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High-Potential Employees Are Increasingly Disengaged

Updated June 2010 - A survey by the Corporate Executive Board (CEB), a leading research and advisory services company, found that high-potential employees are increasingly disengaged and seeking new career opportunities. Some 25 per cent plan to leave their current employers in the next year compared to 10 per cent in 2006. About one in five (21 per cent) identify themselves as 'highly disengaged' a three-fold increase since 2007.

This report forms part of wider employee engagement research by the CEB's Corporate Leadership Council analyzing data from 50 000 employees on issues such as how they view their employers, how they are managed, and how they react to current economic circumstances. High-potential employees were identified as such by their respective employers. The report concludes that businesses should place greater emphasis on leadership succession planning to secure their future position.

The ongoing research also found that nearly 40 per cent of internal job moves made by 20 000 high-potential employees in more than 100 global organisations prove not to be successful. Researchers conclude that companies need to review their talent management programs to ensure the development and retention of their best employees during the economic recovery.

The report suggests six strategies by which companies can identify, re-engage, and effectively manage their most talented employees:

  • Stimulate Without stimulating work, recognition and development opportunities, potential leaders can quickly become disengaged
  • Test Explicitly test job candidates for ability, engagement, and aspiration to assess suitability for career progression
  • Manage Manage high-potential employees at corporate level to avoid limiting access to opportunities and hoarding of talent by line managers
  • Challenge Place talented employees in positions where new capabilities are demanded
  • Recognize Offer higher compensation and recognition to improve engagement
  • Engage Involve high-potential employees in strategic planning and emphasise their role in future success

Conrad Schmidt, executive director and chief research officer said:

"Organizations are at a real risk of losing their most talented employees as disengagement levels increase, the economy recovers, and the labor market warms up. It is paramount that companies act now, not only to re-engage and retain high potential employees, but to re-evaluate and shore up their succession plans and preserve leadership development within their organizations."

Cost of disengagement

A decade ago, a Gallup study indicated that "actively disengaged" employees - workers who are fundamentally disconnected from their jobs - were costing the U.S. economy between $292 billion and $355 billion a year.

These estimates were based on Gallup's "Q12" employee engagement survey of the U.S. workforce, which calculated that 24.7 million workers (19%) were actively disengaged. The survey, running since 1999 found that actively disengaged workers were absent from work 3.5 more days a year than other workers - or 86.5 million days in all.

Gallup research consistently showed a tendency for actively disengaged workers to be (in comparison with colleagues):

  • significantly less productive
  • report being less loyal to their companies
  • less satisfied with their personal lives
  • more stressed and insecure about their work

The Q12 survey took its name from 12 core questions (see below) that Gallup asked employees at its clients' work units. The results allowed Gallup clients to see and understand links between levels of employee engagement and productivity, growth and profitability.

Gallup Q12 survey

  1. Do I know what is expected of me at work?
  2. Do I have the materials and equipment I need to do my work right?
  3. At work, do I have the opportunity to do what I do best every day?
  4. In the last seven days, have I received recognition or praise for doing good work?
  5. Does my supervisor, or someone at work, seem to care about me as a person?
  6. Is there someone at work who encourages my development?
  7. At work, do my opinions seem to count?
  8. Does the mission or purpose of my company make me feel my job is important?
  9. Are my co-workers committed to doing quality work?
  10. Do I have a best friend at work?
  11. In the last six months, has someone at work talked to me about my progress?
  12. This last year, have I had opportunities at work to learn and grow?

Rodd Wagner, a principal at Gallup, and James K. Harter, Ph.D., chief scientist at Gallup's international workplace management practice have written a book - 12: The Elements of Great Managing by 12 based on Gallup research over the past decade. The book focuses on vivid portraits of real-life managers harnessing employee engagement in a variety of situations:

  • saving a failing call center
  • turning a hotel's finances around
  • improving care at a hospital for sick kids
  • building a better car, and
  • maintaining a factory's production while battling power outages

12: The Elements of Great Managing by 12 also addresses an issue Wagner and Harter describe as "an element unto itself": why higher salaries don't always produce better work.

The book is a successor to the classic First, Break All the Rules. Besides a decade of Gallup data, the authors make use of the latest insights from brain-imaging studies, genetics, psychology, behavioral economics, and other scientific disciplines to reveal what drives good managers.

According to Wagner and Harter:

"Ultimately, what emerged are the 12 elements of work life that define the unwritten social contract between employee and employer. Through their answers to the dozen most important questions and their daily actions that affected performance, the workers were saying, 'If you do these things for us, we will do what the company needs of us.'"

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