What’s the Link Between Employee Experience and Customer Experience?

EXCX-Image_megan-lynette-402538-unsplash-700x700-min

Why we care:

It seems like everywhere we look folks are talking about employee experience (EX). In fact, a global 2018 study of five hundred CHROs, found that 83 percent of organizational leaders believe a positive employee experience is crucial to the organization’s success.[i]

Why is this the case? Some folks mention the hyper-competitive talent market and the expanding need for innovation. However, an equally critical reason is financial: many believe there is a clear connection between employee experience and customer experience (which should then drive revenue).

While this makes sense intuitively, there are still many unanswered questions:

    1. What, exactly, comprises employee experience?
    2. What is the relationship between employee experience and employee engagement?
    3. How does employee experience impact customer experience (CX)?[ii]
    4. What is the measurable impact of employee experience on customer experience?

Understanding the answers to these questions will allow leaders to make much more strategic employee experience investments.

This is why we are launching a new research initiative, sponsored by Medallia, focused on these questions. We have already begun our analysis of existing literature and are actively looking to interview organizational leaders (is that you? Email us!) who can share their stories (the good, the bad, and the ugly) of how they have used employee experience to impact customer experience.

Hypotheses:

There is not a clear definition of employee experience. For example, some believe that employee experience is the result of connection, meaning, impact, and appreciation that employees find in their jobs – and builds on the foundations of culture and engagement[iii]. Others see employee experience as being more akin to customer experience – using technology to make employee life more personal, predictive, and seamless[iv].

Though neither of those definitions of employee experience are aligned, they are different from employee engagement, which itself does not necessarily have a clear definition. For example, some[v] defined employee engagement as the harnessing of organization member’s selves to their work roles. Others[vi], stated it is a positive fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption. And, yet another academic[vii] defined it as an “employee’s willingness and ability to contribute to company success by freely giving the extra effort on an ongoing basis.”

Finding clarity on the differences and similarities of employee experience and engagement is our starting point.

Despite the competing definitions, research[viii], [ix] indicates that both employee engagement and experience influence customer experience and satisfaction, but the way they do that may be different. To better understand where and how organizations should invest, we need to have a framework for thinking about all of these concepts.

In addition, we believe there are insights that can be drawn from the customer experience world[x], such as thinking about experience as both static (e.g., a specific point-in-time or interaction) and dynamic (developing collectively over time), that can be applied to our understanding of employee experience.

Finally, we believe that organizations where employees can take action on employee experience and engagement insights tend to see better customer experience. To create a culture that enables these actions, organizations need to consider desired behaviors, leadership activities, information sharing protocols, decision-making rights, incentives and technology.

This Project:

Some of the ideas this research project will explore include:

Participate:

This research premise outlines our initial hypotheses on the relationship between employee experience and customer experience. Because at RedThread we value collaboration, we welcome your feedback on:

  •  What we should study
  • What we shouldn’t study
  • What else do you want to know about this topic

Please take a few moments to share your comments with us.

Also, you can follow along our research journey as we share findings throughout each phase of the project. Planned outputs include the following:

  • Premise (this article!)
  • Literature Review Findings: June 2019
  • Initial Findings Summary: June 2019
  • Key Findings Infographic: August 2019
  • Final Report: August 2019
  • Webcast: September 2019

We welcome your comments, ideas, and suggestions for people we should interview! Please also share this research premise with others interested in employee experience and its relationship to customer satisfaction.

[i] “The New CHRO Agenda Employee Experiences Drive Business Value,” ServiceNow, 2018.

[ii] “The Intersection of Employee Experience and Customer Experience,” P. Britt, CMS Wire, 2018.

[iii] “The Employee engagement Experience: Culture, Engagement, and Beyond,” Josh Bersin, Jason Flynn, Art Mazor, Veronica Mellan, Deloitte Human Capital Trends 2017: Rewriting the Rules for the Digital Age, Deloitte Consulting LLP, 2017.

[iv] “The New CHRO Agenda: Employee Experiences Drive Business Value,” ServiceNow, 2018. https://www.servicenow.com/content/dam/servicenow-assets/public/en-us/doc-type/resource-center/ebook/ebook-chro-report-comp.pdf

[v] “Psychological conditions of personal engagement and disengagement at work.” Kahn, W.A. Academy of Management Journal, Vol 33, 692-724. 1990.

[vi] “Job demands, job resources, and their relationship with burnout and engagement: a multi-sample study.” Schaufeli, W.B. & Bakker, A.B. Journal of Organisational Behaviour, Vol 25, 293-315. 2004.

