Wednesday, July 23, 2008

Drivers of Employee Engagement

“I think employee engagement is important because it gives you the productivity. If you are looking at it from a purely financial point-of-view, it is about low-costs, high-output and much more creatively.” Frank Du, HR Director of Uniliever Food Solutions Asia makes this insightful observation about the importance of employee engagement.

Employee engagement is not something that can be increased simply by sending out a survey or instituting a program. It requires a culture change. Engagement is not accidental. There are actually three key elements that contribute to a highly engaged workforce, including having the right employees in the right jobs; leaders who are attuned to their direct reports; and systems and strategies for gaining and maintaining engagement in every organization.

Organizations must hire employees who fit the job requirements, develop leaders with the right skills and provide support through strong systems and strategies. Together, these three drivers lead to the formation of an engaging work environment. Once created, the engaging work environment has a positive impact on employee behaviors and attitudes. In particular, an engaging environment builds loyalty in employees by meeting their personal and practical needs, thus encouraging them to stay with the organization. In addition, an engaging work environment taps into employees' motivation to try harder and put forth the extra effort that differentiates organizations from their competitors.

Finally, when organizations have engaged employees, the long-term benefits translate to the bottom line. Organizations have more satisfied and loyal customers, increased profits, better-quality products or services and greater growth potential.

Employee Engagement

I found the recent Watson Wyatt report on Employee Engagement very interesting. Indian employees were found to have the highest employee engagement score (78%) the survey in Asia Pacific. The three main drivers of employee engagement were customer focus, compensation and benefits and communication, that too across companies.
In the current scenario, attracting critically skilled talent and retaining it is a constant challenge for most companies. This gives organizations the much needed competitive advantage in the market.
It has been found that factors which attract employees to an organization are
the nature of work, stress levels, career development opportunities, pay and job security
Career development is an area in which most appear to companies struggle.
Designing reward programs has become a focus for many companies which are making
increased investment in annual merit increases, learning and training, increased investment in incentive earning opportunity for employees, recognition programs and providing accelerated career opportunities. However, there is negligible increase in benefits. Unfortunately most companies fail to make employees aware of this investment.

Tuesday, July 22, 2008

The Exciting World of HR

I've always wanted to start a blog. I'm finally on track. So much is happening in the field of HR and this is the best mode of self-expression.
In the words of Winston Churchill "Continuous effort - not strength or intelligence - is the key to unlocking our potential. "
I plan to make this blog innovative and interactive.
Ciao

Women in the Boardroom

A recent study conducted by New York-based not-for-profit organization Catalyst has revealed that companies that hire more women at senior executive positions stand to improve financially.

It wqs found that companies which had at least 30 per cent women on the board performed better. Also, boards that had more women in 2001 saw their numbers rise further by 2006, indicating that women on top bring in more women.

Catalyst based its study on an analysis of 359 Fortune 500 companies starting in 2000 and thereafter once again in 2006. Companies with maximum women directors and corporate officers also showed improved financial numbers as against companies that lacked women at the top.

The study also said that the number of Fortune 500 companeis that had more than 25 per cent or more of women, was also growing in numbers consistently. While only 30 companies fitted the bill in 2001, the number went up to 68 in 2007.

In Feb 2008, PepsiCo's India-born chief Indra Nooyi was among Forbes' list of 10 best women chief executive officers of large corporations based on their total return to investors since each woman took the top job.

Forbes gives top rank to Catherine Burzik, head of Kinetic Concepts, a medical technology company, and number two to Meg Whitman of eBay, the online marketplace. PepsiCo under Nooyi, who took over as CEO in October 2006, gave investors annual return of 9.4 percent, and 13.1 percent cumulative. Standard & Poor (S&P) annualised return is 2.6 percent while industry average annualised return is 0.4 percent, according to the magazine.

Paying a compliment to the women CEOs on the list, Forbes magazine said stock performance had as much to do with corporate leadership as it had to do with the state of the marketplace.

The magazine said of about 1,000 public companies with at least $1 billion in annual revenue, there are 30 female chief executives in its database. A dozen of these companies have shown total returns greater than their industry peers, with a minimum length of time in office of the CEO of a year and a half. Nooyi's strategy and style of functioning at the global food and soft drinks behemoth has been analysed by Fortune magazine in a cover story in its current issue.

The magazine had earlier rated her the world's most powerful businesswoman in 2006 and 2007.