Employees Grow Slightly Less Positive About Their Companies

GALLUP NEWS SERVICE

PRINCETON, NJ -- The nation's employees have become less optimistic about their companies' prospects over the last three months. The Gallup/UBS Employee Outlook Index for July is down by about 11 points since April, with about half that drop (five points) occurring in the last month. This drop parallels the downturn in the American public's views of the overall economy. At the same time, despite this slippage, the Index as a whole reflects quite positive attitudes on the part of the American worker. Workers are, in general, much more confident in their own companies than they are in other companies, or in the U.S. economy as a whole.

The Gallup/UBS Index is based on a series of questions that ask employees of non-governmental, for-profit companies with five or more employees about their company's current conditions, their expectations about their company's future, and about their own personal job security.

Here is the basic Index trend over time, followed by the specific trends in the three components of the Index.

Gallup/UBS Employee Outlook Index

As can be seen, all three components of the Index have slipped since April -- not dramatically, but enough to cause the overall Index to slide. In most instances, the questions that comprise the Index show that the nation's employees are still positive about their own company, but are now just a little less so than before. There is little doubt that the general slide in the stock market and focus on corporate corruption is having an impact on how workers look at their own companies.

Employees continue to be least positive about their own job security, and most robustly positive about the future for their companies.

Here are several examples of the specific attitudes of employees that are changing.

1. 76% of employees said their company's financial situation was getting better in April. That number has now dropped to 68%.

Company's Financial Situation: Getting Better or Getting Worse?

2. While 64% of employees in April thought their companies would continue to be profitable over the next six months, that number has fallen to 57% now.

How Confident Are You That Your Company Will be Profitable in the Next Six Months?

3. The percentage of employees who are "extremely confident" that they will still have their jobs in a year dropped by nine points from April to July.

How Confident Are You That You Will Continue to Work for Your Company in the Next 12 Months?

It is important to point out that workers are still more positive about their own companies than they are about the general economy. This comparison can be made in the following chart that shows the ratings employees give of their own companies' financial situation alongside the overall ratings given the U.S. economy by the sample of all Americans.

How would you rate your company's financial situation today -- as excellent, good, only fair, or poor?

How would you rate economic conditions in this country today -- as excellent, good, only fair, or poor?

Whereas 74% of the nation's employees rate their own company's financial situation as excellent or good, only 29% of the public in general is currently rating the overall economic climate in the country as excellent or good.

To be sure, these are two separate populations and subjects being rated -- workers on the one hand rating their companies, and the general population on the other hand rating the nation. The sharp differences reflect the general tendency for people to rate their local situations more positively than they rate national situations -- a phenomenon evident across a wide variety of issues, such as healthcare, Congress, education, and crime.

Still, it is a hopeful sign that employees look around at their own companies and are not nearly as negative as they are about the country as a whole.

How do employees rate their own managers? Despite the publicity about corrupt managers who have led their companies down the road to ruin and bankruptcy while enriching themselves, over eight out of 10 employees say that the people who run their companies are honest and ethical, and three quarters say they are good leaders. There is slightly less agreement that their managers are worth the money they earn.

Employees give their own managers much more positive ratings on each of the three dimensions than they give managers of other companies across the United States.

Would you say that each of the following phrases does or does not apply to the people who run your company/run most companies? How about… [ITEMS A-C ROTATED, THEN ITEMS D-G ROTATED]?

The differences are particularly pronounced on the "honest and ethical" and on the "worth the money they earn" measures.

Survey Methods

These results are based on telephone interviews with a randomly selected national sample of 660 adults who are employed with non-governmental, for-profit companies having five or more employees, age 18 years and older, conducted July 9-11, 2002, and July 22-24, 2002. For results based on this sample, one can say with 95 percent confidence that the maximum error attributable to sampling and other random effects is plus or minus 4 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.