State of the Global Workplace Report 2013

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EmployEE EngagEmEnt InsIghts for BUsInEss lEaDErs WorlDWIDE

State o

the GlobalWorkplace


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t w ss and a bigger share o the marketplace companies must rst

win the hearts and minds o their employees. I you are a business leader serious about

implementing proven engagement strategies or growth at your organization, contact

Stephanie Holgado at +1-202-715-3101 or [email protected].

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protection saeguard the ideas, concepts, and recommendations related within this document.

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aboutthiS

report

The State of the Global Workplace: Employee

Engagement Insights for Business Leaders

Worldwide report highlights ndings rom Gallups

ongoing study o workplaces in more than 140

countries rom 2011 through 2012. This is a

continuation o Gallups previous report on employee

engagement worldwide, which covered data rom

2009 through 2010. This latest report provides

insights into what leaders can do to improve employee

engagement and perormance in their companies. It

includes regional analyses o employee engagement

data, country-level insights rom Gallup consultants

around the globe, a look at the impact o engagement

on organizational and individual perormance, and

inormation about how companies can accelerate

employee engagement.


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Leaders,

Te world economy isnt growing ast enough, and this is starting to cause some serious problems.

One issue in particular that comes to mind is revolution. Any number o countries suering rom low

economic growth and high unemployment could explode in the next ew years.

So how can a business leader help save the world or at least his or her country? Te answer starts

right in his or her own workplace. Business leaders can save their countries by building stronger

companies. Tat means helping their businesses get new customers or building out the current

ones they have.

And there will be plenty o new potential customers in the coming decades. Right now, the worlds

GDP is US$60 trillion, and that gure wil l grow to US$200 trillion in the next 30 years. Simply

put, the global economy will have US$140 trillion worth o new customers. Competing or those

customers will be the World Cup or world economic dominance. Te winners will enjoy thriving

economies and workplaces. Te losers will ace unrest and revolution.

Countries that double the number o engaged employees in every company will be best positioned to

win the lions share o the US$140 trill ion in new customers.

Doing so starts with you in your company. And it spreads around the country rom there. When andi your company, and then country, doubles its workorce engagement, only great things will ollow:

an economic boom, an explosion o innovative ideas, and a surge in entrepreneurship. No country can

ramp up ideas and entrepreneurship high enough right now. Tere are literally trillions in customer

revenue waiting to be won.

Hiring and developing great managers and building up and leveraging the strengths o every

employee are the two keys to doubling employee engagement. How employees eel about their

jobs starts and ends with their direct supervisor. I employees eel, among other things, that their

from the Ceo

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supervisor takes a real interest in their development, or oers requent praise and recognition, they

are very l ikely to be engaged. Hiring the right managers is absolutely essential to building an engaged

workorce. I companies throughout your country hire the right people to lead and actively encourage

the engagement o their workorces, economic dominance will be sure to ollow.

And great managers already know what decades o Gallup research has revealed: rying to get

employees to x their weaknesses doesnt work. Weaknesses cant be developed much at all but

employees strengths can be developed innitely. Te problem is, too many companies ocus on xingweaknesses, and this only breeds non-engagement or, worse, active disengagement. No company or

country will win the economic World Cup with this approach.

Great managers build development plans around every employees strengths. When employees work

rom strengths, nothing motivates them to achieve more not money, not love, not vacations, not

good benets, not company volleyball games, not motivational speakers. And employees working

rom their strengths do win new customers.

Only great business leaders can hardwire strengths-based thinking throughout the organization to

ensure that their business hires the right people to be managers. Do your job right, and youll save

not only your company, but also help your country to thrive and win the competition or US$140trillion in new customers.

Jim Cliton

Chairman and CEOJim ClitonChairman and CEO


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table o contentS

exeCutive Summary

Worldwide, actively disengaged workers continue to outnumber engaged workers at a rate o nearly 2-to-1.Employee engagement will be an increasingly important concern or countries and organizations seeking to boost

labor productivity as the global economy continues its rapid pace o change.

WorldWide, only 13% of employeeS are engaged at WorkThe vast majority o employed people around the globe are not engaged or actively disengaged at work,

meaning they are emotionally disconnected rom their workplaces and less likely to be productive.

hoW gallup meaSureS employee engagementGallups Q12 metric shows that employee engagement is measurable, manageable, and improvable.

hoW employee engagement driveS groWthGallups recent meta-analysis conrms employee engagements well-established links to nine essential

perormance outcomes, and additional research connects employee engagement to higher earnings per share.

What the World WantS iS a good JobJob creation is the biggest challenge currently acing global leaders. Highly engaged workplaces have a critical

advantage in harnessing the talents and energy o their employees to promote growth. Around the world,

engaged workers are most likely to say their employers are hiring new people.

payroll to population: a neW meaSure of eConomiC energyGallup began measuring employment trends around the world in 2010 and developed a unique metric to track

ull-time employment among global populations that is unaected by changes in labor orce participation.

emerging marketS need engaged employeeS to groWRapid growth and development in emerging-market countries has dramatically changed the worlds economic

landscape over the past decade. However, that growth is slowing in many such countries, and their need to tap

into the energy and talents within their populations is growing.

Spotlight: ChinaJust 6% o Chinese employees are engaged in their jobs one o the lowest gures seen worldwide. As China

makes the transition to a more consumer-based economy in the coming years, the countrys businesses will

increasingly rely on engaged employees to attract and retain customers.

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11

14

20

23

26

29

34

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three WayS to aCCelerate employee engagement

Gallup helps organizations boost engagement levels with strategies to hire the right employees, develop theirstrengths, and enhance their well-being.

1. Select the Right People

2. Develop Employees Strengths

3. Enhance Employees Well-Being

linking employee engagement to CuStomer groWthEmployee engagement is not an end in itsel. The moment an employee connects with a customer is a source o

untapped power that has proound implications or a companys protability.

employee engagement varieS greatly by region and Country

Gallups worldwide employee engagement study shows there is a considerable variation in engagement levelsacross dierent regions and countries o the world.

sub-s aic

South Arica

midde E d n aic

United Arab Emirates

E ai

South Korea

su ai

India

sue ai

Indonesia

aui d new Zed

Australia New Zealand

What the beSt do differentlyDespite ongoing economic challenges and low levels o employee engagement among populations worldwide,

many organizations are nding success by making engagement the ocus o their growth strategies.

38

49

54

107

Uied se d Cd

Canada

li aeic

Regional Highlight

Wee Eue

Germany United Kingdom

Cwe Ideede se d neb Cuie

Russia

Ce d Ee Eue

Poland


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Currently, 13% o employees across 142 countries worldwide are engaged in their jobs that is, they are

emotionally invested in and ocused on creating value or their organizations every day. As in Gallups 2009-

2010 global study o employee engagement, actively disengaged workers i.e., those who are negative and

potentially hostile to their organizations continue to outnumber engaged employees at a rate o nearly 2-1.

Employee engagement will become an increasingly important concern or countries and organizations seeking

to boost labor productivity as the global economy continues its rapid pace o change. Even as unemployment

rates remain high in many developed-world countries ve years ater the onset o the global economic crisis,

growth rates in China and other large developing countries have been alling. Around the world, demographic

trends are having substantial economic consequences. In several regions including southern Europe, South

Asia, and the Middle East a youth bulge continues to produce record unemployment among young people.

Meanwhile, many large economies including China, Japan, and the U.S. ace talent shortages as their

workorces age and shrink.

One common actor among organizations worldwide is the need to more eectively understand and use their

peoples talents, skills, and energy. In many countries, raising workers productivity levels is critical to business

growth and badly needed job creation. In countries that ace talent shortages, companies that meet their

employees needs are most likely to win in the competition or top talent. In each case, companies around the

world will need to improve their ability to ensure that workers are in the right roles and are emotionally invested in

their jobs.

