1、The Formula for a Winning Company Culture The Formula for a Winning Company Culture There is a growing body of research and evidence that shows that a company with more engaged employees achieves better business outcomes. Theres also the human case to be made for improving the employee experience. O

2、ur research has uncovered what matters most for creating a great employee experience, and several cost-free ways that you can improve engagement by making small changes in the way you communicate with employees about their value, your companys strategy and compensation. Heres a preview of our findin

3、gs they might surprise you: Appreciation matters most for employee satisfaction, followed closely by company outlook. How people are paid relative to the market for their position matters relatively little in terms of employee satisfaction. What does matter is how employees feel about the pay proces

4、s., which has 5.4 times as much impact. Company outlook is the most important driver of employee retention. Appreciation is second most important. Frequent two-way communication is an important driver of employee satisfaction, but has a much smaller effect on employee retention. Pay vs. market, on t

5、he other hand, is much more important in reducing intent to leave than it is for driving employee satisfaction. Pay process still matters more than pay vs. market, but the difference is much smaller than it is in determining employee satisfaction. In this whitepaper, well provide you with actionable

6、 insights from a survey of over half a million workers about what matters most for improving satisfaction and reducing attrition. The Data We gathered two years worth of data from the PayScale salary survey. This survey collects pay information and includes a set of job-specific questions about fact

7、ors that influence pay, from location to experience to security clearance to which type of aircraft a pilot flies. The raw data we collect pass through a set of rigorous validation checks before they enter our salary database, where theyre used by the PayScale data team for research. Experience Vari

8、ables During 2015 and 2016, we also collected data on the employee experience from 501,796 workers in the PayScale salary survey. Most of the questions ask the employee to rate each statement on a five-point scale from “strongly disagree” to “strongly agree.” The only exception was a question about

9、attrition, where respondents answered yes or no when asked if they plan on actively seeking employment outside of their current company in the next six months. Here are the criteria we measured and the specific prompts we used: Strongly Disagree Strongly Agree Communication There is frequent, two-wa

10、y communication between management and myself. 1 2 3 4 5 Development My employer provides me with sufficient opportunities for learning and development. 1 2 3 4 5 Company Outlook I am confident my employer has a bright future. 1 2 3 4 5 Relationship With Manager I have a great relationship with my d

11、irect manager 1 2 3 4 5 Pay Process How pay is determined at my company is a fair and transparent process. 1 2 3 4 5 AppreciationI feel appreciated at work. 1 2 3 4 5 Employee Satisfaction I am extremely satisfied working for my employer. 1 2 3 4 5 Intent to Leave In the next six months, I plan on a

12、ctively seeking new jobs outside of my current company. YesNo Additional Variables In addition to this new data on experience, we included a measure of how each workers pay compared to the median of the range that the Payscale Salary Model predicted for their position. We call this variable Pay vs.

13、Market, and it accounts for the all the compensable factors in the salary survey. To allow for ready comparison between this variable and the attitudinal statements, we grouped workers into five bins, ranging from the most underpaid for their position to the most overpaid. We also included each work

14、ers age, location and highest level of education achieved. Methodology Employee Satisfaction and Intent to Leave are the experience outcome variables. The basic idea is that everything an employee experiences at work contributes to how satisfied (or dissatisfied) they feel from day to day. How satis

15、fied they feel which includes how they feel about pay, workplace communication, appreciation, their companys future, etc. is a major piece in determining whether they plan on leaving their company in the next six months. This type of data requires a statistical model. Each of these variables individ

16、ually has precisely the effect you would expect: A good score increases satisfaction and decreases intent to leave. However, we need to look at these variables all at once to know which are more and less important. The statistical model isolates the effect of each variable, and allows the data to sp

17、eak to which variables matter most for determining satisfaction and intent to leave. The detailed methodology appendix includes additional technical information on the statistical models we employed. Results The first key result for both employee satisfaction and intent to leave is that everything m

