3 M Human Resources Measurement Engagement A Multiyear

3 M Human Resources Measurement Engagement: A Multiyear Affair Karen B. Paul, Ph. D. (kbpaul 1@mmm. com) Benjamin Schneider, Ph. D. (BSchneider@valtera. com) © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Karen B. Paul, Ph. D. Background § Responsible for creation and execution of: § Assessment and testing § Competencies § 360’s § § Presented research for: § § § Organizational survey research and executive assessment ASTD, HRPS, SIOP, APA and APS Published in professional journals: § Journal of Applied Psychology § Training and Development Author of chapter in: § § Handbook of Employee Selection Managing Human Resources for Environmental Sustainability 2 © 3 M 2010. All Rights Reserved. Manager, HR Measurement 3 M Company Ph. D. Industrial and Organizational Psychology Bowling Green State University

3 M Human Resources Measurement Benjamin Schneider, Ph. D. Background § Responsible for advising on consulting projects, writing research papers, and working with clients. § 3 Special interests in organizational climate and culture, employee engagement, service quality, linking employee survey data to corporate effectiveness, and the role of personality in organizational life. § Published nine books and 150+ professional journal articles and book chapters. The latest book (with W. Macey, K. Barbera, & S. Young is Employee Engagement: Tools for Analysis, Practice and Competitive Advantage (Wiley-Blackwell, 2009). § Taught at the University of Maryland for many years as well as Yale University, Michigan State University and for shorter periods of time at Bar-Ilan University (Israel; on a Fulbiright), and Dartmouth College. § Winner of several awards for his research including © 3 M 2010. All Rights 2009 Reserved. SHRM’s Michael R, Losey Award for his work Senior Research Fellow, Valtera & Professor Emeritus, University of Maryland Ph. D. in Industrial and Social Psychology University of Maryland

3 M Human Resources Measurement Little Bit of Background on 3 M and Valtera 4 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement More Than 35 business Units Organized Into Six Market-Leading Businesses 5 § § § Consumer and Office Display and Graphics Electro and Communications Health Care Industrial and Transportation Safety, Security and Protection Services © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement 3 M’s Technology Platforms Ab Abrasives Ac Acoustics Ad Adhesives Am Ce Ceramics Dd Di Fe An Do Analytical Dental & Orthodontic Materials As Ec Energy Components Nanotechnology Fc Flexible Converting & Packaging Display Nt Em Electronic Materials Drug Delivery Advanced Materials Application Software Pm Sm Bi Biotech Mi Fs Flexible Electronics Filtration, Separation, Purification Fi Im Films Fl Fluoromaterials 6 © 3 M 2010. All Rights Reserved. Is Integrated Systems Design Lm Imaging Light Mgmt In Md Inspection & Measurement Medical Data Mgmt Me Metal Matrix Composites Mf Mechanical Fasteners Nw Microbial Detection & Control Nonwoven Materials Mo Op Molding Mr Microreplication Optoelectronics Pd Particle & Dispersion Processing Pe Predictive Engineering & Modeling Polymer Melt Processing Specialty Materials Po Su Porous Materials & Membranes Pp Surface Modification Tt Precision Processing Track and Trace Pr Vp Process Design & Control Rp Vapor Processing We Radiation Processing Accelerated Weathering Se Wo Sensors Wound Mgmt