In other words, the need to build highly engaged workplaces will become more important than ever. Through

decades o research with hundreds o organizations and more than 25 million employees, Gallup has developed

an unparalleled understanding o what the worlds strongest organizations do dierently and how engagement

aects productivity and employee well-being in any workplace.

executive Summary

State of the global WorkplaCeE m p l o y E E E n g a g E m E n t I n s I g h t s f o r B u s I n E s s l E a d E r s W o r l d W I d E

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Some of gallupS moSt important findingS inClude:

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Engaged workers are the lieblood o their

organizations. Work units in the top 25% o Gallups

Q12 Client Database have signicantly higher

productivity, protability, and customer ratings, less

turnover and absenteeism, and ewer saety incidents

than those in the bottom 25%.

Organizations in Gallups Q12 Client Database with

an average o 9.3 engaged employees or every actively

disengaged employee in 2010-2011 experienced 147%

higher earnings per share (EPS) compared with theircompetition in 2011-2012. In contrast, those with an

average o 2.6 engaged employees or every actively

disengaged employee experienced 2% lower EPS

compared with their competition during that same

time period.

Active disengagement is an immense drain on

economies throughout the world. Gallup estimates,

or example, that or the U.S., active disengagement

costs US$450 billion to $550 billion per year. In

Germany, that gure ranges rom 112 billion to 138

billion per year (US$151 billion to $186 billion). In

the United Kingdom, actively disengaged employees

cost the country between 52 billion and 70 billion

(US$83 billion and $112 billion) per year.

egg ls v Wd rg

rg

Overall, among the 142 countries included in the

current Gallup study, 13% o employees are engagedin their jobs, while 63% are not engaged and 24%

are actively disengaged. However, these results vary

substantially among dierent global regions.

East Asia has the lowest proportion o engaged

employees in the world, at 6%, which is less than hal o

the global mean o 13%. Te regional nding is driven

predominantly by results rom China, where 6% o

employees are engaged in their jobs one o the lowest

gures worldwide. Chinas low engagement level may

increasingly pose a barrier to its continued growth as

the country makes the transition to a more consumer-

based economy and businesses come to rely more on

ront-line employees to attract and retain customers.

In Australia and New Zealand, 24% o employees

are engaged, while 60% are not engaged and 16% are

actively disengaged. Te resulting ratio o engaged to

actively disengaged employees 1.5-to-1 is one

o the highest among all global regions and similar to

results rom the U.S. and Canada (1.6-to-1).

Gallup ound the highest levels o active disengagement

in the world in the Middle East and North Arica

(MENA) region, particularly in unisia (54%),

Algeria (53%), and Syria (45%). Te regions high

unemployment rates may be a actor in these results,

causing many disengaged workers to remain in their

jobs despite their unhappiness at work.

Despite the countrys strong economic growth, only

8% o Indonesian employees are engaged in their

jobs, while 15% are actively disengaged. By contrast,employees in the Philippines another ast-growing

economy in Southeast Asia had the highest level

o engagement in the region at 29%, with only 8%

actively disengaged.

i W G rss, eggd

es a m l r J

Gw t ogzs

Organizations worldwide that maximize employees

motivation and enthusiasm or their work are in turnhelping to stimulate job creation. Globally, 44% o

engaged employees say their employers are hiring

people and expanding the size o their workorces

vs. 34% o those who are not engaged and 25% o

actively disengaged employees who say the same. Tis

relationship is consistent across all global regions.

Perceptions o job creation are lowest globally among

employees living in the Commonwealth o Independent



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States and neighboring countries. Overall, 24%

o employees living in this group report that their

employers are hiring new people, the lowest gure

among all regional groups. Nearly our in 10 engaged

workers say their employers are expanding the size otheir workorces, compared with about two in 10 not

engaged or actively disengaged employees.

One-third o employees in the MENA region (33%)

say their employers are hiring new people a gure

that will need to rise in the coming years to meet the

regions increasing need or new jobs to accommodate

its burgeoning youth population. Across the MENA

region, about hal o engaged employees say their

organizations are hiring vs. slightly more than one-

ourth o actively disengaged employees who say the

same.

Job creation is nowhere more important than in South

Asia, where it is estimated that more than a million

people will enter the labor orce every month in coming

years. Currently, employees working in South Asia are

about as likely to say their organizations are letting

people go (25%) as they are to say their employers are

hiring (28%). Among engaged employees, however,

more than our in 10 (42%) say their companies arehiring, while 12% say they are letting people go.

Many countries in Western Europe, including France,

Ireland, Italy, and Spain, continue to suer rom severe

employment crises. Residents in these countries are

among the least likely in the world to say it is a good

time to nd a job in their communities. However,

engaged employees are twice as likely to report their

workplaces are hiring (34%) as they are to say they are

letting people go (16%). Among actively disengaged

employees, these gures are reversed, with 34% saying

their organizations are letting people go, while 18% say

they are hiring.

p hg d mg ps hd

cs Gw d egg ls

In the MENA region, the concept o wasta (similar to

the Western concept o who you know) can be used

to gain employment and advantage in the workplace,

as a result o personal relationships, and potentially

undermine workplace engagement. Not only does this

system create poor t or roles among improperly hired

employees, but it also spreads negative perceptions

among otherwise engaged colleagues.

In ast-growing Southeast Asian economies like

Indonesia and the Philippines, where demand or labor

is high, companies will need a strong talent strategy

to thwart talent poaching. Important to the success o

such strategies will be managers willingness to eschew

the old command-and-control mentality in avor o a

more collaborative approach, particularly with younger

workers.

In East Asian societies, the cultural value o deerenceto authority may make businesses less likely to ocus

on management structures that allow employees to

eel capable o taking initiative. Only about one in six

employees in East Asia strongly agree that their opinions

count, the lowest proportion o any global region.

Te positive momentum in the Latin American

job market has heightened the competition or

talented workers among businesses in the region.

Te momentum has also increased the importance o

building loyalty among employees by ensuring that they

have what they need to be ully engaged in their jobs.

In Australia and New Zealand, only 19% o employees

in leadership positions are engaged in their jobs.

Low engagement among managers is troubling or

businesses, as Gallup has ound that they play the most

signicant role in inuencing engagement among their

direct reports.

Wdwd, eggd es rgdt ls m hg d e m

ps es

Around the globe, engaged employees are more likely

to be thriving i.e., to rate their overall lives

highly on a zero-to-10 scale than those who are

not engaged or actively disengaged. Among all global

regions, engaged workers are at least 1.6 times as likely

as actively disengaged workers to be thriving. Te ratio


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is highest in South Asia, where engaged employees

are 5.5 times as likely to be thriving as those who are

actively disengaged.

In East Asia, engaged workers are about hal as likely tohave experienced stress the previous day as their actively

disengaged peers. Prior research oers some ev idence

that those in East Asian societies are less likely to draw

on social support in stressul situations. Consequently,

workplace actors and good managers in particular

may make more o a dierence in helping to ensure

that employees eel ree to ask or help to manage stress

more eectively.

Latin America has the highest percentage (55%) o

thriving employees in any developing region. Terelationship with workplace engagement is also

particularly strong there: wo-thirds o engaged

employees (66%) are thriving, compared with less than

hal (42%) o actively disengaged workers.

About one-third o MENA residents (34%) say they

experienced anger or much o the day beore the

survey, easily the highest proportion among any global

region. However, this number alls to 19% or engaged

employees in the region, compared with 35% o their

actively disengaged counterparts. Likewise, 75% o

engaged employees versus 48% o actively disengaged

employees experienced enjoyment yesterday.

Similarly, in sub-Saharan Arica, engaged employees

are signicantly more likely than actively disengaged

employees to say they experienced enjoyment or much

o the day yesterday and about hal as likely to have

experienced anger.

