Engagement: Risks, Research and Results...2016 Leadership Conference The Gallup Q12 Engagement Survey 20 12. This last year, I have had opportunities at work to learn and grow. 11

2016 Leadership Conference

Mike RudeChief Human Resources Officer

Engagement:Risks, Research and Results


Mike Rude – Chief Human Resources Officer

30 years of Human Resources Leadership building cultures

focused on Talent, Strengths & Engagement to drive

organizational and financial performance

2


Mike Rude – Chief Human Resources Officer

Responsible for Aviation Department of 2 jets, 4 pilots and 2 crew

3

Challenger 650 Gulfstream 450


$8B Global Medical Device Company12 years as VP & CHRO

4

3 consecutive years(2011, 2012, 2013)

#1 Medical Equipment Industry

$23B Pharmacy Benefit Mgmt. CompanySVP & CHRO

FASTEST GROWING COMPANIES#1 in 2011

#11 in 2012

5 time recipient#67 out of 872

Large Companies

http://phx.corporate-ir.net/phoenix.zhtml?c=118965&p=irol-newsArticle&ID=1775282&highlight=

http://phx.corporate-ir.net/phoenix.zhtml?c=118965&p=irol-newsArticle&ID=1775282&highlight=

http://www.stryker.com/en-us/F100Admired/index.htm

http://www.stryker.com/en-us/F100Admired/index.htm


Why Engagement?

Premise:

Higher levels of Employee Engagement will drive Stronger Business Outcomes and Greater Financial Success.

Copyright © 2012, 2013 Gallup, Inc. All rights reserved.

5

http://dilbert.com/strips/comic/2009-11-25/

http://dilbert.com/strips/comic/2009-11-25/


Engagement Defined

An Engaged Employee is involved in, enthusiastic about, and committed to his or her work

• Knows the scope of their job

• Thrills to the challenge of their work every day

• Is in a role that uses their talents

• Always looks for new and different ways of achieving the outcomes of their role


Engagement ≠ Satisfaction

6


Engagement is Not . . .

7



8



9



10

2016 Leadership Conference 11

3 Types of Employees

EngagedThese employees are loyal and psychologically committed to the organization. They are more productive and more likely to stay with their

company for at least a year.

Not EngagedThese employees may be productive, but they are not

psychologically connected to their company. They are more likely to miss workdays and more likely to leave.

Actively DisengagedThese employees are physically present but

psychologically absent. They are unhappy with their work situation and insist on sharing this

unhappiness with their colleagues.

30% 52% 18%


Highly Engaged Employees . . .

. . . are 100% emotionally and psychologically committed to their role and their company.

. . . are a company's most productive and efficient workers.

. . . want their organization to succeed because they feel connected emotionally, socially, and even spiritually to its mission, vision, and purpose.

. . . have a direct, positive impact on customer engagement that drive repeat business and sustained profits.


The Business Case for Engagement


-2%

90%

147%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

Below Top Quartile Top Quartile Top Decile

Company-Level Employee Engagement

Higher Engagement Drives Stronger Financial Performance

Earnings Per Share % Difference

From Competition For 2011-2012

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Gallup’s Meta-Analysis Conclusions

15

Copyright © 2011 Gallup, Inc. All rights reserved.

Difference between Top and Bottom Engagement Quartiles

-37%

-25%

-65%

-28%

-48%

-41% -41%

10%

21% 22%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30% Turnover

Absen-teeism

Shrink-age

SafetyIncidents

Customer

ProductivityProfitability

High-Turnover

Orgs.

Low-Turnover

Orgs.

PatientSafety

Incidents

Quality(Defects)


Sales Growth by Sales Rep Engagement

24%

12%

6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Sales Growth

Engaged Not Engaged Actively Disengaged

(n=115) (n=167) (n=29)

Shifting Not Engaged reps to Engagedwould result in $57M more is sales

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Sales Rep Turnover by Levels of Engagement

9%12%

17%

0%

5%

10%

15%

20%

25%

30%

Engaged Not Engaged Actively Disengaged


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“What Gets Measured, Gets

Managed . . . and Done!”

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The Gallup Q12 Engagement Survey

19

Growth

Basic Needs

Management Support

Teamwork

Employee Engagement Hierarchy


The Gallup Q12 Engagement Survey

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12. This last year, I have had opportunities at work to learn and grow.

