Up to 40% return on investment with little risk? Yes. When the investment is in employees

There are very few areas in life where you can be guaranteed great returns on investment with little or no risk and jail is not involved. Investing in employees is one of them. Recent survey data from about 7,000 employees doing a wide range of work in Canada confirmed that employee morale could be increased by up to 40% if workplaces invested their energy, time, and resources in communication excellence and identifying and managing conflict. Morale in this case is not the same as job satisfaction. Job satisfaction is liking what you do while morale is a measure of key conditions that affect how you feel about what you like doing. In other words, you can love being a computer programmer or a plumber but really hate how you are treated by the boss, how respected and valued you feel at work, and your ability to have a say and be taken seriously.

There are many valid studies showing a strong correlation between employee morale and how effective and engaged employees are at work. While it’s fairly obvious, a significant body of research confirms that bummed out employees with low morale take off more sick time, aren’t as energized about doing a great job, and are at risk of either abandoning ship or simply hiding below deck. And the opposite is true of high morale employees.

A recent private employee study for a large organization now quantifies with statistical precision just how much a return on investing in employees can bring. The analysis looked at results from 7,000 employees and how they rated a dozen key workplace measures including internal communication, conflict management, teamwork, workplace trust, job satisfaction, and morale. A statistical regression analysis was then used to discover which of the measures had the greatest predictive power of higher morale. What the results show is that overall, employee morale could be increased by up to 40% if an outstanding job is done on several key factors associated with internal communication–listening to employees, offering constructive feedback, recognizing very good performance, and providing useful feedback on new information in an efficient and effective manner (all other things remaining the same)

Because those communication factors are strongly correlated to conflict management, workplace accountability, and workplace trust, the research shows potential increases in performance for those measures as well. The bottom line is that there’s a large return on investment to be gained, with little risk, by attending to factors that show a strong correlation to employee morale and also are strong predictors of morale.

There is a caution of course. Sound scientific employee research can narrow down with fine-point accuracy areas that are very likely to increase employee morale (or any other measure). This is the “what” we know. However a successful outcome will only occur when the data is used as a starting point to engage employees in a discussion about “why” things are the way they are. This is where the human factor comes in–the recognition that workplaces are not mechanistic models defined by an elegant org chart or by systems and processes consumed with measuring outputs and not outcomes.

There are of course some who eshew the use of quantitative research and analysis in organizational design, development, and continuous improvement. Their argument is that cold, hard, data is no substitute for sitting down with fellow humans in a spirit of safe and meaningful dialogue. My view, based on the above findings and my ongoing work, is that successful OD is the result of both science and sentience. Curious if others have similarly found this marraige a compatible one.


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