The Business Case for Employee Communication & Engagement

1. The Business Case for Employee Communication & Engagement

2. To cover this evening • Brief update and discussion on the Information and Consultation Directive • Present some recent research on the link between effective communications and business performance • Look at a possible framework for assessing and developing your communications strategy • Discuss the business case for employee engagement as a critical part of the communications mix

3. A few key questions….. • To what extent do your employees understand the company’s objectives and their own role in helping to achieve them? • How much do they understand about the necessity for change and what the changes are likely to mean to them? • Does the organisation really know what messages are actually getting through and what employees really care about • How aligned are your key messages with every day people processes

4. Typical objectives of effective communications • Helping employees understand the business • Providing employees with financial information and objectives in order to engage them in the business • Exhibiting strong leadership by management during organisational change • Aligning employees’ actions with customer needs • Educating employees about organisational culture and values • Explaining and promoting new programmes and policies • Integrating new employees into the organisation • Providing employees with information on the value and rationale of their total rewards programme

5. The messages may be clear but there are a lot of things that can get in the way Reward Strategy Y, Z..? Grapevine X Performance Management Culture E-mail !! Line Management Behaviour

6. Ideally…. Reward Strategy Performance Management X X! Grapevine Culture Line Management

7. What, Why, Who, How…The communication spectrum Communicate • Individual behavior • Face-to-face communications • Policy decisions/ rules • Personnel choices • Business strategies Involve Engage Clarify • Bulletin boards • Memos • Newsletters • Intranet/Internet • Brochures • E-mail / Videos Inform Commitment “in our work” Awareness “in our eyes” Understanding “in our minds” Acceptance “in our hearts”

8. The Information and Consultation Directive

9. Information and Consultation Directive Information and Consultation Directive • Our Experience • Transfer of businesses • Collective redundancies • European works councils (EWC)

10. Information and Consultation Directive Impact of the Directive • Some latitude • Transposition date: 23 March 2005 - 150 employees • 23 March 2007 - 100 to 150 employees • 23 March 2008 - 50 employees

11. Information and Consultation Directive What is the Directive seeking to achieve? • Strengthening dialogue • Promoting mutual trust • Improving “risk anticipation” • Greater flexibility in the workplace • Improved employee access to training

12. Information and Consultation Directive What is the Directive seeking to achieve? • Employee awareness of need to adapt • Promotion of employee involvement in future of business • Enhanced information flow • Assisting anticipatory measures

13. Information and Consultation Directive What information? • Recent and probable development of undertaking • Situation, structure, probably development of employment • Any anticipatory matters • Particularly where threat to employment • Decisions likely to lead to substantial changes in work organisations or contractual relations.

14. Information and Consultation Directive The Directive applies to: • Undertakings • Public/private • Carrying out an economic activity • Located in a member state • Employing at least 50 employees

15. Information and Consultation Directive The Directive applies to: • Establishments • Unit of business • Within member state • Engaged in economic activity • Employing 20 employees

16. Information and Consultation Directive The Directive applies to: • Information • Data • Sufficient to enable “representatives” acquaint themselves • Consultation • Exchange of views

17. Information and Consultation Directive The Directive applies to: • Employee representatives/employers • At relevant level of management • “With a view to reaching an agreement”

18. Information and Consultation Directive The Directive applies to: • Confidentiality Protected • Information not to be released without authority • Others also bound by obligation of confidentiality

19. Information and Consultation Directive Government Consultation Paper • Directive permits management/labour determine their own arrangements • Government expects employers to avail of this voluntary approach • Legislation is to be the fall-back • Existing arrangements may need to be updated to comply

20. Information and Consultation Directive What formalities are likely? • Is current procedure “effective”? • Do current arrangements apply to entire workforce? • Is current agreement in writing? • Is there evidence that employees want to continue present arrangement?

21. “Can we achieve effective communications, business return and compliance..”The research base for why effective communications is good business practice

22. Data on HR policies and practices from survey of VPs of HR of 600+ leading European companies Correlations XXX research on people practices – e.g. HCI 2002 Employee Retention Revenue Growth External Service Value Customer Satisfaction Customer Loyalty Human Capital Practices Employee Satisfaction Improved company performance Employee Productivity Independent financial data from Standard & Poors and Datastream, for these companies Source: Adapted from “Putting the Service-Profit Chain to Work, ” Heskett, et al, – Harvard Business Review, March-April, 1994.

