Rethinking employee engagement from the perspective of psychological development final

Rethinking Employee Engagement from the Perspective of Psychological Development

Richard Barrett

Powerful metrics that enable leaders to measure and manage cultures.

www.valuescentre.com

2

What is Employee Engagement?

Engaged employees are enthusiastic about their work and care about the success of the organisation.

A workplace approach designed to encourage the commitment of employees to the organisation’s goals and values.



3

Why is Employee Engagement Important?

Engaged employees bring more of their discretionary energy to their work.

Organisation’s with high levels of employee

engagement outperform organisations with low

employee engagement by a significant margin.



4

Employee Engagement and Performance

Organisations with highly engaged employees have 3.9 the earnings per share growth rate compared with organisation with low employee engagement—Gallup

Organisations with high employee engagement are 78% more productive and 40% more profitable that those with low employee engagement—AON Hewitt



5

S&P 500

Average Annualized Return

16.39%

Average Annualized Return

4.12%

BCWF

The Best Companies to Work For engender high levels of employee engagement and commitment, because the leaders of these organisations focus on meeting their employee’s needs.

The Top 40 Best Companies to Work For (USA)



6

What’s the Difference?

Caring creates happier customers, who buy more and refer more often, which drives sales, resulting

in increased income.

Engaged employees care about their organisations, are more productive, give better

service, and stay in their organisations longer.



7

Employee Engagement and Cultural Entropy

Employee engagement is highly correlated with cultural entropy.

Cultural Entropy: A measure of the conflict, friction and frustration that people experience in their day-to-day

activities that prevents an organisation from achieving peak performance.



8

25%

35%

45%

55%

65%

75%

85%

0% 5% 10% 15% 20% 25% 30%

Cultural Entropy

Emp

loye

eEn

gage

me

nt

Research carried out in 163 organisations in Australia by Hewitt Associates and the Barrett Values Centre in 2008.

Low Entropy = High Engagement

High Entropy = Low Engagement

Employee Engagement vs. Cultural Entropy



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Entropy and Engagement

Cultural Entropy Most employees are ….

10% or less Highly Engaged

11% to 20% Engaged

21% to 30% Becoming Disengaged

31% to 40% Disengaged

41% or more Highly Disengaged



10

Cultural entropy is a function of the personal entropy of the current leaders and

institutional legacy of past leaders as embedded in the structures, systems,

policies and procedures of an organisation.

Where Does Cultural Entropy Come From?

Personal entropy is the amount of fear-driven energy that a person expresses in his or her day-to-day interactions with

other people.



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What is Personal Entropy?

Personal entropy shows up in potentially

limiting values such as:blame, jealousy, power-seeking, status-seeking, arrogance, demanding,

internal politics, etc.



12

What is Institutional Legacy?

The institutional legacy contribution to cultural

entropy shows up as bureaucratic procedures, hierarchical structures,

silo functioning, etc.



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The values that are most important to us are a reflection of the needs of the stage of psychological development we are at and the unmet needs of the stages of psychological development we have passed through but have not yet mastered.

A Values-Based Approach to Identifying Employee Needs

Our needs (what we value) have always been, and always will be the principal drivers of our behaviors and actions.



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Richard Barrett has made extraordinary contributions to our understanding of organisational values and culture. His frame-works for measuring culture and enabling whole system change are elegant. His reservoir of know-ledge is vast and his connection to timeless wisdom is profound.

Raj Sisodia Co-founder and co-chairman of Conscious Capitalism Inc. and Professor of Marketing at Bentley University

Everything I am talking about is in this book



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Stages of Psychological Development

Stages Primary Motivations

Serving

Integrating

Self-actualising

Individuating

Differentiating

Conforming

Surviving Evo

luti

on

of

Pers

on

al C

on

scio

usn

ess

Satisfying your physiological and nutritional needs.

Satisfying your need for love, and belonging.

Satisfying your need for respect and recognition.

Satisfying your need for freedom and autonomy.

Satisfying your need to find meaning and purpose in life.

Satisfying your need to make a difference in the world.

Satisfying your need to lead a life of service to others.



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Surviving



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INFANCY 0-2 Years Old

Staying alive!

