Annual Report 2001 - Cornell University

19 Reaping High Profits through Integrity

Tony L. Simons, Hotel Administration, and Washington University colleague established that hotels where employees report managers as having integrity—managers' words match their deeds—reap substantially higher profits. Employees are more committed to the company, which leads to better employee retention and customer service. The uniqueness of the study is that it revealed that even small improvements in managers' integrity (one-eighth of a point in the behavioral integrity score of a manager) led to much higher profits, 2.5 percent of revenues. This accounts for more than $250,000 for the bottom line of an average full-service hotel. For an industry that averages 20 to 30 percent profit on revenues, this is a big boost. The researchers hold that the effect also applies to other businesses.

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© 2002 by the Office of the Vice Provost for Research [OVPR], Cornell University.