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Employee Engagement Practices at Intuit
1.
© Intuit Inc. All rights reserved. Employee Engagement at Intuit By Craig Ramsay With Martha Finney
2.
© Intuit Inc. All rights reserved. 2 Employee Engagement at Intuit By Craig S. Ramsay With Martha I. Finney Index Introduction 3 The Case for Employee Engagement
7 The Engagement Journey at Intuit 13 The Foundation for Intuit’s Employee Engagement Culture and Practices 18 Making Employee Engagement Meaningful and Real 30 Steps for Establishing an Employee Engagement Culture in Your Company 41 About Intuit and the Authors 49 Appendix 50 © 2008 Intuit Inc. All rights reserved. No part of this material may be duplicated or republished without prior written permission from Intuit Inc.
3.
© Intuit Inc. All rights reserved. 3 Introduction In 2000,
at a time when the technology sector was experiencing significant transformation, Intuit was also undergoing vital changes. A new CEO Steve Bennett, who joined Intuit from G.E. in January 2000, brought with him an enthusiasm for helping to grow the company by building on the legendary innovation and customer- driven expertise that founder Scott Cook has instituted at Intuit. Steve focused his initial efforts on the business with Six Sigma process excellence practices, and on Intuit’s organizational capability through leadership development and talent management practices. Because Steve shared the Intuit philosophy about “It’s the people…” which clearly states the prominent role employees play in the success of the company, it’s not surprising that his initial stakeholder focus was not solely on customers and shareholders… but also on our employees! In fact, Steve’s first hire was the senior head of Human Resources, Sherry Whiteley, to collaborate with him every step of the way in creating a high performance organization and a great place to work. One of his first mandates to leadership was to identify those culture characteristics, values, behaviors and leadership qualities that make Intuit great -- not just for our customers but also for our employees -- and he wanted them to be measurable. The task was to understand the attributes that make the company a place where our employees would be excited to come every day, do their very best work, choose to stay despite tempting offers to go elsewhere, and treat one another with dignity and respect. Of course, the idea of developing a motivating and rewarding workplace environment wasn’t exactly new. The Fortune 100 Best Companies to Work For list, for instance, had already been well- established and recognized for many years by that time. But Steve’s mandate would take Intuit deeper into this field of inquiry, and through a rigorous journey of self-discovery, establish us as one of the model practitioners for what would soon be called employee engagement. This conversation has since gone far beyond any discussion of employee training, incentives, benefits, and programs, and has required Intuit to dig deeply into the employee relationship to examine more complex questions about real passion, inspiration, dedication, and commitment. We have had to understand how our people actually think, feel and act when they are “engaged.”
4.
© Intuit Inc. All rights reserved. 4 Others have
begun to notice what we’re doing to engage our employees. We’ve been approached by consultants, academics, and our colleagues in corporate leadership with requests for information on our particular approach to building an extraordinary workplace that attracts top talent and keeps people who want to do their best work. And so, we have decided to create this document that describes our essential point of view, approaches and the results we’ve experienced so far. This is not an exact science. Employee engagement should be an ever-evolving, developing and improving approach to making a workplace the best it can be for a company’s valued talent, who will, in turn, invest their own passion, innovation and dedication to making the company best in class. With that said, we’re offering a description of our own approach, which you might be able to borrow from to build an engagement framework for your company that can be measured and gets results. Before we get into the details of Intuit’s employee engagement practices, let’s set some expectations about employee engagement. You probably already know that helping employees to be highly engaged has been proven to benefit essential business interests such as productivity, customer satisfaction, innovation, quality, attraction and retention of the best talent available. (We’ll get into more specific evidence in the next section.) But we’d also like to invite you to consider what employee engagement is not: Employee engagement is not a nice thing to do. Skeptics (or at least people experienced enough to have watched leadership trends come and go) may be tempted to dismiss employee engagement as another one of those “soft and fuzzy,” “feel-good” approaches to people management. To the contrary, focusing on employee engagement is a commitment to creating a winning workplace environment -- a commitment that requires staying consistent to the philosophy, even -- and especially -- in tough economic or industry times. A commitment to fully engaged workforce will, at times, force management to make some very tough, painful decisions. Throughout the company, employees will hold their leaders accountable for decisions that are made on their behalf, and such accountability must be monitored. And to some extent this accountability needs to be made public. And leadership will be expected to commit itself again and again to the core, driving principles of its engagement philosophy. If you’re going to do this, you better be ready for the ride. Employee engagement is not the sole purview of Human Resources. Your company should not have anyone whose title is “VP of “We approach every discussion and interaction through a filter of authenticity and integrity without compromise. As a leader, I am always asking myself, ‘Are people growing and developing? Is everyone being heard? Am I drawing out the best in every individual? At the end of the day, have I shown up as the best I can possibly be?’” (Vice President of Procurement & Real Estate Services)
5.
© Intuit Inc. All rights reserved. 5 Employee Engagement”.
Even though employee engagement is people-oriented, its only chance for true success is absolute commitment from the top. In fact, the success of an engagement focus is contingent on the extent to which it is aligned with the values of the company and is driven by all the top leaders. Regardless of the various “people” practices, processes and programs that can be implemented, engaging employees starts with examining the core values held by the company to understand what they really mean when they talk about the importance and value of people to the company. Even more importantly, the mindset and behavior of leaders must reflect their belief in the importance of employees. Ask yourself: Do your leaders truly believe that company success is significantly dependent on consistently meeting the needs of your people over time. Do their actions and decisions demonstrate a genuine concern for employee well-being? Can they sincerely articulate their own point of view about the value employees bring to the company? “Yes” is the only answer that will give employee engagement a chance for success in your organization. Employee engagement is not about free food or balloons or five-year tenure plaques. Of course, various benefits, incentives, and other amenities may be part of your company’s unique motivation and appreciation culture, but true employee engagement cannot be “bought.” Most employees’ sense of real engagement is affected by their total experience of the company, their job, their coworkers and the work environment over a sustained period, not by the perks that they receive. Employee engagement is not a one-size-fits-all proposition. There may be an employee who enjoys balloons and new coffee mugs. In that same department you will have another employee who would prefer to take a few hours off in the afternoon to watch a child’s soccer game. Some employees cherish their work because they see how the company serves its customers in a deep and profound way – or they truly enjoy the people they work with. Others value their jobs because their steady paychecks enable them to send the first generation of their family to college. While there are common expectations of the workplace that apply to most employees, every individual has their own unique set of needs…and even those needs can change for the individual over time. So, a wise employee engagement practice remembers that every individual has a different set of values and imperatives in life, and as life changes, so too do those needs. Valuing and honoring these individual differences is the only way to help each employee be the best they can be throughout their career journey with the company.
6.
© Intuit Inc. All rights reserved. 6 Employee engagement
doesn’t require perfection to get started. You can initiate a focus on employee engagement no matter what kind of business you’re in or where your company is along its journey. You don’t have to have a particularly enticing consumer product. You don’t have to have top-of-the-line furnishings or interior design in your workplace. You just have to be willing to look unblinkingly at your company’s current condition and see how you actually value employees – how well the current experience of your employees aligns with whatever employee value proposition your leaders have decided to stand by. And you have to be committed to taking not only the first step but also stay the course for as long as your company stands for those values. Abraham Maslow once said, "What is necessary to change a person is to change his awareness of himself." While he was originally talking about individual self-actualization, the same can be said for the adventure of initiating employee engagement in your company and the growth and change that comes with making such a commitment. As you will see in the Intuit story, employee engagement starts with an exercise in thorough self-discovery. It is this process that will launch you down the path toward best practices in employee engagement, and you will return to it repeatedly in the years to come. Again, you don’t have to be perfect. But you must be willing to look. And see. And then take action. So, knowing all of this, the question before us is: Is this an endeavor you really want to undertake? You don’t have to. Employee engagement isn’t for every company. But there are a few facts we will all face in the next few years: A workforce shortage is in your near future, if it’s not squarely in your lap already. People (especially top employees) are going to have more choices in the work they do and the companies they do it for. Consequently, we are going to see a desperate attempt to attract and keep top talent among companies across all industries and geographic regions. There are organizations that will not recognize the importance of regarding employees as key stakeholders in the success of the enterprise. And there are firms that will not choose to inspire their people to perform at their highest levels. And there are workplaces that will not decide to address the one-at-a-time needs of each employee to feel like a unique, contributing member of the organization. The best employees will find companies that will.
7.
