Organizational psychologists know there is a relationship between employee satisfaction and organizational effectiveness. Even though the relationship between individual-level employee satisfaction and individual-level performance is not very strong, organizational performance is not simply the sum of individuals’ performances. There are factors other than those affecting individual-level performances that influence organizational performance. For example, “shared values” can be one of these factors. If your employees share positive attitudes they will typically have norms of collaboration and cooperation, norms that enhance productivity.
When you conduct employee survey research, your goal is to bring about changes that will lead to better performance and increased profits. But how can you be sure that investing time and money into employee research will result in an increase in your bottom line?
Look at the research.
Numerous scientific studies have been conducted that verify the value of employee research. Robin Mann has conducted extensive research on best practices in the food and drink industry. In one study, Mann and colleagues reported the results of a large-scale industry benchmarking and self-assessment initiative. The companies chosen for the study were all considered models of excellence in their industry. The results showed that surveying to identify improvement opportunities and assessing progress regularly were best practices and contributed to the success of the companies studied. According to Mann, employee research is vital for companies in the food industry that want to move forward and progress toward business excellence.
Daniel Koys, a professor in the Department of Management at DePaul University, has also examined the relationship between employee attitudes and business outcomes (such as increased profits). At two points in time Koys gathered data from units of a restaurant chain using employee surveys, manager surveys, customer surveys and records from the organization. Using a statistical tool called regression analysis, Koys found that employee attitudes and behaviors influence organizational outcomes.
While studies such as the ones conducted by Mann and Koys are informative, it is reasonable to question whether the results they obtained are isolated incidents or actual trends. Organizational psychologists know that the only way to determine if an actual trend exists is to conduct a longitudinal study. Longitudinal research involves the analysis of data collected at multiple points over a period of time. Comparing longitudinal research to data collected during one period of time is like comparing a video to a snap shot. A snap shot of people captures only a moment and many of the nuances of the situation are lost. However, when you watch people in a video you get much more detail, and you can see how people interact and influence each other. In order to determine if employee research leads to positive trends let’s look at a longitudinal study conducted in the foods industry.
In 2007 the National Business Research Institute (NBRI) began conducting longitudinal research at a major international foods company. The first survey, conducted in 2007, identified one primary survey item that was driving the employees’ perceptions. This was “I am aligned with top management’s strategy for the future.” This one item was found to drive 54% of the total survey items. In 2007, the normative score for this item placed it at the 65th percentile. This means that when compared to a normative database containing over three billion responses, 35% of respondents gave this item a higher score. According to the SWOT (Strength, Weakness, Opportunity, Threat) analysis used by NBRI, a score at the 65th percentile is in the “opportunity” range. NBRI advised the foods company to quickly form cross-functional work teams in order to develop action plans, secure management approval, and implement the plans. They recommended that the action planning teams brainstorm to develop ideas for increasing performance on the primary root cause. NBRI informed the foods company that any plan that positively impacted employee alignment with top management’s strategy for the future would have an impact on 54% of all the survey items. This included items related to employee satisfaction, loyalty, commitment, productivity, and retention, among others.
After the initial survey, this foods company began to address their primary root cause. Their normative score began to increase year over year on this item and in their 2011 survey this item was at the 77th percentile! In addition, in four years the company increased the number of items in the strengths category by 400%!
All companies are dynamic, and they are continuously changing. Thus, it is important to regularly survey employees to keep your finger on the “pulse” of your company. NBRI has continued to conduct research at this foods company in order to identify the changing root causes of employee attitudes and perceptions. In 2008, “The amount of recognition I receive is appropriate” was identified as a root cause. At that time, this item scored at the 63rd percentile. NBRI advised the company to take action to improve employee perceptions of the appropriateness of the amount of recognition they receive. The score on this item increased to the 69th percentile in 2009 and to the 70th percentile in 2010.
The 2009 survey identified, “I am comfortable in my relationships with my peers” as a root cause driving employee behavior. This item scored at the 60th percentile. The foods company quickly addressed this issue and just one year later the score increased by 16 percentiles to the 76th percentile! “Upward communication is encouraged at this company” was also identified as a root cause, with a normative score at the 66th percentile. One year later this item had increased to the 73rd percentile.
These improvements are impressive, but in order to determine whether positive trends have occurred it is necessary to compare items across several years. When conducting longitudinal research, it takes three measurements to establish a trend. A score must increase by at least five percentiles to be statistically significant. In 2009, the first year for which trend identification was possible, the foods company had positive trends for 29 items on their survey. This represents a total of 23% of all survey items. One item that showed an impressive increase was “The company devotes the appropriate amount of resources to treat its associates well.” This item increased from the 32nd percentile in the first year of measurement to the 47th and 67th in the second and third years, respectively. A total gain of 35 percentiles, a gain seven times as high as the minimum needed for statistical significance. One item, “The company, puts a high value on associate satisfaction” increased from the 31st percentile in the first year to the 58th in the second and the 80th percentile in the third year! A dramatic increase of 49 percentiles!
In their most recent survey, this foods company experienced positive trends in 76% of their survey items! One of the items, “I understand the long-term goals of the company” increased from a normative score at the 49th percentile in 2007 to the 73rd percentile in 2008 and to the 78th percentile in 2009, an increase of 29-percentile points. A remarkable increase of 39 percentiles occurred for the item “My ability to succeed at this company is not affected by my race, gender, or religion” which increased from the 49th to the 88th percentile in the three-year period.
By quickly and effectively addressing their root causes, the foods company also experienced a significant increase in the overall company score in their employee surveys. In 2007 the company was at the 56th percentile overall, only 6 percentiles above the national average. In 2009, the overall company score had risen to the 69th percentile, 19 percentiles above the national average!
After examining the data from NBRI’s longitudinal study, there is no doubt that a dedication to employee research has resulted in phenomenal gains for this foods company. Addressing their root causes has led to an extraordinary increase in survey scores and tremendous growth for the company. This foods company now operates across the U.S. and in almost three dozen other countries. As they continue their commitment to employee research, there is no doubt that they will continue to see positive trends.
NBRI has helped many companies in all sectors of business to identify the drivers of their employees’ behaviors and increase their bottom line. If you would like to learn more about how NBRI can help your company make phenomenal changes, contact us at 800-756-6168.
National Business Research Institute, Inc.