A Handbook of Human Resource Management Practice

The Sears Roebuck model

The Sears Roebuck model (Rucci et al, 1998) defines the employee-customer-profit
chain. It is sometimes called the ‘engagement model’. It explains that if you keep
employees satisfied in terms of their attitude to the company and their job you will
create a ‘compelling place to work’, which will encourage retention and lead to service
helpfulness and merchandize value, which leads to customer satisfaction, retention
and recommendations, thus creating ‘a compelling place to shop’. This in turn creates ‘a
compelling place to invest’, because of its impact on return on assets, operating margins
and revenue growth (Figure 2.1).

This model encourages the use of attitude surveys to measure job satisfaction and
engagement and has been used in a number of organizations in the UK.
Nationwide has developed its ‘Genome’ human capital investment model to quan-
tify the impact that employee commitment has on customer satisfaction and business
performance. The model uses data from existing sources such as employee opinion
surveys, customer satisfaction indices, business performance statistics and employee
metrics covering turnover, length of service and absence. Use of the model enabled

Human capital management ❚ 41

Attitude about

the job

Serving

helpfulness

Customer

recommendations

Employee

behaviour

Customer

impression

Return on assets

Operation margin

Revenue growth

Attitude about

the job

Employee

retention

Merchandize

value

Customer

retention

A compelling place

to work

A compelling place

to shop

A compelling place

to invest

Figure 2.1 The Sears Roebuck Model: Employee-Customer-Profit chain