Housing Authority of the City of El Paso

Housing Authority of the City of El Paso Employee Engagement Study June 4, 2013 © 2013 Towers Watson. All rights reserved.

Our Process HACEP Leadership desired a baseline measure of employee engagement and an understanding of the top issues that were impacting employee engagement Towers Watson was contracted to facilitate leadership interviews and employee focus groups with supervisors, professional contributors and maintenance staff on May 8 -9, 2013. All direct feedback will be kept confidential and secured by Towers Watson, independently from HACEP will receive an executive summary that captures the key themes, provides a baseline of employee engagement against external benchmarking data, and includes recommendations for improving engagement based on our research. 1 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Current State of HACEP is undergoing dramatic changes due to a purposeful decision by leadership to transform the business strategy and culture of HACEP from a primarily governmentfunded model to a private model where funding is more stable and growth is possible. This requires changes across HACEP, including skills and capabilities of leaders, supervisors and employees to deliver against the new business model. The change is happening rather quickly based on the history of the speed of change at HACEP and is also being delivered in an environment that is not ready for the change. Both leaders and employees are strongly committed to the mission of HACEP and feel proud to be a part of this organization that has such a huge impact on El Paso. Most leaders buy into this change and believe it is necessary and important to best serve the El Paso community. However, some do not see it as possible due to compliance and legal regulations in the public sector. Most employees do not understand or buy-into the need for this change and see it as yet another shift in leadership that they can ride out. Many employees are long-tenured and have no experience or context for a private business model. Leadership and employees are not aligned, and communications between the two groups are becoming increasingly tense and disconnected. Employees are very nervous by the changes, distrust leadership and are primarily concerned about job security. 2 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

2013 Engagement Baseline During this tremendous period of change, leaders continue to be engaged. Employees and supervisors, on the other hand, are very disengaged. And, leaders recognize that employee engagement is low. Percent Favorable Percent Neutral Percent Unfavorable HACEP Overall (n = 87 of 227) 45% 31% 24% Leadership (n = 12 of 12) 83% 8% 8% Supervisors (n = 22 of 39) 36% 27% 36% Prof. Staff (n = 25 of 46) 36% 32% Maintenance (n = 28 of 130) 43% 14% Engagement U. S. 2012 Benchmarks for Percent Favorable National Transitional Salaried Hourly 79% 83% 77% Notes: Engagement was defined to HACEP employees as pride, commitment, and willingness to go the extra mile. Towers Watson’s normative benchmarking data was created by averaging items that measured these three concepts. Due to rounding, numbers may not equal 100% 3 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Towers Watson Norm Descriptions Towers Watson US National Norm Comprised of a weighted average of employee survey results from a cross-section of industry sectors for operations located in the United States. The data is derived from recent client studies conducted by Towers Watson and is updated annually. Data are weighted by size and by industry using current Census data so as to represent the distribution of employees in major industry sectors across the nation. Towers Watson US Transitional Companies Norm A weighted average of employee survey results from companies across a range of industries that have experienced significant changes impacting all employees. Such changes can include, but are not limited to, reorganization through bankruptcy, widespread layoffs, acquisition, changing from a privately-owned company to a publicly-owned company or visa versa, or being bought out by the employees. In addition, these companies generally report financial performance indicators (e. g. , return on invested capital, net profit margin) that are below relevant industry averages for at least a 36 -month period. The employee survey data are derived from client studies conducted by Towers Watson. To develop the Norm, publicly available sources of financial data are researched to obtain company performance information for client organizations. Towers Watson US Salaried Exempt Norm Comprised of a weighted average of survey results from salaried exempt employees representing a cross-section of industry sectors. The data is derived from recent client studies conducted by Towers Watson US Hourly Norm Comprised of a weighted average of survey results from hourly employees representing a crosssection of industry sectors operating in the US. The data is derived from recent client studies conducted by Towers Watson. 4 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Top Themes from Employee Focus Groups Job Security Communication Leadership Limited Resources Trust & Respect Job security is #1 concern for most employees Employees feel stressed about their job security, especially due to the assessments Concerns that there is a hidden agenda with the assessments Many changes with poor change management and constant changes in direction Communication from leadership is ineffective Top-down/”ivory tower” decision making approach Employee opinions or input are not considered Supervisors have no real power to make decisions Constant struggle to obtain adequate resources to do work Unrealistic expectations for work deadlines Increasingly heavy workload due to the loss of tenured and experienced employees Inconsistency in style and treatment of employees Perception that HR lacks transparency and “works for leadership, not the employees” 5 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Top Themes from Leadership Interviews Job Security Communication Leadership Change Management Trust & Respect Recognition that employees are primarily concerned about job security but also understand the need to change the capabilities required for HACEP to succeed D-Level recognize that decisions/information is often cascaded down to front line employees without considering the “how” and see top leadership as not consistent in demonstrating the importance of the “how” Recognition of the gap of employee involvement in decision-making Decision-making is hierarchical, driven from the top and tightly controlled C-Level not completely aligned in messaging, which cascades to the D-Level and on down D-Level recognize the need to improve collaboration but find it very difficult given their lack of ownership over decisions and conflicting messages from the C-Level Lack of change management structure to help deliver the desired future business strategy. Clear on what 2015 should look like, but how to get there is very unclear - leaves room for misalignment The “how” is void in what is required of leaders and supervisors through this change and the impact on employees. Believe employees finally realize that the leadership team is going to “stick around” for awhile, but still don’t trust that the changes are real and coming. Perceive employees as distrusting the change process (e. g. , assessments) and do not feel that their opinions are being heard or respected More consistent recognition would have great impact, but the first attempt was stalled 6 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