3 M Human Resources Measurement 3 M Facts Year-End 2009 Sales Worldwide. . . . $23. 1 billion International (63% of total). . . . $14. 6 billion Where are We? § Sell products in over 200 countries § Operations in more than 65 countries Earnings Net income. . . . $3. 19 billion § 35 international companies with manufacturing operations, 35 with laboratories R&D Expenditures $1. 29 billion For 2009. . . . . $6. 86 billion Total last 5 years. . . . . § In the United States, operations in 28 states § 6700 researchers worldwide; 3, 400 in the United States Employees 74, 835 Worldwide. . . . . 31, 513 United States. . . . Contributions: § In 2009, donations of cash and products totaled more than $50 million in the U. S. alone 567 U. S. Patents Awarded 7 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement 3 M Human Resources HR partners with the business to drive growth through people GOVERNANCE § HR principles § Strategic HR oversight § Policy development and adherence § Compliance § 3 M Source § 24/7 Information and transactions INFORMATION § HR Contact Center § Resolution and referral services § § § § § Leadership team counsel § HR strategy supporting business strategy BUSINESS § Human Capital plans identification HR MANAGERS emphasizing and development of talent § Brokerage of resources required to meet business HR plans OF SERVICES Benefits Compensation Employee relations Employee services Measurement and assessment CENTERS EXPERTISE Mergers, acquisitions and transitions Talent acquisition Talent development Workforce planning and management 8 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement 2010 -2014 Global HR Business Critical Engaged, Ys 3 M Strategies Grow the current core business HR Vision HR partners with the business to drive growth through people. Complimentary acquisitions International growth Build new businesses HR Mission Provide workforce and organizational solutions to accelerate strategy execution and drive operational excellence. 9 © 3 M 2010. All Rights Reserved. HR Strategies Productive and Diverse 3 M Employees 1. Engage employees and strengthen employment brand 3 M Strategy Acceleration Through HR Leadership and Expertise 2. Enhance ability to acquire and retain the right workforce 3 M Workforce and Organizational Readiness Operational Excellence and Productivity of Global HR Services Protect the Corporation 3. Enable effective human capital planning and increased workforce productivity 4. Optimize HR administration including global web and call centers 5. Accelerate the development of talent 6. Design compensation and benefits plans to meet evolving business needs

3 M Human Resources Measurement About Valtera 10 § Valtera provides premier human capital consulting and technology solutions to organizations worldwide in the following areas: Surveys and Analytics, Employee Engagement, Leadership Assessment, Testing and Selection, and HR Audits and Legal Support. § Valtera was founded in 1977 and has been providing employee survey services globally since that time. Valtera’s long and successful history of providing employee surveys has been built on the basis of our consistently high standard of delivery for some of the world’s leading corporations. Valtera managed the international data warehousing and reporting for the Mayflower global survey consortium from 1992 to 2010 with 100% accuracy. § Valtera corporate leaders are recognized authorities in the field of organizational/industrial psychology and they are intimately involved in the execution of large-scale projects. Their recently published work on the organizational drivers of customer satisfaction was selected as the winner of the 2009 Journal of Service Research Best Article Award sponsored by IBM. § Valtera uses a fully integrated online survey platform to administer paper and webbased, multi-language global surveys for hundreds of thousands of participants in a single wave. § Beyond offices just outside of Chicago Valtera has offices in the Netherlands and the All Czech Republic, and working partnership with firms across the world including © 3 M 2010. Rights Reserved.

3 M Human Resources Measurement Everybody wants to have an engaged workforce because it can forge a path to competitive advantage. Yet ask five different people to define engagement and you’ll likely get five different answers …. 11 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement What is Engagement? 3 M’s Definition en●gage●ment (in gājd/ měnt) “an individual’s sense of purpose and focused energy, evident to others in the display of personal initiative, effort and persistence directed toward organizational goals. ” It is all about alignment. 12 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Is Satisfaction the Same as Engagement? Behaviors Engaged employees behave: § Persistence at difficult tasks § Helping others § Taking Initiative § Going beyond expectations Satisfied employees behave: § And so forth § Low absenteeism § Low turnover § Low substance abuse Engaged employees are satisfied too… And demonstrate satisfaction behaviors as well as engagement behaviors Why Should We Care? 13 © 3 M 2010. All Rights Reserved. © 2006 Valtera Corporation. All Rights Reserved.

3 M Human Resources Measurement A Broader Business Case True competitive advantage is indexed between MANY firms, not simply measured within ONE firm. 14 © 3 M 2010. All Rights Reserved. © 2006 Valtera Corporation. All Rights Reserved.

