Management: Course Final Paper
Introduction
In earlier studies, organization change has been defined as the breaking down of existing structures and the creation of new ones. In other words, it is a transformation of an organization between two points in time. Such a scenario can develop anxiety, uncertainty, and ambiguity in the minds of employees due to differences in experienced, socio-demographic characteristics, attitude, knowledge and behavioural patterns. For overcoming the employees’ nervousness management, organizational change agents put stress extensively on employee readiness predictor variables. As clearly stated in the literature, employee attitude and employee readiness factors pose a significant affect in preparing employees physically and mentally for immediate action. Employee readiness can be best defined as the beliefs, thoughts, and behaviours of an employee for accepting the needs and capabilities of an organisation. Usually, it is known as a cognitive precursor to behaviours of either support or resistance.
Previous literature conducted on employee satisfaction and attitude confirms that several researchers have been examining predictor variables to closely understand the employee attitudes and behaviours in the field of organizational change management. In a study conducted in a manufacturing company in the United States of America (USA), 131 survey samples was acquired to reveal that margin in life and demographic variables of workers closely associated with readiness for change such as job knowledge and skills, social relations in the workplace, organisational culture, and management leadership relationships have a substantial impact on readiness to change.
Research also shows that employee and organizational management have always required to understand the attitudes and behaviours pertaining to organisational performance. Employees could develop their positive attitudes and behaviours towards the organisation based on the work place factors. These are the aspects of worker related to the nature and quality of relationships between employees and an organisation. Interestingly, this approach specifically indicates the individual employee’s attachment in terms of beliefs, willingness, and desires to sustain membership of the organisation. Furthermore, workplace factors have mostly been revealed in view of active and passive job, flexible company policies and procedures, change efficacy, job knowledge and talent, management leadership relationships, social relationships at the workplace.
In order to create and develop positive attitude and behaviour in employees, workplace variables are likely to affect employee attachment to the organisation. Further in this direction. In the organisational behaviour domain, the term peer and supervisor relation has been largely employed for understanding employee attitudes and behaviours regarding his/her work organisation or work. This factor was related to understanding the employees’ feelings and thoughts.
In organisations, supervisor and peer relationships have been applied to understand employees’ attitudes and behaviours. Relationship between supervisor and employee is considered to transfer knowledge from individual to individual, groups and organisation. It is commonly regarded as one’s belief in the importance of hard work and frugality. This relationship helps understanding the employee’s intention when they applied to re-map the work commitment constellation. This term was used by researcher to understand employee attitudes and behaviours pertaining to career commitment and obtained positive results. Therefore, the level of behaviour of the supervisor and peer found crucial for improvement, innovation and job satisfaction.
Studies have revealed that nearly 22 million employees are presently actively disengaged or extremely negative in their workplace, which is why the economy rate has risen up to $300 billion annually in productivity. The current paper describes the linkages between customer satisfaction and employee satisfaction and retention and business outcomes. It also demonstrates how employee attitudes can be measured and enhanced.
The first part illustrates the linkage research, and shows evidence about how employee satisfaction is correlated to customer service, market share, revenue generation, and the bottom line. The second part presents and outline of methodologies to assess employee attitudes like the use of employee surveys, and how to effectively employ measures for improving employee satisfaction.
Part A: Linkage Research
Introduction
What are the linkages between employee attitudes about their workplaces and customer service, market share, revenue generation, and the overall bottom line measures of business success? In organizational behaviour, this is an extremely crucial question, and a wide scope of research has been conducted to study this question. Linkage research deals with this research area, and the linkage research framework entails that the more certain leadership practices and values exist within a specific work environment, the more productive and energized the workforce. This in turn will greatly increase the satisfaction of customers and will lead to the strengthening of the long-term business performance of the company.
Research has shown that there exist linkages between employee attitudes about their work environment and customer service. Marcus Buckingham, employed with the Gallup organization, feels to help build the most powerful company possible, the initial thing that is important to happen is that every worker must be able to successfully give responses to twelve core questions about the daily realities of their job. This involves questions like “Do I know what is expected of me at work?, At the workplace, do I have the chance to do what I do best every day?, and Is there some peer at workplace who encourages my development?. It had been studied and examined how the answers to the twelve simple questions were pivotal factors in determining business results. The most operative workplaces, i.e. those within the top 25% of twelve question scores, were 56 percent more likely to attain more-than-average customer loyalty, while 38 percent more likely to have more-than-average productivity, and lastly, 27 percent more likely to report higher profitability.
