Innovative HR Solutions, LLC

Wednesday, January 4, 2017

What Happened in 2016: The Year in Review and How Employee Satisfaction and Engagement Changed

As we begin 2017, it is important that we learn from the past so that the business decisions we make in the future are based upon facts and data in order to develop a coordinated strategy.  One of HR’s goals over the past year has been to retain talent as well as look for alternative ways to respond to the current business challenges.  Preserving our company’s competitive edge by retaining our high performers along through the use of HR metrics will allow us to be better positioned for the future.

HR Metrics

The Human Resource profession over the past decade has become much more sophisticated by utilizing metrics to examine employee trends in order to better anticipate future challenges and opportunities.  When we use HR metrics and evaluate historical patterns we are better able to respond to the challenges we face on the job.  A key challenge is determining if our reward and benefit dollars are being used wisely.  Metrics are a common measurement across all professions and are used as a way to retain, challenge talent and hold people accountable.  One key metric that is being used by thousands of HR professionals is the employee survey.  The analysis and subsequent data following a survey is a key tool in determining employee satisfaction, management effectiveness and employee engagement.  With so many people looking for that next opportunity, retention of a company’s employees is often critical to its survival.  Understanding and responding to these employees’ concerns and questions are important components in ensuring that success. 

Survey Methodology

For the purpose of this analysis respondents completed an on-line survey consisting of questions about their jobs, executive leadership, staff development, core values, compensation and benefits and management at their organization.  The number of statements from each company ranges from 15 to over 150. The number of respondents from each company ranges from a minimum of 100 to well over 2,500.  Using the Likert scale (from 1.00 to 5.00) the levels of employee satisfaction are as follows:

Employee Satisfaction Levels
Range
Level
3.91 to 5.00
High
3.70 to 3.90
Moderate
3.50 to 3.69
Neutral
3.00 to 3.49
Low
1.00 to 2.99
Unacceptable

Normative Data

Using normative data is important for clients as this information serves as a benchmark which allows a company to compare their own mean scores with the client base.  Normative scores are updated continuously and, due to the size of our database, we can utilize an 99.9% confidence interval, resulting in a margin of error of + .01.  This means that our clients have a high level of confidence in the data they receive.  In the past, clients have often requested that we create norms that would provide a benchmark against their industry or region in the country. Today, however, we have begun to see a shift from benchmarking within one's own industry toward benchmarking against other “best places to work”. This is particularly true with regard to benchmarking in the areas of organizational climate, culture, engagement, management and leadership.

This review is based on data collected from over 70,000 working individuals from organizations representing a broad cross-section of industries and regions of the country. All data is effective as of December 31, 2016.

Areas of Employee Satisfaction

In general, employees are satisfied with their jobs.  Employees appreciate that management is operating the business efficiently, often under conditions of uncertainty and with tight resources.  For a complete review by functional area as it relates to satisfaction levels please see the chart below:
 
Employee Management Relations
 
With respect to employee management relations, employees gave this area a satisfaction rating of 3.89 or moderate levels of satisfaction. The great majority of employees believe that their manager will listen to their point of view and assist them in growing professionally.   In addition, the survey results indicate that management treats and respects all individuals, diversity is encouraged and has become a part of the corporate culture.
 
Job Satisfaction
 
Job satisfaction was another highly-rated area achieving a satisfaction rating of 3.83 or moderate levels of satisfaction.  A high percentage of employees enjoy the work they do, are challenged and feel a strong sense of accomplishment in their position.  They believe that they can make a contribution and want to be a part of making their company successful.
 
Career Opportunities
 
A majority of employees indicated that they feel they have a career with their organization and that they work well as a team.  They support their co-workers in their department by sharing information and offering advice. Career Opportunities received a 3.76 satisfaction rating or moderate levels of satisfaction.  Our respondents however want to experience more internal opportunities and career paths that offer them challenges as well as more financial growth.
 
Core Values
 
The survey responses focusing on the mission, vision and values of the organization received a 3.95 or high levels of satisfaction.  This response would suggest that employees understand the importance of supporting the strategic mission of their organization.
 
