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Mentoring and Employee Engagement

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 MENTORING & ENGAGEMENT
                 Sustaining Organizational Success




www.3creek.com                        By Triple Creek
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TABLE OF CONTENTS

                Introduction ..................................................................................................3

                The High Cost of Employee Disengagement ............................................. 4

                The Positive Impact of Employee Engagement ........................................ 6

                Engagement, Mentoring and the Q12™ .................................................... 8

                Conclusion .................................................................................................. 11

                Appendix..................................................................................................... 12

                Endnotes/References ................................................................................ 13




                The material contained in this pamphlet is by Triple Creek Associates, Inc.
                It is protected by U.S. Copyrights and Trademarks. The Reproduction of this
                material in any form is prohibited by penalty of law. No part of this publication
                may be reproduced, stored in a retrieval system, or transmitted, in any form
                or by any means, electronic, mechanical, photocopying, recording, or
                otherwise, without prior written permission of Triple Creek Associates, Inc.

                Copyright ©2006, 2010 by Triple Creek Associates, Inc. Second Edition




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INTRODUCTION
                 In Follow this Path: How the World’s Greatest Organizations Drive
                 Growth by Unleashing Human Potential, authors Curt Coffman and
                 Gabriel Gonzalez-Molina analyze a Gallup Organization study of over
                 10 million customers, 3 million employees and 200,000 managers.1


                 Based on their research, they infer that:




                                                                           Results in
                                                                          Sustainable
              Engaged                        Lead to                     Growth, Profits
             Employees                       Engaged                    and Higher Stock
                                            Customers                       Value for
                                                                         Organizations2




                 The argument is clear: engaging employees should be a top priority in
                 companies that are striving for success.


                 What is also clear is that the majority of employees are not engaged,
                 and it costs companies dearly:


                        Hundreds of diverse companies were studied that shared one
                        extraordinary and troubling statistic. In a majority of these
                        companies, only 20 to 30 percent of the employees were
                        engaged in their work…. The most engaged work groups were
                        the most productive. The rest tended to be average, mediocre,
                        or downright destructive….3




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                                                                                                         4




   78% of the workforce is                                                22% of the workforce is
   not engaged or is actively                                             engaged, resulting in:
   disengaged, resulting in:
                                                                             -   Low Turnover
      -   High Turnover                                                      -   High Productivity
      -   Low Productivity                                                   -   High Customer Metrics
      -   Low Customer Metrics                                               -   High Profitability4
      -   Low Profitability4


                             The Critical Question: What can companies
                             do to increase employee engagement?



                  In this paper, we will explore the negative impact of employee
                  disengagement on an organization and the positive impact of
                  increasing employee engagement. We will also show how web-based
                  mentoring can address a number of critical issues that have been
                  proven to impact employee engagement positively.




THE HIGH COST
OF EMPLOYEE DISENGAGEMENT
                  The facts and statistics related to employee engagement can be
                  startling. The numbers in this section highlight evidence in relation
                  to two major areas: retention/turnover and organizational costs.


                  Retention/Turnover
                  One of the most obvious results of disengagement is turnover.


                      • According to a 2003 Towers Perrin study of 35,000 employees,
                         employee engagement may be the best predictor of retention5;
                         or to state this negatively: employee disengagement may be
                         the best predictor of turnover.
                      • “The importance of engagement is that it simply improves
                         retention. Fully two-thirds (66 percent) of highly engaged
                         employees have no plans to leave their current jobs, versus just
                         a third (36 percent) of the moderately engaged and only 12
                         percent of the disengaged.”6




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                                                                                                      5



                    • According to the Gallup research in Follow this Path, in
                          employment years 3-10, 22 percent of the workforce is
                          engaged, 56 percent is not engaged, and 22 percent is actively
                          disengaged (meaning a staggering 78 percent of employees are
                          disengaged to some degree).7
                    • Disengaged employees are two to three times more likely to
                          leave their jobs voluntarily, leading to average turnover rates in
                          the United States of 15-20 percent, depending on industry and
                          region.8


                Costs
                The cost of disengagement is steep for organizations on multiple
                fronts.


