Giving employees the information they need to meet company goals, and ensuring job performance is evaluated fairly, could help boost a company’s share price.
Analysis of employee engagement survey data and share price movements between 2017 and 2023 found that organisations where employees said they lack the information they need to do their job effectively, saw significantly lower growth in their share price over a six-month period.
Employee experience platform Culture Amp looked at data from 553 publicly-listed companies and found a link between employee enablement, recognition scores, and share price growth.
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Organisations with high scores in response to the statement, “The information I need to do my job effectively is readily available”, saw their share price outperform low-scoring companies in the following six months by an average of 9.2%.
Those with high scores on the recognition survey item – “My job performance is evaluated fairly” – outperformed low-scoring firms by 5.9%.
High scores around role clarity, company confidence, and perceptions of leaders’ resource allocation decisions, also had a positive effect on share price.
Culture Amp urged employers to improve information flows, consult with people before making resource allocation decisions, share a compelling vision and strategy for the company’s future, improve clarity around roles and ensure performance management processes are rigorous and fair.
Culture Amp’s lead people scientist Arne Sjöström, said: “In uncertain economic times, leaders can be tempted to de-prioritise people and culture initiatives in their organisation. However, investing in a better employee experience is not just a ‘nice to have’, but critical to the success of a business.
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“Leaders now need to improve knowledge management systems and information flows throughout the business and ensure a robust and fair performance management process.”
