LOS MEJORES 20 PATRONOS EN PUERTO RICO

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Los 20 Mejores Patronos en Puerto Rico

2

Today’s Goals

Describe Engagement and Why It’s Important

Discuss Findings from our Best Employer

Research

Employee Benefits: Market Practice and Trends

Recommendations

Communications:

Bringing it all To Life

Next Steps

3

A Global and Local Perspective of Engagement

Engagement and Best Employer

studies with over 5,000 organizations

Conducted Engagement Research in 80 markets, 60 industries, and 40+ languages

150+ organizations in Puerto Rico (41,000+ employees)

Our solid experience and proven methodology: 65+ years of experience in HR consulting, 30+ years of experience in employee surveys


What is Engagement?

5

Engagement is…about Results

Satisfaction

Commitment

Engagement

Hewitt’s Employee Research Over Time

Pos

itive

Cor

rela

tion

to B

usin

ess

Per

form

ance Business Results

The extent to which people will act and intervene to improve business results

The extent to which people want to contribute to business success

The extent of people’s approval of their employer

Higher

Lower

6

Six Categories Drive Employee Engagement — Experiences that Influence Engagement Behaviors

SAYSAY

STAYSTAY

STRIVESTRIVE

OpportunitiesCareer OpportunitiesLearning and Development

PeopleSenior LeadershipManagerCo-WorkersValuing People

Total RewardsPayBenefitsRecognition

Company PracticesCommunicationPerformance AssessmentCompany Reputation

WorkWork TasksSense of AccomplishmentResourcesProcess

Quality of LifeWork Life BalancePhysical Work Environment

Engagement

Employee Perceptions Behaviors

EngagementDrivers


Why is Engagement Important?

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The Engaged Associate Adds More Value

Growth in employee productivity

$18,600 more market value per

employee

$3,800 more profits per employee

$80,000–$120,000 additional revenue

per month

Higher profitability

Higher customer loyalty

Recruitment costs 55%

lower

Turnover down 40% to 50%

Companies With Engaged Employees Report…

Source: Impact of Engaged Employees on Business Outcomes; Ongoing Employee Engagement Research, Hewitt Associates, 2005

9

Best Employers

Attract and Retain More Employees

Best Employers

have higher Engagement scores

Best Employers

have significantly lower levels of turnover:

–

Asia: 40% lower

–

Australia: 45% lower

–

Canada: 54% lower

–

Europe: 30% lower

–

U.S.: 50% lower

–

Puerto Rico: 32% lower

Best Employers

have larger pools of talent—

nearly twice as many applications per employee in most studies

Source: Hewitt Best Employer

Studies

“Being a Best Employer is worth

$75 million annually in recruiting,

retention, and productivity gains.”

—Scott McNealy Sun Microsystems


What We Learned from Our 2009 Best Employer Research in Puerto Rico

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What Differentiates the 20 Mejores

Patronos?

Senior Leadership

–

Leaders:

>

Hold a deep belief that people are their greatest asset

>

Deliver on their promises to their employees

>

Are champions of their organization’s values

>

Create a compelling picture of the future

>

Instill a culture of accountability

>

Grow and stretch their people

>

Are open and involved

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Patronos?

Well defined communication strategy

–

In a monthly basis the Mejores

Patronos

informed their employees of:

>

Business goals/objectives

>

Organizational operating results

The Mejores

Patronos

provide different tools to continually listen to their employees, such as;

Los 20 Mejores The

RestEmployee

surveys 100% 83%E-mails from

the

highest

executive

of

the

organization 95% 67%Employee focus groups 75% 40%Formal employee suggestion program 80% 40%

13


Patronos?

