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ARBINGERINSTITUTERESEARCHREPORT:

CreatingaHigh-PerformanceCulture:

TheRoleofCompanyCultureinDrivingSuccess

TableofContents

Foreword3

Introduction

4

Keyinsights

5

1.0Whatdoesahigh-performingculturelooklike?

6

2.0Theimpactofeffectiveleadership

12

3.0Employeeengagement&teamperformance

15

4.0Theroleofdiversity,equity&inclusion

19

Thecompetitiveadvantage:mindset

23

Participantsandmethodology

25

Abouttheresearchpartners26

RESEARCHREPORT|2

Foreword

Anorganization’scultureislikeair:vital,

omnipresent,andattimes,invisible.Airandculturealikecanbetakenforgranted—untiltheybecometoxic.

Cultureisbothimmenselyimpactful

andnotoriouslydifficulttodefineandtoshift.Itarisesfromthecomplexinterplayofindividualandcollectivevalues,

behaviors,beliefs,mindsets,traditions,policies,andmore.Culturecanalign

withorcontradictexplicitinternal

messaging,and,atacorporatelevel,itultimatelyanswersthequestion,“Whatdoesitfeellikeandmeantoworkhere?”

Fromourexperiencewiththousandsofclientsaroundtheworldoverthelast

40+years,we’reconvincedthatcultureplaysacrucialpartinorganizational

successandthatitcanbeimproved

inscalable,replicable,andsustainableways.We’vealsowitnessedtheprimaryreasonthatorganizationsfailto

improvetheircultures:theyfocuson

changingtheexternalbehaviorsoftheiremployeesinsteadofaddressingthe

fundamentalmindsetsthatdetermine

behavior.However,whenproperly

understoodandimplemented,culturecanbetransformedfromlackluster

happenstance—orevenliability—intoanenduringcompetitiveadvantage.

Intheturbulenceofapost-pandemiclandscape,theneedforpeople-centricandeffectiveorganizationalcultures

hasneverbeengreater.Toshedgreaterlightontherelationshipbetween

companycultureandorganizationalsuccess,wepartneredwithAscend2

tosurveyover300executivesand

decisionmakers.Theirresponses

clarifytheobstaclestoandbenefits

ofhigh-performingcultures;therolethatleadershipdevelopment,team

performance,anddiversity,equity,and

inclusioninitiativesplayinstrengtheningculture;andthewaysthatmindset

influencesculturaloutcomes.

RESEARCHREPORT|3

RESEARCHREPORT|4

Introduction

Quietquitting(47%)andthegreatresignation

(41%)aretheworkplace

movementsmost

commonlyreportedtohaveanegativeimpactoncompanycultureinthenexttwoyears.Botharesymptomsofcultureissues.Inthisreport,

we’lldelveintohow

organizationalchangestartswithindividualsandmindsetchange.

There’snodenyingthatthelandscapeofourworkenvironmentsischanging.Inthelastfew

years,we’veseentrendslikethegreatresignation,quietquitting,anddiversity,equityand

inclusioninfluenceorganizationalcultureandperformancebothpositivelyandnegatively.

Asleadershipteamsnavigateworkforcechanges,theymustconsiderthecostofdisengaged

employeesandhowmuchitcoststheorganization.Whatistheprocesstoinfluencechange,

howdoyoudevelopandexecuteaplan,andhowdoyoumeasureprogress?Yes,theworkforce

isquicklychangingandthemoreweunderstandthechanges,thebetterwecandevelopa

strategytomeetthecurrentenvironment.

Togetabetterhandleontheevolvingworldofwork,wesurveyedover300decision-makers

andstrategicleadersandaskedthemwhatculturemeanstothem,wheretheirorganization

standsoncertainelementsofculture,andwhattheirorganizationsaredoingtoimproveit.

Themodernworkforcecravesrespect,understanding,andhumanityintheirworkplaceand

willnolongertolerateunsatisfactorycompanycultures.Infact,88%ofdecision-makersand

leaderswesurveyedexpecttheimportanceofcompanyculturetoincreasesignificantlyin

thecomingyear.

