Businesses Sometimes Just Don't Get It...

General Motors recently tried to boost sales by offering all customers the same discounts available to their employees. If I were a GM employee I would be pissed. In a “brilliant move“ GM just removed employee benefits. Companies who face financial trouble have often lost touch with their customers and their employees. Happy employees make happy customers. Happy customers are more likely to buy again and buy more volume. Its easier and more cost effective to keep a customer than it is to attract new customers. Why did GM think this was a good move?

“Increasing numbers of studies over the past six decades all point to one conclusion:
Organizations that pay attention to people issues will see results in their bottom-line profitability and in their sustainability in good and bad times.

Consider:
• Companies with high employee commitment showed greater financial sustainability in tough times. High-commitment organizations outperformed low ones by 47 percent in 2000 and a whopping 200 percent in 2002 when the economy was at its worst in recent years.
• Low-turnover hospitals had lower risk-adjusted mortality scores and lower severity-adjusted lengths of patient stays.
• Companies that used employee-involvement practices had a 66-percent higher return on sales, 20-percent higher return on investment and 13-percent higher return on equity.
• Southwest Airlines, long noted for its people-friendly environment and open, trusted communication from management, has been profitable the past 30 years, including the post 9-11 months.
Committed employees are the essential ingredients of company success. However, employees can be fully engaged only when they understand and appreciate important company goals. Then, they can tailor their daily actions to effectively support key strategies, initiatives and customer-retention programs.
Today’s employees want more information from management. The past several years have created multiple uncertainties: Employees are concerned about the wavering economy, waves of downsizings, the faster pace of change both within organizations and within their marketplaces and the demands of customers for rapid response times and creative solutions.
Recent studies are showing:
• Only 52 percent of employees feel they know how their job helps promote company objectives.
• Only 39 percent of American workers trust their companies’ senior leaders.
On the other hand:
• Companies in which employees trust top management had shareholder returns that were 42 percentage points higher than those whose workers lack confidence in management.
• A 5-percent increase in employee loyalty can increase profits by as much as 50 percent. “
According to research results from Employee Retention Strategies Phoenix AZ