Business Leaders – Want to Make More Money? Keep Your Employees Happy!

What business does not want to make more money? Whether it is for themselves or their stockholders, business success is usually measured in the bottom line.

Some traditional managers believe the way to accomplish this is by making employees feel powerless. They want to control every moment of their employees’ day, tell them what to do and mandate exactly how everything should be done.

Instead of success, these employers find frustration. A recent Gallup poll found 72% of U.S. workers are not engaged in their work. Instead of trying to create high levels of customer service, they only go through the motions. It is not surprising 25% of employees plan to leave their current employer in the next year.

Instead of pushing employees down, employers need to show them they value the knowledge and experience of their employees. We have written about this many times, but in this post I want to focus on it from a different angle, the impact of effective employee involvement on the profitability of the company.

The research firm Jackson Organization (now part of Healthstream, Inc,) reported on a study in which 26,000 employees were asked to rate their level of agreement with the statement: “My organization recognizes excellence.” The study found “companies that effectively appreciate employee value enjoy a return on equity & assets more than triple that experienced by firms that don’t. When looking at Fortune’s ’100 Best Companies to Work For’ stock prices rose an average of 14% per year from 1998-2005, compared to 6% for the overall market.”

Former Secretary of the Treasury Dr. Robert Reich also reported “Operating margins (how much a company makes from each dollar of sales it takes in) for the high scoring companies was over six times greater than companies perceived as weak on employee recognition.”

Managers often believe giving employees more money will enhance satisfaction, yet the real solution is not that easy or that costly. Dr. W. Edwards Deming documented over 40 years ago that providing salary increases does not increase real job satisfaction. The short term impact of more money does not equate to long term satisfaction.

Achieving the financial benefits of happier employees requires work and commitment on the part of managers. They need to implement an effective employee engagement process that is designed to utilize the knowledge of employees. This commitment must be demonstrated with the actions of managers at all levels to show they are interested in real employee involvement.

Since effective employee engagement helps all phases of your business, including the bottom line, why would you not want to make it part of your organization? For assistance in getting the most from employee involvement, contact CALMC.

About CALMC Blog

Columbus Area Labor-Management Committee is a not-for-profit organization dedicated to involving employers and employees to preserve jobs, resolve workplace issues, and promote labor-management cooperation. Visit our website at
This entry was posted in Customer Service, Employee Engagement, Employee Involvement, Job Retention, Labor-Management Cooperation, Problem Solving, Teamwork and tagged , , , , , , , , , , , , , . Bookmark the permalink.

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