2. Institute for Public Relations
Report Excerpts
• Employee/Organizational
Communications
– By Bruce K. Berger, Ph.D.
University of Alabama
– November 17, 2008
» http://www.instituteforpr.org/topics/employee-organizational-
communications/
3. Measurable Benefits
Value of Internal Communications
• Many would agree with Harris and
Nelson’s (2008) assertion that
internal communication is:
– An essential aspect of
organizational change
– “The key variable in almost all
change efforts, diversity initiatives
and motivation.”
» (Harris and Nelson, p. 95)
4. Measurable Benefits
Driver of Business Performance
• Some even argue that internal
communication is the most
“fundamental driver of business
performance”
» (Gay, Mahoney & Graves,
2005, p. 11).
6. Specific Examples
Driver of Business Performance
• Employees who are disloyal to their
organizations, or lack commitment to helping
organizations achieve their goals, may cost
business $50 billion per year in:
– Quality defects
– Rework and repair costs
– Absenteeism
– Reduced productivity,
– Alvie Smith, former director of corporate communications at General Motors
(cited in Cutlip, Center & Broom, 2006).
7. Measurable Benefits
Improved Performance
• Improving the quality, adequacy and timeliness
of information that employees receive about
– customers,
– the organization or
– their own work
• Can improve their individual performance by
as much as 20-50 percent
» (Boyett & Boyett, 1998)
8. Internal Communications’
Big Impact
• More than 80 percent of
employees polled in the US and
UK said that employee
communication influences their
desire to stay with or leave an
organization.
• Nearly a third said communication
was a “big influence” on their
decision.
» (Burton, 2006)
9. Measurable Benefits
Most Admired vs. Least Admired
• The 200 “most admired” companies spent more
than three times as much on employee
communications as the 200 “least admired”
companies.
» (Seitel, 2004)
10. Measurable Benefits
Links to Productivity
• Employees’ satisfaction with
communication in their
organizations is linked to
– Organizational commitment
– Productivity
– Job performance and satisfaction
– Other significant outcomes
» (Gray & Laidlaw, 2004)
11. Measurable Benefits
Retain Employees
• Organizations with engaged and
committed employees
– were 50 percent more productive
– than those organizations where employees
weren’t engaged.
• In addition, employee retention rates
were 44 percent higher in organizations
with engaged and committed
employees.
» (Izzo & Withers, 2000)
12. Measurable Benefits
Retain Employees
• The cost of replacing an “average”
employee is nearly 50% of annual
salary.
• Losing a highly-skilled or experienced
employees ups the ante to 150%.
» Paulson Training
12
13. Measurable Benefits
Sustained Success
• Positive communication climate and
effective employee communication
– strengthen employees’ identification with
their organizations,
– contributes to an organization’s financial
performance and sustained success.
» (Smidts, Pruyn & van Riel, 2001)
14. Measurable Benefits
Industries Thrive or Die
• Decades ago, Sears Roebuck found that creating a more
compelling place to work for employees led to
– a significant increase in employee attitude scores
– customer satisfaction scores and
– revenues
» (Rucci, Kim & Quinn, 1998)
15.
16. Measurable Benefits
Industries Thrive or Die
• Starbucks, Limited
Brands, Best Buy track
engagement.
– Best Buy knows the value of a
0.1% increase in engagement
at particular store
– That value equates to more
than $100K in store’s annual
operating income.
17. Measurable Benefits
Increased Market Values
• A significant improvement in
communication effectiveness in
organizations was linked to a
29.5 percent rise in market
value.
» (Watson Wyatt, 2004)
18. Measurable Benefits
Build Community and Trust
• Effective communication facilitates
engagement and builds trust.
• Both critical ingredients in strong, viable
organizations
» (Grates, 2008)
19. Measurable Benefits
Better Companies through Better Communication
• Companies with highly effective
internal communications
experienced 47% higher returns to
shareholders over companies with
least effective communications.
» (Tower Watson 2009/2010
Communication ROI Study
Report)
Notas do Editor
One of today’s more visible case histories is what is currently occurring with the transformation of JCPenney as led by former Target and Apple executive – Ron Johnson, the individual credited with the creation of the Apple Store experience. From a recent article in the online business publication, the Business Insider, the story of what appears to be an internal communication shut-down is occurring, which the numbers seem to support. The question is: With an employee culture that has coined the phrase, ‘JCPenney, where communication goes to die,” can the retailer stay afloat if the front line is fueled by rumor? Lives in fear of the next round of layoffs? Hasn’t a means by which to contribute ideas? “There are no memos or written directives anymore. The last one I saw was eight months ago. Everything gets communicated verbally and without too much detail.”The current pulse check: Widespread fear, anxiety and distrust of the new management team.