© Intuit Inc. All rights reserved. 7 The Case for Employee Engagement Recently, workplace
trends watchers have seized upon the notion that employee engagement is the “new loyalty.” The idea is that the “old loyalty” died with the passing of the old cradle-to-grave employment contract, and that in the past, people were “loyal” to companies because, in return, they had employment for life. With the vast layoffs, downsizings and corporate reengineering of the 80’s and early 90’s, employees got the message: “You own your own career. The company will not watch out for you.” Today’s employees are looking out for Number One. This new, self- determining frame of reference (which is really just smart career consumerism) has created a transactional relationship between workers and their companies. In this new reciprocal version of loyalty, people will only invest their time and energy with a company that is committed to satisfying their expectations. Companies foster this new loyalty when they provide new and challenging growth opportunities, promote the flexibility for employees to work hard and have a life, help employees build community with coworkers and make employees feel proud about what the company does for customers and the community. In summary, people will be loyal to a company that is loyal to them. Engagement can flourish in a company where loyalty flows in both directions, where both employers and employees are free and equipped to make independent employment decisions, and where both employers and employees willingly agree to engage each other in a shared mission of thriving economically and serving their ultimate vision, mission and purpose – according to a mutually agreed-upon set of values and expectations. Where the old loyalty put the burden of performance and “measuring up” squarely on the shoulders of the employees, the mutuality implied in employee engagement shifts some of the load to the employer. And for leaders not already signed on to the principles of employee engagement, it’s natural for them to wonder if the results are worth the extra effort and trouble – especially if the trade-off (balancing employee and employer needs) is perceived as a loss of managerial power. Engagement Research Over recent years, many academic, consulting and workplace research firms have studied employee engagement and tracked the results. And they generally agree that companies willing to
8.
© Intuit Inc. All rights reserved. 8 undertake the
sustained system-wide overhaul of their employer/employee relationships have shown measurable return on their investment and positive changes in their culture and external competitiveness. Academic researchers, consulting firms and employers have not yet reached consensus on an accepted definition or construct that measures employee engagement. Many concepts are offered as elements of engagement: Satisfaction, job involvement, intrinsic motivation, attachment, loyalty, affective commitment, intention to stay, organizational citizenship behavior and discretionary effort. A few consulting firms have created models and assessments based on the established research and have used them to measure engagement across thousands of employees. In its 2004 Employee Engagement Survey report, the Corporate Leadership Council, for example, describes engagement as “the extent to which employees commit to something or someone in their organization and how hard they work and how long they stay as a result of that commitment.” Towers Perrin uses the expression “discretionary effort,” describing it as the “extra time, brain power, and energy…employees’ willingness and ability to contribute to company success.” In its 2003 Talent Report, Towers Perrin expresses confidence in the power of engagement: “…Engagement remains the ultimate prize for employers…at a time when virtually every organization is struggling with cutbacks and financial pressure -- trying to improve performance with fewer people and dollars – having a critical mass of employees who freely give that effort is of tremendous value.” The report goes on to capture the absolutely essential multi- dimensional aspect of employee engagement: “Think of it as human power driving the financial and operational engine. The greater the power, the better the engine performs on multiple levels.” Hewitt Associates does it in three words: Say, stay, strive. In other words: Engaged employees are more likely to say good things about their employers to friends, families, and potential customers; they are more likely to stay with their current companies; and they are more likely to throw in all the necessary additional effort to help their companies achieve their shared goals. How do these characteristics show up in the ways engaged employees talk about their workplace experience? Generally speaking, the research supports the following attitudes almost universally shared by employees who work for companies “I absolutely love change. I love to be different. I love to be Number 1. And my teams know it. They have become so creative!” (Director of Service Delivery)
9.
© Intuit Inc. All rights reserved. 9 committed to
the principles of employee engagement, consequently considering themselves active participants in achieving their company’s prosperity and their own: § I am personally motivated to help my company succeed. § I can see the connection between my work and the company’s overall success. § The company uses clear and regular communications to keep me current on everything I need to know to be successful in my job. § My company is committed to equity and fairness. § My company’s values align with my personal values. § I believe in the future of my company. § There is clarity throughout the organization about roles and responsibilities. § I willingly do work above and beyond the call of duty. § I respect, trust and admire the people I work with. § There is both formal and informal recognition of work well done. § I know that my company can quickly adapt to shifts in the economy or our market. § My company cares about customer service and I have what I need to serve my customers to their satisfaction. § I trust and understand the words and actions of senior management and my direct supervisors. § If I’m offered a similar job at a different company, I would choose to stay where I am. On the face of it, how can anyone say no to the prospects and promises of employees who feel this way about their jobs? But as this report shows, implementing an employee engagement culture requires total commitment from the very top of the organization, all the way down to the individual contributors themselves. As multi- faceted as the benefits may be, the efforts must also be taken in a multi-dimensional way requiring determination, significant expense, unblinking self-awareness, courage and patience. So it helps to be very clear as to the many ways employee engagement provides a compelling return on investment. Benefits of Employee Engagement Performance. Almost every research organization studying the performance impacts of employee engagement has been able to prove that the business units with engaged employees generally have higher levels of productivity, profit and customer satisfaction than the ones who don’t – even where those business units belong to the same company. The Corporate Leadership Council, for instance, found that engaged employees perform 20% better than their non-engaged counterparts. Likewise, ISR found that companies that scored high in employee engagement – even during the tough economic period between
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© Intuit Inc. All rights reserved. 10 1999 and
2001 – saw a 3.74% increase in operating margins and a 2.06% increase in net profit margins. However, companies in the low engagement groups underperformed, realizing negative results in both operating and net profit margins. In a later study, ISR found in 2004 that high-scoring companies surpassed their industry average performance in net income growth by 6%. Companies with low engagement scores underperformed in their industry by 9%. Employee engagement benefits also show up in the stock market. A study by Hewitt Associates of its own Best Employers list (companies with 60% to 100% engaged employees) showed an average of total shareholder return of 20.2%. Conversely, companies with fewer than 40% engaged employees saw a negative return (-9.6%). Companies that fell in between these two groups in terms of percentage of engaged employees experienced only a total shareholder return of 5.6%. Talent Attraction and Retention. There was a time in the early 2000’s when the war for talent subsided somewhat as the economy faltered. That time is over and the war for talent resumes. The consulting firm Accenture reports that 41% of its surveyed firms anticipate that their war for talent will be “significant to severe” in upcoming years. Likewise, back in 2003, the Society for Human Resource Job Recovery survey found that 64% of employees were planning to look for new jobs, citing better compensation, dissatisfaction with current career development, poor management, boredom and conflict with their organization’s values and mission as reasons for their decision to seek alternative jobs. If you are the only company in your industry known to have a high engagement culture, you are most likely to attract and keep the highest quality talent – thereby creating a virtuous cycle of industry stars attracting one another and combining their passion and talents to promote their company’s continued success. Conversely, if your company is the only employer among your competitors that isn’t implementing an employee engagement culture, you may end up with lower-quality talent – those people who are still available for employment because the higher-quality engagers have passed them by. Companies committed to employee engagement are also most likely to keep the valuable talent they have brought onboard. According to the Corporate Leadership Council, engaged employees are not only higher performers, they are also 87% less likely to leave their companies. (The Corporate Leadership Council estimates that replacing front-line employees costs about 40% of
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© Intuit Inc. All rights reserved. 11 their salary,
and other studies show employee replacement costs amounting to as much as 200% of their salaries). Leadership Development. Great leadership and high employee engagement go hand in hand. Across the board, companies with high engagement scores find that the best get better. Because there is such a high emphasis on self-awareness and personal accountability for all levels of leadership at these companies, a manager’s ability to engage employees keeps getting better. The net effect for employees is both a positive job experience of and better relationships with their bosses. The 2006 Gallup Employee Engagement Index found that “happy and engaged employees are much more likely to have a positive relationship with their boss, are better equipped to handle new challenges and changes, feel they are more valued by their employers, handle stress more effectively, and are much more satisfied with their lives….77% of engaged employees say their supervisor focuses on strengths and positive characteristics….” Physical Health and Personal Well-being. In the days of the old loyalty, an employee’s physical condition and frame of mind may have been considered extraneous to company concerns. However, rising health care costs and the need to reduce expensive, regrettable attrition have made employee well-being an essential consideration for organizations that want to operate at peak performance. The 2006 Gallup Employee Engagement Index reported that 45% of engaged workers reported a “great deal of overall happiness from their work life,” and 53% said that they experienced “general life fulfillment.” Conversely, this survey showed that 54% of disengaged workers reported that job-related stress caused them to behave poorly with family and friends. A year earlier, the Gallup index reported that 62% of engaged employees felt that their worklife positively affected their physical health. And 54% of actively disengaged (the other extreme of the engagement spectrum, where employees are so disaffected with their jobs that they may sabotage their company’s efforts or contaminate the culture for engaged employees) said their jobs had a negative affect on their physical health. That same year 78% of engaged workers reported that their work lives benefited them psychologically, while 51% of actively disengaged employees felt their work lives were having a negative impact on their mental well- being.
