The Theory and Practice of Employee Engagement. California State Automobile Association. October 4, 2006. ©2006Towers Perrin.
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The Theory and Practice of Employee Engagement
California State Automobile Association
October 4, 2006
Towers Perrin has prepared this document for the benefit of CSAA. This document contains proprietary material and should not be reproduced, either in total or in part, circulated, or quoted from without the express permission of Towers Perrin.
Background – Engagement at CSAA
*The prior year’s employee engagement survey produced the same response rate of 64%, or 4,090 respondents out of 6,400 employees invited to take the survey
1.I would recommend CSAA to a friend as a good place to work.
2.I am proud to tell others I work for CSAA.
3.My job provides me with a sense of personal accomplishment.
4.I am willing to put in a great deal of effort beyond what is normally expected to help CSAA succeed.
5.I understand how my role in CSAA is related to CSAA's overall goals, objectives and direction.
6.I understand how my unit/department contributes to the success of CSAA.
This year, CSAA’s engagement index score was similar to last year’s -- and still notably higher than Towers Perrin norms
Diff. from Norm
1. How would you rate your immediate supervisor/manager on:
Consulting employees before making decisions that affect them
2. How would you rate your immediate supervisor/manager on:
Acting in ways that support a diverse and inclusive environment
3. I can be myself around here.
4. It’s safe to say what you think around here.
5. At CSAA, employee input and different opinions are actively encouraged.
6. Employees at CSAA are able to contribute to their fullest potential regardless of their age, race, ethnic background, gender, religion, disability, sexual orientation, or family status.
Diff. from Norm
1. How would you rate your immediate supervisor/manager on: Encouraging/empowering people to take initiative in their work
2. CSAA empowers employees to make appropriate decisions that are in the best interests of the company and customers.
3. CSAA provides me with opportunities to learn new skills and develop myself.
4. I have the appropriate amount of decision-making authority to do my job well.
5. At CSAA, employees are supported in taking appropriate work-related risks.
Diff. from Norm
Engagement surveys point out these key areas for improvement:
Note:Totals may not add to 100% due to rounding
Results were consistent with engagement survey findings, withno significant differences based on ethnicity or gender.
ROI – Context for Engagement ROI Analysis
= Global response
Towers Perrin’s Global Workforce Study reinforces why engagement matters: Highly engaged employees believe they contribute directly to results
I can positively impact quality
I can positively impact cost
I can positively impact customer service
5 unit increase in employee attitude
1.3 unit increase in customer impression
.5% increase in revenue growth
Towers Perrin’s work with a major hospitality company elaborated on the relationships among employee behaviors, customer loyalty and financial results
Reduced Turnover Cost
Team Member Attitudes and Behaviors
Q10: Overall job satisfaction
Q15: Encouraged to identify problems
Q19: Hotel retains top performers
Q20: Team members are kept informed
Q33: Proud to work for hotel
Q54: Vision - ‘Investing in the development of team members’
Q55: Vision - ‘Delivering innovative products/services’
Q56: Vision - ‘Improving hotel perf. through the BC’
Q57: Vision - ‘Family of brand awareness’
Q60: Hotel’s image
Q63: Balanced Scorecard drives decisions
Q69: Hotel management balances short-/long-term considerations
Q70: Members of the Executive Committee cooperate well together
Q72: Hotel has high standards for business ethics
Commitment/ Loyalty Index
Q1 Hotel as a place to work
Q58 Overall satisfaction w/hotel
Q59 Willingness to recommend to a friend
EBITDA / GOP Margin
Guest Service Index
Q4 High quality service
Q5 Courteous team members
Q6 Sensitive to guest needs
Q7 Solving guest problems
Q8 Meeting expectations consistently/timely
Q9 Providing a safe place
How (and Why) CSAA Analyzed the ROI of Engagement
- Leadership development
- Creating a diverse and inclusive environment
- Hiring, promotion and talent management processes and policies
To understand the financial value of engagement in CSAA’s insurance business, we examined data on the financial value of engagement in the insurance industry
*23 top U.S. writers with at least $1 billion in DPW and approximately 60% or more of writings in personal auto and homeowners. Most of the companies do not pay a dividend, so combined ratio without dividend was used in the analysis.
**Customer satisfaction data is based on employee perceptions.
*Percentages show relative strength of linkage to engagement; higher percentages mean a stronger linkage
Customer Service Index
The correlation between the engagement index and the customer service index is high (.69)
Source: Towers Perrin’s 2005 Global Workforce Study
Numbers shown for tested relationships (solid arrows) are correlation coefficients; these range from 0 to 1, with 1 indicating two variables are perfectly related to each other. * indicates a statistically significant relationship. Dashed arrows show relationships that exist by definition.
Actions Taken and Lessons Learned