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HUMAN RESOURCE SERVICES Office of the General Manager

MEMORANDUM November 4, 2013 TO: CC: Mayor and Council Penny Ballem, City Manager Sadhu Johnston, Deputy City Manager Christie Smith, Acting Director, Communications Janice MacKenzie, City Clerk Kevin Quinlan, Director, Policy and Communication, Mayors Office Lynda Graves, Manager, Administration Services, City Managers Office Mike Magee, Chief of Staff, Mayors Office Corporate Management Team Paul Mochrie General Manager, Human Resource Services Update Employee Engagement Strategy

FROM:

SUBJECT:

As you know, the City undertook its second Employee Engagement Survey in its history over the last few months. The initial survey, the first in the Citys history, was reported to Council in late 2010. This memo will serve to update you on the results of the 2013 follow-up survey and provide background on the work that has been underway since the last survey. The survey was done again in partnership with the Hay Group and thus provides us benchmarked and comparable data. In general, we are cautiously encouraged by the results of this second survey over 80% of the areas surveyed showed improvement and there was a clear relationship between the specific areas of our focus on engagement over the last 2.5 years and the results. Below is a summary of the highlights relative to employee engagement as of 2013 this data relates to the City of Vancouver including Park Board and VFRS but does not include VPL and VPD who both undertake their own surveys and strategy in terms of employee engagement: Response rate for survey 48% versus 50% in 2010; Overall voluntary turnover of regular employees in the organization (excluding those retiring) remains very low at 1.7%;
City of Vancouver, Human Resource Services Office of the General Manager 453 West 12th Avenue Vancouver, British Columbia V5Y 1V4 Canada tel: 3-1-1, Outside Vancouver 604.873.7000 fax: 604.873.7696 website: vancouver.ca

95% of City employees (excluding those who are close to retirement age) report they have no intention of leaving the organization in the near term; Overall across the 16 thematic areas tested in 2010, the proportion of employees responding favourably increased in 13 of these areas including: o 8 areas improved by 3-7 percentage points (Clear and Promising Direction, Confidence in Leadership, Quality and Customer Focus, Development Opportunities, Pay and Benefits, Health and Safety, Collaboration); o 5 areas improved by 1-2 percentage points (Employee Engagement, Respect and Recognition, Authority and Empowerment, Training, Work Structure and Process); o 3 areas were less favorable as compared to 2010: Employee Enablement had a 1 percentage point drop in favorable ratings; 2 had a more substantive decrease in favorable rating: Resources (-3 percentage points) and Stress and Workload (-7 percentage points) o The most significant areas of progress were in the favorable ratings related to the functioning of employees immediate supervisor and performance management. The results also demonstrate strength in the areas related to respect and recognition and quality and customer focus. Other key accomplishments which reflect on the extensive work being done by the City to enhance employee engagement include: o Peer recognition: in 2013 the City has been designated as one of the Canadas Top 100 Employers, one of BCs Top 50 Employers and one of Canadas Best Diversity Employers; o Since 2010, over 400 managers have received comprehensive training on performance management. This has been a huge undertaking across the organization, and our progress is evidenced in a 42 percentage point increase in the proportion of employees indicating that they have received a performance review in the past year. o Since 2011, in total, over 75% of front line and middle managers have taken advantage of professional development provided by the City which is tailored to key leadership competencies o The City has launched a service recognition program 400 hundred staff were nominated by their peers for these awards in 2013, up from 300 in 2012 and 250 in 2011 The Corporate Management Team will be moving ahead immediately with developing their strategic initiatives related to these results. A number of short term actions will be rolling out immediately: Communication of the 2013 survey results to all City staff; General Managers will be working with their teams on immediate priorities for action; Human Resources will provide departmental leadership teams with information specific to their portfolio to support their engagement work;

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Our ongoing work for the city-wide initiatives related to employee engagement will be informed by the 2013 updated information. On behalf of staff, I would like to thank all of Council for the appreciation and support that you convey to City staff on an ongoing basis. For public servants working to serve the citizens of Vancouver, that recognition has great impact. The information below provides more background for Councils benefit on the work which has been undertaken to support Employee Engagement. Please do not hesitate to contact me if you have any further questions.

