are unhappy with their salary, it is the last straw. When the employee is dissatisfied and the salary is not right, they start to think about moving elsewhere.
Best-practice organizations regularly benchmark their compensation and rewards structure within and outside their industries. 3M, for example, regularly benchmarks its practices via a variety of listening posts, including capturing feedback from employees, vendors, and other organizations; attending conferences on the topic; and reading research literature on employee recognition, rewards, and engagement. Schlumberger participates in annual salary benchmarking and associated adjustments. Every year a full salary review is conducted, which helps determine the budget for the following year. Schlumberger also performs ad hoc salary analysis when it notices certain categories of talent being poached and for at-risk talent populations. APQC has conducted an analysis of top performers in its Open Standards Reward and Retain Employees benchmarking survey, which shows that roughly 70 percent of top performers review/revisit overall compensation strategy annually and review/revisit employee benefits packages as required by market demands. Top-performing organizations make their employees and their families feel safe through a comprehensive benefits package. At minimum, organizations should offer competitive medical, dental, and disability insurance to their employees. Figure 5 lists the top three benefits offered by reward and retain employees top performers, compared to the rest of the responses. Top Three Benefits Offered at Top-performing Companies
Short- and long-term disability Dental
100% 55% 100% 64% 100% 92% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Top Performers All Participants
Medical
0.00%
Figure 5 A critical part of employee rewards strategy is ensuring that top-performing employees are rewarded financially in terms of wages, bonuses, contributions to
pension/retirement accounts, and when available, stock options. Employees at bestpractice organizations are engaged because they know their work will be tangibly rewarded from their earliest days of employment. This includes a higher emphasis on pay for performance at best-practice organizations than among other organizations. APQCs analysis from the Reward and Retain Employees benchmarking survey shows that top-performing organizations have a higher percentage of salary that is performance-related pay than the rest of survey respondents across the board (Figure 6). Percentage of Salary That is Performance-related Pay (Median)
60% 50% 40% 30% 20% 10% 0% Senior Middle management/Executive management/Specialist Top Performers Operational workers/Office staff 28% 30% 20% 15% 7% 50%
All Participants
Figure 6 At Infosys, the performance culture is based on merit. Pay-for-performance is a key tenet of performance management at the organization, which makes a clear differentiation when it comes to high-performer rewards and growth opportunities. The compensation package for the high-performing employee is 50 percent fixed and 50 percent variable (the level of variability increases the more senior the position of the employee). This structure is carefully designed to enable high performers to earn anywhere from 50 percent to 80 percent more than an average performer and up to 150 percent of their specified salaries. Even junior employees have a minimum of 10 percent of total compensation tied to performance. A balanced scorecard of performance measures flows all the way down to junior
employees at Infosys, and individual performance is ultimately tied to overall corporate performance via a balanced scorecard of measures. This study found that money is a satisfier, but not a driver of employee engagement. An analysis of top performers in APQCs Reward and Retain Employees survey shows that top-performing organizations spend significantly less on rewards and retention, but at the same time have higher levels of efficiency and productivity and fewer days absence per reported FTE. Just throwing more money into a rewards strategy does not necessarily engage employees or provide a large enough incentive to high-potential employees. In Marshall Goldsmiths book What Got You Here Wont Get You There (Hyperion, 2007), the author describes a research project for Accenture he conducted with 200 high-potential leaders from 120 organizations around the world. These 200 employees, hand selected by their organizations as future leaders, were asked if and why they plan to stay with their employer. The top three answers were: 1. I am finding meaning and happiness now. The work is exciting, and I love what I am doing. 2. I like the people. They are my friends. This feels like a team. It feels like a family. I could make more money working with other people, but I dont want to leave the people here. 3. I can follow my dreams. This organization is giving me a chance to do what I really want to do in life. Marshall writes: The answers were never about money. They were always about happiness, relationships, following dreams, and meaning. Take a comprehensive view of the work/life balance. To keep employees engaged, organizations must do everything they can to support employees personal and family lives. This study found that best-practice organizations take a comprehensive view of the work/life balance, a view that goes beyond standard flex time and work-from-home policies to holistic support of the employee while at work and incorporating considerations of an employees family. The best-practice partners have nearly every base covered in relation to work/life balance, including health and safety, work-at-home policies and practices, fitness benefits, family-friendly benefits, support for dual-career families, and even encouraging employees to pursue lifelong dreams. Infosys encourages a healthy work/life balance in part by creating an environment where people feel they have meaningful and supported careers. Infosys has instituted several policies to support work/life balance such as paid maternity and paternity leave, options for those workers seeking part-time opportunities, flexible schedules, telecommuting for selected employees, sabbaticals for employees to engage in volunteer activities, and opportunities for additional formal education.
Schlumberger has enacted a formal policy to actively support dual-career married couples (whether one or both spouses work at Schlumberger). Once an employee indicates they are in a dual-career family, Schlumberger provides scheduling and work flexibility to accommodate them. In addition, Schlumberger employees are allowed to take leaves of absence to accomplish personal goals, objectives, and dreams. Employees health and well-being is one of 3Ms top priorities. This upfront attention ultimately saves the organization money by minimizing costly reactive interventions. In 2008 3M launched a program called Healthy Living Resource, which offered free health screening assessments for their employees. As an added incentive, the company offered $100 dollars for participating employees. Through this program, 3M actually sent a handful of employees to the hospital directly from the health screening. The projected savings from these immediate interventions was approximately 50 percent of the total it paid out for incentives. In addition to saving this large amount, 3M provided important health information to their employees and decreased its future cost of health care. 3M also offers an employee assistance program, onsite medical clinics, a fitness center, lunch-and-learn educational opportunities, and an activity club based on various hobbies and interests. Retain key talent in creative ways during times of reduced business activity or organizational changes. It would stand to reason that if organizations do a good job of rewarding and engaging their key talent, then retention and unwanted turnover would not be issues. However, a passive attitude toward employee retention is not a wise longterm strategy. This study found that best-practice organizations actively retain their key talent and can be creative in efforts to retain this talent during economic downswings and/or organizational changes. Schlumberger identifies high-value talent annually, and employee high-value flags expire after one year. High-value employees are determined by their performance in certain categories of skills such as line management skills, functional expertise, outstanding business performance, technical expertise, outstanding sales performance, and the ability to mentor (if applicable). These individuals represent the top 15 percent of employees. As high-value employees are identified worldwide, their information is stored on the HR intranet site. Managers can review the highvalue talent distribution by region, as well as diversity statistics, to ensure that the high-value talent pool is representative of the work force demographics at large. The responsibility for flagging high-value employees ultimately resides with line managers, assisted in this process by HR. HR prepares lists of candidates based on previous years entries and ensures these candidates career profiles are up-to-date on the HR intranet. Corporate HR at Schlumberger actively identifies at-risk populations of key talent. HR maintains an up-to-date list of at-risk, high-value employees by business
segment and geography. At-risk populations are immediately brought to the attention of executive management for preventive action. On an annual basis, the chairman and CEO indicates which specific efforts must be made to retain these experts, and corresponding retention objectives are assigned to line managers. Schlumberger also works to retain high-valued talent during times of organizational change, such as during mergers and acquisitions, recognizing that managing the change process well is key to retaining the desired talent at the acquired organizations. One critical success factor to ensure that associated changes are properly managed is the assignment of an integration manager, whose role is to engage with employees, familiarize them with Schlumberger, and integrate them into the organizations mission, vision, and values. When, due to cost constraints, Schlumberger is forced to let some valued talent go for a period of time, it offers incentivized leaves of absence. Schlumberger pays the employee 20 percent of their base salary at the beginning of the leave and reserves the right to call the employee back six months to a year later for rehire. If the employee agrees to be re-hired at that time, then he/she receives an additional 30 percent of their annual salary. Schlumberger has determined that offering employees 50 percent of their annual salary for selected employees they wish to rehire has been a tremendous benefit and ultimately reduces costs of rehiring and additional training for new employees. As an IT services company, Infosys finds that 10 percent to 12 percent of its work force may not be billable to a client project at any given point in time. Employees that are not billable are at risk of disenchantment because they may not have the opportunity to improve their skills and be as productive in their job as they would like. To combat this potential problem, Infosys has created a MyWorks portal that allows employees who need help across the enterprise to post short-term projects while allowing employees not fully utilized to search for short-term assignments. Demand for additional resources is matched with a supply of talented underutilized workers, a win-win for the organization. Outcomes and Measurement The last study scope area explores how best-practice organizations institutionalize employee engagement through accountability and measurement. Best-practice organizations hold managers and leaders responsible for engaging their employees as a key competency and expectation. In addition, the best-practice partners are able to correlate positive levels of employee engagement with real, positive business outcomes. Hold leaders responsible for employee measures. As discussed throughout this report, the best-practice partners ultimately lay the responsibility for employee engagement at the feet of supervisors and managers, with executive championship provided by senior executives and support, tools, templates, and guidance from corporate HR. This expectation is reinforced in two
