Engineer Employee & Customer Satisfaction

Employee satisfaction (ES) and customer satisfaction (CS) levels have long been considered valuable indicators of—as well as analogous to a two-cylinder engine powering—the future financial health of a business. ES and CS measures are therefore of interest to prospective investors in the business.
     Now researchers at Virginia Commonwealth University, Singapore Management University, and University of Pittsburgh say that increases in social media usage and in ease of both publicly-held company stock purchasing and private-market investing by individual consumers are changing how businesses should optimally conduct their ES and CS initiatives and announce the results of those initiatives. The objective should be to demonstrate results which stimulate promise of greater shareholder wealth. Among the researchers’ observations is that firms with low CS ratings could accomplish this objective by increasing ES alongside broad social media visibility.
     The researchers propose, based on their inquiries, that individual investors are attracted to firms showing imbalance between ES and CS. The explanation is that the investors are particularly attracted by business prospects for explosive growth. Although high levels in ES and CS indicate healthy business operations, an imbalance signals prospects for improvement under skilled management. “Buy low, sell high” is the smart investor’s mantra.
     The researchers’ attention to social media visibility derives from how individual investors would assess a firm’s CS and ES levels. For CS, the individual could analyze product or service reviews. Those are abundantly available on social media sites. ES levels are more difficult to find in abundance, so it benefits the firm to post them prominently on their own.
     A team of researchers at Aston University, Technical University Munich, and University of Paderborn view the two cylinders—ES and CS—as firing off interdependently. The team’s model, resulting from a large-scale longitudinal study set in a multi-outlet retail chain, incorporates operational investments and operating profits as components.
     The model shows a lagged effect between operational investments and ES: It takes some time for the additional resources to produce an outcome. The researchers advise managers to exercise patience. There is also a lagged effect between CS and operating profits. A third lagged effect is in a reinforcing loop. That is, as operating profits change, operational investments are likely to change in the same direction in the future.
     Business firms can attract investors by properly managing the interdependencies, the prompt and lagged effects of the components, and the postings about CS and especially ES on social media.

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