Posted by Chris on August 08, 2001 at 08:04:06:

In Reply to: relationship between satisfaction and productivity posted by Coco on August 08, 2001 at 06:29:54:

There's a link between employee satisfaction and profit margin and growth. It's a bit of an egg / chicken situation though, isn't it.

I chopped this from the Independent (UK)

From The Independent July 11th, 2001

Roger Trapp
SCARE TACTICS have become a familiar weapon in the hands of management
gurus in recent years. Big-name speakers, such as the strategy expert Gary
Hamel, are apt to present their listeners with a choice that is not much more
sophisticated than, "Do what I tell you or face oblivion", typically at the
hands of a completely new player in your industry.
Not David Maister. The man who has acquired a formidable reputation as
a consultant to professional service firms says it is in the nature of the
human condition that such an approach does not work. He says business people
in particular should stop looking for "magic pills" and concentrate on common
sense, and stop deluding themselves that they are going to get fit by
proclaiming they are on a diet while sneaking snacks and treats. In other
words, they should end the hypocrisy of "pretending you're going for a goal
when you know you aren't doing what it takes to get there".
As Dr Maister freely admits, this theme of being true to yourself and
upholding high standards is familiar to those who have followed the career of
the UK-born former Harvard Business School professor. What makes it different
this time is that now he claims to have the data to back up his convictions.
Using a survey of more than 5,500 people in 15 countries that is the
basis of his new book, Practice What You Preach! (The Free Press, pounds
17.99), he says raising employee satisfaction by 20 per cent will increase a
company's financial performance by more than 42 per cent. Financial
performance was measured by examining margins, profit per employee, and growth
in revenues and profits over two years. Employees were also asked to rate how
well they thought their workplace was doing in such areas as client service,
quality of work, market reputations, profitability, growth, quality of the
workplace, creativity, teamwork and career development.
From this, Dr Maister deduces that financial success is directly
attributed to good client relationships, which, in turn, are caused by a high
quality of customer service, which is itself largely the result of employee
satisfaction.
In case anybody should run away with the idea that this is all about
being nice, Dr Maister is quick to point out that there is nothing soft about
the companies and managers he has identified as high achievers in this area.
"The standards are tough," he writes in the tersely-written book
subtitled What Managers Must Do To Create A High Achievement Culture. "They do
not say, gently, `we encourage teamwork'. They say things like `we have no
room' for individualists. The message is that management must have the guts
and courage to enforce the standards they frequently preach." For this reason,
while the message seems straightforward and obvious, it is not necessarily
going to attract many adherents. There are no quick fixes in this approach.
Just a lot of hard graft, particularly in the area traditionally seen as
requiring soft skills - managing people.
He acknowledges that he finds the people aspect of business much more
difficult than the strategy side so chooses to work alone, on a daily rate, he
helpfully points out, of $15,000 (pounds 11,000). So he can understand why
managers in a variety of organisations (his case studies are based on
businesses in such fields as public relations, consulting and advertising)
might shy from it. But, equally, his studies convince him that the ability to
"energise, excite and enthuse your people" is crucial to success.
He also accepts that his steadfast adherence to principles, standards
and doing one thing supremely well has caused a certain irritation in some
larger practitioners among lawyers, accountants and other professional firms
where he made his name. They say they have had to become more businesslike as
they have mushroomed in size, if only to keep the revenues coming in to cover
their huge staff costs.
But an unrepentant Dr Maister insists this is mistaken. "My advice is
not that they need to become more businesslike," he says. "They need to become
more professional. They need to take their standards very much more seriously
than they tend to do."
This is not to say they should not necessarily chase cash from
wherever it comes, or adopt a policy whereby partners' remuneration is based
on "eat what you kill", or their level of billing, rather than a more
equitable arrangement. It is just that, as the book's title sug- gests, they
should not do it while claiming they are concen- trating only on a certain
type of work or promoting teamwork.
Moralistic as this may appear, Dr Maister says he does not mean it
that way. He further softens the message (and further diverges from his
consultant counterparts) by allowing the possibility that there is a middle
way between towering success and collapse - muddling through. What separates
the muddler from the star is ambition and the ability to encourage others to
share the dream.
However let there be no mistake: moving from one to the other takes a
lot of hard work that not everybody is prepared to endure.
Caption: Dr David Maister; `Companies should stop claiming to be on a
diet while sneaking snacks'
Copyright: Independent Newspapers(UK) Limited

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