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Rewarding, Engaging, and Retaining Key Talent

2010 APQC. ALL RIGHTS RESERVED.

page 1

ContentsProject Personnel and Copyright 2

Sponsor and Partner Organizations 4

Study Methodology 5

Introduction 8

Key Findings and Lessons Learned 16

Case Study: 3M 39

Case Study: Infosys 51

Case Study: Schlumberger 64


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Project Personnel

STUDY TEAM

Rachel Brill, APQCLawson Arnett, APQC

SUBJECT MATTER EXPERTISE

Marc Drizin, founder and chief instigator, Employee HoldemRachele Williams, APQC

EDITOR

Paige Leavitt, Editor


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MEMBERSHIP INFORMATION

For information about how to become a member of APQC, and to receivepublications and other benefits, call 800-776-9676 or +1-713-681-4020 or visit our

Web site at www.apqc.org.

COPYRIGHT

2010 APQC, 123 North Post Oak Lane, Third Floor, Houston, Texas 77024-7797USA

All terms such as company and product names appearing in this work may betrademarks or registered trademarks of their respective owners. This report cannotby reproduced or transmitted in any form or by any means electronic or mechanical,

including photocopying, faxing, recording, or information storage and retrieval.

ISBN-10: 1-60197-158-3 ISBN-13: 978-1-60197-158-6

STATEMENT OF PURPOSE

The purpose of publishing this report is to provide a reference point for and insightinto the processes and practices associated with certain issues. It should be used asan educational learning tool and is not a recipe or step-by-step procedure to becopied or duplicated in any way. This report may not represent currentorganizational processes, policies, or practices because changes may have occurredsince the completion of the study.


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Sponsor OrganizationsAARPConocoPhillips Co.Deere & Co.

Johnson & JohnsonOccidental Petroleum Corp.U.S. Army ARDEC

Partner Organizations3MInfosys Technologies Ltd.Schlumberger Ltd.


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Study MethodologyAPQCs consortium benchmarking study methodology (Figure 1) was developed in1993 and serves as one of the premier methods for successful benchmarking in the

world. It was recognized by the European Center for Total Quality Management in1995 as first among 10 leading benchmarking organizations models. It is anextremely powerful tool for identifying best and innovative practices and forfacilitating the actual transfer of these practices.

Figure 1

The Rewarding, Engaging, and Retaining Key Talent collaborative research studywas designed in conjunction with member and customer feedback to provideproven best practices for employee engagement. APQC employed its proven, four-phased benchmarking methodology to gather data and discover best practices. Anexplanation of work completed during each phase follows.

Phase 1: Plan

The planning phase of this study began in early 2009. APQC administered an onlinevoice of the customer survey to members and customers, supplemented by phoneinterviews with key member organizations. The study topic and scope originatedfrom these interviews, as well as from feedback from the special adviser.

APQC researched organizations cited in the secondary literature for successfulpractices in employeeand specifically, key talentengagement. APQC generated alist of more than 80 potential organizations. The APQC project team contacted the


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process owners at each of these organizations to assess qualification and interest inbeing showcased as a best-practice partner in this study. From this initial list of

more than 80 candidate organizations, eight met the best-practice criteria and wereinterviewed by the APQC project team. The study consortium selected three ofthese for the award and for in-depth study: 3M, Infosys, and Schlumberger.

The study began with a meet the sponsors phone call on November 5, 2009 toallow representatives from the sponsoring organizations to network and share theirchallenges, issues, and expectations with the project team. The virtual kickoffmeetingattended by APQC, the special advisers, and the study sponsorswasheld on December 9, 2009.

Phase 2: Collect

Three tools were used to collect information for this study.

1. Screening surveyShort online survey designed to determine if potential best-practice partners met the study criteria for best-practice status

2. Site visit guideQualitative questions that structure the discussion frameworkfor all virtual site visits

3. Quantitative surveySponsor organizations were given the option ofcompleting the Open Standards Research Reward and Retain Employeesbenchmarking survey online in return for a customized report comparing resultsto the Open Standards Research database

The three best-practice organizations hosted virtual site visits in February 2010attended by sponsors, the study advisers, and members of the APQC team. APQCthen prepared written case studies of the site visits and submitted these to the best-

practice partners for approval.

Phase 3: Analyze

In February 2010 APQC and the special adviser analyzed the information,concentrating on the best practices and key enablers. APQC analyzed thequantitative data, specifically with regard to metrics and practices of top performerson a balanced set of metrics.

Phase 4: Adapt

The presentation of key themes and leading practices took place March 31, 2010 viaa virtual knowledge transfer session.


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ABOUT APQC

APQC is the leading resource for performance analytics, best practices, processimprovement, and knowledge management. The organization's research studies,benchmarking databases, and renowned Knowledge Base provide managers withintelligence to transform their organizations. A member-based nonprofit founded in1977, APQC serves more than 750 of the Fortune Global 1000 companies andnumerous government organizations. For more information, visit www.apqc.org orcall +1-713-681-4020.

ABOUT EMPLOYEE HOLDEM

Marc Drizin is founder and chief instigator of Employee Holdem, an HRconsultancy that specializes in strategies for attracting, motivating, and retaining

talent. Drizin uses the Work Force Engagement Assessment, a scientificallyvalidated survey that creates a road map of improvement for his clients to improveemployee engagement and retention. In addition, Employee Holdem conducts abiannual national work force engagement assessment and delivers 25 to 35 speechesand workshops per year around the world on employee loyalty, ethics, and customerand employee retention.

Prior to founding Employee Holdem, Drizin was director of work forceengagement at Performance Assessment Network Inc., where he was responsiblefor all aspects of employee engagement and retention research. Before this, heserved as vice president and loyalty specialist for Walker Information, a marketresearch firm.

Drizin has co-authored three books on employee engagement and retention:Workforce Engagement: Strategies to Attract, Motivate, and Retain Talent (WorldatWorkPress, 2007),Employee Engagement: A Guide for Managers and Supervisors(WorldatWorkPress, 2008), and Designing Employee Recognition Programs(WorldatWork Press, 2009).


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IntroductionIn spring 2009, as we talked to our members and clients about their key challengesand issues in HR, one clear need for best-practice information emerged at theforefront: how to engage and ultimately retain employees, particularly amid aneconomic downturn.

During a downturn, employees tend to suffer from disengagement and fear as theywitness rounds of layoffs and high unemployment rates. Employees are stressed outbecause they are expected to do more work with fewer resources. In addition, loyalcustomers become scarce, so everyone has to work harder to generate profits. Andemployees often take financial hitsvia a reduction in salary, a withdrawal of theirtraditional retirement matching program, a suspension in pension benefits, and/orunpaid short-term furloughsas their employers struggled to manage labor costs.

Secondary research conducted by APQC in spring 2009 revealed that many high-potential employees are planning their exodus once the economy improves andorganizations begin hiring again. With little loyalty to employers that have not visiblyappreciated them, such employees will jump ship for the first better offer thatcomes their way (often for the same job at a competitor, for only slightly more pay,as subject matter expert Marc Drizins research data shows).

Clearly, organizations need help fulfilling employees sense of job security, careergrowth, and appreciation for a job well done. Best-practice partner Infosys calls thisback-to-the-basics HR. Best-practice partner 3M considers this treating people fairlythrough accountability and rewards, a respectful work environment, empowering

work procedures, and by remembering to recognize and celebrate theaccomplishments of employees.

This study finds that employees want a challenging job at a fair pay; in return, theyare willing toand even want towork very hard. APQC found that this desire forchallenging work at a fair wage is universal, regardless of culture, industry, orlocation. As APQCs research confirms, providing this opportunity does not have tobe inordinately expensive. Employee engagement can be as simple as emphasizingjob rotation, internal mobility, and placement in a succession plan for key talent.

