Satisfied Employees = Satisfied Customers = Profitable Companies

When it comes to understanding how to balance the need to
keep a sharp eye on the bottom line and keep a workforce fully satisfied and
productive, some managers and companies seem to get it while others don’t have
a clue.

There’s a
ton of research and surveys
that prove the following:

Satisfied
employees = satisfied customers = profitable companies

While I may not be a researcher, I have no shortage of
stories from readers, friends, family, and acquaintances that bring this simple
formula to life.

Here are two real recent examples. The names have been
changed to protect the innocent.

Company
#1: 20 Cents an hour

“Marty” is a department manager at a regional grocery
chain. Marty consistently hits his numbers – in fact, he often the #1
performing department of the entire chain for stores.

How does he do it? Well, he works hard, keeps waste to a
minimum, is good with the customers, and takes care of his employees.

He recently did a performance evaluation for one of his
assistant managers, “Bob”. Bob is a 17 year employee, hard worker, never calls
in sick, and over the last year has consistently gone above and beyond to help
Marty meet his goals and take care of the customers. After submitting the
paperwork and getting the required approval from above, Marty gave him a great
review and a 70 cents per hour raise.

You would have thought Bob had won the lottery! He was
ecstatic, grateful, proud, and walking on air for the next two weeks. It was
the biggest raise he had ever received. Bob was already a solid employee, but
as a result of that extra recognition, he was working even harder with extra
enthusiasm.

Four weeks later Marty got a call from one of the
regional managers. It seems there was an oversight in the approval process, and
Bob’s raise was 20 cents more than allowed under company policy. No matter how
hard Marty fought, at the end of the day, he had to tell Bob his raise would be
20 cents less.

Bob was devastated. What was once an engaged, productive,
proud “associate” quickly turned into a dejected, bitter, and completely
demotivated employee. Marty did the best he could to soften the blow, but he
couldn’t blame Bob for being ticked off.

I’m not sure how the story will end – maybe Bob will come
around – or maybe he’ll go work for a competitor or get fired for a bad
attitude. If that happens, it’s going to cost the company thousands of dollars
in lost productivity, replacement hiring costs, and training costs.
Some estimate the average
cost of turnover to be $75,000
. I’d say that’s
conservative.

All for 20 cents
per hour
. $400 dollars per year.

Company
#2: The $2000 sales management training lesson

Tony, a newly hired sales manager, went to his manager,
Joanne, and confessed: “I screwed up! I made a promise to a sales rep that I
shouldn’t have made. The operations manager just let me know that I didn’t
fully understand our compensation policy and we need to take it back, or it’s
going to put us $2,000 over budget. What should I do?”

The response from Joanne? “Take it back?! Hell no! Admit
that you made a mistake, and the let the sales rep keep the payment. He’ll respect
you for it, and word will quickly spread amongst the rest of the sales reps
that you have their backs. That’s a small price to pay for that kind of loyalty
and commitment. We’ll make up the $2000 in no time. I’ll talk to the operations
manager.”

Joanne clearly understood the impact of the perception of
screwing over one of the company’s top sales reps because of a management
mistake. The sales rep was even more appreciative when he found out it was a
mistake yet it wouldn’t be taken away. While the operations manager wasn’t too
happy initially, he got over when he saw the sales numbers at the end of the
month.
And now….. the rest
of the story:

Company #1 continues to struggle and just got purchased
by a competitor. Company # 2 is making money hand over fist in a tough economy.
You might argue that company #2 could afford
to make the policy exception. Actually, one of the reasons that company is
so successful is that they keep a sharp eye on costs and wastes.  Apparently, making good on a promise isn’t
considered an unnecessary expense; it’s considered an investment in keeping
your workforce engaged and productive.

Both true stories – better than anything I could make up.
Two similar management mistakes and company policies, yet two very different
responses and results.

Comments?