Satisfied staff equals satisfied customers equals business growth

There has been extensive research over the years that sets out to prove that improving employee satisfaction impacts directly on organisational performance and, ultimately, organisational success. It's certainly true that satisfied staff are likely to result in a satisfied customer base, and satisfied customers directly impact on the bottom line.  

If employees believe that they are and will be supported by the employer, especially  their line manager, in getting what they want out of work, beyond just money, they will respond with positive behaviour – high employee engagement levels. Specific employee engagement practices include:

  • Shared decision-making
  • The opportunity for all people to influence the planning process
  • A robust approach to communicating
  • An open flow of information
  • The development of effective leaders and managers

What’s the impact of Employee Engagement on the bottom line?

Past research has thrown up many different finding in terms of putting the impact of employee engagement into figures. Aon Hewitt’s 2014 Engagement Report examined the link between engagement and its impact on a business’ bottom line, finding that organisations in the top quartile for engagement, where more than 70% of employees are engaged, saw a 4% increase in sales growth compared to an average company. By contrast, sales growth in bottom quartile engagement companies was down 1%.

In  a recent article for Forbes, Kevin Kruse points out the argument that “Maybe employees are just more engaged when their companies are growing, bonuses are big, and stock prices are climbing.”. However, this viewpoint has been investigated in a research paper by Silvan Winkler, Cornelius König and Martin Kleinmann.  New insights into an old debate: Investigating the temporal sequence of commitment and performance at the business unit level  looked at the organisational commitment of 755 retail bank employees from 2005—2008, along with financial performance and customer satisfaction of the business units they worked in. The study provides insight into the relationship between job attitude and job performance, finding that while the impact of business performance on attitudes diminishes after 1 year, the impact of employee attitudes on business performance lasts much longer, in fact up to 3 years.

Organisations that place effective employee engagement at the heart of their business strategy will be rewarded with greater levels of innovation; increased commitment from employees; improved customer satisfaction and, ultimately, better productivity that will help gain competitive advantage. It does not require complex or expensive investment in new ways of working but it does need wholehearted support from senior managers through their leadership and strategic vision, and the active buy-in of effective line managers.

INSPIRING Business Performance provides valuable, practical advice for organisations who want to improve employee engagement or look more generally at achieving performance improvements.