Survey: Engaged Employees = Engaged Customers

    June 2, 2005

A feature in the Financial Times last week on how to engage employees (paid sub access) referenced a study by the Forum for People Performance Management and Measurement at Northwestern University in the US.

Carried out last year, the study surveyed 100 US media companies to find out how engaged their staff were and whether this had any effect on corporate profitability. Focusing on non-customer contact employees, the study sought to understand the organizational drivers of employee satisfaction and employee engagement (the degree of employee motivation and sense of inspiration, personal involvement, and supportiveness), and the downstream effects of these employee attitudes on customers and financial performance.

And this was no simple study:

A total of 110,000 surveys, with three dollar bills attached, were mailed to prospective respondents in the 100 markets involved in the study. A total of 37,036 customers completed the survey, resulting in approximately a 34% response rate, with the number of respondents per market ranging from 271 to 472 (mean = 366.7). […] To test for non-response bias, we followed up the mail survey with a telephone survey of 2,000 non-responders.

With the rather breath-taking title of “Linking Organizational Characteristics to Employee Attitudes and Behavior – A Look at the Downstream Effects on Market Response & Financial Performance,” the 15-page survey report presents the study results in some detail.

If you’re involved in employee communication, the report makes for interesting and worthwhile reading and provides useful factual data to add to your armoury that provide further evidence of the direct linkage between motivated and happy employees and satisfied customers.

From the report’s conclusion:

What is clear from this research is that Employee Satisfaction and Employee Engagement are important attitudes for managers to understand as they each influence critical market outcomes directly and, in turn, indirectly influence an organization’s financial performance.

Organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction. In addition, satisfied employees see their positive attitudes transferred directly to satisfied customers. It is an organization’s employees who influence the behavior and attitudes of customers, and it is these customers who drive an organization through the purchase and use of its products. Without customers, an organization ceases to exist.

And, the proper target on which employees should focus is customers – employees have a direct effect on customer attitudes and behaviors, and hence, this is where the energy of an organization’s employees should be directed.

[…] Other key organizational factors identified in this research include the key role played by organizational communication in driving Employee Satisfaction, and the role played by managerial facilitation and job design in driving Employee Engagement.

Link: Northwestern University

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