Staff Development
 
According to the survey data, employees understand how important customer satisfaction is to maintaining the financial health of their company.  Employees value strong customer relations and recognize that only by satisfying the customer will the organization be successful.  The module satisfaction rating for this functional area was 3.56 or neutral levels of satisfaction.  Many respondents believe that the learning opportunities at their company have declined over the past several years.  A recommitment to learning, along with a more formal training program that will equip employees to successfully carry out the requirements of their present and future job roles will need to be a strong consideration for the future.  The survey data suggests that employees believe that as technology changes, and as new management techniques are required, organizations will need to offer additional support to help them meet these new challenges. Clearly the lack of training is an area of concern for progressive employers.
 
Opportunities for Improvement
 
It is anticipated that Human Resources will face tremendous challenges in three key areas as the economy continues to grow. These areas include compensating employees fairly, ensuring that communication flows freely throughout the organization and providing employees with the training necessary to ensure their competency in the future.
 
Fair Compensation
 
Employees rated fair compensation the lowest of all areas surveyed; this area received a satisfaction rating of 3.34 or low levels of satisfaction.  This value indicates low levels of satisfaction with the pay and rewards programs.  Employees feel the financial pressures and at the same time they believe they are not compensated at a level commensurate with their duties and responsibilities. Over the next twelve months employees will desire additional compensation and/or look for new opportunities.
 
Effective Communication
 
Communication is an issue for a majority of companies. Effective communication was rated low with a satisfaction rating of 3.42 or low levels of satisfaction. Employees are requesting more information about the new products and services offered by their company as well as management’s clarification of the organization’s vision and prospects for growth.  Employees would also like to have more advance notice of activities occurring at their organization and receive information about changes and strategic decisions that affect them in a timelier manner.  Respondents very often do not believe that other departments are keeping them informed about key projects that are under consideration or have been approved.  An improvement in communication is critical to ensure the success of a company.
 
What is Important to Employees
 
Understanding what is important to employees is critical for the Human Resource professional. The data suggests that progressive compensation practices are a key indicator of a productive organization.  Employees understand that career opportunities are dependent on the economy and how their company is positioned for the future.  Ensuring that a company’s compensation program remains competitive is an important issue that employers will need to address in the near term, especially in circumstances where employees’ workloads and responsibilities have increased due to reduced staffing levels in selected industries.  Using a 1 - 100% scale, a complete review of functional areas that are important to employees are illustrated in the chart below:
 
Opportunities for Improvement
 
It is anticipated that Human Resources will face tremendous challenges in three key areas as the economy continues to grow and expand. These areas include compensating employees fairly, ensuring that teamwork and collaboration are consistently practiced throughout the organization and that managers are skilled mentors to help provide coaching and career suggestions to their employees.
 
Fair Compensation
 
Compensation is valued by employees at an 84.7% rating.  This rating suggests that as the economy expands employers will need to respond to the pressure from their staff to increase merit pay or they may see a rise in turnover due to poor pay practices.
 
Building Teamwork
 
The data suggests that over the past several years teamwork has become more important to employees.  Enhancing and maintaining teamwork is critical to retaining talent.  Teamwork is valued by employees at an 83.8% rating.  This rating suggests that management will need to focus on team building activities to better support both the internal and external the customer.
 
Employee Management Relations
 
The data suggests that managers play a critical role in supporting their subordinates.  Enhancing and maintaining a strong partnership is critical to retaining talent.  Strong and skilled managers are valued by employees at an 84.8% rating.  This rating suggests that management will need to continue to develop skilled managers to act as a coach and mentor.
 
In conclusion, employers today face extraordinary challenges with respect to managing the business and at the same time meeting the needs of their employees.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Wednesday, August 17, 2016

What Makes and Effective Team?

 
We recently completed an employee engagement survey for a hi-tech client and after evaluating the survey results five key findings surfaced.  The respondents indicated that they wanted more transparency from the leadership team along with more timely decisions.  The respondents also indicated that they were looking for more responsibility, an improvement in communication and, finally, a work environment that is more engaging and team oriented.  So. let’s delve deeper into the detailed results.
 