ways: 1) by building responsibility into leadership competencies and the formal expectations of a leader and 2) through performance management practices. Engagement as an Expectation of What it Means to be a Leader Best-practice organizations expect their leaders to develop their people. APQCs 2007 study Identifying, Developing, and Assessing High-Potential Talent found that a key expectation of leaders is that they be communicative with employees and focus on people. Some organizations go so far as to explicitly list employee engagement as a core leadership competency. For example, one of the first steps 3M took in its formal corporate engagement journey in 2007 was to integrate employee engagement into the leadership attributes and competencies. Attributes of 3M leaders follow: thinks from the outside in; drives innovation and growth; develops, teaches, and engages others; makes courageous decisions; leads with energy, passion, and urgency; and lives 3M values. Engagement as a Key Component of Performance Management At Infosys, every manager has a LITMUS scorecard to track his or her own performance against key action items identified as a result of the LITMUS survey, as well as to motivate managers to achieve a higher level of performance. Managers use LITMUS tools to help track initiatives resulting from the employee engagement survey results at the corporate level. LITMUS portals display results online for managerial access. Infosys also employs people dashboards enabled by an HR analytics and warehousing service that allow the organization to gather meaningful insights from HR data collected from various organizationwide HR and nonHR systems. These dashboards show key work force measures and statistics that allow managers a quick assessment of overall sentiments and retention along with regional, skill-specific, and manager-specific retention concerns and the issues that have the greatest impact on engagement and turnover. The HR leaders at Infosys recognize that the majority of the engagement incentives come from business line managers, so the HR group evaluates the managers engagement and retention efforts. Managers at Infosys are measured by the people dashboards, along with the LITMUS results and other employee feedback mechanisms detailed in this report. Managers overall performance is evaluated in part by their staffs relative engagement and productivity and changes over time. Schlumberger relies strongly on management by objectives, formalized within the performance appraisal process, which applies to all employees. Each January, the
vice president of HR proposes key improvements to the executive management team, who in turn validates the suggestions against current business strategies. These expected improvements are then captured in a global HR directions document, from which specific objectives are extracted and distributed throughout the organization. The achievement of these objectives is part of the performance incentive plan of all line and HR managers. Link employee engagement with business outcomes. The best-practice partners have been able to correlate positive employee engagement with positive business outcomes, such as lower turnover and absenteeism and higher levels of productivity and innovation. External research on the service-profit chain (the link among employee satisfaction, customer satisfaction, and organizational profitability) can be used as the business case to begin the employee engagement journey. As illustrated by the work force engagement model used by Employee Holdem, organizations can then ensure the conditions for engagement, which lead to positive business outcomes (Figure 7). This model demonstrates that organizations with higher levels of employee engagement provide higher levels of return on assets, profitability, and shareholder value. Employee Holdem Model for Components of Work Force Engagement
Positive business outcomes
Outcomes of an engaged work force: stay longer work harder recommend the organization
Desired state: engaged work force Attraction Motivation Retention
Components: Components: Reputation management Work force selection Organizational orientation Performance management Rewards and recognition Work /life balance Stakeholder input Opportunities for advancement Training and development Tools and technology Components: Daily satisfaction Effective senior leadership Ethics, diversity, and safety
Figure 7
3M has conducted its own correlations between engagement and business outcomes, most notably innovation. The organization conducted a recent study among its business laboratories in order to measure the relationship between engagement and innovation and found that those business laboratories that have more engaged employees (per results of the worldwide business unit survey) two years later were more innovative (i.e., produced more products) than business laboratories where employees were less engaged. Since 3M greatly relies on innovation, these findings were pertinent. 3M has also been able to correlate higher levels of job satisfaction with lower levels of employee absenteeism. It is noteworthy that 3M does not currently tie employee engagement scores to managerial or leadership compensation. You cant just tell employees to be engaged, and you cant just monitor or push the engagement metric up, because the behavior will go underground and people will feel coerced, said Sandra Tokach, vice president talent solutions. But you can invite employees to participate in engagement efforts, and you can and have to lead and inspire by example. The measurement efforts at Infosys have demonstrated a link between employee engagement and customer satisfaction. The organization recently completed an analysis of its customer satisfaction data and is correlating the results with the appropriate business units employee engagement results. The organization has already found that the business units with the highest profitability consistently have the most engaged work force. Conclusion: Embedding Engagement into Talent Management Figure 3 on page 14 presents a model for embedding employee engagement into the different aspects of talent management. Figure 8 on pages 36 through 38 summarizes examples of how to put this model in play across the talent management lifecycle within your own organization. Talent Management Process Recruiting/ Employment branding/ Communication Examples for Integrating Employee Engagement into Talent Management Process Create and communicate a formal employment brand to employees. Externally brand the organization as an employer of choice, and seek external validation (awards as best place to work or best place for leaders). Employ extensive and early outreach to potential talent pools in local communities, schools and universities, and globally (where applicable). Allow employees the opportunity to be heard informally via social media channels and formally via grievance redressing programs.
Talent Management Process Selection
Examples for Integrating Employee Engagement into Talent Management Process Leverage high-potential or high-value talent to recruit and select new-hire candidates. Use like-talent to recruit like-talent (e.g., technical talent to recruit technical talent). Hire for attitude/passion, and train for talent. Train managers and leaders on principles of employee engagement. Teach new managers and supervisors the fundamental concepts of talent management. Make engagement easy and accessible by providing centralized tools and templates online. Invest in formal entry-level or onboarding training to engage new employees. Provide meaningful and customizable career paths for employees that allow for a sense of purpose and direction in the organization and provide an element of challenge to employees jobs. Have senior leaders serve as executive champions of and role models for employee engagement. Offer structured leadership development including personal development plans, action learning, leaders teaching leaders, a focus on real-world business challenges, mentoring, coaching, 360-degree feedback, executive development, and networking with senior executives. Regularly identify high-value or high-potential talent. Give primary emphasis on internal promotion and mobility. Create a culture of rewards and recognition. Offer fair total compensation and benefits, as determined by employee feedback and external benchmarking. Budget for employee rewards and recognition. Allow high-value or high-potential employees to pursue their dreams through approved leaves of absence.
Training and development
Leadership and high-potential development
Succession planning
Rewards and recognition
Talent Management Process Retention
Examples for Integrating Employee Engagement into Talent Management Process Go beyond exit interviews: find out what motivates high-value employees individually through regular, in-depth conversations with them (beyond the annual performance appraisal) while they are still employed. Anticipate unwanted turnover and take preventive steps to mitigate it. Provide customized reward, recognition, and retention practices to key or high-potential talent, and even the work force at large, where possible. Take a holistic employee view of the work/life balance. Gather employee feedback from multiple listening posts (employee opinion surveys, town hall meetings, field site visits, social media, employee suggestion programs, HR audits, etc.). Employee feedback data should be analyzed and prioritized, and action plans should result from the data. Leverage online portals where managers and supervisors can easily access HR dashboards with key employee metrics and access the status of responses to employee feedback information. Align individual performance with organizational performance. Hold managers and senior leaders accountable for action plans resulting from employee feedback. Include engage employees in leadership and managerial competencies. Reward employees based on performance. Correlate engagement levels with real business outcomes and communicate the results.
Work force analytics/ Management
Performance evaluation/ Management
Figure 8
Case Study 3M
Founded in 1902, Minnesota-based 3M is a diversified technology manufacturer with almost 80,000 employees in more than 60 countrieswith approximately 31,000 of those employees residing in the United States. In 2008 3Ms net revenue totaled more than $25 billion, with sales from its six primary business segments: 1. consumer and officestationary, office, home care, protection, construction, home improvement, and visual systems; 2. display and graphicscommercial graphics and optic, traffic safety, and touch systems; 3. electronics and communicationselectronics solutions, electric markets, communications markets, and electronics material markets; 4. health caremedical supplies, skin products, drug delivery systems, dental/orthodontic, health information systems, and microbiology; 5. industrial and transportationabrasive systems, industrial adhesives, personal care, specialty materials, software, aerospace, packaging, and automotive; and 6. safety, security, and protectionindustrial minerals, commercial care, security systems, building safety, corrosion protection, occupational health, and environmental safety. HR ORGANIZATION STRUCTURE HR at 3M is comprised of centers of expertise (COEs) focused on various specialties, complemented by business HR partners dedicated to each business and an information services organization with an HR contact center and 24/7 selfservice support (Figure 9, page 40). The global COEs include: benefits and compensation; employee relations; employee services; measurement and assessment; mergers, acquisitions, and transitions; talent acquisition; talent development; and work force planning and management. The employee relations (ER) COE is organized by business and location with professionals providing a range of HR and ER services to their assigned clients. 3Ms senior vice president of HR reports to the CEO and has three vice presidents reporting to her: total compensation (including benefits and employee services), talent solutions, and international. HR directors support each major business and corporate services and have dotted-line responsibility to the senior vice president of HR. At 3M, HR partners with the business units to drive growth through people. Employee engagement initiatives are owned by the businesses, and the engagement and measurement COE within talent solutions provides overall consulting and some engagement tools, resources, and services to the businesses. The engagement and
measurement COE is responsible for conducting the leadership survey, conducting standard employee opinion surveys, prehire testing, developmental assessments, executive assessments, employee engagement, and the employment brand. Sister COEs within talent solutions handle work force planning, talent acquisition, and talent development. The talent solutions COE delivers these supporting services to the global 3M organization.