                    • Turnover – The average annual turnover cost to an organization
                          of 10,000 employees is roughly $84 million (or $8,400 per
                          employee).9
                    • Productivity Lost – According to the Gallup research, active
                          disengagement causes lost productivity that costs an estimated
                          $3,400 per $10,000 in salary10; this is on top of the turnover
                          costs. The Gallup research further establishes that the least
                          engaged employees are the lowest performers.
                    • Absenteeism – One hospital network reported that unengaged
                          employees missed 1.9 days more per year and actively
                          disengaged employees missed 4.8 more days per year than
                          engaged employees.11


                The chart below represents a summary of these costs for an
                organization of 10,000 with a turnover rate of 15 percent whose
                employees have an average salary of $40,000.


                 Factor                     Rate                    Amount
                 Turnover                   $8,400 per employee     $84,000,000
                 Productivity Lost          $3,400 per $10,000      $29,920,00012
                                            in salary
                 Absenteeism                $154 per day13          $3,264,800
                                            Total                   $117,184,800




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                                                                                                       6



                 If this total seems high, consider one example cited by Coffman and
                 Gonzalez-Molina. A $6 billion software organization had engagement
                 numbers in line with national averages: 24 percent of employees
                 engaged, 60 percent not engaged, and 16 percent actively disengaged.
                 The turnover rates were just as depressing: 7 percent for engaged
                 employees, 13 percent for those not engaged, and 28 percent for the
                 actively disengaged. The company implemented a program to address
                 engagement issues and achieved dramatic results. They increased
                 the engaged population to 36 percent and decreased the actively
                 disengaged group to 9 percent. The company estimates that this shift
                 in engagement added $250 million to the bottom line in retention
                 savings alone.14 Clearly, increasing engagement will save companies
                 substantial sums of money and offset any significant losses they would
                 incur through disengagement and turnover.




THE POSITIVE IMPACT
OF EMPLOYEE ENGAGEMENT
                 Authors Coffman and Gonzalez-Molina make the case that employee
                 and customer engagement is the one lever that can lead to higher
                 profits. According to a 2002 meta-analysis by Gallup, business
                 units with more employee engagement showed higher rates in every
                 measure of success when compared with business units that had low
                 employee engagement.


                     • 86 percent higher success rate on customer metrics.
                     • 70 percent higher success rate in lowering turnover.
                     • 70 percent higher success rate in productivity.
                     • 44 percent higher success rate in profitability.
                     • 78 percent higher success rate in safety figures.15


                 Recent research on the mentoring program at Sun Microsystems
                 demonstrates that mentoring had a much higher impact on the
                 bottom 60 percent of performers than on the top 40 percent. In fact,
                 the greatest impact accrued to the bottom 20 percent, leading the




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                                                                                                      7



                researchers to conclude that “investing in a mentoring program for
                high performers does not yield as significant of a return as might be
                assumed. Rather, the better investment for Sun would be to spend
                the money on lower performers to help them raise their level of
                performance.”16


                This is further supported by additional research—the top factor that
                increases engagement, according to the 2003 Towers Perrin study,
                is actions that demonstrate senior management’s “sincere interest
                in employees’ well-being.”17 Engaged employees believe that senior
                leaders care about their personal and professional development, and
                one of the most desirable and appreciated developmental opportunities
                is a mentoring relationship. Surveys of Fortune 500 leaders show that
                96 percent believe that mentoring enhanced their career development
                and opportunities.18


                Sun Microsystems’ research also validates the positive impact
                mentoring has on employee retention. The study involved an analysis
                of Sun’s mentoring program, examining more than 1000 employees
                over a five year period. The results showed higher retention rates for
                both mentees (72 percent) and mentors (69 percent), when compared
                to the retention rates of non-participants (49 percent).19


                By every measure, companies or even business units that invest in
                efforts to increase employee engagement, even by a few percentage
                points, could see substantial returns on that investment. The primary,
                long-term benefit to increasing engagement is seen in sustainable
                profit margins that could add hundreds of millions of dollars to the
                bottom line every year. In our view, investing in a large, self-directed
                mentoring process is a low cost, high impact way to foster employee
                engagement, while improving morale, retention and productivity at the
                business unit or organizational level.