Transparency
 
The survey respondents indicated that the leadership team needed to be more transparent and open with the employees.  A business is a reflection of the leaders of the organization, and if the leaders ensure transparency, the team will mirror this value.  Honesty was determined to be a key value of the company, and if practiced more consistently, the result will be an effective better functioning team that trusts and believes in the executives.
 
Timely Decisions
 
Good leaders are creative, innovative, flexible and decisive; however, decisions-makers may be forced at times to deviate from the set course and make a decision without all of the information.  It is during these critical situations that the team will need to look for guidance, evaluate the data and reach a decision that is the best given the available data.  The survey respondents indicated that the decision making process was often too protracted.  The leaders were afraid of making decisions and were risk adverse.  Some risk is acceptable and the respondents, including the leaders of the company, determined that decisions needed to be more timely even if the information was incomplete.
Ability to Delegate
Trusting the team and learning to delegate to subordinates are an important signs of strength, not weakness. Delegating tasks to department managers and individual contributors is one of the most important skills a leader needs to have.  The key to delegation is identifying the strengths of the team, and capitalizing on those strengths and hold each team member accountable for their decisions.  This will prove to your team that as a leader you trust and believe in them and are fair.  The survey results indicated that the respondents wanted to have more responsibility and management needed to learn to delegate more, provided that decision-making parameters were established and properly communicated.
 
Being a Good Communicator
 
Being a good communicator is critical to all leaders in a growing organization.  Knowing what you want accomplished and explaining the company’s vision for the future to the team are extremely important.  The survey results indicated that the leaders lacked the ability to communicate the vision and strategy.  Healthy lines of communication were also determined to be poor.  The respondents requested that management establish an all-hands meeting, newsletters, webinars and state-of-the-company presentations to improve communication.  Communication is also managing by walking around and creating an open door policy.  Making it a point to talk to the employees on a daily basis was determined to build trust and keep the leaders in the loop.  The results also indicated that the company executives need to make themselves available to discuss the strategic as well as tactical issues.
 
Having a Sense of Humor
 
Because the respondents spend so much time at work the survey results indicated that they want to be a part of a company that can “work-hard and play-hard”.  Challenges happen all the time in business.  A client may go elsewhere, the company website goes down, the telephone lines to customer service are interrupted or the company’s line of credit is not extended.  Guiding the team through these or any challenges without panicking and with a sense of purpose is as important as tackling the underlining reasons why a particular event occurred. It was determined that having a sense of humor will pay off as it will allow the team to laugh at the mistakes and learn from them.  Good leaders are successful in building a team, encouraging healthy discussions and learning from the daily business challenges.
 
In Conclusion
 
The employee survey results were communicated to the employees and action plans were developed and are currently being implemented.  The leaders of the company made a commitment to ensure transparency in the process, be inclusive and maintain on-going communication.  They also agreed to establish accountability measures for improvement by evaluating the progress made over the next survey cycle.  This initiative was truly a team effort regardless of level in the organization.
 
 
 

Friday, June 24, 2016

Is Aligning Your Company Culture with the Employees Important? – Three Tips


The culture of any company is the cement that holds the organization together.  A culture that is effectively integrated into the company, where all employees are held accountable for its adherence, along with a rewards program that supports the agreed upon culture will add value to the company.   A fractured culture erodes confidence in the products and services a company sells and can lead to serious long-term challenges for the HR professional and leadership team.

HR professionals should consider implementing these three recommendations to support the successful implementation of a culture based upon the mission statement of the company, the values of the organization and the strategic vision of the leadership team.

Communicate Your Mission to the Stakeholders

Creating a cohesive organization based upon shared values will allow your employees to be make the transition from just viewing their role as just a job to a career with the organization.  The value of examining your company’s mission statement will ensure that the mission is aligned with reality and current practices.  Communicating the agreed upon mission statement to employees, customers, vendors and shareholders will ensure that all stakeholders subscribe to these principles.   

