Rethinking employee engagement from the perspective of psychological development final

Rethinking Employee Engagement from the
Perspective of Psychological Development
Richard Barrett

Powerful metrics that enable leaders to measure and manage cultures.
www.valuescentre.com
2
What is Employee Engagement?
Engaged employees are enthusiastic about their work and
care about the success of the organisation.
A workplace approach
designed to encourage
the commitment of
employees to the
organisation’s goals and
values.

3
Why is Employee Engagement
Important?
Engaged employees bring more of their
discretionary energy to their work.
Organisation’s with high
levels of employee
engagement outperform
organisations with low
employee engagement by a
significant margin.

4
Employee Engagement and Performance
 Organisations with highly engaged employees have 3.9
the earnings per share growth rate compared with
organisation with low employee engagement—Gallup
 Organisations with high employee engagement are 78%
more productive and 40% more profitable that those with
low employee engagement—AON Hewitt

5
S&P 500
Average
Annualized
Return
16.39%
Average
Annualized
Return
4.12%
BCWF
The Best Companies to Work For engender high levels of employee engagement and commitment,
because the leaders of these organisations focus on meeting their employee’s needs.
The Top 40 Best Companies to Work For (USA)

6
What’s the Difference?
Caring creates happier customers, who buy more and
refer more often, which drives sales, resulting
in increased income.
Engaged employees care
about their organisations, are
more productive, give better
service, and stay in their
organisations longer.

7
Employee Engagement and
Cultural Entropy
Employee engagement is highly correlated with
cultural entropy.
Cultural Entropy: A measure of the conflict, friction and
frustration that people experience in their day-to-day
activities that prevents an organisation from
achieving peak performance.

8
25%
35%
45%
55%
65%
75%
85%
0% 5% 10% 15% 20% 25% 30%
Cultural Entropy
EmployeeEngagement
Research carried out in 163 organisations in Australia by Hewitt Associates
and the Barrett Values Centre in 2008.
Low Entropy =
High Engagement
High Entropy =
Low Engagement
Employee Engagement vs. Cultural Entropy

9
Entropy and Engagement
Cultural Entropy Most employees are ….
10% or less Highly Engaged
11% to 20% Engaged
21% to 30% Becoming Disengaged
31% to 40% Disengaged
41% or more Highly Disengaged

10
Cultural entropy is a function of the personal
entropy of the current leaders and
institutional legacy of past leaders as
embedded in the structures, systems,
policies and procedures of an organisation.
Where Does Cultural Entropy Come From?
Personal entropy is the amount of fear-driven energy that a
person expresses in his or her day-to-day interactions with
other people.

11
What is Personal Entropy?
Personal entropy shows
up in potentially
limiting values such as:
blame, jealousy, power-
seeking, status-seeking,
arrogance, demanding,
internal politics, etc.

12
What is Institutional Legacy?
The institutional legacy
contribution to cultural
entropy shows up as
bureaucratic procedures,
hierarchical structures,
silo functioning, etc.

13
The values that are most important to
us are a reflection of the needs of the
stage of psychological development
we are at and the unmet needs of the
stages of psychological development
we have passed through but have not
yet mastered.
A Values-Based Approach to Identifying
Employee Needs
Our needs (what we value) have always been, and always
will be the principal drivers of our behaviors and actions.

14
Richard Barrett has made
extraordinary contributions to
our understanding of
organisational values and
culture. His frame-works for
measuring culture and
enabling whole system change
are elegant. His reservoir of
know-ledge is vast and his
connection to timeless
wisdom is profound.
Raj Sisodia Co-founder and co-chairman of
Conscious Capitalism Inc. and Professor of
Marketing at Bentley University
Everything I am talking about is in this book

15
Stages of Psychological Development
Stages Primary Motivations
Serving
Integrating
Self-actualising
Individuating
Differentiating
Conforming
Surviving
EvolutionofPersonalConsciousness
Satisfying your physiological and
nutritional needs.
Satisfying your need for love,
and belonging.
Satisfying your need for respect
and recognition.
Satisfying your need for freedom
and autonomy.
Satisfying your need to find
meaning and purpose in life.
Satisfying your need to make a
difference in the world.
Satisfying your need to lead a life
of service to others.

