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Corporate Leadership Council re nc
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• Engagement is a positive emotional • Become a “great place to work” • Increase total shareholder return by up
connection to an employee’s work through building trust in colleagues and to 47 percent
ensuring employee pride and enjoyment • Reduce absenteeism
• Engagement is affective, normative, and
continuance commitment • Segmentation is the key to managing • Better customer feedback
employee commitment and productivity
• Engaged employees are inspired to go • Less shrinkage of inventory
• Great managers are key to achieving an
above and beyond the call of duty to engaged workforce • Higher sales
help meet business goals
• To achieve motivation, give the
employee a “kick in the pants”
Source: Allen, Natalie, and John Meyer, “Affective, Continuance, and Normative Commitment to the Organization: An Examination of Construct Validity,” Journal of Vocational Behavior, 1996; Herzberg, Frederick. “One
More Time: How do You Motivate Employees? ” Harvard Business Review (Classic), January 2003; Coffman, Curt and Gabriel Gonzales-Molina, Follow This Path: How the World’s Greatest Organizations Drive Growth
by Unleashing High Potential, New York: Warner Books, 2002; Towers, Perrin, Understanding What Drives Employee Engagement, 2003; Age Wave and Harris Interactive, The New Employee/Employer Equation, 2003;
Watson Wyatt, WorkUSA2000: Employee Commitment and the Bottom Line, 2000; Hay Group, The Retention Dilemma: Why Productive Workers Leave—Seven Drivers for Keeping Them ; Hewitt Associates, LLC, Best
Employers in Canada, 2003, http://www.greatplace towork.com/; Corporate Leadership Council research.
Discretionary Effort
An employee’s willingness to go “above and
Day-to-Day Work
Rational Commitment beyond” the call of duty, such as helping Performance
The extent to which employees believe that others with heavy workloads, volunteering
managers, teams, or organizations are in their for additional duties, and looking for ways to
self-interest (financial, developmental, perform their jobs more effectively.
Team
or professional).
Emotional Commitment
The extent to which employees value, enjoy Direct Manager Intent to Stay
and believe in their jobs, managers, teams, or An employee’s desire to stay with the
organizations. organization, based on whether they intend
to look for a new job within a year, whether Attrition
Organization they frequently think of quitting, whether they
are actively looking for a job or have begun to
take tangible steps like placing phone calls or
sending out résumés.
The Council assessed the engagement level of employees through 47 questions that measured the strength of rational and emotional
commitment to day-to-day work, direct manager, team, and organization, along with the level of discretionary effort and intent to stay.
Sample Emotional Commitment Sample Rational Commitment Sample Discretionary Effort Sample Intent to Stay
Questions Questions* Questions Questions
• I believe in what I do every day at work • The best way for me to develop my skills • I frequently try to help others who have • I intend to look for a new job with
in my organization right now is to stay heavy workloads another organization within the next year
with my current team
Strongly Strongly
Disagree Agree Strongly Strongly Strongly Strongly
Disagree Agree Disagree Agree
Strongly Strongly
Disagree Agree
• I enjoy working with my team • There are days when I don’t put much • I frequently think about quitting my job
• The best way for me to advance in this and leaving this organization
organization is to stay with my current effort into my job
Strongly Strongly
Disagree Agree
supervisor
Strongly Strongly
Strongly Strongly
Disagree Agree
Disagree Agree
• When speaking to others, I speak highly Strongly Strongly • I am actively looking for a job with
Disagree Agree
of my supervisor • I am constantly looking for ways to do my another organization
• The best way for me to advance my job better
career is to stay with my current
Strongly Strongly
Disagree Agree organization Strongly Strongly
Strongly
Disagree
Strongly
Agree
Disagree Agree
• I have recently made phone calls or sent
• I am proud to work for my organization Strongly
Disagree
Strongly
Agree
• When needed, I am willing to put in the out my résumé in order to find a job with
extra effort to get a job done another organization
Strongly Strongly • My performance would suffer if I worked
Disagree Agree
with any other team in my organization
Strongly Strongly Strongly Strongly
Disagree Agree Disagree Agree
Strongly Strongly
Disagree Agree
* Rational commitment to day-to-day work was not measured due to its similarity to rational commitment Source: Corporate Leadership Council 2004 Employee Engagement Survey.
to the team, direct manager, and organization.
1
Retail (2%), Strategy/Planning (2%), Research and Development (1%), Quality Control (3%), Purchasing Source: Corporate Leadership Council 2004 Employee Engagement Survey.
