5 | Workforce
Know Your Employees
The numbers tell you that Advocate Good Samaritan Hospital (AGSH) in Downers Grove, Illinois, is a good place to work: associate, physician, and volunteer satisfaction were all near 100% in 2009. One of its core competencies is to “build loyal relationships,” which it does by using systematic processes to identify and meet workforce requirements.
A recipient of the 2010 Baldrige Award, AGSH has more than 2,700 associates (employees), nearly a thousand physicians, and 500 volunteers. In its award application summary, available here, AGSH describes the Workforce Satisfaction & Engagement Process that it uses to determine what matters most to its employees, physicians, and volunteers. As the diagram shows, regression analysis determines the most important factors, which are then validated through rounding and two-way communication.
Organizations can only achieve and sustain high levels of employee satisfaction and engagement through (a) profound knowledge of the factors that produce satisfaction and engagement and (b) an organization-wide commitment to improving performance on those factors. Advocate Good Samaritan Hospital’s results prove that its knowledge and commitment are world-class.
To read more about employee satisfaction and engagement, click on these articles:
- Understanding Employee Requirements
- A Culture That Values Employees
- How Does Your Workplace Measure Up?
- Employee Engagement Boosts Organizational Performance
- MEDRAD: Win with Your People
Evaluating Training Effectiveness
In its award application summary, Studer Group, a 2010 Baldrige Award winner, describes a tiered approach to evaluating training effectiveness. This is typically a weak area for most organizations, whether or not they integrate Baldrige. Most rely on participant surveys at the end of classes or courses to tell them whether the training was effective. At Studer Group, that is just one tool in the first of three tiers it uses to determine effectiveness.
Tier One methods include evaluations by everyone involved in the training. Tier Two measures effectiveness by how well the new knowledge and skills were applied. Linkage grids identify specific actions that participants should take, and online surveys capture the extent to which participants applied the learning. Tier Three assesses the degree to which new knowledge and skills affected results. For example, Studer Group has two employee segments: coaches and admin employees. Each coach is formally evaluated on the degree to which his/her partner’s (client’s) results improved on individual LEM (a Web-based performance management system) scores.
Tier Three addresses the true value of any training, that it make an impact on the success of the organization. Participant surveys tell you what people thought of the training but they cannot tell you how effective it was at helping the participant, and the organization, move forward.
Studer Group is a small (119 employees) healthcare consulting firm that helps organizations create and sustain cultures of service and operational…
7Apr2011 | Steve George | 0 comments | ContinuedA Culture That Values Employees
What is your organization’s turnover rate? Why does it matter?
Software company SAS has an employee turnover rate of 2.6%. The info-tech industry average is 22%. SAS has approximately 11,000 employees. If it lost employees at the industry rate, it would have to replace an additional 2,100 employees each year.
How much does it cost to replace an employee? You can find a method of calculating that cost here, but a good rule of thumb is 150% of an employee’s annual compensation (the cost of recruitment, training, lost productivity, and lost sales, etc.). I don’t know what the average annual compensation is for an SAS employee who leaves the company, but let’s say it’s $60,000. Probably low for knowledge workers and certainly low for executives and managers, but we’ll be conservative here. If it costs SAS $90,000 to replace every employee, the company’s 2.6% turnover rate compared to the industry average 22% rate is saving SAS $189 million annually!
How does SAS achieve such a low turnover rate? According to CEO Jim Goodnight, “Knowledge-based companies need knowledge workers. Looking at services that keep employees motivated, loyal, and doing their best work as merely expenses and not an investment is, I think, a little shortsighted.” So SAS keeps turnover low by investing in its employees.
In 2010, SAS topped Fortune’s Best Places to Work list for the second year in a row. According to Fortune, its perks for employees are…
22Feb2011 | Steve George | 0 comments | ContinuedFear in Workplace a Barrier to Success
Gallup recently identified five “internally built and locally maintained” barriers to an organization’s effectiveness: fear, information flow, short-term thinking, misalignment, and money.
Fear is a natural byproduct of many organizations’ cultures. It’s not necessarily the “cowering in the corner” type of fear (although I once worked for a company that inspired cowering) as much as the type of fear that breeds timidity, defensiveness, and blame. Does your organization produce fearful or trusting employees?
