A feature in the Financial Times last week on how to engage employees (paid sub access) referenced a study by the Forum for People Performance Management and Measurement at Northwestern University in the US.
Carried out last year, the study surveyed 100 US media companies to find out how engaged their staff were and whether this had any effect on corporate profitability. Focusing on non-customer contact employees, the study sought to understand the organizational drivers of employee satisfaction and employee engagement (the degree of employee motivation and sense of inspiration, personal involvement, and supportiveness), and the downstream effects of these employee attitudes on customers and financial performance.
And this was no simple study:
A total of 110,000 surveys, with three dollar bills attached, were mailed to prospective respondents in the 100 markets involved in the study. A total of 37,036 customers completed the survey, resulting in approximately a 34% response rate, with the number of respondents per market ranging from 271 to 472 (mean = 366.7). […] To test for non-response bias, we followed up the mail survey with a telephone survey of 2,000 non-responders.
With the rather breath-taking title of "Linking Organizational Characteristics to Employee Attitudes and Behavior – A Look at the Downstream Effects on Market Response & Financial Performance," the 15-page survey report presents the study results in some detail.
If you’re involved in employee communication, the report makes for interesting and worthwhile reading and provides useful factual data to add to your armoury that provide further evidence of the direct linkage between motivated and happy employees and satisfied customers.
From the report’s conclusion:
What is clear from this research is that Employee Satisfaction and Employee Engagement are important attitudes for managers to understand as they each influence critical market outcomes directly and, in turn, indirectly influence an organization’s financial performance.
Organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction. In addition, satisfied employees see their positive attitudes transferred directly to satisfied customers. It is an organization’s employees who influence the behavior and attitudes of customers, and it is these customers who drive an organization through the purchase and use of its products. Without customers, an organization ceases to exist.
And, the proper target on which employees should focus is customers – employees have a direct effect on customer attitudes and behaviors, and hence, this is where the energy of an organization’s employees should be directed.
[…] Other key organizational factors identified in this research include the key role played by organizational communication in driving Employee Satisfaction, and the role played by managerial facilitation and job design in driving Employee Engagement.
Download the report (PDF).
Clear link between employee satisfaction, customer satisfaction and improved financial performance
A study published by The Forum for People Performance Management & Measurement at Northwestern University (here – via Nevon) found that: “There is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction …
Thanks for the posting. I wrote a post on this and trackbacked to you. Glad we have connected. I met Elizabeth recently and she spoke very highly of you and your work.
I’m not sure of the Netiquette of blowing someone else trumpet for them. I’m absolutely sure that this is something very close to Neville’s heart and I can’t stress how important I think it is. When I worked with Neville in a commercial environment he taught me that if you want to get your message out to your targets then you absolutely, with no exceptions, must have created an environment where your employees understand your message, believe it and can engage in the success of your company. Not by shouting at them but by making sure the message is simple enough, clear enough and compelling enough for them to believe and engage with. It should be obvious that if you can’t make it those things for an internal audience then you have no chance at all of having an external audience understand it. It should be obvious that if the employees believe the message but have to work in an environment of fear and threat then the message will inevitably be modified by their attitudes to their employers.
If the message isn’t clear enough then you probably have to start looking at your company strategy and changing it!
This is doubly true in a world where employee blogs are becoming a way of engaging with external audiences. If you look at the analogy of membranes between your company and its market and the attempt to use blogs to break through the membrane, it becomes pretty pointless if there’s a doubly thick membrane between the senior management of a company and the employees.
It’s nice to see a piece of research which shows that the “fear and loathing” management model is a disastrous one to follow.
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Regina, thanks for your comment. I read your post. Glads you got the link in there to the Forum (I missed that).
David, thanks for that. The membrane analogy is perfect.
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A couple of weeks ago there was some interesting commentary happening in employee communications and HR blogs about a study released by Northwestern University about employee engagement. Our own Regina Miller was in the thick of it. I am not…
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A couple of weeks ago there was some interesting commentary happening in employee communications and HR blogs about a study released by Northwestern University about employee engagement. Our own Regina Miller was in the thick of it. I am not…