Corporate  Responsibility  Module  

Lecture  Three:  Employees      

January  22st  2015  Lecturer:  Tobias  Webb  

Tobiaswebb.blogspot.com    

Leadership:  The  big  picture  

 Simon  Sinek:  Why  good  leaders  make  

you  feel  safe    

Nadine  Exter,  Cranfield,  on  Employee  Engagement  in  Sustainability  

Some  useful  extra  reading  

 A  study  of  the  link  between  

Performance  Management  and  Employee  Engagement  in  Western  mulLnaLonal  corporaLons  operaLng  

across  India  and  China  

A  reminder….Employees  and  business  value:  Alex  Edmans  

London  Business  School  and  Wharton  researcher  Alex  Edmans    Three  key  points  to  remember  about  the  latest  research  on  the  business  case  for  CSR:  

1.            Employee  welfare  is  posi/vely  related  to  firm  value.  While  the  idea  that  “companies  do  beRer  if  their  workers  are  happier”  is  seemingly  intuiLve,  this  idea  is  contrary  to  tradiLonal  ways  of  managing  workers,  which  holds  that  a  dollar  paid  to  workers  is  a  dollar  taken  away  from  shareholders.  Human  resource  departments  are  not  just  cost  centres,  but  a  posiLve  source  of  value  creaLon.  

   

Employees  and  business  value:  Alex  Edmans  

2.            CSR  can  improve  firm  value.  TradiLonal  thought  is  that  considering  other  stakeholders  (e.g.  employees,  customers,  the  environment)  is  at  the  expense  of  shareholders.  Thus,  socially  responsible  invesLng  should  underperform  tradiLonal  invesLng,  since  responsible  companies  are  distracted  from  the  boRom  line.  His  paper  suggests  that  there  need  be  no  tension  between  CSR  and  profit.  

3.            The  market  does  not  fully  value  intangibles  such  as  stakeholder  capital.  Results  suggest  that  the  market  doesn’t  immediately  recognise  the  benefits  of  stakeholder  capital.  As  a  result,  we  need  to  move  beyond  evaluaLng  managers  according  to  short-­‐term  performance  to  encourage  them  to  consider  the  long-­‐run  health  of  their  firms  –  and  society.        

Academic  research  findings  

Employee  Engagement  and  CSR:  TRANSACTIONAL,  RELATIONAL,  AND  DEVELOPMENTAL  APPROACHES  

 Philip  Mirvis  

Evident  from  surveys  says  (1)  

•  Three  out  of  four  of  the  Millennial  GeneraLon  (born  1978-­‐1998)  want  to  work  for  a  company  that  “cares  about  how  it  impacts  and  contributes  to  society.”    

•  Among  those  already  in  the  workforce,  nearly  seven  in  ten  say  that  they  are  aware  of  their  employer’s  commitment  to  social/environmental  causes.    

•  65  percent  say  that  their  employer’s  social/environmental  acLviLes  make  them  feel  loyal  to  their  company.  

Evident  from  surveys  says  (2)  Sirota  Survey  Intelligence,  of  1.6  million  employees  in  seventy  companies,  found  that:  

•  Employees  who  approved  of  their  company’s  commitments  to  social  responsibility,  compared  to  those  who  did  not  approve  were:  

•  Far  more  engaged  on  their  jobs.    •  More  apt  to  believe  that  their  employers  were  interested  in  their  well-­‐being.    

•  They  also  had  more  favorable  percepLons  of  their  management’s  integrity  and  rated  their  companies  as  more  compeLLve,  too.  

Evident  from  surveys  says  (3)  •  A  2007  Towers  Perrin  survey  of  90,000  employees  in  18  countries  found  that  only  21  percent  reported  being  fully  engaged  on  the  job.    

•  The  rest  were  either  simply  enrolled  (41%),disenchanted  (30%),  or  disconnected  (8%).    

•  In  turn,  the  Gallup  Employee  Engagement  Index  reported  that,  on  average  as  of  2010,  some  33  percent  of  employees  were  engaged  by  their  companies,  49  percent  were  not  engaged,  and  18  percent  were  acLvely  disengaged.  

 Mirvis  (2012)  explores  three  different  ways  that  companies  design  and  manage  their  efforts:  

 1.   A  transac/onal  approach,  where  programs  are  undertaken  

to  meet  the  needs  and  interests  of  those  employees  who  want  to  take  part  in  the  socially  responsible  efforts  of  a  company.  

2.  A  rela/onal  approach,  where  an  organizaLon  and  its  employees  together  make  a  commitment  to  social  responsibility;  and  

3.  A  developmental  approach,  where  a  company  aims  to  more  fully  acLvate  and  develop  its  employees  and  the  firm  to  produce  greater  value  for  business  and  society.  

