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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
FINDING THE PATH

and taking you there

CORPORATE

HEALTH GROUP

employee engagement does it really add value

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
The Context for Employee Engagement
  • A key part of the organization’s overall customer experience strategy
  • Not stand alone
  • Leadership must understand the connection
definitions
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

why should we care
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

relevance to today s workplace
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

traits of a satisfied employee
Traits of a Satisfied Employee
  • Pleasant
  • Satiated
  • Content
  • Gratified
  • Low absenteeism
  • Low turnover
  • Low substance abuse

Source: Leadership Excellence, August 2006

traits of an engaged employee
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
behaviors of an engaged employee
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

today s objectives
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

today s deliverables
Today’s Deliverables
  • Criteria for calculating engagement index
  • Categories of effective people practices that drive engagement
  • Measurement tools

8

case study lifespan
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

lifespan facts
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

why did lifespan pursue engagement
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

lifespan employee engagement initiative
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

participation
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

measuring employee engagement
Measuring Employee Engagement
  • Response Scale (Likert )
  • An engagement index includes respondents answering 4 or 5 on all three outcome questions

15

engagement index
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

engagement segment definitions
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

the not so good news
The Not So Good News…

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

19

the unengaged who are they
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

categories of effective people practices
Categories of Effective People Practices
  • Work Life Balance
  • Values
  • Leadership/Management
  • Immediate Supervisor
  • Career Development

21

top engagement drivers
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

top engagement drivers27
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

slide28
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

follow up action planning
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

follow up action planning30
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

gap to perfection
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

correlation study
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
% 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
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
% 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
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
% 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
% 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
% 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

next steps and tools
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

employer of choice objective
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

management scorecard
Management Scorecard
  • Purpose
        • Measure Progress
        • Recognition and Reward
        • Accountability
        • Best Practices
  • Retention, Diversity, Engagement
  • System, Site, Division, Department
  • Distributed Quarterly

38

resources
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

slide44
FINDING THE PATH

and taking you there

CORPORATE

HEALTH GROUP

1-888-334-2500

www.corporatehealthgroup.com

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