This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
AAA was established in 1900 and offers an array of automotive, insurance, travel and financial services.
AAA is a not-for-profit, tax-paying federation of 77 motor clubs with more than 1,100 offices, serving 46 million members throughout the United States and Canada.
CSAA (AAA of Northern California, Nevada and Utah) serves more than four million members and is the second-largest member organization of the national AAA organization.
We have almost 7,000 employees working out of more than 125 locations across five states.
The 2006 Employee Engagement Survey was designed to meet the following key objectives:
1. Learn how employees view the organization overall and understand how they feel about their experiences in specific work groups
2. Understand employee perspectives regarding CSAA’s business effectiveness and the organization as a place to work
3. Assess how well the organization is delivering on its vision, values and behaviors from an employee perspective
4. Identify any important differences of opinion across CSAA
The survey was administered from December 5 through December 16, 2005 (with paper surveys accepted through December 20)
Of the 6,762 employees invited, 4,325 completed the survey – this response (64%) is a strong response rate for an employee engagement survey*
*The prior year’s employee engagement survey produced the same response rate of 64%, or 4,090 respondents out of 6,400 employees invited to take the survey
CSAA’s diversity index score is also above the comparable index figure for last year
Six questions form a diversity index that CSAA has identified as the best survey measure regarding diversity and is statistically reliable.
The diversity index includes the following questions:
1. How would you rate your immediate supervisor/manager on:
Consulting employees before making decisions that affect them
2. How would you rate your immediate supervisor/manager on:
Acting in ways that support a diverse and inclusive environment
3. I can be myself around here.
4. It’s safe to say what you think around here.
5. At CSAA, employee input and different opinions are actively encouraged.
6. Employees at CSAA are able to contribute to their fullest potential regardless of their age, race, ethnic background, gender, religion, disability, sexual orientation, or family status.
CSAA conducted a culture scan to give us even more information
Background: CSAA’s territory is extremely diverse. In general, our employees reflect that diversity – except at the senior level.
Goal of culture scan: To understand what basic beliefs drive organizational practices and behaviors and how those beliefs impact the ability of CSAA to leverage diversity
Components of scan: Interviews, focus groups, analysis of employee engagement survey, historical review
Towers Perrin’s work with a major hospitality company elaborated on the relationships among employee behaviors, customer loyalty and financial results
EBITDA / GOP
Margin
EBITDA / GOP
Margin
RevPar Index
RevPar Index
Customer Loyalty
Customer Loyalty
Commitment/ Loyalty Index
Q1 Hotel as a place to workQ58 Overall satisfaction w/hotelQ59 Willingness to recommend to a friend
Commitment/ Loyalty Index
Q1 Hotel as a place to workQ58 Overall satisfaction w/hotelQ59 Willingness to recommend to a friend
Guest Service Index
Q4 High quality serviceQ5 Courteous team membersQ6 Sensitive to guest needsQ7 Solving guest problemsQ8 Meeting expectations consistently/timelyQ9 Providing a safe place
Guest Service Index
Q4 High quality serviceQ5 Courteous team membersQ6 Sensitive to guest needsQ7 Solving guest problemsQ8 Meeting expectations consistently/timelyQ9 Providing a safe place
Team Member Attitudes and
Behaviors
Customer OutcomesCustomer Outcomes
FinancialOutcomesFinancialOutcomes
Reduced Turnover Cost
Reduced Turnover Cost
Key Drivers
Q10: Overall job satisfaction
Q15: Encouraged to identify problems
Q19: Hotel retains top performers
Q20: Team members are kept informed
Q33: Proud to work for hotel
Q54: Vision - ‘Investing in the development of team members’
With this as backdrop, we undertook a six-step process
1. Project planning and kickoff – Launched the project by confirming goals and desired results of the effort
2. Compiled current CSAA data – Obtained financial, customer satisfaction measurement and HR data to analyze for linkage relationships
3. Developed value driver models – Identified statistical relationships between engagement and operational outcomes
4. Mapped employee behavior/attitude elements to customer behavior elements – We delved further into engagement data to understand the nuances of engagement at CSAA