Satisfying physiological and nutritional needs

Surviving

Stage Motivation



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Conforming



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Conforming

Stage Motivation

CHILDHOOD 3-7 Years Old

Keeping safe and secure!

Satisfying need for love, and belonging.



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Differentiating



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Differentiating

Stage Motivation

TEENAGER8-19 Years Old

Distinguishing yourself

Satisfying need for respect and recognition.



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Individuating



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Individuating

Stage Motivation

YOUNG ADULT20-39 Years Old

Releasing your fears!

Satisfying need for freedom and autonomy.



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Self-actualising



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Self-actualising

Stage Motivation

ADULTHOOD40-49 Years Old

Becoming who you are!

Satisfying need to find meaning and purpose.



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Integrating



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Integrating

Stage Motivation

MATURE ADULT50-59 Years Old

Aligning with others!

Satisfying need to make a difference in the world.



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Serving



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Serving

Stage Motivation

SENIOR60+ Years Old

Finding fulfilment!

Satisfying your need to serve the greater good.



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Stages, Levels and World Views

We grow in stages of psychological development

We operate at levels of consciousness

We live inside (are embedded in) cultural world views



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Levels of Consciousness

All things being normal, the level of consciousness we operate from will

correspond to the stage of psychological development we have reached.



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Stages and Levels

Stages Levels of Consciousness

Serving SERVICE

Integrating MAKING A DIFFERENCE

Self-actualising INTERNAL COHESION

Individuating TRANSFORMATION

Differentiating SELF-ESTEEM

Conforming RELATIONSHIP

Surviving SURVIVAL Evo

luti

on

of

Pers

on

al C

on

scio

usn

ess



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What Employees Value

A safe working environment and pay and ben-efits that are sufficient to take care of family

Opportunities to work in a congenial atmos-phere where people care and respect each other

Opportunities to grow professionally with support, feedback and coaching

Opportunities and challenges by being made accountable for projects and processes

Opportunities for personal growth and develop-ment to support you in living your life purpose

Opportunities to leverage your contribution by collaborating with other like-minded individuals

Opportunities to serve others and care for the well-being of the Earth’s life support systems

Surviving

Relationship

Self-esteem

Transformation

Internal cohesion

Making a difference

Service




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Robert Kegan’s Types of Mind

Socialized Mind

Self-Authoring Mind

Self-Transforming Mind

Surviving

Relationship

Self-esteem

Transformation

Internal cohesion

Making a difference

Service




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Socialized MindFocused on meeting deficiency needs. Work is a job—a way of earning a living and caring for family. They may enjoy their work and colleagues, but are never passionate about what they do. Surviving

Relationship

Self-esteem




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Self-Authoring MindFocused on achievement and ambition. People operating with a self-authoring mind seek opportunities for advancement. They think of their work as career—a pathway to a better future.

Transformation

Internal cohesion




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Self-Transforming MindFocused on leading a values and purpose-driven life. People operating with a self-transforming mind see their work as a vocation. They want to leave a legacy and be of service to the world.

Making a difference

Service




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Building a Values-driven Organisation



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Building a Values-driven OrganisationStart with a Values-Survey

PERSONAL VALUESWhich of the following values and behaviours most reflect who you are? Pick ten.

CURRENT CULTUREWhich of the following values/behaviours most reflect how your organisation currently operates? Pick ten.

DESIRED CULTUREWhich of the following values/behaviours most reflect how you would like your organisation to operate? Pick ten.

Placement of Values by Level (100 employees)

Top Ten Values

1. tradition (L) (59)

2. diversity (54)

3. control (L) (53)

4. goals orientation (46)

5. knowledge (43)

6. creativity (42)

7. productivity (37)

8. image (L) (36)

9. profit (36)

10. open communication (31)

10

42 5

7

9

6

8

3

110

Current Culture

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

Survival

11%

1

2

3

4

5

6

7

Cultural Entropy

Placement of Values by Level (100 employees)

