Growing Worker Confusion about Corporate Goals Complicates Recovery, Watson Wyatt WorkUSA® Study Finds

Employers Get Low Marks on Linking Worker Job Objectives and Pay to Corporate Strategy

WASHINGTON, D.C., September 9, 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, according to a new Watson Wyatt study of nearly 13,000 workers.

Conducted earlier this year, Watson Wyatt's WorkUSA® 2002 Survey found that less than half of employees (49 percent) understand the steps their companies are taking to reach new business goals – a 20 percent drop since 2000. The study also found 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 and the author of WorkUSA® 2002. “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, the WorkUSA® 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.”

WorkUSA® is one of the largest and most current statistically representative surveys on the attitudes of U.S. workers. The 2002 survey includes responses from 12,750 workers at all job levels and in all major industries.

	Key Findings from the Watson Wyatt WorkUSA® 2002 Survey Percentage of workers who: 2000 2002 Have confidence in the job being done by senior management 50% 45% Believe their companies conduct business with honesty and integrity 68% 63% Trust senior leaders at their firms N/A 39% Say their companies effectively manage business changes such as downsizing, mergers, restructuring, expansion N/A 43% Believe their companies communicate effectively with employees N/A 32% Say their companies involve employees in decisions that affect them 27% 19% Say senior management motivates them to perform well 40% 32% See no clear link between their jobs and pay N/A 40% Believe that high performing workers go unrewarded 42% 40% Say their companies do a good job telling them how their pay is determined 56% 43% Are satisfied with their pay N/A 60% Are satisfied with their benefits N/A 49% Believe their pay packages compare well with those offered by other companies 57% 48% Believe their benefits packages compare well with those offered by other companies 38% 48% View their stock option programs favorably 57% 50% View their profit sharing plans favorably 55% 45%

Source: Watson Wyatt WorkUSA® 2002 Study

About Watson Wyatt

Watson Wyatt & Company, the primary subsidiary Watson Wyatt & Company Holdings (NYSE: WW), is an international human capital consulting firm that provides services in the areas of employee benefits, human resources technologies and human capital strategies. The firm is headquartered in Washington, D.C., and has more than 4,250 associates in 61 offices in the Americas and Asia-Pacific. Together with Watson Wyatt Partners, a leading European-based consulting partnership, the firm operates globally as Watson Wyatt Worldwide. Watson Wyatt Worldwide has more than 6,300 associates in 87 offices in 30 countries.

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