And fair compensation can be a matter of regularly benchmarking what isconsidered fair for different types of key talent and ensuring a competitive payrate.

The bottom-line advice from this study is eye-opening in its simplicity. That is,engaging key talent involves 1) listening to employees, gathering their feedback, andacting on it and 2) paying attention to job satisfaction through regular performancemanagement, regular recognition, fair compensation and benefits, and theopportunity for employees to develop themselves personally and professionally.

Rachele Williams, program manager, research services, APQC


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Ive spent the last 25 years consulting with world-class organizations in their work toimprove the satisfaction, loyalty, and retention of their customers. Over time, my

interests shifted to a critical driver of customer loyalty: the after-sales care andsupport provided by employees.

Simply put, employees are assets with feet. They make the decision every day to goback to their place of employment. But more important to an organization thantheir tenure is employees desire and likelihood to work hard, to be active teammembers, and to go the extra mile for customers. No matter the size of theorganization, the industry they serve, their geographic location, or the demographicmake-up of their employees, it comes down to the golden rule.

Nearly 15 years ago, I gave a series of workshops related to my companys firstnational benchmarking study on employee loyalty and referenced the golden rule. A

colleague of mine said: Marc, my family has a different definition of the goldenrule. In our house, he who has the gold makes the rules. I laughed but quicklyrealized the implication of the statement, not only to that benchmarking study butalso to the state of the employer-employee relationship at that time and in thefuture.

Today around the globe, unemployment rates are at record highs. Even withunemployment rates in the United States at or near double digits, 2.7 million jobsremained unfilled in January 2010. Just as telling, nearly 5,000 U.S. employees

voluntarily quit their job every day.

During this same time, many products and services have been commoditized to thepoint that quality, convenience, availability, and price differences are almost

nonexistent among competitors. Customers can now demand better, cheaper, andfaster, instead of seeking just one of those differentials. That leaves two clear pointsof differentiation for organizations today: their people and the investment theymake in them.

Lee Iacocca once said: Start with good people, lay out the rules, communicate withyour employees, motivate them, and reward them. If you do all those thingseffectively, you can't miss. Our best-practice organizationsInfosys, 3M, andSchlumbergerlive these words every day through their deeds and actions.

Marc Drizin, founder and chief instigator, Employee Holdem


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WHY THIS RESEARCH?

Ultimately, APQC conducts collaborative research in response to member need: theneed to solve real-world business challenges and the need for best practices, metrics,and measures to help study participants validate their current practices and/or get tothe next level within their organization. For each project, APQC works with premiersubject matter experts or special advisersthought leaders in academia, research, orconsultingto provide content expertise and guidance. We scan the globe for best-practice organizations to learn from, regardless of whether or not they are APQCmembers and regardless of industry, organization size, or geography.

Our research is aligned with APQCs Process Classification Framework (PCF), anorganizationwide taxonomy of operational and support process groups, processes,and activities. PCF 6.0 represents the process group Develop and Manage HumanCapital. The Rewarding, Engaging, and Retaining Key Talent study most closely

aligns with PCF 6.4, the process to reward and retain employees. All of APQCsresearch is governed by its Benchmarking Code of Conduct, which provides aplatform for efficient and ethical benchmarking.

STUDY SCOPE

As implied by its title, this study was about rewarding, engaging, and retaining keytalent, with the emphasis on employee engagement (because recognition and rewardpractice influence employee engagement, and retention is considered an outcome ofengaging employees). We were interested in exploring the topic with regard to allemployees, and key talent (e.g., high value, high potential, technical, and/orleadership) in particular.

Whereas the topic and specific questions for exploration in the qualitative researchwere driven by member and customer feedback and input from study sponsors andthe special advisers, the scope categories for the study follow a general, holisticframework of 1) strategy, 2) processes, 3) practices, and 4) outcomes and measures.

After a brief introduction to each of the best-practice partners and key definitions,the report follows this outline.

APQCs history of collaborative research in human capital has spanned thespectrum of topics across the HR life cycle over the past decade in response tomember interest and need (Figure 2, page 11). The Rewarding, Engaging, andRetaining Key Talent study fills an important gap in a body of research that has

heretofore examined talent management broadly over the years but not yet drilleddown into employee engagement best practices.


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APQCs History in Human Capital Collaborative Research:

The Last Decade

Figure 2

BEST-PRACTICE PARTNERS OVERVIEW

After a comprehensive screening process by the APQC project team, beginningwith more than 80 organizations cited in secondary literature and/or nominated bythe special advisers and study sponsors, APQC narrowed down the list to eightorganizations that met the best-practice criteria and were willing to participate andshare their practices. Three organizations were then selected for the best-practicepartner designation by the consortium sponsors. These three organizations havestrong brand names and corporate reputations, purposely represent a variety ofindustries, and most importantly exhibit exemplary practices for engaging their key

talent. These organizations have also been able to explicitly link their work inemployee engagement with specific positive business outcomes. This link will be ofgreat interest to those readers seeking to establish a business case for conductingformal employee engagement work.

This section includes an overview of each best-practice partner and why they wereselected for the study.


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3M

Best known for its innovative products like Scotchgard fabric protectors andPost-it

Although formal employee engagement measurement is relatively new to 3M (workbegan at the corporate level in 2007), corporate HR has now committed itself toemployee engagement with vigor; the organization is as passionate about employeeengagement as it is to excellence in new product development and innovation. Since2007, 3M has developed a common corporate definition, strategy, tools, andprocesses for employee engagement, complemented by individual engagement plans

within each business unit. The organization measures employee engagement viathree survey instruments: a worldwide leadership survey, a worldwide business unit

survey (administered once every two years), and customized employee engagementsurveys (conducted on an as-needed basis). Employee engagement scores from the

worldwide business unit survey are analyzed, compiled, and reviewed by the seniorvice president of HR and the CEO, and those business units with the ten highestand lowest scores are visible throughout the organization.

Notes, 3M is a diverse manufacturing conglomerate headquartered in St.Paul, Minn. In 2008 the organization generated more than $25 billion in revenueand employed roughly 80,000 employees in more than 60 countries.

3M has also implemented some notably successful engagement practices, includingan employee value tool discussion guide for managers that helps facilitate in-depth,regular conversations with individuals about what motivates them in the workplace,

while they are still employed. 3M also offers a 10-minute video series for managersand supervisors on various employee engagementrelated topics.

Ultimately, 3M has seen great success from its efforts and has correlated employeeengagement to positive business outcomes, most notably innovation. The case studyprovides more insights and best practices offered by 3Ms vice president of talentsolutions and manager of HR measurement.

Infosys

Infosys Technologies Ltd. is one of the worlds leading technology services firmsand provides engineering and software development; data management; projectmanagement; IT systems integration, support, and maintenance; and strategicconsulting services to customers around the world. This organization ranks No. 330on the Financial Times Global 500, with 109,000 employees and $4.6 billion inrevenue in 2009.

According to the Infosys virtual site visit hosts, employment at the organization hasa high prestige factor. As the first Indian company to offer an employee stockoption plan, many employees have shared in the wealth as the organization hasgrown.

The primary role of HR at Infosys is to facilitate the employees state of being atwork from one of obedience and diligence to one characterized by initiative,


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creativity, and ultimately passion. To that end, the organization has a positive andchallenging work environment with state-of-the-art training facilities, an unwavering

commitment to training and development, customized career paths, a values-basedrewards system, and a culture of meritocracy where key talent can earn a significantpercentage of their total compensation based on performance.

