HR Effectiveness, Talent and Leadership
December 19, 2013
© 2013 Aon plc To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any
third parties without the approval of Aon Hewitt
Today’s Speakers
 Kathleen Strukoff – Partner, Pacific Southwest Market Leader
 Darryl Roberts – Associate Partner, Performance, Reward & Talent
 Dennis Hart – Partner, U.S. Employee Engagement Leader
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Thought Leadership 2012 – 2013
Reports, White Papers & Publications
Coming in 2014: Top Companies For Leaders
 Initiated in 2001, this study examines best-in-class leadership and
talent strategies, practices and outcomes of companies around the
world
 The study explores and evaluates:
– How organizations assess, select, develop and reward leaders
– The execution of leadership practices, as well as the strategy that
guides it
– A holistic combination of factors which are fundamental to building
and sustaining a strong leadership pipeline today and in the future
– 2014 marks the seventh iteration of the study. The Aon Hewitt Top
Companies for Leaders database contains insights from more than
2,300 organizations in 40 countries using a consistent global
methodology of selection and data analytics
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What Do High Performing Companies Do Differently?
Employee Engagement and Alignment are Consistent Themes
1 Articulate clearer/different strategies and goals
2 Balance more inputs for decision-making
3 Connect more to the business and to employees
4 Define effectiveness differently
5 Earn better outcomes as a result
For this study, “high performing” or “The Best” organizations are defined as those that achieve the highest levels of:
• Revenue against objectives
• Innovation
• High employee engagement
Source: Aon Hewitt 2012 Total Rewards Survey
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But Most Have Significant Room to Improve Engagement
The Engagement Opportunity
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What is a Normal Change in Engagement?
We analyzed almost 1,100 organizations in our global database that conducted repeat
engagement surveys between 2010 and 2012 to answer some specific questions:
 What is typical improvement in engagement between survey cycles?
 How do you define “really big” improvement in engagement—what is the outlier
boundary?
 What are the Engagement Outliers doing to achieve such big improvements?
 How do some Engagement Outliers continue to improve upon top quartile scores?
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Engagement Outliers
Engagement Outliers are achieving
14%+ point improvement in 2 years
or less…or improving upon top
quartile engagement levels
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Most Improved Players
Most Improved Players are companies that
started out in the bottom quartile of
engagement, with 46% or less of their
employees engaged, and were able to
improve this score by 14 percentage points
or more within two years or less. Only
about 25% of the bottom quartile (or 6% of
companies overall) achieve these type of
gains.
 Fix the basics
 Get your culture out of the ditch
 Focus on fulfilling work
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Best Getting Better
Best Getting Better companies are rare
(about 10% of all organizations), and are
marked by strong perceptions in several
key engagement drivers, as well as
continuous improvement in others.
 Protect the basics and meaningful
work
 Lead a culture of engagement
 Align rewards for performance
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Most Improved Player Case Study
Global Information Services Company
Below Average Engagement at 48%
Disciplined Actions:
Clear Objectives:
Improve engagement,
reduce turnover and
redefine the employee
brand.
Career Opportunities –
Intranet site modeled after
LinkedIn for employees
Any employee walking
the halls could tell you
the five Senior Leader
directed priorities
Change Management –
Company branded change
campaign
Communication – Social
media and YouTube
modeled intranet
Focused Approach:
One census survey and
one pulse survey annually
identifying engagement
and top engagement driver
priorities.
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
Empowering Performance
Focused on individual
empowerment
Engagement
Local level manager
effectiveness and
recognition
15%
pts.
in 2 years
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Engagement and Organizational Change
Highly Engaged % Over M&A Timeline
Engagement typically takes 2 – 3 years to recover following M&A
14%
12%
10%
8%
Highly Engaged % Over M&A Timeline
6%
Baseline
4%
2%
0%
< 3 months
3-6 months
6-12 months
1-2 years
2-3 years
3 or more years
Time Since Last Major Merger or Acquisition
Source: Aon Hewitt (2013) “Managing Employee Engagement During Times of Change.”