Current Culture

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

Survival

Highly Aligned Team of 16 People

commitment 12 5(I)

continuous improvement 10 4(O)

employee fulfilment 10 6(O)

balance (home/work) 9 4(O)

customer satisfaction 9 2(O)

making a difference 9 6(S)

financial stability 8 1(O)

humour/ fun 8 5(O)

teamwork 8 4(R)

accountability 9 4(R)

commitment 8 5(I)

continuous improvement 8 4(O)

employee fulfilment 8 6(O)

humour/ fun 8 5(O)

shared vision 8 5(O)

customer collaboration 7 6(O)

customer satisfaction 6 2(O)

financial stability 6 1(O)

teamwork 6 4(R)

Values Plot August 6, 2012Copyright 2012 Barrett Values Centre

I = IndividualR = Relationship

Black Underline = PV & CCOrange = PV, CC & DC

Orange = CC & DCBlue = PV & DC

P = PositiveL = Potentially Limiting (white circle)

O = OrganisationalS = Societal

Matches

PV - CC 4CC - DC 7PV - DC 1

Health Index(PL)

PV - 9-0CC - 9-0DC-10-0

making a difference 10 6(S)

family 9 2(R)

commitment 8 5(I)

humour/ fun 8 5(I)

balance (home/work) 6 4(I)

continuous learning 6 4(I)

integrity 6 5(I)

accountability 5 4(R)

creativity 5 5(I)

Level Personal Values (PV) Current Culture Values (CC) Desired Culture Values (DC)

7

6

5

4

3

2

1

IRS (P)=6-2-1 IRS (L)=0-0-0 IROS (P)=1-1-6-1 IROS (L)=0-0-0-0 IROS (P)=1-2-7-0 IROS (L)=0-0-0-0

Highly Aligned Team of 16 People

CTS = 53-22-25Entropy = 0%

CTS = 50-26-24

Entropy = 2%

Personal Values

CTS = 51-29-20

Entropy = 0%

Current Culture Values

Desired Culture Values

C

T

S 2

1

3

4

5

6

7

0%

0%

0%

6%

12%

7%

22%

32%

13%

8%

0% 20% 40% 60%

1

2

3

4

5

6

7

0%

1%

1%

6%

8%

8%

26%

28%

19%

3%

0% 20% 40% 60%

1

2

3

4

5

6

7

0%

0%

0%

5%

5%

10%

29%

27%

22%

2%

0% 20% 40% 60%

1

2

3

4

5

6

7

21%

54%

25%

22%

54%

24%

24%

56%

20%

Notice how evenly matched the

distributions are

Entropy Level = Highly Engaged

Banking Sector

Level 7

Level 6

Level 5

Level 4

Level 3

Level 2

Level 1

Personal Values Current Culture Values Desired Culture Values

IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0

Matches


Health Index (PL)

PV: 10-0CC: 10-0DC: 10-0

1. accountability 8576 4(R)

2. honesty 6133 5(I)

3. commitment 5221 5(I)

4. respect 4420 2(R)

5. family 4057 2(R)

6. integrity 4023 5(I)

7. caring 3568 2(R)

8. balance (home/work) 3526 4(I)

9. responsibility 3279 4(I)

10. efficiency 3085 3(I)


2. client-driven 4571 6(O)

3. client satisfaction 3486 2(O)

4. brand reputation 2740 3(O)

5. achievement 2491 3(I)

6. teamwork 2408 4(R)

7. environmentalawareness

2372 6(S)


9. being the best 2218 3(O)

10. cost-consciousness 2187 3(O)


2. balance (home/work) 4183 4(O)



5. employee recognition 3297 2(R)





10. employee satisfaction 2687 2(O)

Values Plot Copyright 2011 Barrett Values Centre April 2011

Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational

Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal

Banking Sector Organisation with 27,000 Employees

1%

0%

1%

5%

16%

16%

26%

4%

7%

24%

0% 20% 40%

1

2

3

4

5

6

7

3%

3%

5%

5%

11%

20%

13%

14%

6%

20%

0% 20% 40%

1

2

3

4

5

6

7

1%

0%

0%

5%

15%

16%

21%

12%

5%

25%

0% 20% 40%

1

2

3

4

5

6

7

Banking Sector

Values Distribution Copyright 2011 Barrett Values Centre April 2011

CTS = 37-24-39Entropy = 2%

CTS = 33-20-47

Entropy = 11%

CTS = 38-25-37Entropy = 1%

Personal Values

Current Culture Values

Desired Culture Values

11%

50%

39%

20%

33%

47%

17%

46%

37%

C

T

S

Entropy Level = Engaged

Banking Sector Organisation with 27,000 Employees

Less evenly matched

distributions

Shift in culture towards personal consciousness

Small Company

Personal Values

Large Company

Personal Values

Family Respect FamilyCaring Efficiency

CommitmentIntegrityHumour/fun CreativityAccountabilityBalance (home/work)Continuous learning