23. Employee engagement Business Performance People management Business KPIs Employee outcomes In summary…

24. Overall HCI(89.6% value added) 2002 European HCI results HR Function Effectiveness(21% value added) Collegial, Flexible Workplace (11% value added) Recruiting & Retention Excellence (14.6% value added) Prudent Use of Resources (14.5% value added) Clear Rewards & Accountability(21.5% value added) Communications Integrity (7% value added)

25. Communications integrity

26. Communications Research 2003- The bottom line “Communication is no longer a “soft” function. It drives business performance and is a key contributor to organisational success” XXX’s “Communication ROI” Survey 2003

27. Communications Research 2003 - Headlines • Companies with the highest levels of effective communication experienced a 26% total return to shareholders compared with -15% experienced by firms that communicate least effectively • Organisations that communicate effectively were more likely to report lower employee turnover rates (20% less) • Different elements of effective communications affect value to different degrees

28. Elements (clusters) of effective communication practice CONNECTSTO THEBUSINESSSTRATEGY CREATESEMPLOYEELINE OFSIGHT UTILISES EMPLOYEE FEEDBACK DRIVESSUPERVISORY/MANAGERIALBEHAVIOR INTEGRATES TOTAL REWARDS FOCUSES ONCONTINUOUSIMPROVEMENT LEVERAGESTECHNOLOGY FOLLOWS AFORMAL PROCESS FACILITATESCHANGE

29. Action Commitment Acceptance Understanding Awareness The research pointed to a Hierarchy of effective communication EFFECTIVE COMMUNICATION CREATESEMPLOYEELINE OFSIGHT DRIVESSUPERVISORY/MANAGERIALBEHAVIOR BEHAVIORAL CONNECTSTO THEBUSINESSSTRATEGY FOCUSES ONCONTINUOUSIMPROVEMENT FACILITATESCHANGE STRATEGIC INTEGRATES TOTAL REWARDS UTILIZES EMPLOYEE FEEDBACK LEVERAGESTECHNOLOGY FOLLOWS AFORMAL PROCESS FOUNDATION

30. The research also estimated the relative effect of change to market value

31. Action Commitment Acceptance Understanding Awareness A framework for looking at “compliant” communications ? EFFECTIVE COMMUNICATION Core pillars of the Information & Consultation Directive CREATESEMPLOYEELINE OFSIGHT DRIVESSUPERVISORY/MANAGERIALBEHAVIOR BEHAVIORAL CONNECTSTO THEBUSINESSSTRATEGY FOCUSES ONCONTINUOUSIMPROVEMENT FACILITATESCHANGE STRATEGIC INTEGRATES TOTAL REWARDS UTILIZES EMPLOYEE FEEDBACK LEVERAGESTECHNOLOGY FOLLOWS AFORMAL PROCESS FOUNDATION

32. Connects to the business strategy

33. Creates employee line of sight

34. Facilitates change

35. Action Commitment Acceptance Understanding Awareness Let’s look at some practical examples…. EFFECTIVE COMMUNICATION CREATESEMPLOYEELINE OFSIGHT DRIVESSUPERVISORY/MANAGERIALBEHAVIOR BEHAVIORAL CONNECTSTO THEBUSINESSSTRATEGY FOCUSES ONCONTINUOUSIMPROVEMENT FACILITATESCHANGE STRATEGIC INTEGRATES TOTAL REWARDS UTILIZES EMPLOYEE FEEDBACK LEVERAGESTECHNOLOGY FOLLOWS AFORMAL PROCESS FOUNDATION

36. Follow a formal communications process

37. Case study Communications project management process- Overview Discover Invent Deliver • Implement theplan • Get managers' buy-in • Vision, pressure to change, capacity, first steps • Counsel/train managers • Stakeholder mapping • Matching message to medium to audience • Design, write, produce for above • Evaluate results • Initial reactions, business outcomes, agreed criteria • Telephone survey, focus groups for employees • Telephone, email, meetings for HR and line managers • Adapt as necessary • Scope the project • Examine businessdrivers, initiatives, issues • Explore existing channelsand media • Identify success measures • Agree roles and responsibilities, modus operandi, conflict resolution • Assess the baseline • What is in place now? Programmes, attitudes • Communications Audit • Desk research • Project team discussion • Develop the solution • Gap analysis - "What will this mean people need to think/do differently" • Make recommendations for change communication strategy, and communication management and implementation activities • Prioritise issues

