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CCH® HR MANAGEMENT 10/31/07

Strong link between employee engagement and business success, Watson Wyatt survey finds

Employee engagement can lead to superior financial performance as companies that increase employee engagement levels can rightfully expect to improve their subsequent financial performance, according to the latest WorkAsia research study by Watson Wyatt Worldwide, a leading global consulting firm.

The study findings demonstrate that engaged employees understand the organization s business goals, the steps required to achieve those goals and how their contributions drive results. They have a strong desire to participate in the company's success. It is therefore crucial for companies seeking to develop strategies for building engagement, to first have insight into the top drivers of employee engagement within their own unique environment, as it affects productivity, retention and financial performance.

The study helps employers identify areas of improvement in order to increase employee engagement and effectiveness thus enhancing the organization s financial performance. The top three drivers of engagement identified by the study for the Asia-Pacific region are customer focus, compensation and benefits, and communication. These drivers are remarkably consistent within the Asia-Pacific region and around the world, with only slight variation across countries.

"The WorkAsia study tells us that forward-looking organizations are replacing one-size-fits-all offerings with programs that target their most valuable employees. These efforts enable them to create a more productive and stable workforce," said Russell Huntington, director, Human Capital Group, Asia-Pacific.

Unfavorable compensation packages. The study revealed that the top three drivers of employee engagement are customer focus, compensation and benefits and communication. Customer focus, being the top key driver, affects an employee s sense of pride and job security. According to employees in the Asia-Pacific region, companies are doing a good job in this area. However, they are of the view that companies do a poor job in seeking their opinions and involving them in making decisions. These same workers also believe that their compensation package compares unfavorably with peers in other companies and are not satisfied with the information that is provided to them on their package.

Customer focus, compensation drive engagement. Drivers of engagement vary across employee segments. The "Value Creators", representing 13 percent of the workforce in Asia-Pacific, are a segment with high levels of commitment and line of sight. They are more than twice as likely to be top performers than other employees and they contribute substantially to organizational success. Like the overall sample, their engagement is driven by customer focus and compensation, but they are also strongly engaged by strategic direction and leadership and also by performance management.

For additional information on this and other HR topics, consult CCH Human Resources Management or Personnel Practices/Communications.

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