3M Human Resources
Figure 9 EMPLOYEE ENGAGEMENT DEFINED 3Ms formal definition of employee engagement is: an individuals sense of purpose and focused energy, evident to others in the display of personal initiative, effort, and persistence, directed toward organizational goals. Employee satisfaction is a necessary but not sufficient condition for employee engagement. Employees who are truly engaged will demonstrate higher levels of persistence at difficult tasks by helping others, taking initiative, and going beyond expectations. 3M partnered with vendor Valtera to craft this definition of employee engagement. The definition represents the latter three parts of Valteras four-part engagement
model (Figure 10). The first part of the model requires the conditions for engagement that can be controlled in the workplace, starting with trust and management. The sense of purpose and focused energy refers to the effort it takes to capture peoples hearts and minds, leading to an engaged attitude. This leads to engaged behaviors and alignment with the organization. Alignment is considered critical at 3M. Employees might always exhibit energy and attention; however, if there is no alignment with overarching organizational goals, then certain organization outcomes will never be achieved. Valteras model brings all parts of the organization together and provides a common language to talk about employee engagement. 3M Engagement Model
Figure 10
EMPLOYEE REWARDS, ENGAGEMENT, AND RETENTION STRATEGY
Job satisfaction is important and does predict some organizationally relevant outcomes, but so is employee engagement, which predicts such things as ROI, profitability, and shareholder value. Karen B. Paul, manager, HR engagement and measurement COE
3Ms HR strategies are closely tied to the overall corporate strategy and are supported by an overarching HR vision and mission, followed by HR business critical outcomes and then more targeted and granular individual HR strategies. For the HR strategy to engage employees, there are three sublevel strategies: ensuring work is challenging and meaningful for employees, aligning work with the big 3M (seeing employees role in the big picture organization), and building employee engagement as a leadership responsibility. Specific HR tactics then support these strategies. For example, HR tactics to make employee work more challenging and meaningful include career pathing, mentoring, coaching, job rotation, a 360-degree feedback process, and connection to work/life benefits. In this manner, HR strategy and overall organizational strategies closely align. CREATING AN INTEGRATED EMPLOYMENT BRAND For 2010 3M will use both internal and external vehicles for the development and deployment of its employment brand via an integrated employment branding model. Internal branding vehicles include an internal branding toolkit, a do-it-yourself video, a traveling booth, internal Web sites, a video contest and DVD related to the employment brand, and internal commercials. 3M already employs a variety of social networking tools to engage employees. It is crucial that 3Ms external messaging and communications resonate with internal employees. Employee engagement is the critical starting point for building a stronger 3M employment brand. High employee engagement then leads to high customer engagement, which in return leads to higher share of customer and sales revenue. 3M aims to drive employee engagement through its employment brand to align and link its branding messages. 3Ms employee tagline is: Technically brilliant, endlessly innovative. Thats you. Thats us. 3M aims for the branding messages, coupled with the iconography of the images, to represent its innovative culture. RETENTION TOOLS AND STRATEGY
I thought I really knew my people. And using the employment value tool, I found out many things in terms of what work they particularly like and what motivates them at this time in their careers. Karen B. Paul, manager, HR engagement and measurement COE
3M uses an employment value tool to engage and retain individual employees. This tool is a structured, open-ended interview guide for individual supervisors to steer conversations with their employees. The guide provides questions about development, personal satisfaction, work/life balance, work environment,
motivational drivers, collaboration, compensation, and benefits. This tool has proven successful for supervisors to have in-depth conversations with their employees to understand their main drivers of engagement and retention. 3M also studies employee retention factors. In one study, 3M identified clusters of employees based on their main motivators for working with 3M. These included employees who were in it to win it (employees who make decisions based on career advancement opportunities, pay, and stock options), in it to experience it (employees who make decisions based on supportive supervisors, travel, and lots of opportunity), and in it for their family (employees looking for good benefits and flexible schedules). These findings help 3M tailor HR programs and offerings to and adapt to the ever-changing needs oftheir employee population. PROCESSES FOR REWARDING, ENGAGING, AND RETAINING KEY TALENT Developing an Employee Engagement Initiative 3M kicked off its engagement initiative in 2007. The new CEO, George Buckley, drove the change. 3M leveraged its existing high levels of employee engagement to boost creativity and efficiency simultaneously. Senior management worked with HR executives to develop corporate and business unit plans to feed the pipeline for radically new products, efficiently turn new ideas into new products, and bring those products to market at the fastest speed and lowest cost possible. When first embarking on its employee engagement initiative, 3M created an approach that was flexible enough to embrace business units that had already started working on employee engagement, with an overarching objective of improving employee engagement levels to drive organizational outcomes. The first step created a baseline measure for the employee survey to capture employee engagement. For the second step, 3M developed a two-fold plan: 1) an organizationwide approach that created tools, education, communications, and a shared vision of employee engagement worldwide and 2) complementary, individual business unitspecific engagement plans. The latter allowed each business unit HR director to customize the best intervention based on how advanced in employee engagement process the business unit previously was. 3Ms initiative requires its leaders to build the environment for employee engagement. The CEO visibly demonstrates his commitment to employee engagement and made employee engagement a leadership responsibility. 3M has learned that strong leadership engages employees in tough economic situations and pulls us through faster than the competition, said Karen B. Paul, manager, HR engagement and measurement COE. When the urgency and need are clear, our employees deliver. As a result of this effort, to develop, teach, and engage others is now a core leadership attribute. This addition displays how 3M was able to strategically embed
engagement into its core strategy, which would ultimately drive several other HR processes. According to Paul, the organization has made great strides since 2007 in its employee engagement work: corporate tools and resources for employee engagement are in place, global HR professionals are trained, and business unit and corporate-level interventions occur when needed. Although most of 2007 was spent planning the initiative, 3M did integrate engagement as a key leadership attribute, create a shared definition organizationwide, and set a baseline measurement for engagement. In 2008 3M trained its supervisors and managers on the importance of engagement and incorporated engagement into its leadership classes. In 2009 3M began recording and disseminating 10-minute videos to supervisors and managers. These videos, typically created one per quarter, provide a quick overview of a variety of different topics related to employee engagement. In 2010 3M engages its supervisors as people developers, as well as continued to integrate new social networking tools into its offerings. Employee engagement work is ongoing with regard to country-level interventions. 3M has found many differences in the United States compared to international structure that need to be taken into account. Engagement Deployment Matrix 3M has created an engagement deployment matrix, which segments the key groups interested and involved in the employee engagement corporate initiative (Figure 11, page 45). The matrix outlines four key groups of peopleHR generalists, employees, supervisors/managers, and executive vice presidents/general managers/managing directorsand the associated strategies and approaches for each to deploy employee engagement processes. Employee Surveying Processes 3M currently uses four different employee survey processes. 1. Diagnostic surveyThis small, customizable survey is a catch-all, depending on what a business unit wants it to be. 2. Standard employee opinion surveyThis full census is used by the individual business units once every two years. Each business unit chooses when they want to administer the survey. The survey is approximately 60 items in length, with up to 40 additional optional questions. Measuring engagement, this survey is very actionable, especially at the business unit level. 3. Leadership surveyThis survey is administered in odd numbered years and is completed by all supervisor levels and above worldwide. This survey is much more strategic in nature than the standard employee opinion survey. Results are shared widely, and appropriate actions are planned. 4. Exit interviewsThese interviews are conducted with both retirees and future alumni of 3M.
Deployment Matrix for Talent Segmentation
Figure 11 The engagement and measurement COE creates executive summaries for the head of HR and CEO to review. The business units also contribute to this document by sharing their efforts to improve employee engagement, which provides an opportunity to compare the business units. In addition, 3M regularly reviews turnover reports by organization and by employee group. Global Application and Cultural Implications 3M is careful not to display visuals that might be confusing in different areas of the world. Graphics and images regarding employee engagement are left up to individual countries to ensure it is sending out appropriate messages. Through its decentralized business/country approach to engagement, the organization is seeing innovative and creative approaches to employee engagement around the globe. 3Ms international divisions have won recognition for their employee engagement processes. For example, 3M in Argentina, the Czech Republic, and Spain won best employer awards, and 3M Germany has been on the best places to work list from 2003 to 2009.
EMPLOYEE REWARDS, ENGAGEMENT, AND RETENTION PRACTICES 3M has observed that fair and competitive compensation is a key foundation for employee engagement. If employees do not trust and understand the way they are compensated, then they may be unable to focus on career and learning/growth development. The organization regularly communicates total compensation to its employees, which depending on level consists of base pay, variable pay, stock options, and stock units. Recognition Practices 3M has also established many opportunities for employee recognition. For example, the organization has developed an internal, online, cash award system that allows organizations to recognize contributions with grossed-up rewards as recognition. Nominations for this award can come from fellow employees or clients. In addition, 3M has implemented service awards to recognize employees for their long-term service to 3M. After an employee has been with the organization for more than 15 years, they are invited to an annual celebration every five years. 3M has also created an online program called Idea Direct that allows employees to submit ideas for new products and be recognized for their submissions. Often, employees work with multiple technologies simultaneously and may think of new ideas or improvements for these technologies. This program provides an easy venue to capture those ideas. It also ensures employees are aware they have a responsibility for innovation and feel their innovative ideas are valued and appreciated. 3M rewards and recognizes employees through a number of award programs at the corporate, business unit, and regional levels. Across 3M, management can choose from a variety of monetary and non-monetary awards. Examples of corporate awards follow. The Carlton Society honors employees for outstanding career scientific achievements; their contributions to new technologies or new products; and high standards of originality, dedication, and integrity. Circle of technical excellence and innovation awards honor exceptional contributions to the innovation, productivity, and growth of 3M. Pyramid of excellence awards recognize outstanding individual, administrative employee performance and contributions. The quality achievement awards program identifies internal best practices, honors the teams and individuals involved, and communicates those practices throughout the organization. The communication awards program recognizes exemplary communications programs developed for both internal and external 3M audiences.