Thisprogressionofthemodernworkplaceisforcingorganizationstolookatculturefroma

differentperspective.Overhalfofdecision-makersandleaders(52%)agreethatevolvinga

strategytomeetthechangingdynamicsofthemodernworkforceisthetopchallengewhenit

comestoimprovingculture.So,intheageofquietquittingandthegreatresignation,howare

organizationsmeetingtheneedsoftheiremployeesinagenuineandeffectivewaytocreatea

culturethatisacatalystforimprovementandgrowth?

Thedataweuncoveredpaintsapictureofworkplacesthatrecognizetheimportanceof

improvingtheirculture,butmanyoftheirstrategiesaremissingthemarkbyfailingtoaddress

onekeycomponent:Mindset.

Keyinsights

INSIGHT1

Best-in-classculturesimprovethebottomlineinabigway.Organizationswith“verysuccessful,”orbest-in-classculturesreportedmoresignificantincreasesinrevenuelastyearthanthosewithlesssuccessfulcultures.

INSIGHT2

Leadershipdevelopmentiskeytoimprovingculture.52%ofthosesurveyedsaythatleadershipdevelopmenthasthegreatestimpactonimprovinganorganization’sculture.Successfulleadershipdevelopmentinitiativesarealsoassociatedwithamorepositiveoutlookonbusinesssuccess,increasesinrevenue,andfeelingsofcontributingmeaningfulworkthatmakesanimpact.

INSIGHT3

Initiativesthatprioritizemindsetmakeagreaterimpactonimprovingcultureandperformance.97%ofdecision-makersandleaderssurveyedagreethatthecollectivemindsetofanorganizationdirectlyimpactsthatorganization’sculture.WhenmindsetisconsideredinDEI,performancemanagement,andleadershipdevelopmentinitiatives,organizationsreportmoreoverallsuccessincompanyculture,employeeacquisition,retention,satisfaction,andproductivity.

INSIGHT4

Analarmingneedforprioritizinginitiativesthatcontributetobettercompanyculture.Organizationsthatprioritizediversity,equity,andinclusion(DEI),leadershipdevelopment,andperformancemanagementinitiativesexperienceamyriadofbenefitsincludinghigherretention,moresignificantincreasesinrevenue,andmorepositiveoutlooksonsuccess.Theissueis,71%ofthosesurveyedworkfor

companiesthatdoNOTprioritizeDEI,leadershipdevelopment,andperformancemanagementinitiatives.

RESEARCHREPORT|5

1.0

Whatdoesahigh-performing

culturelooklike?

RESEARCHREPORT|6

Whatdoesahigh-performingculturelooklike?

Benefitsofimprovingcompanyculture

Organizationsaregrowingincreasinglyawareofthe

importanceofcompanycultureincreatinghigh-

performingworkenvironments.Infact,99%ofexecutives

Whatarethegreatestbenefitsofimprovingthe

cultureofanorganization?

wesurveyedagreethatcultureisconsideredimportant

。Increasedproductivity

whenitcomestoachievingbusinessobjectiveslike

revenueandgrowth.

。Improvedretention

Nearlyhalf(46%)ofalldecision-makersand

leaderssurveyedreportthatculturedrives

improvementsinareascriticaltogrowthsuchas

Improvedemployeeengagement

employeeproductivity,retention,andengagementas

cultureimproves.

Increasedfeelingsofinclusion,belonging,&psychologicalsafety

Prioritizingperformancemanagementimproves

productivity.Thosesurveyedwhoreportthat

Increasedrevenue

performancemanagementinitiativesareahighpriority

attheirorganizationaresignificantlymorelikelythan

allotherstodescribetheemployeeproductivityattheir

organizationasverysuccessful,orbest-in-class.

Improvedcommunication &collaborationImprovedemployee

(70%vs30%)

Respectgiveswaytomoresuccessfulretention.

42%ofthosesurveyedsaythatemployeesattheir

organizationfeelgenuinerespectforeachother.This

accountability

groupisover50%morelikelytoreportbest-in-class

Improvedsituational

successwhenitcomestoemployeeretentionattheir

awareness

organizationcomparedtothosewhodonotworkfor

Decreaseinnegative

organizationswhereemployeesfeelrespected.

conflicts

(59%vs39%)

RESEARCHREPORT|7

1.1Whatdoesahigh-performingculturelooklike?