Te severity o Western Europes debt crisis and the

accompanying austerity measures in many countries

may help explain why lie evaluations in most o the

region tend to be lower than those in other developed

regions. Hal o employees in Western Europe (50%)

are thriving in their overall lives, compared with 59%

in the U.S. and Canada and 66% in Australia and

New Zealand. Among engaged employees in Western

Europe, the thriving percentage rises somewhat to 59%.

ed is o assd W hg

egg ls i es c d

Js t m us t kwdg d

ts

In many developing and transitional economies where

the demand or high-skilled labor exceeds the supply

o more highly educated residents, better-educated

employees are more likely to be engaged at work.

However, this is not necessarily true in developed

economies, many o which are suering an extended

period o high unemployment. In the U.S. and Canada,

or example, engagement trends downward slightly with

employees education level. College-educated workers

in both countries are less likely than those with only

a high school education to strongly agree that they

have the opportunity to do what they do best at work

each day.

Likely reecting the mismatch between educational

curricula and the needs o employers in the region,

one in our MENA employees with a college-level

education (25%) are actively disengaged. Tis is the

highest proportion among highly educated workers in

any global region.

Among employees in Southeast Asia, there is a

particularly strong relationship between employees

educational attainment and their engagement levels:

Tose with an elementary education or less are almost

our times as likely as those with a college education

to be actively disengaged at work. Tose in jobs less

likely to require higher levels o ormal education are

also least likely to be engaged at work, demonstrating

a need or businesses in industrial sectors to improve

communication and recognition systems that help

motivate and empower individual workers.

Similarly, engagement rates increase with Latin

American employees educational attainment levels. Te

engaged-actively disengaged ratio is most avorable in

job types that tend to require higher levels o education

and provide a more autonomous working environment

such as proessional workers and those in management

or leadership roles.



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What CompanieS Can do to improve engagement:

Bring engagement into the

companys everyday language.

Te companies most successul at

engaging their employees bring the

conversation o engagement into the

workplace every day. It is important

beore organizations begin measuring

engagement to communicate the

reasons behind this strategic goal and

the advantages or the companyand

the employees themselves. Regular

communication rom the companys

leaders and inormal communication

between employees will begin to

breed a culture o engagement,

leading participation rates o employee

engagement metrics and other

interventions to be more successul.

Use the right employee engagement

survey.Te employee engagement

metrics companies use can aect

their ability to create changes in

perormance. Oten, organizationsmake the mistake o using employee

surveys to collect data that are

irrelevant or impossible to act on.

When a company asks its employees

or their opinions, they expect action

to ollow. Gallups Q12employee

engagement metric was designed

with this expectation in mind

the data the Q12survey collects are

specic, relevant, and actionable orany team at any organizational level,

and they are proven to aect key

perormance metrics. Why? Because

the Q12measures employees emotional

engagement, which ties directly to

their level o discretionary eort

their willingness to go the extra mile

or their company.

Focus on engagement at the

enterprise and local levels.

ransormation occurs at the local

level, but it only happens when

the tone is set rom the top down.

Companies realize the most benet

rom engagement initiatives when

leaders weave employee engagement

into perormance expectations

or managers and enable them to

execute on those expectations.

Managers and employees must eel

empowered by leadership to make

a signicant dierence in their

immediate environment.

Select the right managers.Whether

hiring rom the outside or promoting

rom within, organizations that

scientically select managers or the

unique talents it takes to eectively

manage people greatly increase the

odds o engaging their employees.

Instead o using management jobs aspromotional prizes or all career paths,

companies should treat these roles

as unique, with distinct unctional

demands that require a specic talent

set. Tey should select managers

with the right talents or supporting,

positioning, empowering, and

engaging their sta.

Coach managers and hold them

accountable or their employees

engagement.Gallups research has

ound that managers are primarily

responsible or their employees

engagement levels. Organizations

should coach managers to take an

active role in building engagement

plans with their employees, hold

managers accountable, track

their progress, and ensure they

continuously ocus on emotionally

engaging their employees. Te

top perormers in Gallups Q12

Client Database consistently make

employee engagement part o their

ormal review process, and most use

these improvements as a criterion

or promotions.

Dene engagement goals in

realistic, everyday terms.While the

overall organization may set loty

goals or engagement, leaders mustmake these objectives meaningul to

employees day-to-day experiences

to bring engagement to lie. Ensure

that managers discuss employee

engagement elements at weekly

meetings and in one-on-one sessions

with employees to weave engagement

into daily interactions and activities

related to their perormance objectives.

Find ways to meet employees where

they are.As this report demonstrates,

employees worldwide have dierent

needs and expectations that inuence

their engagement levels. Local cultural

inuences and economic conditions,

as well as more specic variables such

as respondents job type and education

level, all play roles in shaping their

workplace experience. Managers

should be aware o the actors most

relevant to engagement among their

workers. Tey should also understand

that every interaction with an

employee has the potential to inuence

his or her engagement and inspire

discretionary eort.


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WorlDWiDe, only 13% oemployeeS are enGaGeD

at Work

The current global economic environment presents unprecedented

challenges and unique opportunities or business leaders. Most o the

developed world continues a slow, arduous recovery rom the global

recession. Developed- and emerging-market countries, however, are

recovering aster rom the crisis, many beneting rom ree market reorms

that have attracted oreign investment and unlocked entrepreneurial

potential among their populations. Still, as organizations rom multinational

corporations to small-business startups seek to benet rom ongoing

development in these rapidly changing markets, they must learn how to

maintain adaptive, high-productivity workplaces and grow their customer

bases in widely varying social, cultural, and economic environments.


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Vital to maintaining high-productivity workplaces is

organizations ability to engage their employees. Gallups

extensive research shows that employee engagement

is strongly connected to business outcomes such as

productivity, protability, and customer satisaction that

are essential to an organizations nancial success.

o provide an outlook on employee engagement and why

it matters or global organizations, or the rst time in

2009 and 2010, Gallup gathered engagement results rom

employed workers worldwide or its 2010 State of the Global

Workplacereport. Tis current report provides an update o

the previous results using data gathered in 2011 and 2012

rom nearly 230,000 ull-time and part-time employeesin 142 countries. Gallup nds that the proportion o

employees worldwide who are engaged in their jobs has

ticked upward rom 11% to 13%, while the proportion who

are actively disengaged has allen slightly rom 27% to

24%. Tis slight improvement notwithstanding, low levels

o engagement among global workers continue to hinder

gains in economic productivity and lie quality in much o

the world.

Engaged employees are those who are involved in,

enthusiastic about, and committed to their work and who

contribute to their organization in a positive manner.

Engaged employees are the ones who are most likely to

drive innovation, growth, and revenue that their companies

desperately need. Tese engaged workers build new products

and services, generate new ideas, create new customers,

and ultimately help spur the economy generating more

good jobs.

According to Gal lups latest ndings, 87% o workers are

not engaged or actively disengaged and are emotionally

disconnected rom their workplaces and less likely to be

productive. Te proportion o actively disengaged employeeshas decreased rom 27% to 24%. But, actively disengaged

employees continue to outnumber engaged employees by

nearly 2-to-1 implying that at the global level, work is

more oten a source o rustration than one o ulllment.

It also means countless workplaces worldwide are less

productive and less sae than they could be and are less

likely to create badly needed new jobs.

actively DiSenGaGeD not enGaGeD enGaGeD

20% 40% 60% 80% 100%

13

11

63

62

24

272008-2009

2011-2012

overall engagement amongthe employed population in142 CountrieS WorldWide only 13% are engaged

12 W O R L D W I D E , O N LY 1 3 % O F E M P L O Y E E S A R E E N G A G E D AT W O R K


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rs b e egg

As in 2009 and 2010, the current results point to substantial

variation in engagement levels among employees in dierent

global regions and among countries within those regions.Te ndings also reveal dierences among employees with

dierent job types and at dierent education levels within

countries. Recognizing these dierences can help managers

understand how societal actors could aect workplace

characteristics and help them identiy specic barriers they

must overcome to build more engaged workorces.

