What does employee satisfaction have to do with stock performance? Quite a lot in fact; and at the 2015 HR Technology conference, Glassdoor’s Chief Economist Dr. Andrew Chamberlain stood before a packed room to prove the causal link between the two. Speaking to an audience of CHROs, Chamberlain cited third party research from The Journal of Corporate Finance and Journal of Financial Economics, substantiated by research of his own, titled “Does Your Company Culture Pay Off?” to prove that employee satisfaction is directly linked to stock performance.
So how can companies use this information to make changes to improve employee satisfaction? Chamberlain cited a study from his data science team, which asked the question: Does Money buy Happiness? The data revealed from a sample of 221,000 Glassdoor users suggests it does not. It turns out people are more driven by culture & values, senior leadership and clear career paths than they are by compensation. Chamberlain’s advice to HR department heads is to advocate for programs that truly drive employee satisfaction.
Programs that build employee satisfaction
- Healthy culture: leaders should find out where the culture problems lie by asking for honest and perhaps anonymous employee feedback. Then put a plan and budget in place to address concerns and right wrongs that are causing attrition or morale issues. Culture isn’t as simple as cake on your birthday. It’s a moving breathing entity that is made up of corporate values and whether or not employees embrace those values.
- Clear career paths: No one likes feeling stuck. Employees who have a clearly defined career path will be set up for success and feel more embraced by their employers. Chamberlain suggests employers map out long term goals for employees and put time, energy and resources toward communicating large company goals and working with individual employees to grow from within.
- Senior leadership: If employees don’t respect leadership, the above two workplace attributes are likely to suffer, along with many others. If organizations are having trouble with certain leaders or finding that workers do not embrace the same goals or methods, the research suggests it could be time to invest in leadership training, or make executive changes.
Deciding where to spend your company’s next dollar is tough, so the more data leaders arm themselves with, the better position they’ll be in to convince a skeptical CEO of the value of employee satisfaction. Whether you’re a CHRO or you report to one, you can ignite change simply by taking relevant research in to consideration as you decide where to spend your company’s next dollar.
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