The chart was adapted from Driving Fear Out of the Workplace by Kathleen Ryan and Daniel Oestreich, who offer seven strategies for replacing fear and mistrust with energy and innovation:
- Acknowledge the presence of fear. Just talking about it in small groups and staff meetings is a start.
- Pay attention to interpersonal conduct. Identify abrasive or abusive conduct and develop a shared picture of positive relations.
- Value criticism: Reward the messenger. Promote a mindset that problems are prized possessions because they suggest opportunities for improvement.
- Reduce ambiguous behavior. Reduce the amount of incomplete, inaccurate, or confusing communications.
- Discuss the undiscussables. Uncover the issues people aren’t talking about and find ways to discuss them.
- Collaborate on decisions. Practice involving more people in making decisions.
- Challenge worst-case thinking. Help free people from the traps of their negative assumptions.
I’ve written before about the late quality guru W. Edwards Deming’s 14 Points for Management. Number eight on his list is “drive out fear” because it prevents employees from acting in the organization’s best interests.
To read more about developing an engaged workforce, click on these articles:
21Feb2011 | Steve George | 0 comments | ContinuedPay Inequality
There’s nothing in the Baldrige Criteria about equal pay for equal work, but that doesn’t mean it’s not an issue organizations should address. A new chart from the Bureau of Labor Statistics, courtesy of the NYT’s Economix blog and Huffington Post, shows that the majority of women still earn 80% or less of what men earn.
The Baldrige Criteria do ask how your performance management system considers workforce compensation. According to the data, most organizations consider women worth less than men. Here’s hoping Baldrige Award winners lead the way in addressing this discrimination.
18Feb2011 | Steve George | 0 comments | ContinuedEmployee Engagement and Innovation
You can’t skim the headlines of today’s business news and opinions without reading about innovation multiple times. It’s the hot topic among executives, the program du jour, the solution to every problem, and the yellow brick road to recovery. The only problem is that it is fraught with danger, beset by flying monkeys that threaten the innovation process at every step: a culture that stifles innovation, the lack of systematic approaches to support innovation, the expectation of innovation from just a few people.
While the value of innovation will endure, the current innovation fad will fade. The organizations that sustain a competitive advantage will continue to make the most of sound management systems that do the important things well, one of which is engaging their employees in achieving performance excellence.
I’ve written about this in the past (links below). I’ve discussed a Towers Perrin study of 90,000 employees in 18 countries that showed that companies with the most engaged employees had a 19% increase in operating income in the previous year compared to a 32% decline among those with the least engaged employees. Gallup called employee engagement “performance optimization management principles” and determined that organizations with these principles outperformed their competitors by 26% in gross margin and 85% in sales growth.
In “What It Takes to Be a Great Employer,” Tony Schwartz, president and CEO of The Energy Project, points out that people share four core needs beyond survival:…
8Feb2011 | Steve George | 0 comments | ContinuedHow to Hire for Values
One of the first questions asked by the Baldrige Criteria is for the distinctive characteristics of your organizational culture. The entire Leadership category revolves around culture including how you set and deploy your vision and values, create your culture, promote legal and ethical behavior, and fulfill your societal responsibilities.
Culture is critical because it reflects “the principles that define who you are as an organization and that shape day-to-day business decisions,” according to Alan Lewis, owner and chairman of Grand Circle Travel, a $600 million tour business for Americans ages 50 and over. Lewis recognizes that an organization’s culture is carried by its people. “Employees who do not adhere to a shared corporate culture dilute it,” he writes, “detracting from the essence that gives your company its identity and helps it achieve aggressive goal.”
His views explain his January 26 article in HBR: “Why My Company Hires for Culture First, Skills Second.” Grand Circle Travel uses a values-based hiring model to interview potential job candidates for values. Lewis states, “This decision has not only enhanced our recruiting efforts, it has contributed to the long-term success of our associates and of our organization.”
He offers three pieces of advice for developing a values-based hiring process:
- Involve job candidates in activities that reveal their values. Grand Circle uses a group interview with quirky challenges that require them to interact, work with each other, solve problems, and exhibit leadership. He describes a “raw-egg drop…