Te good news or global business leaders is that decades

o Gallup research has established certain basic workplace

conditions that managers worldwide can ocus on to

help employees eel emotionally connected to their

workplaces. Te criteria on which Gallup based its employee

engagement (Q12) measure are universally applicable because

they address undamentallyhuman emotional needs such as

the need or respect, positive relationships, and a sense o

personal development.

People spend a substantial part o their lives making a

living, whether in a high-tech startup in Singapore, a

nancial institution in Australia, or a garment actory

in the Dominican Republic. As a result, the quality o

their workplace experience inevitably reects the qual ityo their lives. With the vast majority o employees

worldwide reporting an overal l negative experience at

work and slightly more than one in 10 indicating that

they are involved in and enthusiastic about their jobs and

committed to their organizations success it is no wonder

that the global recovery remains sluggish, while social

unrest abounds.

Business leaders worldwide must raise the bar on employee

engagement. Increasing workplace engagement is vital to

achieving sustainable growth or companies, communities,

andcountries and or putting the global economy back

on track to a more prosperous and peaceul uture.

actIvEly dIsEngagEdEmployEEs contInuE tooutnumBEr EngagEd

EmployEEs By nEarly2-to-1.

W O R L D W I D E , O N LY 1 3 % O F E M P L O Y E E S A R E E N G A G E D AT W O R K


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hoW Gallup meaSureSemployee enGaGement

Gallup measures employee engagement based on workers responses to

its Q12 survey, which consists o 12 actionable workplace elements with

proven links to perormance outcomes. To identiy these elements, Gallup

spent years conducting thousands o interviews at every level o various

organizations, in most industries, and in several countries. Since Gallup

nalized the Q12 question wording in the late 1990s, the survey has been

administered to more than 25 million employees in 189 dierent countries

and 69 languages. The ollowing items are the ones that emerged rom

Gallups pioneering research as the best predictors o employee and

workgroup perormance.

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11i s s s,

s w s

d

gss.

06t s s

w w gs

d.12

ts s , i

d s

w d

gw.

gallupS Q12

H O W G A L LU P M E A S U R E S E M P L O YE E E N G A G E M E N T


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Sgs e egg

In addition to discovering the 12 items, Gallup also ound that the order o the items is

important. Te 12 items represent the our stages o a hierarchy that an employee goes

through on the path to complete engagement. Items 1 and 2 represent employees primary

needs. When employees start a new role, their needs are basic. Tey ask, What do I get

rom this role?

In the second stage, encompassing items 3 through 6, employees think about their own

individual contributions and consider how others view and value their eorts. Manager

support is most important here because managers typically dene perceptions o value.

Once employees advance through the rst two stages o the hierarchy, their perspective

begins to widen and they evaluate their connection to the team and the organization. In the

third stage, encompassing items 7 through 10, employees ask themselves, Do I belong?

Ten, during the ourth and most advanced stage, composed o items 11 and 12, employees

want to make improvements, learn, grow, innovate, and apply their new ideas.

Te our stages help managers evaluate workgroup perormance and concentrate their eorts

on areas most relevant to where their team is on the journey to complete engagement.

25 mIllIon

EmployEEs In189dIffErEnt

countrIEs and69languagEs

SinCe the late 1990s, gallup haS

adminiStered the Q12 Survey to more than

16 H O W G A L LU P M E A S U R E S E M P L O YE E E N G A G E M E N T


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gallup employee engagementCategorieS

1eggd employees work with

passion and eel a proound

connection to their company.

They drive innovation and move the

organization orward.

2n eggd employees are

essentially checked out. Theyre

sleepwalking through their workday,

putting time but not energy or passion

into their work.

3a Dsggd employees

arent just unhappy at work; theyre

busy acting out their unhappiness.

Every day, these workers undermine what

their engaged coworkers accomplish.

t ts es

Based on employees responses to the 12 items, Gallup

groups them into one o three categories: engaged, not

engaged, and actively disengaged.

Not engaged workers can be difcult to spot: Tey are

not hostile or disruptive. Tey show up and kill time

with little or no concern about customers, productivity,

protability, waste, saety, mission and purpose o the

teams, or developing customers. Tey are thinking about

lunch or their next break. Tey are essentially checked

out. Surprisingly, these people are not only a part o your

support sta or sales team, but they are also sitting on your

executive committee.

Actively disengaged employees are more or less out to

damage their company. Tey monopolize managers time;

have more on-the-job accidents; account or more quality

deects; contribute to shrinkage, as thet is called; are

sicker; miss more days; and quit at a higher rate than

engaged employees do. Whatever the engaged do such as

solving problems, innovating, and creating new customers

the actively disengaged try to undo.

On the other hand, engaged employees are the bestcolleagues. Tey cooperate to build an organization,

institution, or agency, and they are behind everything

good that happens there. Tese employees are involved

in, enthusiastic about, and committed to their work. Tey

know the scope o their jobs and look or new and better

ways to achieve outcomes. Tey are 100% psychologically

committed to their work. And, they are the only people in

an organization who create new customers.



20/120

tg e egg n l

Ater a baseline reading o an organizations employee engagement level ollowing the

rst companywide Q12 administration, Gallup provides customized tools and analysis to

help leaders take the necessary next steps. Ater all, measurement without targeted action

is useless. Moreover, i employers do not ollow up on engagement results, employees

disengagement may actually increase. By consistently tracking Q12 results rom year to year

and developing the right data-based interventions to promote growth, employers will ensure

that their workorce is meeting its potential and maximizing its perormance outcomes.

Additionally, Gallup developed empirical indexes to help companies strategically pinpoint

and improve specic ocus areas relevant to their current situation. For example, Gallup

has ound that the companies that increase employee engagement the most are those

that hold all employees accountable or taking action on their Q12 results. By adding the

Accountability Index to the Q12

survey, companies can track each workgroups eortstoward making progress on engagement goals.

Te Brand Ambassador Index oers a va luable opportunity to measure the strength o

employees connection to their organizations brand. Gallups research shows that employees

who know what their organization stands or and what dierentiates it rom its competitors

tend to be more engaged, and they more actively support and endorse their companys

products and services.

By using one or more o these 18 indexes in conjunction with the Q12 metric, leaders

have another tool with which to capture more o their organizations story. Gallups

empirical indexes oer companies actionable insights on a range o important topics,including change management, communication, customer orientation, innovation, and

supervisor eectiveness.

By consistently tracking Q12 results rom year to year and

developing the right data-based interventions to promote

growth, employers will ensure that their workorce is meeting

its potential and maximizing its perormance outcomes.

18 H O W G A L LU P M E A S U R E S E M P L O YE E E N G A G E M E N T


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t pw egg

Leaders oten say that their organizations greatest asset is its people but in reality, this is

only true when those employees are ully engaged in their jobs. Engaged workers stand apart

rom their not engaged and actively disengaged counterparts because o the discretionary

eort they consistently bring to their roles day ater day. Tese employees willingly go the

extra mile because o their strong emotional connection to their organization. Reaching this

unique state goes beyond having a merely satisactory experience at work to one o 100%

psychological commitment. Any employee can achieve this state in an engaging workplace,

but leaders can be sure they are creating and maintaining this type o environment onlyi they actively measure and manage the true drivers o engagement. Gallup created

and continues to test the Q12 metric to help organizations harness the power o engaged

employees in the most efcient and actionable way possible.

mEasurEmEntWIthout targEtEdactIon Is usElEss.



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hoW employee

enGaGement DriveSGroWth

Although measuring employee engagement is an increasingly common

practice in the business world, Gallups Q12 employee engagement metric

is distinct in that it is backed by rigorous science linking it to nine integral

perormance outcomes. Gallup administers the Q12 to workers in various

companies, nonprots, and other organizations worldwide in an eort to

help its clients improve their employee engagement. Meanwhile, Gallup

researchers continually study ndings rom research on the Q12 to learn

more about employee engagements impact on organizational and

team perormance.