Hold Managers Accountable for Living the Company Values

An increase in stakeholder loyalty can boost profits and productivity; however, this is predicated upon the managers and the leaders of the organization being held accounting for “living the values” of the company.  Research has shown that ethical managers that communicate these shared values will lead to greater profitability and growth.   According the Gallup Business Journal (June, 2013) work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability, and 21% in productivity

Employers today want to understand how they can secure more support from their employees.  On-going management and accountability based upon the vision, mission and vision will make it easier for the HR professional and the leadership team to determine how to best execute the strategy for the future.
Tie Pay and Performance to the Adherence of the Agreed Upon Values

We all know that what gets measured gets managed with success.  Performance reviews are a great tool to tie the successful communication of the mission with the success of the leaders.  If the executive team has a vested interest in the process and are measured on their success of tying their decisions to the published values; this measurement will add accountability to the process.  While tying pay, accountability and performance is not a guarantee of success the outcome with be more probable.

Tuesday, April 19, 2016

Is On-going Professional Development Important?


Professional development and the opportunity to learn and grow are very important for the HR professional and business leader.  Learning best practices will allow for managers and individual contributors to understand what is happening not only in their industry but in other industries as well.  The cross-transfer of technology and new management practices and techniques will enable the HR professional to try out new and innovative programs at work.  Professional development and training programs should focus on two key training strategies:

Business, Revenue and Sales Growth Training
 
Creating a high performance environment will allow your employees to make the transition from selling a product or service to selling a solution.  The value of making this transition will ensure that sales practices and processes are consistent yet meet the needs of the customer.  In HR, while the “sales” component is typically not external, key to attracting external talent is the ability to “sell” the company and the culture.

Employee Satisfaction & Loyalty Training

An increase in employee loyalty can boost profits and productivity.  Research has shown that engaged employees lead to greater profitability and growth.   Allocating training dollars to a manager’s budget can reduce turnover, improve product knowledge and diagnose any performance issues of key employees.  Creating a high performance culture of learning will identify the strengths and weaknesses of the individual.  Allocating the resources to bridge the performance gap will create a culture of loyal employees.
Employers today want to understand how they can secure more creativity and support from their employees.  On-going training will allow for the manager to determine how to execute the best strategy from the employee’s perspective by enriching their jobs and assisting them with fine-tuning their skills.

Over the next several months the Society of HR Management, the NGLCC, The California HR Conference sponsored by PIHRA and Arizona SHRM will be hosting their annual leadership conferences across the nation.  These premier organizations will explore progressive HR programs and new technologies.  Conferences provide an excellent venue for HR professionals to network with other business partners from across the United States and the world.  You are encouraged to attend these professional development learning opportunities to increase your knowledge and skill level.

Monday, February 29, 2016

Is the Performance Management Process Broken?


Each year millions of companies across the county go through the process of reviewing employee performance, ranking their employees against their peers then communicating their strengths, weaknesses in face-to-face discussions as a way to motivate staff and presumably to improve productivity.   The question is should this process continue or is it such a failure that this key management tool should be discarded and a new way of evaluating performance be developed?

Using our employee engagement survey tool as the backdrop to this question the data suggests that the process is not broken but the way the process is administered and communicated needs to be fine-tuned to better reflect the current workforce.

What is a Performance Review?

First of all, let us define what a performance review is and why it is such an important tool in managements toolbox.    The performance review is a mechanism to document an employee skill level based upon a clear understanding of the duties and responsibilities of the job and the results expected.  The performance review is a unique way for management to motivate and maximize performance and productivity, as well as outline career goals and expectations.  It also facilitates a ranking mechanism for management and is an excellent way to provide succession planning services.

What is the Manager’s Role in the Process?

The manager’s role in the process is to properly set the stage to ensure the success of the discussion as well as encourage employee motivation and engagement for the future.  The manager must discuss the job, standards and expectation and summarize their subordinate’s strengths and weaknesses by providing specific examples of successes and challenges in their performance.  Highlighting these areas in generalities will not support the specific areas for improvement that the employee faces nor will it support the overall rating.  In our survey data our respondents indicate that they want a timely review, that is layered with specifics and offers them a path to improve.  The respondents also indicate that they want to seek agreement with their manager on the performance improvements desired and work in an environment where the company will support their professional development.  Where managers fail is that they are not prepared for the discussion, do not provide specifics and are unwilling to hold their direct reports accountable.  Successful managers also need to let their employees know that they have a responsibility in the performance process as well.