The sales and marketing professionalism award honors and recognizes individuals who have made exceptional contributions in sales and profit growth. The supply chain achievement award recognizes employees who have made significant, sustainable contributions to the improvement, execution, efficiency, and the results of 3Ms supply chains. Training and Development To foster employee engagement, 3M focuses on leadership development, both as a mechanism to engage this critical talent and to incorporate tenets of employee engagement and good management practices in the training curricula itself. There are a variety programs and classes in place to develop 3M leaders. Leading for performance and accountability and facilitative leaders These classes teach basic skills for employees at the supervisor or manager level. Leadership and development for growthThis class is delivered in all areas of the world for midlevel managers to help build leadership skills. Developing growth leadersThis three-day program concludes with a oneyear follow-up process. Designed to enable 3M's leaders to more effectively grow their businesses for senior managers and directors, the program blends classroom sessions with senior leaders, external thought leaders, and leaders of current entrepreneurial businesses within 3M with workshop time to applying the in-session lessons. Accelerated leadership and development program IIThis businessfocused leadership development program occurs within each of the larger business units in 3M. The curriculum for this program is tailored to the specific business challenges in those units. Accelerated leadership and development program IThis corporate program is offered one to two times per year for high-potential managers and directors around the world. This is an intense 12-day leadership development program offered for only 45 participants. Seven of the 12 days are devoted to action learning, which helps develop talent and yields creative solutions to 3Ms most significant problems. The simulation takes the leaders through seven steps, all the way from identifying the issue through to reporting out the recommendations to relevant executives. General managers and managing directorsThis week-long program prepares new general managers and managing directors as they move into their roles. 3M has been externally recognized for some foundational practices that are common to its leadership development programs, including: Leaders teaching leaders3M leaders, including the CEO and executive vice presidents, teach the content that is presented in these classes. By teaching the content to others, the leaders are simultaneously refreshing their own knowledge and getting to know other people better. This is vital to building networks and gaining connections across the different parts of the organization.
Focus on business needsFrequent meetings with the CEO and other executives ensure a strong understanding of current issues and gaps to better focus leadership development content around 3Ms business needs. Relationships with the executivesHR professionals at 3M strive to maintain strong relationships with executives so they can create content specific to their business needs. It is also important to facilitate relationships among leaders with other high-potential employees within the organization. LEARN (listen, engage, ask, respond, and note gains) and GROWTH (goal, reality-based, options, what the employee will do, talents, and how to measure) models3M created these models and incorporated them into leadership coaching processes. These models aim to focus on employee strengths, not gaps, and measure employee progress moving forward. Healthy living 3M makes it a top priority to focus on its employees health and well-being and provides them with access to tools to keep themselves and their families healthy. These programs benefit employees, help lower long-term health costs for the organization, and improve employee productivity, engagement, and commitment. In 2008, for instance, 3M launched a program called Healthy Living Resource, which offered free health screening assessments. Employees were granted $100 to participate and offered additional coaching classes and programs, where appropriate, based on their assessment results. The organization has also instituted a variety of offerings to support its employees work/life balance such as an employee assistance program, medical clinics on-site, a fitness center, lunch and learn Web streams, and an activity club that focuses on employees hobbies and interests. OUTCOMES AND MEASUREMENT 3M has analyzed the results of its standard employee opinion surveys and leadership surveys. It has found a number of conditions that must be present for employee engagement. Ultimately, employee engagement begins with trust: trust in the organization, trust in the brand, and trust in leadership. Leaders are held accountable for engagement through the cascaded results reviewed by the CEO, as well as via the executive summary process. As 3Ms talent reviews are completed, all survey scores from each business unit are rolled up along with the reviews, which create an additional check point. This adds another layer of accountability, as well as an opportunity for comparisons among divisions. 3M has decided not to tie leadership compensation to engagement scores. The business case for 3Ms employee engagement work was provided by the Valtera study, which demonstrated that organizations with higher levels of employee engagement also have higher returns on assets, profitability, and shareholder value.
In addition, 3M has conducted its own correlations between innovation and business outcomes, most notably innovation. The organization conducted a recent study among business laboratories in order to measure the relationship between engagement and innovation and found that those business laboratories that have more engaged employees (per results of the worldwide business unit survey) two years later were more innovative (e.g., produced more products) than business laboratories where employees were less engaged. Since 3M greatly relies on innovation, these findings were pertinent. 3M has also been able to correlate higher levels of job satisfaction with lower levels of employee absenteeism. The organization participates in several benchmarking initiatives in the area of engagement. 3M also captures feedback from employees, vendors, and customers, and it HR professionals attend conferences and review the research literature on employee engagement. 3Ms engagement efforts have seen some positive results as of 2009. The organization has seen a worldwide improvement in its engagement scores since its initiative began in 2007. Additional successes include being recognized externally as a best practice, the positive reception by supervisors of its video series, a successful HR vendor conference on employee engagement, and the roll-out of it employee value tool. In addition, the e-supervisor content on engagement is now rolled out worldwide, and Paul runs a popular blog on employee engagement. CHALLENGES AND LESSONS LEARNED 3M offers the following lessons learned and advice from its employee engagement work: Focus on organizational fit. There are many definitions available externally for employee engagement, but many of these definitions are not thought through and/or do not align with 3Ms overall organizational strategy. Leverage successes. Incorporate how different business units successfully engage employees. Use storytelling, conversations, social networking, and employee dialogue to drive engagement. Create a shared sense of purpose. Integrate processes across functions to ensure HR solutions are actionable across the organization, while still flexible enough to address individual business needs. Four keys to remember in implementing an employee engagement process are: 1. when setting expectations, define the right outcomes (not the right steps); 2. ask employees why they think something (not what they think); 3. when motivating an employee, focus on his/her strengths (not weaknesses); and 4. when developing an employee, help him/her find the right fit (not just the next rung on the ladder).
You cant just tell employees to be engaged, and you cant just monitor or push the engagement metric up, because the behavior will go underground and people will feel coerced, said Sandra K. Tokach, vice president of talent solutions. But you can invite employees to participate in engagement efforts, and you can and have to lead and inspire by example. Paul said that success is evident when everyone feels that they have not only the right but also the obligation to seek out new opportunities. Success is when the hallways buzz with energy, when people come to work excited, and when they are proud to be associated with your dynamic organization. Ultimately, the value you create within your organization translates into shareholder wealth.
Case Study Infosys Technologies Ltd.

An IT services firm, Bangalore-based Infosys Technologies Ltd. is one of the largest IT companies in the world in terms of organizational revenue and employee size. Its services include data management, project management, systems integration and support, and maintenance services. With more than 109,000 employees and $4.7 billion in revenue in 2009, Infosys has offices in 22 countries as well as development centers in Australia, Canada, China, India, Europe, Japan, Middle East, the United Kingdom, and the United States. Infosys delivers technology-enabled business solutions in order to help Global 2000 companies optimally function in a flat world, which Infosys characterizes as a playing field leveled by globalization forces such as technology ubiquity, demographic shifts, emerging economies, and regulatory compliance. Infosys believes that winning in the flat world requires a paradigm shift in the way organizations operate. A shift from viewing cost as a barrier to growth to optimizing cost structure as a fuel for growthIn order to succeed in a flat world, organizations must lower their organizational operating cost structure so that goods and services will be available to consumers globally (including in developing markets). A shift from earning customer loyalty through good service, to earning customer loyalty by providing faster innovationIn order to thrive in a flat world, organizations must go beyond simply providing goods and services in order to generate customer loyalty; rather, they must be willing to explore new models of innovation to increase customer satisfaction and retention. A shift from spending money on information to making money from informationTo succeed in a flat world, organizations should use business and market intelligence to uncover revenue potential and also harvest that information for profit. A shift from winning in the straightaway to winning in the turnsTo succeed in a flat world, organizations must have a strategy to remain competitive as the market fluctuates through the business cycle. Infosys helps its clients to make these transitions through its services and technologies. The organization pioneered the Global Delivery Model (GDM), which facilitates the growth of offshore outsourcing by organizations worldwide. The GDM is based on the principle of moving an organizations work to a location that best benefits the organizations strategic direction in terms of the best talent, the lowest cost, and the lowest amount of acceptable risk.
OVERVIEW OF THE HR FUNCTION
At Infosys, HR is no longer just about enabling, supporting, and providing services. It is about doing it, and doing it right. Nandini Nathan, group manager, business partner HR
The HR function at Infosys is comprised of corporate HR and business partner HR. Corporate HR is responsible for the centralized areas of talent planning, recruitment, organizational development, geographic HR, compliance and immigrations, compensation and benefits, and employee relations. Infosys has a dedicated COE for each of these areas in corporate HR. A centralized HR shared services center assists the COEs through back-office HR support and an HR effectiveness organization focused on innovation and best practices. Business partner HR is decentralized to support the business lines: IT services, engineering services, business process outsourcing, and products and platforms. Each business line has a business partner HR team that serves as relationship managers to the business. These business partner HR teams report to both the business line leaders and the corporate HR function. A business partner HR team provides these primary services for its business line: providing HR solutions to drive the people needs in the business line, ensuring HR operations are aligned with the employee life cycle and business operational needs, and providing people solutions to drive the business needs. Ultimately, business partner HR teams provide each of the business lines end-to-end HR processes, including administering HR operations, implementing corporate HR initiatives, creating HR solutions, managing new employees, and evaluating business solutions related to talent. Employee Engagement Defined Infosys defines employee engagement for each individual employee as possessing passion for the work he/she performs at the organization. The role of HR at Infosys goes beyond performance management by fostering this culture of initiative, creativity, and enthusiasm.
