A feel-good strategy with proven financial results
Many of us believe that good morale and a positive work culture are terrific goals –but when pushed to prioritize, we tend to focus on hard results (like productivity or expenses), rather than what we perceive to be soft-touch, fuzzy options like morale.
That’s why I love that the American Psychological Association (APA) has compiled a fact sheet and an entire website devoted to healthy workplace practices (http://www.phwa.org). They use hard data – including compelling financial data – to show how important this so-called soft stuff really is. Consider:
- APA’s 2008 Psychologically Healthy Workplace Award (PHWA) winners report an average turnover rate of 11% compared to 40% nationally, only 21% of their employees report chronic work stress compared to 34% nationally, and PHWA winners report an 82% employee satisfaction rate compared to 66% nationally. When you consider that turnover costs the average company between 12% and 40% of revenue, the reduction in turnover alone is stunning.
- Companies that invest more than average in employee training outperform the market by 45% and have returns that are 86% higher than those companies that spend less than average.
- In a study of 24 publicly traded companies, those with high morale outperformed similar companies in their same industries by almost 2.5 to 1, while the stock prices of companies with medium or low morale lagged behind their industry peers by more than 1.5 to 1.
(There’s more! Download the Fact Sheet.)
The PHWA results come primarily from for-profit companies. That makes sense – it is always easier to measure results in stock prices and profit statements. But if morale and organizational culture and other healthy workplace practices can make a difference in profits, then how much greater a difference can they make in the lives of our employees and the people we serve?
Just a little something to think about. Where can you start to make a difference in the health of your workplace?
2 Responses to “A feel-good strategy with proven financial results”
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Lee Ann Slayton
President, Slayton Consulting, LLC
Great post Lee Ann. I agree completely. For instance, earlier this year I got to visit with Tony Hsieh and the leadership team at Zappos, the internet shoe company. They have built a $1 Billion dollar company on what Tony calls “The Science of Happiness”. It was quite a remarkable and profitable environment.
Warmly,
Paul
Paul, thanks for the Zappos example. That is a great one. Don’t I remember that you wrote something about your experiences there? Let me know; I’d love to share it.