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The Employee Ownership Update

Corey Rosen

March 15, 2006

(Corey Rosen)

Massive New Study Illuminates Employee Attraction, Retention, and Engagement

A new worldwide study of 86,000 employees by Towers Perrin finds that only 14% of the respondents were highly engaged, defined as "the willingness and ability to contribute to the organization's success." In most counties, most employees were "moderately engaged," but a quarter or more were not engaged, including in the U.S. The study covered the U.S., Canada, Mexico, Brazil, eight European countries, and four Asian countries.

The study found that base pay was generally the most important driver to join a company, but there was considerable variation on other dimensions in different countries. In the U.S., health benefits, work-life balance, career advancement, and salary increases linked to performance (in that order) came up next. While people may come for pay and benefits, they stay for reasons associated with organizational culture. The researchers say a key finding is that employees want to work in "an organizational culture that values and nurtures talented employees and seeks to find and keep high-caliber people." In the U.S. the opportunity to learn new skills ranked second, followed by the employer's reputation, fair compensation relative to other employees and managers who understands what motivates employees. Salary, retirement, supervisory quality, work-life balance, and other issues mattered less. Finally, on employee engagement, senior management's interest in employee well-being ranked number one in the U.S. (a finding consistent with that of the Great Place to Work Institute's research), followed by skills development, employer reputation, enough decision-making input to do the job well, and fair salary criteria. Globally, opportunities to learn new skills ranked number one. In most counties, most employees were "moderately engaged," but a quarter or more are not engaged. The study covered the U.S., Canada, Mexico, Brazil, eight European countries and four Asian countries.

Study authors Sandra O'Neill and Julie Gebauer argue that the results show that employees have become very suspicious of management pledges to employees to make greater contributions to the organization and to provide rewards for doing so. "In the United States," they say, "employees are frustrated and skeptical about both their senior leadership and how well their company is delivering on their employment deal...They don't think they've seen enough in terms of pay raises, incentives or other rewards for their contributions-despite hearing lots of talk about 'pay for performance.' And this view appears to be intensifying as the economy regains steam." An article detailing the study appears n the First Quarter 2006 issue of the WorldatWork Journal.

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