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Best Place to Work

Leadership Development, DFW Executive Coach, Best Places to Work, Employee Engagement, Employee RetentionWhy do organizations want to be on the  ”Best Places to Work” lists?  Is is that they want their employees to have more fun at work?  Could it be that their owners and executives want to be a part of something larger than themselves and want their employees to have that same feeling of contribution?  Perhaps it’s about professional reputation?

It could be all of the above.  But, the biggest secret about the best places to work is that they are more productive and profitable.  The truth is, organizations can have it all – fun, innovation, community, great customer service, employee retention – and still be wildly profitable.

Aligning emotional intelligence with shareholder value can mean big bucks.

Let’s start with the 28 companies  profiled in the book “Firms of Endearment: How World Class Companies Profit from Passion and Purpose”.   The premise was to look at companies that are truly loved by all who come in contact with them – customers, employees, suppliers, environmentalists, the community, even governments – in other words, organizations that hire people with high emotional intelligence.   The results:  1025% ROI between 1996 and 2006 compared to only 122% for the S&P 500 and 316% for the companies profiled in the bestselling book Good to Great.

Next, Fortune Magazine’s “100 Best Companies to Work” vs. the stock market (source Russell Investment Group) between1998 and 2007:

  • In the “reset annually” portfolio in which equal dollar amounts (at the beginning of 1998) were purchased in the stock of each of the 1998 100 Best publicly traded companies, liquidated at the end of 1998 and the proceeds invested in the 1999 list by buying equal dollar amounts of each publicly traded firm on the 1999 list, and repeated for each of the subsequent years:  11.85% ROI vs. 5.93% on the S&P and 6.22 on the Russell 3000.
  • In the “buy and hold” portfolio, in which qual dollar amounts (at the beginning of 1998) were purchased in the stock of each of the 1998 100 Best publicly traded companies and held through the duration of the study: 11.85% ROI vs. 5.93% on the S&P and 6.22 on the Russell 3000.

Towers Watson interviewed 90,000 employees in 18 countries, and found “companies with high employee engagement had a 19% increase in operating income and almost a 28% growth in earnings per share. Conversely, companies with low levels of engagement saw operating income drop more than 32% and earnings per share decline over 11%.”

Being a Best Place to Work is all About Employee Engagement

The criteria for being a  ”Best Places to Work”  is based on employee engagement.  (Read more about employee engagement.)

Jim Harter, Ph.D., Gallup’s chief scientist of workplace management and wellbeing and Frank L. Schmidt, Ph.D. the Gary C. Fethke Chair in Leadership and professor of management and organizations at the University of Iowa, led a team of researchers who conducted a meta-analysis using a longitudinal database that included 2,178 business units in 10 large organizations. The results of the study were recently published in the journalPerspectives on Psychological Science.  Ultimately, they found that engaged employees cause high retention rates, better financial performance, and customer loyalty, to the tune of 16% greater profitability between the top-quartile and bottom-quartile units.

Employee Engagement comes down to Inspired Leadership

People want to contribute to something greater than themselves.  They want to be appreciated and know that they make a difference, and they want to feel that they belong.  Great leaders create and sustain these environments.

At Vivid Epiphany, we build leaders who foster employee engagement.  Contact us today for more information about how our executive coaching programs and individually tailored engagements can boost your bottom line.

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