The Keys to Corporate Responsibility Employee Engagement

The keys to corporate
responsibility employee
engagement
February 2014
Corporate Responsibility
At a glance
Disengaged employees
drag down companies,
costing billions of dollars
in lost productivity and
resulting in much higher
turnover rates.
Are your corporate
responsibility goals part
of everyday work life?
Can your employees
connect their personal
passions with the
company’s mission?
A three-step Connect-
Embed-Improve method
can create a culture
of engagement at your
firm and empower
employees for personal
and organizational success.

3PwC
Connection, consistency,
and continual improvement
Introduction
It is nearly impossible to tackle your company’s big corporate
responsibility challenges without also tackling the operational
challenge of employee engagement –which is both a means to drive
your CR efforts and the end result. If you’re doing it right, employees
become increasingly passionate about their work within the company
and in the community. Our three-step model can help your firm
achieve its employee engagement goals.
Within the current framework of
creating shared value that underlies
much of corporate responsibility
work today, employee engagement
is singularly important. Harnessing
the shared values of all employees,
coupled with the values contained in
the company’s culture and mission,
can lead not only to greater business
success, but to inspired, productive,
and highly impactful people.
Employee engagement is an evergreen
topic for companies, a tool that
can support their innovation goals,
increase their bottom line, drive
corporate responsibility efforts, and
advance companies’ broadest missions.
In each of these cases, companies
look to their employees to get it done
and when they don’t, the costs can
be staggering.
1 Edmans, Alex (2011): Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity
Prices. Journal of Financial Economics 101(3), 621–640
2 Source: p. 21 “Millennials at work”
PwC’s own research shows that across
industries, 10% to 15% of the global
workforce can be categorized as
Disconnected—with low levels of
engagement and a high likelihood to
exit the organization. What’s more,
only two in five employees express a
strong intent to work for their current
employer for at least another year.
In high-performing organizations that
are focused on employee engagement,
the rate of Disconnected employees can
be cut by more than half. And when
employees see positive, ongoing
management of employee engagement,
they are 20 percent more engaged than
those with no focus.
A paper published by Wharton
finance professor Alex Edmans in
2011 evaluated the stock performance
of organizations named to Fortune
magazine’s annual list of the
“Best Companies to Work For”
and determined that companies
making the list from 1984 to 2009
outperformed peers by 2-3 percent
per year.1
And a 2010 study conducted by the
Corporate Executive Board found that
employees most committed to their
organizations put in 57 percent more
effort on the job — and are 87 percent
less likely to resign — than employees
who consider themselves disengaged.2

4 The keys to corporate responsibility employee engagement
Given the importance of employee engagement, one might assume the
secrets to success have all been revealed. But the roadmap for success in this
area — engagement that leads to real shared value — remains elusive.
However, a model exists to help companies achieve greater engagement
and drive individual, business, and societal value. This model revolves around
three key aspects: connection, consistency, and continual improvement.
We will explore how connection, consistency, and continual improvement —
and a bit of alchemy — are all needed from today’s leaders if they seek to build
a culture of engagement that supports the development of highly productive,
efficient, and self-actualized workers who can deliver benefits in any number
of ways.
Connection
Connecting the individual
to the collective
Consistency
Embedding your change
effort across the company
Continuous improvement
How well is your company able to
connect your business goals to the
interests and passions of its employees?
How do your programs create a sense
of belonging or community?
Figure 1: Corporate responsibility employee engagement model
How consistent are your engagement
programs with larger company
goals as demonstrated by a clear
alignment between words (corporate
communications) and deeds (operations,
policies, and work streams)?
Is your company’s change effort seen
as a tick box exercise or a long-term
opportunity to continually improve and
engage staff and stakeholders?
Employees most committed to their
organizations put in 57% more
effort on the job — and are 87% less
likely to resign — than employees who consider
themselves disengaged.