Challengesofimprovingcompanyculture

77%

Overthree-quarters

Improvingculturewithinanorganizationdoesn’thappenovernight.Itrequiresdiligenceand

consistency,listeningandthoughtfulconsideration,andstrategicexecution.Organizational

leadersanddecision-makersnotethatdevelopingastrategytomeetthedemandsofachanging

workforceisatopchallenge,followedcloselybystayingconsistentwiththeirapproachand

findingadequateresourcestoexecute.

Whatarethetopchallengesofimprovingcompanyculture?

ofdecision-makersandstrategicleadersreportthatshort-termgoals

Evolvingthestrategytomeet

changesintheworkforceFollow-up/stayingconsistent

Resourcesneededtoimplement

52%

(revenue,profit-margin,reductionofexpenses)hinderlong-term

46%

strategiestoimprovecompanyculture.

38%

38%

Employeeadoption

Creatingastrategy

35%

Executiveperspective

Trackingperformancemetrics

Buy-infromleadership

33%

90%ofexecutivessaythattheimportanceofcompanycultureisincreasingintoday’smarket,yetmorethanaquarter(26%)ofalldecision-makerssaythattheystruggle

26%

togetbuy-infromtherestoftheirleadershipteams.

RESEARCHREPORT|8

i

-

-

t

s

e

B

s

s

a

l

c

n

(Best-in-classculturevs.allothers)

1.2Whatdoesahigh-performingculturelooklike?

Asnapshotofabest-in-classculture

%ofcompaniesthatprioritizeeachareaagreatdeal.

cultures

58%ofdecision-makersand

leaderssurveyeddescribetheir

organization’scultureas“very

successful.”Throughoutthis

report,youwillseereferences

tothisgroupastheygiveus

particularlyhelpfulinsightinto

whatbest-in-classculturesare

doingdifferently,andwhatthey

areexperiencingasaresult.

○%ofcompaniesthatfocusonemployeemindsetineacharea.

Organizationswithbest-in-classculturesreport

(Best-in-classculturevs.allothers)

thatemployeedevelopment(75%)andleadership

development(55%)initiativesaremostimpactfulin

improvinganorganization’sculture.

Thisisreflectedinthedatathatshowsthatthisgroup

prioritizesinitiativeslikeperformancemanagement,

leadershipdevelopment,aswellasdiversity,equity,and

inclusion(DEI)agreatdealmorethanthosewithless

successfulcultures.

Akeydifferentiator.Whatsetsbest-in-class

culturesapartthemostisfocusingonemployee

mindset,ratherthanjustbehavior,whenitcomes

totheseinitiatives.

RESEARCHREPORT|9

Theresult:

Morerevenue,betteroutlook.

Best-in-classculturesreportsignificant

revenueincreasesinthepastyear.

Companieswithsuccessfulculturesare5timesmore

likelytoseesignificantrevenueincreasesinthepastyear

thanthosewithlesssuccessfulcultures.(47%vs9%)

Best-in-classcultureshaveamore

positiveoutlookonthesuccessoftheir

businessinthecomingyear.

Companieswithbest-in-classculturesare3.5timesmore

likelytohaveextremelypositiveoutlooksonbusiness

successthanthosewithlesssuccessfulcultures.

(75%vs21%)

RESEARCHREPORT|10

14%

8%

55%

34%

49%

35%

Redflag:

FailingtoprioritizeDEI,leadership

development,andperformancemanagement

ThereisclearevidencethatplacingahighpriorityonDEI,leadershipdevelopment,

andperformancemanagementinitiativesimprovesorganizationalcultureand,asaresult,organizations’bottomlines.However,71%oforganizationsdonotprioritizeanyofthesethreeinitiativesasmuchastheycouldbe.

Towhatextentdoyoufeelyourorganizationprioritizesthefollowing?

AgreatdealSomewhatVerylittleNotatall

Diversity,equity&inclusion(DEI)LeadershipdevelopmentPerformancemanagement

3%

2%

2%

11%

54%

32%

Theimpactofthese

initiativesonsuccess

The29%oforganizations

thatprioritizeDEI,leadership

development,andperformance

managementinitiatives,report

betterresultsinkeycategories.