So,  what’s  the  problem  

•  On  the  surface,  engagement  in  CSR/CR/Sustainability  makes  perfect  business  sense;  

 •  Studies  prove  it.  •  Surveys  prove  it.  •  So  why  don’t  more  companies  do  it  well?  

So  why  don’t  more  companies  engage  employees  well  on  CR/Sustainability?  

•  Many  do:  But  they  tend  to  be  the  largest  ones,  such  as  PUMA,  Mars,  Alliance  Boots,  IBM  etc.  

•  OR  they  are  smaller,  mission  driven  firms  such  as  Patagonia,  Interface,  etc.  

•  There  are  lot  of  companies  that  are  not  in  the  global  leadership  group  nor  who  are  mission  driven  on  sustainability  and  CR.  

•  Probably  tens  of  thousands  of  them  globally.  

These  companies  struggle  with  employee  engagement  in  CR  because:  

•  They  think  it’s  expensive,  and  some  of  it  is  (supply  chain  changes,  product  changes  or  system  changes  generally).  

•  They  don’t  tradiLonally  value  Human  Resources  as  strategic  so  don’t  hire  the  right  people  and  apply  the  right  resources.  

•  They  don’t  really  believe  the  numbers,  and  think  a  more  tradiLonal  business  approach  is  best.  

•  So  iniLaLves  like  this  in  a  company  like  this  are  sLll  rare.  

•  Company  grown  by  merger  since  2006.  

•  From  Boots  to  Alliance  Boots  now  merged  with  Walgreens.  

•  Company  in  Europe  has  appointed  40  (approx)  CSR  Champions.  

•  Based  all  over  Europe.  Idea  is  they  are  there  to  catalyse  change  in  the  business.    

•  Engaging  senior  execuLves,  other  employees  on  issues  from  energy  efficiency  to  social  innovaLon.    

•  Board  members  have  personal  tasks/targets  on  CSR  and  sustainable  business.  

 

•  Employee  champions  also  promote  Alliance  Boots'  work  with  anL-­‐cancer  network  EORTC.  

•  Trained  by  interacLve  video,  presentaLons,  workshops.  Graded  on  a  pass/fail  basis  as  part  of  their  annual  assessments.    

•  Company  also  communicates  their  targets,  policies,  and  work  using  company  intranet,  to  store  managers  and  other  employees.    

•  Board  of  the  company  has  CSR  CommiRee  which  meets  quarterly  to  review  progress.    

•  Aiming  to  roll  out  basic  video  training  on  "What  CSR  means  to  us"  across  the  whole  company.  

Employees  and  CR  

Case  Study:  Accenture    

Gib  Bulloch  from  Accenture  on  ADP  

Accenture:  “Human  Capital  Strategy”  

•  246,000  employees.  •  35%  female  -­‐  17%  of  Senior  

ExecuLves.    •  Big  picture  short  term  

focus:  equipping  250,000  people  with  skills  to  get  a  job  or  build  a  business.  Claim  162,000  achieved  so  far.  

How?    

•  Via:  cash  and  in  kind  support  "equivalent  to  $44.5  million"  from  $25  billion  turnover.  

•  Target  of  $100m  by  2013.  •  Training  and  capacity  

building  with  NGOs:  InternaLonal  FederaLon  of  Red  Cross/Red  Crescent.  

What  does  this  mean  in  pracLce?    

•  DonaLons.  •  In-­‐kind  consulLng.  •  "Train  the  trainer"  Lme  

donaLons  with  NGOs  to  support/empower  vulnerable  people.  

 

Junior  Achievement  Young  Enterprise      

•  Encouraging  student  business.  

•  Award  and  donaLons.  •  Encouraging  Workplace  and  

Entrepreneurial  Skills.  •  18,000  students  by  2012,  

esLmate  that  15%  will  become  entrepreneurs  by  2016-­‐18.  

Big  on  donaLons,  short  on  exact  detail…  

•  Also  support  Save  the  Children  and  Plan  InternaLonal  with  donaLons.    

•  Claim  59%  of  contribu/ons  are  in  kind    (unclear  on  detail).  

•  Strategies  regionally  and  locally  adapted:  different  approaches  per  country  needs.  

Employee  Engagement  Methods  

A  mulL-­‐channel  approach:    •  Company  Intranet  •  eLearning  programmes  •  Volunteering/skills  

matching  •  Employee  surveys  •  Local/small  group  meeLngs  •  CR/Sustainability  

Champions    

Accenture  Development  Partners  

"Corporate  Social  Enterprise"    •  Non  profit  model  helps  

employees  make  a  difference  in  development  via  paid  secondments  to  NGOs  around  the  world.  