There is a strong commitment to employee engagement. For example, an employeesatisfaction survey (called LITMUS) takes the pulse of the work force every 18months. Every manager has a LITMUS scorecard based on the results, and he orshe is measured on progress against a set of defined parameters.

The case study details Infosyss employee philosophy and practices, presented bythe senior vice president and head of HR development and the group manager ofbusiness partner HR.

Schlumberger

Schlumberger Ltd. is a global oilfield services provider supplying technology,information solutions, and integrated project management that optimize reservoirperformance for customers in the oil and gas industry. It employs 79,000 people of140 nationalities working in approximately 80 countries.

Schlumberger is committed to internal development and organizationwide globaltalent mobility. The organization leverages a number of mechanisms to gatherfeedback and understand employees, including eight to ten global, annual HR audits;an employee satisfaction survey; and regular HR open houses and field visitsbetween personnel staff and other employees. HR routinely schedules in-depth

discussions with high-value employees and their managers. These career orientationreviews focus on goals and expectations, what truly motivates that employee,training and development, and other engagement and retention factors.

During the recent economic downturn and during any time of organizational changesuch as the acquisition of another organization, Schlumberger applies creativepractices to retain its valued talent, such as chartering an integration managerresponsible for employee retention and offering incentivized leaves of absenceduring slow times to select valued employees.

The case study details Schlumbergers emphasis on internal employee developmentand career paths in order to engage key talent.


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THE REWARD AND RECOGNITION ROAD MAP

Developed in part from the work of author Gary Hamel, Employee Holdem uses aReward & Recognition Roadmap to assist clients in determining the messagesthey inadvertently send employees and supervisors (Figure 3). The road map isdivided into three segments, showing the progression from training talent toeducating talent to developing talent and correlating these progressions to theappropriate reward and recognition practices of an organization.

The Employee Holdem Reward and Recognition Road Map

Figure 3

Employees new to an organization, their job, or their daily activities are in thetraining stage, and it is the employers responsibility to provide these new workers

with the opportunity to become proficient through instruction and practice.Supervisors and managers often measure and reward obedience and diligence duringthis training phase, using factors like error rate and attendance as reference points.Simply put, the organization is interested in getting a person who can adequately dothe job.

As employees acquire the basic skills, experiences, and competencies to perform

their jobs, they may be ready to progress to the next level and learn additionalinformation about the organization, its products and services, and the organizationsmission, vision, and values. Best-practice organizations use developmentassessments and career paths to better understand the interests, talents, values, andbeliefs of these employees. They may also encourage employees to make decisionsthat assist both internal and external customers. During this phase, performancemanagement begins to move away from rewarding basic action to rewarding an


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overall understanding. In this phase, organizations are interested in having the rightperson who can do the job.

Employees who have demonstrated advanced initiative, skills, and aspirations thenadvance to a development stage. Managers move from a role as trainers and teachersto a role as coach, with the intent to develop the unique capabilities and possibilitiesof each high-potential employee. These high performers are encouraged to provideinput to enhance the customer experience through product and processimprovement and to work with peers to meet the organizations goals.

The organizations expectations of these employees expand, and an employeesexpectations that their rewards and recognition for a job well done increase.Organizations take a more active role in understanding what drives this key talent byassisting them in fulfilling their dreams, both personally and professionally. In this

phase, organizations want the person who wants to excel in the job.


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Key FindingsBefore discussing the study findings gleaned from the best-practice partners withregard to their employee engagement philosophy and strategy, it may be helpful tofirst understand how the HR function is structured at each best-practice partner andhow each organization defines employee engagement within the context of itsspecific organizational culture.

HR STRUCTURE AND DEFINITION OF EMPLOYEEENGAGEMENT

3M corporate HR is comprised of various centers of expertise and a centralizedinformation services organization, complemented by business HR partners

dedicated to each business. Central employee engagement strategy and processresponsibility reside with the engagement and measurement center of excellence

within the talent solutions department. The engagement and measurement team isresponsible for conducting the leadership survey, standard employee opinionsurveys, prehire testing, developmental assessments, executive assessments,employee engagement, and the employment brand. All talent solutions processes areapplied consistently to the global 3M organization.

3M partnered with a professional services firm to develop its formal,organizationwide definition for employee engagement. The key aspect of thisdefinition is the focus on alignment between the employees behavior and action

with overall organizational goals and objectives; without this alignment, anemployees initiatives and efforts may be counterproductive, or even detrimental, tothe organization. This formal definition for employee engagement provides acommon language and focus. As summed up by the vice president of talentsolutions, the formal definition for employee engagement gets everyone on thesame page and provides a shared sense of purpose.

The HR function at Infosys is comprised of corporate HR and business partner HR.Corporate HR is centrally responsible for talent planning, recruiting, organizationaldevelopment, geographic HR, compliance and immigrations, compensation andbenefits, and employee relations. Business partner HR is decentralized to supportthe business lines. Each business line has a business partner HR team that serves asrelationship managers to the business. These business partner HR teams report toboth the business line leaders and the corporate HR function.

Infosys defines employee engagement for each individual employee as possessingpassion for the work he/she performs at the organization. This definition wasadapted from author Gary Hamels hierarchy of human capability to achievecompetitive success. The role of HR at Infosys goes beyond performancemanagement by fostering this culture of initiative, creativity, and enthusiasm.Nandini Nathan, group manager of business partner HR, said: It is all about thepassion. Employee engagement is then a given.


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Schlumberger is organized into a matrix structure comprised of business segmentsand regional markets. As a matrix organization, HR representatives are present in

each of the regions, as well as each business segment and technology center. Alongwith the matrix of HR representatives, Schlumbergers regional HR support centersconsolidate HR data and administration, thus allowing the personnel function andHR professionals out in the field to focus on face-to-face strategic support of theirinternal customers.

Although Schlumberger has not developed a formal definition of employeeengagement, the organization views the motivation of its employees as a core value,along with a commitment to technology and a determination to produce superiorprofits. Employee motivation and engagement are intrinsic to its organizationalculture. The employee value proposition is characterized by borderless careers,extensive development and training opportunities, a challenging job with high levels

of autonomy and responsibility early in a career, progression based on performancerather than seniority, diversity and true meritocracy across all nationalities, and acompetitive salary and benefits package.

STRATEGY

Among the best-practice partners, employee engagement responsibility resides withmanagers and supervisors. That said, senior executive championship is necessary.

The study also found that successful employee engagement is not a set of practicesor a program but rather a journey woven into organizational culture and integrated

with other key aspects of talent management.

Partner with line managers and the business on employee engagement, withchampionship from senior leaders.

When it comes to crafting a strategy for employee engagement, HR should serve asa key facilitator of employee engagement within the organization and providecentralized tools, templates, and processes. But the responsibility for employeeengagement resides with front-line supervisors and managers. All three best-practicepartners agree.

Senior leadership should provide executive championship for the effort and act asrole models at the highest level. Accountability for employee engagement at themanagerial, supervisory, and senior leadership levels is integrated into theperformance management process at best-practice organizations.

At 3M, corporate HR partners with its business units to drive growth throughpeople. Engaging employees and strengthening the employment brand is a key HRstrategy for 2010, which is in turn aligns with HR critical success factors, itsoverarching vision and mission of HR, and its overall organizational strategy via agoal tree. The goal tree graphic visually depicts four overarching corporatestrategies, which cascade into the HR vision and mission that support the corporatestrategy, the corresponding five HR critical success factors that support the HR


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vision and mission, and the six HR strategies that support the critical successfactors.

