Posts by Esséré

Book : Completing Capitalism

One of my areas of interest is group dynamics and when the group is large, the corporate culture.

But what exactly is a company’s culture?
What are the characteristics of an effective, humanistic culture that respects the common good, the Planet, Life?

Is it more efficient? Does it lead to greater performance?

And what are the levers that move this culture in one direction or the other?

One may or may not believe in Vinet Nayar’s statement: “Emplyees first, Customer Second”, according to which taking care of one’s employees leads to taking care of their customers, employees who feel respected respect customers, happy employees lead to happy customers… and therefore to a better overall performance of the company.

We are convinced of this and our goal here is not to convince you! If you want to know more about this belief, it is possible to consult studies that have measured this correlation (ref 1, 2, 3, 4, 5).
In this article, we would rather dig into this “taking care of your employees” / “happy employees”. What does it mean? What is it and how do you make your employees happy? Is it about making them feel good? To meet all their demands? Pay them more? How much and where does it all end? …

Here is a testimonial from a research conducted at Mars, Inc.

In the amazing book “Completing Capitalism”, Bruno Roche and Jay Jakub have defined the notion of Human Capital of a company. In the same way as financial capital, human capital must, for the authors, contribute to the financial value of the company.

An analysis of the literature has shown that 4 dimensions constitute this Human Capital:

  • The procedures that lead to ways of working: management style, teamwork or rather individual, level of autonomy in decision-making, number of hierarchical levels, type of relationship with one’s manager…
  • Social interactions between colleagues: number and quality (comparison, competition, mutual aid, collaboration…).
  • The identity of the company: what the company represents beyond the creation of economic value, how it behaves and how it is perceived. These are the values, beliefs and collective expectations. This dimension is the feeling of how much the managers embody the identity of the company, how much they are exemplary … A strong identity allows to lighten the procedures and to fluidify, simplify, make more agile the decision making processes.
  • The social capital between employees: level of trust, cooperation habits…

Then the authors asked themselves how to measure these 4 dimensions of Human Capital.

Even if the answer varies from one company to another, a study conducted over 6 years, on 4 Mars BUs, on four continents, showed that there are 5 main drivers, classified in two categories by increasing order of influence,

Self-centered :

  • My manager’s posture: mainly if he was there to help me, support me, develop me and promote me and that this is no longer the case with my new manager. At Mars, this driver is equivalent to a 2% pay cut.
  • My social status in relation to others in the company, perceived power, recognition and prestige of my position in the organization. At Mars, this driver is equivalent to a 9% salary increase.
  • My growth potential, which includes opportunities to learn and take on new responsibilities. At Mars, this driver equals a salary increase of 11%.

Company-centric:

  • Social capital among employees: the level of trust and cohesion in the human community, the ability to mobilize and collaborate for the common good among colleagues (between managers and managers, between managers and top managers. At Mars, this driver is equivalent to a 15% salary increase.
  • The company’s identity: is it defined and known, is it aligned with the strategy, is it aligned with the values of the individuals? At Mars, this driver is equivalent to a 30% salary increase.

In other words, this study underlines that if you want to take care of your employees, and therefore your customers, then you need to work on the identity of your organization (https://www.essere.xpected.digital/fr/vision/).

Reference

  • Peter Warr, « Well-Being and the Workplace, » in Well-Being: The Foundations of Hedonic Psychology, eds. Daniel Kahneman, Edward Diener, and Norbert Schwartz (New York: Russell Sage Foundation, 1999), 392-412.
  • J. K. Harter, F. L. Schmidt, J. W. Asplund, E. A. Killham, and S. Agrawal, « Causal Impact of Employee Work Perceptions on the Bottom Line of Organizations, » Perspectives on Psychological Science 5, (2010): 99 378-389.
  • A. Edmans, « Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices, » Journal of Financial Economics 101 (2011): 621-640.
  • P. Böckerman and P. Ilmakunnas, « The Job Satisfaction-Productivity Nexus: À Study Using Matched Survey and Register Data, » Industrial and Labor Relations Review 65 (2012): 244-262.
  • M. Riketta, « The Causal Relation Between Job Attitudes and Performance: A Meta-Analysis of Panel Studies, » Journal of Applied Psychology 93 (2008): 472-481.