16
Surviving

17
INFANCY
0-2 Years Old
Staying alive!
Satisfying physiological
and nutritional needs
Surviving
Stage Motivation

18
Conforming

19
Conforming
Stage Motivation
CHILDHOOD
3-7 Years Old
Keeping safe and secure!
Satisfying need for love, and
belonging.

20
Differentiating

21
Differentiating
Stage Motivation
TEENAGER
8-19 Years Old
Distinguishing yourself
Satisfying need for respect
and recognition.

22
Individuating

23
Individuating
Stage Motivation
YOUNG ADULT
20-39 Years Old
Releasing your fears!
Satisfying need for freedom
and autonomy.

24
Self-actualising

25
Self-actualising
Stage Motivation
ADULTHOOD
40-49 Years Old
Becoming who you are!
Satisfying need to find
meaning and purpose.

26
Integrating

27
Integrating
Stage Motivation
MATURE ADULT
50-59 Years Old
Aligning with others!
Satisfying need to make a
difference in the world.

28
Serving

29
Serving
Stage Motivation
SENIOR
60+ Years Old
Finding fulfilment!
Satisfying your need to serve
the greater good.

30
Stages, Levels and World Views
 We grow in stages of psychological
development
 We operate at levels of consciousness
 We live inside (are embedded in) cultural
world views

31
Levels of Consciousness
All things being normal, the level of
consciousness we operate from will
correspond to the stage of psychological
development we have reached.

32
Stages and Levels
Stages Levels of Consciousness
Serving SERVICE
Integrating MAKING A DIFFERENCE
Self-actualising INTERNAL COHESION
Individuating TRANSFORMATION
Differentiating SELF-ESTEEM
Conforming RELATIONSHIP
Surviving SURVIVAL
EvolutionofPersonalConsciousness

33
What Employees Value
A safe working environment and pay and ben-
efits that are sufficient to take care of family
Opportunities to work in a congenial atmos-
phere where people care and respect each other
Opportunities to grow professionally with
support, feedback and coaching
Opportunities and challenges by being made
accountable for projects and processes
Opportunities for personal growth and develop-
ment to support you in living your life purpose
Opportunities to leverage your contribution by
collaborating with other like-minded individuals
Opportunities to serve others and care for the
well-being of the Earth’s life support systems
Surviving
Relationship
Self-esteem
Transformation
Internal cohesion
Making a difference
Service
Levels of
Consciousness

34
Robert Kegan’s Types of Mind
Socialized Mind
Self-Authoring Mind
Self-Transforming Mind
Surviving
Relationship
Self-esteem
Transformation
Internal cohesion
Making a difference
Service
Levels of
Consciousness

35
Socialized Mind
Focused on meeting
deficiency needs.
Work is a job—a way of
earning a living and
caring for family. They
may enjoy their work
and colleagues, but are
never passionate about
what they do.Surviving
Relationship
Self-esteem
Levels of
Consciousness

36
Self-Authoring Mind
Focused on achievement
and ambition. People
operating with a self-
authoring mind seek
opportunities for
advancement. They think
of their work as career—
a pathway to a better
future.
Transformation
Internal cohesion
Levels of
Consciousness

37
Self-Transforming Mind
Focused on leading a
values and purpose-
driven life. People
operating with a self-
transforming mind see
their work as a vocation.
They want to leave a
legacy and be of service
to the world.
Making a difference
Service
Levels of
Consciousness

38
Building a Values-driven Organisation

39
Building a Values-driven Organisation
Start with a Values-Survey
PERSONAL VALUES
Which of the following values and behaviours most reflect who you are?
Pick ten.
CURRENT CULTURE
Which of the following values/behaviours most reflect how your
organisation currently operates? Pick ten.
DESIRED CULTURE
Which of the following values/behaviours most reflect how you would like
your organisation to operate? Pick ten.

Placement of Values by Level (100 employees)
Top Ten Values
1. tradition (L) (59)
2. diversity (54)
3. control (L) (53)
4. goals orientation (46)
5. knowledge (43)
6. creativity (42)
7. productivity (37)
8. image (L) (36)
9. profit (36)
10. open communication (31)
10
42 5
7
9
6
8
3
110
Current Culture
Service
Makingadifference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival

11%
1
2
3
4
5
6
7
Cultural
Entropy
Placement of Values by Level (100 employees)
Current Culture
Service
Makingadifference
Internal Cohesion
Transformation
Self-esteem
Relationship
Survival