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Engagement and Organizational Change
How to Improve Engagement in Times of Change
Top 5 Drivers of Engagement for Different Types of Organizational Change
Rank Order
Mergers/Acquisitions
Restructuring
Strategy Transformation
1
Involved in decision
making
Involved in decision making
Involved in decision
making
2
Co-workers make
personal sacrifices to
help the organization
Understand career path
Understand career path
3
Senior leadership is
visible
Co-workers make personal
sacrifices to help the organization
Company provides a twoway dialogue
4
Provided proper training
to do job
Company provides
encouragement for development
Provided proper training to
do job
5
Understand career path
People in work group are reliable
Have the resources
necessary to do job
Highlighted drivers are unique to one type of change.
Source: Aon Hewitt, “Managing Employee Engagement During Times of Change.”
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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There can be a HUGE payoff for improving engagement
Sensitivity of Lagged Operating Income to Changes in Employee
Engagement for a $5B Organization (numbers in $millions)
NOTE: Sensitivity based on regression beta weight from study of 94 companies controlling for regional
differences in Employee Engagement. Sensitivity assumes a $5B organization with gross margin of 55%
and operating margin of 15%.
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Case Study: Wholesale and Logistics Company
Sales Goal achieved (versus 100%)
Engagement links to sales performance
+5%
+4.0%
+4%
+3%
+1.5%
+2%
+1%
+0.1%
Goal Met
-1%
-2%
-3%
-4%
-3.0%
-5%
Actively
Disengaged
Passive
Moderately
Engaged
Highly
Engaged
Engagement Level
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Case Study: Retailer
Engagement links to customer satisfaction
Customer Satisfaction
70%
68%
65%
63%
60%
55%
50%
High Engagement Locations
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
Low Engagement Locations
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Case Study: Health Insurer
Engagement links to performance rating
Engagement Score vs. Average
+20%
+15%
10%
+10%
2%
+5%
Org. Average
-5%
-4%
-10%
-15%
-20%
-16%
Rating: 2
Rating: 3
Rating: 4
Rating: 5
Performance Ratings
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Case Study: Agriculture Company
Engagement links to quality
60%
Quality Issues (Shrinkage)
53%
50%
40%
30%
20%
13%
10%
0%
Higher Engagement Locations
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
Lower Engagement Locations
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Engagement Levels are on the Rise Globally but Shifting
Across Regions
2 pts
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
1 pt
2 pts
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Four Out of Ten Employees are Not Engaged – Two Out of
Ten are Actively Disengaged
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The Work Experience is Improving More than it is
Deteriorating
Communication
BU/Division Leadership
Managing Performance
Innovation
Recognition
Sense of Accomplishment
Customers
Organization Reputation
Diversity
Benefits
6%
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
2%
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Pay is one of the top drivers of engagement
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Total rewards optimization can align pay and other rewards to
maximize ROI
Effectiveness can be defined in terms of
engagement, retention, or other outcomes.
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Regional Summary of Engagement Drivers
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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What Do Best Employers Do Differently?
1 pt
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
2 pts
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Engagement Gaps (Best Employers vs. Others)
•
•
Roughly 20% more employees in Best Employers organizations are engaged than
employees in other organizations
Engaged employees understand the organization’s objectives and their role, and drive
better financial results
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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The Best Getting Better: Best Employers Do Things Differently
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Focus on Engagement at the Individual Level
Accelerate the Cycle and Engage People in their own….Engagement
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Mood Ring: What is the Mood at your organization?
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Focus on Engagement at the Individual Level
Personality Selection Tests that Predict Engagement
Positivity
Drive
Cooperation
Liveliness
Structure
Sensitivity
Achievement
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Questions
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Think Tank Webinar Series
For replays of the Think Tank Webinars, see www.aon.com/ah_thinktank
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Contacts
Darryl Roberts
Associate Partner, Performance, Reward & Talent
Aon Hewitt
949.933.1954
darryl.roberts@aonhewitt.com
Dennis Hart
Partner, U.S. Employee Engagement Leader
Aon Hewitt
224.688.3444
dennis.hart@aonhewitt.com
Proprietary & Confidential | Think Tank Webinar | December 19, 2013
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Legal Disclaimer
© 2013 Aon plc
This document is intended for general information purposes only and should not be construed as advice
or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon
Hewitt's preliminary analysis of publicly available information. The content of this document is made
available on an “as is” basis, without warranty of any kind. Aon Hewitt disclaims any legal liability to any
person or organization for loss or damage caused by or resulting from any reliance placed on that
content. Aon Hewitt reserves all rights to the content of this document.
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