The organizations engagement and measurement team developed a commoncorporate definition, strategy, tools, and processes for employee engagementleveraged organizationwide, complemented by individual engagement plans withineach business unit. The manager of HR measurement at 3M has responsibility forthe overall employee engagement strategy, including training, education, andcoordination of central, worldwide employee engagement processes; and she andher team support specific engagement tactics at the business level. But ultimately,employee engagement stems from trust in senior leadership, and the real influencersof day-to-day employee engagement are line managers and supervisors. 3M hasfound that the conditions necessary to engage employees are trust in leadership,supervisors and managers, and in the work group environment.

Business managers lead the efforts to engage people at Infosys. As stated byNathan: Engagement is ultimately a line manager responsibility. It is not HRs jobto do. Yet leaders at Infosys are key to the employee engagement strategy. Thecorporate leadership team serves as role models who demonstrate an ability torelate, genuineness, accessibility, approachability, humility, and a results orientation.

According to Nathan, the Infosys senior leadership team drives an open culture andconstantly inspires the employees.

At Schlumberger, line management is responsible for employee engagement, andcorporate HR supports line management. Although corporate HR is heavilyinvolved in administering and measuring engagement and in creating andimplementing rewards and retention practices, ultimate accountability for employee

engagement resides with line management.

A commitment to employee engagement at Schlumberger begins with visiblecommitment and support from senior leadership. In order for any endeavor to besuccessful in business, the focus has to come from senior leadership, said BenoitBarbier, HR manager, reservoir management group. Without a clear, consistent,and persistent message from the senior leadership team, employee engagement andretention will not be successful.

Integrate the employee engagement strategy with the overarching talent andemployment branding strategy.

All three best-practice partners closely integrate employee engagement strategy with

other elements of talent management strategy, such as employee recruiting andselection, training and development, rewards and retention, performancemanagement, and overall employment branding. Karen Paul, manager of HRmeasurement at 3M said, Integration of employee engagement with other HRprocesses is key.


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Employee engagement is by no means a stand-alone endeavor or even a specific setof activities at best-practice organizations. It is a journey ingrained in their

organizational cultures. Figure 4 summarizes the key elements of talent managementthat organizations should integrate with employee engagement strategy andprocesses. (The processes for integrating employee engagement strategy withrecruitment, selection, and employment branding strategy are summarized in thissection; employee engagements integration with the other elements of talentmanagement is detailed in subsequent findings.)

Integrating Employee Engagement with Other Aspects of Talent

Management

Figure 4

Integrate engagement with the selection strategy.

Creating a cadre of engaged employees begins with selecting the best individuals forspecific positionsthat is, individuals who fit within the larger organizational wayof life. Individuals who feel comfortable in their role and who feel like they fit intothe organizational culture will certainly have a higher level of engagement thanindividuals placed in the wrong position or who simply do not fit in. Best-practice


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organizations leverage their high-potential and high-value talent to identify otherpotential candidates.

Infosys hires for attitude and passion and trains for talent. In order to assess thecultural fit, passion, and engagement of potential new hires, Infosys has a panel ofhigh-potential supervisors and managersvarying between 800 and 2,000individuals at any one point in timethat recruit and represent Infosys on collegecampuses. This panel undergoes extensive training and coaching to appropriatelycommunicate with candidates, showcase careers at Infosys, and gauge applicant fitfor the organization.

Schlumberger uses field recruiters and other technical experts sourced from its high-value employee population to recruit and select new technical talent. Theserecruiters ensure that an enthusiasm for working at Schlumberger and core

organizational values are well-communicated to applicants. By leveraging like-talentto recruit like-talent, factual information about job opportunities is well-communicated to prospective employees and the engineers-turned-recruiters areable to identify applicants who will also fit the Schlumberger culture.

Integrate engagement with the recruiting and employment brandingstrategy.

Best-practice organizations also recognize that their employment brands andcorporate reputations are critical factors in engaging current employees (as well asrecruiting and selecting future engaged employees).

3M has an internal employment brand and tag line: Technically brilliant, endlessly

innovative. Thats you. Thats us. The engagement and measurement team at 3Mbelieves employee engagement leads to customer engagement, which in turn leads toincreased customer share and increased sales revenues. 3M has created an integratedemployment brand model comprised of external branding vehicles (such as external

Web sites and community activities) and internal branding vehicles includinginternal Web sites and an internal commercial.

Infosys brands itself as a premier organization for leaders, with only the best of thebest accepted and with application criteria and selection rates more stringent thanHarvard University. In fact, more than 97 percent of applicants are screened outduring the selection process at Infosys. The organization has aggressive annualrecruiting goalsas a technology company, it highly leverages technology and sharedservices to meet these goalsand therefore employs extensive and early outreach to

potential employees to create brand awareness, including a global internshipprogram that attracts top talent across the world, outreach to communities local todevelopment centers (the Rural Reach program), a program to train young highschool students (the Catch Them Young program), and strong relationships withhundreds of universities globally.


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PROCESSES

What processes do best-practice organizations use to collect feedback from theiremployees, how often do they gather this feedback, and how is the informationused? The best-practice partners employ a variety of listening posts beyond standardemployee satisfaction or opinion surveys to capture employee feedback information.

As a result, their employees feel empowered and that they have a voice in thedirection of the organization. They have the ability to communicate with seniorleadership. And management at all levelsfrom senior executives to linemanagersare held accountable for action plans resulting from the feedback and fordeveloping, engaging, and teaching others as a key competency. This section detailsthe processes by which best-practice organizations gather satisfaction, opinion, andengagement information from their employees.

Gather employee feedback from multiple listening posts.

Communication is a critical piece of any successful engagement strategy. Eachemployee expresses opinions in a different way. It is important to offer a variety ofmethods, such as anonymous surveys and in-person meetings, to allow employees toexpress feedback in their own way. In addition, welcoming employees opinionsshows them their opinions matter. Each best-practice partner has multiple avenuesto collect employee feedback.

Infosys has several lines of communication for positive and constructive exchangesbetween employees and management. Methods to collect employee feedbackinclude: My Voice@Infosys, a separate communication platform for employees to share

inputs and suggestions surrounding various policies; HRD Blog, a platform for employees to communicate issues of importance

with the head of HR; and a managers portal used to collect and share relevant business information.One of Infosys formal feedback mechanisms, Lets Interact on Themes that Matterto Us (LITMUS), is an online employee engagement survey of issues that matter toits employees. After the survey is administered, the data is interpreted and actionitems are created. Employees have access to a LITMUS portal where the progress ofeach action item is shared. In addition to collecting employee opinions, this surveyalso gauges manager performance and measures progress against specificparameters.

3M administers four employee surveys. Its diagnostic survey is a customizable catch-all used by the business units at their own discretion. Its standard employee opinionsurvey undertakes a full census delivered every two years at the business unit level.3M also has a leadership survey for supervisor levels and above, as well as exitinterviews for both retirees and future alumni. Both the diagnostic survey and thestandard opinion survey can be tailored to fit the needs of each individual businessunit. In addition, 3M offers an employment value tool, a structured and open-ended


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interview guide used by supervisors to guide conversations through several issuesincluding personal satisfaction.

Schlumberger also offers several methods to collect employee feedback. Its reservoirmanagement group leverages an annual employee satisfaction survey to keep a pulseon employee opinion. And HR audits are conducted on a global basis to providerich information exchange among all levels of employees. Schlumbergers HRdepartment also conducts regular open houses with employees in a variety ofregions. The trade showlike atmosphere at the open houses allows employees to

walk around with their families and ask questions on topics such as payroll,pensions, benefits, and careers.

PRACTICES

The studys third key scope area is understanding the tangible and intangiblepractices that best-practice organizations employ in order to engage their employeesin general and key talent in particular. Study sponsors wanted to explore whether ornot these practices vary across cultures, regions, and generations and also howorganizations continue to engage their critical talent despite economic fluctuations.Referring back to Figure 3 on page 14, the findings and examples presented in thissection detail post-hire elements of talent management (i.e., training anddevelopment, rewards and retention, and performance evaluation and management)and the practices that contribute to increased employee engagement within each.

