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Connecting the Organizational Pulse to the Bottom Line

June 1, 2004 | Charlotte Garvey



HR Magazine, June 2004Employee survey results get morphed into actionable items in business goals.

More companies are breathing life into their employee survey results. Rather than letting results sit lifeless on an HR executive’s bookshelf, organizations are using survey data to create dynamic tools that spur action plans and interactive, ongoing dialogue between company leaders and employees. Companies are moving away from the idea that an employee survey is a one-shot event that elicits general feedback. Instead, they are developing surveys that query progress on key organizational goals and tie results data to business plans.

At software company Intuit, based in Mountain View, Calif., “the voice-of-the-employee survey is one of the company’s major operating mechanisms,” says Craig Ramsay, senior manager at the company’s human resources quality and research department.

“People realize the impact [employee feedback] has on the business bottom line,” says Jeffrey Saltzman, chairman and CEO of Sirota Consulting LLC in Purchase, N.Y. Sirota develops and manages the survey process for a range of private and public companies, including Intuit, Bank of America and Tiffany & Co. “It’s not a touchy-feely” abstract exercise when you can document two or three issues that, when addressed, can make your employees more productive and thus affect a company’s bottom line, he adds.

Taking the time to implement action plans based on survey results “translates into big bucks,” says Gregg Campa, director of client relations at the Business Research Lab in Houston, which conducts about 70 employee surveys a year. He cites a financial services client that had a turnover rate of 55 percent. After the company acted on results from a survey that pinpointed the source of its retention problems, the turnover rate the next year dropped to 22 percent and then down to 14 percent following a second survey. The firm documented savings of $2 million annually by reducing turnover, Campa says.

Survey Design Based on Business Goals

To tie results to the bottom line, the survey itself must be written with business goals in mind. To that end, surveying has evolved from a gauge of employee satisfaction toward an emphasis on employee engagement, focusing more actively on the company and less on the individual, says Victoria Berger-Gross, an industrial psychologist and senior vice president of HR at Tiffany & Co., the New York-based jewelry retailer.

The company just completed a first-time survey of its 4,000 employees across the United States and Toronto, and plans to poll the rest of its global employees over the next two years.

With an employee satisfaction survey, employers typically would find out, “OK, they’re satisfied. Now what?” observes Berger-Gross. But with surveys more focused on employees’ connection to and perception of their employer’s business, “You design it with the end game in mind.”

That end game varies from company to company. But the basic process involves analysis of the data (often by a consultant), communication of the data to various levels of the organization, development of action plans to address key issues identified through the survey, and then action plan execution and follow-up. Experts emphasize that good action plans must be built with data that is “actionable,” meaning information that focuses on issues over which a manager has some control.

Option One Mortgage Corp., a 4,500-employee subsidiary of H&R Block with headquarters in Irvine, Calif., built its survey with help from Mercer Human Resource Consulting of Kansas City, Mo., using 15 “key drivers to associate satisfaction, engagement and retention.” Option One each year asks employees the degree to which they agree with those 15 statements. (See "Option One Survey".)

Option One CEO Bob Dubrish, who helped develop the survey, says he was motivated to launch it after he saw a similar survey work well at another company. In addition, when he met with employees at various branches of his company, they repeatedly cited the company culture as a top reason for staying. Dubrish says he and HR vice president Kristiina Hintgen, SPHR, decided it would be important to measure that sense of engagement. “Any time you measure something, you get better at it,” Dubrish notes.

Intuit’s surveying process, developed with Sirota, is based on the company’s “employee value proposition,” which essentially is a contract Intuit has with its employees, says Ramsay. The proposition includes statements such as, “Invest in me to help me grow fast” and “Let me know where I stand and how I’m doing.” Intuit has about 7,000 employees worldwide.

The proposition and the subsequent survey, initiated in the early 1990s, grew out of the efforts of then-new CEO Steve Bennett to move Intuit’s guiding philosophy from “fluff generic” concepts to specific statements tied to employees’ commitment to and happiness with the company because he felt the company needed something firmer for managers to react to, Ramsay says. The survey, which is aimed at measuring employee engagement, gives managers data that prompt action, because the results pinpoint potential problems with employees that managers are expected to address. Ramsay says his research team can use the employee survey data, sometimes supplemented with other data, to show managers patterns of practices that produce higher employee engagement. “We can correlate certain items [in the survey] with turnover,” and demonstrate to managers that focusing on those issues has statistically been shown to reduce turnover. “That’s very powerful,” Ramsay says.