                The need to address employee engagement and retention issues is
                precisely why so many companies we talk to are looking at a web-
                based process to broaden the reach and perception of mentoring.
                This approach does a number of things to increase engagement and
                morale:




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                                                                                                       8




                     1. Leadership is seen as providing all employees with
                         developmental opportunities, rather than just an elite few.
                     2. Employees can find mentors to help them improve the
                         competencies needed for current jobs, thus increasing
                         satisfaction and a sense of accomplishment.
                     3. Employees can explore other career paths and opportunities
                         through mentoring relationships outside their own departments
                         and silos.
                     4. Employees take more responsibility for their own development
                         and for the development of others, increasing the sense of
                         teamwork and community.
                     5. More employees can be utilized as mentors, increasing their
                         sense of value and worth to the company.


                 Increasing engagement may well be the single most important
                 personnel factor that leadership can control that will lead to higher
                 profitability in the long run.




ENGAGEMENT, MENTORING AND THE Q12™
                 The hard facts about employee engagement lead authors Coffman
                 and Gonzalez-Molina to conclude, “Engaged employees are a rare and
                 precious resource.”20 So what can companies do to retain and energize
                 these employees? Can companies practice a kind of human resource
                 alchemy, turning disengaged employees into rare and precious assets
                 who actually engage customers and contribute to company value?


                 The answer is a resounding yes.


                 We agree with Coffman and Gonzalez-Molina that employee
                 engagement can be improved. We further believe that one way to
                 accomplish this is through mentoring; the right approach to mentoring
                 can create an engagement engine that drives up individual, business
                 unit and organizational performance.




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                The premise of Follow this Path is that great managers unleash the
                untapped potential of people, increasing their engagement by building
                12 conditions into the workplace culture and environment. These
                conditions are referred to as the Q12™, and according to Coffman
                and Gonzalez-Molina, these should be the primary focus of anyone
                concerned with enhancing employee engagement.


                The authors argue that a manager who keeps the Q12™ in mind and
                interacts with employees according to these principles will bring out
                the best in people and increase engagement, resulting in a more
                productive work group. “Managers view it as their responsibility
                to provide a range of learning options… and it is the employees’
                responsibility to select from these options,” keeping track of what they
                have learned.21 One learning option specifically mentioned in this
                context is mentoring.


                While managers may have the most impact on a few of the Q12™
                factors, mentoring can directly impact the employees’ experience. Few
                managers can provide all of the 12 critical environmental conditions
                alone, and in some cases, mentors may be better positioned than
                managers to help employees discover their potential and thus become
                more productive and engaged. We will explore these mentoring
                connections to engagement under two main benefits of mentoring
                relationships; the notations are provided to correlate our views of
                mentoring with the authors’ Q12™ factors. (See chart on page 10 for
                details.) Additional Q12™ information can be found in the appendix.


                1. Mentoring provides an objective way for employees to
                explore their strengths and find better alignment between their
                talents and their role in the organization. Many employees are in
                jobs that only partially fit their strengths. Managers can often become
                more focused on the parts of job performance that are lacking. They
                may not have the time or energy to fully explore whether the problem
                is a talent issue or whether another role in the organization may
                well provide a better fit. To offset this, we recommend that people
                have access to multiple mentors who can help employees grow and
                develop in their areas of strength and interest (#6 and #12). From
                the feedback and exploration of other job roles, a mentor could