[vii] “A Prognostic Examination of Functional and Emotional Employee Engagement Drivers and their Impact on Employee Performance,” Karminder Ghuman, FIIB Business Review, 2016.

[viii] “Enhancing emotional performance and customer service through human resources practices: A systems perspective,” Allison S. Gabriel, Arik Cheshin, Christina M. Moran, Gerben A. van Kleef, Human Resources Management Review, 2016.

[ix] With CX, Engaged Employees Mean Everything,” Bruce Temkin, Customer Relationship Management, 2016.

[x] “The Multilevel Nature of Customer Experience Research: An Integrative Review and Research Agenda,” Anne‐Madeleine Kranzbühler, Mirella H.P. Kleijnen, Robert E. Morgan, Marije Teerling, International Journal of Management Reviews, 2017.

Follow this project:

Think this topic sounds interesting? Then sign up to “follow” this project. We will send you updates about new articles, surveys, and other content and calls to participate in roundtables, interviews, and webinars. Basically, if you care about PM, sign up to stay “in the know.” Oh, and don’t worry — we’ll only send you emails relevant to this project. 

2 Comments
  1. * What we should study
    I love the questions outlined, quite comprehensive and well-rounded for one study. 🙂
    * What we shouldn’t study

    * What else do you want to know about this topic
    In response to the question: What, exactly, comprises employee experience? I would love to know, not only the conceptual definition, (how you define it?) but also:
    1) who owns it?
    2) what functional areas support it? (there is quite a bit of variability in this from org to org and I suspect that how people view EX is influenced by where in the organization the function sits and who owns it).

    Other questions that can be added are:
    3) What metrics are used today to measure EX?
    4) How long has your company had an explicit focus on Employee Experience? (This research study could, potentially, inform the creation of a maturity model for EX, so getting the information on how long the organization has had a focus on EX would be helpful).
    Similarly, what is the size of the group that owns EX and the approximate budget devoted to EX.

  2. SOO glad you are doing this– and you are the perfect team to do it justice. Here are my thoughts:
    –A. Engagement (customer or employee) is the result of having an INTRINSIC MOTIVATION to interact.
    –B. We are intrinsically motivated to to engage in activities that make us feel 3 things: competent, autonomous, and socially valued (Self Determination Ryan, Deci 2000)
    Following this logic, I would hypothesize:
    1) CX improves when employees have an intrinsic motivation to engage with the customers.
    2) Employees will be intrinsically motivated to engage with customers if doing so gives them a sense of competency, autonomy, and social value.

    8th grade explanation (please bear with me here :))

    When you choose to do things with a company, you are engaging with them. If you are a customer, it’s called customer engagement. If you are an employee, it’s called employee engagement.

    Everyone really wants to “engage”, or do things for 3 reasons: Competency, autonomy, and social value.

    First, Let’s talk about competency. We are attracted to actions that make us feel smart, or like an expert, i.e., competent. For example, a customer might spend time reading reviews so she can purchase the best product. An employee might want to spend extra time tweaking a customer review page so that customers can go through the reviews quickly and easily, bringing them closer to making a decision to buy. It’s really just about getting that feeling of competency. The customer feels savvy because they made the best purchase, and will likely return. If the employee is able to read the metrics, she can see that her modifications increased purchases by 50%. She might then try the same modifications on other pages. If the employee hadn’t spent that extra time tweaking the site, the customer might have left the site to read reviews and purchase from the competition.

    People also want to do things where they have a choice, are in charge, i.e., have a feeling of autonomy. For a customer, this means they might want to be left alone to browse through items, and not be bothered by a sales person or a chat bot. For an employee, having autonomy might mean that they create an “Employee Picks” page, where they list their top 10 favorite items for sale, without any influence from their company. In both cases, the customer and employee are engaged in actions where they have choice and independence.

    Finally, people also like to do things that make them feel valued, important, or special, giving them social status or social capital. A customer might spend extra money on a name brand if they feel it might send a message to other people. An employee might go out of their way to bring a high-end brand name item that is on sale to a customer along with the regularly-priced item that they came to purchase. The employee might whisper that that the sale actually starts tomorrow but they will do a favor for this customer because they are special. The employee feels a sense of power by offering a discount, and valued because he has a following of regular customers that ask for him by name.

    In all of these examples, people are intrinsically motivated to take action, i.e., engage, based on how competent that action makes them feel, how much autonomy they feel they have while engaging in that action, and how socially valued they feel as a result of the action.

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