(For more information on designing effective employee surveys, see “Getting Feedback You Can Depend On” in the March 2003 issue of HR Magazine.)

Sharing the Data

At Tiffany, which works with consultant Sirota, the CEO and top executives get a “high-level” report first, then vice presidents get divisionwide data. But those vice presidents do not get data that is broken down to apply specifically to each director (often the head of a store or specific programmatic function). Directors see that information first because they are the ones expected to create action plans. Distributing survey results from the top of the company down to middle management and from ground-level managers up is the best way to build in accountability, Berger-Gross says. “We need people to own their data.”

Through a computer-based system at Intuit, all employees have access to all survey data. This includes broad access to an “action tracker” web site, on which are posted hundreds of action plans developed by Intuit managers for addressing issues raised in the survey process. The site is searchable by name, so it’s like “a public forum,” Ramsay notes. “This is a pretty big incentive for managers to do the right thing,” and it “holds their feet to the fire” in implementing their plans. In addition, the site serves as a “best practices” communication tool because managers can view other plans to spark ideas of their own.

“There’s a certain trust level that employees give you to start out with,” adds Ramsay. If data from a survey are held “behind a wall, or, worse, if you don’t do anything with it, all this stuff starts chipping away at employee trust.”

Action Planning and Implementation

Tiffany’s survey results indicated “virtually nothing was horrible companywide,” says Berger-Gross. But the poll did identify some areas where additional efforts are needed, including employee recognition and reward programs, she notes. At a recent conference for directors, managers identified this area as one that would be tracked for development of action plans.

Manager training at Tiffany conducted prior to the survey process emphasized the company’s high expectations for implementation of action plans. HR told managers to provide details on their action plans within three weeks. “We have a very robust performance management system” that will make it easy to build in survey result implementation as a measurement of their performance, Berger-Gross says.

At Intuit, there are three levels of action planning: companywide; organizational, meaning vice presidents and executive vice presidents; and developmental, meaning managers. All managers with five or more direct reports responding to the survey, the minimum number required for generating unit-specific reports, get an analysis of that data. “Everybody is expected to engage their team in ‘voice-of-the-employee’ discussions,” Ramsay says. “You pull out the results and walk through them, and then give the employees ‘soak time’ with the data.”

A manager is expected to get feedback from the employees in his or her unit and then collaboratively develop items to work on. For example, if there were significant negative responses to the statement, “My business unit makes good decisions,” the manager is expected to “scope that down” with employees to find out what gets in the way of making better decisions, Ramsay says. They must choose items that the manager can actually impact.

Showing improvement on more companywide issues can be trickier, he notes. Issues that Intuit has taken on “wholesale” can take years to show up in survey responses. For example, several years ago, Intuit modified its compensation system to move from what Ramsay terms a “peanut butter” system—spreading pay across all the employees—to a pay-for-performance approach. With that change, Intuit management considered the compensation system “fixed.”

But survey scores regarding the pay system still lagged until a recent survey, Ramsay says. “You can fix processes and systems, but people don’t realize they’ve changed right away.”

Ramsay explains that changing a specific process often can be accomplished within an annual survey cycle; however, if the change will fundamentally involve a culture shift, don’t expect to see survey scores move on the next annual survey. “The seasoned HR executive will know the difference, will have the tenacity to drive the change forward, and, at the same time, the patience to understand that a survey score lag time is normal as people begin to understand and internalize a new reality.”

Intuit is working with Sirota to add new features to the action plan tracker, such as automatically reminding managers that “It’s been a while since you’ve logged on or updated your action plan.” Says Ramsay, “We try to get out of the way” after giving managers the right tools to move forward, “but there are little things that help hold the accountability level up.”

One of the tools is an electronic “pulse” survey, which managers can launch several times during the year. The survey takes an interim snapshot of where employees are on survey questions, telling a manager how he or she is doing in implementing an action plan.

But Ramsay advises managers to limit use of pulse surveys so employees don’t feel over-surveyed and urges face-to-face discussions to find out how things are going.

Accountability

Intuit managers are expected to take the survey process and follow-up actions seriously, Ramsay says. “If they don’t get it, especially at the [vice president] level, they get ousted like a bad virus.” If poor survey results are not turned around relatively quickly, he adds, “they’re gone.”

