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
3.91 to 5.00
3.70 to 3.90
3.50 to 3.69
3.00 to 3.49
1.00 to 2.99

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.
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