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© Intuit Inc. All rights reserved. 12 The High Cost of Disengagement Just as
employee engagement has an active set of benefits for employers who want to leverage their employees’ talents, intelligence, energy and knowledge to create a mutually beneficial future, employee disengagement can actively destroy a company’s prospects for prosperity. Disengaged employees may speak disparagingly about their company to their friends, family and potential customers and employees. They will be unlikely to go the extra mile in the service of customer satisfaction. They’ll indulge in expensive, unnecessary absenteeism. And, perhaps worst of all, they’ll spoil things for the moderately or extremely engaged employees, who could, as a result, lose their own grip on their loyalty to the company. Not only would employers not want to have actively disengaged employees on their rolls, companies also cannot afford to have them in their employ. According to Gallup statistics, about 22.5 million workers in the United States are actively disengaged, amounting to a loss of $350 billion in lost productivity. With the presence of actively disengaged employees, many of those wonderful advantages that engaged employees bring to the workplace go to waste. In addition to the lost productivity mentioned above, disengaged employees threaten a company’s reputation in its community and industry; they present a risk of sabotage of either the company’s products or the internal culture, causing valued employees to leave in search of a healthier, more productive workplace environment. The presence and effects of actively disengaged employees threaten to destroy every company’s most solid competitive advantage – the dedication and commitment of its most valuable employees. Conclusion If employee engagement is indeed a “new loyalty”, this two-way transference of energy and commitment to realizing a prosperous future is a self-evident argument to make. Every year new surveys and new statistics prove out the fundamental principle that high- quality employees deeply desire to benefit their companies and go the extra mile to support their companies’ objectives and to provide superior customer service. The case for employee engagement is an obvious one to make: It’s not only the right thing to do, it’s also simply good business.
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© Intuit Inc. All rights reserved. 13 The Engagement Journey at Intuit At Intuit,
the fundamental principles of our employee engagement philosophy can be traced back more than 20 years to our earliest values. So we can’t exactly call it new because our employees have always been very important to Intuit. Employee engagement captures an all-pervading modus operandi of mutual respect, authenticity, innovation, community, leadership, accountability, growth and trust cast in a sustainable culture of service and regard for all stakeholders. We strive for “Best We Can Be” results for three stakeholders (customers, shareholders and our people) in everything we do at Intuit. We know that we will achieve great business results if we have talented and engaged employees delivering for our customers. So there is a great deal of accountability at all levels of leadership for creating the kind of working environment that inspires Intuit’s employees to do their best work every day. We’re not perfect all the time – but perfection isn’t our objective so much as is continuous improvement over time. And not all of our three stakeholder groups prevail with every choice or decision we make. But, again, over time, our stakeholders (especially our employees) know that everyone’s values, needs and interests are sincerely honored and respected as part of the company’s operating culture. And so, in this sustainable solution, employee engagement grows as we live out the philosophy and people principles that were evident even from Intuit’s very beginnings. This is Intuit’s employee engagement story and our continuous journey toward creating a high-performance workplace where our people feel liberated, confident and inspired to do their best work, regularly going above and beyond the call of duty in the service of Intuit’s customers. During the years of Intuit’s first decade, the people-oriented values of its founder Scott Cook were an essential part of the company’s daily operating culture. While it wasn’t formalized during those years, the values for innovation, diversity and focus on the customer were equally matched by
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© Intuit Inc. All rights reserved. 14 the pervading
value of respecting and valuing individual human dignity and the contributions Intuit’s people brought to the enterprise. By Intuit’s 10th year in 1993, Cook wisely recognized the importance of codifying Intuit’s values and formally establishing a permanent philosophical map. Instead of unilaterally undertaking this exercise himself, he put his people value into action by shutting down for a one-day offsite, where the entire community of employees could create and agree upon that set of operating values. Intuit continued to thrive over the next seven years after the writing of those operating values. But as the company grew and matured some of its “familial” cultural norms, like consensus driven decision making, were holding Intuit back. In 2000, when Steve Bennett was brought on board, he seriously considered and then embraced all the employee-written operating values (asking permission to change only one word, transforming the original Think Fast, Move Fast to Think Smart, Move Fast). Bennett shared the company’s belief that its people were its primary source of competitive advantage, especially in the software industry. Knowing this, he got down to business looking for a way to translate these operating values into a set of rigorous, measurable and accountable expectations of the company and its leaders. Intuit already had mechanisms for measuring satisfaction from the customers’ standpoint, so now he wanted to develop the same comprehensive understanding of how the employees were experiencing Intuit against its stated values. Along with the newly hired senior vice president of HR, Sherry Whiteley, Intuit’s leaders began asking themselves two driving questions: “Our operating values state that employees are important, but what are we really committing to the employees?” and “What can we point to that says ‘this is what working at Intuit should feel like according to employees’?” Competitive Advantage = The People As a software company, most of Intuit’s competitive advantage is not derived from production costs (low-cost manufacturing, defect-free product is a market requirement, not a competitive advantage), but from a customer focus through employees: · Innovation: Employees use a customer- driven approach to understand and innovate to address customers’ unmet needs, · Product Experience: The intellectual capital of Intuit’s designers and coders drives product usefulness, and · Customer Service: The ability and drive of Intuit’s 2,500 customer service representatives creates a superior service experience for our customers. Talented employees who are engaged in solving for Intuit’s customers create the only source of truly sustainable competitive advantage.
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© Intuit Inc. All rights reserved. 15 Our senior
leaders traveled to all sites in the company asking employee groups: “What would it take for us to ensure that this is a great place to work and a high-performing organization? What would that look like to you?” Because of the high-touch, pro-people culture already established inside Intuit, people could trust that the leaders were sincere in seeking out the answers. And so they started talking. Out of those conversations emerged Intuit’s Employee Value Proposition (EVP), which captured the expectations employees had of the company, and its leaders, about what they needed in order to be their absolute best in a high- performing organization. The EVP was more than just a mandate. It was a bargain struck between Intuit’s employees and the company’s future. In return for investing a focused effort in making Intuit an even better place to work, employees would be expected to turn in an even higher level of performance. And, Intuit’s executive team would be expected to support practices that would encourage and reward higher employee performance (e.g., installing a rigorous compensation plan, and a formal pay-for- performance program). Consequently, this cycle of higher expectations raised the levels of accountability throughout the entire organization. Leaders expected more from the entire employee population. And, now that employees had been invited to be overt about their own expectations, they, in turn, naturally expected to see actions taken and measurable results as well. And so this turn of the evolutionary crank caused another transformation: The old ‘employee satisfaction’ survey would be jettisoned in favor of a carefully articulated and engineered survey designed to specifically measure employee engagement levels against the expectations set by the employee value proposition itself. In 2001, Intuit retained Purchase, NY, research consulting firm, Sirota Survey Intelligence, to help us redesign our employee survey to measure engagement. Sirota brought more than just survey expertise – they have been a strategic thinking partner in helping Intuit drive important changes through our survey process. Our survey which has seen annual refinements since 2001 has become
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© Intuit Inc. All rights reserved. 16 a popularly
anticipated event – we get close to 95% participation every year - and an essential tool for driving improvements throughout the year. The survey process itself has been a significant catalyst for driving an understanding of engagement and a set of engagement practices into our culture over the past few years. It has given our employees a means to honestly express their needs with the confidence that action will be taken. And it has facilitated the development of natural leader behaviors that help them focus on and respond to employee needs. Today While a lot of attention is still paid to the annual survey results, it is the day-to-day experiences employees have that make engagement come alive in the context of our culture today. Much of the responsibility for manifesting our values as behaviors and choices lands squarely on the heads of all the people who lead, manage and supervise Intuit employees. While we don’t expect absolute perfection at all supervisory levels throughout the year, we look for continuing progress. And, frankly, some managers – actually, some stars in other aspects of their work – have lost their jobs because year to year they showed no signs of adopting the engagement mindset by integrating the values behind our EVP into their own leadership styles. But the principles of employee engagement must prevail over time. Otherwise it loses its resonance and meaning to employees - it becomes just another program, another flavor of the month. At this writing, our employee engagement culture has been in place for over five years, and with every passing day it evolves, transforms, improves to more accurately reflect and serve what is most important to all our employees. In the past two years, we have expanded our engagement focus to include all points along the ‘employment lifecycle.’ This longitudinal look at the ‘total people experience’ allows us to understand what is most important from the time people first become aware of Intuit as an employer, through their experiences as a candidate and a new hire, to the various phases of their tenure as an Intuit employee, to the experiences they have in their last days and after they leave. By understanding the end-to-end employee experience, we have the insights, skills, tools and resources we need to continuously improve the way we deliver an engaging experience to Intuit’s people throughout their journey with the organization. We want
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© Intuit Inc. All rights reserved. 17 every employee
to feel inspired to be their very best while delivering for customers and fueling company growth, and all the while, be having such a great experience with Intuit that they can’t imagine having a better experience anywhere else. To this end (as you will see later in this report), our programs, processes and practices cover as many aspects of our employees’ lives as we can anticipate, and then even more as employees bring their needs, desires and ambitions to our attention. Yes, we continue to measure the way these efforts are experienced in an annual employee survey. But it is the day-to-day interaction in the hallways; it’s the casual conversations in employees’ cubicles; it’s the celebrations of new marriages and new babies; it’s our presence in our communities through company-sponsored volunteerism and giving; it’s the transparency of our plans, approaches, even our executives’ own personal plans for improvement; it’s the way we help our employees solve for their customers’ needs while we help their supervisors solve for their employees’ needs; it’s the way we learn from our mistakes and use those lessons to build new knowledge, technique and processes; it’s the way we help our people put their own families first; it’s the way we build our own road to the future by helping our employees build a visible future for themselves – it’s all those things that make our employee engagement come alive. A Steve Bennett mantra that is still with us is “talented and engaged employees delivering for customers.” His mandate to the entire company: Get great at what you do. Do the best job you can. Tell us how we can do it better. Listen to and solve for your customers. And everything else will follow. And the ongoing story is that we continue to do the right things to institutionalize that mandate and make it accessible to everyone.
