Hewitt Associates
Wal-Mart China Associates
Engagement Survey Result
Presentation
Nov., 2005
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Agenda
• Why Measure Employee Engagement?
• Wal-Mart Associate Opinion Survey Introduction
– Survey Background : Why Do We Conduct the Survey?
– Participant Profile
– Survey Methodology
– Interpreting the Results
• Key Findings
– Engagement Results
– Positive Areas
– Need-to-improved Areas
• Benchmarks and Comparison
• Suggested Initiatives
• Best Practices for Achieving Sustained Engagement
Results
• What Will Improve if Engagement Score is Increased?
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Why Measure Employee Engagement?
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Improving Business Results Through
Engaging People
Individual Life
Goals and Strategies
Individual
Capabilities
People Requirements
and Talent Strategy
Employment
Relationship
People Management
Practices
Individual Priorities
and Engagement
Engagement
Business Results
and Strategies
Business
Capabilities
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Why Engagement Matters:
Business Needs
Service
Quality
Features
Problem
Resolution
Price/
Relative
Value
Employee
Behavior
Recom-
mendation
Retention
Expansion
Business
Performance
Customer
Satisfaction/
Value
Customer Value Drivers
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Why Engagement Matters:
Employee Needs
Employee
Engagement
Employee
Behavior
Turnover
Recommend Employees
Recommend Products/Services
Create new Products/Services
Customer Service
Productivity
Opportunity
Quality of Life
Culture
Total Compensation
Leadership
Relationships
Work Activities
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Wal-Mart Associate Opinion Survey
Introduction
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Survey Background: Why Do We
Conduct the Survey?
• The Associate Opinion Survey is a very important part
of the Grass Roots process.
– It lets us look, in an objective way, at how associates feel
about working at Wal-Mart.
– It lets us measure whether we’ve done a good job over time
of helping to make Wal-Mart a better place to work.
– It provides a foundation for the Grass Roots meetings,
giving managers direction for their discussions.
– And it tells us where to concentrate our resources in order
to raise our associate engagement the most over time.
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Participants Profile – By Division
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Participant Profile – By Grade
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Engagement Satisfaction
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Engagement Background
Consistently speak positively about the organization to coworkers,
potential employees, and most critically, customers (current and
potential)
SaySay
An intense desire to be a member of the organizationStayStay
Exert extra effort and engage in work that contributes to business
successStriveStrive
•What is Engagement?
– Engagement is the state of emotional and intellectual involvement or commitment of
an employee to an organization.
– Significant research and experience show strong evidence that higher levels of
Engagement combined with appropriate capability produce stronger business
results and sustainable competitive advantage.
– Engaged employees are productive, innovative and take ownership of their results.
Three key behaviours indicate strong Engagement.
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The Engagement Model
Procedures
Policies
Processes
Valuing People
Processes
Compensation
Pay
Benefits
People
Senior Management
Business Unit Manager
Immediate Manager
Co–workers
Diversity
Opportunities
Career Opportunities
Recognition
Training
Quality of Life
Work/Life Balance
Physical Work Environment
Safety
Location
Engagement
Work
Intrinsic Motivation
Influence
Work Tasks
Resources
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– In the Engagement Survey, employees responded to each item by indicating their level
of agreement/disagreement with particular attributes and behaviours in the organization.
– An overall Employee Engagement is calculated from employee responses to a set
number of questions (see below). These questions, indicate the degree to which
employees will “Say”, “Stay” and “Strive” at the company:
• I would recommend Wal-Mart to a friend seeking employment.
• Given the opportunity, I tell others great things about working at Wal-Mart.
• It would take a lot to get me to leave Wal-Mart.
• I rarely think about leaving Wal-Mart to work somewhere else.
• Wal-Mart inspires me to do my best work everyday.
• Wal-Mart motivates me to contribute more than is normally required to complete
my work
– The Employee Engagement score is the percentage of employees who
individually scored an average of >= on Say, Stay and Strive questions
Interpreting the Engagement Score
Say
Stay
Strive
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Sam’s Club
The combined proportion of
responses for ‘5’ and ‘6’
(‘‘Agree’ and ‘Strongly
Agree’)
Results shown on the graphic chart in the report include:
– The combined proportion of responses for ‘1’ and ‘2’ ( ‘Strongly Disagree’ and
‘Disagree’).
