September 10, 2002 >
Recent corporate strategy shifts have left many employees confused about the link between their jobs and company objectives, making recovery efforts more difficult for companies, a new survey reveals.

Consultant Watson Wyatt reports that it questioned nearly 13,000 workers and found that less than half (49 percent) understand the steps their companies are taking to reach new business goals, a 20 percent drop since 2000.

The survey also showed that employees are unclear about the important connection between job performance and pay; only 35 percent see a clear link between the quality of their job performance and the money they earn.

"Confusion about corporate goals and uncertainty about the link between pay and performance will complicate economic recovery for many companies," said Ilene Gochman, Watson Wyatt's national practice leader for organizational effectiveness. "This is extremely unfortunate because we know that there is tremendous positive impact to the bottom line when employees see strong connections between company goals and their jobs. Many employees aren't seeing that connection."

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

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

In addition to findings on the link between employees and business goals, survey also examines employee trust levels, effective business change management, communication, performance management and worker attitudes towards pay and benefits.

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

Key findings from the Watson Wyatt WorkUSA(tm) 2002 survey

Percentage of workers who:

Have confidence in the job being done by senior management

2000: 50%
2002: 45%

Believe their companies conduct business with honesty and integrity

2000: 68%
2002: 63%

Trust senior leaders at their firms

2000: N/A
2002: 39%

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

2000: N/A
2002: 43%

Believe their companies communicate effectively with employees

2000: N/A
2002: 32%

Say their companies involve employees in decisions that affect them

2000: 27%
2002: 19%

Say senior management motivates them to perform well

2000: 40%
2002: 32%

See no clear link between their jobs and pay

2000: N/A
2002: 40%

Believe that high performing workers go unrewarded

2000: 42%
2002: 40%

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

2000: 56%
2002: 43%

Are satisfied with their pay

2000: N/A
2002: 60%

Are satisfied with their benefits

2000: N/A
2002: 49%

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

2000: 57%
2002: 48%

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

2000: 38%
2002: 48%

View their stock option programs favorably

2000: 57%
2002: 50%

View their profit sharing plans favorably

2000: 55%
2002: 45%