(2%), Legal (2%), Communications (3%), Actuaries (3%), Pharmacists (1%), and Miscellaneous (12%).
2
Includes Asia (1%), South America (1%), and Pacific Rim (<1%).
Note: Percentage totals may not equal 100 percent due to rounding.
13% 11%
• Poorer performers who frequently put in minimal • Employees neither go to great lengths in their jobs, • Higher performers who frequently help others with
effort nor do they shirk their work heavy workloads, volunteer for other duties, and are
constantly looking for ways to do their jobs better
• Four times more likely to leave the organization than • Significant variation in intent to stay
the average employee • Half as likely to leave the organization as the average
employee
• Nine times more likely to leave the organization than
the “true believers” • Nine times more likely to stay with the organization
as the “disaffected”
Source: Corporate Leadership Council 2004 Employee Engagement Survey.
23.8%
2.9%
* The analysis above is based on the percentage of each organization’s workforce that demonstrates the Source: Corporate Leadership Council 2004 Employee Engagement Survey.
highest level of both emotional and rational commitment to day-to-day work, the manager, the team, and
the organization (termed “True Believers” on page 14b).
Percentage
of Company
Workforce
12.5%
Exhibiting
Highest Level of
Discretionary Effort
0.0%
Company
Rational Commitment
• Team
• Manager Discretionary Effort Performance
• Organization
Emotional Commitment
• Job
• Team Intent to Stay Retention
• Manager
• Organization
* Rational commitment to day-to-day work was not measured due to its similarity to rational commitment
to the team, direct manager, and organization. Source: Corporate Leadership Council 2004 Employee Engagement Survey.
100%
e Understanding Direct
hir Performance Inflectors
Direct performance inflectors include
43% • Job-relevant information (e.g.,
training)
• Experiences (e.g., on-the-job
development)
Recruiting for High Performance • Resources (e.g., a better computer).2
Total
• Intelligence Percentage 50% o
s to D
Improvement u rce
• Right Skill Set Reso our Job
Y
57%
0%
1.57
* The analysis above presents a statistical estimate of the maximum total impact on discretionary effort and performance Source: Corporate Leadership Council 2004 Employee Engagement Survey.
emotional commitment will produce. The maximum total impact is calculated by comparing two statistical estimates: the
predicted discretionary effort or performance rank for an employee who scores “high” in emotional commitment, and
the predicted discretionary effort or performance rank for an employee who scores “low” in emotional commitment.
10%
9.2% Moving from strong non-commitment
to strong commitment decreases the
probability of departure by 87 percent.
Probability
of Departure
in Next 12 5%
Months
1.2%
0%
Strongly Non-Committed Strongly Committed
* Analyzing data from the Council’s 2004 employee engagement data and attrition models from CLC Solutions, Source: Corporate Leadership Council 2004 Employee Engagement Survey.
non-linear regression was used to estimate the rate of departure for employees according to commitment level.
22.9%
Percentage of 15.8%
Percentage of Workforce in
Workforce Highest Category
Strongly Rationally
7.8%
4.9% of Discretionary
Committed Effort
Organization Organization Organization Organization
A B A B
20.8%
Percentage of
Workforce Percentage of
Strongly Workforce in
13.7%
Emotionally 4.9% Highest Category
Committed of Intent to Stay
Organization Organization
A B Organization Organization
A B
29%
38%
71%
62%
* Company performance is determined by above or below average one-year revenue growth relative to Source: Corporate Leadership Council 2004
industry peer group. Above average employee commitment is defined as having more than 11 percent of an Employee Engagement Survey.
organization’s workforce fall into the highly committed category. Below average employee commitment is
defined as having less than 11 percent of an organization’s workforce fall into the highly committed category.
Rational Commitment
• Team
• Manager Discretionary Effort Performance
• Organization
Engagement Levers
Emotional Commitment
• Job
• Team Intent to Stay Retention
• Manager
• Organization
* Rational commitment to day-to-day work was not measured due to its similarity to rational commitment
to the team, direct manager, and organization. Source: Corporate Leadership Council 2004 Employee Engagement Survey.
In the last 12 months, about how many hours of general training have you received Example:
I believe in what I do every day at work.
from your organization? Question 4 of Engagement Assessment:
I received no general skills training in the last 12 months I believe in what I do every day at work.