20


23/120

The 2012 meta-analysis once again veried that employee

engagement relates to each o the nine perormance outcomes

studied. Additionally, Gallup continues to nd that the strong

correlations between engagement and the nine outcomesstudied are highly consistent across dierent organizations

rom diverse industries and regions o the world.

t Q12 pds k p os

Every two to our years Gallup completes meta-analysisresearch a statistical technique that pools multiple

studies on the Q12. By conducting this research regularly

over time and increasing the number o business units

analyzed, Gal lup stays on the cutting edge o how well

employee engagement predicts key perormance outcomes.

When sample sizes allow, Gallup establishes links to new

outcomes that companies can measure and manage to drive

organizational perormance through employee engagement.

Gallup knows o no other company that backs its employee

engagement survey with such extensive research.

In 2012, Gallup conducted its eighth meta-analysis on the

Q12 using 263 research studies across 192 organizations

in 49 industries and 34 countries. Within each study,

Gallup researchers statistically calculated the business/

work-unit-level relationship between employee engagement

and perormance outcomes that the organization supplied.

Researchers studied 49,928 business/work units, including

nearly 1.4 million employees. Tis eighth iteration o the

meta-analysis urther conrmed the well-established

connection between employee engagement and nineperormance outcomes:

customer ratings

protability

productivity

turnover (or high-and low-turnoverorganizations)

saety incidents

shrinkage (thet)

absenteeism

patient saety incidents

quality (deects)

Given the timing o the eighth iteration o this study, italso conrmed that employee engagement continues to be

an important predictor o organizational perormance even

in a challenging economy. Gallup researchers studied the

dierences in perormance between engaged and actively

disengaged business/work units and ound that those

scoring in the top hal on employee engagement nearly

doubled their odds o success compared with those in the

bottom hal. Tose at the 99th percentile had our times the

success rate o those at the rst percentile.

Median dierences between top-quartile and bottom-

quartile units were 10% in customer ratings, 22% in

protability, 21% in productivity, 25% in turnover (high-

turnover organizations), 65% in turnover (low-turnover

organizations), 48% in saety incidents, 28% in shrinkage,

37% in absenteeism, 41% in patient saety incidents, and

41% in quality (deects).

In short, the 2012 meta-analysis once again veried

that employee engagement relates to each o the nine

perormance outcomes studied. Additionally, Gallupcontinues to nd that the strong correlations between

engagement and the nine outcomes studied are highly

consistent across dierent organizations rom diverse

industries and regions o the world.

H O W E M P L O Y E E E N G A G E M E N T D R I V E S G R O W T H


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increaSeD enGaGement leaDS to hiGher

earninGS per Share

Gallups research also shows that companies with engaged

workorces have higher earnings per share (EPS) and seem

to have recovered rom the recession at a aster rate. In a

recent study, Gallup examined 49 publicly traded companies

with EPS data available rom 2008-2012 and Q12 data

available rom 2010 and/or 2011 in its database and ound

that organizations with a critical mass o engaged employees

outperormed their competition, compared with those thatdid not maximize their employees potential.

In act, researchers discovered that as the economy began to

rebound ater 2009, having an engaged workorce became

a strong dierentiator in EPS. Companies with engaged

workorces seemed to have an advantage in regaining and

growing EPS at a aster rate than their industry equivalents.

Conversely, those organizations with average engagement

levels saw no increased advantage over their competitors in

the economic recovery.

Organizations with an average o 9.3 engaged employees

or every actively disengaged employee in 2010-2011

experienced 147% higher EPS compared with their

competition in 2011-2012. In contrast, those with an

average o 2.6 engaged employees or every actively

disengaged employee experienced 2% lower EPS compared

with their competition during that same time period.

meaSurinG What matterS

Joseph Juran, a noted management expert, said, Without

a standard there is no logical basis or making a decision or

taking action. Most organizations understand this to some

degree; however, many persist in measuring perormance by

the wrongstandard using unsubstantiated or ineective

metrics that ultimately lead nowhere. When leaders work

with Gal lup to measure and manage employee engagement

at their companies, they can be condent that the Q12 is

backed by years o empirical research and used by some othe worlds leading organizations.

Factors such as EPS, protability, productivity, and

customer ratings are all key indicators in determining an

organizations health and its potential or growth. For

leaders who are responsible or these outcomes, the research

plainly shows that the Q12 is more than just another

human resources initiative; it is the best measurement

tool or initiating companywide transormation to create

sustainable growth. By intentionally ocusing on measuring

and managing employee engagement using Gallups Q12

metric, companies gain a competitive advantage that keeps

them moving orward. Research shows concentrating on

employee engagement can help them withstand and

possibly even thrive in challenging economic times.

-80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30%

-37

-25

-65

-28

-48

-41

-41

10

21

22Profitability

Productivity

Customer

Quality (Defects)

Patient Safety Incidents

Safety Incidents

Shrinkage

Low-Turnover Orgs.

High-Turnover Orgs.

Absenteeism

TURNOVER

engagementS effeCt on key performanCe indiCatorSMedian dierences between top- and bottom-quartile teams

22 H O W E M P L O Y E E E N G A G E M E N T D R I V E S G R O W T H


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What the WorlD WantSiS a GooD Job

Gallup research nds that good jobs are what the world needs most. Global

surveys consistently demonstrate that people with good jobs dened

as those that oer steady work averaging 30 or more hours per week

and a paycheck rom an employer are more likely than those in other

employment categories to rate their present and uture lives positively. Thus,

job creation is essential to a communitys capacity to meet its residents

needs, and leaders worldwide must learn how to attract or retain talented

people who can create new businesses or help existing ones expand.

Communities striving to nd sources o sustainable growth need a critical

mass o high-energy businesses and organizations that bolster job creation

and economic opportunity. That energy is more likely to be ound in

workplaces where employees are engaged in their jobs. Engaged employees

are almost two times as likely as those who are actively disengaged to report

that their companies are hiring new people or expanding. By contrast, actively

disengaged employees report that their companies are reducing workorces

at rates almost three times that o the engaged population.


26/120

eggd es r t ls b

When employees eel engaged and productive at work, it

positively aects their lives at work and beyond the workplace

as well. Engaged employees assess their overall lives more

highly than not engaged or actively disengaged employees.

Tey also report more positive day-to-day emotional states

and interactions with others than their less engaged peers.

Each year in more than 140 countries and territories,

Gallups World Poll tracks two types o measures important

or assessing the subjective quality o peoples lives: 1) their

overall lie evaluations, which are used to categorize them as

thriving, struggling, or suering, and 2) their specic

emotional states, measured by asking whether or not theyexperienced a series o positive and negative emotions

including enjoyment, stress, and anger the day beore

the survey.

Lie evaluations are based on the Cantril Sel-Anchoring

Striving Scale, with steps numbered rom zero to 10. Triving respondents rate their present lives at 7 or higher, and predict

their lives in ve years will be at 8 or higher. Suering respondents rate both their present and uture lives at 4 or lower. Te

remainder those with midlevel ratings are classied as struggling.

eggd es a m os

a e

Gallup data suggest that engaged employees help oster

entrepreneurship in their communities. Job creationdepends on the condence o a citys inhabitants to start up

new ventures. Engaged employees are more likely than their

less engaged peers to have condence in their communities

business environment: 71% o engaged employees report

that their city is a good place to start a business, compared

with 53% o those who are actively disengaged. Engaged

employees are also more likely to agree that hard work gets

you ahead.

baSed on What you knoW or have Seen,Would you Say that, in general, yourCompany or employer iS ... ?

enGaGeD not enGaGeD actively DiSenGaGeD

0% 10% 20% 30% 40% 50% 60%

25

48

27

34

52

14

44

46

10Letting people go

and reducing the size

of its workforce

Not changing the size

of its workforce

Hiring new people

and expanding the size

of its workforce

optimiSm about the loCal eConomyriSeS With engagement level


0% 20% 40% 60% 80% 100%

53

69

65

81

71

87

Believe hard work

can get you ahead

Believe city or area

is a good place for peoplestarting new business

24 W H A T T H E W O R L D W A N T S I S A G O O D J O B


27/120

Worldwide in 2012, 31% o employees rated their l ives

highly enough to be considered thriving, while the majority,

59%, were struggling and 10% were suering. But these

results varied dramatically according to whether or not those

employees were engaged in their jobs. Engaged employeeswere more than three times as likely to be thriving in their

overall lives as those who were actively disengaged. Tis

relationship is meaningul because employees who are both

engaged in their jobs and thriving in their overall lives are

less likely to be thrown o course by organizational changes

or disruptions in their personal lives.