38. Case study Communication strategy development framework 4. Stakeholder mapping 9. Measure and improve 2. Employee mindset and behaviour changes needed Alignment of processes to support behaviour changes 5. Roles and responsibilities 1. Vision and objectives for company & project 3. Commu-nication goals and guiding principles 6. Timetable/key milestones 7. Messages 8. Comm tools, channels and activities

39. Knowing where you are is a good place to start - the communications audit A communication audit explores: • Organisational goals and philosophy • Audience perception of goals and objectives • The climate for communication • Assessment of the Informal/formal structure of organisational communication • Information needs of various audiences • Up, down and across communication channels

40. Case study Communications Audit- Questionnaires might help to gather key data

41. Case study Some specific questions on the role of management

42. Case study Business AlignmentCheck 1 = Very High Value 2 = High Value 3 = Average 4 = Low Value 5 = Very Low Value

43. 2. Integrate total rewards

44. My Benefits My Job • Pensions provision • Insurance cover • Non cash recognition • Work challenge • Contribution • Feedback • Independence Communicating the “Employer Brand” or Employee Deal A Great Place to Work • Culture and Values • Strong Leadership • Employer Brand • Physical Environment My Pay My Career & Development • Market Competitive Salary • Performance Bonus • Longer term incentives • Other • Performance management • Recognition • Development • Career Opportunities The Employee "Deal"

45. Aligning communications, pay and performance VISION / MISSION CORE BELIEFS DESIRED CULTURE STRATEGIC OBJECTIVES REWARD PLANS PERFORMANCE

46. What and how to communicate Corporate Strategy Strategic Objectives Core Capabilities Core Performance Competencies (Business Knowledge, Functional Skills, Value-Added Behaviors) Business Measures (Financial, Operating, Customer, People) Team and Individual Competencies Team and Individual Measures Key Performance Factors “THE WHAT” “THE HOW”

47. Communicating reward Reward Communications- Typical Employee issues • An emotive subject… • Want to know: • What do I get (or can I get)? • How much is it worth? • When do I get it? • What do I need to do to get it? • Low awareness of reward components and available benefits • Lack of understanding of: • reward value • market competitiveness • what each element is actually rewarding • links to performance • May be unhappy about eg amounts, eligibility, equality, range of benefits

48. Communicating reward Common communication mistakes • Managers unwilling or unable to provide one-to-one communication on reward and performance • Written communication focuses on how the elements work, not ‘what does it mean to me?’ • Over-detailed and confusing • Reward elements communicated separately, with no context provided and no common branding • Not giving all the facts and rationale for reward policy • No opportunity for involvement and feedback • Wrong media – must meet the needs of each particular audience

49. Agree clear objectives and desired messages for each audience… • Increase employees' understanding of the value of their total reward package • Ensure that employees understand what each element of reward is for and what they need to do to get it • Provide opportunities for managers and employees to influence reward design, processes and communication • Equip managers with simple tools to enable them to manage reward and performance processes fairly, efficiently and accurately • Ensure that managers have the skills and confidence to make and explain reward/performance decisions – eg dealing with poor performance

50. Communicating reward Methods of communication • Survey/ePoll • One-to-one with manager • Group Q&A sessions • Focus groups (testing/feedback) • Project 'champions' • Help line (telephone and/or email) • Intranet feedback/Q&A tools • Web 'chat' session (eg with CEO) • Reward modeller • Formal consultation process INVOLVE • Contract/handbook • Email/Memos • Letters • Q&A booklet • Posters/postcards/leaflets • Total Reward Statement • News channels • Screensaver/pop-up screen • Presentations/'Town hall' • Meetings/briefings • Video/web-cast • Training material • Help line 'script' • Voicemail • Intranet/Internet • Notice board INFORM