3 M Human Resources Measurement Engagement – Even More Critical in a Tough Economic Climate 3 M has learned strong leadership “engages employees” in tough economic situations and pulls us through faster than the competition When the urgency and need are clear, employees deliver! 15 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement The Conditions that Yield Engagement Attitudes and Behavior 16 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement The Engagement Model Organizational Outcomes Engagement Behaviors Engagement Attitudes Conditions For Engagement 17 © 3 M 2010. All Rights Reserved. © 2006 Valtera Corporation. All Rights Reserved.

3 M Human Resources Measurement How to Build Conditions for Engagement § Treat people fairly § § § Accountability and Rewards – metrics, pay, promotions, performance management Interpersonally – respect, warmth Procedurally – keep promises, involve people in decision-making, have an operational rhythm, distribute work equitably § Pay attention to the seemingly mundane 18 § Technology § Support § Internal battles © 3 M 2010. All Rights Reserved. © 2010 Valtera Corporation. All Rights Reserved.

3 M Human Resources Measurement How Does Trust in Management Impact Engagement? 19 © 3 M 2010. All Rights Reserved.

Legend 3 M Human Resources Measurement Conditions for Engagement Leadership Resource Allocation Performance Management Job Satisfaction Growth Feedback Commitment Values Total Compensation Intention To Stay Poor <50% Favorable Good 50 -80% Favorable Excellent >=80% Favorable Engagement Trust Supervision Work Group 20 Communication Diversity Change Recognition Safety* Innovation Alignment Career Progress Responsibility Customer Focus Job Demands Loyalty Based on US 2009 Standard Opinion Survey Results & 2009 US Leadership Survey © 3 M 2010. All Rights Reserved. Bottom Line Results

3 M Human Resources Measurement Trust in Management § We know from our own research at 3 M that this is the single best predictor of employee attitudes…. § The first lens of how employees view the workplace 21 Data from 3 M Poll © 3 M 2010. All Rights Reserved. Division Management has a high level of personal integrity. 2000 3 M Poll 57% YES 16% NO 56 28 16 Division Management is good at driving the changes needed for growth. 9 19 72

3 M Human Resources Measurement Basic Building Blocks of Engagement § Engagement happens when people feel safe to take action on their own initiative § People feel safe when they trust their environment § People trust their environment when they feel fairly treated by it Fairness 22 Trust Feel Safe Engaged § The key is to create a culture of trust in © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Dimensions of Managerial Trust § Managerial consistency § Acting with integrity § Sharing and delegation of control § Openness of communication § Demonstration of concern 23 * From Whitener, Brodt, Korsgaard & Werner (1998) © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Achieving Employee Engagement What are We Doing? 24 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Engagement Objective § Improve employee engagement levels to drive organizational outcomes § Key Components § Corporate-wide: • • • § Within Businesses: Provide support to the Big B/Area/Staff Groups to take action on the concepts communicated in and through the corporate-wide components of the strategy © 3 M 2010. All Rights Reserved. • Additional areas of focus to address identified gaps • 25 Improve employees’ understanding of 3 M’s vision, future and decision-making Increase communication of business goals, plans and achievement Involve employees to help them understand what is engagement and what is the business case

3 M Human Resources Measurement 2008 -9 Strategy Summary Global Goal Tree (1 of 4) HR Strategy HR Sub-strategies HR Tactics In Support of Sub-strategies Career paths project Mentoring Engage Employees How to make my work challenging and meaningful Coaching Job rotation 360 Connection to work / life benefits Connecting engagement to employment brand Align to the big 3 M NEO Linking with sustainability Integrate innovation into the story Leadership responsibility to build the environment Built into leadership competencies Emails from CEO Imbedded in leadership programs (GM/MD; ALDP, etc) Messaging of engagement as a leadership responsibility 26 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Where Are We? § Got most of the pieces in place § Differences in U. S. / international structure require more attention Built Corporate Tools and Resources 27 © 3 M 2010. All Rights Reserved. Train HR WW Business Unit Intervention Country Level Interventio n Corporate Level Intervention

