Human Resources – Your company’s other precious metal


I appreciated the “Dare to face the future” column in the May 30 issue of Small Business Times. Rather than sit around and hope things are going to get better, I’m like you, I think we need to take action. You had a lot to say in that column to the point where I got to thinking, “This is overwhelming.” If you had to suggest one area for a company to focus on during this period of economic uncertainty, what would it be?


In my last column, “Protect your Gold,” published in the June 27 issue of SBT, I offered my response to this question and focused on customer satisfaction as a very significant aspect of organizational effectiveness. I introduced a framework in which three factors (basic, performance, and excitement) combine to form a graduated hierarchy of customer satisfaction (i.e., dissatisfied, expected, desired, and excited).

Much of the June 27 column was devoted to the organization’s gold, its customers.

In this column, I’ll focus on the organization’s other precious metal, its employees, and the critical role that they play in customer satisfaction. Along the way, I’ll highlight why the adage, “People who are well served, will serve well” needs to be heeded and acted upon.

At the outset, let me observe that your employees represent a key for differentiation in the marketplace. Think about the products or services that your company offers. How do they compare with what the competition is offering? What are the features and benefits of your products or services? How do they stack up against what the competition offers? 

Perhaps you are fortunate to be a market leader, offering products and services that are well recognized.

Or, perhaps you are not so fortunate. Perhaps you are striving to increase your break-through, to increase your visibility, etc.

Certainly, a worthwhile undertaking is to fine tune and augment the processes by which you develop and offer the products or services. Within the context of this column, I would suggest that another place to focus is on the extent to which you are truly developing the full capacity of each person who is involved in carrying out the processes that yield the products and services that your company offers.

Now, think about the features and benefits that attach to your human resources. What percentage of them are operating at peak capacity? Research by Hunter, Schmidt, and Judiesch has demonstrated that very real differences in work output exist between top, average, and sub-par performers. This is a common sense statement but the research tells a pretty compelling story, an important aspect of which is that the variability of average work output varies by job type.

For example, if you compare the work output of a sub-par semi-skilled worker with that of an average semi-skilled worker, a 19 percent difference is typical. Compare the work output of that same sub-par worker with the productivity of a peak performer and you are likely to observe a 38 percent or greater difference in output. So, if a sub-par employee produces 100 units, an average employee will produce 119, and a peak performer will produce 138 (or more). Wow!

Clearly, these are not trivial differences. From my perspective, identifying and cultivating top talent is not merely a human resources concern these days. No, this is a strategic organizational concern. This is especially true for Wisconsin employers when we stop to consider that our state is a slow job growth state and we have a very high percentage of Baby Boomers in the workforce, folks who have fewer years ahead of them than behind them in terms of their career horizons.

Remember, as well, that your people account for a good percentage of your operating overhead, as high as 80 percent for some organizations. How well are you treating these precious commodities? You probably do some ongoing maintenance with the equipment your organization uses in its daily operations. You might even have a service agreement in some instances. What is the corresponding service agreement or maintenance plan with your human resources? 

This leads me to ask the following central question: Are you setting up your people to offer exciting customer service, internally and externally, as they carry out their work in support of the products or services with which the organization is concerned?

What I’m driving at, of course, are the organization’s practices in retaining, managing, educating, and developing its employees. Are you spending adequate time and effort here so that the employees are well prepared to wow those customers each and every time? 

At the bottom line, if you treat your people like expendable commodities, easy come, easy go, or worse, why in the world would you expect them to turn around and bend over backwards in service of your customers? In other words, there is a direct relationship between how employees are treated and the kind of service they offer. 

So, the prescription here is as follows: If you want your customers to experience exciting service, then you have to offer exciting service to your employees.  

Don’t believe me? Here are some cold, hard facts from the Gallup group that bear upon what I’m talking about:

• The number one reason people leave their jobs is that they don’t feel appreciated.

• Negative employees can scare off every customer they speak with  . . . for good!

• 65 percent of American workers report receiving no recognition in the workplace last year.

• According to a Gallup survey, more than 90 percent of people say they are more productive when they’re around positive people.

• The ratio of positive to negative interactions is critical. The magic ratio is 5:1.  Less than 3:1 is too little. Greater than 13:1 is too much.

 Want to play the customer satisfaction game at an excited level? Then, start playing the performance optimization game at an excited level. Start refining your people practices. In short, get “ARMED” (i.e., Acquiring, Retaining, Managing, Educating, and Developing)!

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