Moreover, there existed a strong and positive correlation between employee and customer satisfaction as seen in a retail branch banking survey. The respondent survey comprised of seventy scaled items which measured respondent views on bank statements, ATM (automated teller machine), problem resolution, personal bankers, perceived value, physical branches, and overall satisfaction. The results revealed that the strongest correlation was seen between customer orientation, confidence and communication. Since a strong correlation was detected between customer service and employee satisfaction, the bank discovered that it was crucial to further increase employee satisfaction so as to make their customers happier as well as fulfilled with the services they were getting (Valuing Human Capital, 2013).
In organisations, supervisor and peer relationships have been applied for understanding employees’ attitudes and their behaviours in the workplace. In earlier studies, relationship between supervisor and peer has been observed to transform knowledge and information from individual to individual, groups as well as organisation. Moreover, it is commonly considered as an employee’s belief in the importance of hard work and frugality. With such a relationship, one can easily understand the employee’s intention when he or she applies to re map the work commitment arrangement. According to researchers applying this term in their study help them in knowing employee attitudes and behaviours with respect to career commitment and discovered positive outcomes. Therefore, it can be confirmed that the level of behaviour of the peer and supervisor was seen to be one of the critical factors in promoting innovation, improvement, and job satisfaction. By studying supervisor and peer relations, it becomes easy to assume that workers working together influence and tend to have an effect on each others’ behaviours.
Further in this direction, the book “Organizational Behaviour” (Robbins & Judge, 2012) also talks about the deep connection between job satisfaction and customer satisfaction. Since workers in service jobs commonly interact with customers on daily basis, it is a valid question to ask whether or not employee satisfaction has a positive correlation with positive customer results. For front line employees and officials who are regularly in contact with their customers, the answer is definitely yes (Robbins 89). The evidence reveals that satisfied employees are likely to increase customer satisfaction and gain customer loyalty. Obvious reason for this is that satisfied employees are inclined to be friendlier, upbeat, and responsive, which makes customers happier. Additionally, Robbins (89) states that because satisfied workers will have lower turnover, customers will develop relationships with the same familiar friendly faces that in-turn helps bolster customer loyalty (Robbins 89).
Hence, there is a strong correlation between employee satisfaction and engagement and customer satisfaction.
Market Share
Market share has a strong association with the amount of revenue yielded. Market share has a high importance in any industry. For instance, three big organizations in the electronic design automation (EDA), namely, Synopsys, Cadence, and Mentor Graphics are leaders in the big niches, and almost all of the revenue for each company comes from established leadership market positions. Once the market leadership is established, customers or users seldom change vendors for a software tool until it totally fails. For these companies in EDA, nearly 70 %-90 % of the revenue is generated from divisions wherein the company has higher than 30% market shares. Due to the importance of achieving the market leadership position in determining revenue, Mentor Graphics places more concentration on attaining market share in key segments, to affect revenue.
Furthermore, for gaining market share, it is essential to have workers who are fully engaged, willing to apply that extra effort in adopting new initiatives that deal with increasing market share. Only by having satisfied employees can an organization gain market share and leadership. Explaining further, there are various ways of achieving market share in the EDA industry: by stressing on discontinuities in the EDA market, by possessing powerful internal development, by entering into new markets, and by having an efficient sales force. Each of these items demand a work force that is fully productive and engaged.
Revenue Generation and Bottom Line
A strong correlation also exists between employee satisfaction and revenue generation and bottom line. A workforce that is actively disengaged costs the U.S. economy a whopping $300 billion annually in productivity. Consequently, for firms that desire to increase their bottom line, it is necessary to grow the number of workers who are actively engaged.
Another good example is New Century Mortgage where the managers decided to identify the number of employees that were fully engaged, and to determine where and how the company needed to improve. They completed an employee survey, and the executives underwent training to incorporate organizational changes to promote engagement based on issues identified in the survey. Their findings revealed that the actively disengaged employees generated an average of 28% less revenue than their fully engaged counterparts. Further, the employees in the large middle group produced 23% less revenue than the top group.
Saks is another case study example to study how high employee engagement can affect revenues. At Saks, management was looking for methods to boost service to customers. Once they measured employee satisfaction and detected and resolved problem areas, a 20 to 25 % improvement was seen in stores with great engagement. Together with higher sales figures, they also observed an improved dialog between the sales force and management, which helped everybody to understand that this improvement is a long-lasting feature.