Highly Aligned Team of 16 People
commitment 12 5(I)
continuous improvement 10 4(O)
employee fulfilment 10 6(O)
balance (home/work) 9 4(O)
customer satisfaction 9 2(O)
making a difference 9 6(S)
financial stability 8 1(O)
humour/ fun 8 5(O)
teamwork 8 4(R)
accountability 9 4(R)
commitment 8 5(I)
continuous improvement 8 4(O)
employee fulfilment 8 6(O)
humour/ fun 8 5(O)
shared vision 8 5(O)
customer collaboration 7 6(O)
customer satisfaction 6 2(O)
financial stability 6 1(O)
teamwork 6 4(R)
Values Plot August 6, 2012Copyright 2012 Barrett Values Centre
I = Individual
R = Relationship
Black Underline = PV & CC
Orange = PV, CC & DC
Orange = CC & DC
Blue = PV & DC
P = Positive
L = Potentially Limiting (white circle)
O = Organisational
S = Societal
Matches
PV - CC 4
CC - DC 7
PV - DC 1
Health Index
(PL)
PV - 9-0
CC - 9-0
DC-10-0
making a difference 10 6(S)
family 9 2(R)
commitment 8 5(I)
humour/ fun 8 5(I)
balance (home/work) 6 4(I)
continuous learning 6 4(I)
integrity 6 5(I)
accountability 5 4(R)
creativity 5 5(I)
Level Personal Values (PV) Current Culture Values (CC) Desired Culture Values (DC)
7
6
5
4
3
2
1
IRS (P)=6-2-1 IRS (L)=0-0-0 IROS (P)=1-1-6-1 IROS (L)=0-0-0-0 IROS (P)=1-2-7-0 IROS (L)=0-0-0-0

Highly Aligned Team of 16 People
CTS = 53-22-25
Entropy = 0%
CTS = 50-26-24
Entropy = 2%
Personal Values
CTS = 51-29-20
Entropy = 0%
Current Culture
Values
Desired Culture
Values
C
T
S 2
1
3
4
5
6
7
0%
0%
0%
6%
12%
7%
22%
32%
13%
8%
0% 20% 40% 60%
1
2
3
4
5
6
7
0%
1%
1%
6%
8%
8%
26%
28%
19%
3%
0% 20% 40% 60%
1
2
3
4
5
6
7
0%
0%
0%
5%
5%
10%
29%
27%
22%
2%
0% 20% 40% 60%
1
2
3
4
5
6
7
21%
54%
25%
22%
54%
24%
24%
56%
20%
Notice how evenly
matched the
distributions are
Entropy Level =
Highly Engaged

Banking Sector
Level 7
Level 6
Level 5
Level 4
Level 3
Level 2
Level 1
Personal Values Current Culture Values Desired Culture Values
IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0
Matches
PV - CC 2
CC - DC 6
PV - DC 4
Health
Index (PL)
PV: 10-0
CC: 10-0
DC: 10-0
1. accountability 8576 4(R)
2. honesty 6133 5(I)
3. commitment 5221 5(I)
4. respect 4420 2(R)
5. family 4057 2(R)
6. integrity 4023 5(I)
7. caring 3568 2(R)
8. balance (home/work) 3526 4(I)
9. responsibility 3279 4(I)
10. efficiency 3085 3(I)
2. client-driven 4571 6(O)
3. client satisfaction 3486 2(O)
4. brand reputation 2740 3(O)
5. achievement 2491 3(I)
6. teamwork 2408 4(R)
7. environmental
awareness
2372 6(S)
9. being the best 2218 3(O)
10. cost-consciousness 2187 3(O)
2. balance (home/work) 4183 4(O)
5. employee recognition 3297 2(R)
10. employee satisfaction 2687 2(O)
Values Plot Copyright 2011 Barrett Values Centre April 2011
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal
Banking Sector Organisation with 27,000 Employees

1%
0%
1%
5%
16%
16%
26%
4%
7%
24%
0% 20% 40%
1
2
3
4
5
6
7
3%
3%
5%
5%
11%
20%
13%
14%
6%
20%
0% 20% 40%
1
2
3
4
5
6
7
1%
0%
0%
5%
15%
16%
21%
12%
5%
25%
0% 20% 40%
1
2
3
4
5
6
7
Banking Sector
Values Distribution Copyright 2011 Barrett Values Centre April 2011
CTS = 37-24-39
Entropy = 2%
CTS = 33-20-47
Entropy = 11%
CTS = 38-25-37
Entropy = 1%
Personal
Values
Current Culture
Values
Desired Culture
Values
11%
50%
39%
20%
33%
47%
17%
46%
37%
C
T
S
Entropy Level =
Engaged
Banking Sector Organisation with 27,000 Employees
Less evenly
matched
distributions
Shift in culture towards
personal consciousness