5PwC
What is employee
engagement and why
does it matter?
Employee engagement is defined
as the commitment to and passion
for one’s work and role within a
company. Engagement, as opposed
to satisfaction, translates directly into
discretionary effort—the willingness
to do more than only meet job
requirements and customer needs.
Employee engagement is the extent
to which employees are motivated to
contribute to business success, and are
willing to apply discretionary effort to
accomplishing tasks important to the
achievement of stated business goals.
Companies that engage and empower their
workforce are better positioned to anticipate
and adapt to changing market conditions.
An engaged workforce can have a
significant effect on financial and
operational results and in most cases
without an engaged workforce, CR
efforts will founder. Businesses with
highly engaged employees see higher
customer satisfaction, have lower
turnover rates, and outperform in
terms of CR impact and ROI, than
businesses with lower levels of
employee engagement.
One of the most interesting aspects
of employee engagement is that it can
serve as a barometer for the health of
the company at large. Companies that
engage and empower their workforce
are better positioned to anticipate and
adapt to changing market conditions.
A company’s engagement efforts are a
tangible manifestation of its company
culture and if that culture is one that
is defensive, unbalanced, or inflexible,
it spells long-term doom. Importantly,
as cycle rates of change continue to
become shorter and shorter, the ability
to adapt, innovate, and continually
improve is crucial.

Millennials and employee engagement
Many companies see members of the millennial generation as the key
to their future success, and they are right. Not only are millennials a
massive cohort, destined to make up half the global workforce by 2020,
but as the first generation to come of age in the Internet age, their facility
with all things digital can also help a company succeed.
CEOs increasingly worry that they will soon be unable to find the talent
that they will need to succeed, and are competing fiercely for the best
available talent that will replace the retiring Boomer generation in the
near future. Every year, more and more of that talent will be recruited
from the ranks of millennials.
Millennials tend to have different career priorities than older employees,
including a desire for flexible hours, frequent feedback on their work,
and a dislike of traditional corporate structures, which can all prove
challenging for employers. However, engagement strategies offer solutions
that can help younger employees apply their whole range of abilities and
passions, and strengthen their connection to the company as a whole.
For such a critically important cadre of employees, and one that feels it has
been required to compromise on work goals during the global economic
downturn, employee engagement efforts are key to helping them, and the
business, thrive.
For more on this topic, please read:
PwC’s NextGen: A global generational study
How do we measure
employee engagement?
To help organizations use employee
engagement to drive business goals,
PwC has created the Employee
Engagement Index (EEI). The EEI
has shown through factor, regression
and correlation analyses to link to
operational and workforce metrics.
Specifically, engagement is measured
by asking employees the extent to
which they agree with the EEI items
in Figure 2.
However, measuring the state of
engagement is just the critical first
step in PwC’s model. While the
attributes that define engaged
employees remain constant—
Advocacy, Commitment, Effort, Pride,
Achievement, Alignment—PwC’s
model is predicated upon the reality
that, just as every organization is
unique, so too are the factors that
can influence employee engagement.
Thus, our model is built to also
measure the factors, or dimensions,
of the employee experience (i.e. CR,
ethics or diversity), and through
statistical analysis, determine the top
drivers of engagement unique to an
organization. It is in this way that we
are able to determine which factors are
most important to focus on in order to
improve engagement and economic,
social and environmental performance.
Figure 2: Employee Engagement Index (EEI)
Advocacy
“I would recommend the company
to friends and family as a great
place to work.”
Commitment
“I intend to stay with
the company for
another 12 months.”
Discretionary effort
“My colleagues are willing
to go beyond what is
expected for the success
of the company.”Pride
“I am proud to work
for the company.”
Achievement
“My colleagues are
passionate about
providing exceptional
customer service.”
Alignment
“I understand how
my job contributes
to the success of
the company.”
Employee
Engagement Index
(EEI)

