Happy workers boost performance
Article Date: May 09 2005
High levels of staff morale can enhance share price performance, or so new research from US-based attitude research consultancy Sirota seems to suggest.
In a survey of 28 publicly traded organisations, Sirota discovered that market valuations of the 14 ‘high morale’ companies featured, rose by an average of 16 per cent in 2004 – some eight percentage points more than the average six per cent increase recorded by other businesses in similar sectors. By way of contrast, ‘low morale’ companies saw their share prices rise by just three per cent over this same period.
To David Sirota, chairman of the eponymous research organisation, the message to employers is clear. ‘Morale is a direct consequence of being treated well by a company and employees return the “gift” of good treatment with higher productivity and work quality. These gains translate director into higher company profitability’.
In order to boost morale, he argues that firms must: treat workers fairly, offer them a sense of achievement and pride in the company’s activities and help them generate good, productive relationships with fellow workers. ‘Employees who work for companies where just one of these factors is missing are three times less enthusiastic than workers at companies where all elements are present,’ Sirota says.
In spite of the link, however, he concedes that it remains something of a mystery as to whether companies perform better because their workers are content or vice versa. ‘Satisfied employees lead to satisfied customers, which results in higher sales,’ he elaborates. ‘And satisfied customers and higher sales, in turn, result in more satisfied employees… it’s a virtuous circle.’