Provide meaningful and challenging work opportunities to all employees.

Although business units and regions within an organization should have the

flexibility to customize employee engagement initiatives to their cultures and needs,the fundamental tenets of what comprise an engaged employee should be the sameregardless of age, gender, position in the organization, region, or culture. Andalthough job profiles invariably differ, engaged employees want meaningful andchallenging work.

What makes work meaningful and challenging? Such work allows employees to viewtheir job as a means to an end, as enriching their life skills, and as an opportunity todevelop both personally and professionally.

The employee engagement and measurement team at 3M has found that thefundamentals of employee engagement are universal, varying little by generation,

years of service, or region. Sandra Tokach, vice president of talent solutions, said,The desire for meaning and purpose in the workplace knows no borders.

On the other hand, the team has found that how 3M capitalizes on thefundamentals of engagement is local and contextual. Communication aboutemployee engagement initiatives and engagement training, for example, takes intoaccount local cultures and languages. A picture or phrase that may be appropriate inone country may be considered offensive or not have the intended meaning in


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another. The implementation of rewards and recognition programs is also context-specific; employees in one country may consider a cash award more attractive,

whereas employees in another country may be much more motivated by a signedcongratulatory letter from a senior executive recognizing their achievements.

3M engages employees through three fundamental tenets.1. Treat people fairly, through accountability and rewards, respect and

warmth, and procedural fairness (by keeping promises, involving people indecision making, creating an operational rhythm, and distributing workequitably).

2. Pay attention to the seemingly mundane, such as technology, support, andinternal battles.

3. Recognize and celebrate employee successes.

Schlumberger sees few differences country by country in key motivation factors.The concepts of a good job and fair pay, regular recognition by management, a goodwork environment, and a clear path ahead seem to transcend cultural boundaries.

Customize key talent management practices, where appropriate, to maximizeengagement and retention.

Although it would appear that the basic prerequisites for employee engagement arecommon across cultures and generations, in some cases like with high-value orhigh-potential talentit may be appropriate to customize talent managementpractices in order to increase engagement levels and retain this valued talent. AsInfosys has found, it is not only external customers who are increasingly moresophisticated, knowledgeable, and demanding of individualized service but also

internal employees who desire a self-determined, customized approach to theircareers. Career paths and employee training and development are strong, positiveinfluencers of employee engagement. Best-practice organizations allow employees tocustomize and take ownership of their own careers and express their individuality.

They make efforts to understand valued talent and groups of individuals with likepreferences, and they tailor talent management efforts accordingly.

One of the ways Schlumberger engages and retains its in-demand specializedtechnical talent is through technical career ladders whereby employees can self-manage, to a large extent, their careers at Schlumberger. Career maps housed on adedicated career management Web site identify the conditions for promotion fromone level to the next. Technical employees take charge of their training anddevelopment based on what they have agreed to with management will be theirprimary career path within the organization. Employees can access all of the mapson the career Web site, where they can view job descriptions, the requirementsnecessary to move to another position with a higher level of responsibility, theassociated knowledge and competencies, and the training and development they

would need in order to get the next level or position. This online careermanagement tool has proven to be a key retention factor for technical talent atSchlumberger.


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Another customized talent management tool at Schlumberger is career orientationreviews. Managers periodically conduct in-depth, one-on-one reviews with high-

value talent. The reviews cover the gamut of employees careers to date, theirtechnical and functional skills, and soft skills they have mastered. The objectives ofthe reviews are to thoroughly explore the employees desired long-term goals anddesired career path within the organization and then to align employee expectations

with organizational requirements. These individual conversations encourage long-term retention of valued employees and foster a calibration between the needs ofemployee and the employer for a mutually beneficial relationship. The outcome ofeach review is captured in an HR intranet database and can be viewed on-demandby line managers and the HR function.

Employees at Schlumberger are also encouraged to express their individuality, whichin turn contributes to their increased engagement as they appreciate an organization

that appreciates them. This can be seen on employee career networking profiles,which are housed on the company intranet, similar to personal Facebook pages (butwithin the corporate firewall) that the employees themselves manage. These internalemployee biographies allow individuals to present themselves to their colleagues in astructured manner but with freedom about the content that they choose to share.

Infosys has developed a customized online career pathing system called InfosysRole and Career Enhancement (iRACE), which uses a career transformationarchitecture to map out career progression paths at Infosys. Employees cancustomize a path that works best for them by choosing from more than 25 paths.

Infosys customizes talent management approaches for critical technical and high-potential talent in order to engage and retain these key resources. Approximately 20

percent of Infosys employees are considered to have niche skills. These specializedskills cut across different technologies and lines of business. Infosys has createdcustomized reward practices in order to ensure that such skills are not lost tocompetitors. High-potential talent are identified by the board of directors and itsLeadership Institute and given a personal development plan, training, mentors, andexecutive development.

3M has conducted a conjoint analysis of high-potential employees to determine theirunique engagement and retention motivators. Through this analysis, theorganization identified eight specific clusters of employees with similar preferencesbased on their main motivators for working with 3M (including in it to win it, init to experience it, and in it for their family groups). These findings help 3M

tailor HR messages, programs, and policies toand adapt to the ever-changingneeds oftheir high-potential employee population.

Use virtual collaboration and social media to create a sense of communitybetween employees and the employer.

Globalization has required organizations to spread their employees all over theworld in order to meet the needs of customers. Organizations must find a way to


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bring employees together regardless of physical distance. Employees want to feel asense of community and belonging within the organization.

Social media can help employees more easily collaborate with each other, bridgedistances, and get to know each other in a casual environment. Social media cancome in many forms, such as a blog, a wiki, a Facebook group, or a Linked-incommunity. Company-sponsored social media allow employees to talk with eachother and encourage innovation among them.

Both Infosys and Schlumberger offer a YouTube equivalent that allows employeesto create videos that display their own unique life experiences or sketches abouttheir life in the work place, even allowing employees to have best video contestsamong various field locations.

3M sponsors Ideadirect, a tool that allow employees to more easily communicatewith each other. Ideadirect encourages employees to submit ideas for new productsin a structured environment that is easy to use while ensuring the employees feeltheir ideas are valued and appreciated.

There are several different social media offerings available to Infosys employees.Infy TV is an external television channel that connects internal events, initiatives,and updates to the general public. Infy TV allows employees to feel connected toeach other, as well as to friends, family, and fans of Infosys. Infosys also offers AskKris, a monthly interactive column where the CEO answers employees questionson a variety of topics. In addition, a wiki platform allows employees tocommunicate and collaborate on a topic of their choosing.

Schlumberger uses online bulletin boards to resolve employee, product, and supportissues, primarily in their technical communities. These bulletin boards can also beuseful in bringing together special interest groups, such as women in the workplace.Schlumberger allows for individual employee blogs, which encourage employees toshow their creative side. These blogs serve as a nice complement to the morestructured bulletin boards and the CNPs discussed earlier.

Train employees in order to increase their engagement and magnifyengagement efforts. That is, provide training and development from the

point of hire, train managers and leaders to be engagement experts, andcontinuously develop high-potential and leadership talent.

Best-practice organizations recognize the critical role training and development,

career paths, and the opportunity for career advancement play in employeeengagement.

As demonstrated by the best-practice partners, training does not have to happen in aclassroom or be a vendor product to be effective. Training and development ofteninvolves some combination of formalized on-the-job training, structured jobrotations, effective mentoring programs, and e-learning. In order to improveemployee engagement, organizations must make a strong effort to train and develop


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employees and provide them with a meaningful career path in order to keepemployees excited, challenged, productive, and motivated. No matter their title,

position, or tenure, employees are energized by new experiences, new challenges,and the opportunity to learn new things.