?84%ofthisgrouphasanextremelypositiveoutlookonthesuccessoftheir

business.

?53%ofthisgrouphas

experiencedasignificantincreaseinrevenueinthelastyear.

?34%ofthisgrouphasanemployeeretentionrateof80%orhigher.

RESEARCHREPORT|11

2.0

Theimpactofeffective

leadership

RESEARCHREPORT|12

59%

53%

44%

33%

32%

27%

6%

Theimpactofeffectiveleadership

Leadershipdevelopmentinitiatives

Whichofthefollowingelementsarepartofyourcompany’s

leadershipdevelopmentinitiatives/programs?

Overhalf(52%)ofthosesurveyedsaythatleadership

developmenthasthegreatestimpactonimproving

anorganization’sculture.Aneffectiveleadermakes

employeesfeelvaluedandpromotesemployee

Leadershiptraining

collaboration,trust,engagement,andfeelingsof

eagernesstoimprove.

Executivecoaching

Nearlyhalf(48%)ofdecision-makersand

Strategicplanning

Successionplanning

leaderssaythatfeelingvaluedisoneofthe

mostimportantthingsthatcontributetotheir

satisfactionintheworkplace.

0Mindset

Offsiteretreats

Sowhatareorganizationscurrentlyincludingintheir

strategiestoimprovetheperformanceandcapabilities

oftheirleaders?Themostcommonlyreported

Noneoftheabove

elementsareleadershiptraining,executivecoaching,

andstrategicplanning.

Only32%ofsurveyrespondentsreportthattheirorganizationsfocusonmindsetintheirleadershipdevelopment

programs,butourresearchshowsthattheorganizationsthatfocusonmindsetaresignificantlymorelikelytohaveemployeesthatfeeltheyaredoingmeaningfulwork(76%vs43%).

RESEARCHREPORT|13

2.1Theimpactofeffectiveleadership

Leadershipdevelopmentsuccess

Nearlyhalf(49%)ofalldecision-makersandstrategicleaderssurveyeddidnotthinkthattheirprogramswereagreatsuccess,whatcanorganizationsdotoimprovetheiroddsofsuccess?

Themostsuccessfulleadershipdevelopmentprogramsaresignificantly

morelikelytoincludeexecutivecoaching,leadershiptraining,mindset,andsuccessionplanningthanothers.

Measuring,tracking,andoptimizingleadershipdevelopmentprogramsisalsoanindicatorofsuccess.

Effectiveleadership

developmentpromotes:

Employeeengagement.

Organizationswiththe

mostsuccessfulleadership

developmentinitiativesare3X

morelikelythanallotherstohavegreatsuccesswithemployee

engagement.(83%vs28%)

Employeeconfidence.

Thosewiththemostsuccessfulleadershipdevelopment

programsare73%morelikelytofeelthatemployeestrusteachotherattheirorganizations.

(44%vs26%)

Employeeambition.

Thosewiththemostsuccessfulleadershipdevelopment

programsare63%morelikelytofeelthatemployeeshaveaneagernesstoimprove.

(49%vs30%)

RESEARCHREPORT|14

3.0

Employeeengagement

andteamperformance

RESEARCHREPORT|

15

47%

30%

33%

41%

26%

31%

55%

55%

41%

Salary

Employeescraverespect.

51%ofalldecision-makersandleaderssurveyedsaythatfeelingrespectedisoneofthemostimportantcomponentsofworkplacesatisfaction.

Organizationswithmindset-focusedinitiativesintheirDEI,leadership

development,andperformancemanagementprogramsare73%morelikelytoreportthatemployeesfeelgenuinerespectforoneanotherthanthose

whodonotconsideremployeemindsetintheseprograms.(57%ofthose

whofocusonmindsetsaythatemployeesfeelgenuinerespectforeachothervs33%ofthosethatdonotfocusonmindset).