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© Intuit Inc. All rights reserved. 18 The Foundation for Intuit’s Employee Engagement Culture and Practices Establishing employee
engagement as a natural part of our company culture required that Intuit commit itself to a mindset and management practices for continually gathering feedback and taking visible actions to meet employee needs. In this section, we describe the fundamental frameworks and processes that have helped us define employee engagement and measure engagement levels at Intuit. The ideal engagement measurement system should show: § How the company is performing against its Employee Value Proposition, § How engaged employees actually are at various key points in their journey with the company, § What sorts of environmental factors are driving engagement levels, and § What impact engagement levels might have on important employee outcomes. Our process clearly assesses each employee’s experience of the company and his or her work, and shows how this experience is affecting her or his level of motivation. When examined across all our employees, we can determine the relationship between engagement and other important indicators such as turnover, performance and customer satisfaction. Definition of “Employee Engagement” To establish a framework for measuring engagement at Intuit, we had to start by developing our own clear definition of employee engagement. When we first started using this phrase in the early 2000’s it may have well been completely interchangeable with employee “satisfaction,” “commitment,” or “motivation” in our conversations. So, over the first couple of years, we began to research the engagement concept to discover for ourselves what makes it different and what it means to Intuit. We talked to our leaders and employees to gather their knowledge and points of view; benchmarked with other research groups; spoke with consulting firms; and we read an extensive amount of academic literature – and if anything, we learned that we were not the only ones trying to understand the subject of employee engagement. As of this writing, we are not aware of any construct for defining and measuring employee engagement that is universally accepted by management theorists, practitioners or academicians.
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© Intuit Inc. All rights reserved. 19 The “OutsideIn” View According to
our review of available research, the concept of engagement has been described by most organizational psychology experts as having both psychological and behavioral aspects. Many take a multi-dimensional view and define engagement as a work-related mindset that is influenced by individual traits, cognitive and emotional states, and/or characterized by highly motivated behaviors. Some find that it is a more persistent motivational state - not affected by any particular event – but determined by characteristics of the workplace environment experienced over time. Others have suggested that it is the opposite of job burnout. Our closest collaborator in Intuit’s employee engagement research work has been our survey partner, Sirota Survey Intelligence. Founder David Sirota summarized what the company has learned through 40 years of work researching employee satisfaction and motivation in his book, The Enthusiastic Employee. Sirota, and his co-authors, described a state of motivation reached when employees feel their needs are being met: “…the result isn’t just satisfied employees but enthusiastic employees” where “…employee enthusiasm results in enormous competitive advantage.” Sirota’s Three Factor Theory of Human Motivation in the Workplace states that employees seek to satisfy three needs: Equity, Achievement and Camaraderie. Intuit’s engagement model (presented later in this section) is also based on needs satisfaction and is closely aligned with this theory. We also worked with the Corporate Leadership Council as a case study for their 2004 Series on Employee Engagement. We learned from CLC’s engagement model which describes two types of commitment: Rational and Emotional. Rational commitment is contingent on employees judging whether their basic needs can be effectively met with their current employer. This primarily drives an employee’s intent to stay. Emotional commitment is based on the sense of pride, inspiration and enjoyment employees get from their job and organization. Emotional commitment primarily drives an employee’s discretionary effort (the motivation to perform “above and beyond the call of duty”). Additional research with a number of other organizations and consulting firms including reviews of engagement studies revealed various other definitions, models and constructs. We learned that one of the strongest psychological aspects of employee engagement is the notion of affective and/or attitudinal
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© Intuit Inc. All rights reserved. 20 investment in
one’s work. These feelings of commitment, value and involvement have several key components: § The sense of value and worth the individual feels as part of the organization, § The feelings of pride for, and satisfaction with the organization, § The sense of personal investment in, dedication to, and attachment to the job or organization, § The feelings of connection and community within the organization, and § The inspiration and motivation to grow and contribute to make things better. Although we did not find a common construct for engagement, the external research did help shape our thinking. To develop our own definition and model, we rationalized these external viewpoints with our own culture by interviewing 100’s of employees, managers and executive leaders. Our employee survey team hosted focus groups to understand from employees what most energizes and motivates them. We heard employees tell us that an “engaged employee” at Intuit is passionate about delivering high performance because this is the place where they feel they get to do their best work. They also said they care a great deal about our customers, and the success of the company, as well as their own fulfillment and achievement. In addition, a cross- functional team of Intuit’s senior managers (part of Intuit’s Action Learning Program) talked to each one of our executive staff to elicit their definition of employee engagement and best practices for building engagement in their organizations. This team also interviewed 100’s of employees to determine, from the employee perspective, what management behaviors had the biggest impact on their engagement. (See the appendix for a complete list of these behaviors.) Based on this research we developed a definition of employee engagement that works for Intuit. We believe that employee engagement is the emotional and intellectual state -- or mindset -- our employees have about Intuit and their work experience. But it is not just a feeling or an attitude; it is a motivated state of being, compelling our employees into action. We define employee engagement as “how an Intuit employee thinks and feels about, and acts towards his or her job, the work experience and Intuit.” The fact that we could not find a widely-accepted construct that measures engagement has not stopped Intuit from developing our own. Through the very process of developing a definition and measurement practice that works within the context of our culture, we have established a meaning of engagement that works for us. This is probably more powerful than had we adopted a “standard.”
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© Intuit Inc. All rights reserved. 21 Building a Model Because our
model is founded in needs satisfaction, our research efforts also included identifying the motivational factors that might influence an employee’s level of engagement. We started with a review of the various theories on basic human motivation itself -- ‘Need (Content) Theories of Motivation’ -- such as Maslow’s Hierarchy, Aldelfer’s Existence, Relatedness, Growth (ERG) Theory, McClelland’s Motivational Needs Theory, Herzberg’s Hygiene and Motivation Theory and a number of others. A couple of basic concepts about human motivation were common across the studies: § Most people have basic innate needs which start with material and physiological well-being, then satisfying interpersonal relationships and personal achievement, and finally self-fulfillment, § Most people are free to act upon their higher order needs as long as lower, more basic needs are substantially met. More recent works discuss a transcendent state which seeks to find meaning and identify with something greater than achievement and power: In the highest state of human motivation, people have an almost spiritual yearning to connect to something beyond their own ego to make a real difference in the world. We translated these concepts to the workplace setting and constructed a four-level model we believe best characterizes engagement at Intuit: The Intuit Employee Engagement Model. The Intuit Employee Engagement Model The Intuit model captures the attitudinal and motivational state that results from common experiences of our work environment that fulfill an employee’s needs in four areas. Loosely based on preceding models of motivation, engagement becomes stronger as more of an employee’s needs are met in these four needs areas - each building on the others in terms of power to motivate employees to the highest levels of engagement.
