So employee satisfaction doesn’t matter?

Once again, inspiration for a blog post came from an unusual place.  This time, it came to me from two tweets I read from Chris Reaburn during a recent sleepless night.  Chris posted two articles from Glassdoor.com.  One about the best places to work according to employee votes.  The second, was a list of the companies rated lowest by employees.

These articles got me reflecting on a subject about which I’m insanely passionate; that of employee empowerment and satisfaction.  If you’ve been reading this blog for a while, you already know we’ve connected the dots a few times between employee satisfaction and customer satisfaction.  That link, in my mind, is indisputable. Some think the impact of employee satisfaction is too squishy and hard to measure.  So, while not a statistical analysis, lets take a look at some of the companies on both lists and see if employee satisfaction makes a difference to the things finance types care about.

The Bad                               Return on Equity
#2 United Airlines                  (2,743.85)
#3 Spherion                                (27.18)
#9 Hertz                                     (54.98)

The Best                              Return on Equity
 #1 Southwest Airlines                  2.97
#12 Kraft Foods                          7.93
#15 NetApp                              17.45
#45 Best Buy                             21.67

One big thing popped out at me in building this list.  If Southwest Airlines and Best Buy can generate these types of returns, in the year of the ‘Great Recession’ and in an industry that I wouldn’t wish on my worst unfriend, how do companies like Radio Shack and Kmart fail to deliver?  Maybe their leadership needs to ask its rank and file.

Oh, and if you still think employee satisfaction, customer satisfaction and financial performance are unrelated, check out this list of top companies in customer service.  You’ll see many of the same companies from the Best list according to employees.

Comments

  1. Daily I find reinforcment of Service Profit Chain – one of my most fundamental business beliefs.

    You see the evidence in the companies mentioned above, that employee satisfaction results in employee loyalty, and that loyal employees are not only more productive, but better provider of customer value. That this value drives customer satisfaction and loyalty, which drives long term profit.

    A huge part of where this starts, employee satisfaction, is a result of internal quality – from the processes and technology that enable service providers jobs directly to the support roles for the line sales, service and operations.

    When internal quality isn't adequate, you can sense it from the front line providers you deal with. They're not "on message" in terms of how the brand is supposed to be positioned. You can see in their eyes or tell in their voice that they aren't enabled to provide a solution, or that they aren't confident in the solution / answer they give you.

    Little makes me more angry in a service setting than a company that obviously doesn't provide the line the tools they need to perform the type of service they ask of them. So many companies are demanding exceptional service of their front line service operations staff, without realizing that exceptional service has to start with a in internal service orientation that is equally, if not even more, exceptional.

  2. Hey Chris,
    Insightful as always. (and I think better than the post). Isn't interesting that your assessment comes back to that topic of alignment of expectations, capabilities and rewards. The ECR framework. Seems so simple.

    Thanks again for stopping by

  3. Interesting that Spherion, a recruiting / employment firm, falls on The Bad list…

  4. And there you are again. Thanks for taking the time to comment. And yes, I found that incredibly ironic as well.

    As follow up, here is the latest list of customer service champs according to Business Week

    http://ow.ly/19TAi

    LL Bean at #1

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