American Marketing Association March 24, 2009

1. Company Values and Employment Branding: Alignment and Engagement American Marketing Association March 24, 2009 Rick Garlick, Senior Director of Consulting and Strategic Implementation, Maritz Research

2. The Importance of Values • Brands represent a value proposition to both employees and customers. • Corporate values inform the mission of the company. • Just as customers seek out companies that represent the values that are important to them,so do employees. • Employees are more engaged when they share their companies’ values. • To the extent that employeesare aligned behind their companies’ core values, the more motivated they are to deliver the promised brand experience to customers.

3. The Current State of Value Alignment • Only one-in-ten (12%) of North American employees ‘strongly agree’ that their values and their companies’ values are ‘completely consistent’ • Twice as many actively disagree

4. The Study • Maritz conducted a full-blown study to understand • Which workplace values are most important to employees? • How do company values impact how employees do their jobs? • Which values are most important to attract and retain talent? • How do company values impact customers? • How do values relate to company profitability?

5. The Study • 1478 full-time employees • 18 years or older • Work 30+ hours or more per week • Not self employed • Wide variety of business sectors • Conducted online • Panel provided sample • Wide range of questions • 65 total questions surveying attitudes toward employer

6. The Study • Each person was also shown 26 ‘value’ statements. • ‘Q-Sort process • Asked to select which three value statements most and least represented the values they most associated with their company. • Process was repeated for ‘next most’ and ‘next least’ important statements until all values were categorized. • Cluster segmentation analysis was performed to profile each person into a ‘value segment’. • Segments examined both ‘important’ and ‘unimportant’ values

7. Values Segments Values tended to cluster into four themes - ‘4 Ps’ • Profit-oriented values • Driving profit for the company and stakeholders • Being entrepreneurial • Being driven to succeed • Competitiveness • Being the best in the business • Productivity-oriented values • Taking initiative • Fostering teamwork • Innovativeness • Efficiency • Hard work • Operational effectiveness

8. Values Segments (cont’d) • Principle oriented values • Being open in communication • Fairness • Caring and concern for employees • Respect • Trust • Honesty and integrity • Having high ethical standards • Doing the right thing at all times • Strong commitment to customer service • Progressive oriented values • Being environmentally responsible • Having a commitment to diversity • Being socially responsible • Adaptability

9. Segment 1: High Profit-Focus; Low Principle-Focus (16%)- ‘Win at Any Cost’ • Most defining values are • Driving profit for the company and stakeholders • Competitiveness • Being entrepreneurial • Operational effectiveness • Being driven to succeed • Least defining values are • Honesty and integrity • Having high ethical standards • Caring and concern for employees • Fairness • Trust • Respect

10. Segment 2: High Progressive-Focus; Low Profit-Focus (16%)- ‘Social Progressives’ • Most defining values are • Adaptability • Being environmentally responsible • Having openness in communication • Fairness • Commitment to diversity • Least defining values are • Being the best in the business • Having a strong commitment to customer service • Driving profit for the company and stakeholders • Being driven to succeed • Competitiveness

11. Segment 3: High Principle-Focus; Low Profit-Focus (15%)-’Always Do the Right Thing’ • Most defining values are • Honesty and integrity • Doing the right thing at all times • Having high ethical standards • Respect • Caring and concern for employees • Least defining values are • Driving profit for the company and stakeholders • Competitiveness • Being the best in the business • Being driven to succeed • Being entrepreneurial

12. Segment 4: High Profit-Focus; Low Progressive-Focus (14%)-’The Traditionalists’ • Most defining values are • Driving profit for the company and stakeholders • Being the best in the business • Running efficiently • Being driven to succeed • Competitiveness • Least defining values are • Being socially responsible • Being environmentally responsible • Having a commitment to diversity • Openness in communication • Adaptability

13. Segment 5: High Principle-Focus, Low Productivity- Focus (14%)-’People and Customers First’ • Most defining values are • Caring and concern for employees • Honesty and integrity • High ethical standards • Doing the right thing at all times • Having a strong commitment to customer service • Least defining values are • Operational effectiveness • Efficient • Adaptability • Competitiveness • Innovativeness

