A 5-year academic study by the University of Chicago of Great Place to Work data shows that there is a direct link between an organisation’s values as perceived by its employees and its financial performance.
A team of researchers at Chicago University, using Great Place to Work data, found:
- There is no correlation between an organisation’s published values (e.g. on its website) and financial performance
- However, there is a correlation between a culture of strong values (‘high integrity’) as perceived by employees and performance – i.e.:
- The values need to be lived throughout the organisation as shown by the Great Place to Work Trust Index(c) survey statements:
‘Management’s actions match its words’
‘Management delivers on its promises’
- Trust is a key value that drives engagement; engagement is shown to directly link to improved business performance
- Organisations with high levels of integrity also have higher levels of customer satisfaction.
- There are often short term costs in maintaining integrity (e.g. turning down the ‘quick buck’) but there are long term benefits in staying true to one’s Values
- Organisations often find it difficult to maintain integrity when they go public
- The pressure to deliver shareholder value means they are less able to focus on integrity
- Therefore privately-owned companies tend to have higher levels of integrity than publicly-quoted companies
- Venture capital backed organisations also don’t suffer this drop
- The stock market underestimates the value of corporate culture – it is not generally included alongside financial measures
- Organisations need to report more non-financial measures (leading indicators)
The 2014 Great Place to work report is now available here.
The 2013 Great Place to work Engage for Success article can be found here.