April 10, 20231

Human Capital – Performance & Rewards

Ernst & Young RomaniaErnst & Young Romania

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Employee Engagement

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Retaining Employees – Business Impact

• Taco Bell – Top 20% employee-retention stores had double the sales and were 55% more profitable than bottom 20% employee-retention stores.

• Marriott -10% reduction in turnover leads to $50-$100 million increase in revenue.

• 1 % reduction in attrition for IBM global services India resulted in a saving of 1 mil $ per annum.

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Key Principles of Retention

Retention is fundamentally linked to engagement

A few leaders/managers drive most of attrition

Its important to focus on Stars & Solid Contributors

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45%

78%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2005-06 2006-07

Employee Satisfaction

32,81%

19,91%

0%

5%

10%

15%

20%

25%

30%

35%

2005-06 2006-07

Attrition % age

Employee Engagement & Retention are directly related to each other – IT Company

Illustra

tion

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A few Leaders/Managers drive most of Attrition

“People leave managers, not companies . . . If you have a turnover problem, look first to your managers.”

First, Break All The Rules, By Marcus Buckingham & Curt Coffman

“When job opportunities are plentiful, people with crummy bosses leave.” From Hidden Value: How Great Companies Achieve Extraordinary Results With Ordinary People by Charles O’Reilly III

80% of employees view their company and their supervisor the same way. University of Michigan

“People leave managers, not companies . . . If you have a turnover problem, look first to your managers.”

First, Break All The Rules, By Marcus Buckingham & Curt Coffman

“When job opportunities are plentiful, people with crummy bosses leave.” From Hidden Value: How Great Companies Achieve Extraordinary Results With Ordinary People by Charles O’Reilly III

80% of employees view their company and their supervisor the same way. University of Michigan

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Talent Watch Survey Data Indicates:

• Join companies for:

– Organization Factors: pay, benefits, reputation

– Job factors: Schedule, Challenge, Learning

– Leader factors: Trustworthy, Coach, Flexible

• Leave Companies for:

– Leader factors: Trustworthy, Coach, Flexible

– Job factors: Schedule, Challenge, Learning

– Organization factors: Pay, Benefits, Reputation

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Important to focus on Stars & Solid Contributors

Invest heavily in the stars (top 20-25 %) Identify the brightest talents over a period of time Give them higher responsibilities and higher variable paybacks Be conscious of not disturbing the solid contributors

Grow the solidly contributing players ( 70% of the organization) They are the operational arms of the organization and its conscience in times of change Recognize and consult them Coach them on their development areas. Pay them well for their contributions

Act decisively on the “disaffected marginal performers” ( bottom 5-10%) They make bad bosses & poor role models and tend to attract other sub standard

performers

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What can we do about Engagement & Retention

• Engagement & Retention Diagnostics

• Action Steps to improve Engagement & Retention

• Engagement & Retention Diagnostics

• Action Steps to improve Engagement & Retention

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Engagement Diagnostics

• Engaged employees will :– Communicate: Consistently speak positively about the organization – Consult & Coach: Look at solutions & work with others to tackle it– Commit: Make extra effort and have an intense desire to stay

• Typical Surveys focus on Leadership & People Policies

• Types of Engagement Analysis based on Employee Satisfaction Survey:– Overall Satisfaction & Correlation with past data– Analysis by Experience, Level, Education, Age, Sex– Analysis by Function/Department; Supervisor/Leader

• Engaged employees will :– Communicate: Consistently speak positively about the organization – Consult & Coach: Look at solutions & work with others to tackle it– Commit: Make extra effort and have an intense desire to stay

• Typical Surveys focus on Leadership & People Policies

• Types of Engagement Analysis based on Employee Satisfaction Survey:– Overall Satisfaction & Correlation with past data– Analysis by Experience, Level, Education, Age, Sex– Analysis by Function/Department; Supervisor/Leader

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Retention Diagnostics

• Institutionalizing Attrition Analysis - Tools Used– Exit analysis for all associates

– Attrition Analysis Framework for Organization Data

• Types of data analysis– Voluntary/Managed Attrition

– Skill Wise Attrition

– Experience wise, Level wise attrition

– Band and gender analysis

– Root cause analysis

• Institutionalizing Attrition Analysis - Tools Used– Exit analysis for all associates

– Attrition Analysis Framework for Organization Data

• Types of data analysis– Voluntary/Managed Attrition

– Skill Wise Attrition

– Experience wise, Level wise attrition

– Band and gender analysis

– Root cause analysis

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Actions to improve Engagement & Retention

• Communicate business direction & leadership expectations to employees regularly & ask for feedback

• Market driven Compensation revisions targeted at employee groups with high attrition levels (example employees with 2-6 years experience)

• Innovative long term incentives & retention programs

• Focus on career programs, job rotations & secondments

• Transparent, business driven & consistent implementation of perf. appraisal & annual awards linked to the appraisal programme

• Attrition & employee satisfaction figures indexed to leaders & retention /engagement of employees given 20-30% of weightage in their performance appraisal

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Actions to improve Engagement & Retention (Contd.)

• Personnel policies simplified & communicated to all employees specially new employees;

• Improve induction/orientation programme for new hires

• Improve flexible working and mobility specially for working mothers

• Organize and track focus groups, 1-1 meetings and informal get-togethers

• Restructuring of the HR function to focus and measure responsiveness to resourcing, retention/engagement and transaction needs of the organization

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Human Capital Services

• HR Infrastructure for Start-up Companies – Quick & effective start of business (Compensation, Recruitment, Labor compliance, Establishing the HR Function/HR Outsourcing)

• HR Due Diligence & Merger Integration – Managing Human Capital integration Risks (Due Diligence, Day 1 Readiness, Post Merger Integration)

• Total Rewards – Designing & Implementing Reward Prog. (Comp. Surveys, Performance Mgmt., Variable Pay Design & Implementation)

• Talent Management – Attracting, engaging and retaining talent (Diagnostics & Action Plans for Attracting, Engaging & Retaining Talent)

• Aligning People Strategy to Business – Improving focus & effectiveness of HR (HR Diagnostics & Restructuring/Enablement of HR)

• HR Outsourcing – Building scale & reducing costs in HR administration

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