Employee First - A Paradigm Shift in Business Philosophy

In an  attempt to understand some of the new age HR Strategies, I happened to stumble upon an interesting
read on Fortune which quotes " The World's Most Modern Management - In India".

The view refers to the Employee First initiative by Indian Software giant HCL Technologies which according to Vineet Nayar ( CEO & President - HCL Technologies)  is "empowering and pointing the way to the future of Business".

We have heard almost all business leaders at some point say "Employees are our greatest asset" which is often not backed by sufficient action. More often Customer Satisfaction takes priority over Employee Satisfaction. And more so that there have been very few research studies ( at least in India) which have focused on the link between the two.

Though the link between Employee Satisfaction and Productivity/ Profits seems like common sense, some Research have also shown contradictory results leading us to believe that though satisfied employees can lead to better financial health; good financial results may NOT necessarily mean satisfied employees. Hence the corollary of " Satisfaction leading to Productivity" may not always be true.

A study by Gallup ( with a Retail Store Chain) has made some interesting revelations on the link between Employee Engagement and Profits. The study statistically proves that engaged employees are key to greater productivity and customer engagement, and, by extension, higher profits.The Gallup Organisation states that companies with engaged staff have 38% higher customer satisfaction, 22% higher productivity and up to 27% higher profits.

"The dual focus on employees and customers was generally accepted as correct. All of the strategies had their conceptual foundation in the "employee-customer profit chain," a business model popularized in the early 1990s that maintains that better employees make for happier customers, both of which drive profits.

Ongoing customer research shows that stores with engaged employees also earn consistently higher scores for customer satisfaction and loyalty than their lesser engaged counterparts. A positive customer experience, in turn, drives sales and profits. In 2001, for example, stores in the top half of customer loyalty generated ₤3.4 million more in sales each year, and ₤1 million more in profits than stores in the bottom half. "

Hence the argument that Employee Satisfaction ( or more recently Engagement) does affect the bottom line has to be largely accepted to be true and companies may need to take extra efforts to keep their workforce highly engaged with the larger picture (of Profits) in mind.

In recent times there have been two notable publications about employee engagement, which prove beyond all doubt the economic case for creating engaged employees. These two reports are included here for you to download.

• Engaging for Success by David MacLeod and Nita Clarke (on behalf of the UK Government)
• The Economics of Engagement by The Human Capital Institute – an independent US research organization
  

I would cherish your views on the same.

Interested to know a contradictory view? Visit Kevin Wheeler's blog where he professes that Employees are not Assets.