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© Intuit Inc. All rights reserved. 22 The Intuit Employee Engagement Model à Identity
& Meaning “I see how our work makes my world a better place” à Relationship & Belonging “I am challenged and capable of doing my work well, and feel appreciated for my efforts” “I believe the company cares for my well-being by providing for the basic physical, economic and psychological workplace needs of employees” à Security & Justice ©2008 Intuit Inc. Inspiration Needs Worth Needs Connection Needs Basic Needs “I am a trusted, integral member of a community of people I like and respect” à Accomplishment & Esteem
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© Intuit Inc. All rights reserved. 23 The following
are brief descriptions of the four needs areas of Intuit’s Employee Engagement Model: Meeting “Basic Needs” ensures a sense of security and justice: It is achieved with employees feeling that the company cares about their well-being – that basic (and primarily self-serving) physical, economic and psychological needs are met by Intuit. These needs include: Feeling safe, being paid equitably, feeling secured with benefits, feeling included, and being treated with dignity and respect. Employees determine a sense of equity and justice by comparing their own situation and experiences at Intuit with internal and external market place referents. Perceived inequity occurs when employees feel that the rewards they receive for their contributions compare unfavorably to the rewards other employees appear to be receiving for their work. This extends to feelings of treatment and respect. Employees form perceptions of what constitutes a fair trade between their energy and efforts and work outcomes, and whether Intuit has a practice of bringing justice to inequities. Because these are vital human needs, meeting or exceeding them will not necessarily inspire higher performance, but can significantly increase one’s commitment to stay at the company. Meeting “Worth Needs” provides for a sense of accomplishment and esteem. People want to feel empowered and capable of making a difference, and that their skills and contributions are valued by the organization. Challenging and satisfying work is key to a sense of worth and personal fulfillment. A clear understanding of how one’s job supports the organization’s goals affects a person’s sense of purpose, and feelings of value as derived from his or her work experience. Being truly appreciated for one’s contributions and achievements helps employees feel valued for their accomplishments. Feeling supported in learning new skills and developing one’s career are also factors that greatly increase a commitment to stay and a willingness to invest discretionary effort. Meeting “Connection Needs” promotes relationship and belonging through a person’s association with and attachment to his or her leadership, direct manager and coworkers. This sense of affiliation comes when employees feel real camaraderie with members of their team, and cared for and supported by their bosses as well as the company’s senior leaders. Meeting these social needs shapes the employee’s sense of allegiance to their immediate manager, and affiliation with a broader community of people at work. When employees genuinely like their coworkers and feel like an integral part of the team they experience a deeper connection and “I come here every day and give 110% because I enjoy my work. I appreciate and value the people I work with. We really feel that we’re family. Job offers from other companies come along all the time. But they’re not that important to me. What’s important to me is who I work with and the experiences that we have every day.” (Applications Administrator)
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© Intuit Inc. All rights reserved. 24 commitment to
the organization, which can significantly increase their willingness to stay and to go ‘above and beyond’ for the team. Meeting “Inspiration Needs” establishes identity and meaning, which is experienced as the sense of affirmation a person gets from being part of a winning company with a compelling vision and purpose. When employees can identify with and commit to the company’s mission, and align with the values of the company, they are willing to go to extraordinary lengths to help it succeed. A strong identity with the company is greatly shaped by how the company treats its customers, the environment and serves the community. Helping employees clearly see how the company makes the world a better place for its customers and stakeholders can turn employees into strong advocates for the company, significantly increase their commitment to stay, and instill a real passion for producing outstanding results. The next step in our model development was to identify the key organizational processes and practices that most shape the Intuit employee experience in each of the four engagement model needs areas. We call these practice areas Dimensions. In the chart below each of the 15 Dimensions with descriptions of the feelings and attitudes that best exemplify high employee engagement in that dimension are detailed: Inspiration Dimensions: Vision, Values and Meaning § Belief that the work of the company is meaningful - that it fulfills a higher order human/social need for its constituents § Feeing that the company’s values align with one’s own § A clear sense of purpose, direction and positive feelings about the future of the company § Confidence that the company demonstrates that it is socially, environmentally, and fiscally responsible § Feeling personally motivated to help the company succeed Leadership § Belief that leaders truly care for and act with compassion and interest in employee wellbeing § Credence that leaders are ethical and demonstrate integrity (walk the talk) in everything they do § Confidence that leaders are competent and will lead the business to success Customer Focus § Belief that the company understands the needs of its customers, is committed to the highest quality products and services, and has a culture that truly embraces its customers, winning them over in everything that it does § Feeling fully trusted, resourced and enabled to satisfy customers, both internal and external “At Intuit, we embrace not only the work that we do but humanity. And that’s inspiring to me.” (Call Center Rep.)
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© Intuit Inc. All rights reserved. 25 Connection Dimensions: Teamwork & Collaboration §
A sense of trust, respect, admiration and compassion for coworkers § A feeling of social connection and community § Commitment to the team and others across the organization, strong desire to cooperate to achieve higher goals Communication § A trust that ideas and feelings can be shared openly – that honest, straightforward communication & dialogue is encouraged and preferred Worth Dimensions: Basic Needs Dimensions: Treatment & Inclusion § Feeling valued and respected, a sense of dignity, and belief that there is organizational justice § Feeling validated for who one is, for the unique person and ideas one brings to the organization § Feeling fully acknowledged and included, able to share openly, even when views are unpopular, without retribution Quality Work-Life § Feeling supported for a life outside work, feeling trusted to manage time and work location to deliver results Physical Space/ Safety/ Security § Feeling physically safe, workspace is designed to provide comfort and efficiency, to inspire employees to perform, to provide effective interaction/execution of work; § Confidence that physical and intellectual assets are protected Compensation & Benefits § Sense of economic security - judgment that one’s pay is fair, and commensurate with one’s efforts and contributions § Comfort that the basic financial, health and wellness provisions for one’s family are met Job Satisfaction § A feeling that one’s job fully utilizes one’s talents, skills and energy, challenges one to be one’s best, and gives one a sense of value and worth § A sense of empowerment and control over the decisions and outcomes of the job - the ability to influence conditions of the work environment, the ability to take risks and be creative on one’s job § A sense of deep personal fulfillment and achievement from their work Performance Management § A clear understanding of goals and roles, and how one’s job fits within the organization -- line-of- sight from tasks to company success § Feeling encouraged and enabled to succeed: An understanding of one’s current performance and impact, and support with the coaching and feedback needed to do one’s best work Training & Career Development § Experiencing the opportunity to continuously improve and learn new skills, try new and/or progressively more challenging roles § A sense of career opportunity - seeing a future with the company Resources & Work Processes § Confidence that the company provides the information and knowledge to be current on everything needed to perform the job and be successful § Understanding of clear steps required to perform one’s core job functions § Having access to tools, materials, equipment, technologies, enabling infrastructure that enable successful planning & execution of one’s work Recognition § Feeling acknowledged and appreciated for one’s performance, a sense of recognition for achievement and success Decision-Making § Confidence that the organization has an effective process for reaching agreement, for making quality decisions in a timely manner, with appropriate stakeholder input and involvement
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© Intuit Inc. All rights reserved. 26 Engagement Outcomes Once we
had defined employee engagement for Intuit and developed a model to understand what might impact engagement levels we stopped to ask: Now, how do we know if an employee actually has this motivated state of being? How does one spot an “engaged” employee? And if they are indeed engaged, what sort of behaviors can we observe and results can we expect? As outlined in the prior section, research has certainly shown that highly engaged employees demonstrate some predictable behavioral outcomes, including: Higher customer satisfaction ratings, better performance, higher sales, lower regrettable attrition and superior productivity. It became imperative for us to derive a valid engagement measurement system so that we could proactively take action that would affect these important outcomes. Measuring Employee Engagement at Intuit At Intuit, we want people not only to understand Intuit and what we stand for, but based on their actual experiences with the company, to connect with, feel great about, and promote Intuit. To this end we strive to create great people experiences. Understanding what drives engagement at each step in the ‘employment lifecycle’ (whether as a candidate, employee, or alumnus) helps us identify the opportunities for continuously improving the overall people experience as well as what matters most at different points in a person’s journey with the company. To create an employee engagement measurement system, we enhanced our annual employee survey process from a rudimentary satisfaction survey to a deep and broad inquiry into true engagement at Intuit. And we began to administer an ‘engagement check’ not just with the annual survey, but also at other ‘listening posts’ along the employment lifecycle (e.g., new employee survey, exit survey, etc.) Our belief was that employees, if asked the right questions at key points along their journey with Intuit, would willingly and truthfully tell us how they “think and feel about, and act toward their job, the work experience and Intuit.” To determine how companies in a similar industry might be defining and measuring employee engagement, we conducted formal benchmarking with the 20-member companies in the Information Technology Survey Group (ITSG). We also reviewed available research for any engagement survey questions that had been
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© Intuit Inc. All rights reserved. 27 proven as
valid indicators of engagement or predictors of the employee outcomes we desired. Intuit’s survey research partner Sirota Survey Intelligence was a tremendous support in helping us to identify the right questions and find normative items. We selected five questions that we included on our 2004 survey, and have been using since. The first two are measures of affective commitment, and the last three are measures of behavioral intent: § I am proud to work for Intuit. § Overall, I am satisfied with Intuit. § I would recommend Intuit as a great place to work. § I would not leave Intuit even if I were offered a comparable position with similar pay & benefits at another company. § At Intuit, I am motivated to go 'above and beyond' what is expected of me in my job. By taking the average percent favorable score of these five items, we have our “Employee Engagement Index.” These five questions are most predictive of the desired behaviors of an engaged employee: Higher customer satisfaction ratings, better performance and productivity, and lower regrettable attrition. The Annual Employee Survey Our annual employee survey is still the most comprehensive measure we have of engagement at Intuit. It is designed to measure how Intuit is performing to the expectations of Intuit’s Employee Value Proposition. In preparation for the design of the survey, we conduct annual employee focus groups to understand if there is anything new in the current employee experience that is impacting engagement that we need to account for. We make appropriate tweaks to our engagement model dimensions, and to the EVP commitment statements, and then we redesign the survey to measure the new EVP. The resulting instrument is approximately 65 questions: Three to five ‘independent variable’ questions for each of the 15 dimensions in our Employee Engagement Model, and the five-item index of engagement as an outcome (dependent) variable. In order to make certain we have the proper groupings of items that will maximize the variance when loading against the engagement index, we use various tests (SEM and Confirmatory Factor Analysis) of our items and dimensions, ensuring that each item contributes additional insight and that the dimension constructs hold together well. Wherever possible, we use normative items (questions that “I’ve seen my small business customers grow from a shoebox to being a midmarket company where they have more than 20 employees and are successful. And now they have to leave us. And it’s okay! We’ve helped them. Small businesses are the backbone of America. To know that we’re helping the backbone of America, it’s great!” (Sales Supervisor)
