Raising Business Performance by Employee Commitment

Raising Business Performance by Employee Commitment [FP12]
This report was stimulated by empirical research by the Institute for Employment Studies. Their analysis showed that employee satisfaction is not enough - that employee commitment is a more significant factor. The report looks at the new models developed by the IES and the opportunities and implications for HR. The research was described by Linda Barber, Research Fellow at the IES. The report deals with the both findings, which are profound, and the implications for the role of HR.
The way employee commitment can deliver profitable and sustainable growth is no longer regarded as an ‘act of faith’. it is not employee satisfaction and customer satisfaction that drives business performance it is employee commitment that has a direct, demonstrable impact on business performance HR can deliver measurable policies with strong links to profit.
A lack of previous UK research prompted this report based on robust statistical study of 65,000 staff and 25,000 customers in a 100 retail outlets. This established a direct and strong link between employee commitment, customer satisfaction and sales. The resulting model can be used to predict which aspects of employee and customer satisfaction need to be improved to increase sales and profits. The report includes evidence of how a one-point increase in employee commitment led to a monthly average increase of £200,000 sales per outlet.
The study has some important messages: Customer satisfaction, without loyalty, is not enough to improve business performance. Businesses use woefully inadequate methods to measure the right things. Human resource management has a significant part to play in making the service-profit chain work. Keys to success are described in the report.

Data of the kind used in the IES study can be used to develop the right performance indicators. [S4 ~ 13 pps ~ 2000]

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