Using Employee Survey Research to Understand Employees and Increase Profits
People hear this word and their first response is a big YAWN. Add the word scientific in front of it and many enter a deep sleep.
Say this word and you have people’s attention. Let me tell you what is exciting about research:
RESEARCH –> PROFITS
Employee survey research is an exciting process of discovery that when properly conducted and applied in business also leads to increased profits. Conducting scientific research is like reading or watching a mystery. In the beginning of a mystery, you are presented with an unexplained event to be explored. This can be compared to the process of employee survey research. Prior to surveying your employees’ perceptions, all you know is what you observe of their behavior. You have knowledge of their productivity, turnover rates, absenteeism, etc. but you do not know the attitudes and perceptions that drive these behaviors. Once the mystery to be solved has been identified, detectives begin to collect clues or facts. Once you decide to gain a better understanding of your employees you collect data. At the end of the mystery detectives put all the clues together and the mystery is solved. Once you complete your employee survey research, you understand what drives your employees’ behavior and you can take proactive measures to increase profits. Now let’s look at the scientific process in more detail.
What do psychology, biology, business, chemistry, sociology, and physics all have in common? They are all sciences. As sciences, they all use the same method for discovery-the scientific method. Organizational psychologists use their knowledge of the scientific method and organizational behavior to study, explain, and predict the behaviors of employees and customers thereby helping companies to increase profits. The scientific method can be broken down into five steps as follows:
- Review the literature. Once a scientist becomes curious about some phenomenon, he or she reviews the literature to learn what has already been discovered about it. The scientist may find that someone has already answered the question. In many other cases scientists will learn information that will direct their own research and facilitate the second step of the process. When conducting employee research, it is important to be knowledgeable of existing research so that you will know the relevant attitudes and perceptions to explore in order to predict employee behavior.
- Identify the research question. In this second step the scientist, drawing on information from the literature review, narrows and defines the research topic. It is important to be specific when identifying the research question in order to keep the study manageable and choose the right design (see next step). For employee research, this step involves choosing the specific topics to be explored in the study such as employee perceptions of organizational climate, communication, productivity, and job satisfaction, to name a few.
- Design the study. Scientists have numerous research methodologies at their disposal. A scientist chooses the research design best suited for the research question being explored. Employee research is usually conducted using a survey format, although other designs may be appropriate depending on the purpose of the research. During this step, organizational psychologists design survey items to investigate each topic to be explored in the employee survey.
- Collect and analyze the data. In this step the research plan is implemented and information is collected. Once collected, the scientist uses various statistical techniques to analyze the data and draw meaning from it. An organizational psychologist can use statistical analyses to identify a small number of issues that drive, control, or predict a large number of issues within an organization.
- Report the findings. If I complete a research project and then take all my data, findings, and conclusions and toss them in a file cabinet and leave them there, of what value is my research? None. To be useful, scientific findings must be shared. It is only when they are shared that they can be applied to bring about beneficial changes. Results of employee surveys are distributed to those in management so that they can implement changes that will bring about an increase in profits. It is also recommended that some of the results be shared with the employees. It lets employees know that their voices were heard and that the company is serious about making beneficial changes.
Many companies do not have highly trained scientists in their employ therefore they rely on research firms to conduct their employee surveys. Hiring a research firm that specializes in employee survey research is a very cost effective way of learning about your employees. Why does spending money to hire a research firm actually save you money?
They’ve already completed steps 1-3!
Any reputable firm specializing in employee research has already reviewed the literature and knows the important employee attitudes and perceptions to measure when conducting employee research. Also, such a firm will have already identified the specific questions to ask in order to measure these attitudes and perceptions and the best methodology to implement the study.
When interviewing potential firms for your employee research there are certain questions you should ask.
Does your firm have a standardized employee survey? Don’t be fooled by consultants who tell you that in order to get useful data you have to do your own survey development. This is an expensive and timely process that involves interviews with your employees (and possibly the use of focus groups) to identify topics for investigation. This costly process is unnecessary since research has already identified the employee issues that are common to all industries. A research firm should have standardized surveys that you can use and customize, if desired, for your company.
How many opinions are represented in your benchmarking database? Be prepared for an inquisitive look here as the salesperson stops to think-“Benchmarking database…What benchmarking database?” Most firms will only provide you with a description of your own employees. You may think information about your own employees is all you want or need. However, if a consulting firm only provides you with information about the opinions of your employees you are not getting a very good return on your investment for two reasons. First of all, you want an employee research instrument that is valid and reliable. If an instrument is valid, it actually measures what it is intended to measure. For example, if a psychologist designs a new instrument to measure depression but the instrument actually measures anxiety; it is a completely invalid instrument for measuring depression. When conducting employee research your survey instrument is valid if it is representative of the issues you want to measure. You also want your data to have a specific type of validity, external validity. Data have external validity if they can be generalized, or applied, to others besides those in the sample being measured.