Less than 1 hour Strongly Agree Disagree
1 to 5 hours Agree Strongly Disagree
… Somewhat Agree
61 to 70 hours
Somewhat Disagree
More than 70 hours of training
Step #4: Calculate the Lever’s Total Impact Step #3: Apply a Structural Equation Model
on Discretionary Effort and Intent to Stay to Estimate Impact of Lever
Rational
Commitment
• Team Discretionary Effort
• Manager
• Organization
Change in Effort
and Intent to
Leave Due to Engagement
Amount of Levers
General Training
Received Emotional
Commitment Intent to Stay
Effort Intent to • Job
Stay • Team
• Manager
• Organization
0%
Emotional— Emotional— Emotional— Emotional— Rational— Rational— Rational—
Job Organization Team Manager Organization Team Manager
* Each bar represents a statistical estimate of the maximum total impact on discretionary effort Source: Corporate Leadership Council 2004 Employee Engagement Survey.
each type of commitment will produce. The maximum total impact is calculated by comparing
two statistical estimates: the predicted discretionary effort level for an employee who is
strongly committed, and the predicted discretionary effort level for an employee who is strongly
uncommitted. The impact of each commitment type is modeled separately.
38.8% 38.6%
33.7% 33.2%
Improvements in 30.0%
Intent to Stay 30%
25.4%
0%
Rational— Rational— Emotional— Emotional— Emotional— Rational— Emotional—
Organization Team Organization Manager Job Manager Team
* Each bar represents a statistical estimate of the maximum total impact on intent to Source: Corporate Leadership Council 2004 Employee Engagement Survey.
stay each type of commitment will produce. The maximum total impact is calculated by
comparing two statistical estimates: the predicted intent to stay for an employee who
is strongly committed, and the predicted intent to stay for an employee who is strongly
uncommitted. The impact of each commitment type is modeled separately.
Rational Commitment
• Team
• Manager Discretionary Effort Performance
• Organization
Engagement Levers
Emotional Commitment
• Job
• Team Intent to Stay Retention
• Manager
• Organization
* Rational commitment to day-to-day work was not measured due to its similarity to rational commitment
to the team, direct manager, and organization. Source: Corporate Leadership Council 2004 Employee Engagement Survey.
• 401(k) Plan • Commission Internal Equity • Job Fit—Better Suited for Another Position • Manager: Possesses Job Skills
• Ability to Obtain Necessary Information • Commission Satisfaction • Job Fit—Type of Work • Prescription Drug Benefit
• Manager: Accepts Responsibility for Successes and Failures • Manager: Commitment to Diversity • Job Freedom • Profit Sharing External Equity
• Manager: Accurately Evaluates Employee Performance • Community Involvement • Job Influence • Profit Sharing Internal Equity
• Manager: Accurately Evaluates Employee Potential • Company Performance • Leave Benefits Information • Profit Sharing Satisfaction
• Manager: Adapts to Changing Circumstances • Connection Between Work and Organizational Strategy • Manager: Lets Upper Management Know of Employee • Provides Job Freedom
• Amount of General Skills Training Received • Manager: Creates Clear Work Plans and Timetables Effectiveness • Provides Necessary Tools and Resources
• Amount of Job-Specific Training Received • Culture of Flexibility • Manager: Listens Carefully to Views and Opinions • Onboarding: Provides Work Immediately
• Amount of Travel (Actual Versus Desired) • Culture of Innovation • Long-Term Disability • Quality of Informal Feedback
• Manager: Analytical Thinking • Culture of Risk Taking • Senior Executive Team: Makes Efforts to Avoid Layoffs • Manager: Recognizes and Rewards Achievement
• Manager: Appropriately Handles Crises • Customer Focus • Senior Executive Team: Makes Employee Development a • Organization’s Reputation of Integrity
• Manager: Articulates a Long-Term Vision for the Future • Day-Care Priority • Manager: Respects Employees as Individuals
• Manager: Attains Information, Resources, and Technology • Manager: Deeply Cares about Employees • Manager: Makes Sacrifices for Direct Reports • Retirement Information
• Base Pay External Equity • Manager: Defends Direct Reports • Maternity Leave • Senior Executive Team: Strong in Strategy
• Base Pay Internal Equity • Manager: Demonstrates Honesty and Integrity • Opportunity Culture Selection and Implementation
• Base Pay Satisfaction • Manager: Demonstrates Passion to Succeed • Opportunity to be Promoted • Sufficient People to Complete Tasks