Onboarding and New-Hire Training

Nothing is more powerful than a first impression, and this concept extends frominterpersonal communications to the broader realm of employee engagement whenan employee is new to an organization. Best-practice organizations extensively trainnew hires via formal onboarding and entry-level training programs. The investmentthat best-practice organizations make in employee training and development,regardless of economic up or downswings, is significant (as is the payback on thatinvestment).

Infosys, for example, has a world-class training infrastructure for its employees,according to Nandita Gurjar, senior vice president and head of HR development.

The organization is committed to employee training and development even ineconomic downturns.

Best-practice organizations have extensive, formal new-hire onboarding and entry-level training. For example, recently graduated new hires at Schlumberger enterthree-year technical or sales training programs. And Infosys enrolls new hires in athree- to six-month new employee finishing school that uses benchmarks againstbest-practice standards.

Training New Managers and Leaders as Engagement Experts

Best-practice organizations recognize that the manager or supervisor is the ultimateinfluencer of individual employee engagement. These organizations considersupervisors, managers, and senior leaders as employee engagement ambassadors.Since employees leave bosses and not jobs, best-practice organizations train newmanagers/supervisors in the principals of engaging their employees. Furthermore,those in leadership roles have employee engagement as a critical competency theyare managed against and expected to exemplify.

In rolling out its formal corporate processes and standards for employeeengagement, 3M focused on leaders and supervisors as a key constituents in theeffort. In 2007 3M integrated employee engagement into the responsibilities ofleaders. In 2008 the organization educated its supervisors and managers on the

importance of engagement and incorporated engagement into its leadership classes.In 2009 3M began producing and disseminating short, targeted videos to supervisorsand managers. These videos provide training and development on various topicsrelated to employee engagement. In 2010 3M plans to do additional work to engageits supervisors as developers of their people.

HR professionals at Schlumberger recognize the critical nature of managers inengaging their employees. To that end, the organization offers programs that teach


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people management skills to new, mid-level, and more senior-level managers. Forexample, its management essentials program covers key behaviors Schlumberger

expects from its managers as they progress through their careers, including effectivecommunication (new manager training); preparing subordinates to becomemanagers (mid-level manager training); and leading change, building effective teams,and developing leadership throughout the organization (senior manager training).

Continuously Developing High-Potential Talent and Leaders

Leadership development and succession planning can be, and have been in pastAPQC studies, individual areas of focused research in their own right. Therefore,these topics were not examined in-depth in this study. However, the logic followsthat engaged leaders continuously receive and support training and development.

That is, leaders should engage employees as a key leadership competency. And

employees who are invested in by their organizations via training and developmentprograms are more engaged. Therefore, leaders should receive continuous trainingand development in order to engage others, as well as to stay actively engagedthemselves.

Although the terms high potential and leaderare used synonymously in this section,often high potentials are future leaders. Therefore, it is even more important toinvolve high potentials in training and development programs, not only to satisfy,engage, and retain them in their jobs but also to train them for their next job,perhaps as a supervisor or manager.

The best-practice partners use their leaders to teach other leaders, focus on real-

world business challenges and business-critical content, leverage action learning, andoffer opportunities for networking with executives in leadership training. Each ofthe best-practice partners have structured programs in place for high-value or high-potential talent identification, succession planning, and leadership development. Forexample, 3M offers formal training programs for supervisors and managers,directors, general managers, and managing directors.

Infosys follows a tiered leadership model. (Tier I leaders are future top managementand those next in line for the board, Tier II leaders are function heads and leadersthat have been chosen for future business function leadership roles, and Tier IIIleaders are employees anticipated to take on a leadership role in the next three tofive years.) High-potential leaders are identified by the board of directors and itsLeadership Institute. Each high-potential leader has a personal development plan,

which includes action learning, assigned mentors and coaches, and executivedevelopment provided by top business schools. In addition, formal successionplanning takes place for key positions in the organization.

Create a rewards and recognition culture.

Recognize efforts and reward success. Rewarding employees appropriately is a vitalpart of any work force engagement strategy. If employees arent shown they are


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appreciated for the work they do, then there is a good chance they will leave theorganization.

The best-practice partners have shown that it is important to go beyond the typicalrewards strategy. Rewards should come in different packages, whether it be a cashaward, spot awards, a certificate, or even a company t-shirt in order to appeal toevery type of employee. Each of this studys best-practice organizations offer awardsgiven on the spot that need little to no approval from supervisors, peer-to-peerawards, and informal and formal rewards. They also allow the flexibility (andbudget) for managers to award employees as necessary, for business units to offerappropriate awards, and for regions to offer awards appropriate for their cultures.

The best-practice organizations are also beginning to incorporate rewards intotraining and career opportunities, such as offering promotion ladders or careerlattices. Rewards might also include improvements in work/life balance, additional

training and development opportunities, or even the ability to pursue dreamsthrough approved leaves of absence.

3M ensures that all of its financial incentives are grossed-up to ensure that the taxesdo not affect the amount of the reward. 3M aims to make every employee feelimportant and recognized (e.g., through length of service awards).

At Schlumberger, formal rewards are part of an awards hierarchy; basic cashcompensation appears at the bottom, followed up the hierarchy with larger cashincentives and job bonuses, fringe and mobility benefits (the ability for employees tomove positions as desired), deferred compensation and enhanced insurance benefits,employee stock purchases, and finally stock grants at the top.

Infosys engages its high-potential talent through compensation enhancements,career paths, and customized reward packages. Infosys reward system, theEmployee Reward Tree, is based on customer delight, leadership by example,integrity, fairness, and the pursuit of excellence.

Reward your employees based on performance, not tenure.

All of the best-practice organizations recognize that the key element in engagingemployees is ensuring fair, competitive total compensation. Karen Paul from 3Msaid: We think in terms of total compensation (for example, base pay, variable pay,stock options, and restricted stock units). Fair total compensation is a keyfoundation for all employees. Without it, learning, growth, and development areirrelevant.

Benoit Barbier from Schlumberger also stated the importance of fair pay in keepingemployees engaged: Having the right salary for retention is fundamental. People

wont leave the organization because of their salary; but if they are unhappy withtheir salary, it is the last straw. When the employee is dissatisfied and the salary isnot right, they start to think about moving elsewhere.


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Best-practice organizations regularly benchmark their compensation and rewardsstructure within and outside their industries. 3M, for example, regularly benchmarks

its practices via a variety of listening posts, including capturing feedback fromemployees, vendors, and other organizations; attending conferences on the topic;and reading research literature on employee recognition, rewards, and engagement.Schlumberger participates in annual salary benchmarking and associatedadjustments. Every year a full salary review is conducted, which helps determine thebudget for the following year. Schlumberger also performs ad hoc salary analysis

when it notices certain categories of talent being poached and for at-risk talentpopulations.

APQC has conducted an analysis of top performers in its Open Standards Rewardand Retain Employees benchmarking survey, which shows that roughly 70 percentof top performers review/revisit overall compensation strategy annually and

review/revisit employee benefits packages as required by market demands.

Top-performing organizations make their employees and their families feel safethrough a comprehensive benefits package. At minimum, organizations should offercompetitive medical, dental, and disability insurance to their employees. Figure 5lists the top three benefits offered by reward and retain employees topperformers, compared to the rest of the responses.