Engaged employees also exhibit more positive day-to-day

emotions and experiences than not engaged or actively

disengaged employees. Almost all engaged employees (95%)

report being treated with respect the previous day. Engaged

employees also experience higher rates o enjoyment and

lower rates o anger and stress than their not engaged or

actively disengaged counterparts. Perhaps most tellingly,

engaged employees are our times as likely as those who are

actively disengaged to say they like what they do each day.

As the pressure increases or community leaders to

provide good jobs and increase economic opportunities,

engaging employees has never been more relevant. Engaged

workorces create external benets to the entire community

through increased economic optimism among residentsand improved perormance outcomes among businesses.

As Gal lup CEO Jim Cliton notes in his 2011 book, Te

Coming Jobs War, Successul local companies are not just

engines or job creation but also engines or local social and

community improvement. Trough their eect on business

outcomes, eorts to improve employee engagement have the

potential to create the economic energy necessary to build

stronger communities.

engaged employeeS are four timeS

aS likely aS thoSe Who are aCtively

diSengaged to Say they like What they

do eaCh day.

engaged employeeS are more thanthree timeS aS likely to be thrivingaS aCtively diSengaged employeeS


0% 10% 20% 30% 40% 50% 60% 70% 80%

15

63

22

33

60

7

49

46

5

Suffering

Struggling

Thriving

engaged employeeS have more poSitivedaily interaCtionS


0% 20% 40% 60% 80% 100%

79

64

44

26

89

81

35

18

95

86

27

13

Experienced angerthe previous day

Experienced stressthe previous day

Experienced enjoymentthe previous day

Treated with respect

the previous day

W H A T T H E W O R L D W A N T S I S A G O O D J O B


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payroll to population:a neW meaSure oeconomic enerGy

Traditional employment metrics are imperect indicators o a countrys true

economic situation. As it is generally dened, a countrys unemployment rate

the measure tracked most oten worldwide is not aected by changes in

the workorce participation rate. When jobs are scarce, people may drop out

o the workorce or become sel-employed in menial labor or subsistence-

level work such as small-scale arming. Such changes can actually lead

to an improvementin unemployment rates, even though ewer people are

contributing signicantly to a countrys economic output.

In 2012, Gallup developed a new employment indicator intended to gauge the prevalence

o good jobs in a countrys economy. Tis metric, called Payroll to Population (P2P),

estimates the percentage o the entire adult population aged 15 and older not just those

currently in the workorce who are employed ull time or an employer or at least 30

hours per week. Unlike the traditional unemployment rate, P2P decreases when ewer

people are working and increases when more people nd ull-time work.

26


29/120

Gallup nds this new measure o employment to be

more strongly related to GDP per capita than any other

employment metric including unemployment, which

shows little correlation with GDP. Te strength o the

relationship between P2P and GDP per capita demonstrateshow P2P provides a more accurate measure o the

percentage o people who are contributing to a countrys

economic energy.

Gallup does not count adults who are sel-employed, working

part time, unemployed, or out o the workorce as payroll-

employed in the P2P metric. Te exclusion o sel-employed

workers may seem counterintuitive given the importance

placed on entrepreneurship or creating jobs. However,

while sel -employment is typically thought o as providing

economic energy and ueling growth in the developed world,

in developing countries, it tends to consist o subsistence

work that contributes little to a countrys economic well-

being. On a global basis, sel-employment has a negative

relationship with GDP per capita.

p2p r

26% 2012

In 2012, the global P2P

gure was at 26%, down

slightly rom 27% in 2011.

Tis decline reverses the

upward trend in P2P since

the height o the global

recession in 2009.

On a regional basis,

Northern America,

consisting o the U.S. andCanada, has the highest

P2P rate (42%) o all

regions in 2012, ollowed by

the group o European countries and areas not in the European Union (40%), which includes Switzerland, Norway, Iceland,

and North Cyprus. At the other end o the spectrum, sub-Saharan Arica has the lowest P2P rate (11%) ollowed by the

Middle East and North Arica region (MENA) at 18%, which was the only other region to have a P2P rate below 20%.

2012 p2p rate vS. 2012 gdp per Capita,WorldWide

0 10 20 30 40 50 604

6

8

10

12

LOG

OF

2012

PER-

CAPITA

GDP

PERCENTAGE OF POPULATION WORKING FULL TIME FOR AN EMPLOYER (P2P)

payroll to population, 2009-2012

% of thE populatIon agEd 15 and oldEr

employeD ull time or an employer

2012201120102009

24%

26%

27%

26%

2012 based on surveys in 140 countries

PAY R O L L T O P O P U L AT I O N : A N E W M E A S U R E O F E C O N O M I C E N E R G Y


30/120

Te small and medium-sized enterprises

(SMEs) that provide the bulk o employment

in most o the developed world are ar less

common in developing economies. Tis helps

explain why the percentage working or an

employer is so low in regions like sub-Saharan

Arica and South Asia. MENAs relatively

low P2P rate is largely attributable to the high

proportion o residents (56% in 2012) who do

not participate in the workorce. Many people

in the MENA region, especially women,

voluntarily choose not to work. Young

people also tend to be more likely to be out

o the workorce than their counterparts in

other regions, underscoring the job creation

challenge acing many MENA leaders.

Tough a countys P2P employment rate bears

a strong relationship to its overall economic

output (GDP), P2P is ar less predictive oworkers lie quality ratings, particularly in

developing regions. Among sub-Saharan

Aricans participating in their countries labor

orce, or example, 15% o those who work

ull time or an employer give lie ratings high enough to consider them thriving, vs. 11% o those who do not work ull

time or an employer. Employees engagement levels are much more highly related to lie evaluations and other indicators o

lie quality; across sub-Saharan Arica, 29% o engaged workers are thriving vs. 8% o actively disengaged workers.

b l

As many countries are sti ll struggling to recover rom the global recession, the decline in P2P in 2012 is an unortunate

reversal o the growth seen in 2010 and 2011. Developing countries must strive to create ormal job opportunities with

desirable working conditions, which will in turn reduce the need or inormal subsistence jobs. Developed countries

must maintain or grow P2P rates to guarantee residents decent work opportunities and continued economic prosperity

and social programs. Further, as more residents come to work ull time or employers, an understanding o workplace

conditions that promote their productivity and well-being i.e., that engage them in their jobs will become

increasingly important to economic development.

In 2012, the global P2P gure was at 26%, down slightly

rom 27% in 2011. This decline reverses the upward trend

in P2P since the height o the global recession in 2009.

global payroll to population employmentrateS, by region

% of thE populatIon EmployEd full tImE for an EmployEr

2012

Global 26%

Northern America 42%

Europe Other 40%

Commonwealth o Independent States 38%

European Union 33%

Latin America and the Caribbean 31%

Balkans 29%

East Asia 28%

South Asia 23%

Southeast Asia 21%

Middle East and North Arica 18%

Sub-Saharan Arica 11%

Among adults aged 15 and older; non-Arab expats were excluded from thesample in Arab Gulf countries

28 PAY R O L L T O P O P U L AT I O N : A N E W M E A S U R E O F E C O N O M I C E N E R G Y


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emerGinG marketS neeD

enGaGeD employeeS toGroW

Rapid growth and development in emerging-market countries has dramatically

changed the worlds economic landscape over the past decade. The term

emerging market has long been applied to the so-called BRIC countries

o Brazil, Russia, India, and China. However, economists have more recently

highlighted emerging-market conditions in numerous other countries, including

Mexico, Indonesia, Turkey, and South Arica.

