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
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.
“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