One of our areas of interest is group dynamics and when the group becomes large, it become the corporate culture.
But what exactly is a company’s culture?
What are the characteristics of an effective, humanistic culture that respects the common good, the Planet, Life?
Is this culture more efficient? Does it lead to greater performance?
And what are the levers that move this culture in one direction or the other?
One may or may not believe Vinet Nayar’s statement: “Employees first, customer second,” that taking care of your employees leads them to take care of your customers. Employees who feel respected respect customers. Happy employees lead to happy customers… and therefore to better overall company performance.
At Esséré, we are totally convinced by this process, but our goal in this article is not to convince you! If you want to know more, check out the studies that have measured this correlation (ref 1, 2, 3, 4, 5).
Instead, in this article, we want to dig into the topic of “caring for employees / happy employees“. What does this mean? What is it and how can you make your employees happy? Is it about making them feel good? Meeting their every need? Pay them more? How much and where does it stop? …
Here are the findings of research conducted at Mars, Inc.
In the astonishing book “Completing Capitalism“, Bruno Roche and Jay Jakub have defined the notion of Human Capital of a company. In the same way as for financial capital, for the authors Human Capital must contribute to the financial value of the company.
They share a review of the literature that identifys 4 dimensions of the Human Capital. The 4 dimensions are:
- The procedures that lead to ways of working: management style, teamwork or individual work, level of autonomy in decision making, number of hierarchical levels, type of relationship with the manager…
- Social interactions between colleagues: number and quality (comparison, competition, mutual aid, collaboration…).
- Corporate identity: what the company represents beyond the creation of economic value, how it behaves and how it is perceived. It is about values, beliefs and collective expectations. This dimension is the feeling of how much the leaders embody the company’s identity, how much they are exemplary … A strong identity makes it possible to streamline procedures and to make decision-making processes more fluid, simpler and more agile.
- The social capital between employees: level of trust, cooperation habits…
The authors then asked themselves how to measure these 4 dimensions of Human Capital.
Although the answer varies from company to company, a study conducted over 6 years, on 4 Mars BUs and 4 continents, showed that there are 5 main drivers, classified into two categories in increasing order of influence,
- My manager’s posture: at Mars, an employee is willing to accept on average a 2% pay cut to have a manager who is there to help, support, develop and promote him.
- My social status relative to others in the company, perceived power, recognition and prestige of my position in the organization. At Mars, this factor is equivalent to a 9% salary increase.
- My growth potential, which includes opportunities to learn and take on new responsibilities. At Mars, this factor equates to an 11% salary increase.
- Social capital among employees: the level of trust and cohesion in the human community, the ability to mobilize and collaborate for the common good among colleagues (between managers and managers, between managers and executives). At Mars, this driver is equivalent to a 15% salary increase.
- Corporate identity: is it defined and known, is it aligned with strategy, is it aligned with people’s values? At Mars, this driver is equivalent to a 30% salary increase.
As a conclusion, this study highlights that if you want to take care of your employees, and therefore your customers, you need to work on your organization’s identity first (Esséré’s Vision offering), and on the level of trust and cohesion around a common good. (Esséré’s Tsansformation offering)
We hope you enjoyed this reading !
- Peter Warr, « Well-Being and the Workplace, » in Well-Being: The Foundations of Hedonic Psychology, eds. Daniel Kahneman, Edward Diener, and Norbert Schwartz (New York: Russell Sage Foundation, 1999), 392-412.
- J. K. Harter, F. L. Schmidt, J. W. Asplund, E. A. Killham, and S. Agrawal, « Causal Impact of Employee Work Perceptions on the Bottom Line of Organizations, » Perspectives on Psychological Science 5, (2010): 99 378-389.
- A. Edmans, « Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices, » Journal of Financial Economics 101 (2011): 621-640.
- P. Böckerman and P. Ilmakunnas, « The Job Satisfaction-Productivity Nexus: À Study Using Matched Survey and Register Data, » Industrial and Labor Relations Review 65 (2012): 244-262.
- M. Riketta, « The Causal Relation Between Job Attitudes and Performance: A Meta-Analysis of Panel Studies, » Journal of Applied Psychology 93 (2008): 472-481.