In many cases, ast-paced changes have come with growing pains or these emerging-market

countries. For instance, some social sectors benet more than others do rom economic growth

in these countries, resulting in widening income inequality. Gallups surveys rom several

emerging-market countries highlight another actor that could be just as threatening to the

pace o growth: low levels o employee engagement. Aggregated results or employees in 23

emerging markets reveal that about one in 10 employees are engaged at work nearly hal the

proportion ound across 23 developed-market countries. (Countries are classied as emerging

markets and developed markets according to their current placement in the MSCI Developed-

Market and Emerging-Market indices.)

A lack o employee engagement among businesses in emerging-market countries is likely to

become an increasingly signicant problem. o sustain their growth levels, these countries

must rely less on commodity production and exports, and ocus more on developing their

domestic consumer markets. Economists have noted that the slowing pace o growth in many

emerging markets is a testament to this need to rebalance their economies.

Growing consumer markets means that businesses must know how to attract and retain

customers to maintain a competitive edge in the marketplace. Inevitably, these organizations

will be those that understand and operate according to a basic principle supported by decades o

Gallup research: Engaged employees are the only ones who create engaged, loyal customers.


32/120

inDia: l us rs Wdsd Dsgg

Engaged employees are relatively rare in one o the worlds

most populous emerging markets, India. Gallups 2012 data

indicate that among Indians who work or an employer, 9%

are engaged, while 31% are actively disengaged.

However, there is considerable variation in engagement

levels in India by education level and job type. Among

proessional, managerial, sales, service, and administrative

job types, engagement rates were all above 10%, while

they ell below that threshold among job types that moreoten involve physical work such as installation/repair,

construction/mining, and manuacturing/production.

Te last two o these job types contain extremely high

proportions o actively disengaged employees in India: 44%

o construction and mining workers are actively disengaged,

as are 32% o manuacturing and production workers.

Employee engagement tends to be somewhat lower across

countries among these industries because the traditional

management mentality tends to put process ahead o people.

However, the dierences appear to be particularly sharp in

India, a country that has long struggled with entrenched

social divisions.

Recent labor unrest in India reects the widespread

rustration in these job sectors. Such incidents have led toconcerns about the social instability and lost productivity

created by resentment and unhappiness among workers.

As Gallup data show, disengaged Indian workers are

more likely to have experienced anger and stress the day

beore the survey and less likely to say they were treated

with respect.

engagement more Common in developed-market CountrieS than inemerging-market CountrieS


0%

10%

20%

30%

40%

50%

60%

70%80%

25

20

65

61

10

19

Developed-market

countries

Emerging-market

countries

EngagEd not EngagEd activEly disEngagEd

Elementary education or less 7% 58% 35%

Secondary education 12% 69% 19%

Tertiary education 22% 70% 8%

Managers/Executives/Ocials 18% 72% 10%

Proessional workers 17% 71% 12%

Sales workers 15% 62% 23%

Clerical/Oce workers 14% 74% 12%

Service workers 11% 62% 27%

Construction/Mining workers 7% 49% 44%

Transportation workers 7% 63% 30%

Farming/Fishing/Forestry workers 7% 56% 37%

Manuacturing/Production workers 4% 64% 32%

Installation/Repair workers 4% 74% 22%

30 E M E R G I N G M A R K E T S N E E D E N G A G E D E M P L O Y E E S TO G R O W


33/120

Improving industrial workers outlook is critical or Indias

economic uture. Economists note that the countrys

manuacturing base must grow or India to experience

more broad-based development and provide enough jobs

or the 250 million young people who will soon enter

the workorce.

Expanding its manuacturing base means making Indias

regulatory environment more hospitable to manuacturers

and tackling structural problems such as discrepancies

between the salaries o permanent workers and the large

number o temporary contract workers in these industries.

Further, though the U.S. Bureau o Labor Statistics

estimates that two-thirds o Indias manuacturing output

is produced in the ormal economic sector, most o the

manuacturing jobs are in the inormal sector i.e., small-

scale enterprises primarily operated by amily members and

unregulated by any agency or state government. One o the

challenges acing Indias manuacturing sector is to move

more inormal-sector employees to larger ormal-sector

businesses, which tend to be more efcient because theyreap economies o scale and have greater access to credit

rom ormal nancial institutions.

Larger manuacturing rms to seek to retain the dynamism

and entrepreneurial spirit o employees in smaller businesses

during this transition. Tat means helping employees in

these workplaces eel respected by their managers and

engaged in their jobs. In this sense, Gallups employee

engagement research oers good news, showing that

the same management and workplace actors that dene

engagement predict improved perormance outcomes across

industries and job types. Managers in these manuacturing

companies can do a lot to close the communication gap with

employees and give them a greater sense o psychological

commitment to their work.

enGaGinG inDuStrial employeeS

Considering the high degree o routine that typically

characterizes jobs in manuacturing and construction,

managers in India may need to work hard to establishindividualized eedback and recognition practices among

workers. Managers in Indias industrial sectors may also

need to go to greater lengths to guarantee that all employees

have regular opportunities to express their opinions about

working conditions and their ideas or improvement. In

manuacturing and construction workplaces, where saety

issues are oten a concern, such communication is essential

not only or helping employees eel respected, but also or

reducing their risk o injury on the job. As noted in Gallups

2012 Q12

meta-analysis o 192 organizations in 34 countries,workgroups in the top quartile o employee engagement

scores had 48% ewer saety incidents than workgroups in

the bottom quartile.

Improving communication among managers and workers

may help improve the desirability o manuacturing

jobs among Indian youth. Experts note that to sustain

its economic development, India must expand job

opportunities in all economic sectors. Realizing the

more than one-third of indiaSaCtively diSengaged employeeSexperienCed anger and StreSS thepreviouS day


0% 20% 40% 60% 80% 100%

68

35

39

73

30

38

90

19

18

Experienced stress

yesterday

Experienced anger

yesterday

Treated with respect

yesterday

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countrys manuacturing potential will be particularly

important in this respect. Leading the way will be those

companies that have learned to promote workplace harmony

and boost productivity by harnessing the energy and

initiative o engaged employees.

braZil: hg egg rs

Not all emerging-market countries workorces post

employee engagement results as low as those in India. In

Brazil, another o the worlds largest emerging economies,

Gallups 2011-2012 study nds that engaged employees

outnumber those who are actively disengaged by more than

2-to-1 27% vs. 12%, respectively. Tough these results

leave room or improvement, this ratio is one o the most

avorable among 19 Latin American countries or which

individual results are available.

For most o the past decade, Brazils economy saw

remarkable growth. ens o millions o Brazilians escaped

poverty during that time as the countrys middle class

expanded. Gallups surveys indicate that the proportion o

Brazilians satised with their standard o living climbed

rom 66% in 2006 to 77% in 2010 beore leveling o.

Brazilians overall lie evaluations reect their economic

optimism; in 2012, 59% gave lie ratings high enough to

classiy them as thriving, among the highest gures in

the region.

uture leSS certain or braZilS Workorce

Whether Brazilians positive views are sustainable over

the next decade, however, remains to be seen. Brazils

economic boom has stalled since 2011, and the countrys

unemployment rate has begun to rise. More Brazilians are

looking or jobs, and the quality o the jobs they can nd

will relate to how they view their lives. Gallups 2011-2012

employee study reveals that among employed Brazilians,

48% o those who are actively disengaged at work are

thriving in their overall l ives vs. 77% o those who are

engaged in their jobs. In act, actively disengaged employees

are somewhat less likely to be thriving than Brazilians who

are unemployed (54%).