Top Three Benefits Offered at Top-performing Companies

Figure 5

A critical part of employee rewards strategy is ensuring that top-performingemployees are rewarded financially in terms of wages, bonuses, contributions to

92%

64%

55%

100%

100%

100%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00%

Medical

Dental

Short- andlong-term

disability

Top Performers All Participants


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pension/retirement accounts, and when available, stock options. Employees at best-practice organizations are engaged because they know their work will be tangibly

rewarded from their earliest days of employment. This includes a higher emphasison pay for performance at best-practice organizations than among otherorganizations. APQCs analysis from the Reward and Retain Employeesbenchmarking survey shows that top-performing organizations have a higherpercentage of salary that is performance-related pay than the rest of surveyrespondents across the board (Figure 6).

Percentage of Salary That is Performance-related Pay (Median)

Figure 6

At Infosys, the performance culture is based on merit. Pay-for-performance is a keytenet of performance management at the organization, which makes a clear

differentiation when it comes to high-performer rewards and growth opportunities.The compensation package for the high-performing employee is 50 percent fixedand 50 percent variable (the level of variability increases the more senior theposition of the employee). This structure is carefully designed to enable highperformers to earn anywhere from 50 percent to 80 percent more than an averageperformer and up to 150 percent of their specified salaries. Even junior employeeshave a minimum of 10 percent of total compensation tied to performance. Abalanced scorecard of performance measures flows all the way down to junior

50%

30%

20%

28%

15%

7%

0%

10%

20%

30%

40%

50%

60%

Senior

management/Executive

Middle

management/Specialist

Operational

workers/Office staff

Top Performers All Participants


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employees at Infosys, and individual performance is ultimately tied to overallcorporate performance via a balanced scorecard of measures.

This study found that money is a satisfier, but not a driver of employee engagement.An analysis of top performers in APQCs Reward and Retain Employees surveyshows that top-performing organizations spend significantly less on rewards andretention, but at the same time have higher levels of efficiency and productivity andfewer days absence per reported FTE. Just throwing more money into a rewardsstrategy does not necessarily engage employees or provide a large enough incentiveto high-potential employees.

In Marshall Goldsmiths book What Got You Here Wont Get You There (Hyperion,2007), the author describes a research project for Accenture he conducted with 200high-potential leaders from 120 organizations around the world. These 200

employees, hand selected by their organizations as future leaders, were asked if andwhy they plan to stay with their employer. The top three answers were:1. I am finding meaning and happiness now. The work is exciting, and I love

what I am doing.2. I like the people. They are my friends. This feels like a team. It feels like a

family. I could make more money working with other people, but I dontwant to leave the people here.

3. I can follow my dreams. This organization is giving me a chance to dowhat I really want to do in life.

Marshall writes: The answers were never about money. They were always abouthappiness, relationships, following dreams, and meaning.

Take a comprehensive view of the work/life balance.

To keep employees engaged, organizations must do everything they can to supportemployees personal and family lives. This study found that best-practiceorganizations take a comprehensive view of the work/life balance, a view that goesbeyond standard flex time and work-from-home policies to holistic support of theemployee while at work and incorporating considerations of an employees family.

The best-practice partners have nearly every base covered in relation to work/lifebalance, including health and safety, work-at-home policies and practices, fitnessbenefits, family-friendly benefits, support for dual-career families, and evenencouraging employees to pursue lifelong dreams.

Infosys encourages a healthy work/life balance in part by creating an environmentwhere people feel they have meaningful and supported careers. Infosys hasinstituted several policies to support work/life balance such as paid maternity andpaternity leave, options for those workers seeking part-time opportunities, flexibleschedules, telecommuting for selected employees, sabbaticals for employees toengage in volunteer activities, and opportunities for additional formal education.


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Schlumberger has enacted a formal policy to actively support dual-career marriedcouples (whether one or both spouses work at Schlumberger). Once an employee

indicates they are in a dual-career family, Schlumberger provides scheduling andwork flexibility to accommodate them. In addition, Schlumberger employees areallowed to take leaves of absence to accomplish personal goals, objectives, anddreams.

Employees health and well-being is one of 3Ms top priorities. This upfrontattention ultimately saves the organization money by minimizing costly reactiveinterventions. In 2008 3M launched a program called Healthy Living Resource,

which offered free health screening assessments for their employees. As an addedincentive, the company offered $100 dollars for participating employees. Throughthis program, 3M actually sent a handful of employees to the hospital directly fromthe health screening. The projected savings from these immediate interventions was

approximately 50 percent of the total it paid out for incentives. In addition to savingthis large amount, 3M provided important health information to their employeesand decreased its future cost of health care. 3M also offers an employee assistanceprogram, onsite medical clinics, a fitness center, lunch-and-learn educationalopportunities, and an activity club based on various hobbies and interests.

Retain key talent in creative ways during times of reduced business activityor organizational changes.

It would stand to reason that if organizations do a good job of rewarding andengaging their key talent, then retention and unwanted turnover would not beissues. However, a passive attitude toward employee retention is not a wise long-term strategy. This study found that best-practice organizations actively retain their

key talent and can be creative in efforts to retain this talent during economicdownswings and/or organizational changes.

Schlumberger identifies high-value talent annually, and employee high-value flagsexpire after one year. High-value employees are determined by their performance incertain categories of skills such as line management skills, functional expertise,outstanding business performance, technical expertise, outstanding salesperformance, and the ability to mentor (if applicable). These individuals representthe top 15 percent of employees. As high-value employees are identified worldwide,their information is stored on the HR intranet site. Managers can review the high-

value talent distribution by region, as well as diversity statistics, to ensure that thehigh-value talent pool is representative of the work force demographics at large.

The responsibility for flagging high-value employees ultimately resides with linemanagers, assisted in this process by HR. HR prepares lists of candidates based onprevious years entries and ensures these candidates career profiles are up-to-dateon the HR intranet.

Corporate HR at Schlumberger actively identifies at-risk populations of key talent.HR maintains an up-to-date list of at-risk, high-value employees by business


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segment and geography. At-risk populations are immediately brought to theattention of executive management for preventive action. On an annual basis, the

chairman and CEO indicates which specific efforts must be made to retain theseexperts, and corresponding retention objectives are assigned to line managers.

Schlumberger also works to retain high-valued talent during times of organizationalchange, such as during mergers and acquisitions, recognizing that managing thechange process well is key to retaining the desired talent at the acquiredorganizations. One critical success factor to ensure that associated changes areproperly managed is the assignment of an integration manager, whose role is toengage with employees, familiarize them with Schlumberger, and integrate them intothe organizations mission, vision, and values.

When, due to cost constraints, Schlumberger is forced to let some valued talent go

for a period of time, it offers incentivized leaves of absence. Schlumberger pays theemployee 20 percent of their base salary at the beginning of the leave and reservesthe right to call the employee back six months to a year later for rehire. If theemployee agrees to be re-hired at that time, then he/she receives an additional 30percent of their annual salary. Schlumberger has determined that offering employees50 percent of their annual salary for selected employees they wish to rehire has beena tremendous benefit and ultimately reduces costs of rehiring and additional trainingfor new employees.

As an IT services company, Infosys finds that 10 percent to 12 percent of its workforce may not be billable to a client project at any given point in time. Employeesthat are not billable are at risk of disenchantment because they may not have theopportunity to improve their skills and be as productive in their job as they would

like. To combat this potential problem, Infosys has created a MyWorks portal thatallows employees who need help across the enterprise to post short-term projects

while allowing employees not fully utilized to search for short-term assignments.Demand for additional resources is matched with a supply of talented underutilized

workers, a win-win for the organization.

Outcomes and Measurement

The last study scope area explores how best-practice organizations institutionalizeemployee engagement through accountability and measurement. Best-practiceorganizations hold managers and leaders responsible for engaging their employeesas a key competency and expectation. In addition, the best-practice partners are ableto correlate positive levels of employee engagement with real, positive businessoutcomes.

