ustomer satisfaction, and, after a while, improvements in revenues as customers return more often, spend more, and bring in friends. Eventually, the result would be better financial performance.
Virtually all firms of any size have the information they need to track this type of indirect path, and can use the metrics to show the ongoing effects of efforts to improve not only workforce satisfaction, but other employee attitudes and attributes as well.
THE DATA SOURCE
Data came primarily from the extensive records of a large U.S.-based home-improvement retailer, comprising about 96,000 employees in 782 stores. Data were obtained for fiscal years 2003 (Year 1) and 2004 (Year 2).
Employee satisfaction was measured by 12 items scored on a 5-point scale (1=strongly agree, 5=strongly disagree; “no opinion” was also an option). The items addressed store-level management practices and employees’ perceptions of their work. Individual
responses were aggregated up to the unit level. Employee retention was calculated at each store by comparing the number of employees who remained in a given store from Year 1 to Year 2 versus the number of employees in the store in Year 1. Employee responsiveness was measured as the average time employees took to respond to customer requests for assistance.
The company measured customer satisfaction with phone- and internet-based surveys (future discounts were offered as an incentive). The questions, on a seven-point scale (1=completely dissatisfied; 7=completely satisfied), addressed customers’ satisfaction with the company over time an