The Business Journals

thinkstockphotos-136144792_800xx2122-1196-0-218HOW WAGE HIKES CAN LEAD TO MORE CUSTOMER HAPPINESS
by Kenneth Matos / July 7, 2015

There is an abundance of company leaders who believe compensating and treating employees well helps improve customer service. It’s a simple equation of happy employees equal happy customers.

Walmart’s recent flurry of decisions to boost wages is causing many employers across the country to rethink how they compensate employees, even beyond debates over whether government should mandate increases in the minimum wage.

Walmart announced recently it was raising wages for its managers. This is on top of a similar announcement in February to raise 500,000 of its employees’ wages, pushing their pay above minimum wage. Soon, 90,000 of McDonald’s workers will see a wage hike.

There has been a lot of speculation about why Walmart, McDonald’s and others made the moves. But a few key messages that may result is that retail jobs can be good jobs, not just jobs on the margin of the economy, and how employees are compensated can impact the ultimate customer experience.

Indeed, when it comes to creating effective workplaces, our review of hundreds of top U.S. employers found an abundance of company leaders who believe compensating and treating employees well helps improve customer service. It’s a simple equation of happy employees equal happy customers.

Employers can’t ignore the two-factor theory of motivation. It proposes that satisfaction and dissatisfaction come from two different sources — some things (like low prices) make customers happy and other things (like well-stocked shelves and friendly employees) keep people from becoming unhappy. This matters, because it means you can’t shift all your resources towards increasing things that make people happy if you don’t deal with the things that make people unhappy.

If you don’t deal with this, you create a hidden sinkhole of dissatisfaction at the foundation of your business that can consume all the work you put towards making people happy.

 

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