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© Intuit Inc. All rights reserved. 28 can be
compared to others in our industry), and we try not to make so many changes to the items that we loose the ability to show year over year comparisons. In fact, applying this survey design process rigor, we have not had to change more than a few items each year. Our survey is administered for three weeks by Sirota Survey intelligence through a web interface. Every unit in the company (with five or more responses on the survey) receives survey results. This includes the employee engagement index score, scores for all survey items plus dimension scores. Our manager reports include comparisons to higher and lower levels of management. Our managers hold feedback sessions with their teams and use their survey results to establish shared vision on what’s working well and what needs improvement. Hosting these sessions is not optional in our culture, nor is taking visible action optional. (For more specific information on how we do this, see the following chapter, “Making Employee Engagement Meaningful and Real”). For executives, we provide score comparisons year over year and a detailed engagement breakdown for their organizations showing demographic analyses, dimension scores, and the top 8 – 12 “Key Driver” items (those survey questions that have the strongest correlation with the unit’s employee engagement index). We also publish the employee engagement index scores for every manager in their unit so it is explicitly clear to executives where there are engaged and disengaged teams in their organizations. This allows for clear decisions and actions to be taken to provide support and make improvements. As an example, Sales and Customer Service employees (making up 40% of Intuit’s workforce and handling most of the contact with our customers) had some of the lowest engagement scores in the company on the 2004 survey. Analysis of the dimensions clearly showed where there were roadblocks and de-motivators. So, with a sustained focus over the past two years on the dimensions that mattered most for high engagement of this group, we have seen their engagement shoot up 16%. It is now higher than the company average, which is already near best in class (top 10% in our industry). Empirical Results By comparing survey responses to actual employee behaviors, we have shown that the extent to which Intuit employees feel engaged has a significant impact on their retention and performance. Using multivariate regression and correlation analyses we found that our
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© Intuit Inc. All rights reserved. 29 most engaged
employees truly value, enjoy and believe in what they do. They exhibit the following predictable behaviors: § They expend extra effort with customers and coworkers. Our most engaged employees are indeed 130% more likely to be higher performing, § They are two and a half times more likely to feel encouraged to be innovative, § They are six times more likely to feel valued (their inputs used to improve products/services), § They identify with and stay with the company. Our most engaged employees are five times more likely to say they will stay at Intuit, even if offered a comparable position elsewhere! And over time, we have seen predictable outcomes for our customers: Customer satisfaction ratings have a strong correlation with engagement among our Call Center (Customer Service) employees. In a 2005 study, we found that frontline units with the highest engagement index scores had significantly higher call resolution scores as rated by their customers. With our most recent 2006 survey, our overall Intuit engagement index score again moved up (seven points to 83%), placing us in the top 10% in our industry for employee engagement. We believe that highly engaged employees deliver truly better customer experiences, and over time this translates to better business results. Because Intuit has posted better than expected earnings and enjoyed a 40% increase in stock price (more than double the S & P 500) during the past two years, we wondered, as many companies do, whether this “winning company” climate affected employee attitudes and engagement levels. We commissioned Sirota Survey Intelligence to examine the relationship between Intuit’s engagement scores and the stock price activity, stock option ownership, and employee stock participation by individual employees over the past four survey cycles. They found that only 1/10th of one percent of the variation in Intuit’s engagement scores could be attributed to movement in stock price, or any other financial metrics; and that leadership practices and organizational factors (see Dimensions above) accounted for almost all of the variance in engagement scores. This gives us great confidence in our engagement model and supporting measurement process; and that these tools have helped us foster an engagement culture that we actually do have the ability to influence.
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© Intuit Inc. All rights reserved. 30 Making Employee
Engagement Meaningful and Real Building a company culture that places an authentic and natural focus on engaging employees is an evolutionary process in four phases: Creating Awareness, Building Understanding, Gaining Commitment and Taking Action. A company can accelerate this evolution by purposefully encouraging the right management mindset and intentionally re-architecting organizational practices so that nearly anything that affects the employee experience is explicitly directed at fostering employee engagement. In this section, you will learn how Intuit has leveraged its leadership and organizational practices to establish a culture for engagement. Creating Awareness of Employee Engagement The Awareness Phase starts with an unflinching self-examination by the company’s management to determine just how important engaging its employees is to the company. A sustained focus on engagement is usually possible if two attitudes are present among the company’s top leaders: 1. Right Thing To Do: They sincerely believe it is the right thing to do for employees. They know that in the company’s espoused value system, treating employees right by addressing their engagement needs is something they should support in good times and bad. 2. Good For Business: They believe it will be good for business. Engaging employees will produce tangible benefits for all other stakeholders: Customers, shareholders, and the community. So a sustained focus on employee needs will help the company be successful and grow. At Intuit, the journey started in 2001 with this same “gut-check” and business rationalization. Our strong beliefs about the role that employees play in the success of the company were already made clear by our Operating Values. Our Employee Value Proposition established unquestionably the specific expectations of the company and management for creating an optimal engagement environment (see both in the “Engagement Journey at Intuit”). The external research on employee engagement was full of conclusive studies showing the links among high engagement and reduced turnover, increased performance and improved customer satisfaction. At the time we did not have any evidence that this was true for Intuit, other than it made intuitive sense.
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© Intuit Inc. All rights reserved. 31 The value
of employees is clear to Intuit’s executives. One of the mantras you will hear often at Intuit clearly places the importance of employees right up there with Intuit’s customers and shareholders by making this simple statement: “What we need is talented and engaged employees delivering for customers…business results will follow.” So through a process of self-discovery, we knew that establishing an employee engagement culture was the right thing to do for Intuit, as well as a key component to our success as a company. Understanding How Engaged Employees Really Are Sensing how the company is doing to engage employees must start with listening to employees. They know what their needs are and if those needs are being met sufficiently. In 2002, Intuit identified and began actively promoting the formal and informal practices that focused on listening to and understanding what’s important to our employees. We called these “Voice of Employee” (VOE) processes. Since then, we have expended our focus. We have designed and implemented several confidential opinion surveys and other ‘listening posts’ to gather inputs and measure salient points at every stage of the Intuit employee experience. Some examples are: § The Annual Employee Survey to gain a census view of the entire company, § Pulse Surveys to check in on selected units, § Exit Surveys to listen to those who are leaving the company, § Training feedback to understand how well training is working, and § The New Employee Survey to see how assimilation experiences are engaging employees. More recently, we introduced feedback opportunities through Employee Suggestion Programs. All these “self-reporting” VOE processes have helped us to understand what is engaging and disengaging to employees along all points in the “employee lifecycle.” Because we do not report survey results for fewer than five responses, the opinion surveys work well for determining how engagement is going at the team level, but not for individuals. Each employee is motivated by different things and has different needs at any point in their tenure at Intuit. It is a manager’s job to
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© Intuit Inc. All rights reserved. 32 be aware
of this and to actively stay in tune real-time with each his or her employees. We have come to realize that the best source of VOE is face-o-face: § Informal hallway chats where leaders stop and talk to employees at every level, § One-on-one meetings between the employee and manager, § Focus groups where employees are free and safe to talk about their concerns and § Skip-level meetings between employees and their boss’ boss. In addition, managers are encouraged to look for signs of engagement and disengagement as they work together with their employees. These personal observations and interactions allow managers to check in on how things are going and find out directly what is most engaging or disengaging to each employee. We can also get a sense for engagement levels by paying attention to information collected about our employees’ behaviors: Retention rates, absentee rates, participation in company programs (training classes, etc.), number and type of employee relations escalations, percentage of employee referrals, customer satisfaction ratings, internal job transfers and promotion rates, and recognition program utilization. These aggregate views are the least useful sources for gauging engagement, because they are often lagging indicators. Even though employee outcome data can be useful for trying to identify the causes of engagement and disengagement, any actions taken based on this type of VOE is reactive at best. Intuit’s managers use a wide range of methods for gathering and understanding VOE. Some still depend on Intuit’s formal “listening posts” (e.g., survey data). But many have internalized Intuit’s expectations of staying current with what’s going on with their employees, and they do it naturally as part of their ongoing routine. They believe listening to and responding to employees is what good Intuit leaders do. And they know that more frequent informal check- ins will give them the insight early enough to actually make a difference. Committing to Focus on Employee Engagement Engagement happens one employee at a time. And the greatest advantage a company has for building an engagement culture is their leaders. Intuit managers are expected to show their commitment by taking time to understand and respond to engagement not only at the team level but also for each member of “Everyone who comes to work has their own life when they go home. They have their own reasons why they come to work. Understanding their beliefs helps you understand how to motivate someone and how to encourage them to be the best that they can be.” “Every conversation, every interaction I have with each and every one of my employees has to benefit them to a high level so they feel good about the time they spend with each other.”
