Corporate Leadership Council
Executive Summary

Driving Performanceand Retention ThroughEmployee Engagement

Key Questions Addressed
Recognizing an increased need to protect against unwanted attrition andsafeguard productivity, senior executives seek renewed understandingof “the voice of the workforce” and its implications for the organization.
This executive summary highlights insights to the following concerns:• How Engaged Is the Workforce?
• What Is the Business Impact of High Engagement?

KEY AUDIENCES
Heads of HR
HR Leadership
Senior Executive TeamLine Unit Managers

RESEARCH CONTENT
Survey of more than 50,000
employees at 59 globalorganizations• What Drives Employees’ Decisions to Commit to Staying with
the Organization and Volunteer Extra Effort on the Job?

Identification of the highest impact
drivers of employee engagement• How Does Engagement Differ by Employee Segment and by
Organization?

Employee engagement tools andstrategies from best practiceorganizations• How Can Organizations Establish a High-Performance
Relationship with Employees in Support of Business Needs?

© 2004 Corporate Executive Board

Council Staff

Corporate Leadership Council
Corporate Executive Board
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Washington, DC 20006
Telephone: +1-202-777-5000
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www.corporateleadershipcouncil.com

Consultants
Christoffer Ellehuus
Piers Hudson
Contributing Analysts
Thomas Bedington
Damian Smith
Jiyoung Chung
Contributing Associate
Kate Elsam
Project Managers
Bruce Rebhan
Earl Potter
Practice Managers
Gwendolen Sheridan
Carl Rhodes
Managing Director
Jean Martin-Weinstein
Executive Director
Michael Klein
General Manager
Peter Freire

Creative Solutions Group
Graphic Designer
Christina Lynn
Proofreader
Tracy Banghart

Note to Members on Confidentiality of Findings
This document has been prepared by the Corporate Executive Board for the exclusive use of its members. It contains valuable proprietary
information belonging to the Corporate Executive Board and each member should make it available only to those employees who require
such access in order to learn from the material provided herein and who undertake not to disclose it to third parties. In the event that you areunwilling to assume this confidentiality obligation, please return this document and all copies in your possession promptly to the Corporate
Executive Board.
© 2004 Corporate Executive Board

Catalog no.: CLC12PD3N8

© 2004 Corporate Executive Board

4

Driving Performance and Retention Through Employee Engagement

Driving Performance and Retention
Through Employee Engagement
Top 10 Findings
1. The Corporate Leadership Council has completed a global study of the engagement level of 50,000
employees around the world, based on a new, more precise definition of engagement and its direct impact
on both employee performance and retention.
2. Those employees who are most committed perform 20% better and are 87% less likely to leave theorganization—indicating the significance of engagement to organizational performance.
3. While the majority of employees are neither highly committed nor uncommitted, more than 1 in 10
employees are fully disengaged—actively opposed to something or someone in their organizations.
4. There is no high-engagement or low-engagement “group”—commonly used segmentation techniques
based on tenure, gender, or function do not predict engagement.
5. Instead, dramatic differences between companies suggest that engagement levels are determined more bycompany strategies and policies than any characteristics regarding the employee segments themselves.
6. An analysis of both rational and emotional forms of engagement reveals that emotional engagement is fourtimes more valuable than rational engagement in driving employee effort.
7.

Employee retention, on the other hand, depends more on a balance between rational and emotional
engagement—as illustrated by the importance of compensation and benefits in driving employees’ intent
to stay.

8. While employees’ commitment to their manager is crucial to engagement, the manager is most importantas the enabler of employees’ commitment to their jobs, organizations, and teams.
9. Among the top 25 drivers of employee engagement identified by the Council, the most important driveris a connection between an employee’s job and organizational strategy.
10. To create and sustain a high-engagement workforce, best practice organizations effectively manage four
critical leverage points:••••

Leverage Point #1: Business Risks
Leverage Point #2: Key Contributors
Leverage Point #3: Engagement Barriers
Leverage Point #4: Culture

The Corporate Leadership Council Engagement Survey and Analysis Tool (CLC ESAT) allows
Council members to survey their staff and receive an automated report defining their levels of engagement.

Available at www.corporateleadershipcouncil.com
Source: Corporate Leadership Council research.

