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FINDING THE PATH and taking you there. CORPORATE HEALTH GROUP. Employee Engagement: Does It Really Add Value?. Catherine Baumgardner, Corporate Health Group Brandon Melton, Lifespan ASHHRA Annual Conference October 16, 2006. 2. The Context for Employee Engagement .

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Slide1 l.jpg

FINDING THE PATH

and taking you there

CORPORATE

HEALTH GROUP


Employee engagement does it really add value l.jpg

Employee Engagement: Does It Really Add Value?

Catherine Baumgardner, Corporate Health Group

Brandon Melton, Lifespan

ASHHRA Annual Conference

October 16, 2006

2


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The Context for Employee Engagement

  • A key part of the organization’s overall customer experience strategy

  • Not stand alone

  • Leadership must understand the connection



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Definitions

  • Employees feel a strong emotional bond to the organization that employs them

  • People demonstrate a willingness to recommend the organization

  • People are willing to commit time to help the organization to succeed

    Source: Wikipedia

4


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Why Should We Care?

  • Strong relationship between employee satisfaction, customer loyalty and store profitability. Source: Harvard Business Review (1998)

  • Sales force engagement linked to physician loyalty. Source: PeopleMetrics (2002)

  • “Fully engaged” employees had higher portfolio holdings. Source: PeopleMetrics (2004)

  • Employees who were “fully engaged” produced significantly fewer “defects” than those who were “disengaged.” Source: PeopleMetrics (2005)

5


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Relevance to Today’s Workplace

  • Increased employee, patient satisfaction

  • Engaged employees mean a better bottom line

  • Enhanced employee retention

  • Identifies key drivers of employee engagement

6



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Traits of a Satisfied Employee

  • Pleasant

  • Satiated

  • Content

  • Gratified

  • Low absenteeism

  • Low turnover

  • Low substance abuse

    Source: Leadership Excellence, August 2006


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Traits of an Engaged Employee

  • View their work as a part of enhancing the overall organization

  • Are willing to do what it takes to exceed customer expectations

  • Believe in their organization

  • Want to make it work better

  • Trust their managers


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Behaviors of an Engaged Employee

  • Build relationships

  • Anticipate customer needs

  • Support co-workers to provide excellent service

  • Take initiative

  • Find answers

    Source: Leadership Excellence, August 2006


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Today’s Objectives

  • Share practices most highly correlated with engagement

  • Discuss where to best expend resources to impact engagement

  • Show correlation between employee engagement and organizational performance

7


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Today’s Deliverables

  • Criteria for calculating engagement index

  • Categories of effective people practices that drive engagement

  • Measurement tools

8


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Case Study--Lifespan

  • Health System Founded: 1994

  • Hospitals (Founded):

    • Rhode Island Hospital (1863)

    • Newport Hospital (1873)

    • The Miriam Hospital (1926)

    • Bradley Children’s Psychiatric Hospital (1931)

    • Hasbro Children’s Hospital (1994)

10


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Lifespan Facts

  • Employees: 11,400

  • Physicians: 2,519

  • Residents: 510

  • Patient Discharges: 52,680

  • Emergency Department Visits: 198,447

  • Revenues: $1.26B

  • Research: $66.8M

11


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Why Did Lifespan Pursue Engagement?

The mission of Human Resources is to assist Lifespan and its Partners to become the Employer and Provider of Choice in the communities we serve.Our vision is to be at the forefront of human resources practice to achieve the sustained success of Lifespan and its Partners.

12


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Lifespan Employee Engagement Initiative

People Practices

Worklife

Values

Leadership/Management

Supervision

Career Development

Employee Engagement

Advocacy

Retention

Job Satisfaction

Organizational Performance

Patient Satisfaction

Financial Performance

Employee Retention

13


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Participation

  • All but one Lifespan location conducted the Employee Engagement Survey in August and September 2005

  • All five Lifespan locations used the same core questions – allowing comparison across the health system

  • More than two thirds (69%) of Lifespan employees participated in the Employee Engagement survey

  • All but one location has an Engagement Index of 70% or higher – fully engaged and engaged employees

  • All Lifespan locations have the same top overall driver of engagement – “Lifespan cares about its employees”

14


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Measuring Employee Engagement

  • Response Scale (Likert )

  • An engagement index includes respondents answering 4 or 5 on all three outcome questions