EMPLOYEE REWARDS, ENGAGEMENT, AND RETENTION STRATEGY
Our assets walk out of the door each evening. We have to make sure that they come back the next morning. Narayana Murthy, Infosys chairman and chief mentor
The Evolution of HR Strategy at Infosys HR strategy has morphed over time as Infosys has experienced rapid growth. The early years of the organization in the 1980s were characterized by a command and control economy and the emergence of the IT services industry, which heavily influenced the people management philosophy at Infosys. During this time, HR focused on creating foundational people processes, including the means to rapidly attract best-in-class talent and also attract and groom mid-level management through a merit-based system. The organization sought the best engineers in India, those with technical skills that were rapid learners. During this time, the task of leadership development was primarily delegated to the leaders of the organization, who were expected to teach, mentor, and guide high-potential talent. Infosys worked to build a work force for an adaptable, agile, and learning organization, with a flexible but robust organization design and structure. In building this foundation of people processes, HR at Infosys found that it had to constantly balance the needs of three key stakeholders: 1) employees, whose needs were for employability, continuous development, growth and careers, and total rewards; 2) the business, whose needs included transformation, profitability, scalability, flexibility in staffing, and fungible skills; and 3) customers/clients, whose needs were for technical depth, value for the money, and for Infosys to act as a trusted adviser. In the 1990s Infosys was challenged to scale effectively in the face of tremendous organizational growth. During this time, the economic scenario liberalized, and the organization faced increased competition from domestic and international players. In response, the organization created a global brand name and increased public awareness of that brand. The people strategy at Infosys during this time focused on becoming an employer of choice, deepening relationships with potential talent sourcing channels and the community (such as academia, students, parents, the community at large, and shareholders), and real wealth creation for employees through employee stock options. HR supported the business by hiring large numbers of employees, while maintaining quality through a strong employer brand and scalable systems and process. HR engaged employees through both tangible and intangible benefits, such as a world-class infrastructure and facilities and stock options.
In 2000 Infosys experienced a spectrum of growth across its clients and services offerings, with its work force reaching 52,000 by 2006. In the marketplace, the imperative was to reduce time-to-market for new products and services, to cater to knowledgeable consumers, and to effectively respond to globalization, deregulation, and consolidation. During this time, the organization also experienced both organic and inorganic growth. Consequently, the people strategy focused on providing a greater reach into campuses in order to hire the best talent, creating a strong leadership pipeline, better customizing HR policies to different generations of talent, catering to a culturally inclusive and globally diverse work force, and introducing the business partner HR function as a strategic partner to the business. As of 2010, the HR organization has taken a back-to-the-basics approach by providing employees with a sense of job security, career and growth opportunities, and opportunities for instant gratification (rewards and recognition). Employee Value Proposition The employee value proposition at Infosys looks at answering some basic questions: Why do employees choose to join Infosys over competition? Why do employees opt to build long-term careers with Infosys? What do employees get from their work experience that allows them to be and feel successful? What do employees get from their work that helps them to succeed and grow? What makes employees committed to the organization? What aspects of the environment encourage good work? The organization designs specific action items around this feedback in order to ensure that employees are engaged at the organization. (More about the process for gathering employee engagement information can be found in the Processes section.) Selection Strategy The HR function at Infosys focuses on hiring best-in-class talent; investing in its employees (e.g., developmental opportunities); and engaging, rewarding, and retaining those employees in a high-performance culture. The organization believes that it is through the implementation of efficient, effective, and innovative HR practices that a successful businessand happy employees and investorswill result. From the beginning, Infosys has made it a priority to recruit and select only the best talent available. In 2009 Infosys recruiters visited more than 700 universities and schools seeking the brightest minds in technology and engineering. Infosys screening process of potential applicants has been considered to be more stringent than that of Harvard University. For every available position, Infosys receives thousands of applications and only extends offers to roughly 3 percent of applicants.
Investing in new talent at Infosys is a constant and is unaffected by economic swings. The organization has multiple programs in place to reach out to potential talent, such as: campus connecta program that reaches more than 500 colleges and 30,000 students per year; rural reach programsprograms that reach out to schools within 150 kilometers of Infosys development centers to create brand awareness; catch them younga program that trains high school students on the basics of computer programming at more than 100 schools per quarter; sparka program involving 2,400 faculty members and 36,000 students; instepan internship program for 90 of the best minds across 125 international colleges; and project summera project to hire more that 1,000 new employees in the summer to help manage U.S.-based projects. Infosys leverages its shared services organization and technology for recruiting, testing, and assessing applicants in order for it to handle the tremendous recruiting and screening volumes, while still maintaining its high-quality standards. As an IT company, the organization heavily uses automation in its recruiting practices. The HRIS system is built on SAP, and multiple applications sit on top of SAP that help manage the hiring process seamlessly. In order to secure fundamental technical skills, the organization has a technical competency map. Applicants that fit this initial criteria move on to interviewers and hiring managers who focus on their ability to learn in different situations. And in order to assess the cultural fit, passion, and engagement of potential new hires, Infosys has a panel of high-potential supervisors and managersarying somewhere between 800 and 2,000 individuals at any one point in timethat recruit for and represent Infosys on campuses. This panel undergoes extensive training and coaching to appropriately communicate with candidates, showcase careers at Infosys, and gauge applicant fit at Infosys. Employee Engagement Strategy The responsibility of employee engagement ultimately lies with line managers at Infosys. One of the keys to employee engagement strategy at Infosys is communication. This is even truer in the volatile economy of recent years. Opening up the lines of communication for both positive and negative exchanges is a key part of Infosys engagement strategy. These lines of communication help the employees at Infosys have a voice in the company and as such makes them more actively engaged in the day-to-day processes. In addition, Infosys anticipates employees to progress through different attitudes during their tenure, from obedience to diligence and then on to knowledge and intellect, initiative, creativity, and ultimately, passion. Infosys business partner HR
function works to advance employees through this continuum. The leaders at Infosys see that with passion comes engagement and that there cannot be one without the other. All of Infosys processes and tools to achieve effective employee engagement are aimed at helping employees progress to a passionate attitude. Employee Retention Strategy Infosys hires 25,000 to 30,000 new employees annually. Infosys sees the attrition rate that requires this large talent pipeline as a product of the organizations specialized retention strategies. Infosys makes a concerted effort to determine topperforming employees each year, as well as employees with niche skill sets and talents. Once this group of valuable assets is identified, Infosys actively seeks to retain their employment. Through compensation enhancements, career pathing, and customized reward packages, Infosys seeks to ensure these employees continue to shine and progress through the ranks of the organization. Processes for Rewarding, Engaging, and Retaining Key Talent Infosys employs a formal feedback system to capture the issues that matter to employees. Lets Interact on Themes that Matter to Us (LITMUS) is an online employee engagement survey, based on the Gallup Q12 survey, that Infosys administers every 18 months to understand the overall sentiment of employees. Infosys tries to capture what the employees truly care about through LITMUS. Once the survey is administered, Infosys interprets the data and creates action items from the feedback. That is, business leaders create three to four action items for the following year based on the employee survey results. These action items are taken seriously and are focused on throughout the following year, with a midpoint update by the business leaders to employees to inform them of the status of action items. A LITMUS portal keeps employees informed on the progress of action items based on their feedback. Other less formal, ongoing mechanisms also collect employee feedback, such as periodic forums hosted by senior leaders. For example, the CEO holds quarterly forums, the head of HR hosts a monthly blog, and the business line heads conduct chat forums either monthly or quarterlyall to solicit feedback from employees. There are several examples of Infosys using Web 2.0 and social networking technologies to facilitate open communication and feedback from employees. Examples of online offerings that help employees communicate follow. My Voice@Infosysa communication platform for employees to share their inputs and suggestions on various policies affecting them on an ongoing basis HRD Bloga platform for employees to communicate with the HR head on issues concerning them Ask Krisa monthly interactive column on the intranet that provides an opportunity for the employees to ask questions to Infosys CEO S. Gopalakrishnan (i.e., Kris to his colleagues)
Infy TVan Infosys TV channel that keeps employees informed on units and regions across the organization Infosys YouTubea channel that connects internal events, initiatives, and updates to the external world In addition, Infosys has methods in place to gather feedback on specific items, such as policy issues. Managers can provide feedback through a managerial portal on areas that are important to them, and the portal serves as a communication platform for managers worldwide to share, assimilate, and analyze relevant business information. And employees can report from their teams on issues that are germane to them through bulletin boards. The business lines also have their own, individualized methods for collecting employee feedback. These outlets are where the day-to-day pulse of the organization is measured. All of the employee input from all of the informal, ongoing feedback mechanisms including talent diagnosis, attrition, and retention dataare collected at the end of each year. Senior managers analyze this data and incorporate the information into strategy planning sessions that will take place the following January for the next years planning cycle. EMPLOYEE REWARDS, ENGAGEMENT, AND RETENTION PRACTICES Infosys uses a system of career incentives, feedback loops, and technologies to ensure its work force is engaged and retained (Figure 12, page 58). Career Pathing The HR group regards each employees individual needs and drivers in terms of career growth and advancement incentives. Each employee receives a customized path to ensure he/she is fully engaged. An online career pathing system called Infosys Role and Career Enhancement (iRACE) uses a career transformation architecture to map out career progression paths at Infosys. Employees can customize a path that works best for them by choosing from more than 25 different career paths, with transitions among them. Not only does iRACE serve to create a more engaged work force but also helps to increase the billability of resources throughout the organization over time. The system has the added benefit of increasing spans of control of managers, as career planning resources are available to employees via self-service.
Infosys Leadership System
Figure 12 Training and Development Infosys works to ensure its leadership pipeline is full of candidates. New employees are assessed in a number of ways to determine their best fit in the leadership pipeline. The average age of employees at Infosys is 26 years old. The leaders at Infosys have a strong desire to train and mold these young professionals into the leaders of the future. Infosys has created a tiered model for developing leaders within the organization: Tier Ithe future top management and those next in line for the board at Infosys; Tier IIcomprised of function heads and function leaders that have been chosen for future business function leadership roles; and Tier IIIa group of employees picked to take on leadership positions in the next three to five years. High potentials are identified by the board of directors and the Leadership Institute, a separate organization within HR responsible for leadership development activities at Infosys. Each high-potential leader has a personal development plan, which includes action learning, assigned mentors and coaches, and often executive development at top business schools. Formal succession planning takes place for key roles.