3 M Human Resources Measurement Driving a Growth Culture Engaging Every Employee to Serve Our Customers, Shareholders and Communities Customers Employees Shareholders Brand Employment Brand Shareholder Promise Innovative products with superior quality, value and service Acquire, retain, value and develop employees’ diverse talents, initiative and leadership Provide attractive returns through sustainable global growth Customer loyalty and share growth Employee engagement, mind share and productivity Growth in 3 M stock Our communities, our world. Respect our social and physical environment around the world. 28 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Alignment of HR Practices Human Capital Planning Succession Planning Development Performance Appraisal Leadership Attributes Assessment 29 © 3 M 2010. All Rights Reserved. Tier Reviews Consensus Review

3 M Human Resources Measurement Leadership Attributes § Thinks from outside in § Drives innovation and growth § Develops, teaches and engages others § Makes courageous decisions § Leads with energy, passion and urgency § Lives 3 M values Engagement is essentially a leadership responsibility. 30 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement 2009 Engagement § Seeing Worldwide Improvement in Scores § Book on Employee Engagement Came Out § Named by APQC as one of the Best for Rewarding, Engagement, & Retaining Key Talent § Profiled by SHRM, Conference Board and webinar with i 4 cp § 2008 Named by CEO Magazine #1 Best Companies for Leaders § Named by Fortune #16 Global Top Companies for Leaders § Engagement Video Series for Supervisors & Managers Well. Received § Blog In Place § HR Vendor Conference on Engagement § Employment Value Tool was Rolled Out § Great things going on in the businesses and countries 31 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Employment Brand 32 Key Messages: Driving 3 M’s global leadership Inventing the future with technology Succeeding through collaboration Creating solutions to sustainability challenges Developing diverse talents, building careers © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Building a Stronger Brand Start Here Employee Engagement Customer Engagement Share of Customer Sales Revenue 33 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Definitely in Social Media www. facebook. com/3 MCareers. US What’s Next Globally? Sales, Lab/TS: § Facebook § Linked In § Twitter § Landing Pages § SEO Pay-Per. Click Campaigns 34 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Employee Engagement A Green 3 M Employee Assistance Program Community Giving A Healthier You Taking Care of the Environment Taking Care of Others Taking Care of Our Communities Taking Care of Yourself 35 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement 3 M Poland Green Week Program 15 -19 June 2009 Program Objectives: § Building and enhancing 3 M image (Employment Brand) as a socially responsible company § Creating positive impact on the Employees Engagement and work atmosphere § Ecological education including 3 M best practices § Increasing environmental awareness among the Employees 36 Joint program of CMPA, EHS and HR © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Monday to Friday Activities Monday: Recycling Wednesday: Switch Off Friday: Make It Green § Presentation of the film: The Inconvenient Truth global warming documentary movie § Take back event – a small gift for employees § Day with a car (bicycle, car sharing) – small awards for those who arrive first to work on bicycle § Collect used paper, cans etc. to gather money in return and donate the money to local ZOO § Mailing – recycling! § Contest „Green eco-photo” (awards: books, calendar with ecological advices), exhibition of best works § Clean your office (one hour desk cleaning) § Mailing – switch off! § Seat trees, sow grass § Bicycle race – options: § For each km 3 M pays 1 PLN and donates the money to local ZOO § Training bike on the site. § Mailing – Green Office! Tuesday: Save Thursday: Go On Foot § Contest “Eco-film” (ecological films recorded on mobile phones) – award the best film employees voting § Quiz Eco-knowledge on the base of 3 M materials and mailing § Presentation of 3 M ecological and sustainability projects 37 § Calculate the energy you use! – Mailing © 3 M 2010. All Rights Reserved. § Voting and selecting the best Eco-film § Event “Exchange or forward”: bring your old books or any products you are not going to use and exchange for other