© 2004 Corporate Executive Board

Executive Summary

5

Finding #1: The Corporate Leadership Council presents a new outcome-focusedmodel of engagement.
The Corporate Leadership Council presents a new model of employee engagement emphasizing
business outcomes. The Council defines engagement as the extent to which employees commit tosomething or someone in their organization, how hard they work, and how long they stay as a resultof that commitment. By using this outcomes-focused definition, we can measure the tangible benefitsof engagement, as opposed to focusing on “engagement for engagement’s sake.”

The Corporate LeadershipCouncil’s Model of Engagement
Engagement
drivers…

…determine rationaland emotional commitment…

Rational Commitment*• Team• Manager• Organization…which in turn lead to…resulting in improved
effort and intent to stay… performance and retention

Discretionary Effort

Performance

Intent to Stay

Retention

Engagement Drivers

Emotional Commitment• Job• Team• Manager• Organization

CLC’s Employee Engagement Survey• 50,000 employees• 10 industries* Rational commitment to the job was not measured due to its
similarity to rational commitment to the team, direct manager,
and organization.

• 59 Organizations• 27 countries

Source: Corporate Leadership Council research.

© 2004 Corporate Executive Board

6

Driving Performance and Retention Through Employee Engagement

Finding #2: Engagement is critical to performance and retention.
By increasing employees’ engagement levels, organizations can expect an increase in performance of up
to 20 percentile points and an 87% reduction in employees’ probability of departure. The highly engaged
outperform the average by two deciles and are dramatically less likely to leave the organization.

The Business Case for Engagement
Employee engagement drives performance…
Maximum Impact of Commitment on Performance

Moving from low to highengagement levels canresult in an improvement
in employee performanceof 20 percentile points.

Numberof Employees

50thPercentile
Performance

70th
Percentile
Performance…and retention
Maximum Impact of Commitment on Probability of Departure
9.2%

Probabilityof Departurein Next 12
MonthsMoving from strong
disengagement to strong
engagement decreases
the probability ofdeparture by 87%.

(∆ 87%)

1.2%

Strongly Noncommitted

Strongly Committed
Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

Executive Summary

7

Finding #3: More than 1 in 10 employees are fully disengaged.
While 11% of employees (the “True Believers”) demonstrate very strong commitment, 13% (the”Disaffected”) are actively opposed to someone or something in their organizations. The real opportunity lies
with the middle 76% of employees (the “Agnostics”) who are only modestly committed.

The State of Workforce Engagement
Based on a sample of 50,000 employees surveyed in 2004

The “Disaffected”

The “Agnostics”

The “True Believers”

76%
13%

Characteristics

11%

Characteristics

Characteristics• Exhibit very littlecommitment• Exhibit moderatecommitment• Exhibit very strong
commitment• Poorer performers
who frequently put inminimal effort• Employees neither go
to great lengths in theirjobs nor do they shirk
their work

• Higher performers who
frequently help otherswith heavy workloads,
volunteer for otherduties, and are constantly
looking for ways to dotheir jobs more effectively• Four times more
likely to leave theorganization than the
average employee• Significant variation in
intent to leave• Half as likely to leave
the organization as theaverage employee

Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

8

Driving Performance and Retention Through Employee Engagement

Finding #4: There is no high-engagement or low-engagement “group.”
There is no demographic group whose engagement is always high or always low. Rather, employee
engagement is a characteristic not of groups but of individual people to be won or lost, improved ordiminished, by their organization.

No Easy Litmus Tests
Quick “rules of thumb” will prove inadequate as a meansof identifying the committed and uncommitted
Generation X “Slackers”?
12.0%

Single Parents with Children?

11.7%

12.0%

10.6%

Percentage
of Employeeswith Highest 6.0%
Commitment
Levels

10.8%

11.4%

Percentage
of Employeeswith Highest 6.0%
Commitment
Levels

0.0%

0.0%
Employees
Over 40

Employees
Under 40

SingleParents
with ThreeChildrenSinglePeoplewith No
Children“Overworked” Managers?
12.0%

10.8%
9.9%

Percentage
of Employeeswith Lowest 6.0%
Commitment
Levels0.0%Managers
Managers
Working
Working
Fewer Than
More Than
60 Hours per 60 Hours per
Week
Week

Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

Executive Summary

9

Finding #5: Dramatic differences exist in engagement levels between companies.
While minimal differences in engagement exist across demographic segments, dramatic differences
exist across organizations. Organizations with a highly engaged workforce have almost 10 times as many
committed, high-effort workers as those with a low-engaged workforce.