Paul Mochrie General Manager Human Resources

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2013 Employee Engagement Summary - Backgrounder The broad range of public services provided by the City of Vancouver is highly dependent on the effort, expertise and initiative of our large and diverse workforce. In recognition of the wellestablished relationship between an organizations performance and its employees commitment and engagement in their work, the City identifies as one of our key goals the aim of inspiring excellence in the workplace and our employees. Pursuant to that objective, the City has undertaken a deliberate strategy to sustain and strengthen the engagement of our staff. The City regularly monitors key metrics to inform us of our progress in relation to being an employer of choice. The rate of staff turnover is a standard metric used to track engagement in an organization. Based on objective benchmarking data compiled from a national group of municipalities and comparable public sector employers, the City enjoys a high degree of stability amongst our workforce. As discussed in more detail below, a very high proportion of City employees (95%) presently indicate an intention to remain with the organization. If retirements are excluded, the voluntary turnover rate amongst regular employees over the past year is 1.7%. Another marker is the perception by external agencies of the success of the City as an employer. Over the last few years, the City of Vancouver has received extensive provincial and national recognition as a leading employer. For 2013 alone, the City was distinguished as one of Canadas Top 100 employers, one of Canadas Best Diversity Employers and one of BCs Top 50 Employers. These awards continue to reinforce the Citys profile as a great place to work. The ability to work constructively with Unions is a further hallmark of successful organizations. Since 2010, we have successfully negotiated eleven collective agreements with no strike action and pay adjustments that are significantly less than preceding agreements and much more aligned with inflation. This included the first agreement with the Vancouver Police Union negotiated without the involvement of an arbitrator in 28 years. In 2010, as part of our commitment to continue to enhance our organization, the City conducted the first comprehensive staff survey ever undertaken in the Citys history to assess employees perceptions of their work environment and the organization in general. Consistent with best practice for surveys of this nature, the City engaged a third party, Hay Group, to administer the survey and compile the results. The results of the survey were reported to Council in November 2010, along with four priorities for action: Implement a systematic performance development process Enhance our leadership effectiveness Provide clarity and alignment of goals and direction Ensure fairness and transparency in employment practices and decisions Since 2010, we have maintained a consistent focus on these objectives and have undertaken a range of specific improvements, as summarized below. Our work on addressing these priorities has been undertaken in parallel with ongoing organizational change to enhance the Citys effectiveness, productivity and better align with Councils direction. The continuing transformation of the Citys businesses, including the consolidation of shared services in a number of areas and introduction of digital services for those doing business with

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the City, has affected many staff, including impacts on job functions, reporting relationships, and organizational structures. While the City has been successful in avoiding extensive layoffs over this timeframe, the extent of change within the organization has been significant and has demanded a significant commitment to best practice change management processes. Concurrent with these organizational changes, we have under your direction moved ahead a significant number of critical policy initiatives across all areas of the City. Employee Engagement - Follow-up Work Since 2010 As set out above, the City established four priorities for action based on the results of the 2010 employee survey. The following summary reflects some of the key initiatives we have undertaken in alignment with those priorities: Historically, the City did not have a consistent performance management program. At the time of the 2010 survey, only 29% percent of employees indicated that they had received an annual performance review. In 2011, we commenced comprehensive training for managers on effective performance management; to date, over 400 managers have received this training. In parallel, we introduced a standardized review process and made annual performance plans and year-end reviews a mandatory requirement for exempt managers. We are also working to ensure that all employees receive an annual review. This has been a huge undertaking across the organization, and our progress is evidenced in a 42% increase in the proportion of employees indicating that they have received a performance review in the past year. As part of our work in this area, we have also adjusted compensation policies for exempt staff to reinforce the linkage between satisfactory performance and salary progression. In the area of leadership, Human Resources conducted a comprehensive review of the Citys leadership development programs and over the last two years, have implemented a number of targeted initiatives to support the development of front-line and middle managers in various departments throughout the City. Since 2011, over 75% of our managers have been involved with these developmental efforts, and we continue to bring leaders through these competency-based programs. We are already seeing measurable results in the competency level and effectiveness of the participating leaders. The City has also implemented a standardized set of competency requirements for all leaders and has incorporated an evaluation of those requirements into annual performance assessments. To further support and align the Citys leadership team, we hold regular forums over the course of each year with middle and senior managers from across the organization. The Corporate Management Team has also established the employee engagement strategy as a standing agenda item for review and discussion. In 2010, the Corporate Management Team articulated the organizations first corporate business plan that outlines long-term goals as well as short-term priorities for the City as an integrated organization. This allowed clarity for ensuring the work of the organization aligned with the goals of Council and that efforts were focused across all portfolios on identified priorities. The Plan was communicated widely to employees and has been