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                           help an employee find a job that better aligns the person’s talents
Employee
                           and passions with organizational mission and purpose (#8). This
Responses to
Q12™ Factors               gives each person a better opportunity to do their best and make a
                           maximum contribution every day at work (#3).
1. Focus me.
2. Equip me.
3. Know me.                2. Mentoring provides a safe, supportive, relational
4. Help me see             environment where employees can explore, grow and develop
   my value.
                           as people and team members. One of the underlying themes of
5. Care about me.
6. Help me grow.           Follow This Path is that relational and emotional issues play a much
7. Hear me.                larger role in the success of companies than previously realized. The
8. Help me see
                           current Emotional Intelligence movement provides further evidence to
   my importance.
9. Help me feel            this truth—people must feel emotional support to develop relational
   proud.                  competencies. Not every manager can or perhaps should provide
10. Help me build
                           everything an employee needs in this critical area. For example, a
    mutual trust.
11. Help me                mentor can provide a safe place where employees can express real
    review my              opinions about work and discuss issues concerning coworkers (#7).
    contributions.
                           Mentors can help employees see more clearly how best to work
12. Challenge me.
                           through relational issues to utilize their team while working toward
                           common goals (#9).
Coffman and
Gonzalez-Molina, 95.
Gallup® and Q12™
are trademarks of The      Mentoring can also provide a relationally supportive environment
Gallup Organization.
                           outside the context of a direct supervisory situation. It can provide a
All rights are reserved.
                           caring environment where “someone at work” is focused on developing
                           the person, not just improving their job performance (#5). Mentors
                           can provide encouragement (#4) and feedback on progress that
                           employees need in order to have a more balanced view of themselves
                           and their job (#11). Mentors can also become trusted advisors
                           who can help employees process events, which can lead to deeper
                           engagement (#10).


                           By providing self-directed mentoring opportunities for all employees
                           and encouraging managers to support and promote these
                           relationships, organizations ensure that employees are not limited
                           in their experience of the Q12™ elements by the boundaries of
                           what a manager can provide. It is a truism that people quit bosses
                           not companies. Forward thinking companies realize that not every
                           manager is a superstar, and therefore provide functional workarounds
                           for employees to discover their potential. This often occurs using




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                                                                                                      11



                a network of developmental and relational opportunities such as
                mentoring. This results in the Q12™ factors of employee engagement
                becoming part of the social and cultural fabric of the company;
                they are not solely dependent on managerial quality in order to be
                successful.




CONCLUSION
                In every sector that we serve with mentoring solutions—Fortune 500
                and Global 1000 industry leaders, smaller regional organizations,
                governmental agencies, professional associations, higher educational
                institutions—increasing engagement and retention is critical. As
                research has shown, mentoring positively impacts employee
                engagement and can have lasting positive repercussions for
                organizatons.


                Open Mentoring® is a proven way to provide quality mentoring
                relationships throughout an organization. More than 100 clients have
                used our enterprise mentoring system to take advantage of one-to-
                one, group, and situational mentoring to spur employee engagement
                in multiple ways.


                Please contact us for a demo of our web-based Open Mentoring® and
                see for yourself how we can help you address employee engagement.


                Toll-Free: 866-470-1603
                Direct: 303-707-0800
                E-mail: info@3creek.com
                Web: www.3creek.com




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                                                                                                       12




APPENDIX
                 Curt Coffman and Gabriel Gonzalez-Molina present three main pieces
                 of pertinent information related to employee engagement: the
                 Q12™ list, information pertaining to what employees need in order
                 to stay engaged in Chapters 4 and 5, and a summary list of the way
                 employees emotionally respond on p. 95. The following is a hybrid
                 list of these factors created by Triple Creek Associates and meant to
                 be used in the context of this review as a summary for those in the
                 mentoring community. Gallup® and Q12™ are trademarks of The
                 Gallup Organization. All rights are reserved.