11. In the past six months, someone at work has talked to me about my progress.

10. I have a best friend at work.

9. My coworkers are committed to doing quality work.

8. The mission or purpose of my company makes me feel my job is important.

7. At work, my opinions seem to count.

6. There is someone at work who encourages my development.

5. My supervisor, or someone at work, seems to care about me as a person.

4. In the last seven days, I have received recognition or praise for doing good work.

3. At work, I have the opportunity to do what I do best every day.

2. I have the materials and equipment I need to do my work right.

1. I know what is expected of me at work.

Growth

Basic Needs

Management Support

Teamwork



The Connection between Talent, Strengths, Engagement and Financial Results


IdentifyStrengths The Right

Fit

Great Managers

Sustainable Growth

Engaged Customers Engaged

Employees

Stock Increase

Real Profit Increase


The Additional Value of Strengths

• The Clifton StrengthsFinder is a powerful online assessment that helps individuals identify, understand, and maximize their strengths.

• Talents are naturally recurring patterns of thought, feeling, or behavior that can be productively applied.

• All people have a unique combination of talents, knowledge, and skills -- strengths -- that they use in their daily lives to do their work, achieve their goals, and interact with others.

• 34 unique Strengths arranged under core capabilities:

• Executing

• Influencing

• Relationships

• Thinking

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The Additional Value of Strengths

In a Strengths-Based Culture, employees learn their roles more quickly, produce more and significantly better work, stay with their company longer and are more Engaged.

Employees who truly…

Know their Strengths are…

4.8 times as likely to know what is expected of them at work

6.1 times as likely to believe that they can do what they do best every day

Apply their Strengths are…

8.2 times as likely to know what is expected of them at work

15.3 times as likely to believe that they can do what they do best every day

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Why Strengths for Your Company?

25

12% 10% 7%

45%37%

28%

43% 53%66%

0%

20%

40%

60%

80%

100%

Managers and Employeeswith no SF

(n=106,573)

Managers Only with SF(n=20,650)

Managers and Employeeswith SF (n=1,502)

Engaged

Not Engaged

Actively Disengaged


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

67%

28%

11%4% 2%

31%

63%

66%

46%

27%

2%9%

23%

50%

71%

My manager focuses on my strengths or positive characteristics

Employees whose managers focus on their strengths are more engaged

5Strongly

Agree

1StronglyDisagree

4 3 2

Engaged

Not Engaged

Actively Disengaged

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2016 Leadership Conference Copyright © 2015 Gallup, Inc. All rights reserved.

11

8%-18% increased performance*

2%-10% higher customer metrics

20%-73% lower attrition

7%-23% higher employee engagement

4%-10% increased citizenship**

When compared with their peers, employees who receive strengths-based development were found to have:

* Including performance ratings, productivity and sales data ** Defined as employee involvement in company-sponsored activities

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2016 Leadership Conference Copyright © 2015 Gallup, Inc. All rights reserved.

12

14%-29% increased profit

3%-7% higher customer metrics

23%-59% fewer safety incidents

10%-19% increased sales

6%-72% lower attrition

Similarly, workgroups that received strengths-based development were found to have:

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Engraining Engagement and Strengths into your Culture


DOUBLING ENGAGEMENT IS POSSIBLE


13%

30%

0%

10%

20%

30%

40%

50%

60%

70%

Global Workforce U.S. Workforce

% E

nga

ged

47%

Median ofGallup's Clients

63%

Gallup GreatWorkplaces


Building Engagement – Lessons from Highly Engaged Organizations

• Strategy

• Accountability & Performance

• Communication

• Development


• Develop business case for engagement.

• Develop a detailed strategic plan.

• Establish a multi-year strategy for growing employee engagement.

• Integrate engagement planning with business meetings.

Strategy Suggestions

3232


IdentifyStrengths The Right

Fit

Great Managers

Sustainable Growth

Engaged Customers

Engaged Employees

Stock Increase

Real Profit Increase

A Roadmap for Driving Employee Engagement

33Copyright © 2013 Gallup, Inc. All rights reserved.

Corporate Leadership

Be an Example

Be Visible

Be Inquisitive

Systems and Initiatives

Performance Management

Talent Reviews

Development Plans

Communication Tools

Workgroup Activities and Action Planning

Q12 Leader Training

Accountability for Impact PlanningFormal Informal

33


• Establish minimum employee engagement standards. Set clear expectations about what each manager and team are supposed to

accomplish. Trigger direct leader-to-manager intervention based on engagement scores. Take actions to remove managers if they are unable to manage their teams

appropriately and effectively.