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© Intuit Inc. All rights reserved. 33 the team.
Being committed to helping each employee feel highly engaged requires managers to maintain a personal relationship with each of their employees. Another important tool for building an engagement culture is its work environment. This does not mean creating a bunch of new “engagement processes, programs and checklists” that may seem attractive but have no real significance in the context of the culture we are trying to achieve. Instead, we look at the existing organizational processes and management practices and ask how they can be reframed to focus on engaging employees. Intuit has spent the last few years re-architecting these processes and programs to focus on engagement at all four levels of our engagement model: Basic Needs, Worth Needs, Connection Needs and Inspiration Needs. This is not an exhaustive list, but the programs and processes at Intuit that most influence our employees’ engagement at each level in the Intuit Employee Engagement Model are detailed below. Addressing Basic Needs. To help employees feel a sense of safety and respect, Intuit provides a safe and secure workplace. This includes workspaces that are efficiently laid out, aesthetically pleasing and comfortable, furniture that is ergonomically designed, convenient services to make it easier to get work done, procedures to handle medical and other emergencies, and a security staff to protect employees and company assets. We also have various amenities that promote health and wellness, such as onsite exercise classes and recreational activities. Some of our office locations provide additional amenities onsite to help employees access services conveniently, such as a cafeteria, gym and workout facilities, a mobile dentist, and other services. Intuit’s competitive base pay and benefits are designed to help employees feel that they are fairly compensated for their work as well as provided with the financial security to take good care of their families. Every employee owns stock so they can share in the success of the company. We also trust and support employees to manage their time between their work and home life by providing flexibility in where and how they work. Approximately 60% of Intuit employees can telecommute, and 91% of employees reported on our last survey that they feel their manager supports their efforts to balance their work and personal life. In fact, the customer reps in one of our online product groups work exclusively from home. And they have some of the highest engagement scores and customer satisfaction ratings in the company!
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© Intuit Inc. All rights reserved. 34 Intuit’s value
of ‘Dignity and Respect’ epitomizes how we treat each other. By promoting a culture where individuals get to feel heard and validated for who they are, we help each employee to share her or his unique ideas and contributions. Our culture promotes diversity and honors these values, helping employees feel included and freeing them to bring their whole selves to their work and to share their best ideas when problem solving. According to our last employee survey here’s what employees had to say about how they are treated at Intuit (these scores are in the top 10% in our industry): 92% felt they were treated with dignity and respect, 88% agreed that their manager fosters an environment where diversity is valued, and 87% said their manager responds to their ideas and suggestions. Taken together these values, norms and basic provisions help free our employees from economic, physical and psychological concerns and roadblocks that may inhibit them from applying their full passion, energy and creativity to their work. Addressing Worth Needs. We start by matching people with great work that they can enjoy. We do this by finding a good job fit between what the business needs and the employee’s desires, aspirations, skills and abilities. We then supply quality job resources – the information, tools, technology, work processes and other infrastructures - that enable employees to do their jobs well. Intuit’s performance management processes are strongly centralized requiring each manager to set clear goals, give ongoing feedback and coaching, and have mid-year and annual performance discussions to ensure that every employee is performing at her or his best. Our employee education and leadership development offerings enable skills building through classroom and online courses, tuition reimbursement, job rotation programs, and executive Action Learning Programs. Through our Learn-Teach-Learn process, we share our knowledge and help others grow by teaching each other what we are learning. All these processes help employees develop capability, feel challenged and grow. We also have fast track development programs for high potential employees. On our last survey 77% of employees reported to have meaningful development conversations with their managers. We support career development by identifying a growth and mobility path inside Intuit that helps each employee get on-the-job training for future positions, find stimulating new assignments, and take on challenging “stretch” roles. These programs and processes “You have to recognize the value that someone is bringing to the job. When they perform well, recognize the good job they do. When they under perform, coach them in a safe environment. It’s always about getting better.” (Group Manager, Customer Care)
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© Intuit Inc. All rights reserved. 35 help Intuit
employees develop their skills, and enable the company and employee to build a future together. Intuit’s rewards programs, which pay according to performance through bonuses, stock and other recognition (non-cash awards) help the employee feel appreciated and valued for their accomplishments. According to the survey, 80% of employees are satisfied with Intuit's total rewards package (salary, incentives, benefits, stock ownership, etc.) and 76% feel their accomplishments are recognized (top 10% in our industry). We empower employees to take ownership of their jobs and encourage them to enjoy their work. Our customer-driven innovation culture encourages employees to be creative when solving for current customers and our technology-driven innovation culture encourages employees to find new customers and new ways of doing things. These processes help our employees feel a sense of job satisfaction and value. According to our annual survey, 95% believe they are making a significant contribution to the success of their workgroup, and 88% say they like the kind of work they do. Addressing Connection Needs. Helping employees build relationships starts on Day One. Our assimilation process includes a buddy assignment for each employee so they have someone they can go to in addition to their boss to accelerate their onboarding experience. The General Managers of some of our groups take their new employees out to lunch the first week to help them quickly feel welcomed and like a part of the team. Many employees describe their Intuit coworkers as “like family.” In fact, an average of 89% of our employees reported on our most recent employee survey that “We care about each other as individuals.” Intuit’s strong Operating Value “Teams Work” sets the stage for employees working well together to reach for common goals within and across organizations. On the same survey, 92% of employees report that their work team cooperates with other work teams to achieve objectives, and 85% report that their work team works well together. These scores put Intuit in the top 3% of our industry when it comes to our employees’ opinions about collaboration. The company sponsors Employee Networks to help employees connect with others with similar interests. These affinity groups (such as the Intuit Women’s Network, the Indian Network, the Latino Network, and the Lesbian, Gay, Bisexual, Transgender Network) not only honor the diversity at Intuit, and help employees “I’ve learned a lot from each of you and I’m a better person and professional for having known each of you I thank you for that. I feel that I am not just leaving a company, but my family.” (Letter to coworkers from a departing employee) “Everyone works as a team. If we have an issue that we can’t resolve we can look to each other to find the answer.” (Technical Services Rep.)
