Employee Satisfaction-Engagement and Savings in Employee Turnover Costs
As our final example of the relationship of work-related employee attitudes to financial outcomes, consider the experience of SYSCO Corporation, North America’s largest food marketer and distributor (Cascio, 2005). SYSCO developed a model (the value-profit chain) that shows the logical connections between effective management practices and long-term profitability and growth. According to this model, effective management practices drive employee satisfaction and engagement. A satisfied and engaged workforce, in turn, enables a company to pursue excellence in innovation and execution.
The logical proposition is that higher employee satisfaction-engagement drives innovation and execution, which, in turn, enhances customer satisfaction, customer purchasing behavior, and, eventually, long- term profitability and growth. Certainly, management needs to put in place systems, people, technology, and processes that will initiate and sustain innovation and execution – the principal components of an effective value-profit chain. Competitors can easily copy technology and processes, but a highly skilled, committed, and fully engaged work force is difficult to imitate.
SYSCO’s management model is based on five sets of practices that describe how the company seeks to engage the hearts and minds of employees with its employer brand. It is known as the 5-STAR management model (Carrig & Wright, 2006). The framework is general enough to apply to any type of company structure or business model, and it gives businesses wide discretion in actual implementation. The five principles of the STAR model are as follows:
• Ensuring that leaders offer direction and support • Strengthening front-line supervisors • Rewarding performance • Addressing employees’ quality of life • Including employees by engaging them and leveraging diversity
64 Management Today | March 2012
To measure the attitudes of its employees, SYSCO developed a 14-item employee satisfaction/engagement survey built around each of the 5-STAR principles. All members of each SYSCO operating company (there are 147 geographically based operating companies operating under the SYSCO umbrella) participate in a comprehensive annual self-assessment and impromptu and informal assessments on an as-needed basis.
Consider just one of the items: “My supervisor removes obstacles so I can do my job better.” A multiyear study of hundreds of knowledge workers in a variety of industries that tracked their day-to-day activities, emotions, and motivations through 120,000 journal entries strongly supports this driver of engagement. The study found that “workers reported feeling most engaged on days when they made headway or received support to overcome obstacles in their jobs” (Fox, 2010). They reported feeling least engaged when they hit brick walls. In short, small dents in work meant as much as large achievements.
At this point you may well be asking yourself, “So what?” It’s nice that SYSCO developed a logical model to guide its management efforts, and it is nice that the company measures each of its operating companies in terms of the satisfaction-engagement of its employees, but does that matter? Is satisfaction/engagement related to important outcomes that senior managers care about? The answer is an unqualified yes. Here is why.
SYSCO assesses the performance of each operating company in terms of balanced- scorecard metrics in four areas: financial, operational, human capital, and customer performance. Scores on the employee satisfaction/engagement survey comprise one element of the human capital metrics, along with measures of productivity (employees per 100,000 cases shipped) and employee retention (among marketing associates, drivers, and night warehouse employees).
The company was able to demonstrate that higher levels of employee satisfaction/ engagement produced systematically higher
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