Performance Management Process

–

75% of the Mejores

Patronos

link performance process results to pay –

moving toward a pay by performance organization

–

Frequent management training about performance management process

–

80% of the Mejores

Patronos

include leadership competencies as part of the performance management process

–

Between 25% -

75% of a leader’s performance assessment is based on their ability to develop leaders for 70% of the Mejores

Patronos

vs

31% of the Rest


High Performance Workforce Index and Alignment

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The Business Case for Building a High Performance Workforce is Strong…

…We don’t have to look far for the reasons this matters

People Who Are…Focused

Accountable

Achieving

Energized

Engaged

Skilled

Growing

Everyone focused

on the right priorities,

feeling accountable to deliver

great results, energized and engaged

and equipped to give their best, and

building skills important for growing the business

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Hewitt’s Performance and Development Framework

Across the organization, we have to get four things right:

Accountability

High-Achievement Goal-SettingPerformance Coaching

OpportunityGrowth Built Into Every JobPeople Directed Toward Future-Critical Skills

Rewards

Ratings That Send the Right MessagesRewards That Motivate

TrustAuthentic, Business-

Focused

Conversations

…Sustainable high performance requires manager

capability in these essentials

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Engagement and HPW

93%86%

70%

88%77%

55%

Engagement HPW Index HPW Alignment

20 Mejores Patronos

200920 Mejores

Patronos Rest

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AccountabilityOpportunity

RewardTrustAccountabilty

80%65%60%

47%

We set aggressive goalsat all levels of the

organization

Managers are providedwith the tools and

training to setaggressive goals that

will have a positiveimpact in our business

results

20 Mejores

Patronos Rest20 Mejores Patronos

2009 PPI

19

OpportunityOpportunity


70% 70%60%57%

43%33%

We have identified andprovide training in skillsrequired for the future

success of ourorganization

All our employees havethe opportunity to learnnew skills and grow in

their current jobs

We provide employeeswith many opportunities

to grow and learnwithout relying on

promotions

20 Mejores


2009

PPI

20

Rewards

Opportunity


50%

90%

27%

63%

A significant portion ofpeople manager's

reward is based on thecapability to develop

people

Our people practicesmake it clear to

employees that they arethis organization's most

valued assest

20 Mejores


2009

PPI

Trust

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Additional Key FindingsBenefits: Employee satisfaction 92% Regular employees

Best Other Orgn's

Medical insurance 100% 100%

Prescription drug coverage 100% 100%

Employee assistance program 100% 100%

Dental plan 100% 100%

Group life insurance paid by employer 100% 100%

Accidental death and dismemberment insurance paid by employer 100% 100%

Business Travel Accident Insurance (BTA) 100% 100%

Short-term disability (additional to SINOT) paid by employer 100% 100%

Long-term disability paid by employer 100% 100%

Medical insurance for retirees paid by employer 100% 100%

Other (Specify) 100% 100%

Communication: Employee satisfaction 84%


Employee Benefits Market Practice and Trends


2009 Benefit Survey Findings

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2009 Survey FindingsRetirement and healthcare are the benefits with the higher price

tag. Not surprisingly, these reported the most significant changes since last survey was conducted in 2007

Retirement Benefits

–

A number of defined benefit plans were either “frozen” or modified since 2007.

–

Over 90% of the companies reported a defined contribution plan. This represents an increase of approximately 5% compared to the 2007 survey results.

–

Employers continue changing the define benefit formulas or replacing these plans with non-contributory defined contribution plans or “hybrid” pension plans.

Healthcare Benefits

–

The average copays and coinsurances have increased slightly since the 2007 survey was conducted.

–

Employee contributions have increased significantly since 2007. These increases range from 32% to 58% depending on the tier coverage.

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Additional findings

Benefit costs continue to be a top three expense for most organizations, yet many do not have metrics to measure their actual of perceived value.

Employers have to think through what are the appropriate benefit

changes to achieve benefit cost reductions and optimization at a time when some of these changes may be inadvisable since the employees are feeling

the impact of the global economic situation.

As health care costs continue to rise in this struggling economy, employers are challenging employees to take more responsibility for healthy behaviors and retirement saving.


Emerging Trends in HR and Employee Benefits

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Like it or not, people frequently don’t do what will help them stay healthy and live longer.

In our most recent survey 2009

The Road Ahead: Emerging Health Trends, “Promoting employee accountability” was ranked the number one health and prevention component of organizations’ health care strategy in 2009.

Our biggest challenge: About half of eligible employees participate in health promotion program activities when they are presented at the worksite. That number declines unless significant effort is expended to enhance participation using a range of different incentive and engagement strategies.

