Note to Tyrants: Treat People Well

Staff first, customers second. Treat your staff well and they will treat your customers well.

Experience shows the most critical psychological factor in a person’s performance is how well they feel they are being treated by their managers and work colleagues. Treat people well and they will happily contribute their best efforts to building organisational success. Treat them badly and they will sabotage at every opportunity.

Many companies complain that their employees are demotivated, unproductive, and disloyal. Jeffrey Pfeffer, a business professor from Stanford University, argued in the 1990’s that these companies get exactly what they deserve. If you create a toxic or dysfunctional work environment, then you’re going to get toxic behaviours from your workforce. According to Pfeffer's research, companies that engage, empower and treat their staff well outperform companies that don't by 30% to 40%.

Pfeffer also found that over the 20 years from 1972 to 1992, the US companies Wal-Mart and Southwest Airlines had respective share price rises of 19,807% and 21,775%. Yet during this time, their industry competitors performed very poorly as a group. What these two extremely successful companies have in common is their sustained advantage did not rely on technology, patents or strategic position but rather on how they treated their workforce.

Companies that treat people well find there are a minimum of six performance enhancement benefits.

1. Their staff have better mental health and improved levels of motivation.

2. They experience lower absentee rates and much lower turnover. When staff are treated well, they are more likely to stay with the organisation for a longer time, reducing hiring and training costs.

3. When employees feel valued and respected, they are more likely to put in extra effort and go the extra mile to get things done. This leads to increased productivity and better results.

4. Treating staff well also enhances an organisation's reputation because they are more likely to speak positively about the organisation to others, including customers, partners, and suppliers. This positive feedback can enhance the organisation's reputation and attract new business.

5. When staff are treated well, they are more likely to be creative and innovative. People who feel valued and respected, are more willing to share their ideas and suggestions, which leads to new and innovative solutions.

6. Treating people well promotes a positive work environment, where collaboration, teamwork, and mutual respect thrives, leading to better communication, increased job satisfaction, and a more engaged workforce.