Beyond leadership development, training and development is a major practice in engaging and retaining employees at Infosys. From its advanced internship programs to its massive employee training complex in Mysore, India, the organization makes great efforts to ensure its employees have the most up-to-date training and education. Infosys has even engaged in training intermediate and high school students in computer skills and programming. Figure 13 on page 61 depicts the range of training and development opportunities available to employees at Infosys. Training and Development Opportunities
Figure 13 Performance Management The founders at Infosys created a high-performance culture from inception. Infosys business partner HR leaders are responsible for maintaining this culture. The HR group at Infosys recognizes that the best way to drive this high-performance culture is through employees managers. To sharpen the work ethic and promote its culture, the HR group works with managers to focus on building competencies, creating stronger links between rewards and performance, balancing short- and long-term goals, and managing nonperformers through performance improvement plans. The performance culture is based on meritocracy; a balanced scorecard of performance measures flows all the way down to junior employees at Infosys.
Through these performance management techniques, the HR function at Infosys has been able to consistently create an organizationwide focus, commitment, and enthusiasm that aligns and drives people to out-execute competitors and achieve superior business results. Pay-for-performance is a key tenet of performance management at Infosys; even junior employees have a minimum of 10 percent of total compensation tied to performance. Resource Management As an IT services company, Infosys finds that 10 percent to 12 percent of its work force may not be billable to a client at a given point in time. Employees that are not billable are at risk of disenchantment because they do not have the opportunity to build out their skill base and be productively engaged. To combat this potential disengagement, Infosys has created a MyWorks portal that allows employees who need help with projects across the enterprise to post short-term projects and allows employees currently not utilized to search for short-term assignments, to sign up for assignments that they are interested in, and to post completed assignments. Work-Life Balance, Diversity, and Empowerment The organization encourages a healthy work-life balance for its employees and a culture in which employees always feel that they have a voice. To do this, the organization tries to create an environment where people feel that they have meaningful and supportive careers and work in a discrimination-free work place. For example, there are several networks that celebrate diversity and provide employee support within the organization, such as an Infosys Womens Inclusivity Network (IWIN), a family matters network for the more than 14,000 families at Infosys, and differently-abled assimilation process. There are a number of HR policies to support work-life balance and inclusivity, such as paid maternity and extended maternity leave; one-year child care sabbaticals; paternity leave; adoption leave; the option for part-time, flex hours, and selective telecommuting; and sabbaticals for volunteer work, a return to higher education, and teaching. Infosys also tries to create a culture where employees are empowered. For example, the organization has created grievance redressal forums in which employees can express work-related concerns and have their concerns addressed. Social Media to Engage Younger Generations Infosys has also adapted its organizationwide communication practices to accommodate the newest generation of employees. Capitalizing on the explosion of flash video, Infosys has created its own channel on YouTube, as well as an internal broadcasting network called InfyTV. These two media serve as the new organizationwide platform for communication. YouTube and InfyTV enable the executive team to speak directly with all employees at Infosys. This direct communication helps to keep employees engaged, and the feedback systems give
employees a voice and help them to take part in the direction of the company as a whole. Infosys has also created several knowledge-sharing and collaborative sites. InfyWiki is an active online knowledge-sharing community enabled via Wikipedia. The Infosys KShop (the K is for knowledge) is an online innovation forum that helps encourage and capture innovative ideas. KShop hosts more than 2,000 discussions at any given time, and roughly 18,900 editors contribute to the site regularly. Approximately 400 new ideas are contributed to this site daily. Forums such as these engage employees and allow communication across a large and diverse work force. Rewards and Recognition Infosys employee rewards and recognition practices are two-pronged. First, Infosys instilled the framework, processes, and policies for the organization, managers, and business lines to promote rewards and retention and celebrate success. Currently, the rewards system is based on the values of customer delight, leadership by example, integrity and transparency, fairness, and the pursuit of excellence. Reward policies are reviewed annually to ensure they are still consistent with the behaviors the organization wants to promote and guide the organization. For example, in 2009 the reward policy was geared to encourage employees to manage their business during an economic slowdown and contribute via process improvements or innovation. Each business line has also customized its specific values framework (but there must be some level of consistency with the overall framework in intent). Second, Infosys created a corporate spirit and culture to ensure that every employee feels important and recognized. Creating this spirit and essence is the most important piece of the rewards process and the most challenging. In order to inculcate this culture, HR has leveraged various mechanisms such as budget allocations and manager training to allow managers the flexibility to reward employees. For example, Infosys has implemented a spot award that allows a manager to immediately recognize a good deed. Spot awards are budgeted for, managers are trained on how to implement them, and they are tracked and audited. In addition, there are regular quarterly and monthly awards for team champions who exhibit the organizational values. Even though managers nominate the employees, the nominee must also have credibility and buy-in from their team members. Infosys most prestigious award, the Chairmans Excellence Award, is reserved for the best employees, after extensive due diligence originating from either applications or nominations. Senior employees are in charge of reviewing the applications and examine everything from data and outcomes to credentials and testimonials. Ultimately, two winners are chosen for each of seven categories (customer delight, innovation, people development, etc.).
Infosys has also created a program called the employees reward tree. As an organization, Infosys is clear about the behaviors it wants employees to demonstrate. By demonstrating these behaviorsor taking part in different social projects, teaching initiatives, or cross-functional projectsemployees can collect points. As employees collect points and surpass milestones, their progress is tracked on the tree (similar to a career planning map), and certain employees name are projected as having achieved qualities that make them a higher performer. Points can be redeemed, for example, to buy books at a bookstore or purchase souvenirs from the Infosys store. This program is not fully implemented yet, but it has helped reaffirm the desired behaviors of employees and further promotes employee loyalty. Outcomes and Measurement The HR group at Infosys uses several tools to measure employee engagement including the aforementioned LITMUS testing, as well as dashboards of key performance indicators. This LITMUS test gauges manager performance; every manager has a LITMUS scorecard and is measured on progress against defined parameters. Infosys uses these scorecards to track manager performance, as well as to motivate them to achieve a higher level of performance. A LITMUS managers tool helps track initiatives resulting from the employee engagement survey at the corporate level. LITMUS portals display results online for managerial access. People dashboards are enabled by an HR analytics and warehousing service that allow the organization to gather meaningful insights from HR data collected from various organizationwide HR and non-HR systems. These dashboards show key measures and statistics useful to gain a quick assessment of not only overall sentiments and retention but also regional, skill-specific, and manager-specific retention concerns and the parameters that have the greatest impact on turnover. The HR leaders at Infosys recognize that the majority of the engagement incentives come from business line managers, so the HR group evaluates the managers engagement and retention efforts. Managers at Infosys are measured by these dashboards, along with the LITMUS testing and other feedback mechanisms. Managers overall performance is evaluated in part by their staffs relative engagement and productivity. Infosys believes that employee engagement is not effective as a mandate from the HR function; instead, engagement incentives need to come from the managers themselves. The measurement efforts at Infosys have demonstrated a link between employee engagement and customer satisfaction. The organization recently completed an analysis of its customer satisfaction data and is correlating the results with the appropriate business units employee engagement results. The organization has already found that the business units with the highest profitability consistently have the most engaged work force.
Challenges and Lessons Learned The HR group at Infosys recognizes four main lessons learned from their efforts to reward, engage, and retain employees. 1. Engagement is a line manager responsibility. The best source of engagement incentives is from an employees direct manager. Although the business partner HR group is ultimately responsible for each business units employees engagement, they equip the line managers with all the tools and techniques needed to properly engage employees. 2. Employees are sophisticated consumers. A one size fits all approach does not work. Just as sophisticated customers are not pleased with unoriginal and standardized service, neither are employees. To properly motivate and engage employees, employees need customized care. 3. If it is all about the passion, then engagement is then a given. Infosys believes that passion is the highest level in the HR hierarchy of success. Once an employee reaches the pinnacle of the hierarchy, engagement is a given. To encourage progress, Infosys helps guide employees on the right career paths to achieve their passions. 4. And finally, engagement is a journey and not a set of activities.
Case Study Schlumberger

Schlumberger was founded in the 1920s and today is one of the worlds largest oil field services organizations (at $22.7 billion in revenues in fiscal year 2009). Its oil and gas services include seismic surveys, drilling, wire line logging, well construction and completion, and project management. Schlumberger employs more than 77,000 people of more than 140 nationalities working in approximately 80 countries. Schlumberger is organized into a matrix structure comprised of 14 business segments (addressing various stages of oil and gas field exploration and development) and 26 geographical markets (acting as the interface to customers that include national, major, and independent oil companies). The organization invests heavily in technology and R&D and operates 38 research, development, and manufacturing centers around the world. As a matrix organization, there are HR representatives present in each of the geographic regions, as well as each business segment and technology center. Along with the matrix of HR representatives, Schlumbergers regional HR support centers consolidate HR data and administration, thus allowing the personnel function and HR professionals out in the field to focus on face-to-face strategic support of their internal customers. At Schlumberger, HR is divided into four domains: 1. practiceswhich include HR standards, policies, and procedures such as service quality; 2. planningwhich is the talent management arm; 3. employee supportwhich includes face-to-face interaction with managers and employees; and 4. HR transactionswhich involves administration and data management. Although Schlumberger has not developed a formal definition of employee engagement, the organization views the motivation of its employees as a core value, in addition to a commitment to technology and a determination to produce superior profits. Employee motivation and engagement are intrinsic to Schlumberger culture. The Schlumberger employee value proposition that is communicated to prospective and current employees is characterized by borderless careers, extensive development and training opportunities, a challenging job with high levels of autonomy and responsibility early in a career, progression based on performance rather than seniority, diversity and true meritocracy across all nationalities, and a competitive salary and benefits package. Figure 14 on page 65 illustrates the organization structure of HR at Schlumberger.