– The proportion of responses as either ‘3’, where ‘3’ is ‘Slightly Disagree’ on the 6
point scale.
– The proportion of responses as either ‘4’, where ‘4’ is ‘Slightly Agree’ on the 6 point
scale.
– The combined proportion of responses for ‘5’ and ‘6’ ( ‘Agree’ and ‘Strongly Agree’).
Home Office
Store
The proportion of
responses as either
‘3’, where ‘3’ is ‘Slightly
Disagree’ on the 6
point scale
The proportion of responses
as either ‘4’, where ‘4’ is
‘Slightly Agree’ on the 6
point scale
Interpreting the Detailed Results
Graphs
The combined
proportion of responses
for ‘1’ and ‘2’ ( ‘Strongly
Disagree’ and
‘Disagree’)
Logistics
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Reading the Summary Reports
Team Engagement: Home Office Report
My
Department
My
Division
Top 20% of
departments*
Overall Results (Percentage of Engaged Employees) 62% 54% 62%
Engaged Associates are committed to doing their best work for Wal-Mart. They:
• SAY great things about Wal-Mart and their facility,
• Want to STAY at Wal-Mart, and
• STRIVE to go above and beyond to help Wal-Mart and their facility succeed
Taking Action! These are areas that have the highest potential to increase your associate engagement in your facility. You’ll want to focus on these.
3 Areas For Action…
To Best Motivate My Team
(in order of importance)
Career Opportunities: I feel I can have a great career at Wal-Mart
Recognition: I receive appropriate recognition (beyond my pay) for my
contributions and accomplishments
Store/Club/Department Management: I see strong evidence of effective leadership
from my Management team.
Maintain These! These are areas that have high potential to decrease engagement in your facility. You’ll want to maintain what you’re currently doing right.
3 Areas to Maintain…
Keep Up the Good Work in
These Areas
(in order of importance)
Meaningful Work: I get a sense of accomplishment from my work.
Company Reputation: I am proud of what Wal-Mart gives to my local community.
Work Tasks: I truly enjoy my day-to-day work tasks.
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Reading the Detail Report
The score of the
question is the
percentage of
the employees
who mark the
response as
favorable.
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Key Findings
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Engagement Result
China
Overall
Home
Office Stores
Sam's
Club
Logistics
Facility Norms
Engagement Score 54% 54% 54% 50% 46% 52%
1. I would recommend Wal-Mart to
a friend seeking employment
60% 61% 61% 57% 51% 55%
6. Given the opportunity, I tell
others great things about
working here
64% 68% 64% 60% 57% 60%
2. I rarely think about leaving Wal-
Mart to work somewhere else
40% 37% 42% 35% 34% 43%
5. It would take a lot to get me to
leave Wal-Mart
81% 84% 80% 79% 73% 59%
3. Wal-Mart inspires me to do my
best work every day
49% 47% 50% 46% 46% 63%
7. Wal-Mart motivates me to
contribute more than is normally
required to complete my work.
44% 43% 45% 40% 35% 47%
SAY
STAY
STRIVE
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Positive Areas
Company Reputation
• I would recommend Wal-Mart to a friend seeking
employment.
• I believe Wal-Mart is a good citizen in my community.
• Wal-Mart provides good jobs for people in this area.
• I am proud of what Wal-Mart gives to my local
community.
• Given the opportunity¸ I tell others great things about
working here.
Process
• Wal-Mart's policies and procedures allow me to
provide great customer service.
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Need-to-improve Areas
Career Opportunity
• I feel I can have a great career at Wal-Mart.
• I have enough time for career development
• Promotions are given fairly.
Pay
• I understand how pay changes are determined.
• I am paid fairly for the contributions I make to the
company's success.
• My performance has a significance impact on my pay
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Need-to-improve Areas
Management
• If I have an issue with being treated unfairly in the
workplace¸ I am confident that our management team
will take appropriate action.
• Our management team spends enough time with
Associates.
• Our management team acts consistently with what
they say.
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Benchmarks and Comparison
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Hewitt’s Normative Database Profile
– Normative data from the China
section of Hewitt’s Best
Employers in Asia Database
(2005) (BEA) is provided.