7PwC
PDCA is an iterative four-step
management method, also known
as the Deming Cycle, used in business
for the control and continuous
improvement of processes and
products (Wikipedia>PDCA).
Plan
Do
Check
Act
However, it is often used in other
types of change management and
continual improvement processes
where zero defects (i.e. zero violations
of a code) or organizational alignment
is the desired result.
Figure 3: PDCA method
PDCA (Plan-Do-
Check-Act)
The how of
employee engagement
Many companies and consultancies
have developed new models designed
to achieve greater engagement, but
we believe that almost all are derived
from the Deming Cycle’s Plan-Do-
Check-Act method in some way.
Originally created as a tool
of continual improvement in
manufacturing and quality
control, the Deming Cycle is a
useful foundation for employee
engagement because fundamentally,
creating corporate culture is a
process of construction and
continual improvement.
A corporate culture that engages is
one that is always listening, continually
improving, and never satisfied — many
of the same traits needed for success
in using the Deming Cycle, or Kaizen
or Six Sigma. Additionally, many
companies are comfortable with
the Deming Cycle given it is used
in one way, shape or form in nearly
every company. Last, we believe that
models serve one purpose, to simplify
challenges and focus actions, and the
Deming Cycle does this very well.

Plan: What is our desired
end state?
Shifting culture is not for the faint of
heart nor is it the work of one person.
Thus, the most successful strategies
are almost never established from on
high in ivory towers anymore, but
come about as the result of widespread
engagement inside and outside an
organization. As part of this process,
it is critical to think of your employees
as a talent and opinion pool. As the
famous saying goes, “Culture eats
strategy for breakfast,” so job number
one is making sure that your strategy is
seen as authentic within the culture of
your organization. It should emerge
and come together as a mosaic of
employee ideas and values and be
influenced by your marketplace and
the communities in which you operate.
Authenticity is critical in both strategy
and how it is manifested within the
companies day to day. For example,
do the company leaders “walk the
talk”— and if they do, are they in
their tower or out among the staff
so their behavior becomes a model?
Leaders are only leading when
followers can see them.
Planning, or strategy, has become
an art and science, and this is the
area where leaders — those who set
the vision and explain the why and
what —do their work. Planning and
developing strategy are also the most
critical step for employee engagement.
As our leaders look across the
operating environment and context for
disruptive changes, opportunity, and
performance gaps, they can create a
strategic vision for the value employees
really add to the company, its clients
and the community — one that usually
goes far beyond traditional definitions
of employee value creation. These
visions should be lofty, but once again,
they need to resonate with staff and
need to be consistent with the policies
and practices of day-to-day life within
the company — or those policies and
practices need to be changed. This is
the stuff of culture — the set of shared
attitudes, values, goals, and practices
that characterizes an institution or
organization.3
Most importantly, the culture that
is created needs not only to be
consistent, but one that employees
value being part of. This is a community
the employee is proud to be part of, not
paid to be part of.
3 http://www.merriam-webster.com/dictionary/
culture
Questions to consider:
• Where is the company right now
in terms of engaging your staff?
• What goal or goals can be created
to connect business, community,
and individual value?
• People want to work for a
successful, high-performing
organization on projects that
help them grow and in ways that
connect them to something larger
than themselves. Does your plan
envision that?
• Take a simple test and ask yourself:
If you were forced to cut salaries
for a short period of time or forgo
bonuses for a year, would your
employees be supportive? Are
they invested?
The most successful strategies are almost
never established from on high in ivory towers
anymore, but rather come about as the result
of widespread engagement inside and outside
an organization.

9PwC
If there is consistency, it creates a
harmony where individuals see shared
value in the work that is being done,
beyond simply earning compensation,
and want to be part of the work. The
better and more aligned this value is,
the better the results for employees
as well as for companies. This can
be a delicate balance to find as one
key to engagement is connecting
to individual passions. By reducing
your strategy to its most basic elements
(youth education rather than financial
literacy, or environmental conservation
rather than climate change) you have
the best change of capturing passions,
but be careful as too broad a platform
and the focus and impact of your
efforts can be lost.
Do: Pull the right levers
Doing — implementation or execution —
is the responsibility of managers
who translate the leaders’ why and
what into how, who, and when. The
trick is to execute the plan in such a
way that the varied pieces connect
to form a holistic execution to
avoid inconsistency and competing
components. For example, do your
incentive programs support the change
you desire to make? Do the structures,
policies and other enabling elements of
your organization help or hinder your
ability to make the changes you seek?
This is the stuff of authenticity, where
the daily actions of how business is
conducted either connect employees
to the company’s mission or undermine
corporate strategy and communications
as mere propaganda.
An understanding of your company
culture is critical to this step. A good
place to start is to ask; if the company
were a person, how would you
describe him or her? As collaborative,
competitive, passionate, or complacent?
Or defensive when asked to improve,
or arrogant in a delusion that he or
she is infallible? From there, identify
ways to capitalize on that current state
and think about what attributes you
might want to change or disrupt. The
point here is to determine a dominant
set of traits upon which to focus,
exploit and/or improve.
• How consistent are staff
compensation plans with
the CR goals?
• What are ways to start
engagement before your staff
even join your organization?
• To what extent do you offer
work that engages staff’s
hearts and minds?
• To what extent is your internal
structure promoting or inhibiting
your success in meeting your goals?
• How well are the work processes
supporting your plans to succeed?
• Often forgotten is the “who are
we” question, which examines the
entirety of your company. How happy
are we with who we are? What parts
of our culture do we want to keep;
what parts do we want to change?