Where Would You LikeYour Organization to Be?
Organizations exhibit dramatic differencesin the discretionary effort of their employees
Percentage of Workforce Exhibiting Highest Effort Levels by Company

25.0%

Nearly 25% of the workforce
in this organization exert
maximum effort…
…while in this organization,less than 3% of theworkforce are willing to do
the same.

Percentage
of Company
Workforce
Exhibiting
Highest 12.5%
Level ofDiscretionary
Effort0.0%Companies

Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

10

Driving Performance and Retention Through Employee Engagement

Finding #6: Emotional engagement is four times more valuable than rational engagement indriving employee effort.
Employees stay with their organizations when they believe it is in their self-interest, but they exert
discretionary effort when they believe in the value of their job, their team, or their organization. In fact,emotional commitment is four times as valuable as rational commitment in increasing effort levels.

Performance Depends
on the Heart Over the Mind
Employees try (or don’t try) as a result of emotional
commitment, not rational commitment
Maximum Impact of Commitment Type on Discretionary Effort1

A strong emotional commitment to
one’s job and organization has thegreatest impact on discretionary effort.

Emotional Commitment 2
Rational Commitment

55.9%

43.2%

The impact of rational commitment
is much smaller.

38.9%
34.0%

Change in
Discretionary
Effort

18.4%
13.8%
7.6%

Emotional
Commitment
to theJob

1

Emotional
Commitment
to theOrganization

Emotional
Commitment
to theTeam

Emotional
Commitment
to theManagerCouncil research demonstrates that increased discretionary effort is a direct
predictor of improved performance.
2
Emotional commitment is defined as the extent to which employees derive
pride, enjoyment, inspiration, or meaning from something or someone in
the organization. While rational commitment is defined as the extent towhich employees feel that someone or something within their organizations
provides financial, developmental, or professional rewards that are in theirbest interests.

Rational
Commitment
to theOrganization

Rational
Commitment
to theTeam

Rational
Commitment
to theManager

Source: Corporate Leadership Council 2004
Employee Engagement Survey.

© 2004 Corporate Executive Board

Executive Summary

11

Finding #7: Compensation and benefits matter more to retention than effort.
While competitive compensation and benefits packages are crucial to attract and retain talent, other drivers ofengagement are far more effective in driving discretionary effort.

The Impact of Compensation and Benefits
Compensation has a much larger impact on retention than on performance
Maximum Impact on Discretionary Effort and Retention
Due to Satisfaction with Total Compensation Package*

Increasing satisfaction withtotal compensation provides
up to a 21% increase inemployees’ intent to stay but
only a 9% increase in effort.

21.1%
Change in
Discretionary
Effort or
Improvementin Intent to
Stay

9.1%

Intent to Stay

* Each bar represents a statistical estimate of the maximum total
impact on discretionary effort or intent to stay each lever willproduce through its impact on rational and emotional commitment.
The maximum total impact is calculated by comparing two statisticalestimates: the predicted discretionary effort or intent to stay foran employee who scores “high” on the lever and the predicteddiscretionary effort or intent to stay for an employee who scores“low” on the lever. The impact of each lever is modeled separately.

Discretionary Effort

Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

12

Driving Performance and Retention Through Employee Engagement

Finding #8: The manager is most important as the enabler of employees’ commitment to theirjobs, organizations, and teams.
While commitment to the manager is often pointed out as the key driver of engagement, Council
research finds, surprisingly, that the manager actually plays a more important role as enabler of employee
commitment to the job and organization.

Manager as Conduit for What Matters
Managers enable other, more valuable, forms of commitment
Impact of Highest-Scoring Manager Activities and Attributes on Commitment Foci*Manager
Activities andAttributes

Emotional Commitment
to Manager

73%

Emotional Commitment
to Team47%

Emotional Commitment
to Organization

38%

Emotional Commitment
to Job34%

A Means, Not an End
Though commitment to the manager is not itself the most powerful driver of effort,
the manager has tremendous impact on employees’ level of commitment to the team,organization, and job.

