Employee Attitudes Have Big Impact on Bottom Line: Study
A direct link exists between employee satisfaction, customer satisfaction and a company’s financial performance, even if the employees have no direct contact with customers.
Those findings are part of a new study, The Impact of Employee Attitudes on Market Response and Financial Performance, from the Forum for People Performance Management and Measurement at Northwestern University.
Results of the study suggest that influencing customer behavior goes beyond advertising, beyond delivering on a brand’s promise, beyond customer service and beyond product research and development to maximizing employee engagement and satisfaction.
“The implications of this research are enormous in terms of how marketing, sales and communications budgets are determined,” said Francis J. Mulhern, Ph.D., associate dean and chair of Northwestern University’s graduate program in Integrated Marketing Communications, in a statement. “The study supports the idea that internal marketing and communications, directly addressing all levels of employees and their job requirements, needs to be implemented as rigorously as external marketing and sales programs.
The study found that:
- There is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance.
- The key characteristic for explaining employee satisfaction is organizational communication, downward and upward.
- Employee satisfaction is a key antecedent to employee engagement. Interaction between managers and employees with regards to supportiveness and goal setting, as well as job design were also key drivers of employee engagement.
- Organizational culture was another significant driver of employee engagement, where employees must be expected to cooperate and work together, but also to take charge and provide a voice for the customer within the organization.
- When individuals and teams are competing to implement the optimal behaviors oriented to the market and its customers, such competition can work to the advantage of both the organization and its customers.
- Organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction.
- It is an organization’s employees who influence the behavior and attitudes of customers, and it is customers who drive an organization’s profitability through the purchase and use of its products.
The study addresses a universal business principal: it is far less expensive to retain customers than to acquire new ones. Preliminary findings of the study were released in the August PROMO.
The Forum queried 100 public and private media companies. Some 110,000 surveys were mailed delivering a 34% response rate. The Forum conducts and sponsors research that analyzes and substantiates the link between motivated employees, customers and long-term business success.
