Special
Quality Study
We have done hundreds of studies with financial
data and will continue these in the future. We examine
different time periods, industry trends, company size
trends and many other factors. Occasionally, we do
specialized, one-time studies with our database. One of
these was done with quality and customer satisfaction
data.
We were able to get quality and customer
satisfaction data on only a portion of the companies in
our database (approximately 100 of 330). For the most
part this data does not exist or is not publicly
available. However, in some industries (e.g., the
automobile industry) there is detailed information on the
quality of company products and customer satisfaction
with the products.
What we did was take the company overall rating on
quality/customer satisfaction and standardize it against
an industry norm. This means that each industry would
have a mean (average) quality or customer satisfaction
score of 100. A score of 110, for example, would
translate to the exact same amount above the mean in each
industry. This enabled us to combine company scores
across industries.
We correlated each of the 80 people management
practices with this composite quality/customer
satisfaction score. We found that 60 or the 80 items had
a significant correlation with success at quality or
customer satisfaction. The item which correlated highest
with quality was whether the company had a participative
management style. Not surprisingly, this item has
correlated highest over the years with our various
financial criteria.
Bear in mind, our items were not developed to
predict quality or customer satisfaction. They were
developed to predict financial success. Yet it was
interesting to discover the relation to quality. This is,
of course, somewhat expected since success at quality
plays a part in a company's overall financial success.
Our Current Work
We continue to search for additional predictors of
financial success that pertain to people management. The
predictive power of what we have is so strong that it is
hard to improve upon. Yet we keep looking.
We
maintain a qualitative database of company best practices
in people management.
The eighty people management practices that we have
found to predict company financial success fall into the
following categories:
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Management
style |
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Company
culture and goals |
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Organization
structure |
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Communications
practices |
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Quality
and customer satisfaction |
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Recognition
and reward practices |
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Employee
development practices |
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Employee
accommodation practices |
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Selection/promotion
practices |
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Job
design |
Each of the eighty practices is measured on a
five-point scale. This makes it possible for us to
measure "soft stuff" with a great deal of
precision. The scales enable us to roll together scores
for an entire company and then do research with these
scores. We have created national norms, industry norms,
and leading company norms by grouping the 330 companies
in our database into different demographic groups.
Best Practices Database
In addition to a quantitative database of company
information, we collect a qualitative database. This
tells us what the company is doing and how its scores got
to be so high. We gather this information by doing a
direct on-site examination of the company's people
management practices. For example, we take a look at the
exact recognition and reward programs and policies that
exist.
In addition, we run focus group meetings with
randomly chosen employees at a company. If the company is
doing something exceptional in some aspect of people
management, employees will tell us this in the focus
group meetings. Likewise, if the company's activities are
poor or missing, we would know this. The focus groups
help us understand what the company does and what
employees want.
The qualitative database enables us to provide
companies with very specific recommendations on how to
change their practices. For example, say that a given
company has ineffective technical training for its
employees and we know this through their survey scores.
We can then look up the practice leaders in this exact
area. We share with the company needing help who the
leaders are and what they are doing that makes their
technical training so effective.
We actively manage the best practices database, and
share out the information in it with participating
companies. This ensures that each company knows precisely
how to change whatever needs changing. This database is
constantly being updated, as is the quantitative database
of norms.
Assessment Process
Companies that participate in the assessment of
people management practices participate in the following
activities:
1. Employee surveys (either sampling or the entire
workforce).
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