* Each value represents a statistical estimate of the maximum total impact
on emotional commitment to the manager, team, organization, or job
as a result of the highest-scoring manager attribute. The maximum total
impact is calculated by comparing two statistical estimates: the predicted
emotional commitment to each foci for an employee who scores “high”
on this manager attribute and the predicted emotional commitment toeach foci for an employee who scores “low” on this manager attribute.
The impact on each foci is modeled separately.

Source: Corporate Leadership Council 2004 Employee
Engagement Survey.

© 2004 Corporate Executive Board

Executive Summary

13

Finding #9: The top 25 drivers of engagement point to the importance of employees’ connection tothe organization.
Most important among the 25 highest-impact drivers of engagement are a connection between employees’
job and organizational strategy and employee understanding of how important their job is to organizational
success. Also critical for increasing engagement levels are numerous manager characteristics, as well as
cultural traits—predominantly, good internal communication, a reputation of integrity, and a cultureof innovation.

The Top 25 Levers of Engagement
Top 25 Most Effective Levers of Effort
ImpactCategory

1.

Connection Between Work and Organizational Strategy

Lever

32.8

D

2.

Importance of Job to Organizational Success

30.3

D

3.

Understanding of How to Complete Work Projects

29.8

D

4.

Internal Communication

29.2

O

5.

Demonstrates Strong Commitment to Diversity

28.5

M

6.

Demonstrates Honesty and Integrity

27.9

M

7.

Reputation of Integrity

27.6

O

8.

Adapts to Changing Circumstances

27.6

M

9.

Clearly Articulates Organizational Goals

27.6

M

10.

Possesses Job Skills

27.2

M

11.

Sets Realistic Performance Expectations

27.1

M

12.

Puts the Right People in the Right Roles at the Right Time

26.9

M

13.

Helps Find Solutions to Problems

26.8

M

14

Breaks Down Projects into Manageable Components

26.7

M

15.

Accepts Responsibility for Successes and Failures

26.6

M

16.

Encourages and Manages Innovation

26.5

M

17.

Accurately Evaluates Employee Potential

26.3

M

18.

Respects Employees as Individuals

26.1

M

19.

Demonstrates Passion to Succeed

26.0

M

20.

Cares About Employees

26.0

M

21.

Has a Good Reputation Within the Organization

26.0

M

22.

Innovation

26.0

O

23.

Is Open to New Ideas

25.9

M

24.

Defends Direct Reports

25.8

M

25.

Analytical Thinking

25.7

M

O

Organizational Culture and Performance Traits

D

Day-to-Day Work Characteristic

M

Manager Characteristics

Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

14

Driving Performance and Retention Through Employee Engagement

Finding #10: To create and sustain a high-engagement workforce, organizations must manage
four critical leverage points.
Council research reveals that best practice organizations sustain a high-engagement workforce by focusing
on four critical leverage points: business risks, key contributors, drivers of disengagement, and culture.

Engaging the Workforce
Focusing on critical leverage points to drive employee engagement
Leverage Point #1

Leverage Point #2

Leverage Point #3

Leverage Point #4

Prioritizing EngagementDriven Business Risks

Engaging Key
Contributors

Targeting Driversof Disengagement

Building a HighEngagement Culture

The 3 Cs of Culture: Connection
 Contribution
 Credibility*

Strategic Engagement
Gap Analysis

Solid Performer
Career Pathing

Cultural Assessment
Process

Leader Storytellers

Culture Change
Engagement Cascade

Values Realization System
Key Insight

Key Insight

Key Insight

Key Insight

Returns on engagement
practices require a link
between engagement
and business outcomes.
Organizations should relyon economics and businessstrategy when determining
whom to engage and how toengage them in support ofbusiness outcomes.

Organizations must target
investments to thoseindividuals who contributethe most to the business, while
realizing that these people are
not all high performers or highpotentials as they have been
traditionally defined.

Before any proactive organizationlevel engagement strategy will
succeed, organizations must first
identify and remove the drivers ofdisengagement, many of which are“invisible” to traditional methodsof detection, such as employee
engagement surveys.