• Manager: Breaks Down Projects into Manageable Components • Development Plan: Challenge • Opportunity to Help Launch a New Business, Initiative, or • Sufficient Time to Complete Tasks
• Manager: Cares About Employees • Development Plan: Effectiveness Program • Sufficient Tools and Resources
• Cash Bonus External Equity • Manager: Has a Good Reputation within the Organization • Opportunity to Help Turn Around a Struggling Business • Manager: Respects Employees as Individuals
• Cash Bonus Internal Equity • Health Benefits Information • Opportunity to Spend Time with a Professional Coach • Retirement Information
• Cash Bonus Satisfaction • Manager: Helps Find Solutions to Problems • Opportunity to Take Breaks • Safe Workspace
• Manager: Clearly Articulates Organizational Goals • Manager: Holds People Accountable • Opportunity to Work in a Different Country • Sick Leave
• Manager: Clearly Communicates Performance Expectations • Importance of Job to Organizational Success • Opportunity to Work in a Variety of Jobs/ Roles • Stock Bonus External Equity
• Onboarding: Clearly Explains Job Importance • Importance of Projects to Employees’ Personal Development • Opportunity to Work in New Divisions or Business Units • Stock Bonus Internal Equity
• Onboarding: Clearly Explains Job Responsibilities • Importance of Projects to Employees’ Long-term Career • Opportunity to Work in New Functional Areas • Stock Bonus Satisfaction
• Manager: Clearly Explains Performance Objectives • Manager: Inspires Others • Opportunity to Work on Things You Do Best • Senior Executive Team: Strong in Day-to-Day
• Commission External Equity • Internal Communication • Opportunity to Work with a Mentor Process Management
• Development Plan: Emphasis on General Skills Training, Job- • Onboarding: Introduces New Hires to Other New Employees • Effectiveness of General Skills Training • Retirement Medical Group Plan
Specific Training, Skills and Behaviors, Job Experiences, Leadership • Senior Executive Team: Is Committed to Creating New Jobs • Effectiveness of Job-Specific Training • Paid Time-Off Bank
Training, and Management Training • Manager: Is Friendly and Approachable • Employee Assistance Program • Pension
• Development Plan: Employee Influence in Creating • Manager: Is Intelligent • Employee Stock Ownership Program • Manager: Puts People in the Right Roles at the
• Development Plan: Sufficient Time to Complete • Manager: Is Open to New Ideas • Manager: Encourages and Manages Innovation Right Time
• Development Plan: Use • Senior Executive Team: Is Open to New Ideas • Perceived Rewards: Size of Annual Bonus • Safety of Tasks
• Manager: Differential Treatment of Best and Worst Performers • Job Challenge • Perceived Rewards: Size of Annual Raise
• Diffuse Decision-making Authority • Manager: Encourages and Manages Innovation • Manager: Persuades Employees to Move in a Desired
• Senior Executive Team Diversity • Manager: Encourages Employee Development Direction
• Domestic Partner • Equity and Recognition • Manager: Places Employee Interests First
• Education Assistance • Fitness Program • Task Variety
• Effectiveness of Career Advisor • Flexible Work Schedule • Onboarding: Teaches About Group or Division
• Onboarding: Teaches About Organizational Vision and Strategy • Freedom from Harassment in the Workplace Work-Life Balance Information
• Telecommuting • Future Orientation • Manager: Works Harder Than Expects Employees to Work
• Manager: Values Work–Life Balance of Employees • Understanding of How to Successfully Complete Work Projects • Total Compensation External Equity
• Manager: Sets Realistic Performance Expectations • Vacation • Total Compensation Internal Equity
• Manager: Treats Direct Reports Equally • Perceived Rewards: Opportunity for Promotion • Total Compensation Satisfaction
• Manager: Trusts Employees to Do Their Job • Short-Term Disability • Senior Executive Team: Strong in Leading and Managing
• Opportunity to Work with the Senior Executive Team • Health Benefits People
• Senior Executive Team: Strong in Personal Characteristics
Managers 5.04%
Regional 4.33%
Organizations 2.93%
* Using structural equation models, the total effect of more than 100 levers for increasing discretionary effort Source: Corporate Leadership Council 2004 Employee Engagement Survey.
was measured for the aggregate population and the subsets outlined above. The average difference is found by
subtracting the total effect for the aggregate dataset from the total effect for the subset and averaging over the 100
levers. The absolute value of the difference is presented.
