There is evidence, intelligently articulated by Phil Rosenzweig in 2007 (The Halo Effect), that a series of measures of employee satisfaction and engagement go up and down quickly in correlation with company success. He quotes the example of the UK retailer Marks & Spencer (M&S) which in 2005 enjoyed a dismal ranking amongst the Most Admired Corporations of the country. Two years later, M&S became the most admired corporation in the UK, ranking first in 5 out of 9 categories (the same categories used 2 years before) including ‘ability to attract and develop’.
Yes, in the abysmal 2005, M&S hired a new CEO and, sure, that seems to have made the company very successful again. But the company faltered again the next year (same Good-Guy-CEO) and suddenly all parameters (all) went down. Obviously this is a good argument for Rosenzweig’s Halo Effect. It’s hard to believe that all parameters (including developing people, something that M&S did not stop) should move in parallel, up or down. Only a ‘halo effect’ can explain it.
Rosenzweig is critical of the systems employed to rank those companies and the way in which ‘lots of data’ is used and presented as legitimization of the supposed ‘scientific approach’ that yields the ranking. He calls the system of assessment used ‘Delusion of Rigorous Research’ and this resonates with me.
So, if the example of the M&S halo effect teaches something, I think that it’s perfectly reasonable to accept the following argument. Although good employee satisfaction and other standard ‘measures’ of employee engagement, surely lead to better company performance, it is also possible that successful performance is what may drive employee satisfaction and happiness. In caricature, one model says if you want company success, have employee satisfaction. The other model says if you want employee satisfaction, have a successful company.
Before we all jump in to conclude ‘it’s both, of course’, which it might well be, lets consider that the first model (employee satisfaction leads to company success) usually gets most of the attention of the accepted logic. As obvious as the second model may be (successful company leads to employee satisfaction) this model does not get near the same attention. It sounds obvious and almost boring to state that.
Accepting the two models in a more balanced way makes us see how biased our thinking is sometimes. An established mantra, and plenty of numerical data (a great deal of which has dubious rigour) leads us into one direction without seeing any contrarian view. Managing thinking is full of unidirectional logic, almost untouchable and frequently blessed by Big Names or ‘Research evidence’. Reframing questions is part of the ABC of critical thinking. In this case, the question is, it seems obvious that A leads to B, what if it were to be the other way around?
The reasoning might be flawed either way. What if there’s an underlying common generator of both outputs? Sounds like a plausible reason and, indeed, in a system such as a business organization, is the most likely in my opinion. In “Six Simple Rules”, authors Morieux and Tillman, stated that a demotivation and productivity of the same workforce couldn’t arguably be either one generator of the other. Instead, a subjacent structural factor explained both. The complicatedness (somehow different to complexity) of the organizational structures accounted for such explanation. Seems like a similar case. What do you think?