Focus on employees - not customers - leads to higher profits
The brands of top-performing companies are characterised by an emphasis on the experience of employees instead of customers, according to research by Hewitt.
Compelling promise to employeesHighly engaged employees, Clarke says, want a connection to the business that aligns with their individual views.
The best employers in Hewitt's study are much clearer about their brand and the underlying employment "deal", he says, and their brands emphasise a commitment to engaging employees.
Among the best employers, the top three brand characteristics are "caring", "recognition" and "career advancement". This is in contrast with the top brand characteristics at other employers: customer focus; challenge; and excellence. The latter focus more on the company than their employees, Clarke points out.
"In essence, the best focus primarily on the employment experience, and are rewarded with better results." At these companies, he says, senior leadership is visibly committed to supporting the brand, and employees perceive that the brand promise is lived out in the organisation.
Clarke cites as an example the Four Seasons hotel chain in Singapore, where the GM sends personal thank-you notes to any staff member who has been acknowledged by a guest for superior service.
Leadership commitmentLeadership commitment is the fundamental starting point for high-engagement employers, Clarke says. "This commitment is not about saying the right things, but exhibiting behaviours and making decisions that clearly signal people are their greatest asset."
The behaviour of leaders needs to demonstrate that developing and retaining strong talent is a critical element of business success, he says, "but their role goes beyond this. Leaders in 'best employer' organisations play a pivotal role in defining and championing the organisation's values and building a culture and an environment that values people".
Leaders, he says, set the tone through their openness, involvement and leadership style. "While they instil a strong sense of accountability, they also make a commitment to growing and stretching their people."
At Spansion Ltd, for example, a technology company based in China, leaders see their primary role as translating the company's values and vision to employees. The company runs various programs including "leaders teaching leaders" and also creates an open forum in the cafeteria every fortnight to share information and listen to employees' concerns.
Clarke notes that while senior leadership is generally ranked in the top five most important engagement drivers during stable times, it ranks in the top two during times of change.
"Clearly, in the current economic environment, it is critical for leaders to demonstrate their commitment to the people in their organisation, and ensure that this message is effectively cascaded to managers."
Connection to the company and strategyHigh-engagement employers create a compelling picture of the future and enrol employees in it, Clarke says.
They see a direct link between engaged employees and customer satisfaction, he says, noting that 55 per cent of "best employers" use employee engagement as a performance measure, compared to just 28 per cent of other organisations.
Puerto Rico-based "best employer" CIBA Vision increased its employee engagement level by 29 percentage points (from 63% in 2004 to 92% in 2007) after an overhaul that included providing much more communication to employees on company goals and individual expectations. It established formal communication channels, including daily 30-minute employee-led team meetings with senior leaders to review goals and employee issues.
Differentiated high-performance cultureBest employers inspire a passion for outstanding achievement among their people, Clarke says.
"These companies set aggressive goals and hold employees accountable for achieving them. They have a sustained focus on empowerment; this focus motivates employees to contribute the discretionary effort that makes such a difference to productivity and the bottom line."
They take development very seriously, providing employees the support and challenge they need, and they recognise superior performance through opportunities and rewards. "This is particularly true for high-potential employees, who receive additional attention and development."
Clarke notes that this focus doesn't fluctuate with economic cycles: "These companies provide consistent support and development to their people. [They] create a high-performance culture, which becomes a true differentiator for them in attracting and retaining key talent".
Microsoft, a "best employer" in four countries in Central and Eastern Europe, measures high performance through both financial and non-financial indicators, Hewitt's study found. Traditional metrics such as revenue, profitability and market share are complemented by qualitative indicators such as customer experience, employee satisfaction, diversity, and citizenship initiatives.
Aligned people practicesAligning people practices with organisational strategy is the final way in which "best employers" differentiate themselves, Clarke notes.
"Best employers ensure that the efforts and investments they put into their HR programs are in direct support of the company's goals. They also work to ensure that their people practices are integrated with one another, giving employees a consistent employee experience that reflects the culture of the organisation. All key practices - recruitment, development, performance management, and reward practices - operate in harmony to drive employee engagement."
These employers, he says, "reward employees for specific behaviours that support the organisation's goals, creating a clear and meaningful alignment between the individual employee and the company."
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