Satisfied and Motivated Employees Create Satisfied and Loyal Customers Essay
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In Corporate America, organizations vie to maintain their competitive advantage within their perspective industries. In the current economic downturn, organizations have come to rely heavily on the competitive advantage they receive from their employees, or human capital. Organizations are investing more of their funds towards satisfying and motivating employees in the hopes that these employees will create satisfied and loyal customers. To ensure employees are satisfied and motivated, organizations may recognize employee contributions with pay and a package of employee benefits.
These forms of compensation work to ensure increased employee satisfaction and motivation, decreased voluntary turnover, and, therefore, the overall success of the entire organization.
In Corporate America, organizations vie to maintain their competitive advantage within their perspective industries. In the current economic downturn, organizations have come to rely heavily on the competitive advantage they receive from their human capital. Human capital is defined as “an organization’s employees, described in terms of their training, experience, judgment, intelligence, relationships, and insight” (Noe et al., 2011, p. 3). Highly skilled and developed employees are an organization’s most valuable resource in the fight to maintain their competitive advantage. Therefore, organizations are investing more of their funds towards satisfying and motivating employees in the hopes that these employees will create satisfied and loyal customers. In an effort to satisfy and motivate employees, organizations may recognize employee contributions with various forms of compensation including pay and an employee benefits package, and through recognition programs.
These forms of compensation and recognition work to ensure increased employee satisfaction and motivation, decreased voluntary turnover, and, therefore, the overall success of the entire organization. “If we take care of our employees, they will take care of our customers.” During the current economic downturn, many organizations have experienced decreased sales and profits. Many of those organizations responded with spending cuts, which included layoffs and decreased investments in employees. The restaurant chain, Texas Roadhouse, was not immune to the economic downturn and also experienced decreased sales. However, the chain did not respond with spending cuts aimed at employees. In fact, the chain continued its existing spending relative to employee satisfaction and motivation. The text indicates, “Spending to promote job involvement and organizational commitment remained intact” (Noe et al., 2011, p. 319).
The decision to maintain spending relative to employee satisfaction and motivation reflects the chain’s commitment to their employees. The chain’s commitment to their employees has been best expressed by Texas Roadhouse Chief Executive Officer (CEO), G. J. Hart. Hart, who realizes the value his employees bring to the organization, has stated, “If we take care of our employees, they will take care of our customers” (Noe et al., 2011, p. 319). Hart’s phrase may seem like a common cliché’ in Corporate America; however, organizations focused on satisfying and motivating employees are actually gaining the competitive advantage that only their employees can provide. The text indicates, “Every organization recognizes that it needs satisfied, loyal customers.
In addition, success requires satisfied, loyal employees” (Noe et al., p. 293). Texas Roadhouse is not alone in its commitment to its employees. SAS, a privately owned software company, is also highly committed to its employees. Bev Brown, who works in the company’s external communications department, indicates “People do work hard here, because they’re motivated to take care of a company that takes care of them” (Noe et al., 2011, p. 385). More organizations are beginning to realize the advantages associated with satisfying and motivating their employees. And, as the realization becomes more prevalent in Corporate America, more organizations will begin to demonstrate their commitment to their employees by offering generous rewards and recognition programs.
Alternative Motivation Methods & Their Effectiveness
Texas Roadhouse uses money as a primary motivator for its employees. The chain holds a yearly competition to identify its best meat cutter, who is awarded $20,000. The chain’s managers are allotted $500 to host barbecues or outings for their employees. The chain also holds an annual motivational conference to recognize and reward its top performers. The text indicates, “The company invites about a thousand employees, managers, and vendors to bring their spouses to a four-day conference as a way to recognize and reward its best people” (Noe et al., 2011, p. 320). The retreat was costly; and, the chain’s CEO, Hart, was publicly criticized for such lavish spending.
The text indicates, a reporter “… criticized Hart for wasting $2 million on luxuries during lean times” (Noe et al., p. 320). However, Hart stood firm in his commitment to his employees as he replied that “… the effort to inspire employees was precisely the kind of investment that enables his company to succeed” (Noe et al., p. 320). Texas Roadhouse’s strategy is certainly effective in ensuring they retain their top talent. The text indicates, “… turnover among the company’s on-site recruiters tumbled by two-thirds after the company put in place a program to recognize and reward these employees” (Noe et al., p. 320).
Pay is certainly a motivator for employees; however, organizations may also utilize employee benefits as a means of motivating employees. Employee benefits are “… that part of the total compensation package, other than pay for time worked, provided to employees in whole or in part by employer payments” (Milkovich & Newman, 2005). The text indicates that benefits serve functions similar to pay in that benefits “… contribute to attracting, retaining, and motivating employees” (Noe et al., 2011, p. 384). For instance, SAS offers a generous employee benefit package as a means of ensuring their employees are satisfied and motivated. The company’s benefit package includes access to the on-site recreation and fitness center, a subsidized day care center and summer camp, and a subsidized cafeteria.
The company has established an on-site lactation room for nursing mothers, and an on-site health care center for employees and their family members to have medical concerns addressed at no cost. The text indicates that these generous benefits are “… part of a strategy to hire and keep the best people without paying top dollar in salaries” (Noe et al., p. 385). The SAS strategy is certainly effective in regards to ensuring the company retains its top talent. The text indicates, “Compared with 22 percent employee turnover in the industry, SAS reports turnover of just 2 percent” (Noe et al., p. 385). The SAS strategy is also effective in ensuring the company remains profitable. The text indicates that every year the company has been in business “… it has turned a profit” (Noe et al., p. 385).
Transferring the Texas Roadhouse Motivational Methods
The Texas Roadhouse method of using pay to motivate its employees is certainly transferrable to other organizations in Corporate America. Organizations should demonstrate their commitment to their employees by offering competitive and rewarding pay and recognition programs. Doing so will ensure the organization has the ability to attract and retain top talent, which will provide the organization with a definite competitive advantage in their perspective industry.
Milkovich, G., & Newman, J. (2005). Reward systems: Theory and administration. (8th ed., p.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2011). Fundamentals of human resource management. (4th ed.). New York, NY: McGraw-Hill.