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  THE BUSINESS CASE
 

Statistics continue to demonstrate the clear need for work-life programs. While early research into the outcomes of work-life programs focused on such measures as turnover and absenteeism, recent research demonstrates that there is a definitive link between a company's commitment to work-life initiatives and its employees' commitment to their work. What's more, increases in employee commitment have produced measurable improvements in customer loyalty, customer satisfaction, revenues and profits, and shareholder value. Some of the more important findings include the following:

  • Employee commitment is associated with job performance. Employees who are committed to an organization work harder and are more productive in their jobs than employees with weak commitment, as measured by sales figures (Bashaw and Grant, 1994), control of operational costs (DeCotiis and Summers, 1987), and supervisors' ratings of overall work performance (Moorman, Niehoff, and Organ, 1993)
  • Employee attitudes drive both customer satisfaction and revenue. A study at Sears found that every 5 percent improvement in employee attitudes drives a 1.3 percent improvement in customer satisfaction and a .5 percent growth in store revenues (Rucci, Kirn, and Quinn, 1998). In another study, Xerox used a management and measurement system that enabled the company to track relationships between employee attitudes and behaviors, customer satisfaction, and profitability. The company found a tight link between employee satisfaction measures and customer results (Barr, 1998)
  • Employee retention is a key driver of customer retention, which in turn is a key driver of company growth and profits. Research at MBNA's credit card business showed that a 5 percent increase in customer retention translates into a 125 percent increase in per-customer profits (Reichheld, 1996). Another study showed that a 7 percent decrease in employee turnover led to increases of more than $27,000 in sales per employee and almost $4,000 in profits per employee (Huselid and Becker, 1995)

Studies like these have made a strong case for the link between employee attitudes and business results. WFD has developed and rigorously validated a measure of employee commitment, the Commitment Index, in order to further this research and help our clients maximize their employees' commitment.

To find out more about some of the research listed above, click here.


Statistics

The following statistics show why work-life programs are critical to work force productivity and commitment.

  • 29 percent of employed parents experienced some kind of child care breakdown in the past three months, and those child care breakdowns were associated with absenteeism, tardiness, and reduced concentration at work. (1997 National Study of the Changing Workforce, Families and Work Institute)
  • One quarter of U.S. workers (roughly half of them men and half women) have had elder care responsibilities during the past year, and of those, one-third took time off from work to deal with those responsibilities. (1997 National Study of the Changing Workforce, Families and Work Institute)
  • Employees experiencing conflict between work and family demands are three times more likely to consider quitting (43 percent vs. 14 percent). (1997 National Study of the Changing Workforce, Families and Work Institute)
  • Employees who have supportive work environments (including some flexibility and control over their work, fair and respectful supervisors, and a culture that accepts people as they are and that values differences) report greater job satisfaction and more commitment to helping their companies succeed. (1997 National Study of the Changing Workforce, Families and Work Institute)
  • Only one in four employees has access to an elder care resource and referral service at work. (1998 Business Work-Life Study, Families and Work Institute)
  • Less than 5 percent of companies offer back-up or emergency child care, though this is generally one of the most critical needs mentioned by employees in surveys, and directly affects absenteeism, tardiness, and turnover. (1998 Business Work-Life Study, Families and Work Institute)
  • In 1960, women made up 37 percent of the U.S. labor force. By 1980 that number had risen to 42 percent, and today it stands at 46 percent. (U.S. Dept. of Labor, Bureau of Labor Statistics)
  • 85 percent of U. S. workers live with family members and have immediate, day-to-day family responsibilities off the job. (1997 National Study of the Changing Workforce, Families and Work Institute)
  • More than one third of U.S. employees have children under 13 living at home. 19 percent have children under six. (U.S. Dept. of Labor, Bureau of Labor Statistics)

References

Barr, J. H. (1998). Integrating the management system and balanced scorecard. ASQ's 52nd Annual Quality Congress Proceedings, 401-406.

Bashaw, E. R., and Grant, S. E. (1994). Exploring the distinctive nature of work commitments: Their relationships with personal characteristics, job performance, and propensity to leave. Journal of Personal Selling and Sales Management, 14, 41-56.

DeCotiis, T. A., and Summers, T. P. (1987). A path analysis model of the antecedents and consequences of organizational commitment. Human Relations, 40, 445-470.

Fel-Pro, Inc. with the University of Chicago (1993). Added benefits: The link between family responsive policies and job performance. University of Chicago.

Heskett, J. L., Sasser, W. E., and Schlesinger, L. A. (1997). The Service Profit Chain: How leading companies link profit and growth to loyalty, satisfaction, and value. Free Press. NY.

Huselid, M. A., (1996). High performance work systems and firm performance. 1996 Employee Benefits Conference, Session C, March 21-22, 1992.

Huselid, M. A., (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38(3), 635-672.

Huselid, M. A., and Becker, B. I. (1995). The strategic impact of human resources: Building high performance work systems. Coopers and Lybrand.

Meyer, J. P., and Allen, N. J. (1997). Commitment in the Workplace: Theory, research, and application. Sage Publications. Thousand Oaks.

Moorman, R. H., Niehoff, B. P., and Organ, D. W. (1993). Treating employees fairly and organizational citizenship behavior: Sorting the effects of job satisfaction, organizational commitment, and procedural justice. Employee Responsibilities and Rights Journal, 6, 209-225.

Reichheld, F. F. (1996). The Loyalty Effect: The hidden force behind growth, profits, and lasting value. Harvard Business School Press. Boston.

Rucci, A. J., Kirn, S. P., and Quinn, R. T. (1998). The employee-customer-profit chain at Sears. Harvard Business Review, Jan.-Feb., 82-97

 

 

   

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