HR Structure at Schlumberger
Figure 14 Employee engagement is not owned by the HR function; rather, line management is responsible for employee engagement operationally, and corporate HR supports line management. EMPLOYEE REWARDS, ENGAGEMENT, AND RETENTION STRATEGY Senior Leadership Support A commitment to employee engagement at Schlumberger begins with senior leadership support and visible commitment. In order for any endeavor to be successful in business, the focus has to come from senior leadership, said Benoit Barbier, HR manager, Reservoir Management Group. Without a clear, consistent, and persistent message from the senior leadership team, employee engagement and retention will not be successful. Employee engagement is part of key strategic decisions at Schlumberger. For example, the chairman and CEOs annual business strategy document, as well his annual video address to all employees, addresses employee motivation and retention. In addition to the consistent message passed down from the senior leadership team, senior leaders have annual HR-focused objectives, consistent with business directions and employment market conditions, that they are expected to manage. These objectives cascade across the matrix at Schlumberger. One such objective
relates to technical talent: ensuring that key technical populations are well-identified and that key performance indicators related to retention, attrition, diversity, and mobility are monitored monthly, by the vice president of HR, all the way down to the field manager level. Global Recruiting
Employee motivation starts with hiring the right people. Benoit Barbier, HR manager, Reservoir Management Group
Effective employee recruiting and selection are prerequisites to engaged employees at Schlumberger. A recruiting practice that has proven successful at Schlumberger is the use of field recruiters sourced from the high-value employee population. Schlumberger has found that this practice provides two advantages: First, the highvalue employees feel as though they are helping shape the future of the organization by influencing the hiring of key talent. And second, these recruiters ensure that an enthusiasm for working at Schlumberger and core organizational values is wellcommunicated to applicants. By using like-talent to recruit like-talent, factual information about job opportunities is well-communicated to prospective employees and the engineers-turned-recruiters are able to identify people like themselves who will also fit the Schlumberger culture. Employee selection processes include behavioral interviewing, observing candidates on team projects, and realistic job previews. In order to prequalify job candidates, Schlumberger leverages internships extensively. Once selected through a centralized process, the interns are deployed to field sites, engineering sites, or field offices, depending on whether they are attracted by (and ready for) oilfield life or research, engineering and manufacturing, or support functions. Schlumberger maintains relationships throughout the year with hundreds of universities worldwide, which allows the organization to interact with top graduate students presented to the organization by senior faculty members who have a solid understanding of the organization and its hiring needs. The organization also sources key talent by participating in joint research with select universities in order to not only foster the development of new ideas and technologies for the oilfield but also engage early with masters and doctoral candidates who might be future candidates for hire. Defining Key Talent
High-value talent makes up the backbone of Schlumbergers management and the technical leaders of tomorrow. Benoit Barbier, HR manager, Reservoir Management Group
Schlumberger identifies high-value talent annually, and employee high-value flags expire after one year. High-value employees are determined by their performance in certain categories of skills, such as line management skills, functional expertise, outstanding business performance, technical expertise, outstanding sales performance, and the ability to mentor (if applicable). In total, these individuals represent the top 15 percent of employees. As high-value employees are identified worldwide, their information is stored on an HR intranet site. Managers can review the high-value talent distribution by geography, as well as diversity statistics, to ensure that the high-value talent pool is representative of the work force demographics at large. The responsibility for flagging high-value employees ultimately resides with line managers, assisted in this process by HR. HR assists line management by preparing lists of possible candidates, based on previous years entries, and by ensuring that these candidates career profiles are up-to-date on the HR intranet. Employee Engagement Strategies Schlumberger conducts yearly audits, during which senior HR employees lead rigorous focus groups with employees and management from a given geography on a variety of workplace topicsincluding career development and compensation and benefitsin order to determine opportunities for improvement. These audits are conducted on a global basis at all levels of employees and provide a rich information exchange among HR, management, and employees. They ensure that HR provides high-quality service to its internal customers. In addition to audits, HR conducts regular open houses with employees in the various regions. These day-long open houses are organized like minitrade shows hosted by field HR personnel. As the name implies, all employees and their families are invited to come in and ask questions about themselves and their careers, payroll, family medical benefits, and pension plans. Schlumberger has found these open houses to effectively inform employees about their benefits, their obligations, and any other matter relating to their work. Another tool that Schlumberger uses to increase employee engagement is its interchange forum. This program brings together the top management layers of Schlumberger and a group of employees from different parts of the organization for three days of interaction involving formal presentations, workshops, and social activities. For each forum, a theme or real-life business challenge is chosen, with preliminary work, and then debated during the forum. Resulting recommendations are disseminated to the field for action. Schlumberger employees look forward to attending one of these forums and, post-participation, become powerful messengers about executive managements commitment to continuous engagement. In a less formal way, management field visits typically include roundtable sessions during which local employees can ask questions or make comments about current business conditions, employment practices, and upcoming changes in policies.
Roundtable sessions are a strong Schlumberger tradition and an effective way for management to align with employee opinions and feedback at operation sites. Another primary tool to measure and improve employee engagement is the annual employee satisfaction survey (detailed in the Process section). Although not yet generalized throughout the organization, this tool has been in use since 2005 in the Reservoir Management Group. Employee Retention Strategies The high-value talent identification process described earlier includes the creation of top-tier employee lists, who receive special attention throughout the year for financial reward purposes or for consideration for upward career movement. Furthermore, HR maintains an up-to-date list of at-risk, high-value populations of employees, by business segment and geography. These individuals are typically technical experts whose presence is essential for the timely completion of specific research, engineering or field projects, or whose knowledge would be hard to replace. At-risk populations are immediately brought to the attention of executive management for preventive action. On an annual basis, the chairman and CEO indicates which specific efforts must be made to retain these experts, and corresponding retention objectives are assigned to line managers. A relatively new practice that Schlumberger uses to retain valued talent, despite the recent economic slowdown, is incentivized leaves of absence. The organization offers these leaves to selected employees, pays them a reduced salary while on leave, and can call them back six months to a year later. Diversity Strategy Diversity has been a key focus of Schlumberger since the 1970s, when the organization established key principles and policies for recruiting where the organization operates and paying all international mobile engineers working overseas the same regardless of nationality. Since 1990, the organization has focused more on gender diversity, including developing family-friendly policies, respecting gender-specific needs in the work environment, and supporting dual careers. Schlumberger espouses a strong corporate code of ethics focused on respect, offering equal pay, and providing equal opportunity with promotions based on merit rather than seniority. The organizations focus on diversity can be seen in the management ranks: there are 18 different nationalities represented in the top 32 managers of the organization. This focus on equality, combined with other aspects of the employee value proposition, keep a diverse work force engaged at Schlumberger. Strategy Alignment Schlumberger relies strongly on management by objectives, formalized within the performance appraisal process, which applies to all employees. Every January, the vice president of HR proposes key improvements to the executive management
team, who in turn validates the suggestions against current business strategies. These expected improvements are then captured in a global HR directions document, from which specific objectives are extracted and distributed throughout the organization. The achievement of these objectives is part of the performance incentive plan of all line and HR managers. Change Management Change management, which includes maintaining employee engagement throughout the change process, is critical when an external organization is acquired and assimilated into Schlumberger. One of the key elements of successful change management at Schlumberger is the assignment of an integration manager (an HR role), whose function is to engage with employees, familiarize them with Schlumberger, and then integrate them into the culture. The integration manager remains at the acquired organizations premises until the integration is complete, which can take up to a couple of years. He or she reports to the general manager of the acquired organization and becomes an essential part of the management team there. The role of integration manager requires empathy, the ability to listen to employees, adaptability, common sense, and a willingness to compromise. The integration manager complements the role of the incumbent personnel manager. PROCESSES FOR REWARDING, ENGAGING, AND RETAINING KEY TALENT Employee Satisfaction Surveying The Schlumberger Reservoir Management Group regularly conducts employee satisfaction surveys on a global basis (and in multiple languages) as one mechanism to ensure that it keeps a continuous check on the pulse of employees and what makes them loyal. The surveys cover essentially all aspects of working life at Schlumberger, such as an employees relationship with his/her boss, the relationship with peers, the work environment, individual working conditions, and access to training and development. The questions are a mix of quantitative and qualitative questions. Typically, 60 percent to 65 percent of the employee population base responds to the survey in a given year. The data from the survey is collected and housed in a database by an external vendor to ensure anonymity, professionalism, and consistency. Results from the employee opinion survey are analyzed country by country, business segment by business segment, and at the overall corporate level in order to ensure the information is meaningful and is acted on at all levels. Typically, the surveys are administered in the fourth quarter of every fiscal year. Each line manager is then expected to discuss the aggregated results of the survey with his/her employees through roundtables and conference calls, and a panel of employees helps to prioritize the information and determine action items. Every line manager is then responsible for designing an action plan (with quantifiable actions and associated deadlines) for the following year based on the prior years survey results. On a
quarterly basis, line managers present back to employees the results of progress todate against the action plan. Changes to the action list can be made at that time. As a result of its work to gather and act on the employee opinion information, the Reservoir Management Group has found that its employee satisfaction scores have significantly improved from 2006 to 2010. Employee satisfaction survey results automatically capture differences by culture, and related action plans are deemed culturally relevant because they are established by management and employees together, on location. Schlumberger has found few differences country by country in employee motivation factors. Schlumberger has also found that the concepts of a good job and fair pay, regular recognition by management, a good working environment, and a clear path ahead transcend cultural boundaries. Career Orientation Review Schlumberger managers conduct a career orientation review process with employees. This review covers the gamut of employees careers to-date, the domains of their competence, their technical and functional skills, and the soft skills that they have mastered. The review involves a formal meetingwith preliminary work by the employee, his or her direct supervisor, and the personnel managerwith the goal of discussing the employees long-term objectives and career path within the organization. The format of the review is designed to be a discussion between manager and employee, with no set time limit, in order to encourage candor and openness. The outcomes of these reviews not only encourage long-term retention of valued employees but also foster calibration between the employee and the employer in terms of goals and expectations of a mutually beneficial relationship. The outcome is captured in Schlumbergers HR intranet database and can be viewed at any time by line managers and the HR function. The Role of the Supervisor in Employee Engagement HR professionals at Schlumberger recognize the importance of the managers in engaging their employees. To that end, the organization offers programs that teach people management skills to new, mid-level, and more senior-level managers. One such program, called management essentials, covers the key behaviors that Schlumberger expects from its managers as they progress through three stages of their careers. 1. New manager trainingParticipants learn how to practically implement job-related and soft skills including effective communication.