18、atters. For every variable, as scores increased, satisfaction also increased and intent to leave decreased. The second notable result is that there was huge variability in how much these variables affected the outcomes. The primary driver of satisfaction moved the needle 10.9 times more than the lea

19、st important, and the most important variable for intent to leave increased employee retention 7.8 times more than the least important. So, what matters most? Appreciation Matters Most for Satisfaction Satisfaction with Employer Employee Satisfaction For employee satisfaction, there were three clear

20、 tiers of importance for variables. Appreciation is key: An employee feeling appreciated or unappreciated moves the needle on satisfaction more than any other variable. Company outlook is second most important, with 87 percent the strength of appreciation. Three variables were roughly half as import

21、ant as appreciation: communication (53 percent), pay process (49 percent) and development (48 percent). In the third tier are manager relationship and pay vs. market. Manager relationship has 29 percent the strength of appreciation, and pay vs. market is the least important variable in terms of empl

22、oyee satisfaction, affecting employee satisfaction only 9 percent as much as appreciation. Major lessons: Appreciation matters most for employee satisfaction, followed closely by company outlook. How people are paid relative to the market for their position matters relatively little in terms of empl

23、oyee satisfaction. What does matter is how employees feel about the pay process, which has 5.4 times as much impact. Reducing Attrition Depends More on Company Outlook Intent to Leave Employer Intent to Leave Company outlook is far and away the chief driver of intent to leave. An employee who strong

24、ly agreed that their company had a bright future is half as likely to plan on leaving in the next six months than a neutral employee. A worker who strongly disagreed with that statement, on the other hand, is 2.6 times more likely to leave as the neutral employee. Employee appreciation has a similar

25、 effect. An employee who strongly agreed with the appreciation statement is around 55 percent as likely to leave as the neutral employee, whereas an employee who strongly disagreed is 2.1 times more likely to leave. Development was the fifth most important variable for driving satisfaction, but come

26、s in third for intent to leave, at 45 percent of the impact as compared to company outlook. Pay process (36 percent) was next most important, followed by relationship with manager (25 percent) and pay vs. market (22 percent). For improving employee retention, frequent two-way communication was the l

27、east impactful variable at 13 percent relative to company outlook. Major Lessons: Company outlook is the most important driver of employee retention. Appreciation is second most important. Frequent two-way communication is an important driver of employee satisfaction, but has a much smaller effect o

28、n employee retention. Pay vs. market, on the other hand, is much more important in reducing intent to leave than it is for driving employee satisfaction. Pay process still matters more than pay vs. market, but the difference is much smaller than it is in determining employee satisfaction. Additional

29、 Results Relationship with Manager RELATIONSHIP WITH MANAGER PERCENTAGE CHANGE IN INTENT TO LEAVE -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 5 - Strongly Agree1 - Strongly Disagree One of the advantages of the statistical approach we used is that it allows for nonlinear effects, so the difference betwe

30、en giving a 1 (strongly disagree) and 2 does not need to be the same as the difference between giving a 4 and 5 (strongly agree). As such, we were able test the adage that “You dont quit a job; you quit a manager.” What we see here is that employees who disagree that they have a good relationship wi

31、th their direct manager are more likely to leave than those who are neutral. However, there is essentially no difference between a good manager and a great one when it comes to employee attrition. Conclusion: For managers, it looks like good is good enough. Intent to Leave by Education EDUCATION PER

32、CENTAGE CHANGE IN INTENT TO LEAVE -15% -20% -10% -5% 0% 5% 10% 15% 20% 25% M.D.J.D.Ph.DM.B.A.Masters Degree (non-M.B.A) Bachelors Degree Associate Degree / College Diploma High SchoolNo Degree We also compared intent to leave across levels of educational attainment, while controlling for other chara