Wellness / Disease Management Initiatives

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Wellness / Disease Management InitiativesAn effective wellness initiative requires a new approach. It should consider the following:

Design an incentives program. Research the population in order to structure incentives to be complementary to the desired behavior;

–

Ensure balance between incentives that change behavior and those

that give away the potential ROI.

–

Rewards or incentives should be focused on participation rather than on results or outcomes.

Provide two-tiered incentives (for initial and ongoing participation);

Communicate the rationale; use at least three different communication channels and forms during the year; and share participation results at the end of the incentive cycle;

Compliance with HIPAA and ADA. As a general guideline, employers

can avoid discrimination and fulfill compliance with incentive programs that are both voluntary and targeted toward behavior versus health status.

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Wellness / Disease Management InitiativesExamples of incentives that could be used include:

Entering employees into a raffle,

providing a monetary bonus,

providing health coverage credit,

and providing other wellness incentives such as gift certificates.

Measurement is the basis for success!

Continually review the incentive program for maximum effectiveness.

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Pharmacy Purchasing Groups

Purchasing groups give mid-sized employers access to the same deeply discounted pricing usually afforded only to the very largest companies–

while offering a full range of quality guarantees and consulting

services to ensure the highest standards for your pharmacy benefits. Main features:

Include a complete set of rigorous vendor guarantees for financial and service performance.

Client retains complete flexibility of plan design, including utilization management programs like prior authorization and step therapy.

Expected savings of 7% –

10% off current net plan costs

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Quantitative assessment of value relative to the marketBy what percent does each benefit and the aggregate exceed or fall short of the market?How many are richer and how many are less rich?What programs are provided by each of the competitors? What specific plan features are found in the market place: e.g.,

what do the other companies require for prescription copays?What would happen to the values if plan changes were implemented?

Employee perception Assess employees’

awareness, understanding, and perception of adequacy and competitiveness of both the overall benefit plan and each key component.

Assess employee readiness in the areas of health/well-being and retirement.

Through these type of analysis employers understand the current value of the benefits package offered to employees and define its future direction.

Benefits competitiveness and perceived value

32

Flexible work arrangements (FWA)Volatile economic factors, the effect of a long-term recession, as well as new legislative proposals are leading employers to re-think how work is performed and delivered.What are the options?

Compressed workweeks: Working a full-time schedule in fewer than five days in a week or ten days over two weeks.Flextime: Varying the start and end time of a standard day around core hours either on a regular basis or adjusted daily.Part-time: Working less than a full-time schedule with a corresponding reduction in pay and benefits.Phased Retirement: Working part-time or stepping down to less responsibility in preparation for retirement.Virtual Work: Working in an entirely goal-driven environment with no defined work schedule or workplace. In this arrangement, there is no requirement to be anywhere at any time, the only

focus is on

results.

33

A bill was recently introduced to allow flexible work arrangements based on a compressed workweek.

If approved, employees and employers will be able to mutually agree on a work arrangement in based on a compressed workweek schedule. Under such arrangement:

The workweek will not exceed 40 hours; daily working hours must not exceed 10 hours

Hours worked in excess of 10 hours a day will be paid at 1.5 times pay

Hours worked in excess of 12 hours a day will be paid at 2.0 times pay

P. De la C. 2218

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FWA –

Additional considerationsThe bottom-line is that FWA benefit both employees and employers. Nearly 80% of workers say they would like to have more flexible work options and used them if there were no negative consequences at work.FWAs are not

about working less, but about working differently.The organization must have a performance/goal driven culture

in order to be able to implement these arrangements successfully.FWA programs must be formalized

and clearly communicated

to employees.Document and measure

success by establishing ROI metrics and link FWAs to prove the business results.

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Change is in the Air –

The Health Care Reform

There are growing doubts about what benefits the residents of Puerto Rico and other US territories would see under the healthcare reform legislation that results from a divided Congress.

The Senate bill excludes Puerto Rico and US territories from the

exchange

The under funding of Puerto Rico’s Medicare and Medicaid programs is estimated at $2.8 billion annually.

Supporters of the current formula note that most residents of the US commonwealth do not pay federal taxes.