Making a difference

IntegrityHonestyCommitmentAccountabilityBalance (home/work)Responsibility

Different Personal Values

0%

0%

0%

6%

12%

7%

22%

32%

13%

8%

0% 20% 40% 60%

1

2

3

4

5

6

7

21%

54%

25%

1%

0%

1%

5%

16%

16%

26%

4%

7%

24%

0% 20% 40%

1

2

3

4

5

6

7

11%

50%

39%

Small Company

Desired Culture

Values

0%

0%

0%

5%

5%

10%

29%

27%

22%

2%

0% 20% 40% 60%

1

2

3

4

5

6

7

24%

56%

20%

1%

0%

0%

5%

15%

16%

21%

12%

5%

25%

0% 20% 40%

1

2

3

4

5

6

7

17%

46%

37%

Large Company

Desired Culture

Values

Client satisfactionEmployee satisfactionEmployee recognitionAchievement

Customer satisfactionFinancial stability

AccountabilityBalance (home/workHonestyCommitmentTeamwork

Client-drivenCustomer collaborationEmployee fulfilment

AccountabilityCommitment Continuous improvementHumour/funShared visionTeamwork

Different Desired Cultures

Banking Sector

Level 7

Level 6

Level 5

Level 4

Level 3

Level 2

Level 1

Personal Values Current Culture Values Desired Culture Values

IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0

Matches


Health Index (PL)

PV: 10-0CC: 10-0DC: 10-0




4. respect 4420 2(R)

5. family 4057 2(R)

6. integrity 4023 5(I)

7. caring 3568 2(R)

8. balance (home/work) 3526 4(I)

9. responsibility 3279 4(I)

10. efficiency 3085 3(I)




4. brand reputation 2740 3(O)



7. environmentalawareness

2372 6(S)


9. being the best 2218 3(O)

10. cost-consciousness 2187 3(O)


2. balance (home/work) 4183 4(O)



5. employee recognition 3297 2(R)





10. employee satisfaction 2687 2(O)

Values Plot Copyright 2011 Barrett Values Centre April 2011

Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational

Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal

Banking Sector (18,000)



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Cultural Entropy Evolution

Cultural entropy reduction from 25% to 10% led to improved performance through increased employee engagement, increased revenues, improved productivity, and increase in share price.

25%

19%

17%

14%13% 13%

11% 10%

0%

5%

10%

15%

20%

25%

30%

2005 2006 2007 2008 2009 2010 2011 2012

Cutlural Entropy



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Evolution of Number of Survey Participants

8%

25%

38%

51%

67%

73%77%

75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2005 2006 2007 2008 2009 2010 2011 2012

Percentage of employees voluntarily participating in the values assessment grew significantly each year as people realized that the leaders of the organisation were paying attention to the results of the assessment.



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Revenue Evolution

0%

5%

10%

15%

20%

25%

30%

0

5000

10000

15000

20000

25000

30000

35000

2005 2006 2007 2008 2009 2010 2011 2012

Revenue Cultural Entropy

Annual revenue

increases as cultural

entropy falls.

Global Economic Meltdown

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1000

1200

2005 2006 2007 2008 2009 2010 2011 2012

Revenue per Capita Cultural Entropy

Revenue per capita

increases as cultural

entropy falls.

Productivity Evolution


0%

5%

10%

15%

20%

25%

30%

0

5000

10000

15000

20000

2005 2006 2007 2008 2009 2010 2011 2012

Share Price Cutlural Entropy

Share price (cents)

increases as cultural entropy

falls.

Share Price Evolution




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For More Information


www.richardbarrett.net

To get a copy of this presentation go to:

http://www.slideshare.net/BarrettValues

http://www.valuescentre.com/

http://www.richardbarrett.net/

http://www.slideshare.net/BarrettValues

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