What is the Employee’s Role in the Process?

The employees need to come prepared with a self-review so that they can provide honest feedback about their performance.  They should also be prepared to express their short term and long term goals and what they expect from their manager over the next performance review cycle.  If there are any ambiguities with respect to the job, standards or expectations they should be addressed during the performance review discussion.  Finally, if improvement is necessary both the manager and the employee should come to a mutual agreement on what is expected in the future.

Where Does the Process Fail?

The process will often fall short when several key principles are not adhered to by the manager and they include the manger not being honest about their employee’s strengths and weaknesses.  It is often easier to just gloss over the employee’s substandard performance than it is to address the challenges and work with the employee to make them successful.  The survey data suggests that it is easier for managers not to hold people accountable.  Also, managers will often not tie pay and performance but rather take the approach that all employees should receive the essentially the same merit increase regardless of performance.  Once again this may be the easiest path; however, it does not recognize contribution and excellence on the job.  The merit increase program administered through an effective compensation strategy can motivate those employees that are high potentials and successful.

Key to a successful performance review process are managers being honest and prepared and recognizing the differences in the performance of their subordinates.  Employees need to have an attitude that is open to improvement and learning in order to further develop their skill-set.

Monday, October 19, 2015

What is a Key Indicators Report in Human Resources?




As we move into the fourth quarter one idea for the Human Resources department is to provide an annual Key Indicators Report to the leadership team.  This report would summarize the Human Resource activities over the past year along with establishing goals and objectives for the organization for the next 12 months.  In essence, this is a performance review on the function.  What would the sections of the Key Indicators Report include?

Benefits Plans

Each year HR departments examine the benefit plans to ensure that they are at market and are meeting the needs of the employees and their eligible dependents.  This section of the report would include the costs associated the each benefit and the changes that were implemented.  Typically the benefits offered by the company are often one of the key drivers of retention.  With a detailed analysis of the plans offered, along with the expenses associated with each plan, management can be in a better position to determine if the benefits are in alignment with the company’s long term strategy.  Additional examples would include the dollars associated with the 401(k) employer match and soft benefits such as a gym membership or an EAP.

Compensation

Pay and rewards are key elements for also retaining staff.  Each year HR department evaluate the salary ranges, job descriptions, pay and incentive plans.  As part of a Key Indicators Report this section would evaluate the merit increase program to determine if those employees that receive the highest performance ratings are also receiving the largest percent increases.  A simple matrix evaluating pay and performance can be created to summarize the performance process correlating that with pay.  Additional examples to include in this section with be a summary of any changes to the incentive plans, any modifications to the performance review document or process as well as examining the merit increase program to project future labor expense.

Talent Management

Turnover is very expensive for companies today; particularly in a tight job market.  As part of the Key Indicators Report this section would evaluate the number of employment requisitions filled over the past 12 months and the source for finding talent, any associated expenses filling positions as part of a search process and the use of temporary services.  This evaluation will also assist management in finding how many days it takes to replace a position and identify if there are any trends in with respect to turnover.

Leadership Development

Employee development is critical in today’s job market and this section of the report should include the training programs offered by the company, the number of employees that participated in company-sponsored training programs and the outcomes as a result of allowing employees to participate in professional development. Employees who enjoy their job and are satisfied with their career are more engaged and aligned with the business.  Engaged employees who believe that the company is willing to invest in their development will also remain at the organization longer which can result in less turnover.  Elements of this section of the report would include an analysis of the programs offered, the costs associated with the training and the needs analysis that was conducted in order to determine what programs would be of benefit to the staff.

Finally, the report should be presented to the leadership team in person to stress the importance of the Human Resources function over the past fiscal year as well as looking to the future.  This opportunity to review past accomplishments can also lead into a discussion of the future budget, programs and additional headcount to support the needs of the organization.
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