Learning&careerdevelopment

Employeeengagement&teamperformance

Employeesareinterestedinmorethanjustsalary

Theelementsthatfactorintoasuccessfulworkenvironment

varygreatlybyjoblevel.Respondentswhoidentifiedas

executivesandtheC-suitereportbeingmostinfluencedby

learningandcareerdevelopmentwhenitcomestotheir

satisfactionwiththeirworkenvironment.Seniorleadership

roleslikeSVPsandVPsplacenearlyasmuchweightonthe

relationshipstheyhavewithcolleaguesastheydoonsalary.

Inadditiontopeerrelationships,directorsandmanagerssay

thatafulfillingsetofjobresponsibilitiesisoftopimportance.

Thebottomline?Salaryisn’teverythingwhenit

comestoemployeesatisfaction.

Whichofthefollowingelementsarepartofyourcompany’sleadershipdevelopmentinitiatives/programs?

ExecsVP/DirectorsManagers

Companyvalues

36%

35%

43%

Interestingjob

content

33%

26%

30%

Companymission

33%

36%

29%

Rewards&

recognition

35%

50%

38%

Relationshipswithcolleagues

RESEARCHREPORT|16

i

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t

s

e

B

s

s

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l

c

n

3.1Employeeengagementandteamperformance

Performancemanagementprograms

60%oforganizationsincludeprofessionaldevelopmentintheirperformancemanagementprograms.Time

managementandtechnicaltrainingarealsocommonlyincludedinperformancemanagementstrategies.

Whichofthefollowingelementsarepartofyourcompany’s

performancemanagementinitiatives/programs?

Best-in-classculturesAllothers

Professionaldevelopment

Theorganizationswiththemostsuccessfulcompany

culturesaresignificantlymorelikelytoinclude

professionaldevelopment,businessprocess,mindset,

Timemanagement

successionplanning,andoffsite/team-buildingactivities

intheirperformancemanagementprogramsthanothers.

Businessprocess

Technicaltraining

Organizationswithbest-in-class

culturesare3Xmorelikelythan

Mindset

otherstofocusonmindsetintheir

cultures

performancemanagementinitiatives.

Successionplanning

Offsite/team-buildingactivities

Jobrotations

67%

51%

51%

46%

28%

46%

39%

46%

39%

13%

37%

24%

30%

17%

23%

25%

RESEARCHREPORT|17

53%

39%

53%

41%

54%

43%

56%

41%

57%

44%

3.2Employeeengagementandteamperformance

Theimportanceoftrackingandmeasuring

performance

42%ofexecutivessurveyedreportthattrackingperformancemetricsisoneofthemostsignificantchallengestoimprovingcompanyculture.Accordingtoourresearch,trackingtheperformanceofinitiativessuchasemployeeengagement,retention,satisfaction,

productivity,andleadershipdevelopmentiscriticaltoasuccessfulcompanyculture.Infact,respondentswhodescribetheircultureasbest-in-classhavemeasured,optimized,andtrackedtheseinitiativesforlongerthanothers.

%oforganizationswhohavebeentrackingeachareaformorethan5years.

Best-in-classAllothers

Organizationsthat

havebeentracking

theirretentionfor

overfiveyearsare

almost2Xmore

likelytoachieve

over80%retention

Employeesatisfaction

Employeeengagement

Employeeretention

Employeeproductivity

Leadershipdevelopment

ratescomparedto

organizationsthat

havebeentrackingforlesstime(34%vs18%).

RESEARCHREPORT|18

4.0

Theroleofdiversity,equity,andinclusion

RESEARCHREPORT|19

4.0Theroleofdiversity,equity,andinclusion

WhatisincludedinDEI

programstoday?

DEIprogramsrankatthetopofthelistofinitiativesthathavethegreatestimpactonimprovinganorganization’sculturewith53%ofdecision-makersandstrategicleadersreportingso.Butwhatdotoday’sDEIprogramsactuallylooklikeandhowcantheyimprove?

Culturalcompetency,gender/sexualdiversity,andmindsetarethemostcommonlyreportedelementsincludedincurrentDEIprograms.

Whichofthefollowingelementsarepartofyour

DEIinitiatives/programs?

57%

55%

43%

40%

27%

38%

8%

Culturalcompetency

Gender/sexualdiversity

Mindset

Only30%ofdecision-makersandstrategicleaderssurveyedfeelthatemployeesattheirorganizationseektounderstandtheirimpactonothers,whichisfoundationalforrelationshipbuildingand

creatinganinclusiveenvironment.

