Businesses derive very clear and quantifiable benefits from loyal employees. Including higher retention rates, lower absenteeism, improved culture and a greater focus on customers. So measuring employee satisfaction and loyalty is critical not just to the successful implementation of the Service Profit Chain, but to any business that wants to reduce staff turnover and lower costs. You can’t buy loyalty in business or life, you need to earn it. Paying employees more than the going rate for the job they are doing will not reduce staff turnover. An employee whose only motivation is how much they are getting paid is likely to jump ship as soon as they get a job offer with a higher rate of pay. Clearly, employees should be paid a fair day’s pay for a fair day’s work we do, but if money is the sole motivator of an employee then it doesn’t matter how much you pay them, they won’t be loyal.
Many factors contribute to developing loyal employees, including not in any particular order:
- business culture
- positive work environment
- leadership
- job satisfaction
- career opportunities
- employment benefits
- work-life balance
- recognition programs
- performance management
- systems, processes and procedures
- training and development opportunities
Not every one of these factors applies to every individual or category of job and some poor cultures and leaders would argue that none of these things apply to unskilled and semi-skilled workers who turn up and leave right on time and perform simple manual tasks all day. Nothing could be further from the truth. Many of these things determine how well workers at any level can deliver excellent service to customers. A perfect example of this is how systems, processes and procedures enable workers to do their job and deliver excellent service, without having to repeat tasks or develop workarounds.
The Service Profit Chain points to 5 linked factors that enable employees to deliver value to customers:
- Employee Loyalty
- Employee Satisfaction
- Employee Capability
- Service Quality
- Productivity and Output Quality
Capability doesn’t just mean the personal capabilities of individual employees. It encompasses the tools, training, and support along with the systems, processes and procedures that enable them to do their job efficiently and effectively. Which of course also impacts their productivity and in turn company profitability. Service Quality is also impacted by capability as well as culture and the nature of the work environment. Is culture and work environment dedicated to delivering excellent customer service?
Employee Satisfaction and Loyalty surveys should ideally be conducted at least twice every year and Performance Management programs should be a matter of course. The latter should never, ever be used disingenuously or as an excuse to sack people. Most employees want to know how their Manager believes they are performing and even in highly Unionised environments, where participation in performance management programs may need to be voluntary, we have found that the majority of employees want to participate.