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How Employee Satisfaction is Better Business

There's often much debate about employee satisfaction, but research clearly shows that it can drive better business results, through what is known as the service value chain.

We hear a lot about engaged employees being more productive employees, and that employees who are motivated going over and above the basics that their role requires of them. There appears to be a strong link between employee satisfaction and customer satisfaction that shows that there is a compelling business reason to invest in the people experience at work. But if we want satisfied and motivated employees, you will need to design work with this in mind.

Employee satisfaction and results: The service profit chain has been around for a long time now and the principle is a simple one that when explained to most people they nod and say, “makes sense!” It is a model based on getting the People Experience right, by design and driving employee motivation and satisfaction, which in turn drives business success. In the service profit chain model, employee satisfaction leads to better outcomes for your people, which puts them in a better place to deliver the Customer Experience, which in turn leads to customer satisfaction, loyalty and ultimately revenue growth and profit (which can be invested back into the people experience). The People Experience Hub take on this model is shown below: Employee Motivation and Satisfaction in The Service Value Chain 




What does the research tell us about the importance of employee satisfaction?

The importance of employee satisfaction has been researched many times, recently Professor Alex Edmans from the London Business school looked at the Fortune 100 best companies to work for and found that firms with the best levels of employee satisfaction outperformed their peers by 2.3% to 3.8% at the stock market. Alex says: > It’s employee satisfaction that causes good performance, rather than good performance allowing a firm to invest in employee satisfaction. Research from Hoseong Jeon & Beomjoon Choi published in the Journal of Services Marketing in 2012 called “The relationship between employee satisfaction and customer satisfaction” shows that employee satisfaction does have a positive impact on customer satisfaction. But interestingly customer satisfaction has limited or no impact on employee satisfaction. This is especially meaningful for service industries like hospitality and retail where they invest a lot of time and money in designing the best customer experience possible. > The results suggest that the ES-CS relationship is unilateral rather than mutual. In particular, using dyadic data, this study found out employees’ job satisfaction leads to customer satisfaction but not vice versa.

People Experience by Design

One of our mantras here at The People Experience Hub is “People experience, by design” and we help great companies do just this by understanding how people who work there think about their work design. And this design covers the full spectrum of work including, job design, the tools they have to do their job well, their pay and benefits, how they interact with their peers, the workplace and more. Frederick Herzberg, an American psychologist, developed a well documented two-pronged approach to thinking about satisfaction and motivation. He realised that things that may help with employee satisfaction do not necessarily drive motivation as well and vice-versa. The chart below shows in blue the elements that can cause dissatisfaction if poorly designed or implemented and in orange the elements that, if implemented well, can drive motivation. (The chart is ordered with Employee Satisfaction in mind) Sources of employee dissatisfaction and motivation. We can see here that while having great company policies and administration is unlikely to motivate your people, the absence of them will certainly drive dissatisfaction. The workplace is not a major motivator, but bad workplace design will always reduce levels of Employee Satisfaction. The presence of great recognition will motivate staff, the absence will see employee satisfaction reduce.


Who are we designing work for?

We think that you should design work to work for most of your people, but we find more and more that companies have designed work not to be ‘people-centric’ but rather:

Task owner-centric design

You can see this if the phrase “It is easier for me if…” is used – we see this with expenses policies a lot! Rather than design it with the core users in mind it is designed with the finance process in mind.

Technology centric design

You can see this if the phrase “It is easier for the system if…” is used.


Designed simply with just the customer in mind and ignoring the employee

Moving to People-centric design, there are several models that show that looking at design from the human user makes absolute sense, whether it is from process design, user design or ergonomic design the biggest driver has to be the human who will ultimately be performing the task, using the system or sitting in the chair. This approach lets you design the experience with ALL people considered from the employee to the processor, the customer and the consumer. Human-Centred Design (HCD) takes into account all people aspects when looking at solving a problem or designing an experience. Poor work design will lead to dissatisfaction and demotivated people. Another issue we are seeing is that the design happened a long time ago when the world was a different place. The failure for work to move design with new technology or different customer design will often mean that while you may have started with your people in mind this has now drifted and will translate into a poor people experience. One of our clients reviews their processes every 6 months to ensure that they are still relevant to the continually moving world in which they operate.

Measuring the experience

Capturing feedback from your people at all stages of the employee journey allows you to understand what works and what needs work to make it better for your people (by design) Employee feedback - culture, wellbeing, opinion, brand, evp


Our Pulse Surveys allow you to ask targeted questions or seek feedback from a segment of your workforce at any given time. Survey all employees using employee engagement surveys to get under the skin and to give you a baseline of your people experience. Our Culture/EVP and Brand surveys looks at how your internal brand and employee offering is perceived. And wellbeing surveys to check in on your peoples physical, psychological and financial health. Using our analytics engine to show you by any demographic how satisfied your people are and how motivated they are allowing you to make changes that drive visible results. By seeing that a department or a role in your business has dissatisfaction levels enable you to go where the problem is armed with real data that you can use to help people have a better People Experience every day.

--- Check out our guide to running employee surveys


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