– Wal-Mart’s results have been
benchmarked against the China
market data of the overall
database, which includes the
responses from [ ] employees.
– This database contains data
from 78 companies
representing 16 industries.
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The Best Employers in China 2005
1. The Portman Ritz-Carlton, Shanghai
2. Johnson & Johnson Medical (China) Ltd.
3. ASIMCO Technologies Limited
4. China Hotel, A Marriott Hotel Guangzhou
5. Beijing Novartis Pharma Ltd.
6. China Hewlett-Packard Co., Ltd.
7. Federal Express – DTW Co., Ltd.
8. TNT China (Holding) Co., Ltd.
9. Guangdong Nanfang Lee Kum Kee Health Products Co.,
Ltd.
China Ltd./Intel Products (Shanghai) Ltd./Intel Products
(Chengdu) Ltd./Intel China Research Center
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Hewitt conducted a study of the 1,500 organisations from its global
Engagement client and Best Employer database to explore the
relationship between Engagement and Total Shareholder Return
(TSR).
Engagement and Shareholder Value
*Source: Hewitt Associates Employee Engagement and Best Employer Database.
*Best Employers China 2005 (75%)
Destructive
Zone
Uncertainty
Zone
Performance Zone
( = %)
25%
40% 60%
100%
Benchmark Averages*
*
0%
( = %)
Indifference
Zone
( =
%)
Rest of China in BEC
2005 Study ( 50%)
High Performers (61%)
Total Shareholder Return
(TSR > 20% from 1999-2002)
$
$
Hewitt Engagement
Database (52%)
*
* Wal-Mart (54%)
54%
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Engagement Score Comparison: Wal-
Mart, Best Employers and China Norms
Wal-Mart China
Overall
Best
Employers Norms
Engagement Score 54% 75% 52%
1. I would recommend Wal-Mart to a
friend seeking employment
60% 75% 55%
6. Given the opportunity, I tell others
great things about working here
64% 78% 60%
2. I rarely think about leaving Wal-Mart
to work somewhere else
40% 62% 43%
5. It would take a lot to get me to leave
Wal-Mart
81% 86% 59%
3. Wal-Mart inspires me to do my best
work every day
49% 79% 63%
7. Wal-Mart motivates me to contribute
more than is normally required to
complete my work.
44% 66% 47%
SAY
STAY
STRIVE
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Engagement Score Comparison
Say
Stay
Strive
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What Makes The Best, Best?
• Best Employers demonstrate three basic
characteristics across all markets, including China:
Consistently inspire great performance
from their people
Manage their business in ways that
build long-term success and
sustainability
Go out of their way to ensure
employees feel valued
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Inspiring Great Performance
• Inspiration and support from the management . Senior
leaders and immediate managers act as role model, and
passionately and consistently provide support to the staff.
% Employees Who Agree and
Strongly Agree
The Best The Rest
I see strong evidence of effective leadership
from my management team. 73% 40%
I trust our management team to act ethically
and honestly. 75% 49%
I get enough good information about our
organization’s results and performance 83% 49%
My direct Supervisor/Manager provides the
support I need to do a good job. 75% 49%
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Inspiring Great Performance
• Motivating high performance achievement through
rewards.
% Employees Who
Agree and Strongly
Agree
The Best Wal-Mart
I receive adequate recognition (beyond
compensation) for my contributions and
accomplishments
68% 36%
My performance has a significant impact on my
pay 62% 27%
This organization motivates me to contribute
more than is normally required to complete my
work
66% 44%
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Inspiring Great Performance
• Best Employers better define and implement structure,
policies, and resources that enhance productivity and
support achievement of business objectives.
% Employees Who
Agree and Strongly
Agree
The Best Wal-Mart
The organization’s policies and procedures
allow me to provide great customer service.
The tools and resources I have allow me to be as
productive as possible 63% 35%
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Ensuring Employees Feel Valued
• Best Employers create employee ownership through
trust and empowerment. Leaders walk the talk.
% Employees Who Agree
and Strongly Agree
The Best Wal-Mart
I have the authority to make the decisions
necessary to do my job well 61% 49%
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Ensuring Employees Feel Valued
• Best Employers create a more compelling employment
relationship between employees and employers by treating
employees as valued assets and partners.