Fundamental managerial systems determined in earlier studies selection, performance management, development, and compensation systems. In attracting potential workers to fit the organization’s strategies, successful managers appoint employees based on those traits. Training and development further improves the growth of those skills and the attainment of new, trainable skills. Initiatives of human resource intended to offer employees with the necessary skills and tools for delivering customer value cannot be viewed as costs, but rather should be considered as investments with measurable and high returns. One of the main keys to creating a powerful organization lies in how employees are rewarded and compensated. For instance, when compensation and reward systems are harmonized to market driven indicators, appropriate behaviour is strengthened (Sikh, 2011).
An engaged employee is consistent in demonstrating three common behaviours that improve organizational performance:
- Say-the employee counsels for the organization to colleagues, and refers prospective employees and customers.
- Stay-the employee has a strong desire and willingness to be an active member of the organization despite opportunities to work elsewhere.
- Strive-the employee exerts extra time, effort and initiative to contribute to the business’s success.
Employees who are not engaged are likely to be:-
Spinning: wasting their skills and effort on jobs that may barely matter
Settling: are less enthusiastic to perform tasks, show less commitment, but not dissatisfied enough to make a break and
Splitting: they do not stick around for things to change in their company, have more misgivings about their company in terms of performance measures such as customer satisfaction.
According to the findings of Meere (2005), both operating margin and net profit margins decreased over a 3-year period in companies with low worker engagement, whilst these measures rose over the specified period in companies with high levels of worker engagement, on the basis of ISR-led survey on 3,60,000 employees from 41 companies in the world’s ten economically powerful nations.
Financial News, March 2001, as quoted by Accord Management Systems (2004), shows that disengaged workers are more likely to cost their company.
According to the report, Employees who are disengaged:
- Remain absent for an average of 3.5 more days per year
- Cost the US economy approximately $292 to $355 billion per year.
- Are less productive (Markos & Sridevi, 2010)
There is a vast body of knowledge on the topic of employee engagement, and especially in the degree to which how such positive employee attitudes can predict business unit performance. The linkage between employee attitudes and organizational performance is reasoned in three literatures.
The emotional contagion literature indicates that person-to-person interactions and communications, along with the attitudes that employees have, result in transfer of emotional expression and subjective service experiences via imitative behaviour (mimicry). The reflection of positive emotions in attitudes transforms into customer satisfaction. Moreover, the literature on service-profit chain shows that main attitudes like employee satisfaction enhance productivity and the value derived from service, whereby both customer-perceived service quality and customer satisfaction is enhanced. This in turn forecasts other customer behaviours with financial consequence. Lastly, the service environment literature debates that the level of organizational support, and environmental factors that help service effort, foster a higher quality of service and customer satisfaction.
As stated in the book “Organizational Behaviour” (Robbins & Judge, 2012), organizational commitment is said to be the emotional attachment employees or management has toward the company they work for. It is evident that there is a high level of overlap between job satisfaction and organizational commitment, since things that make employees happy with their job often make them more committed to the company as well. Further, companies consider that these attitudes are worth tracking as they are much linked to crucial outcomes such as performance, assisting colleagues, absenteeism, and turnover.
Studies reveal that people pay attention to various aspects of their work environment, such as how they are treated, the relationships they generate with managers and colleagues, and the actual duties they perform. We will now summarize the factors that show consistent relations with job satisfaction and organizational commitment.
Work attitudes are the feelings employees have toward several aspects of the work environment. Two key attitudes that are the most relevant to crucial outcomes and organizational performances are Job satisfaction and organizational commitment. Attitudes generate an intention or willingness to behave in a certain way and could predict actual behavior under certain circumstances. Positive work attitudes of employees stem out depending on their personality, relationships they develop, how they fit with their environment, stress levels they experience, perceived satisfaction of their salary, company policies, social treatment, and the presence of policies covering work–life conflict (Sikh, 2011). When employees display more positive work attitudes, they tend to have the inclination to perform better, depict citizenship behaviors, and miss their working hours less often, and they are less likely to quit their jobs in a short time frame. All in all, with positivity in workplace attitudes, organizations benefit in the form of higher safety and improved customer service, along with higher company performance.
References:
Robbins, S., & Judge, T., (2012). Organizational Behavior. (15th ed.). Prentice
Hall. ISBN: 978-0132834872Valuing Human Capital. (2013). Educational Business Systems. San Luis Obispo,
CA: PBC Publishing. 2013.
Sikh, G. (2011). Analysis of Attitudes and Behaviours of Employees toward
Organizational Change. International Journal of Human Resource, 1 (1), 1-13.
Markos, S., & Sridevi, S. (2010). Employee Engagement: The key to Improving
Performance. International Journal of Business and Management, 5 (12), 89-96.
Meere M. (2005). High cost of disengaged employees Victoria: Swinburne