At Intuit, leaders are assessed for what they have done to improve employee engagement, which contributes to the overall performance rating that affects their pay and bonus, although there is no direct tie between survey performance and bonus eligibility. Option One expects its managers to look at their data and come up with action plans in collaboration with their workforce. In the early stages of the survey, managers were expected to come up with three specific items to try to improve. The system is less prescriptive now, says HR VP Hintgen. Managers are urged to select issues to address, but they are no longer required to pick three.

But there is a clear compensation connection to making changes. Up to 20 percent of Option One managers’ short-term incentive pay has been linked to survey results since the second year of the survey program. “I will say to this day it is controversial,” Hintgen acknowledges, and both she and CEO Dubrish indicate they may adjust the program somewhat. But Dubrish notes the system explains to managers how important the survey is to company operations. “It certainly got their attention,” he says.

The jury is still out on this approach. While the practice is becoming more common, “it is still relatively rare,” says Rodney Fralicx, Mercer’s director of global employee survey research.

There are dangers in tying compensation to results, Fralicx suggests. Managers can “focus on getting the scores up, to the neglect of other aspects of the business,” he says. “This is a real problem if the survey is not linked to business outcomes.”

Intuit’s Ramsay indicates his company does not support making a specific portion of compensation dependent on achieving survey results, because for Intuit, that is already a factor in overall performance rating. “We encourage our leaders to hold their managers accountable for moving the score in the right direction,” he says.

Dubrish argues, “There’s no perfect metric.” He also notes that the bonus compensation at risk is “just one piece of performance” and does not replace managers’ responsibility to make sure their operations stay on track. The focus is on best practices, Dubrish says. “We don’t use this survey to penalize people.”

A Supportive Environment

Tiffany, Option One and Intuit all have survey response rates in the 90-percent range. At Tiffany, Berger-Gross credits the overall company environment. Managers are “very open to collaboration” and also are “capable of dealing with the information” once they get it, she says.

She impressed on upper management the concept that employee loyalty, already a hallmark of Tiffany’s workforce, will only be stronger with the survey process, she says. Also, she conveyed that “how [employees] answer will predict how long they will stick with [the company] in hard times,” Berger-Gross says.

Tiffany will continue to roll out its survey over the next three years, surveying non-U.S. operations except Japan next year, with Japan to follow, and then back to operations based in the United States and Toronto.

At both Intuit and Option One, one of the key ingredients of success has been active CEO support. Olivia Smith, workplace assessment program manager at Intuit, says CEO Steve Bennett does not regard the survey process as an HR-only function. “He understands that’s how you run your business.”

Similarly, Dubrish has been an active participant in all aspects of the survey process, says Hintgen. “Hands down, it was owned by the CEO and he championed it.”

When it came time to explain the survey and its connection to managers’ bonuses, the CEO “was standing right there by my side, which was great because a lot of arrows would have slung my way” otherwise, Hintgen recalls with a laugh.

Dubrish said he also reviews the 80 pages of written comments from respondents, looking for “constructive criticism.”

Charlotte Garvey is a freelance writer based in the Washington, D.C., area who reports on business and environmental issues.


Web Extras

  • SHRM articles: Getting Feedback You Can Depend On (HR Magazine, March 2003)

  • SHRM White Paper: Action Planning Made Easy

  • SHRM Web site:The Promises and Challenges of Linkage Research 
    (PDF file; source: from Sirota Consulting

Option One Survey

Following are 15 statements that Option One Mortgage Corp., a subsidiary of H&R Block based in Irvine, Calif., asks employees to agree or disagree with on its survey:

  • There is a good match between who I am, what I want, and the company’s values and goals.
  • Company policies and practices are applied fairly.
  • Overall, I am confident I will be able to achieve my career objectives at this company.
  • The company invests in its people.
  • The mission and purpose of this company make me feel like my work is important.
  • I feel I am a part of the team at this company.
  • In my department, we have the necessary authority to decide how to best carry out our job responsibilities.
  • On a regular basis, I receive feedback from my immediate leader.
  • My immediate leader acts in a manner consistent with our company’s mission and values.
  • My immediate leader makes business decisions that take into consideration associates’ opinions and ideas.
  • My immediate leader is helpful when I want to discuss my career plans and objectives.
  • My immediate leader coaches me to help me improve my performance capabilities.
  • In my department/branch, promotions are based on qualifications, not politics.
  • There are good financial incentives to stay at this company.
  • My incentive compensation plan is aligned well with my key job responsibilities.

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