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Creating a Balanced Scorecard
How companies are using online surveys to measure employee satisfaction

Says Charlie Watts, Global Practice Leader for Organization and Employee Research at HR consulting company Towers Perrin, "We see two trends emerging with regards to online surveys: One, companies want more employee measurement and two, they are using data gleaned from employee surveys to make a business case for investments."

Creating a "Balanced Scorecard"

Linking employee satisfaction (ESAT) to the bottom line is not new. First cited in the Harvard Business Review in 1994, the "service-profit chain theory" holds that satisfied employees deliver superior service, which creates satisfied customers. In turn satisfied clients create growth in revenue and earnings and increased shareholder value. This theory was linked to a study done by Sears, Roebuck and Company where the company tracked the performance of its managers and linked employee satisfaction to customer satisfaction and financial performance. The company transformed the way it did business, resulting in dramatic financial improvements.

Taking the service-profit chain theory further, Robert Kaplan and David Norton developed a new approach to strategic management: "The balanced scorecard."

The balanced scorecard approach centers on a company's vision and strategy and includes not only financial measures, but also measurements for customer satisfaction, internal business processes and employee satisfaction. As companies today grow and change through mergers and acquisitions, new business growth and societal changes, they are developing metrics, collecting data and analyzing it in order to give themselves a balanced scorecard -- in other words, a more complete picture of the business.

Companies review financial data at least monthly, if not daily or even hourly. To understand what's going on from an employee perspective -- which is what ultimately drives financial results -- organizations need to collect employee data more than just once a generation. That is just what is happening as companies begin to pay more attention to employee satisfaction via online surveys.

Tying ESAT to the Bottom Line

Until about five years ago, measuring employee satisfaction using paper-based surveys was difficult, costly and time consuming. Says Carol Boyce, Ph.D. and Ron Rembisz, Ph.D. of the international management consulting firm, Rembisz and Associates, "By the time the surveys were completed and analyzed, things had probably changed in the organization. Due to costs, a company would probably roll out one ESAT survey every other year -- which means management really didn't have a true indicator of employee satisfaction."

Much of this has changed due to the advantages of online surveys. According to Boyce and Rembisz, companies are "taking employees' temperatures" much more frequently, conducting short 10-15 question surveys weekly, monthly and quarterly on a number of issues including innovation and growth, employee motivation, leadership support for employee autonomy, culture and internal communication effectiveness.

"Companies can now cost-effectively measure any aspect of their business before an intervention occurs, during the intervention, then again afterward -- to make sure the invention 'sticks' -- thanks to online surveys," adds Rembisz. Because results are available within 24-48 hours, companies have real data on which to base decisions.

Online surveys also allow real-time, two-way dialogue. If an outside third party is conducting the survey, the consulting company can get back to individuals with questions such as, "Can you tell me more about why you feel this way?" Say Boyce and Rembisz, "This is particularly effective if a department has a harsh boss. We can set up a team to help a department deal with this issue, such as, 'Have you sat down with your boss as a group?'"

Companies are also using ESAT surveys to effect organizational change. Sean Ryan of White Water Consulting Group says, "People want to perform at their best. Effective survey feedback helps organizations pinpoint the barriers and challenges employees grapple with as their organizations perpetually change. ESAT surveys give managers a regular pulse on how people are doing as the change occurs."

However, adds Ryan, surveys also bring out issues that are occasionally difficult to deal with, which is why companies will sometimes ignore or hide survey results. "A company can have too much on its plate and not enough time, energy or resources to deal with serious culture issues. To be effective, organizations really need to commit to widely sharing the results of ESAT surveys and engaging everyone in the process of closing gaps."

Companies are also using online surveys to measure the effectiveness of specific departments, such as Information Technology (IT). Dick Mathews, of consulting firm Mathews and Company, reports, "Our clients use surveys to rate their IT departments. IT is central to companies now, and a low performing department can adversely affect a company's employees and business processes. We use surveys to measure IT's effectiveness within an organization. Sometimes, the CIO's compensation is based on that measure -- which really shows how internal customer satisfaction is tied to the bottom line."

Online Survey Best Practices

Survey response depends on how the survey process is designed and implemented. The following short list of best practices will help ensure your survey process goes smoothly and receives high response rates. (For detailed information, see the article, "10 Best Practices for Employee Surveys.")

Get Management Buy-in -- "Before embarking on any type of survey, ensure you have management buy-in," advises Mathews. Prior to giving the survey, management should have a plan of action for what happens after the survey is completed. According to Ryan, the worst thing any company can do is to conduct a survey and then not follow-through on the results.

Establish Credibility -- According to Mathews, establishing survey credibility is imperative if you want high response rates. To establish credibility, Mathews recommends the following:

• Ideally, the survey should come from a respected third party source outside the company rather than your corporate HR department.
• When e-mailing the survey, use each recipient's full e-mail address. You don't want to make it look like a bulk mailing.
• Give the name and e-mail address of the survey contact person.
• Stress respondents' confidentiality (this is very important!).

Provide glitch-free technology -- Online surveys should be easy-to-use and as fool-proof as possible. People will abandon a survey in process if they encounter glitches.

Ask for verbal feedback -- Once the data is analyzed, ask employees what their scores mean. "Typically, if a company receives a low score in the area of 'communications,' their first response is to send out an employee newsletter," Ryan says. "Don't do this. Instead, ask employees why they scored the way they did -- you'll learn why people feel the way they do and what really needs to change."

Post the results -- Don't leave employees hanging, Mathews advices. Analyze and communicate the results of your survey, then set improvement goals and accountability to ensure goals are met.

Dennis Frayne is CEO of Hostedware, a company that provides online surveys for human resources, training and education professionals, market researchers and membership associations. He can be reached at dennis.frayne@hostedware.com or (800) 211-6967.


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