Accountability & Performance Suggestions

34


Gallup has consistently found that

PLAY THE MOST SIGNIFICANT ROLE IN DRIVING EMPLOYEE ENGAGEMENT AND BUSINESS OUTCOMES.

MANAGERS

70%of the factors affecting engagement are local.


Gallup Research Paper. Estimating The Influence of the Local Manger on Employee Engagement, Manager PCT Influence Published 2014. Gallup, Omaha, NE.

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• Establish minimum employee engagement standards. Set clear expectations about what each manager and team are supposed to

accomplish. Trigger direct leader-to-manager intervention based on engagement scores. Take actions to remove managers if they are unable to manage their teams

appropriately and effectively.

• Establish a President’s Club to recognize managers who consistently score in the top 90% of their peers. Tie rewards to this exclusive membership.

• Review and evaluate Team Impact Plans. Identify and share best practice Impact Plans. If managers or teams are facing real barriers, do everything you can to

remove these barriers.

• Integrate employee engagement with the manager’s performance management, as well as the talent review and succession processes.

Accountability & Performance Suggestions

36


Engagement Scorecard shared broadly

Engagement Index

Gallup Percentiles Engage-

# of Grand- '11 Global '11 Local Overall ment

Divisions employees Mean Database Database Satisfaction Engaged Not Engaged Actively Disengaged Ratio

11 San Jose Total

Current (5/11): 904 4.32 74 75 48 65% 32% 21.7 : 1

Previous (5/10): 826 4.32 74 75 40 65% 31% 16.3 : 1

% Change 0.0% 20.0%

11a San Jose Internal

Current (5/11): 298 4.34 75 76 41 65% 32% 21.7 : 1

Previous (5/10): 562 4.27 71 71 36 61% 33% 6% 10.2 : 1

% Change 1.6% 13.9%

11b San Jose Sales

Current (5/11): 262 4.49 83 84 57 75% 24% 75.0 : 1

Previous (5/10): 264 4.42 80 81 48 71% 28% 71.0 : 1

% Change 1.6% 18.8%

11c San Jose Endo Spec

Current (5/11): 344 4.17 65 64 47 56% 39% 5% 11.2 : 1

Previous (5/10): 332 4.21 67 67 46 58% 36% 6% 9.7 : 1

% Change -1.0% 2.2%

12 Communications Total

Current (5/11): 287 4.25 70 70 38 63% 35% 31.5 : 1

Previous (5/10): 330 4.11 60 59 29 53% 40% 7% 7.6 : 1

% Change 3.4% 31.0%

12a Communications Internal

Current (5/11): 231 4.20 67 66 33 59% 38% 19.7 : 1

Previous (5/10): 255 4.05 56 54 24 50% 43% 7% 7.1:1

% Change 3.7% 37.5%

2%

3%

4%

3%

1%

1%

3%

Breakouts by division and sub-groups within divisions

37


Engagement incorporated into Staffing Reviews & Succession Planning Processes

Trend

VP HR & OD, Europe Highly Effective 4.58 D High Potential Ready Now High Low High

VP GM Spine & Biotech Consistently Effective 4.18 D Well Placed Well Placed Medium Low Medium

VP, Implants Southern Europe Consistently Effective 3.33 D Well Placed Well Placed Low Low Medium

GM Implants, Northern Europe Highly Effective 4.27 D High Potential Well Placed High Low High

VP Business Development & Public Affairs Consistently Effective 4.37 D Well Placed Well Placed Medium Low Low

VP & CFO Europe Outstanding 3.94 D Talented Expert Ready 3-5 yrs Medium Low High

General Manager MedSurg Consistently Effective 4.32 D Talent to Watch Well Placed Medium Medium Medium

Director of Communications Consistently Effective 3.63 D Well Placed Well Placed Low Medium Low

D=Direct Reports

AD=Multiple Direct Report Teams

R=Roll-Up

Global Talent Category Readiness Developer Risk of Loss Impact of LossScoreTitle 2010 Performance Rating

Team Engagement

38


Division Leadership Development & Succession

Current Target Trend Comments

Ready-Now Successor 100% 100% [name] has been identified as RN successor

Talent Export/Import Ratio 4.3 >1.0 39 Exported / 9 Imported 1/1/10 - 6/30/11. Out of 594 professional and

above employees (excluding Sales and Technical, as of 6/30/11)

Division Executives & Leaders (n = 7)