40%
Change in
Discretionary 20%
Effort
0%
50 100 150 300
* Each bar represents a statistical estimate of the maximum total impact on discretionary effort each Source: Corporate Leadership Council 2004 Employee Engagement Survey.
lever will produce through its impact on rational and emotional commitment. The maximum total
impact is calculated by comparing two statistical estimates: the predicted discretionary effort level
for an employee who scores “high” on the lever, and the predicted discretionary effort level for an
employee who scores “low” on the lever. The impact of each lever is modeled separately.
* Each bar represents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership Council 2004 Employee Engagement Survey.
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates:
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
* This group is made up of 17 percent of managers who manage 11 to 20 people, and 21 percent of Source: Corporate Leadership Council 2004 Employee Engagement Survey.
managers who manage 21 or more people.
30%
22.9%
20.7%
19.7%
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* Each bar represents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership Council 2004 Employee Engagement Survey.
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates:
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
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* Each bar represents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through Source: Corporate Leadership Council 2004
its impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical Employee Engagement Survey.
estimates: the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted
discretionary effort level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
14%
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* Each bar represents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through Source: Corporate Leadership Council 2004 Employee Engagement Survey.
its impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical
estimates: the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted
discretionary effort level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
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* Each bar represents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates: Council 2004 Employee
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort Engagement Survey.
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
23.4%
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Clearly Teaches Teaches Clearly Clearly Introduces Provides Provides
Explains Job About About Explains Explains Job New Hires Work Necessary
Importance Organizational Group or Performance Responsibilities to Other Immediately Tools and
Vision and Division Objectives New Resources
Strategy Employees
* Each bar presents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership Council 2004 Employee Engagement Survey.
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates:
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
Understanding how to do one’s job and a belief …job fit and job quality are …as are access to necessary
in the importance of it are most critical… notably less important… resources and even safety.
40%
32.8%
30.3%
Change in Discretionary Effort
29.8%
23.8% 23.9%
22.0% 21.9%
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20% 18.8% 19.2% 18.9%
16.5% 16.9% 16.5%
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* Each bar presents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership Council 2004
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates: Employee Engagement Survey.
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
25.5%
Quality development
22.4% plans help employees feel
21.0% rationally and emotionally
20.1%
committed.
17.8% 17.8% General skills training sends
17.1% 16.6% a message of “credible
commitment” to employees.
Change in 15% 14.3% 13.8%
Discretionary 13.1% 13.0%
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* Each bar presents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates: Council 2004 Employee
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort Engagement Survey.
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
Change in
Discretionary 15%
Effort
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n
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* Each bar presents a statistical estimate of the maximum total impact on discretionary effort each lever will produce through its Source: Corporate Leadership
impact on rational and emotional commitment. The maximum total impact is calculated by comparing two statistical estimates: Council 2004 Employee
the predicted discretionary effort level for an employee who scores “high” on the lever, and the predicted discretionary effort Engagement Survey.
level for an employee who scores “low” on the lever. The impact of each lever is modeled separately.
Cash Bonus On-the-Job Development • Subtractable—each • Non-Subtractable— Risk-Taking Culture Culture of Internal
employee’s use of the strategy is never “used NEW RISKS Communication
$ strategy reduces the up”
quantity available for
others • Non-Excludable—
Mentoring Job Rotation strategy affects Differential Treatment of Culture of Flexibility
• Excludable—strategy all employees Best and Worst Performers
can be administered to simultaneously
some employees and
withheld from others
Average Impact of Public Good Versus Private Good Strategies on Discretionary Effort*
Pure Private Good Strategies Mixed Strategies Pure Public Good Strategies
25%
20% 21%
17% 17%
Change in 12%
Discretionary 10%
Effort
2%
Compensation Benefi ts Learning and Day-to-Day Work Senior Executive Areas of Direct Organizational
Strategies Development Characteristics Team Qualities Onboarding Manager Culture Traits
Opportunities Focus Characteristics
* Each bar presents an average of the maximum total impact of all the strategies within a category. The maximum Source: Corporate Leadership
total impact for any given strategy is calculated by comparing two statistical estimates: the predicted discretionary Council 2004 Employee
effort level for an employee who scores “high” on the strategy, and the predicted discretionary effort level for an Engagement Survey.
employee who scores “low” on the strategy. The impact of each strategy is modeled separately.
O Organizational Culture and Performance Traits D Day-to-Day Work Characteristics L&D Learning and Development Opportunities
M Manager Characteristics Onb Areas of Onboarding Focus Exec Senior Executive Team Qualities
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