Growing worker confusion about corporate goals

REWARD STRATEGY

Growing worker confusion about corporate goals

Recent shifts in corporate strategy have left all too many US employees confused about the link between their jobs and company objectives, making recovery efforts much more difficult for companies, finds a new survey by Watson Wyatt.

The 13,000 workers participating in the survey gave employers low marks on linking worker job objectives and pay to corporate strategy. Ilene Gochman, Watson Wyatt's practice leader for organisational effectiveness and the author of the report, said: "This is extremely unfortunate because we know that there is tremendous positive impact to the bottom line when employees see strong connections between company goals and their jobs. Many employees aren't seeing that connection."

  • Less than a half of employees (49%) understand the steps their companies are taking to reach new business goals - a 20% drop since 2000.
  • Employees are unclear about the important connection between job performance and pay - only 35% see a clear link between the quality of their job performance and the money they earn.

Impact on shareholder returns

According to the study, three-year total returns to shareholders (TRS) are three times higher at companies where employees understand corporate objectives and the ways in which their jobs contribute to achieving them.

"Companies cannot develop effective teams and working relationships unless everyone involved clearly understands the connections between their jobs and objectives," Gochman said. "Workers and their companies excel when they know why their jobs matter and they understand what's in it for them."

What you will find in this report

In addition to findings on the link between employees and business goals, the survey also examines:

  • employee trust levels
  • effective business change management
  • communication
  • performance management
  • worker attitudes towards pay and benefits.

Key findings from research

Percentage of workers who:

2000

2002

Management

   
  • Have confidence in the job being done by senior management

50%

45%

  • Believe their companies conduct business with honesty and integrity

68%

63%

  • Trust senior leaders at their firms

N/A

39%

  • Say their companies effectively manage business changes such as downsizing, mergers, restructuring and expansion

N/A

43%

Involvement and communication

   
  • Believe their companies communicate effectively with employees

N/A

32%

  • Say their companies involve employees in decisions that affect them

27%

19%

Performance

   
  • Say senior management motivates them to perform well

40%

32%

  • See no clear link between their jobs and pay

N/A

40%

  • Believe that high performing workers go unrewarded

42%

40%

Satisfaction with reward

   
  • Say their companies do a good job telling them how their pay is determined

56%

43%

  • Are satisfied with their pay

N/A

60%

  • Are satisfied with their benefits

N/A

49%

  • Believe their pay packages compare well with those offered by other companies

57%

48%

  • Believe their benefits packages compare well with those offered by other companies

38%

48%

  • View their stock option programmes favourably

57%

50%

  • View their profit-sharing plans favourably

55%

45%

Source: Watson Wyatt WorkUSA (TM) 2002.

A final word

"In every case, we found that employee attitudes make a difference when it comes to business performance. For example, companies that instil trust, manage business changes effectively and communicate openly with employees have much higher shareholder return rates than companies that don't. This means that in today's economic climate, no company can afford to ignore what their employees are thinking." - Ilene Gochman, Watson Wyatt.

Want to know more?

Title: Watson Wyatt WorkUSA (TM) 2002.

Methodology: The survey is based on responses from 12,750 workers at all job levels and in all major industries. It is "one of the largest and most current statistically representative surveys on the attitudes of US workers".

Availability: Visit the Watson Wyatt web site for more details . . .

www.watsonwyatt.com/research/resrender.asp?id=W-557& page=1

Watson Wyatt is an international human capital consulting firm that provides services in the areas of employee benefits, human resources technologies and human capital strategies. The firm has headquarters in Washington DC, and has more than 4,250 associates in 61 offices in the Americas and Asia-Pacific.

www.watsonwyatt.com

Posted 1 October 2002