The Council has identified
three essential components ofa high-engagement culture:connection, contribution,and credibility. A highengagement culture needs
reliable mechanisms to ensure
employees are consistently
experiencing all three of theseelements.

* Pseudonym.

Source: Corporate Leadership Council 2004 Employee Engagement Survey.

© 2004 Corporate Executive Board

Executive Summary

15

Leverage Point #1: Prioritizing Engagement-Driven Business Risks
Practice #1

Strategic Engagement Gap Analysis
Intuit ensures that all strategic planningincludes consideration of human capital risk
Intuit Practice Features1

Engagement data and strategicplanning are integrated
Strategic PlanEngagement driver analysis
prioritizes issues for managers

2

Required Engagement
Profile
•
•
•
•
•

3

Survey Question

Score

Strategic Gap• ___________• ___________• ___________• ___________• ___________

—
—
—
—
—

• _______• _______• _______• _______• _______

Follow Up

Guided by strategic priorities,
managers design and execute action plans

2004 Action Plan
Owner: Parker Pritor
Type: Organizational Action Plan

Desired Outcome: Better-defined career development paths that are more aligned to team members’ career aspirations.

Engagement Drivers:
My career goals can be met at Intuit

Main points from the feedback session:
Current career development paths, particularly those supporting a technical track, are not well understood. Currently, mostcareer management discussions address immediate skills gaps and are not focused on identifying long-term career goals
and paths to attain them.

Action Plan Details
Implementation Team: Parker Pritor, Peter Patel, Sue Bly, Lynn Joi

Budget: $0

Action Plan Steps:

Owner:

Due Date:

1. Collect best practices on career paths from other business units.

Bly, Joi

07-01-2004

2. Create development paths to support career growth.

Patel

08-15-2004

3. Draft and communicate career management responsibilities.

Pritor

10-15-2002

Results: Using the engagement gap analysis, one business unit experienced anincrease in engagement scores from 77% to 87% in one year and enjoyed a concurrent
21% increase in customer satisfaction.

Key Observation
Focus on Business Risks: Take engagement-related action only in the places where businessoutcomes are at risk.
Source: Intuit Inc.; Corporate Leadership Council research.

© 2004 Corporate Executive Board

16

Driving Performance and Retention Through Employee Engagement

Leverage Point #2: Engaging Key Contributors
Practice #2*

Solid Performer Career Pathing
Harrison Company reanalyzes solid performers’ contributions and identifies
structural barriers limiting the company’s ability to engage these performers
Harrison Company Practice in Summary

Redefine Solid Performers’
Contribution

Remove Structural Barriers
to Solid Performer Engagement

Maximize Lifetime Contributionof Solid Performers

Employeeof the Year

• Identify contribution types and theirimpact• Identify opportunities and barriersin the current structure• Encourage career discussion
candor• Distinguish solid performer
subgroups• Restructure roles to support
engagement• Explain performance improvement
rationale• Research the compelling offer
for solid performers• Formalize role descriptions
and structure• Align performance assessmentwith contribution

Results: By improving the engagement and retention of its solid performers, Harrison
Company increasingly relies on the contribution of its solid performers to grow its
core domestic business—experiencing a 20% increase in the company’s domestic
retail sales in one year.

Key Observation
Focus on Key Contributors: Expand the organization’s definition of “contribution” and engage
the employees who are critical to achieving business success.
* Pseudonym.

Source: Harrison Company * ; Corporate Leadership Council
research.

© 2004 Corporate Executive Board

Executive Summary

17

Leverage Point #3: Targeting Drivers of Disengagement
Practice #3

Cultural Assessment Process
Caterpillar provides business units with a Cultural Assessment Process (CAP)
that enhances business results through increased employee engagement
Caterpillar’s Cultural Assessment Process*Component #1: Establish the Relationship
Between Culture and Business Results

Component #2: Identify the “Invisible” and“Visible” Components of Organizational Culture

Caterpillar’s Culture Impact Value Chain

Perceptions

Actions

Results

Component #3: Identify Cultural
Barriers to Engagement
Focus Group

Three “Invisible”
Aspects of Culture

Three “Visible”
Aspects of Culture• Road Maps
• Relationships• Reinforcements• Communication• Learning• Reinforcements