14. Segment 6: High Profit/Progressive-Focus; Low Productivity/ Principle-Focus (13%)-’A Cause for a Profit Purpose’ • Most defining values are • Driving profit for the company and stakeholders • Competitiveness • Commitment to diversity • Being socially responsible • Being driven to succeed • Least defining values are • Efficiency • Operational effectiveness • Caring and concern for employees • Fairness • Honesty and integrity

15. Segment 7: High Productivity-Focus; Low Profitable/ Progressive/Principle-Focus (13%)-’Quality and Efficiency’ • Most defining values are • Operational effectiveness • Being the best in the business • Strong commitment to customer service • Efficiency • Innovativeness • Least defining values are • Driving profit for shareholders • Being entrepreneurial • Doing the right thing at all times • Being environmentally responsible • Fostering teamwork

16. Which Values are ‘Best’? • For ‘engaging’ employees? • For attracting and retaining employees? • For improving service quality? • For driving profit?

17. Engaging Employees • Four engagement questions • Overall, I am completely satisfied with my job. • I would be very happy to spend the rest of my career with my present company. • I would strongly endorse my company to friends and family as a great place to work. • I look forward to coming to work every day.

18. Engaging Employees

19. Attracting and Retaining Employees

20. Attracting and Retaining Employees • Of ‘Boomers’ who chose a company based on brand reputation, 22% chose a ‘People and Customers First’ company; while only 7% chose a ‘Traditionalist.’ • Of ‘Gen X-ers’ who chose a company based on brand reputation, 18% chose a ‘Social Progressive’ company; 10% chose a ‘Quality and Efficiency’ company. • Of ‘Gen-Yers’ who chose a company based on brand reputation; 21% chose a ‘Social Progressive’; however, only 8% chose a ‘Cause for a Profit Purpose’ company.

21. Attracting and Retaining Employees • Additional questions related to retention • I am proud to work at my company. • If I had the chance to do the same work at the same pay for a different company, I would stay here • The pay I receive at my company is fair for the work I perform.

22. Attracting and Retaining Employees

23. Attracting and Retaining Employees

24. Attracting and Retaining Employees

25. Values and Customer Service • Two items used to evaluate the quality of customer service • How much do you enjoy interactions with your company’s customers? (customer affinity) • Our customers would rate the service we deliver as “excellent.” (service quality)

26. Values and Customer Service

27. Values and Customer Service

28. Values and Profitability • In a study such as this, it is difficult to connect an individual’s perception of his/her company’s values to actual company performance. • However, responses to the item ‘If I could, I would invest my own money in my company’ have been consistently linked to company profitability in proprietary studies. • Key question: Does emphasizing profitability as a core value actually lead to greater profitability?

29. Values and Profitability

30. Value Alignment • To what extent are employee values aligned with the companies for whom they work? • ‘My company’s values are completely consistent with my own values.’ (value alignment item)

31. Value Alignment

32. Summing it Up • Being a highly principled company is critically important for success in any/every area (e.g., attracting talent, engaging employees, being profitable, etc.) • Companies that only emphasize making a profit at the exclusion of having any other higher order values seem doomed for extinction. • If a company engages in ‘socially progressive’ activities, but doesn’t demonstrate any real moral commitment behind those principles, it will realize few tangible benefits. • Being a ‘socially responsible company’ will help attract talent, but will not sustain employee engagement for the long-term, unless these initiatives are undergirded by solid ‘people principles’.

33. Q & A?

34. Obtaining Copies of Today’s Presentation For copies of today’s presentation or to replay this webcast (recording generally available within 24 hours) Go to: http://www.maritz.com/News-Events-and-Insights/Events/Webcasts.aspx To contact today’s speaker: Rick.Garlick@maritz.com To receive a copy of the Maritz Research Forum Quarterly eNewsletter, see www.maritzresearch.com(left sidebar) Have Questions for the AMA? Email: alibb@ama.org