                 1. “I know what is expected of me at work.” Focus me.
                 2. “I have the materials and equipment I need to do my work.” Equip
                    me.
                 3. “At work, I have the opportunity to do what I do best every day.”
                    Know me.
                 4. “In the last seven days, I have received recognition or praise for
                    doing good work.” Help me see my value.
                 5. “My supervisor, or someone at work, seems to care about me as a
                    person.” Care about me.
                 6. “There is someone at work who encourages my development.” Help
                    me grow.
                 7. “At work my opinions seem to count.” Hear me.
                 8. “The mission or purpose of my company makes me feel my job is
                    important.” Help me see my importance.
                 9. “My associates or fellow employees are committed to doing quality
                    work.” Help me feel proud.
                 10. “I have a best friend at work.” Help me build mutual trust.
                 11. “In the last six months, someone at work has talked to me about
                      my progress.” Help me review my contributions.
                 12. “This last year, I have had opportunities to learn and grow at
                      work.” Challenge me.




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                                                                                                       13




ENDNOTES/REFERENCES
                 1. Curt Coffman and Gabriel Gonzalez-Molina, Ph.D., Follow this Path:
                    How the World’s Greatest Organizations Drive Growth by Unleashing
                    Human Potential. New York: Warner Business Books, 2002.


                 2. Coffman and Gonzalez-Molina, 14.
                    Their full logic string states: Identify Strengths   The Right Fit
                    Great Managers     Engaged Employees        Engaged Customers
                    Sustainable Growth     Real Profit Increase    Stock Increase.


                 3. Coffman and Gonzalez-Molina, 76.


                 4. Coffman and Gonzalez-Molina, p.136.


                 5. Cited in: Patricia Van Arnum, “HR Balancing Act: Cost Pressures and
                    Employee Development,” Chemical Market Reporter, Sept. 29,
                    2003.


                 6. Van Arnum, Sept. 29, 2003.


                 7. Coffman and Gonzalez-Molina, 136.


                 8. The national average for voluntary turnover (quitting) hovers
                    around 20 percent (Source: U.S. Department of Labor, Bureau of
                    Labor Statistics). These figures are extrapolated from the chart at:
                    http://www.bls.gov/news.release/jolts.t04.htm.


                 9. For our calculations, we use 15 percent as the turnover rate,
                    representing the low end of industry and regional averages. One
                    widely used replacement cost calculation is 1.4 times salary. This
                    means that for a person with a $40,000 salary, the replacement
                    cost would be $56,000. Therefore, a company with 10,000
                    employees would have an average turnover cost of .15 x 10,000 x
                    $56,000 = $84 million annually.




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                                                                                                      14




                10. Coffman and Gonzalez-Molina, 136.


                11. Coffman and Gonzalez-Molina, 141.


                12. Calculated on the Gallup average of 22 percent actively
                    disengaged, with a cost of $3,400 per every $10,000 of salary,
                    and at a salary of $40,000. Calculation is: 2,200 employees x
                    $3,400 x 4 = $29,920,000.


                13. This is an industry specific example and is used here for illustrative
                    purposes. Total work days missed by the unengaged would be:
                    1.9 x 5,600 = 10,640; for the actively disengaged it would be: 4.8
                    x 2,200 = 10,560. Overall total works days missed for both
                    groups would be 10,640 + 10,560 = 21,200. The total cost would
                    be: 21,200 days missed x $154 per day = $3,264,800.


                14. Coffman and Gonzalez-Molina, 141.


                15. Coffman and Gonzalez-Molina, 127-128.


                16. Holincheck, James. “Case Study: Workforce Analytics at Sun.”
                    Gartner, Inc., 27 October 2006 (ID Number: G00142776).


                17. Van Arnum, Sept. 29, 2003.


                18. Sandra Hagevik, “What’s a Mentor, Who’s a Mentor?,” Journal of
                    Environmental Health, October 1998, v. 61(3), pp. 59-61.


                19. Holincheck, Oct. 27, 2006.


                20. Coffman and Gonzalez-Molina, 76.


                21. Coffman and Gonzalez-Molina, 121-122.




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