2. Mid-level manager trainingThis course focuses on higher levels of internal and customer interactions and higher expectations. Participants also focus on preparing their subordinates, who are also managers, to become higher-level managers. 3. Senior manager trainingThis course focuses on leading change, building effective teams, and developing leadership throughout the organization. Beyond the management essentials program, every business segment develops short duration, ad hoc management training programs that cover issues specific to their domains of activity. In addition, numerous first-time and mid-level managers pair up with mentors among the more senior ranks in order to seek advice in times of difficulty or simply to learn from experience in a casual but effective way. For example, the HR manager for the Reservoir Management Group mentors three to five employees at any given point in time. Although every business segment has its own way of implementing regular manageremployee communication, invariably there are weekly meetings, monthly teleconferences, and round tables between managers and their employees, as well as field visits for senior managers to gauge local management performance and relations with employees. EMPLOYEE REWARDS, ENGAGEMENT, AND RETENTION PRACTICES Tangible Rewards and Benefits Tangible compensation and benefits are made up of the following elements at Schlumberger and follow a hierarchy that becomes increasingly advanced (Figure 15, page 72). Social Networking A variety of social media are used at Schlumberger to engage employees. Overall, the corporate code of ethics guides various social media, which are self-monitored. For example, bulletin boards have been in use in Schlumberger since the early days of e-mail on the corporate network in 1985. They are used primarily by technical communities in order to help resolve problems using knowledge and experience organizationwide. Certain bulletin boards regroup people from the same special interest group; for example, the ConnectWomen bulletin board allows female employees to discuss issues relating to women in the workplace. Employees value the culture of freedom of speech and exchange of information across the secured Schlumberger corporate network.
Tangible Rewards and Benefits
Figure 15 Web logs, which are individual employee blogs, have also proliferated within the organization. Any employee may start his or her own blog. Web logs are considered complementary to the more structured bulletin boards. What keeps employees engaged at Schlumberger naturally varies from individual to individual. The diversity in employees and their interests is captured in employee career networking profiles, which are employee-managed intranet pages similar to Facebook profiles. Career networking profiles are essentially internal rsums that allow individual employees to present themselves to their colleagues in a structured manner, but with a good deal of freedom about the content presented. Inspired by the success of YouTube, Schlumberger has also created its own implementation called BlueTube. BlueTube fosters creativity and team spirit by encouraging employees to share their experiences, to write sketches about life at Schlumberger, to send New Year wishes to colleagues across the globe, and to hold contests between field locations on specific themes. Training and Career Development Schlumberger invests heavily in the training and development of its talent pool, both in classrooms and on-the-job. New hires from universities are placed into three-year technical or sales training programs upon joining any of the business segments. The promotion process
throughout the period is fairly strict, and the last stage involves senior management from the business segment or the geographical area. This opportunity for junior employees to interact, often for the first time, with senior management is a great motivator. Training continues throughout the career of a Schlumberger employee, and development planning is part of the annual performance appraisal process. In addition, the management development program offers a series of level-specific training. And Schlumberger selectively offers personal development leaves for highvalue employees who want to go back to school to further their domain expertise and then return to Schlumberger following graduation. One of the ways Schlumberger retains specialized technical talent is through technical career ladders. Career maps are designed specifically for employees who want to have a technical career within Schlumberger and identify the conditions for promotion from one level to the next. These career maps help the roughly 40,000 technical employees to self-manage their own careers to an extent. Technical employees take charge of their own training and development based on the primary career path they have determined with management. These employees can access all of the maps on a dedicated career Web site, which details the training and development they need to advance. This online career management tool has proven to be a positive retention factor for technical talent. Borderless Careers Another important practice contributing to the engagement and retention of employees is the heavy emphasis on promotion from within and on giving people borderless careers. In Schlumberger, there are many paths to get to any job. Employees are developed via new opportunitiescross-function, cross-geography, or cross-businessevery two to three years. People are energized by new experiences, new challenges, and learning new things, said Barbier. We strongly believe that this model of career development is very influential in supporting high levels of engagement. Recognition Programs Schlumberger has also developed a number of formal employee reward and recognition programs, including global technical and team-based rewards and an online peer-to-peer recognition system. Such programs continue despite downward fluctuations in the economy because Schlumberger has found that the cost of such programs is minimal compared to the positive impact they have on employee morale and sense of pride in their work. The global technical and team-based awards are held in high regard internally, the most coveted one being the Performed by Schlumberger award. On an annual basis, teams from around the world submit a project for consideration; projects are selected from each of the geographies and business segments and must meet minimum criteria before being considered. Two initial rounds of voting by
employees create a short list, which is then submitted to the executive team. After a final review, the winners are picked by the chairman and CEO. The winning teams are flown to a recognition event with other award finalists and top executives. Schlumberger has also created a peer-to-peer online recognition program called Rewards of Excellence, whereby any employee can nominate a fellow employee for having performed above and beyond the call of duty. There are four levels of rewards available, ranging from a nice job at the entry level to a wow at the highest level. The higher the level, the higher the cash reward. Management oversees the functioning of this program to ensure that awards are distributed fairly. The Rewards of Excellence program has been in place since 2005 and has proven successful. Other Employee Engagement Practices Through a formal policy, Schlumberger actively supports dual-career married couples, regardless of whether just one or both spouses work for Schlumberger. Ultimately, it is up to the employees to declare themselves as dual career and to describe the implications of this in terms of their mobility and working conditions. In return, the organization strives to provide the flexibility required so that those employees can all have a meaningful and rewarding career. The organization also encourages its employees to fulfill their lifelong dreams. Employees have the ability to take short leaves of absence (with their job held for them) to accomplish personal goals or objectives. For example, one employee took a one-year leave of absence to work as dog-sledding guide in the Artic. This flexibility and encouragement by the organization is a key part of the employee value proposition at Schlumberger. Outcomes and Measurement Being a service organization in a highly competitive industry, Schlumberger recognizes the costs of attrition and poor service quality. Since Schlumberger relies exclusively on an educated and experienced work force to deliver superior quality at anytime and anywhere in the world, an unexpected drop in headcount or a lack of expertise in any geography can have a seriously negative impact on service quality in that region. Consequently, the HR organization calculates and reviews on a monthly basis headcount by category of employee, attrition by category, individual training delays, and promotion delays. Meanwhile, the service quality function reviews monthly service quality statistics per client, per geography, and by type of service. Any deterioration in service quality indicators can usually be traced to a drop of management engagement or a drop in employee motivation. Systematic root-cause analysis then tells Schlumberger what action to take to fix the issue, and management is held accountable to follow through. Conversely, an increase in quality of service indicates that operations are well managed and employees are properly trained, have the right experience level, and are motivated.
On a broader scale, employee satisfaction survey results provide a reliable leading indicator of employee morale. These results indicate where engagement levels can be improved in order to prevent unwanted attrition. SUMMARY In summary, Schlumberger has found that the following practices engage employees: 1. recruit the right talent; 2. offer a variety of opportunities and challenges across regions, businesses, and functions to ensure that the employee is always excited about the next step in his/her career; 3. ensure that individual contribution and performance are properly recognized and are used to drive subsequent career steps; and 4. encourage and train managers to lead by example and communicate and engage with employees in every possible way, as often as possible. To that end, effective communication is part of all management training programs, and managers are rated in the performance appraisal process on their ability to manage HR. CHALLENGES AND LESSONS LEARNED
Even though we think that we have got the basics right in terms of tools, processes, and practices relating to engagement, our challenge remains to ensure that field-level managers spend enough quality time taking care of people. Stephanie Cox, vice president, HR
The vice president of HR for Schlumberger corporate and the manager of HR for the Reservoir Management Group shared some lessons learned from their employee engagement journey. First, at Schlumberger, engagement is a way of life and not just a program. Second, in order for employees to be engaged, the right people are needed in the right positions. This is why recruiting and training and developing talent are given so much importance in Schlumbergers corporate culture and in the HR function. And third, although the HR function is greatly involved in administering and measuring engagement and rewards and retention practices, ultimate accountability for employee engagement resides with line management.

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Rewarding, Engaging, and Retaining Key Talent

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