A research instrument is reliable if it provides consistent measurement. Let’s say one morning you get on your bathroom scale at 6:00 a.m. and it says you weigh 135 pounds but fifteen minutes later you weigh again and it says you weigh 80 pounds. After another fifteen minutes the scale reports your weight as 250 pounds! What are you going to do with that scale? Throw it away and buy a new one! If a scale gives measurements that are inconsistent, we know it is defective. The same holds true for employee survey instruments. They should give consistent year after year measurement. If a research consulting firm has benchmarking data you know that their survey items have been repeatedly tested and therefore, are more likely to be valid and reliable than those of a firm that has no benchmarking data.
A second reason you need benchmarking data is to be able to interpret what your scores really mean. If the firm has benchmarking data, the larger the number of perceptions represented the better. When a firm has a large benchmarking database, it can be used to provide additional, and highly valuable, information about your own employees. For example, let’s say you get the results of your employee survey and two items each have an average score of 3.99 on a scale of one to six in which one represents “strongly disagree” and six represents “strongly agree.” A score of 3.99 is just below the “slightly agree” point. The two items are “My supervisor keeps me informed” and “I am satisfied with my compensation.” The fact that the items have the same average score is misleading since they mean two very different things. For the first item, “My supervisor keeps me informed,” a score of 3.99 is only at the 38th percentile. This means that 62% of employees from various companies who have responded to this item gave it a higher rating. Now you know that this is a low score. However, for the item “I am satisfied with my compensation,” an average score of 3.99 is at the 96th percentile! This tells you that very few employees surveyed would give this item a higher rating. Think about it. Have you ever had an employee complain to you that you were paying him or her too much?! Overall perceptions of compensation are much different from perceptions about being kept informed. Therefore, you must have access to benchmarking data to draw any valuable meaning from your own data.
Other questions you should ask any research firm you are considering include:
May I see a sample executive summary? If you and your colleagues look at the sample summary and your eyes glaze over and you notice that your colleagues have that “deer in the headlights” look, steer clear of that firm. The executive summary should present the findings in such a way that you can understand them even if you have no background in research methods and statistics. It should also clearly identify the root causes of the findings. The root causes of the items in your survey are a small number of items that control, predict, or drive many of the other items. Addressing this small number of items gives you “the most bang for your buck” as improvement in these few items will bring about maximum improvement in the perceptions of your employees. The analytical procedure required to identify the root causes is highly sophisticated, but a good firm will present your results in an easy to understand format.
How you will integrate my employee survey data with my customer survey data? Again, be prepared for a puzzled look from the salesperson. Unfortunately, most firms do not have this capability. Now you may be thinking, “I thought we were talking about employee survey research?” The two are intimately related. Conducting employee research without conducting customer research is like following a mystery all the way through but failing to read or watch the end. Without knowing how the mystery ends what have you really learned? Nothing of real value. The ultimate goal of conducting employee research is to identify areas that you can address in order to increase profits. However, data from both your employees and your customers is required to meet the goal of increasing profits. It is vital to identify the employee perceptions that are driving employee behaviors and directly influencing customer satisfaction. The research of Benjamin Schneider and his colleagues, reported in Administrative Science Quarterly, found that there was a very strong relationship between employee and customer perceptions in a study of bank branches. Mark Schmit and Steven Allscheid came to the same conclusion in a study published in Personnel Psychology. In fact, the relationship between employee and customer perceptions has been replicated in many research studies examining a broad range of industries.
Finding a research firm that has all the characteristics discussed above can seem like an insurmountable task. However, it does not have to be. If you want to get an excellent return on your investment then you want the firm that will deliver the best quality product. Only one firm has a benchmarking database representing over 10 billion opinions-the National Business Research Institute (NBRI). NBRI is also the firm that developed the root cause analysis that is so essential for increasing profits, and the only firm that offers it. Both NBRI’s benchmarking database and root cause analysis are recognized best practices in survey research. They are also the only firm that integrates customer and employee data.
Since NBRI is a leader in the survey research industry, it is natural to be concerned about the complexity of their reports and executive summaries. However, this concern is unnecessary since organizational psychologists at NBRI have developed a very straightforward way to communicate the findings of your data-the SWOT analysis. This analysis tells you how each item compares to the benchmarking database. A survey item is considered a Strength if the mean falls at the 75th percentile or above. If an item falls between the 50th and 74th percentiles it is an Opportunity. A Weakness is any item that falls between the 25th and 49th percentiles and a Threat is any item falling at or below the 24th percentile. This straightforward scale enables you to know precisely how to interpret the score of any item on your survey.
If you would like to learn more about how employee and customer surveys can help you “see inside the crystal ball” contact NBRI at 800-756-6168.
Cynthia K.S. Reed, Ph.D.
National Business Research Institute