How to Build Trust The Trust Equation By Maister, Green and Galford Credibility X Reliability X Intimacy Self-Interest Credibility This is about our words and the confidence generated by our credentials A promise made Reliability This is about actions How well even our smallest deeds match our words and the aspirations we have declared A promise kept Intimacy This is about emotions and empathy Our understanding and caring about the other person’s overall experience Self. Interest This is about the focus of our service The more we’re serving our own needs, the less trust there will be in the relationship The less we’re serving our own needs, the more trust there will be in the relationship 7 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

What our research shows most influences engagement 1 Leadership Effective at growing the business v Sincere interest in employees’ well-being v Behaves consistently with organization’s core values v Trust and confidence in job being done 3 Goals and Objectives v Good understanding of organization’s business goals and steps needed to reach those goals Understanding of how job contributes to the organization achieving its business goals 5 2 Stress, Balance and Workload v Stress levels at work are manageable Healthy balance between work and personal life Work arrangements are flexible Enough employees in work group to get job done right 4 Supervision v Treats me with respect Encourages new ideas and ways of doing things v Acts in ways consistent with his or her words Effective career development conversations Image Organization highly regarded by general public Organization conducts its business with honesty and integrity *For the Top 5 drivers shown above, examples of the types of items in each category have been included. Source: Towers Watson 2012 Global Workforce Study — United States. 8 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Recommendations for moving forward Communication Create employee councils that represent all stakeholders and are tasked to provide upward recommendations. Ensure their voice is heard and included in important HACEP decisions. Create a communication calendar with a regular cadence of leadership communications that is scheduled, shared and often – ensure that the communications are delivered in multiple ways: face-to face is best! Start a CEO roadshow to create buyin for the future business strategy Provide regular joint C and D-Level communications that are aligned accompanied by a supervisor toolkit that gives key messages to deliver to employees Provide more transparency; never forget to share the “why. ” Continue to focus and invest in the communications role Leadership Strive for consistency and alignment from the top – deliver what you say you will do. Need to clarify the “how” – what behaviors are expected as people managers, how they support your values, and consequences for not delivering against them. Must be modeled directly from the top. Provide Directors and Supervisors with clear and consistent goals across HACEP and then empower them to make decisions about their immediate environment. Hold them accountable if they do not deliver. Decide and define the role of the Director as leader/middlemanagement. Continue to accelerate Supervisor capability, especially around communication and change management capabilities. Change Management Create a compelling case for change through the eyes of the employee. What is the WIIFM? Create a roadmap of what is required to get to 2015, including Roles and Responsibilities for Leaders, Supervisors, and Employees to achieve the end goal. Use this framework as a alignment tool in all communications. Empower Directors and Supervisors with information so that they can help drive the changes for their teams. Ensure they are aligned and buy in before announcing changes to employees. Over-communicate upcoming changes and decisions to employees. Provide more lead time and recognize that resistance is a natural part of the change process. Hire a dedicated change and business strategist Culture of Trust and Empowerment that is ready to help HACEP change 9 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Key Strengths to Consider Going Forward How can we leverage the deep pride and commitment to the mission, vision and values of HACEP in communications and the change process? How can we help employees buy into the future vision for HACEP showing them that the continued mission of HACEP will be better enabled from a different business model? How can you take the core values of HACEP and turn them into real behaviors that leaders demonstrate everyday to employees through decisions and actions? Although employee recognition and rewards programs are being considered, how can these programs be driven faster and in a consistent and visible way? What is HR’s role in this process? (Leaders recognize a stronger HR team than in the past and employees have a history of distrusting HR) 10 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

Next Steps • As a leadership team agree on your “Start, Stop, and Continues” for each of Communication, Leadership, and Change Management that you believe will (a) address employee concerns, (b) enable HACEP’s success, and (c) can be shared with employees as a starting point for actioning on the engagement study findings • Plan a communication roll out of a summary of the results, what you heard as a leadership team, and early ideas for addressing the findings • Ensure you engage employees in the actioning process – invite their feedback on the solution – check in that your ideas are on track and will meet their concerns • Create a plan with milestones and metrics – regularly check in on your progress 11 towerswatson. com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.