Diversity

Gender 0% 30% % female (goal is 30% by 2014)

Race (U.S. only) 29% 15% % non-white (goal is 15% by 2014)

Nationality See attached chart

Engagement 4.35 4.20

Multi-Division Experience 57% 75%

Multi-Geographic Experience 43% 66%

Ready Now Successors Outside of Business 0% 75%

Ready Now Successors In-Business 43% 75%

Internal Promotion Rate* 100% 80%

High Potential Leader and Managers (n = 11)


Annual Individual Development Plans (IDP) 100% Work in progress

Completed Annual IDP 100% Work in progress

Engagement 4.55 4.20

Multi-Geographic Assignments 9% 50%

Special Development Assignments 100% 50%

One-Year Retention Rate (2010 HiPos) 100% 100% 0 terms out of 24 2010 HiPos

Diversity

Gender 9% 30% % female (goal is 30% by 2014)

Race (U.S. only) 9% 15% % non-white (goal is 15% by 2014)

Nationality See attached chart

Talent Review Process


Succession Plan Accuracy 100% 80% [name 1] succeeded [name 2]; and [name 3] succeeded [name 4]

Action Plan Follow-up 100% 100%

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• Clearly explain the rationale for and benefits of employee engagement enterprise-wide.

• Develop a comprehensive employee engagement communication plan. Connect employee engagement to strategic objectives and business

outcomes. Maintain consistent messaging – distribute talking points. Ensure high-level leaders continuously and actively support the

initiative.Use multiple communication touchpoints.

• Communicate stories of individuals, teams, and organizations that are realizing engagement success. Ask top managers to share best practices at planned conferences or

meetings.

Communications Suggestions

40


• Build a learning and development strategy for each tier of the organization (employee, manager, and leader).

• For all learning programs for managers, develop targeted employee engagement elements that include strategies for the creation and sustainment of engagement.

• Introduce new employees to employee engagement and their team’s Impact Plan during the New Hire Onboarding process.

• Reward high-performing managers with manager and leadership development opportunities.

• Use the Clifton StrengthsFinder assessment to determine your team members’ strengths. Help them identify how best to drive engagement within their teams based on their own talents.

Development Suggestions

41


Utilize Clifton StrengthsFinder assessment to determine your team members’ strengths

42

Mike R. Mike B. Yvette Katie Jennifer Linda

EXECUTING

Responsibility 5 12 12 2 27 6

Achiever 11 11 18 5 9 1

Belief 7 14 10 4 22 16

Discipline 33 27 28 13 33 23

Focus 23 16 26 17 12 14

Restorative 14 24 32 3 34 27

Arranger 6 13 7 8 21 24

Consistency 27 34 25 6 25 28

Deliberative 15 30 24 25 16 34

INFLUENCING

Communication 12 23 23 15 2 26

Command 3 4 22 20 28 17

Competition 16 18 31 24 6 18

Maximizer 17 19 19 34 7 7

Woo 31 31 33 14 5 32

Activator 1 5 15 16 29 19

Significance 30 7 20 10 10 9

Self-Assurance 22 8 6 21 17 4

RELATIONSHIPS

Empathy 13 29 3 9 1 20

Harmony 2 33 27 1 18 31

Includer 34 22 14 19 14 30

Individualization 10 10 11 28 3 21

Relator 18 6 9 12 4 2

Developer 25 21 17 11 15 22

Positivity 26 20 13 18 20 15

Adaptability 20 26 8 22 11 25

Connectedness 21 28 2 7 19 29

THINKING

Analytical 28 9 21 27 30 10

Context 29 32 30 32 31 33

Futuristic 19 17 16 26 26 11

Ideation 8 2 29 33 23 8

Input 9 15 5 31 8 12

Intellection 24 25 1 29 24 5

Learner 4 1 4 30 32 3

Strategic 32 3 34 23 13 13


• Transformation does not happen immediately. It takes

a lot of energy and effort to initiate change but even

more to build on that momentum.

• It takes focused attention to drive engagement. As an

organization, you can influence and inspire

engagement by:

Building a People Strategy

Holding People Accountable for Performance

Aligning Communication

Building Development Opportunities for your Leaders, Managers, and Frontline Employees

Summary

43


What kind of organization do you want?

44


Thank You!

Documents

Engagement: Risks, Research and Results...2016 Leadership Conference The Gallup Q12 Engagement Survey 20 12. This last year, I have had opportunities at work to learn and grow. 11