Working to win: Gamification for
employee engagement
Challenge. Achievement. Camaraderie. Fun. Common words on
basketball courts, in front of video games, even when swiping the
screen of a mobile device. But what about in the workplace? Proponents
of gamification not only believe that it belongs in the workplace, but
that the emotional drivers behind gameplay can create a more engaged
workforce and positively impact the bottom line.
It may evoke images of employees frittering away the day on the latest
social network game, but gamification is less about games themselves
than about taking the building blocks of those games — missions,
competitions, achievements — and applying those engaging techniques
to business processes. The real value, however, comes from combining
those game mechanics with reputation management and social
networking, not just recognizing employee progress with points
or badges, but also exposing their experience, skill sets, and
accomplishments across the enterprise. Finally, behavioral analytics
go beyond measuring activity to capturing how and why employees are
(or aren’t) participating, providing real-time feedback, and enabling
adjustments to optimize the experience.
It’s the combination of these tools and techniques that make gamification
a pragmatic and powerful vehicle for engaging employees in the tactical,
cultural, and strategic imperatives of the enterprise.
For more on this topic, please read:
PwC’s Solving business problems with game-based design
The trick is to execute the plan in such a
way that the varied pieces connect to form a
holistic execution to avoid inconsistency
and competing components.

11PwC
Check: Conduct an
honest assessment of
your performance and
what enables or
impedes progress
Can you connect your CR program’s
performance to your company’s
more conventional business KPIs?
Identifying these correlative or causal
relationships is critical to the long-
term success of your CR program and
to encourage consistency in program
funding and support even amidst the
ebbs and flows of marketplace changes.
Leaders can’t be certain that their
successors will share the same
view about the value of employee
engagement; therefore, in order to
make their programs sustainable, a
forward-thinking leader has to work
to deeply ingrain these programs.
One way to do so is to embed
the measurement of employee
engagement into the company’s
measurement process. Simply put,
you “manage what you measure.”
Perhaps most important, employees
want to understand the impact they
are making and the success of which
they are a part. Telling the story about
how each individual matters and the
collective force of the program is a key
component of any successful program
that inspires the passions of its people.
This step is not about only measuring,
it is about communicating. Although
leaders and managers are (rightly)
Perhaps most important, employees want to
understand the impact they are making and
the success of which they are a part.
hesitant to overload employees
with communication, successful
communication efforts are
broad-based, with leaders using
everything from performance
evaluations to quarterly meetings
to internal newsletters to consistently
remind, discuss, and inspire the
transformation at hand. It is a
cliché, because it is so true —
repeat, repeat, repeat.
• What KPIs can you create that
connect business, community,
and individual value?
• How can you connect metrics
within your company’s human
resources and annual review
process to the goals laid out in
the plan stage? How congruent
are they with the culture,
process, and structure?
• How flexible can those
metrics be made in order
to allow staff to create their
adventure and tell their story
of success and impact?
• If performance is not what
was hoped for, what is the
root cause?
• How are you communicating your
goals, progress, and performance?
Can your staff hear you? Can
leaders in the firm that might be
closer to your staff — in terms of
both proximity and relationships —
repeat that message?
• What means might be used to
“speak” to staff? Social media?
Dashboards? Infographics?

