Employers & Employees Disconnected on Business Impact of Recession

There are some fascinating differences in the perceptions of employers versus employees regarding the impact of the recession and the consequent changes (restructuring, etc.) made to the "employee value proposition", as reported in the 2009/2010 Strategic Rewards Report conducted jointly by WorldatWork and Watson Wyatt (and covering the practices of 235 U.S. organizations).

While employers appear to recognize the impact that these changes have had on employee workload, stress, work-life balance, etc., they appear to be vastly underestimating the business impact when you compare their responses to the opinions of employees.  Specifically:

41% of employees indicate that the changes have had an adverse impact on quality and customer service, while only 17% of employers believe that this is the case.

The following table, which features data from the report, highlights the different perceptions of employers and employees regarding the impact of changes on the business and the employee experience. 

 
The authors of the survey report attribute much of the negative business impact to a decrease in employee engagement.  That may indeed be part of the picture, but I have to wonder if the leaders of some of these organizations are so caught up in recessionary fire-fighting that they are failing to see the very real business repurcussions of their cutbacks - at the ground level - that are obvious to customer-facing employees. 

It's one thing to ask employees to make some sacrifices - in frozen pay, decreased benefits, etc.  It's another thing to ask them to absorb those sacrifices while simultaneously witnessing a downscaling in service and quality.  What highly motivated, high performing employees are going to stick with that kind of a scenario as the economy turns around?

Who is minding the store here, really? 

Comments

[Derek Irvine, Globoforce]

Great post, Ann. Another stat that leaped off the pages of the report at me was: “Top-performing employees are 20% less likely to agree that they understand the link between their own goals and the company’s goals in 2008.”

Taking that stat in conjunction with the one you quote above, I conclude that employees don’t know what they should be working on and how it contributes to company success (alignment problem) and that quality and customer service is suffering as a result.

More on my thoughts on this research here: http://globoforce.blogspot.com/2009/10/building-alignment-and-engagement-into.html

[Steve Roesler]

Ann,

I've been looking for something simple but meaningful that reflects what I've been seeing in client organizations--this is it. And I'll share it with the clients as well.

What I'm also seeing is that employees who used to be active and vocal, approaching top management with customer issues and other in-depth concerns, aren't risking it as much. They are guarding the job that they are thankful to still have.

[Ann Bares]

Derek:

Thanks for the thought .. and for sharing the link on the alignment and engagement research with us here!

Steve:

Glad to hear that this is helpful in reflecting what you have been seeing on the ground. Your observation about employee reluctance is a troubling one, though. I wonder if that is part of the disconnect here as well - that employees are seeing the customer and quality issues, but don't want to accept the risk they see associated with waving the red flag. Really, really unfortunate.

Thanks for reading and for sharing your observation here!