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© Intuit Inc. All rights reserved. 36 feel a
deeper sense of inclusion, but also establish a sense of community though new connections that benefit the business. We also know how to have fun! Our celebrations are legendary! We celebrate almost anything – a successful product launch, a coworker who just had a baby, or even for a project that failed (so participants can learn from it). We like to take time to acknowledge the milestones that mark our hard work as well as important events in employee’s lives. In this way we share our values and learn to relate with each other on a more personal level. All these programs help Intuit employees build a social bond and a sense of community with their coworkers, satisfying the need for connection at work. Addressing Inspirational Needs. Our CEO Brad Smith shares Intuit’s mission and vision through state-of-the company addresses to all employees, quarterly online CEO chats, and personal “town hall” meetings during site visits. The Executive Leaders of each unit share the goals and strategy of Intuit and their organization at monthly or quarterly “All-hands” meetings. These meetings all help employees understand Intuit’s purpose and direction, and the impact the company is having in the world. Each individual manager continues to share, or “cascade,” company news and unit-level information so that employees can draw a “line of sight” between their jobs and the goals of their unit and the company. Our last employee survey revealed that 88% of employees report that they understand Intuit’s overall goals and direction, 90% say their direct manager shares business unit strategy with them, and 88% say they see a clear link between their work and Intuit's goals. Employee communications are designed to not only provide relevant information; but in doing so, help Intuit employees become more engaged in the company. Intranet articles are published daily covering a wide range of business topics, interviews with customers, new product launches, employees sharing success stories, and executives talking about the business. Where possible, these articles frame messages through the eyes of our employees themselves, so employees recognize their own voice. They almost always feature Intuit as a winning company by clearly showing how the company is delivering for the three stakeholders and making the world a better place. 95% of Intuit employees reported on our survey that ‘Intuit’s products and services solve important problems for our customers.’ Intuit’s Mission: Revolutionize People’s Lives by Solving Important Problems. “When you have alignment between your team’s goals and their customers, whether they are other teams or our paying customers, working toward a common theme you can really get great performance.” (Call Center Manager)
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© Intuit Inc. All rights reserved. 37 Our We
Care and Give Back program is a great example of how Intuit takes social responsibility and supports employee involvement in the community. It provides 32 hours per year paid time off for employees to donate their time, and donation matching where the company will match charitable donations made by the employee. Our communications practices help employees establish real meaning for their work and give them the opportunity to develop a strong sense of identity with the purpose and direction of the company. When employees perceive true alignment between their values and vision and that of the company, the resulting inspirational engagement is compelling. Taking Visible Actions The final phase in establishing a successful employee engagement culture is fostering an open environment where employees clearly see that their needs are being actively addressed. Once the company’s managers have internalized the importance of engagement, and have taken steps to listen to and understand the VOE (voice of their employees), the real test of commitment will be in how they show visible actions in response to employee needs. The single biggest roadblock to building an engagement culture is failing to “walk the talk.” If employees are asked for their opinions, feelings, thoughts, ideas and feedback, and must then stand by while management does nothing with the information they will lose trust in the process. Taking action doesn’t mean that every employee will get all that they need all the time, but each one should feel heard, acknowledged and dignified with some sort of response. To help foster this trust, Intuit’s managers at all levels are expected to: § Role model Intuit’s Operating Values, § Be transparent in communications, share thoughts and feelings about what is real, § Be humble and demonstrate the ability to listen and learn, § Involve and include employees, § Show genuine interest and care for each employee as an individual, § Be accountable, take action on behalf of employees, show a good “say/do” ratio. The mindset and actions of leaders supported by strong organizational practices are what currently drive the culture for engagement at Intuit. Getting Intuit’s managers to the point where they are now - self-motivated to improve employee engagement –
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© Intuit Inc. All rights reserved. 38 has been
an evolutionary process in our culture over the past few years. When we first introduced a new employee survey in 2001, we had few managers who paid as much attention to employee needs as they did to customer concerns or getting business results. When we gave each manager their survey results, our CEO issued a mandate that each one had to host feedback sessions with their team to develop a shared understanding about what’s working and what’s not, and create written survey action plans which were posted publicly on our intranet for all employees to see. Today, we still deliver survey results to all managers; however, we no longer require formal action plans to be written or posted. Two things have changed to eliminate the need to mandate action planning: 1. Most Managers have adopted the “engagement mindset:” They believe it is the job of Intuit leaders to engage each employee, and are inclined to take actions because it is now a requisite responsibility of being a good leader at the company. 2. Managers are held accountable for improving engagement on their teams. Part of the performance assessment for each manager is how well they attend to their employee’s engagement needs as reported by employee’s, and taking visible action is the only real way to make sustainable improvement. Our managers are held accountable because their team’s survey results are so visible to our company leaders. We report employee survey results to our CEO and all division heads showing engagement scores down to the individual manager level throughout the entire Intuit organization. This enables our leaders to clearly identify best practice units where engagement is flourishing and pockets where support or corrective action is needed. The change in mindset can be seen in the chart below by looking at the four levels of ‘Engagement Mindset’ of leaders at Intuit. Again, when we started the survey process most managers were simply following the prescribed steps for gathering survey feedback, and complying with the action planning mandate. As more and more managers began to understand and internalize the value of engaging their employees, they began to monitor engagement levels independent of any survey, and make a concerted effort to address issues real-time. Today, we have a few managers who are still in the “Unconscious” stage; however these managers will not be allowed to stay in that mindset. Most of Intuit’s managers have integrated an engagement focus into how they run their organization using ongoing dialogue and feedback with employees to understand their engagement, and taking visible actions to address and improve engagement.
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© Intuit Inc. All rights reserved. 39 Four Levels
of Manager Engagement Mindset at Intuit Institutionalizing the Engagement Culture Once the company begins to realize the competitive advantages of an engaged workforce, and sees signs of tangible progress, it must look for ways to further embed the new engagement mindset and behaviors so they become part of the culture of the company. In 2005, Intuit launched an employee-focused initiative called “Prospect-to-Retire.” The purpose of this cross-functional group of executives and work teams is to optimize the engagement experience at all points in an individual’s journey with Intuit. This process begins when a person becomes aware of Intuit as a possible company to work for, through the recruiting, interviewing, onboarding and assimilation period, through every experience as Level “Unconscious ” “Aware” “Conscientious” “Masterful” Manager’s Engagement Mindset “I’ve heard of it, but engagement is not something I think about regularly or that I am actively solving for.” “I understand the importance of engaging my employees – but not sure exactly what to do” “I take time to actively check-in with my employees to understand what’s engaging them.” “As a function of how I naturally interact with my employees every day, I hear what each one needs, and have developed a deep understanding of what is motivating and demotivating for each individual person.” How they view gathering feedback and understanding the Voice Of Employee “I think about how engaged my employees are only when I get my annual employee survey results.” “I value the annual survey as a key input to determining what is important for engaging my team.” “I value the many opportunities I have for both formal and informal feedback in determining what is engaging to the team.” “Since I am already naturally in tune with what is engaging for each of my employees…I find the annual survey results just serve to validate what I already knew.” How they view taking actions to improve “I follow the required process for doing a feedback session and action planning.” “I am not always sure where else to look and exactly how to make a difference in my team’s engagement.” ”I set aside considerable time and attention to develop action plans and make a visible difference to my team.” “In the normal course of running my business, I am taking actions all the time to keep engagement levels high for each employee.”
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© Intuit Inc. All rights reserved. 40 an employee,
and finally through retirement or leaving the company. According to our last annual survey, employees at Intuit less than three months report a 93% average engagement level and this drops to 86% average for employees reaching their first anniversary. Something happens to them during their first year that changes their perceptions and expectations, and the Prospect-to- Retire team is committed to finding out how we can sustain initial engagement levels. We have also redesigned our most important annual business planning and review processes so that engagement levels display prominently in the dialogue and decision making. For example, our annual High Performance Organization Review is where our functional groups and business units assess changes needed to their organizational capability to better execute on strategy. This process heavily leverages the Annual Employee Survey results as one of the key inputs for not only assessing issues that may be potentially holding back an organization’s performance, but also for evaluating each leader within an organization for how well they are doing to role model engaging behaviors and teach others their best practices. The rewards system should also place the right emphasis on leaders demonstrating the right mindset and behaviors to engage employees. At Intuit leaders are truly evaluated as much on how they got the job done as on what they delivered. We have found that success with our engagement practices starts with the resolute belief that employees matter, and that diligently attending to their needs is not only the right thing to do from our values perspective, but simply good business. The resulting “engagement mindset” helps our managers take the time to understand each employee’s needs and take visible action as a natural part of their ongoing leadership duties. Reinforcing the engagement culture at Intuit has also been advanced by the careful (re)design of business and management practices so that solving for the needs of employees and improving their experience is an explicit part of every planning process. Nothing is more compelling than the results themselves. We have seen Intuit’s sustained focus on engagement pay off with solid improvements in customer ratings, market share and business results over the last four years.
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© Intuit Inc. All rights reserved. 41 Steps for Establishing an Employee Engagement Culture in Your Company One of
the driving reasons why we created this report on Intuit’s employee engagement culture is that executives from other companies have increasingly reached out to us seeking advice on how they can increase the chance for engagement success in their own organizations. So, for that specific purpose, we decided to dedicate the last portion of this report as a self-help guide to improving the engagement culture in other enterprises. However, it’s important to reiterate that improving your own company’s engagement culture is not a simple proposition. Establishing a practice of employee engagement requires a tremendous amount of leadership, patience and tenacity. Even if you already have some or all of the necessary basic elements in place, they must work together in order to be successful. As you move through the various steps, transitions and decision-making points, remember they are all interrelated. And, like a complex pattern of yarns and colors on an oriental carpet, these elements will quickly fall apart unless they’re interwoven on a solid backing of executive support and complete commitment to the principles and outcomes of employee engagement, come what may: Discouraging survey returns; industry or market downturns; internal crises; changes in leadership, etc. Culture change is never easy. However, the time and effort to create an employee engagement culture will probably be well worth it for you – especially in comparison to the high cost of disengagement. This is your go/no-go starting point. And so, in this final chapter, we will take you through the key decision points to help you move your company toward a true practice of employee engagement. Your first goal is to establish and promote a leadership mindset that integrates all the necessary behaviors, beliefs and attitudes that foster engagement every day – not by relying on expensive surveys or unnecessarily elaborate communications and incentive schemes. Managers with the engagement mindset simply take every opportunity, every day, to show their employees that they care about each one as an individual. They ask each employee how they are doing, what they might need to do their work better, and check to make sure each one feels like a they are a valued member of a team that is helping the company achieve its objectives. “The atmosphere keeps me engaged all the time. Everyone seems to want to do really well for the company. The happy atmosphere keeps everyone working very hard.” (Call Center Rep.)
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