For years HR executives have searched for a way to quantify the impact that investments in human capital have on business performance. Outcomes Linkage™ provides the capability to do just that. This method is based on a statistical technique using structural equation modeling to determine what aspects of employee opinion influence customer satisfaction and other measures of business performance.
A case example:
Documenting a link between employee attitudes and sales
For a major retail bank, Towers Perrin-ISR researched the service-profit chain, which links employee opinions to customer satisfaction and indicators of company performance, to help the bank uncover the financial impact of employee satisfaction.
As shown in the first chart below, bank branches with more satisfied employees enjoyed reduced staff turnover and absenteeism, more satisfied customers, greater customer growth, and increased sales. Branches with more satisfied customers registered fewer complaints and grew their customer base, which, in turn, increased sales.
Towers Perrin-ISR's research determined that empowerment was the most important area affecting employee satisfaction. These findings helped bank managers identify how employee opinions contributed to the achievement of branch performance objectives and target follow-up actions on the critical areas affecting performance.
The table below outlines a few of many measures that Towers Perrin-ISR has successfully used in conducting Outcomes Linkage research.
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