Innovation, inside and out
Employee engagement can be a key means of creating innovation and
innovation can provide a means of engagement. Take for example the
now-legendary example of the Post-It Note. The ubiquitous sticky papers
were invented by accident, and were implemented during an employee’s
sanctioned “bootlegging” time. (3M allowed employees to devote part of
their workweek to personal projects, with the company reaping any
rewards from the work.)
By giving employees the freedom to let their minds and creativity roam,
3M was able to take a “solution without a problem” and turn it into
a profit center beyond anyone’s wildest imagination. It’s also important
to note that, in return for the bootlegging policy — an implicit commitment
to innovation on the part of every employee — 3M committed to engage
the employee and his or her innovations. Without that two-way
commitment, employees can find themselves stuck in a rut, and feel
frustrated and undervalued as a result.
to get momentum started but the mass
of change quickly starts to overcome
any internal inertia. There are dozens
of examples in which a company
change effort seemed to take forever,
followed by what seemed like
overnight adoption of the change.
During the long nights of building
momentum, it is crucial to keep
one’s eye on the goals, measure and
celebrate small wins, and continue
to paint the vision of the end
state alongside the current reality.
Continually
improving
performance and
scaling change is
the final step of the
process and the first
step in going through
the process again
and again.
Act: Work to move from
business mission to
individual significance
Continually improving performance
and scaling change is the final step of
the process and the first step in going
through the process again and again.
Over time, the cycle rate becomes
shorter, iteration a more natural part
of the process and improvement speeds
up. This is akin to getting the train to
move, where it takes tremendous effort
• Where does continued
incongruence lie?
• How can staff become part
of the plan-do-check-act
process itself?
• Do you have a trusted channel
for staff to offer upward
feedback about the firm
and its mission?
• Are there aspects beyond your
company’s control or influence and
therefore require that you engage
other stakeholders?
• Can engaging other stakeholders
provide a means of further engaging
employees?
• How well do leaders in the
organization exhibit the change
behaviors? Are they part of the
solution, or the problem?

13PwC
Conclusion
Bringing your business strategy in line
with your employees’ passions is a
win-win. Getting employees personally
connected to the business success
comes from connectivity, consistency,
and continual improvement.
By harnessing well-worn models
of continual improvement —
models that are likely already at
work in your company — and
creating a strategy that is connective,
collaborative, innovative, and draws
out the best in your staff, you will
earn even more than you invested.
In return for these efforts, your
business will create a differentiated
approach to employee engagement
that builds lasting value for your
business and, in the case of corporate
responsibility change efforts, will
achieve the proverbial “doing well
by doing good.”
For more
information
PwC’s NextGen: A global
generational study
Millennial Workers Want Greater Flexibility,
Work/Life Balance, Global Opportunities
How should organizations adapt their companies to fit the
demands of both millennial and non-millennial employees?
Are stereotypes of millennials accurate? Do millennials
and non-millennials have anything in common?
Our study explores these questions and more. Discover what PwC employees and
partners across the globe — including people from different generations, career
states, and cultural backgrounds — shared about their attitudes in the workplace,
and how millennials in particular factor into the big picture.
Solving business problems
with game-based design
This issue of the Technology Forecast examines the
wide range of game design techniques that can be
used in non-game environments for business benefit.
These techniques are turning out to be pivotal in
motivating customers, employees, and other stakeholders,
and the most compelling use cases underscore the degree
to which success depends on a thoughtful reassessment
of the user experience.

To have a deeper conversation
about how this subject
may affect your business,
please contact:
Shannon Schuyler
Leader and Principal
PricewaterhouseCoopers
+1 (312) 867 1164
shannon.schuyler@us.pwc.com
Nik Shah
Employee Engagement Practice Leader
PricewaterhouseCoopers—Saratoga
+1 (703) 918 1208
nik.shah@us.pwc.com
Jeff Senne
+1 (202) 701 9966
jeff.senne@us.pwc.com
Clinton A. Moloney
Sustainable Business Solutions
+1 (415) 498 8442
clinton.a.moloney@us.pwc.com
www.pwc.com
Copyright ©2014 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network.
Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a
substitute for consultation with professional advisors. PH-14-0089

The Keys to Corporate Responsibility Employee Engagement

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