Unconsciousbias

Anti-racism

Noneoftheabove

Thinkdifferentlytoactdifferently.

Companieswithvery

successfulculturesare

morethan2Xmorelikelythanthosewithless

successfulculturesto

includemindset-focusedinitiativesintheirDEI

programs.(57%vs23%)

RESEARCHREPORT|20

i

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B

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l

c

n

4.1Theroleofdiversity,equity,andinclusion

Whereareorganizationsinvesting?

61%oforganizationsinvestinDEItrainingforallemployeesandanother55%investinDEItrainingfor

leaders,buttheorganizationswithbest-in-classcompanyculturesaresignificantlymorelikelytobe

investingintrainingforleaders.

WhichofthefollowingareincludedinyourinvestmentinDEI?

61%

Weprovidetrainingforallemployees

55%

Weprovidetrainingforleaders

51%

Weuseaconsultanttohelpshape

policiesandpractices

Wehaveanin-houseteamthat

managesaholisticDEIstrategy

30%

Noneoftheabove6%

Companieswithbest-in-classculturesare72%morelikelytoinvestintrainingforleaderscomparedtoallothers.(67%vs39%)

cultures

RESEARCHREPORT|21

4.2Theroleofdiversity,equity,andinclusion

ThepowerofmakingDEIapriority.

EffectiveDEIprogramsempoweremployeesandcandirectlyimproveemployeeretentionandengagement.Nearlytwo-thirds(63%)oforganizationsthatprioritizeDEIinitiativesa

greatdealhaveretentionratesof60%orhigher.ThisgroupthatmakesDEIahighpriorityisalsosignificantlymorelikelytoconsideremployeeretentionandemployeeengagementverysuccessfulattheirorganization.

%whoconsideremployeeretentionandemployeeengagement

“verysuccessful.”

Alinkto

revenue

growth.

Organizationsthat

placeahighpriority

onDEIinitiativesweremorethan2Xmore

likelytoseesignificant

increasesinrevenuelastyearcomparedto

others.(42%vs18%)

RESEARCHREPORT|22

Thecompetitiveadvantage:

Mindset

97%ofdecision-makersandstrategic

leadersagreethatthecollectivemindset

ofanorganizationdirectlyimprovesthat

organization’sculturebutonly16%report

thatmindsetisapartoftheircompany’s

leadershipdevelopment,teamperformance,

andDEIinitiatives.

Acollectivemindsetisyourcultureinaction.In

otherwords,thewaysinwhichyourcompanyasawholethinksandactsareadirectrepresentationofyourcompany’sculture,andthatsignificantlyimprovesoutcomes.Butwheredoesacollective

mindsetoriginate?Themindsetsoftheindividualsthatmakeupanorganizationarethegreatest

contributorstoacollectivemindset,and

whypeoplearethegreatestassettoan

organization’ssuccess.

Mindsetdrivesbehaviors.Behaviorsdon’tchangeuntilacoremindsetchanges,whichiswhy

afocusonmindsetshouldcomefirst.

RESEARCHREPORT|23

Ashiftinmindsetgoesalongway.

The16%ofrespondentswhoworkfororganizationsthatfocusonmindsetineachoftheirleadershipdevelopment,

performancemanagement,andDEIinitiativesseevastlybetteroutcomesthanthosewhodon’tfocusonmindset.

Thosewhoworkfororganizationsthatfocusonemployeemindsetineachoftheseinitiatives...

...aremorethan2xmorelikelytohaveanextremelypositiveoutlookonthesuccessoftheirorganizationinthe

comingyear.(76%vs36%ofthosewho

workfororganizationsthatdon’tfocuson

mindsetintheseinitiatives)

...reportmorefeelingsofrespectand

valueattheirorganization.

?Theyare73%morelikelytoreportthattheirorganizationhasemployeeswhotrusteachother.(45%vs26%)

?Theyare61%morelikelytoreportthattheirorganizationhasemployeeswhoareeagertoimprove.(53%vs33%)

?Theyaremorethan2xmorelikelytoreportthattheirorganizationhas

employeesw

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