Leadership Plus Employee Satisfaction Equals Business Results

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It is no surprise that an organization’s leaders are critical to the company’s success. What is not always connected is the effect that leadership has on employee satisfaction. An employee’s attitude can determine the level of customer service delivered. Therefore, the employee-customer relationship is dependant on the leadership demonstrated within the organization. The connection between leadership, employee satisfaction, and customer satisfaction are direct results on the company’s business financial statement. If there is ever a break in the chain, productivity and profitability may be threatened. Most often leaders attempt to influence the vitality of the company through overhead control and fiscal measures. Perhaps thinking they can impact the vitality by tinkering with processes and policies rather than educating, empowering and supporting employee resources. This sometimes can be ineffective over the long-term (Hughes & Beatty, 2005). In reality what drives long-term profitability can be a combination of strategic and operational leadership actions that drive employee passion and customer loyalty. Strategic leadership identifies the imperatives and is critical for setting the tone and direction for everyone in the company. This is the “what” that provides the key relationships and metrics needed to ensure that all units follow the same strategy. Strategic leadership covers long periods and is a constant cycle of assessing where the company is, understanding where it should go, getting there and checking progress (Hughes & Beatty, 2005) Strategies must then identify the criteria that are the keys that determine behavior. Strategic leadership includes the values, vision, culture and strategic essentials of the organization (Fulmer & Goldsmith, 2000). While it is important to determine the strategy, it needs to be supported and delivered by leadership in operations for employees to understand the values and vision. And then buy into the culture and make the connection of their work to the strategic imperatives. The strategic leadership influences not only the operational leadership but all peers, line managers, employees and even stakeholders such as customers, suppliers and government (Hughes & Beatty, 2005). The implementation of the strategic initiatives, the “how” of the organization, is Operational Leadership. The management practices that drive the procedures, policies and behaviors enable the employees to understand how they specifically contribute to the business’s success by clarifying how each department will achieve the overall strategy. The operational leadership practices must support the strategic leadership messages and plan to create the positive environment that employees and customers will experience. Practices such as sharing information, providing training, and rewarding and recognizing excellence are positively related to satisfaction. Effective operational leadership practices causes employees to be passionate about both their jobs and the company.

Employee company satisfaction is more important than job satisfaction. An employee will stay with a good company regardless of their relationship with their immediate manager with the perception that they can transfer to a better job (Johnson, December 1996). Employees are looking for a sense of fairness and justice in the organization. If an employee perceives inequity and unethical or unfair behavior this will directly impact their level of passion and ultimately affect the customer. Employees that have a sense that the organizational resources are in place to support them are more engaged in their work.

When both strategic and organizational leadership are aligned, it is visible to both the employee and ultimately the customer, thus maximizing the impact of the bottom line. If the connection is missing, the initiatives are inconsistent or not even implemented. When employees perceive that the leadership practices emphasize quality, customer...
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