15


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Engagement Index

  • Advocacy: I would recommend Lifespan as a great place to work

  • Retention: I intend to be working at Lifespan two years from now barring retirement

  • Satisfaction: Overall, I am satisfied with Lifespan as a place to work

16


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Engagement Segment Definitions

  • Fully Engaged “5’s” on advocacy, retention and job satisfaction

  • Engaged “4 or 5” on advocacy, retention and job satisfaction (but at least one “4”)

  • On the Fence “3, 4 or 5” on advocacy, retention and job satisfaction (but at least one “3”)

  • Disengaged At least one “2” on advocacy, retention or job satisfaction

17



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The Not So Good News…

Almost 1/3 (31%) of Lifespan employees are “On the Fence” or “Disengaged”

19


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The Unengaged: Who Are They?

  • Employed 1-2 years

  • Under 40 years of age

  • Work nights and evenings

  • Mostly knowledge workers, not production workers

20


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Categories of Effective People Practices

  • Work Life Balance

  • Values

  • Leadership/Management

  • Immediate Supervisor

  • Career Development

21


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Top Engagement Drivers

  • Bradley Hospital

    • Bradley Hospital cares about its employees

    • My immediate supervisor demonstrates a positive leadership style

    • I feel my career is developing at Bradley Hospital

  • Lifespan Corporate Services

    • Lifespan Corporate Services cares about its employees

    • Lifespan Corporate Services treats employees with respect

    • I have confidence that senior management is leading Lifespan Corporate Services in the right direction

  • Newport Hospital

    • Newport Hospital cares about its employees

    • Newport Hospital is a socially and ethically responsible organization

    • I am able to maintain an appropriate balance between my personal and work life

22


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Top Engagement Drivers

  • Rhode Island Hospital

    • The Rhode Island Hospital cares about its employees

    • There are excellent job opportunities available for me at Rhode Island Hospital

    • Rhode Island Hospital provides quality patient care

  • The Miriam Hospital

    • The Miriam Hospital cares about its employees

    • My contributions are appropriately rewarded and recognized

    • The Miriam Hospital provides quality patient care

23


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Overall Engagement Model

Section*

Survey Item** % Favorable

EMPLOYEE

ENGAGEMENT

(71%)

Satisfaction

Retention

Advocacy

1. Work Life

2. Values

3. Immediate Supervisor

2.My immediate supervisor demonstrates a positive leadership style 78%

4. Career Development

3. I feel my career is developing at Bradley Hospital 65%

5. Leadership/ Management

9. Bradley Hospital takes employee interests into account when

making important decisions 58%

* Sections are listed in the order of their impact on Employee Engagement

** Survey items are listed in order of individual impact on Employee Engagement

Items that score below 65% are highlighted in Red and Bold text.

24


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Follow-up/Action Planning

  • Communicate survey findings to executive management and governing boards

  • Distribute site and department level reports to middle managers

  • Communicate survey findings and next steps to employees

  • Clarify major issues and concerns with employees

    • E-Focus Groups

    • Department Meetings

  • Develop action plans to address issues with key milestones, accountabilities and timelines

    • Overall site plans

    • Department specific plans

  • 25


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    Follow-up/Action Planning

    • Implement needed improvements – site and department specific

    • Communicate specific follow-up actions taken to employees

    • Measure progress through employee ‘pulse’ surveys

    • Conduct Correlation Study

    26


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    Gap to Perfection

    • Newport Hospital Survey was conducted in Nov, 2004.

    • Weighted Average Based on number of Full-Time and Part-Time employees at each Lifespan Site. Straight Average: 44%

    27


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    Correlation Study

    • Relationship Between the Level of Employee Engagement and Organizational Performance

    • Organizational Performance Measures

      • Patient Satisfaction

      • Labor Costs

        • Overtime Usage

        • Contract Labor Usage

      • Employee Retention/Turnover

  • Engagement Levels

    • Lowest Engagement (<50%)

    • Middle Engagement (50%-70%)

    • Highest Engagement (>70%)

  • 28


    Overall rating of care by engagement index l.jpg
    % Overall Rating of Care by Engagement Index

    100%

    80%

    73%

    66%

    65%

    60%

    % Highest Care Rating

    40%

    20%

    0%

    Lowest

    Middle

    Highest

    Engagement Index

    Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.