% Employees Who Agree
and Strongly Agree
The Best Wal-Mart
I am made to feel like a valued member of
this organization 56% 40%
I get a sense of accomplishment from my
work 74% 49%
Training opportunities are available to help
me build new skills. 76% 58%
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Suggested Initiatives
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• Need Wal-Mart’s input to develop
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Best Practices for Achieving Sustained
Engagement Results
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What Makes The Best, Best?
• The Best Employers in Asia study reveals that Best
Employers demonstrate three basic characteristics across
all markets, including China:
– Best Employers consistently inspire great performance
from their people;
– Best Employers go out of their way to ensure
employees feel valued; and
– Best Employers manage their business in ways that
build long-term success and sustainability.
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Best Employers Inspire Great
Performance
• Have in place an organizational structure, policies and
procedures, and the tools and resources to :
• Enhance employee productivity,
• Create a positive work environment, and
• Help the company achieve its goals
• Care about Employee perceptions about the fairness with
which they are rewarded.
• Leaders count in inspiring a great performance from
people: how leaders behave, how their beliefs shape their
own actions, and how well they create a sense of passion
and pride among their people are important.
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Best Employers Value Their Employees
• Employment ‘deal’ goes further than is normally expected
such as fair and equitable rewards, opportunities for career
advancement, and a sense that employee interests are
taken into account.
• Focus more effectively on putting systems and structures
in place that support learning and development.
• Be able to attract talents better than The Rest.
• Retain their talents better than The Rest.
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Best Employers Build Sustainability for
Long Term Success
• Build strong, successful and sustainable businesses by
– Using balanced scorecard or strategic measures to
manage business and for incentive Comp.;
– Measuring the effectiveness of HR programs against
employment brand and recruitment procedures;
• Use more strategic measures to manage business and for
incentive comp. in current case.
• Take more effort on effectively attracting and retaining the
suitable talents, which will always keep them with competitive
advantages in the market
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Becoming a Best Employer
Becoming a Best Employer is not easy, but it is simple:
• Leaders Build Trust
• Create a High Performance Culture
• Ensure a Pipeline of Continuous Talent
• Provide Outstanding Customer Service
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What Will Improve if Engagement
Score is Increased?
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Bottom Line: 25% revenue growth and 75% net income growth over a two year period,
exceeding targets.
Results:
Large increase in employee Engagement (47% to 62% in two years)
20% decrease in employee turnover. Year 2 100% retention of all key talent.
Hewitt Case Study #1: Professional
Services Firm
•Background
•Asian business of large global professional services
firm struggling to meet earnings targets with high
employee turnover and relatively low employee
Engagement. Leadership, development and
recognition identified as key drivers of Engagement.
•Goal
•Improve employee perceptions with leadership and
management to drive increase in Engagement and
thereby increase employee initiative and
accountability for performance.
•Approach
•New management team that focused efforts on
employees and development of leaders and
managers.
•Actions
– Increased formal development opportunities
for employees with particular focus on
preparing employees for changing business
requirements
– 360 degree feedback for all leaders and
targeted development plans. 360 feedback
linked to Engagement data to drive
accountability for Engagement to all leaders.
– Coaching for leaders
– Leaders short-term incentive partially linked
to Engagement results
– Management tools and resources made
more accessible to managers and manager
expectations made clearer.
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Bottom Line:
Increased retention of highly skilled and experienced staff
Cost reduction due to lower recruiting and training costs
Results: Turnover reduced by 5%
Hewitt Case Study #2: Information Systems
Department
•Background
•IS Department in HR consulting firm experiencing
a 30% turnover. IT staff is continually preyed upon
by recruiters who recruit key individuals.
•Goal
•Reduce turnover and maintain key and
experienced staff.
•Approach
– Conducted group and one-on-one interviews with
employees to identify factors that influence
employee engagement and would increase their
resistance to competitive offers
•Actions
• Removed obstacles around pay administration,
increased communication around pay, and tied
compensation directly to performance
• Assessed effectiveness of managers and put in
place “people” managers versus “technical”
managers; established manager training programs
• Increased visibility and direct lines of
communication with senior management and end
customer
• Increased opportunities for IS staff to move
throughout firm