3 M Human Resources Measurement 3 M Thailand 38 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement "Green Touch Campaign" to Enhance the Employee Engagement For Sustainability As one part of Green Touch campaign, Employees' Children Environmental Protection Painting Contest was launched from July to September. Over 60 lovely kids' paintings were collected. Finally 19 paintings won the awards thru online voting and some of them were selected for making 3 M China's New Year e. Card 39 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Employee Engagement and Sustainability 2010 Need to Be Doing So Much More… § Engagement video for supervisors and managers (Top Ten Things You Should Know about Sustainability) § Video contest § Leadership survey roll-out on January 27 th 40 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Employee Engagement A Green 3 M Employee Assistance Program Community Giving A Healthier You Taking Care of the Environment Taking Care of Others Taking Care of Our Communities Taking Care of Yourself 41 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Making a Difference: Healthy Living Resources A diversified four-part program designed to: Lower our long-term health care costs and enhance employee productivity Reduce the demand for costly medical interventions and minimize employee productivity loss Help employees better manage their lives physically, socially and emotionally Other employee objectives: Engagement | Recruitment | Enhance organizational commitment 42 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Where We’ve Been: Key Accomplishments to Date § 17, 899 employees participated and received $100 incentive § Health plan administrators have reached out to atrisk employees and offered coaching classes and additional programs 43 © 3 M 2010. All Rights Reserved. August 2008 Program Launch December 2008 – March 2009 Health Screenings and Assessments

3 M Human Resources Measurement Employee Engagement: Key Strategy to Growth, Innovation and Retention Engagement: Aligning Individual’s Purpose and Energy with Organizational Goals Pride in 3 M § Brand ambassador § Community partner § Social responsibility and sustainability § Family appreciation events § Media coverage § External recognition and awards Career Fulfillment Basic Employee Needs Regular and Open Communication § Performance oriented company § Challenge and growth § Career advancement and broadening § Personal career development § Effective supervisor and peer relationships § Safe working conditions § Equitable compensation and benefits § Ethical business practices § HR principles § 3 M values Active visible leadership is needed to promote stronger levels of engagement. 44 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Engagement as a Leadership Responsibility 45 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Global vs. Local Debate § Fundamentals of engagement are universal § The desire for meaning and purpose in the workplace knows no borders § How you capitalize on the fundamentals is local “After all, results from their recent survey showed that 3 M Mexico employees boast a 95 percent favorability rating. That feedback”, according to Shivitz, “is the best indicator of future financial success. ” Ed Shivitz, Managing Director, 3 M Mexico Stemwinder April 23, 2007 46 © 3 M 2010. All Rights Reserved. § People have needs § Organizations have needs § How you align these 2 facts can produce engagement and financial success but is context specific

3 M Human Resources Measurement Best Employer Enthusiastic Work Climate Remain at 3 M Take on New Roles & Responsibilities Engagement Adapt to New Ways Pursue Development Recommend 3 M Excited About Contribution Best Places to Work Spain 2009 Bes 2008 Best 3 M Czech Republic 47 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Quick Hits You Can Do § Focus on the customer § Read a book or journal article together and discuss § Random lunches § Buy 1001 Ways to Energize Employees by Bob Nelson Engagement isn’t just recognition but it is a small start in the right direction. 48 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Innovation and Engagement (What’s the relationship? ) 49 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Three Work Areas: With Innovation at the Core Employment Brand Perception of your company In the market place and the Value our employees derive from working here Engagement Sustainability Triple bottom line: People, Planet and Profit § Social responsibility § Environmental sensitivity § Economic viability “an individual’s sense of purpose and focused energy, evident to others in the display of personal initiative, effort and persistence directed toward organizational goals. ” Sweet Spot Culture of Innovation 50 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Submit Your Ideas for Products 51 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement Gary Hamel The Future of Management Formidable Challenges that Confront Companies in this New Century accelerating the pace of strategic renewal in § Dramatically organizations large and small § Making innovation everyone’s job, every day § Creating a highly engaging work environment that inspires employees to give the very best of themselves (p. 40 -41) 52 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement We Know From Our Own Research Those 3 M business labs that are more “engaged” have a more positive view of Innovation and 2 years later were more profitable (r=. 56 Innovation and Engagement) 53 © 3 M 2010. All Rights Reserved.

3 M Human Resources Measurement How can we do bette William L. Mc. Knight 54 © 3 M 2010. All Rights Reserved.