Here is a run-down and commentary of two recent WSJ articles that deal with employee attitudes and the bottom line. Certainly, in the not-too-distant past, workplace quality and employee’s attitudes and emotions were not on the radar of business executives but studies are increasingly establishing a positive correlation between workplace quality and the bottom line.
From “To a Pilot, The Friendly Skies Are a Point of Pride” (August 28, 2007)
For many people airline flights can be filled with trepidation, whether worrying about a pet below in cargo, a child on an unaccompanied flight or just simple unease about flying. One airline pilot, has helped a lot of people with his attitude of “treating everyone like it’s the first flight they’ve ever flown” and efforts at keeping travelers better informed. Captain Flanagan, a 56-year Navy veteran, goes the extra mile by doing such things as taking pictures of peoples’ pets in cargo and showing them that they are on board and ok as well as calling the worried parents of young travelers flying alone to let them know that they are ok and making it to their destination.
All-in-all this pilot has had good reviews by the flying public and has single-handedly done a lot to shore up United Airlines reputation of poor customer service.
From “Rules Engagement—Why Employers should—and increasingly do—care about creating a great workplace” (October 1, 2007)
Over time workplace quality has increasingly been showing up on the radar of company executives. Engaging workers hearts and minds is becoming more of a priority. Now, even the military talks about “winning the hearts and minds” of the general populace in the countries where they battle. The positive correlation between employee’s attitudes and the bottom line is certainly becoming increasingly understood.
In the recent past, there was a wall between personal and professional lives and workers were expected to not bring their personal lives to work. This is not always realistic. Emotions are prevalent in the workplace and otherwise. Historically, workplace family/personal issues left unattended, eroded on-job performance (concentration, commitment, etc). Good workplace policies “enable employees to manage their larger lives” which boosts morale and productivity while on the job, leads to employees treating customers better and repeat customers, etc
One example is that in mid-1990’s Xerox instituted a flexible work schedule and saw a jump in customer service and a one-third reduction in worker absences. This directly affects the bottom line.
Another example is of Tom McDermott a claims representative for Acuity, who “saw two clients, an elderly couple and their two grandchildren, “sitting on a curb with 25 cents in their pocket” one Saturday after their house, with all their possessions, burned down, he says. Instead of making them wait for processing of their claim the next week, Mr. McDermott walked to a nearby ATM and took $300 out of his personal savings account, “to get you through” the weekend, he told the couple. The gesture drew grateful mail from the clients that became bulletin-board fodder at Acuity’s headquarters.”
Some may say that “correlation is not causality”. This is true but recently there have been studies establishing causality between workplace environment and bottom line.
“In 2004, Hewitt Associates, Lincolnshire, Ill., tracked about 300 companies over five years, and found that increases in employee engagement clearly preceded improvements in financial performance. Even among companies with below-average profit, an upturn in employee attitudes tended to precede a profit turnaround.”
“Separately, a three-year study of 41 employers by Towers Perrin-ISR, a unit of Towers Perrin, Stamford, Conn., found companies that worked consistently on engaging their employees posted a 3.74% increase in operating profit over a three-year period, while companies with poorly engaged employees saw a 2% decline, says Patrick Kulesa, Towers Perrin-ISR’s global research director; the results show “the remarkable ability of an engaged work force to impact a company’s bottom line.””
“Wrapping up these and other studies, the Conference Board, New York, a nonprofit business-research group, said in a study last year that there’s “clear and mounting evidence that employee engagement is strongly correlated to” productivity, profit and revenue growth. The Hewitt study in particular, the Conference Board said, “gives credence to the assumption that employee engagement actually causes an increase in a company’s overall financial performance.””