Your Employees: An Investment Worth Making

As the holiday season descends, consumer-shopping habits ascend. The holiday season also call into question principals, passion and a reevaluation of organizational goals and strategy.

At this time of year, companies review quarterly sales and performance reports, beginning to re-align their goals with their strategy. While tempting, no organization should leave employees out of the discussion. A recent Harvard Business Review article by MIT visiting operations management assistant professor, Zeynep Ton, argues that investing more in employees improves a company’s profitability. Another article written by Ton earlier this year mentions that labor should be seen as a sales driver instead of a cost driver.  Instead of a short-term expense to be controlled, organizational talent is a long-term investment, which will aid in retention, employee motivation and performance. This motivation can ultimately increase customer satisfaction, profits and brand value. Though Ton mainly addresses retail establishments, the same can be said for hospitals, banks, restaurants and hotels.

Ton goes on to say, “I found that a one-standard-deviation increase in labor levels at a store increased profit margins by 10% over the course of a year…of course the relationship between staffing levels and profitability is not linear: After a certain point, increasing the former will reduce the latter.”

When investing more in your employees, how do you help them fully understand their role and contributions to your organization? Coaching is key. In A Manager’s Guide to Coaching I outline practical tools that managers can apply immediately to improve motivation, clarify goals and increase developmental opportunities.

One tip is to listen and ask questions, instead of always telling your employee what to do. Employees know the situation on the ground better than most and can probably come up with a more than adequate solution than you, if you let them.

Though technology and performance metrics become more and more precise, the need to connect with people directly will never completely disappear. It makes business sense to treat employees well and invest in their well-being.  This is an investment that  will always pay off.

Happy Holidays!

Anne