Building Alignment and Engagement into 2010 Planning

[Derek Irvine]

Watson Wyatt Worldwide and WorldatWork recently issued their 2009/2010 US Strategic Rewards Report: Looking toward Recovery – Realigning Rewards and Re-Engaging Employees. The report evaluates the impact of the workforce-based actions of the recession on companies’ ability to emerge in a competitive position and able to retain top-performers in the recovery. Three key findings were:

1) Organizational restructuring has been pervasive and deep
2) There has been significant negative impact on employee engagement (an alarming 25% for top-performing employees as compared to 9% across the board)
3) Employees believe the changes made by their companies are affecting work quality and delivery to customers

The extreme disconnect between management and line employees the report highlights in these last two points are particularly unsettling:

“Top-performing employees are 20% less likely to agree that they understand the link between their own goals and the company’s goals in 2008.”

“Forty-one percent of employees indicate that changes have had an adverse impact on quality and customer service, while only 17 percent of employers believe this is the case.”

Looking at those two findings together, I can only conclude that employees don’t know what they should be working on and how it contributes to company success (alignment problem again) and that quality and customer service is suffering as a result.

It is heartening to see that companies are finally beginning to understand the ineffectiveness of cash-based bonuses (anticipated to drop 24% from 2007 levels) while 23% of companies are increasing their use of recognition programs, defined by the report authors as “offering a cost-efficient opportunity to recognize the contributions of top-performing employees at a time when the average company has reduced core forms of compensation and benefits.” Why is this good news? Bonuses target a small cadre of elites and rules for achieving the bonus often seems to be a moving target. Recognition, on the other hand, is available to all as an after-the-fact show of acknowledgment and appreciation for a job well done.

How are you building alignment and engagement into your 2010 process? Share your approach in comments.

[Derek Irvine]

Couldn't agree more, Keith. As I said in this post, Layoffs, mergers, acquisitions, restructuring, reorganizing – all outfall of the recession in the majority of companies to some extent and all creating the greatest challenge facing organizations in 2010 – alignment. The massive organizational upheavals leave so many employees floundering in what to prioritize and what really matters. In the midst of these organizational changes, many companies also changed or adjusted their strategic objectives to align with the new priorities, but in doing so neglected to tell the employees how their work and specific tasks should also change to achieve those revised objectives.

Bottom line: people need to know where you're going if you expect them to ever get there.

[Keith Bossey]

Derek, this downturn has caused mis-alignment across the board. Strategies have been thrown out the window as companies keep dialing down expectations for the year. Furthermore, because many companies do not have a strategy, they do not know what their employee resources should look like, causing continued RIF, which in turn cause uncertainty and demotivation. At some point, companies will have to pull themselves out of the immediate and look out to at least the intermediate term, create a strategy and communicate it internally. Comp changes will do nothing until people have some solid footing.