    29


    Percentile rank overall rating of care by engagement index l.jpg
    Percentile Rank Overall Rating of Care by Engagement Index

    100%

    95%ile

    80%

    65%ile

    60%

    50%ile

    Percentile Rank

    40%

    20%

    0%

    Lowest

    Middle

    Highest

    Engagement Index

    Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.

    30


    Likelihood to recommend hospital by engagement index l.jpg
    % Likelihood to Recommend Hospital by Engagement Index

    % Highest Recommendation Rating

    Engagement Index

    Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.

    31


    Percentile rank likelihood to recommend hospital by engagement index l.jpg
    Percentile Rank Likelihood to Recommend Hospital by Engagement Index

    100%

    90%ile

    80%

    60%

    50%ile

    50%ile

    Percentile Rank

    40%

    20%

    0%

    Lowest

    Middle

    Highest

    Engagement Index

    Note: All percentages on this chart indicate a top box score. That is, a 5 (very good) on a 5-point scale.

    32


    Overtime by engagement index l.jpg
    % Overtime by Engagement Index

    RIH Total Overtime Budget: $22,178,510

    Potential Savings*: $5,544,628

    This 9 percentage point difference costs an additional $4,158,471

    This 3 percentage point difference costs an additional $1,386,157

    % Overtime

    Engagement Index

    Note:Potential Savings assumes all employees move to the Highest Engagement Level.

    33


    Contract labor by engagement index l.jpg
    % Contract Labor by Engagement Index

    RIH Total Contract Labor Budget: $11,343,926

    Potential Savings*: $4,003,738

    This 11 percentage point difference costs an additional $2,446,729

    This 7 percentage point difference costs an additional $1,557,009

    % Contract Labor

    Engagement Index

    Note:Potential Savings assumes all employees move to the Highest Engagement Level.

    34


    Voluntary turnover by engagement index l.jpg
    % Voluntary Turnover by Engagement Index

    15%

    Total Voluntary Turnover during time period: 694

    Potential Savings*: $1,645,120 (based on 40 employees)

    10.1%

    10%

    9.0%

    74% increase

    in turnover

    % Voluntary Turnover

    55% increase

    in turnover

    5.8%

    5%

    0%

    Lowest

    Middle

    Highest

    Engagement Index

    Note: Potential Savings assumes employees that would have stayed if Hospitals were in the Highest Engagement Level. Each Nurse has a replacement cost of $42,400

    35


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    Next Steps and Tools

    • Agree upon an organizational motivation and commitment to employee engagement

    • Determine what you would like to achieve

    • Define the goals of your effort and how to measure

    • Develop engagement questions based around the criteria for measurement

    • Conduct Correlation Study: Employee Engagement and Organizational Performance Measure

    • Build accountability into the performance appraisal process, starting with leadership

    • Develop an action plan to address issues

    36


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    Employer of Choice Objective

    • Engagement: Increase percentage of respondents in “disengaged” and “on the fence” categories to the “engaged” and “fully engaged” categories in the Employee Engagement Survey.

      Minimum: 2.5% Midpoint: 5% Maximum 7.5%

    • Diversity: Decrease the gap of racial/ethnic diversity between RI population and Lifespan employees in Technical, Professional, and Managerial Job Categories.

      Minimum: 15% Midpoint: 25% Maximum 35%

    • Retention: Increase retention rates in first 12 months of employment of full and part time employees (voluntary separations only).

      Minimum: 5% Midpoint: 10% Maximum 15%

    37


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    Management Scorecard

    • Purpose

      • Measure Progress

      • Recognition and Reward

      • Accountability

      • Best Practices

  • Retention, Diversity, Engagement

  • System, Site, Division, Department

  • Distributed Quarterly

  • 38


    Resources l.jpg
    Resources

    Brandon Melton Jonathan Honibal

    Sr. Vice President, Lifespan Research Director

    [email protected] PeopleMetrics, Inc.

    401.444.3774 [email protected]

    215.979.8032

    Catherine Baumgardner

    Associate Consultant

    Corporate Health Group

    [email protected]

    717.285.2240

    www.corporatehealthgroup.com

    Sean McDade, Ph.D

    President & CEO

    PeopleMetrics, Inc

    [email protected]

    (215) 979 – 8040

    www.people-metrics.com

    39


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    FINDING THE PATH

    and taking you there

    CORPORATE

    HEALTH GROUP

    1-888-334-2500

    www.corporatehealthgroup.com


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