Small Company
Personal Values
Large Company
Personal Values
Family Respect
Family
Caring
Efficiency
Commitment
Integrity
Humour/fun
Creativity
Accountability
Balance (home/work)
Continuous learning
Making a difference
Integrity
Honesty
Commitment
Accountability
Balance (home/work)
Responsibility
Different Personal Values
0%
0%
0%
6%
12%
7%
22%
32%
13%
8%
0% 20% 40% 60%
1
2
3
4
5
6
7
21%
54%
25%
1%
0%
1%
5%
16%
16%
26%
4%
7%
24%
0% 20% 40%
1
2
3
4
5
6
7
11%
50%
39%

Small Company
Desired Culture
Values
0%
0%
0%
5%
5%
10%
29%
27%
22%
2%
0% 20% 40% 60%
1
2
3
4
5
6
7
24%
56%
20%
1%
0%
0%
5%
15%
16%
21%
12%
5%
25%
0% 20% 40%
1
2
3
4
5
6
7
17%
46%
37%
Large Company
Desired Culture
Values
Client satisfaction
Employee satisfaction
Employee recognition
Achievement
Customer satisfaction
Financial stability
Accountability
Balance (home/work
Honesty
Commitment
Teamwork
Client-driven
Customer collaboration
Employee fulfilment
Accountability
Commitment
Continuous improvement
Humour/fun
Shared vision
Teamwork
Different Desired Cultures

Banking Sector
Level 7
Level 6
Level 5
Level 4
Level 3
Level 2
Level 1
Personal Values Current Culture Values Desired Culture Values
IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 2-2-5-1 | IROS (L)= 0-0-0-0 IROS (P)= 3-3-4-0 | IROS (L)= 0-0-0-0
Matches
PV - CC 2
CC - DC 6
PV - DC 4
Health
Index (PL)
PV: 10-0
CC: 10-0
DC: 10-0
4. respect 4420 2(R)
5. family 4057 2(R)
6. integrity 4023 5(I)
7. caring 3568 2(R)
8. balance (home/work) 3526 4(I)
9. responsibility 3279 4(I)
10. efficiency 3085 3(I)
4. brand reputation 2740 3(O)
7. environmental
awareness
2372 6(S)
9. being the best 2218 3(O)
10. cost-consciousness 2187 3(O)
2. balance (home/work) 4183 4(O)
5. employee recognition 3297 2(R)
10. employee satisfaction 2687 2(O)
Values Plot Copyright 2011 Barrett Values Centre April 2011
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal
Banking Sector (18,000)

49
Cultural Entropy Evolution
Cultural entropy
reduction from 25% to
10% led to improved
performance through
increased employee
engagement, increased
revenues, improved
productivity, and
increase in share price.
25%
19%
17%
14%
13% 13%
11% 10%
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011 2012
Cutlural Entropy

50
Evolution of Number of Survey Participants
8%
25%
38%
51%
67%
73%
77%
75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2005 2006 2007 2008 2009 2010 2011 2012
Percentage of
employees voluntarily
participating in the
values assessment grew
significantly each year as
people realized that the
leaders of the
organisation were
paying attention to the
results of the
assessment.

51
Revenue Evolution
0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
25000
30000
35000
2005 2006 2007 2008 2009 2010 2011 2012
Revenue Cultural Entropy
Annual
revenue
increases as
cultural
entropy falls.
Global Economic
Meltdown

0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009 2010 2011 2012
Revenue per Capita Cultural Entropy
Revenue per
capita
increases as
cultural
entropy falls.
Productivity Evolution
Global Economic
Meltdown

0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
2005 2006 2007 2008 2009 2010 2011 2012
Share Price Cutlural Entropy
Share price
(cents)
increases as
cultural entropy
falls.
Share Price Evolution
Global Economic
Meltdown

54
For More Information
www.richardbarrett.net
To get a copy of this presentation go to:
http://www.slideshare.net/BarrettValues

Rethinking employee engagement from the perspective of psychological development final

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