Milton Moskowitz, the economist who assembles Fortune’s annual list of the 100 best companies to work for, wonders how much Wall Street has to do with making workplaces employee unfriendly. Speaking yesterday at the Communications Leadership Summit hosted by Ragan Communications in Chicago, Moskowitz pointed to Costco, which pays its employees considerably more than Wal*Mart. “I imagine some pipsqueak Wall Street analyst asking why Costco pays its employees so much,” Moskowitz said. Analysts look only at the cost and put pressure on the company, through the shareholders who follow analyst reports, to reduce those costs.

Costco, of course, knows exactly what ROI it gets by treating its employees well: engaged employees. And the research (as we’ve discussed here before) shows that companies with highly engaged workforces enjoy significantly higher growth than those with employees who are disengaged from their jobs.

Wall Street analysts don’t care. They see only columns of numbers and they see only as far as the next quarter. I’ve often wondered when a company announces quarterly earnings that exceed analyst expectations. How often did the company know its earnings would shake out the way they did? Analyst estimates are frequently just plain wrong.

Analysts who often know less about the businesses they follow than they claim to wield far too much power over organizational behavior. Companies that want to take action to engage their workforces should be free to do so without constraints from analysts who simply want to see lower costs. If it’s the people who generate growth (and it is), lower costs are not always going to produce the greatest returns. You gotta love the executives who shrug off the idiocy that spews from analysts’ keyboards and invest in their people anyway. Odds are, they’ll have the last laugh.