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well received as a key reference on the Citys corporate objectives and as a guide to align employees day-to-day efforts with those objectives. Apart from the long term service awards presented to employees completing 25 years of service, the City did not previously have a formal employee recognition program. The City Service Awards program was launched in 2011 to recognize the achievements of teams and individuals working across the Citys departments to achieve the goals of Council. Award recipients are selected based on nominations from staff and acknowledged at an annual event. In 2013, we received a total of 400 staff nominations, up from approximately 300 in 2012 and 250 in 2011. The City senior management has also invested considerable effort in strengthening working relationships with the unions that represent our staff. The 2012 round of collective bargaining with civic unions represented a departure from previous negotiations and produced agreements that not only reflect economic constraints and deliver operational flexibilities sought by the City, but also address a number of longstanding procedural concerns identified by the unions. The City has also made solid progress with several unions in regards to mid-contract communication and dispute resolution. As one outcome of that progress, the City reduced costs associated with employment-related disputes by 40% over the period 2011 to 2013 (including costs forecast to 2013 year-end) as compared to the preceding 3-year period. Since 2010, we have reviewed and updated the Citys employment policy framework to reinforce the expectation that all hiring, promotion and training decisions are fair, transparent and reflect the principle of merit. Collective agreement provisions that outline selection and layoff processes for unionized employees were refined through negotiations to improve confidence in the fairness and consistency of those functions. The City has expanded its use of online learning technology to provide our employees with improved access to flexible, cost-effective developmental opportunities. Given the critical importance of communication as a platform to shift culture and build engagement, the City has dedicated resources within Corporate Communications to focus specifically on the development and implementation of a strategy for communication within and across the organization. In addition to the foregoing City-wide initiatives, there have been extensive efforts within the Citys various departments and work groups to strengthen staff engagement. For example, several departments have completed major strategy development exercises which included employees as integral participants in the process. Improved communications and clarity of expectations for managers have also been subjects of considerable attention. 2013 Employee Survey - Results To assist in evaluating efforts over the past three years and to guide future engagement initiatives, the City recently concluded its second organization-wide staff survey. Hay Group was again retained to administer the survey which was made available to all City employees online and in hard copy between June 17 and August 6, 2013.

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To confirm, Vancouver Public Library and Vancouver Police Department conduct their own employee surveys and, as such, the staff of those organizations are not reflected in these results. In total, 3288 City of Vancouver employees completed the 2013 survey, representing a participation rate of 48%. The participation rate for the 2013 survey is consistent with the 2010 participation rate of 50%. Hay Group has confirmed that a participation rate of 48% is a robust sample to represent the views of the entire workforce. The Hay Group survey comprised 73 questions. The questions in the 2010 and 2013 surveys were virtually identical thereby providing a reliable basis for evaluating any change over time. The questions are grouped into 17 different dimensions of employee perception, which Hay Group refers to as factors, that impact individual and organizational performance. We are pleased to advise that the 2013 survey results reflect overall improvement relative to 2010. Please find attached for your information an overview compiled by Hay Group of the employee feedback in relation the above-referenced 17 factors, as well as a comparison to the results from 2010. As indicated by the attached report, the proportion of favourable responses for 13 of 16 factors has increased since 2010. The 17th factor comprised new questions for 2013 and as such, there is no basis for comparison with the prior survey. Based on the results of the recent survey, the City has seen the largest improvements in favourable responses relating to: Performance management; Employees perceptions of their immediate supervisor; Support for the Citys strategic direction; and Employees motivation to go above and beyond. Of note, the foregoing areas of improvement correlate strongly with the priorities that we identified for action following the 2010 survey. In that regard, the 2013 survey serves to validate that, through focused attention on defined priorities, we have been successful in affecting positive change on those issues. For 2013, there were two factors for which the proportion of favourable ratings declined materially relative to 2010: stress and workload; and availability of resources. This particular result is not entirely unexpected and likely reflects the extent of transformative change across the City and the organizations high level of output over the past three years. Overall the most favourable questions for 2013 relate to the increasing effectiveness of immediate supervisors in terms of respect and recognition, and authority and empowerment, and performance management. We also see strength in the area of quality and customer focus as it relates to delivering high level products and services. Health and Safety emerged as an additional positive area with regards to: supporting employees who may be experiencing personal challenges, roles and responsibilities, and safety of their work area.

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Least favourable responses in the 2013 survey highlight the need to maintain corporate focus on how the organizations work is structured to better communicate and discuss with staff demonstrated action coming out of the survey results, to continue to enhance cross-city employee communications, and to find creative ways to allow the broad base of 7000 employees to engage with the Corporate Management Team and to acknowledge the issues of stress and workload. Employee Engagement Strategy Next Steps While we are encouraged that our employees are seeing positive changes in the organization, the process of transforming work environments and organizational culture is inevitably a longterm endeavour. The Citys employee engagement strategy represents a long range investment and we recognize the opportunities for significant further improvement over the coming years. Moving forward, we will maintain our focused approach to improvement and will concentrate attention on specific areas. Our Corporate Management Team and senior leadership teams within each department will be reviewing the survey results in detail with a view to mapping out specific initiatives to further these objectives.

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