Proponents of a funding fix say that no Medicaid beneficiaries --

the country's poorest residents --

pay taxes, and Medicare beneficiaries on the island pay the same taxes as stateside residents.


Communications Bringing it all To Life

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The Purpose of Communication —

Employee Perspective

Provide education and tools

Provide timely information

Clarify expectations

Increase awareness

Improve the emotional environment

–

Increase job satisfaction/morale

–

Promote employees’ sense of value

–

Maintain healthy levels of noise or uncertainty

–

Sustain employees focus on business

Reinforce decision to join and remain with the company

Employees expect communication to be honest, thorough, understandable and relevant.

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Employer Perspective

Reinforce mission, vision, values and culture

Pave the way for program goals

Align administration processes

Comply with legal requirements

Improve utilization or programs = improvement in ROI

Increase understanding and responsiveness

Improve productivity

Change/set proper employee attitudes and behaviors

–

Change any entitlement mentality

–

Increase employee appreciation

–

Establish and sustain a sense of equity and efficiency

Set the ground for a trustworthy relationship

Helps ensure there is a proper change management process in place

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Change management is the planning and execution of activities that ensure a workforce is

committed, enabled, ready, and organizationally aligned to implement lasting change

to achieve specific business objectives


Change Management Defined

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Importance of Investing in Change ManagementIn a study conducted by McKinsey & Co., they examined 40 organizations’

major change initiatives and found an:

ROI of 143% when an excellent change management program was part

of the initiative (translates to 43 cents gain for each dollar invested);

35% when there was a poor change management program or no program at all (translates to 65 cents loss for each dollar invested);

According to a Harvard University study of 93 companies, a high percentage of business initiatives fail to achieve their stated objectives for the following reasons:

Took more time than allocated 76%Unanticipated problems 74%Coordination was ineffective 66%Competing crisis caused distractions 64%Capabilities of employees inadequate 63%Insufficient training of participants 62%Uncontrollable external events 60%

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Hewitt 5C Change Management Approach – A Framework for Producing Results and Sustaining Change

Commitment

■

Clear vision, linked to the business strategy

■

Sponsorship from major stakeholders

■

Ability to influence and partner

Communication

■

Messages and actions that set the right expectations

■

Communication at all levels to both define and reinforce behavior

Capability

■

New skills and behaviors defined

■

Support of organizational capability with education, processes, and tools

Consequence

■

Incentives to change and consequences of not changing

■

Alignment of performance, reward, and recognition

■

Disable the ability to support old behaviors

Culture

■

Connection to broader business and organization goals

■

Align leaders’

values & behaviors to shape culture

■

Align people policies and programs to reinforce desired culture

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Managing Change to Drive the Right Results –

Develop Strategy and Execute Commitment

–

Stakeholder readiness Leadership and employee engagement Feedback mechanics

–

Lesson Learned: Assume that all stakeholders have different needs

Communication

–

Context setting, clear messages and a flexible, responsive plan

–

Lesson Learned: Different groups may need different media—one size does not fit all

Capability

–

Employee training, manager coaching, systems and process support

–

Lesson Learned: Timing is critical—

train “just in time,” and provide the tools people need

Culture

–

Honest assessment of cultural barriers to change, cultural supports for change and required organizational alignment

–

Lesson Learned: “Culture eats strategy for lunch.”

Consequence

–

Clear requirements for behavior change, rewards and consequences for changing or not changing and specific links between pay and performance goals

–

Lesson Learned: Behavior measurement is labor intensive—it requires ongoing monitoring.

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Manage Change at Both the Program and Individual level

Transformation Transformation

(Focus on Business Outcome)

• Objective• Outcome focused• Predictable• Facts • Reality & Tasks• “Same”

for All People

Transition is internal:

a psychological reorientation that people have to go

through

Transition

(Focus on Where People

Are)

• Subjective• Unpredictable• Perception & Feelings• Psychological

Experience• “Different”

for All People

External:

a different policy,

process, structure or technology

Transformation(Focus on

Business Outcomes)

(Focus on a

person’s ability

to adjust to change)

Subjective ExperiencePerception & Feelings“Different”

for All People

TransitionInternal:a reorientation

that people have

to go through

Objective, Facts, tasksPredictable“Same”

for All PeopleProgram

View

Individual People View

Change Undermines a Person's Sense Of Comfort, Control, & Competence

How will I get the knowledge, skills, and

information that I need?

