Studies have shown that employee satisfaction plays an important role in the effectiveness of organisations. It has long been known that satisfied employees can also ensure greater customer satisfaction. Why does more employee satisfaction also make for more customer satisfaction? And can this connection be quantified?
Well-known phenomenon
Research conducted by Hoseong and Beomjoon (2012) shows that more employee satisfaction leads to increased customer satisfaction. For example, Guzman, Rodriquez and Manautou (2004) also came to the same conclusion in their study of a restaurant chain. These are just two examples of studies explaining this connection but there are many other studies that have also shown this connection. So it is not a new fact that satisfied employees are necessary for customer satisfaction.
Logical explanations
According to the studies, there are a number of explanations for this relationship. The main explanation is that employees who are in contact with customers can develop awareness of customer needs and wants. Alongside this are satisfied employees, employees who have the tools to understand and serve customers optimally. Last but not least, satisfied employees have relatively high energy and drive to deliver good service. Also, satisfied employees have sufficient "emotional capacity" to deliver empathy, respect and focus.
In addition, employee satisfaction also reduces absenteeism. Satisfied employees also have better work morale than dissatisfied employees, which increases productivity.
Chicken or egg?
Does customer satisfaction in turn create employee satisfaction? No, say Hoseong and Beomjoon (2012). And they are not the only ones who have shown this. For instance, Chi and Gursoy (2009) also showed that employee satisfaction comes first, not customer satisfaction. This would imply that customer satisfaction depends on employee satisfaction.
How much employee satisfaction is enough?
Despite the strong correlations between them, we cannot specifically identify a minimum amount of employee satisfaction capture. It is clear, for instance, that a large proportion of the most successful companies also fall among the most attractive organisations to work for. But for the tipping point between satisfied or dissatisfied customers, there is too little scientific data to explain this reliably.
Consequences of employee satisfaction
Research by the likes of Gallup among a large number of organisations has shown that employee satisfaction not only leads to fewer staff turnover. In the selected group of organisations with above-average employees, a number of other metrics were tested. Below is an indication of the impact of above-average employee satisfaction:
- Customer loyalty (+56 per cent)
- Productivity (+50 per cent)
- Profitability (+33 per cent)
- Staff turnover (-50 per cent)
Conclusion
Satisfied employees make for satisfied customers but this is not true the other way around. In any case, these results show that employee satisfaction is a key component for the success of organisations and that this is an important issue for any organisation. In any case, it seems that customer satisfaction, and therefore organisational success, depends largely and significantly on the degree of employee satisfaction.
10 March 2015
"Creating A Highly Engaged and Productive Workplace Culture," The Gallup Organisation.
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Peter Lucas, "Collaboration on Deadline," Knowledge Management (May 2001).
"Business Must Adopt Family-Friendly Ethos," Irish Times (2 March 2001).
Ruth Davidhizar and Ruth Shearer, "Rewarding with Dignity," Hospital Materiel Management Quarterly (November 1998).
Dory Devlin, "Nothing's A Sure Bet in A Changing Workplace," The Star-Ledger (July 12, 1999).