33、cteristics of engagement. What we see is that MBA holders are 24 percent more likely to plan on seeking new employment than someone with a bachelors degree. Those with less education are less likely to plan on seeking new employment, except for M.D.s who are relatively content to stay put. This is h

34、elpful information when considering who may need more, or less, attention. Intent to Leave by Age -60% -50% -40% -30% -20% -10% 0% 10% 60-6550-5940-4930-3920-29 AGE PERCENTAGE CHANGE IN INTENT TO LEAVE No surprises here: As workers age, they become less likely to look elsewhere. Workers between 20 a

35、nd 29 years of age are 8 percent more likely to plan on seeking a new job than those between 40 and 49, while workers between 50 and 59, or over 60, are 15 percent and 50 percent less likely, respectively. What Should I Do? What action items should you take away, based on these findings? Here are th

36、e key ones: 1. Measure Employee Engagement The first step in improving the employee experience at your organization is to take stock of how employees currently feel, because your sense may not match the reality. In our 2017 Compensation Best Practices Report, we found that HR professionals and compa

37、ny leaders overestimate how good their employees feel across multiple engagement categories, from pay fairness to appreciation. (The only thing HR pros actually underestimate is how employees feel about their relationships with direct managers.) There are plenty of services that measure employee eng

38、agement (OfficeVibe, Limeade and a host of others). If a paid engagement survey is not in your budget plan, you can design and launch your own. Qualtrics provides a nice list of dos, donts and suggested questions. 2. Develop and Promote Your Pay Brand If someone asked at a cocktail party whether you

39、r organization compensated well or not, what would people say? The answer to this is your Pay Brand. Our research has shown us over and over that most people think theyre underpaid (including those who are paid well above the market rate), and very few people are satisfied with the salary they recei

40、ve. In other words, most companies are not leveraging the money theyre already spending on payroll. This research shows that how people feel about their pay matters much more than how they are paid relative to the market. Here are some simple steps to ensure you arent failing to cross the finish lin

41、e because of a communication breakdown. Develop a compensation strategy that reflects your organizations values, culture and mission. Communicate this strategy to your employees. Share market data and individual compensation reports with employees, demonstrating why they receive the salary they do.

42、Empower management to have these conversations, and ensure that the numbers support your compensation strategy and the Pay Brand you want to cultivate. 3. Make Appreciation Part of Your Culture Appreciation is the primary driver of employee satisfaction how does your organization demonstrate to empl

43、oyees that they are valued? Spot bonuses, annual company trips and merit- based pay increases send a message of appreciation, but there are plenty of ways your company leadership can show employees they matter without a hefty price tag. Encourage managers in your organization to get into the habit o

44、f providing timely and positive feedback for a job well done. Employees need to regularly hear the message that their work is seen and valued. They need to understand, and feel that the company understands, how their work contributes to the companys mission. Finding ways to convey appreciation can b

45、e a simple, cost-free way to increase employee satisfaction across the board. 4. Communicate Strategy to the Rank and File The chief determinant of whether an employee is planning on jumping ship is their confidence (or lack thereof) that the organization has a bright future. If an employee believes

46、 the company is not headed in a positive direction, what future can they possibly have at the company? Consider all the time that leadership spends strategizing and formulating an action plan. Having an engaged workforce is critical to the execution of any plan, but the first step is getting buy-in

47、at the employee level. Conclusion There is no shortage of advice out there on how to improve an employees experience in the workplace. This research tells us which factors matter most for ensuring that your employees are happy to come to work focusing on these mitigates the risk of wasting resources

48、 trying to fight on all fronts. The most important factors in a good (or bad) employee experience are feeling appreciated at work and believing your company has a bright future. How people feel about their compensation matters much more than how theyre paid compared to the market. Employees need to

49、feel that they are paid fairly, and that the process used to determine that pay is transparent. Detailed Methodology We collected responses from the 2015 and 2016 calendar years. Respondents identified themselves as pricing their current job, evaluating a job offer or researching a job that is not their own. We surfaced the em