Component #4: Determine Solutions
to Cultural Barriers to Engagement
120-Day Action Plan

SurveyCaterpillar’s Seven Action
Plan Areas__________________

Typical Follow-up
Actions

Leadership•Greater consistency in management

Strategy•

Communicate vision, mission, and strategic objectives

Policies and Procedures•

Clarify and communicate overtime policy

Communication•

Improve bottom-up communication channels

Training and Development•

Improve functional career development opportunities

Operations•

Increase flexibility around production scheduling

Organizational Culture•

Enhance sense of belonging through communications and eventsResults: One business unit undergoing the Cultural Assessment Process experienced
a 59% decline in attrition and a 44% decline in absenteeism—creating an annual
savings of $8.8 million.

Key Observation
Focus on Engagement Barriers: Ensure a thorough understanding of all sources ofdisengagement before attempting to redress engagement concerns.
* Caterpillar’s Cultural Assessment Process is currently patent pending.

Source: Caterpillar Inc.; Corporate Leadership Council research.

© 2004 Corporate Executive Board

18

Driving Performance and Retention Through Employee Engagement

Leverage Point #4: Building A High-Engagement Culture
Practice #4

Leader Storytellers
Leaders build communication skills by creating and telling a story to peers, receiving
feedback, and learning to adjust stories for specific audiences and objectives
Continental Airlines’ Storytelling Practice Sessions

I. Design a Story

II. Tell the Story andReceive Feedback

III. Tailor the Story forSpecific Audiences

IV. Tailor the Story forSpecific Objectives• Identify a true event thatcan become a compellingstory• Deliver your story to classparticipants and serve as
audience for their stories• Consider how the story
should be tailored toreservation agents, flightattendants, and mechanics• Consider how your story
could be used to teachdifferent lessons• Assess the emotional• Determine how the story
impact of your story
relates to current challenges
on your listeners
or opportunities• Modify the story, creating a
version for each audience• Craft two new versions of thestory and share them withother participants

Results: More than 95% of the executives indicate that they have improved theircommunication skills significantly since taking the storytelling course.

Key Observation
Focus on a Culture of Connection: Executive-led storytelling is a highly effective means ofcreating connections between individual employees and the organization for which they work.
Source: Continental Airlines, Inc.; Corporate Leadership Council
research.

© 2004 Corporate Executive Board

Executive Summary

19

Leverage Point #4: Building A High-Engagement Culture (Continued)
Practice # 5

Culture Change Engagement Cascade
The RPD* successfully shifts to a culture of employee contribution
by tailoring contribution strategies to each level of the organization
Contribution Strategy Pitfalls and Alcoa Practice

LeadershipTeam

MiddleManagement

Frontline
StaffStandard Practice
Leadership teamdefines approachto employee
involvement andcommunicates this in
a top-down way

Pitfalls
Leaders devolve
few of their powers
and their structure
inadvertently blocks
business units’
efforts to contribute

Alcoa Practice
Restructure Leadership
to Enable Contribution:

Managers try tofind opportunities
to contribute andbuild opportunities
for subordinate
involvement

In the face ofpressing businesstargets, managers’
efforts are
piecemeal and often
unconnected to thebusiness strategy

Involve Managers in
Defining Contribution
Strategy:

Employees haveaccess to mass formsof contribution,for example, via
suggestion boxes

Employeesuggestions are
low in quality andmanagers rarely
follow up on
suggestions• Understand contribution
gaps• Remove structural barriers
to contribution• Involve managers inbusiness problem solving• Link contribution behavior
to business strategy
Build Contribution
Opportunities in the
Wider Workforce:• Communicate the rationale
for employee contribution• Raise frontline businessawareness

Results: By shifting the culture of the unit to one where employees feel accountable
and involved, the RPD has increased its Return on Capital by 80% over a three-year
period.

Key Observation
Focus on a Culture of Contribution: Employers must create opportunities for employees tomake meaningful contributions in their work to ensure full engagement.
* Rigid Packaging Division.

Source: Alcoa Inc.; Corporate Leadership Council research.

