Does Your or Your Employees Attitude Affect Your Bottom Line?
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The Harvard Business Report published a study about Sears department stores. They found that a 5 % increase in employee satisfaction could be traced to a 0.5% increase in profitability. A study from the University of Michigan stated that a 5% increase in employee satisfaction translated into a 4.3% increase in customer satisfaction. And satisfied customers are coming back and buying more. A recent article in Business Week titled "Is Optimism a Competitive Advantage" concluded yes and listed Best Buy as an example. Best Buy found that a 2% increase in employee engagement adds $100,000 to the annual sales of a store.
The key to all this data is to understand that there is a direct link between employee attitude and motivation, and customer satisfaction. When employee engagement increases, so does the customer satisfaction. On the other hand, if the customer satisfaction is higher than the employee engagement score, a business is losing customers, and consequently sales. Remember the Pareto principle? 20% of your company's constraints come from your competitors while 80% come from inside your business.
How do we create that positive attitude and motivation in our employee base? First of all, the carrot or stick approach only works for a short period of time. We get dull being constantly exposed to fear. Fearful employees are, in most cases, the least motivated and helpful ones. And we get used to carrots (pay increases, bonuses, and incentives) very fast. So we need to put out sweeter and sweeter carrots to get any reaction.
How do we develop a highly engaged and motivated workforce that will boost our bottom line? We have to start with first things first - with you, the owner! If you are not motivated, then nobody is; if you are having a bad attitude towards a specific customer, all your associates will. If you are depressed about the business outlook and the opportunity to increase sales, don't expect to see anything else in your financial reports. Your associates will model their behavior after yours and watch critically, if your words and actions are congruent and if your heart is in it.
So start with yourself and make sure that your positive outlook and great attitude is visible at all times. Then look at your associates. Are they motivated? Do they truly care about your customers, do they go the extra mile to serve your customers and make sure that they are satisfied? Remember, satisfying customers is a contact sport!
Dale Carnegie said "if you want to encourage high engagement YOU must believe that it exists within your team and act accordingly".
If you believe in your team, look at each of your employees separately, and think about what might motivate them. As we all come from different socio-economic backgrounds, have experienced different upbringings, different values in our families and are born into different generations, we all have different expectations and place different values on the same things. For example, a Baby-Boomer close to retirement might be working on his legacy and will be motivated by recognitions given or authority delegated, while a Millennial starting out will value strong support, availability of resources and opportunities to learn new things. After determining what triggers motivation in your associates, you need to provide the "right" environment for each of them.
But what about openly disengaged associates who stir the rumor mill at any opportune moment, are the last to arrive and the first to leave and don't give a darn about your customers? The first step should be to confront bad attitude and behavior. Set clear goals and expectations, including a timeline for changes you want to see the employee making. If all fails, there are well trained and highly motivated job applicants with excellent credentials available. Just make sure that you hire first for attitude and second for aptitude and do not only base your hiring decision on technical credentials alone.
Excellent performance comes from excellent performance of every team member! So follow Campbell Soups' transformation from a low performing company with highly unmotivated leaders in 2001 to one of the best performing companies in their industry with the highest employee engagement scores of any company in 2008 (as measured by Gallup).
If you want to learn more about employee engagement and how to measure and improve it, please give us a call, we can help.
© 2009 Copyrighted by Dr. Joe Mayer, Managing Partner of the Mayer Business Group, who helps business owners, professionals and their key employees to grow their businesses by focusing on vision and strategy. Joe can be reached at JMayer@MayerBusinessGroup.com; http://www.mayerbusinessgroup.com/
