What are your employees talking about? What keeps them up at night about their job? What distracts them from their day-to-day activities?
During tough economic times, employee stress levels are up. This directly affects their job satisfaction, which impacts the way they treat customers. This can hurt revenue and profits.
Most business managers agree that good employees have an impact on customer satisfaction. At Allegiance, we call this the Spillover Effect and define it as the statistical relationship between employee engagement and customer engagement.
When employees are engaged, they believe are doing something valuable for their organizations and that their efforts will make a difference. The positive feelings that employees have about their jobs and employers influence the level of service they give to customers. These positive experiences “spill over” to customers, who become advocates for the company’s products and services.
Allegiance recently published a paper called “The Spillover Effect” based on one of the largest research studies conducted on engagement. This study found that disengaged employees hurt one out of every 10 customers. The paper identifies job enhancers that are effective at creating employees who are likely to be emotionally engaged. Critical job enhancers include:
- Having a positive impact on the lives of customers and team members
- Having opportunities for learning important new skills
- Having the ability to offer suggestions
- Completing whole jobs from start to finish
- Receiving feedback about the results of efforts
- Feeling free to perform the work the way they believe is best
Engaged employees contribute to the bottom line. As their engagement is reflected in their service to customers, they are helping to create more loyal customers. Highly engaged customers buy more products, refer potential customers to a company, stay longer and give more feedback, which, in turn, gives companies the opportunity to address issues and concerns and preserve potentially lost revenue.
Employee loyalty Rx for management: thumbs up! Business and the public sector are into a phase of creative disassembly where reinvention and adjustments are constant. Hundreds of thousands of jobs are being shed by United Technologies, GE, Chevron, Sam’s Club, Wells Fargo Bank, HP, Starbucks etc. and the state, counties and cities. Even solid world class institutions like the University of California Berkeley under the leadership of Chancellor Birgeneau & Provost Breslauer are firing staff, faculty and part-time lecturers through “Operational Excellence”. Yet many employees, professionals and faculty cling to old assumptions about one of the most critical relationship of all: the implied, unwritten contract between employer and employee.
Until recently, loyalty was the cornerstone of that relationship. Employers promised job security and a steady progress up the hierarchy in return for employees fitting in, performing in prescribed ways and sticking around. Longevity was a sign of employer-employee relations; turnover was a sign of dysfunction. None of these assumptions apply today. Organizations can no longer guarantee employment and lifetime careers, even if they want to.
Organizations that paralyzed themselves with an attachment to “success brings success’ rather than “success brings failure’ are now forced to break the implied contract with employees – a contract nurtured by management that the future can be controlled.
Jettisoned employees are finding that the hard won knowledge, skills and capabilities earned while being loyal are no longer valuable in the employment market place.
What kind of a contract can employers and employees make with each other? The central idea is both simple and powerful: the job or position is a shared situation. Employers and employees face market and financial conditions together, and the longevity of the partnership depends on how well the for-profit or not-for-profit continues to meet the needs of customers and constituencies. Neither employer nor employee has a future obligation to the other. Organizations train people. Employees develop the kind of security they really need – skills, knowledge and capabilities that enhance future employability.
The partnership can be dissolved without either party considering the other a traitor
Thank you, Rhoads, for such an interesting piece of reading. I agree with your views regarding the importance of employee engagement and how it can act as a “spill-over” onto customers, affecting them eventually. Vineet Nayar, the CEO of HCLT, has highlighted the same issue in his new book “Employees First, Customers Second”. He argues that favoring customers above employees can act as hurdles to the smooth running of the business.