© 2004 Corporate Executive Board

20

Driving Performance and Retention Through Employee Engagement

Leverage Point #4: Building A High-Engagement Culture (Continued)
Practice #6

Values Realization System
To reap the benefits of employee commitment, Novo Nordisk constantly
reinforces its values and holds managers accountable for living them
Novo Nordisk’s Approach to Living the Company Values
Living theCompany
ValuesStep 1: Translate Values
into Behaviors andActions

Step 2: Reinforce Valuesat All Employment
LevelsEmployee

Manager

Step 3: Assess
Behavioral Alignment
with Values

Executive
Global Values
Facilitation Team

Perceived Benefits from Implementing
and Supporting Values• Sharper focal point for decision making(i.e., less confusion)• Increased customer loyalty• Employees know what decisions to expectfrom the management team• Stronger attraction of new employees• Customers know what actions to expectfrom the company• Improved employee satisfaction andretention• Increased morale, pride, and team
identity• Stronger market and employment brand

Results: Eighty-five percent of Novo Nordisk employees today agree that senior
management is living the company values in practice; Novo Nordisk has earned
the number-one place among pharmaceutical companies on the Dow Jones
Sustainability Index.

Key Observation
Focus on a Culture of Credibility: To ensure ongoing organizational credibility, clarify
expected behaviors for different roles, enforce alignment of desired behaviors and action, andstrengthen leadership credibility through behavioral support.
Source: Novo Nordisk A/S; Corporate Leadership Council research.

© 2004 Corporate Executive Board

Executive Summary

21

To Diagnose the Engagement Levels of Your Employees
Available at www.corporateleadershipcouncil.com as of November 22, 2004.
Free of charge to all Council members.

From Insight to Action
The CLC “Engagement Survey and Analysis Tool” (ESAT) provides
members with an opportunity to assess employees’ levelof engagement benchmarked against industry peers
Access the2004 Employee
Engagement
Surveyquestions.

The Corporate Leadership Council’s new
Engagement Survey and Analysis Tool
(ESAT) enables HR executives to:Survey yourworkforceon demandand online.

Access the dataset
relevant to yourorganization.

• Survey their workforces online in thetype of employee engagement thatmatters most to high performanceand low attrition• Benchmark their workforces against a
growing database of more than 50,000
employees from 59 organizations,
10 industries, and 27 countries• Track changes in their workforce
over time
Source: Corporate Leadership Council research.

© 2004 Corporate Executive Board

22

Driving Performance and Retention Through Employee Engagement

To Evaluate Your Organization’s Employee Engagement Strategy
The Corporate Leadership Council has developed this abbreviated diagnostic to assist HR executives in evaluating theireffectiveness in engagement management and to identify areas for improvement. The full version of the engagement
strategy diagnostic tool is available in the Council’s research publication on employee engagement.

Engagement Strategy Diagnostic Tool
Yes

No

1. Does the organization understand the level of engagement across the workforce?

❑❑

2. Does the organization understand which types of engagement, in which parts of theorganization, matter most to business success?

❑❑3. Does the organization adapt its engagement strategy in line with changes in businessstrategy?

❑❑

4. Does the organization have an effective process for closing engagement gaps where
they represent a risk to business goals?

❑❑

5. Does the organization have a clear understanding of how different segments of
employees contribute to business outcomes?

❑❑

6. Does the organization recognize and reward the different kinds of employee
contribution that are most important to realizing current strategic priorities?

❑❑

7. Does the organization have an effective means of identifying the root causes ofdisengagement?

❑❑

8. Does the organization actively involve employees in the process of identifying andremoving barriers to engagement?

❑❑

9. Do all employees have a clear understanding of the connection between their job,
their individual contribution, and the organization’s strategy and success?

❑❑10. Does the organization understand the different types of involvement required, atdifferent levels, to ensure all employees’ effective contribution to business goals?

❑❑

11. Do executives understand the role of organizational credibility in enabling emotional
engagement?

❑❑

12. Is the organization able to identify cases of misalignment between stated mission orvalues and actual practice?

❑❑

Scoring System
Number of“Yes” Responses

Overall Effectiveness of
Employee Engagement Management

10+

Excellent; a source of competitive advantage

8 to 10

Fair; improvement possible

0 to 7

Low; focused development recommended

23

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