What is changing?

How will I be impacted?

What do you need for me to do?

What’s in it for me?

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Change challenges / risks clients typically experience

Hewitt’s recommended best practices as result of our client experiences

•Define success as “get the technology up”, instead of defining success as “end-users adopted desired behaviors”

Ensure project team and sponsors define success as behavior change

Clearly define desired behaviors (e.g. “stop/start/continue”

doing)

Define and track metrics indicating adoption of desired behavior

Develop “consequence management”

plan to encourage desired behaviors

and discourage unwanted behaviors

•Stakeholders, especially managers, are resistant to the change (e.g. using work-

arounds or continue to use old system), or have emotional reactions to the change

Conduct a stakeholder analysis to understand which and how employees

are impacted, their concerns, how to best address those concerns

Develop “what’s in it for me”

messages tailored to managers and other key

stakeholder groups

Conduct workshop to support “personal transitions”

Develop tailored and timely 2-way communications

•Insufficient engagement from sponsors and leaders

Develop strategy for involving sponsors and leaders in leading the change

and holding them accountable for the results

Provide sponsors and leaders with on-boarding and skill-building sessions

Hold regular check-ins with sponsors and leaders

•Insufficient Change Management capability and/or resources on client team

Outline the role and required skills of Change Team members and

select

and fully staff based on the role profile(s)

Provide Change Team with on-boarding and skill-building sessions

Hold regular reviews of change management lessons learned

Change Challenges Clients Typically Face during Transformation

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Checklist of Actions for Successful ChangeCommitment

Determine the business case for change

Determine what will change

Engage executive sponsors who own the change

Define success metrics

Create change dashboard

Communication

Conduct stakeholder analysis

Define key messages

Create communication plan

Prepare the 60-second speech

Evaluate communication effectiveness

Capability

Identify the roles impacted by the change

Identify change impacts and readiness issues

Identify knowledge/behaviors required

Create a learning plan

Identify timing/sequence for learning

Consequence

Review stakeholders

Determine behaviors to stop/start/continue

Determine reinforcement mechanisms

Identify and prioritize specific actions

Implement plan

Culture

Review change readiness assessment

Identify stakeholder issues that help or hinder change

Align with organizational structure (if needed)

Align with selected processes (if needed)

Redefine jobs to fit the change (if needed)

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Next Steps

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Leadership Effectiveness•

Prepare managers and direct reports for their role providing them learning & development opportunities that equipped them to conduct evaluations, feedback discussions and other critical instructions with their employees.

•

Provide strong vision with clear business objective. Driving and affirming key messages.

•

Build strong leadership pipeline for the organization.

High Performance Workforce•

Link individual goals to organizational objectives.

•

Reward success; reject mediocrity.•

Apply work processes consistently.

Tools

•

Leadership style assessment.

•

Develop Leadership profile.

•

Work on gap’s between actual and desire profiles.

•

Coaching and/or mentoring formal programs.

Tools

•

Assess Performance Management process and keep moving forward to a high performance organization mindset.

•

High Potential Program.•

Coaching and mentoring.

Steps to Consider

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Initiatives:

Wellness and Disease Management

Pharmacy Purchasing Groups

Assess your benefits program competitiveness and perceived value

Evaluate work/life balance or similar initiatives

Process/Tools:

•

Population and group utilization assessment. •

Structure incentives to be complementary to the desired behavior.

•

Communicate and measure participation and results. Share results with the employees.

•

Evaluate the option of joining a PPG for higher cost efficiency for your pharmacy benefits.

•

Measure benefit program alignment against market from a quantitative standpoint.

•

Identify what specific plan features are found in the market place.

•

Assess employees’

awareness, understanding, and perception of their benefits and what would happen to the quantitative value if plan changes were implemented?

•

Re-think how work is performed and delivered.•

Assess your organization’s readiness for these type of changes (i.e. culture, performance management process).

Steps to Consider