The GFF survey currently in progress throws up the fascinating fact that managers rate investment in people far below that of mergers and acquisitions - despite the poor record of mergers and acquisitions in yielding corporate benefits. People investment, in contrast, offers great benefits, often at low cost - or even none at all. Here, virtue is more than its own reward, if you believe (as you should) the results of a study of hotels.
The research was carried out by Tony Simons, who asked 6,500 Holiday Inn employees whether their managers delivered on promises and practised what they preached. Employees were also asked questions like were they 'proud to tell others I am proud to work here?' But the impact of the management questions was especially resounding. A one-eighth of a point rise in a hotel management's 'behavioural integrity' (using a five point scale) equates with a profitability jump that adds up to 2.5% of revenues.
It follows that financial performance is damaged by inconsistency, hypocrisy and 'flavour of the month' management that flits from one HR 'initiative' to another, unmindful of the fact that old-fashioned integrity pays off faster and better than any new-fangled nostrum. The damage inflicted by low behavioural integrity, as Simon notes in the Harvard Business Review, can be lasting. One lie can permanently undermine trust in a manager. 'In contrast, a person has to tell a whole lot of truth to qualify as a straight shooter'.