•  Two-­‐way  innova/on  model:  Ideas  for  clients  and  help  for  NGOs  etc.      

Accenture  Development  Partners  

•  A  “key  vehicle”  for  driving  sustainability  experience  into  graduate  hires.  

•  3-­‐12  month  physical  placement  on  a  project  with  an  NGO  or  development  partner  in  a  developing  economy.    

Accenture  Development  Partners  

•  Seen  as  a  “game  changer”  for  parLcipants  in  terms  of  experience,  career,  benefits.  

•  Rigourous  selecLon  process.    

•  Accenture  offers  support,  project  evaluaLon  and  a  peer  community  to  parLcipants.  

•  Valuable  for  clients  +  company.  

Accenture:  Conclusions/Acknowledged  areas  of  improvement  

•  Online  tool  to  streamline  access  and  registraLon  for  community  events  and  track  volunteer  hours.  

•  Even  a  technology  company  struggles  with  measurement  and  data  collec/on…  key  challenge.    

•  A  good  example  of  current  beLer  prac/ce  in  services  industry…  

 

Employees  and  CR  

Case  Study:  Linklaters    

Linklaters:  A  global  law  firm  

5000  employees/partners  Four  Pronged  Approach:      1.  Trusted  Advisor  2.  Valued  Colleague  3.  Engaged  Professional    4.  Good  Neighbour  

 

Linklaters:  Progressive  for  their  sector?    

•  Recognise  role/responsibili/es  as  "trusted  advisor"  and  "voice  in  global  business”.  

•  Global  Engagement  Survey  •  Includes  "global  

responsibility  strategy"  from  2011.  

•  Anonymous  partner  feedback  mechanism  for    employees.  

 

Embedding  CR?  

•  Partners  have  employee  development  KPI's  built  into  partner  performance  expectaLons.  

•  17%  female  partners:  "we  clearly  have  much  to  do”.  

•  Clearly  realise  diversity  is  a  challenge:  Weaker  on  acLon…  

"Women's  Leadership  Programme"    

•  Provides  learning,  coaching  and  mentoring  to  24  managing  associates  over  six  months.  

•  Gited  comprehensive  data  protecLon  training  to  Save  the  Children.  

•  Wellbeing  assistance  service.  

   

Learn  for  Work  Programme  

•  18  offices:  "hundreds  of  volunteers  enthusing"  9000  young  people  about  world  of  work,  careers,  sharing  skills.        

•  57  university  scholarships  in  China.    

 

•  Learning  resources  on  dealing  with  stress.    

•  Recent  flexible  working  pilot  successful.      

•  Sponsored  "Good  Governance  in  Interna/onal  Development"  conference  in  2012.  ObjecLve  of  helping  employees  assist  in  int.  development  outcomes.  

     

Linklaters:  State  of  the  art  on  employee  engagement?    

•  They  are  clear  how  non  core  legal  work  maRers  given  global  markets,  challenges  &  socieLes.  E.g.  Charity  trustee  work,  research,  policy  commiRees,    teaching  etc.  

•  Focus  on  skills  matched  volunteering  in  communiLes  and  with  chariLes.  

Going  a  bit  beyond  the  usual…?  

•  Created  Italian  network  for  women  in  business.  400  members  in  two  years.  

•  Support  legal  advice  clinics  in  Hong  Kong,  London,  Paris  and  Warsaw.  

•  "CommunityMark"  award  from  BITC  in  2012.  

 

Unfinished  measurement…  

•  Use  World  Environment  Day  &  issue  of  sustainable  food  sourcing  to  engage  colleagues.    

•  25%  volunteering  rate  with  75%  skills  matching.  Further  incremental  targets  set.  

•  Community  impact  reporLng  lacking  but  is  a  target.  

Much  more  to  be  done…  

•  Some  targets  weak:  "collaborate  with  clients"  on  Living  Wage.  

•  Retaining  talented  women.  •  Individual  partner  plans  to  

embed  ethics  /  values  /  diversity  and  measurement  of  that.  

 

Conclusions:  Linklaters  

•  Making  good  gradual  progress.  

•  Overall  measurement  of  CR  parLcipaLon  a  significant  challenge.          

•  No  visible  stakeholder  engagement  beyond  charity/volunteering/events.  

 

•  No  menLon  of  an  ethics  commiLee  with/without  external  viewpoints.  

•  No  external  feedback  mechanism.  

•  But  level  with,  or  ahead  of  peers  in  their  sector  globally.