Te economic slowdown has been accompanied by

rustration among Brazilians who eel the government

has ailed to increase access to economic opportunities. In

2013, widespread protests erupted over various grievances,

including lack o improvements to inrastructure and publicservices. Gal lups tracking polls suggest the protests reect

broader public sentiment; Brazilians satisaction with

education and healthcare services in the city or area where

they live has declined signicantly in recent years.

Protestors have pointed to the money being spent on

preparations to host the FIFA World Cup in 2014 and

the 2016 Summer Olympics as examples o misspent

resources. However, the events are centerpieces o the

Brazilian governments eort to promote the country as an

international tourist destination. Te contribution o Brazils

travel and tourism industry to the countrys GDP grew by

7.8% in 2012, and the industry currently supports about 7.7

million jobs in the country.

Te hope is that dynamism in the labor-intensive tourism

industry will lead to signicant long-term job growth

in Brazils service sector. Te countrys relatively strong

employee engagement results bode well or the success

life evaluationS among latin

ameriCan populationSpErcEntagE thrIvIng In 2012

0% 10% 20% 30% 40% 50% 60% 70% 80%

63

59

58

57

49

48

46

45

45

41

37

37

32

31

26

26

22

22

14

4Haiti

Honduras

Nicaragua

Dominican Republic

El Salvador

Paraguay

Peru

Guatemala

Bolivia

EcuadorPanama

Chile

Suriname

Argentina

Uruguay

Colombia

Venezuela

Mexico

Brazil

Costa Rica

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o such a strategy, which will rely largely on ront-line

employees ability to satisy customers a key perormance

outcome o engaged workplaces.

Among Brazilian workers in service-oriented jobs, 28% are

engaged, while 13% are actively disengaged. Te resulting

ratio o 2.2-to-1 is similar to the results among the countrys

workorce overall. However, there is much room or

improvement.

As an example o improvement, one Brazilian service

company has embraced employee engagement as an

important part o its business strategy, expanding

geographically and moving to the leadership position in

its market. Measuring engagement every six months and

training managers on how to devise and implement action

plans based on the results, the company has seen its ratio o

engaged to actively disengaged employees rise rom 2.8-1 in

2009 to 11.8-1 in 2013. More importantly, the companys

employee-ocused management strategy has laid the

groundwork or high productivity and service excellence.

As Brazil grapples with growth chal lenges over the coming

years, it will be important or all businesses operating in

Brazil rom multinational corporations to small-business

startups to ocus on management practices that help

employees stay engaged in their work and condent in their

economic uture.

egg ms: b l

Gallups 2011-2012 data indicate that employee engagement results vary signicantly at the national level among

emerging economies and within countries among dierent social sectors and job types. However, employee

engagement is undamentally a local phenomenon driven by managerial talent and other conditions unique to

each workplace.

Tat said, in many countries undergoing rapid growth and development, most workplaces are ailing to realize

the productivity and well-being gains associated with high levels o employee engagement. Actively disengaged

employees signicantly outnumber engaged employees in Mexico, South Arica, Hungary, and urkey, to name a

ew. An important part o the ongoing development o these countries will be a shit toward workplace conditions

that use employees individual strengths to empower them to make positive change in their organizations. Tis in

turn will help employees provide better services to their customers.

in the City or area Where you live, are you SatiSfied or diSSatiSfied With the ... ?

among BrazIlIans agEd 15 and oldEr

eDucational SyStem or SchoolS availability o Quality healthcare

20%

30%

40%

50%

60%

201220112010200920082007

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SpotliGht: china

Economists and policymakers have said or years that Chinas investment-

and export-driven growth is increasingly unsustainable and that Chinese

consumers need to spend more money to support the countrys expanding

economy. In recent years, the Chinese government has implemented stimulus

programs that oer, or example, rebates or rural Chinese who buy home

appliances and subsidies or upgrading their vehicles.

Ultimately, however, the task o engaging Chinese consumers is in the hands o thousands

o businesses working to build strong brand reputations and harnessing the energy and

initiative o highly motivated employees to better ulll customers needs. Tose eorts will

largely come rom engaged workers who are more likely than those who are not engaged or

actively disengaged to say they are extremely productive in their current jobs.

IN YOUR CURRENT JOB,DO YOU FEEL YOU AREEXTREMELY PRODUCTIVE,OR NOT?ASKED OF CHINESE ADULTS,

AGED 18 AND OLDER,

WHO WORK FOR AN EMPLOYER

Percentage "yes, extremely productive"

67

79

67

53

Actively disengagedNot engagedEngaged

34


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egg lw ass ed ls, J ts

Unortunately, however, China still has one o the lowest rates o employee engagement

in the world. Just 6% o Chinese workers overall are engaged in their jobs, while 68% are

biding their time in the not engaged category and 26% are actively disengaged and likely

to be disrupting the eorts o their coworkers.

Whats more, low engagement is pervasive across Chinese workers with dierent job types

and education levels. Te 7% engagement rate among college-educated workers is not

meaningully dierent rom the 5% rate among those with an elementary education or less.

And even among proessional workers and managers, job types oten characterized by high

levels o status and autonomy, engagement is relatively rare at 8%. More worryingly, 4% o

sales and service workers on which Chinese companies will rely to attract new customers

in an increasingly consumer-based economy are engaged.

EngagEd not EngagEd

activEly

disEngagEd

Elementary education or less 5% 64% 30%

Secondary education 5% 71% 24%

ertiary education 7% 72% 21%

Proessional workers and managers/

executives/ofcials

8% 71% 20%

Construction/mining workers and

manuacturing/production workers

6% 67% 26%

Sales workers and service workers 4% 69% 27%

Clerical/ofce workers 3% 68% 29%

cs es D t h v W

What will it take to engage more Chinese workers in their jobs? In many cases, employers

need to examine their management practices and criteria or selecting managers. Gallup

CEO Jim Cliton has noted that Chinese workplaces are oten characterized by command-

and-control hierarchical structures, and in many cases, people are not selected as managers

or their ability to engage and develop employees.

loW engagement

levelS are

pervaSive aCroSS

ChineSe WorkerS

With different

Job typeS and

eduCation levelS.

S P O T LI G H T : C H I N A


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Tis practice is particularly troubling as Gallups

research shows that managers have a critical impact on

their employees engagement levels. Chinas results are

particularly low on item 7 (At work, my opinions seem to

count.) o Gal lups 12-item employee engagement (Q12)survey. Only about one in eight Chinese employees strongly

agree with this statement, compared with a median o

more than one in our employees among all 142 countries

included in the current study.

At the macroeconomic level, Chinese leaders seek to reormthe countrys economy rom one based predominantly

on manuacturing and dominated by large state-owned

enterprises to one that better promotes innovation and

entrepreneurship as key sources o indigenous growth.

Tis diversication will require a greater ocus on another

critical aspect o employee engagement: ensuring that

workers are in roles that best use their talents. Gallups 2012

surveys reveal that 57% o Chinese workers say their job

is ideal or them among the lowest gures in East and

Southeast Asia.

dEspItE chInas rEmarkaBlE

EconomIc groWth, Its

rEsIdEnts lIfE ratIngs

havE rIsEn only modEstly In

rEcEnt yEars.

Would you Say that your Job iS theideal Job for you, or not?

pErcEntagE sayIng yEs, It Is IdEal

0% 20% 40% 60% 80% 100%

86

80

79

78

73

72

71

67

65

58

57

57

55South Korea

China/Hong Kong

Taiwan

Myanmar

Japan

Vietnam

Singapore

Thailand

Indonesia

Cambodia

Malaysia

Laos

Philippines

36 S P O T LI G H T : C H I N A


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Workplace conditions are also important or improvin

State of the Global Workplace Report 2013

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