What makes a great place to work?

by 27 May 2009

What percentage of your employees would describe your organisation as a great place to work? Teresa Russell talks with Diageo Australia about its increasing number of engaged and super-engaged employees

According to Gallup Australia’s 2008 Biannual Australian Engagement Study, 21 per cent of Australian employees are actively dis engaged in their workplace, costing Aus tralian businesses around $33.5 billion annually. Actively disengaged employees aren’t just unhappy at work; they act out their unhappiness by undermining what their engaged co-workers accomplish.

The survey results also revealed that 45 per cent of actively disengaged employees were planning to stay with their employer for the next 12 months, while 24 per cent planned to remain for their entire careers.

Diageo is the world’s leading pre mium drinks producer, with a portfolio of brands including Guinness, Johnnie Walker, Bundaberg Rum, Smirnoff, UDL and Baileys. Its 550 employees work in eight sites around Australia. Andrew Manterfield, Diageo Australia’s human resource director, has been with the organisation for 27 years, working in both sales and HR in the UK, Asia and Australia.

Manterfield says that 12 years ago the organisation defined its core values and followed up with a lot of cultural work embedding these values into the conversa tion. Of the five Diageo values, four are closely linked to driving engagement: “We value each other”; “Freedom to succeed”; “Proud of what we do”; and “Be the best.” The fact that its people value each other is the most important driver for employee engagement, according to Manterfield.


Diageo measures employee engagement through six questions in its annual ISR survey. “If people give the most posi tive response to all six questions, we describe them as super-engaged, which is the level we’re targeting,” says Man terfield. If they generally answer posi tively to the questions, they are considered to be engaged employees. The percentage of super-engaged employees increased from 25 per cent two years ago to 41 per cent last year, with a target of 50 per cent for 2009.

Another measure of engagement is BRW magazine’s annual Great Places to Work survey, which this year saw a 79 per cent response rate over a ten-day period and placed Diageo fourth in the country. “We have a culture of feedback here and believe it’s important to talk to our people and to listen to them,” says Manterfield, who believes that survey response rates are another good measure of engagement.

The company also runs quarterly pulse surveys consisting of three or four questions on topical issues around employee sat isfaction. “We always frame the questions in terms of whether we’re doing better with ‘x’ compared to a year ago, to ensure we are measuring progress,” he says.

Voluntary turnover, expressed as a moving annual total, has also dropped from 18.4 per cent to 13.5 per cent in the last 12 months, providing tangible savings in recruitment costs.


Diageo’s leadership group used the 2008 survey to identify the main areas to improve company-wide, and also to build plans by function. Three areas of focus were to bring clarity and direc tion to people; to identify issues and resolve them quickly; and to continue valuing each other.

“What needs to be done is simple, but implementing it can be challenging,” says Manterfield. The company uses the phrase, “Know me, focus me and value me” to guide the conversations managers have with their direct reports when discussing objec tive setting, development plans and career aspirations.

The MD and his senior management team have a monthly agenda item on employee engagement. They have adopted a tool called RAPID (Recommend, Agree, Perform, Input, Decide), which is now being filtered down through the organ isation to help clarify ways of working and to eliminate duplication of effort.

The senior leadership team also participates in regular face-to- face meetings with groups of 20–25 employees to give them an opportunity to ask questions and speak their mind. The leaders listen and answer questions in these agenda-free meetings.

“There was an initial fear that we might be asked some thing we can’t do or can’t answer, but as long as you come back to people with an honest answer, they don’t mind,” says Manterfield, adding that people now feel they have clarity and are getting clear direction as a result.

Engagement target

“To boost engagement, you have to create a great place to work for everyone, not just three key people,” argues Man terfield. Although 100 of its line managers have participated in situational leadership learning, he describes Diageo’s approach as “a way of working, rather than a training initiative”.

He says that, in these challenging times, it is especially impor tant to live your values. “Even if you do need to take costs out of your business, look at it through your values. Don’t get task oriented. Authenticity and clarity are vital now.”

Reward and engagement

Organisations have traditionally regarded cash benefits - such as performance bonuses and sales commissions - as a key engagement and retention driver. However, a deeper understanding of employee behaviour has led many progressive organisations to look at smarter ways to invest in their people. In many cases, this has meant a shift from offering cash rewards to non-cash benefits, a trend expected to grow exponentially over the next five to ten years.

But why have cash rewards fallen out of favour? The reasons are twofold; employees began viewing cash rewards as an expected part of their salary package. Recipients also generally spend cash quickly, destroying any association the cash benefit had with the behaviour that drove it as a form of reward.

On the flipside, non-cash benefits generally reward the behaviour that produces a positive outcome, rather than the outcome itself. This has a greater emotional impact; employees have the opportunity to obtain a desired item or experience by saving points that are awarded for positive performances. As a result they are far more likely to repeat that behaviour, and ultimately contribute to the creation of a more successful business culture.

Source: Alan Heyward, general manager, Accumulate