Hold leaders responsible for employee measures.

As discussed throughout this report, the best-practice partners ultimately lay theresponsibility for employee engagement at the feet of supervisors and managers,

with executive championship provided by senior executives and support, tools,templates, and guidance from corporate HR. This expectation is reinforced in two


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ways: 1) by building responsibility into leadership competencies and the formalexpectations of a leader and 2) through performance management practices.

Engagement as an Expectation of What it Means to be a Leader

Best-practice organizations expect their leaders to develop their people. APQCs2007 study Identifying, Developing, and Assessing High-Potential Talent found that a keyexpectation of leaders is that they be communicative with employees and focus onpeople.

Some organizations go so far as to explicitly list employee engagement as a coreleadership competency. For example, one of the first steps 3M took in its formalcorporate engagement journey in 2007 was to integrate employee engagement intothe leadership attributes and competencies. Attributes of 3M leaders follow: thinks from the outside in; drives innovation and growth; develops, teaches, and engages others; makes courageous decisions; leads with energy, passion, and urgency; and lives 3M values.Engagement as a Key Component of Performance Management

At Infosys, every manager has a LITMUS scorecard to track his or her ownperformance against key action items identified as a result of the LITMUS survey, as

well as to motivate managers to achieve a higher level of performance. Managers useLITMUS tools to help track initiatives resulting from the employee engagement

survey results at the corporate level. LITMUS portals display results online formanagerial access.

Infosys also employs people dashboards enabled by an HR analytics andwarehousing service that allow the organization to gather meaningful insights fromHR data collected from various organizationwide HR and nonHR systems. Thesedashboards show key work force measures and statistics that allow managers a quickassessment of overall sentiments and retention along with regional, skill-specific,and manager-specific retention concerns and the issues that have the greatest impacton engagement and turnover.

The HR leaders at Infosys recognize that the majority of the engagement incentives

come from business line managers, so the HR group evaluates the managersengagement and retention efforts. Managers at Infosys are measured by the peopledashboards, along with the LITMUS results and other employee feedbackmechanisms detailed in this report. Managers overall performance is evaluated inpart by their staffs relative engagement and productivity and changes over time.

Schlumberger relies strongly on management by objectives, formalized within theperformance appraisal process, which applies to all employees. Each January, the


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vice president of HR proposes key improvements to the executive managementteam, who in turn validates the suggestions against current business strategies. These

expected improvements are then captured in a global HR directions document,from which specific objectives are extracted and distributed throughout theorganization. The achievement of these objectives is part of the performanceincentive plan of all line and HR managers.

Link employee engagement with business outcomes.

The best-practice partners have been able to correlate positive employeeengagement with positive business outcomes, such as lower turnover andabsenteeism and higher levels of productivity and innovation. External research onthe service-profit chain (the link among employee satisfaction, customer satisfaction,and organizational profitability) can be used as the business case to begin theemployee engagement journey. As illustrated by the work force engagement model

used by Employee Holdem, organizations can then ensure the conditions forengagement, which lead to positive business outcomes (Figure 7). This modeldemonstrates that organizations with higher levels of employee engagement providehigher levels of return on assets, profitability, and shareholder value.

Employee Holdem Model for Components of Work Force Engagement

Figure 7

Positive business outcomes

Outcomes of an engaged work force:

stay longer

work harder

recommend the organization

Desired state: engaged work force

Attraction

Components:

Reputation management

Work force selection

Organizational orientation

Motivation

Components:

Performance management

Rewards and recognition

Work /life balance

Stakeholder input

Opportunities for advancement

Training and development

Tools and technology

Retention

Components:

Daily satisfaction

Effective senior leadership

Ethics, diversity, and safety


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3M has conducted its own correlations between engagement and businessoutcomes, most notably innovation. The organization conducted a recent study

among its business laboratories in order to measure the relationship betweenengagement and innovation and found that those business laboratories that havemore engaged employees (per results of the worldwide business unit survey) twoyears later were more innovative (i.e., produced more products) than businesslaboratories where employees were less engaged. Since 3M greatly relies oninnovation, these findings were pertinent. 3M has also been able to correlate higherlevels of job satisfaction with lower levels of employee absenteeism.

It is noteworthy that 3M does not currently tie employee engagement scores tomanagerial or leadership compensation. You cant just tell employees to beengaged, and you cant just monitor or push the engagement metric up, because thebehavior will go underground and people will feel coerced, said Sandra Tokach,

vice president talent solutions. But you can invite employees to participate inengagement efforts, and you can and have to lead and inspire by example.

The measurement efforts at Infosys have demonstrated a link between employeeengagement and customer satisfaction. The organization recently completed ananalysis of its customer satisfaction data and is correlating the results with theappropriate business units employee engagement results. The organization hasalready found that the business units with the highest profitability consistently havethe most engaged work force.

Conclusion: Embedding Engagement into Talent Management

Figure 3 on page 14 presents a model for embedding employee engagement into the

different aspects of talent management. Figure 8 on pages 36 through 38summarizes examples of how to put this model in play across the talentmanagement lifecycle within your own organization.

TalentManagement

Process

Examples for Integrating Employee Engagement intoTalent Management Process

Recruiting/Employmentbranding/Communication

Create and communicate a formal employmentbrand to employees.

Externally brand the organization as an employer ofchoice, and seek external validation (awards as bestplace to work or best place for leaders).

Employ extensive and early outreach to potentialtalent pools in local communities, schools anduniversities, and globally (where applicable).

Allow employees the opportunity to be heardinformally via social media channels and formally

via grievance redressing programs.


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TalentManagement

Process


Selection Leverage high-potential or high-value talent to

recruit and select new-hire candidates. Use like-talent to recruit like-talent (e.g., technical

talent to recruit technical talent). Hire for attitude/passion, and train for talent.

Training anddevelopment

Train managers and leaders on principles ofemployee engagement.

Teach new managers and supervisors thefundamental concepts of talent management.

Make engagement easy and accessible by providingcentralized tools and templates online.

Invest in formal entry-level or onboarding trainingto engage new employees.

Provide meaningful and customizable career pathsfor employees that allow for a sense of purpose anddirection in the organization and provide anelement of challenge to employees jobs.

Leadership andhigh-potentialdevelopment

Have senior leaders serve as executive champions ofand role models for employee engagement.

Offer structured leadership development includingpersonal development plans, action learning, leadersteaching leaders, a focus on real-world businesschallenges, mentoring, coaching, 360-degreefeedback, executive development, and networking

with senior executives.

Successionplanning

Regularly identify high-value or high-potentialtalent.

Give primary emphasis on internal promotion andmobility.

Rewards andrecognition

Create a culture of rewards and recognition. Offer fair total compensation and benefits, as

determined by employee feedback and externalbenchmarking.

Budget for employee rewards and recognition. Allow high-value or high-potential employees to

pursue their dreams through approved leaves ofabsence.


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TalentManagement

Process


Retention Go beyond exit interviews: find out what motivates

high-value employees individually through regular,in-depth conversations with them (beyond theannual performance appraisal) while they are stillemployed.

Anticipate unwanted turnover and take preventivesteps to mitigate it.

Provide customized reward, recognition, andretention practices to key or high-potential talent,and even the work force at large, where possible.

Take a holistic employee view of the work/lifebalance.

Work forceanalytics/Management

Gather employee feedback from multiple listeningposts (employee opinion surveys, town hallmeetings, field site visits, social media, employeesuggestion programs, HR audits, etc.). Employeefeedback data should be analyzed and prioritized,and action plans should result from the data.

Leverage online portals where managers andsupervisors can easily access HR dashboards

rewarding, retaining talent

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