5. Defined overall investment strategy – We completed the project by recommending a directional investment strategy for improving engagement and the financial outcomes it influences; focus for CSAA:
- Leadership development- Creating a diverse and inclusive environment- Hiring, promotion and talent management processes and policies
We conducted a range of analyses using both Towers Perrin and CSAA data
Using the Towers Perrin Global Workforce Study (GWS) database, we analyzed the relationship between employee engagement and combined ratio for a population of 16 insurance companies
Using these data we developed a structural equation model
We applied this model to CSAA insurance product data
We also performed a series of analyses on the CSAA Employee Engagement Survey data (supplemented by analysis of the engagement findings from our GWS database) to deepen our understanding of engagement drivers
We collected and analyzed a variety of other CSAA data:
Financial data for each product area
Comprehensive file of human resource data
Performance and customer satisfaction metrics from all of CSAA's businesses
To understand the financial value of engagement in CSAA’s insurance business, we examined data on the financial value of engagement in the insurance industry
For this analysis, we integrated two sources of data:
2005 financial data from AM Best (combined ratio, loss ratio, expense ratio, net premiums written (NPW) growth rate) for US insurance companies*
2005 engagement and customer satisfaction** data from Towers Perrin’s Global Workforce Study for the same insurance companies
We looked at relationship among engagement, customer satisfaction and the financial measures across companies
Based on the nature of the measures, we would expect:
Negative relationships between engagement/customer satisfaction and combined ratio, loss ratio, and expense ratio (since lower numbers mean better performance for the these ratios)
Positive relationships between engagement/customer satisfaction and NPW growth
*23 top U.S. writers with at least $1 billion in DPW and approximately 60% or more of writings in personal auto and homeowners. Most of the companies do not pay a dividend, so combined ratio without dividend was used in the analysis.**Customer satisfaction data is based on employee perceptions.
For CSAA overall, a 5% increase in engagement is associated with a possible financial gain of $47.4 million, comprising:
$44.2 million in the insurance product area (net underwriting gain)
$3.2 million in membership and travel (operating income)
Improving engagement also has implications for turnover cost:
A 1% improvement in key turnover drivers is associated with potential cost savings from $185,000 (if the cost of each termination is 50% of annual pay) to $554,000 (if each termination costs 1.5 times annual pay)
These cost reductions are embedded within the broader financial calculations for improved engagement
Engagement is not a stand-alone activity. Relationships are not guaranteed but the direction is clear. It is also a powerful way to galvanize leadership commitment to employee issues.
The relative strength of engagement drivers suggests targets for HR investment
Ten questions account for 67% of the variance in engagement
Key items have a much stronger linkage to engagement than others; question 9 (excellent career opportunities) has an impact almost four times that of item 53 (people care about each other)
Items in bold are also key factors associated with turnover
Top Ten Engagement DriversRelative Effect on
Engagement*
9. I have excellent career opportunities at CSAA. 19%
15. I understand what I can do to build the AAA brand for our customers. 17%
18. CSAA is a company that is an advocate for safe and responsible transportation. 14%
40. CSAA has a set of values that I can identify with. 10%
10. I think CSAA is doing what it takes to be a leader in its industry. 9%
12. CSAA cares a great deal about customer satisfaction. 7%
19. CSAA's senior management is taking steps to ensure the long-term success of CSAA. 7%
11. CSAA is a proactive partner with the communities it serves. 6%
28. Sup/mgr: Supporting my efforts to live CSAA's values and behaviors 5%
53. People at CSAA care about each other. 5%
*Percentages show relative strength of linkage to engagement; higher percentages mean a stronger linkage
We found a strong relationship between engagement, customer satisfaction, and expense ratio; in turn, expense ratio drives combined ratio
Numbers shown for tested relationships (solid arrows) are correlation coefficients; these range from 0 to 1, with 1 indicating two variables are perfectly related to each other. * indicates a statistically significant relationship. Dashed arrows show relationships that exist by definition.