This document summarizes research on the relationship between employee satisfaction and organizational performance. It discusses that while most research has focused on individual employee satisfaction and performance, theorists have suggested employee satisfaction should relate to organizational performance levels. The document reviews two studies that found positive relationships between aggregated employee satisfaction at the business unit or organizational level and various performance outcomes such as productivity, profitability, and customer satisfaction. However, both studies had limitations in generalizability across industries. Overall, the research suggests higher aggregated employee satisfaction within an organization or business unit may positively relate to organizational performance.
A Study on “Job Satisfaction of Employees” was conducted in Cube Engitech Consultant Pvt. Ltd. The Primary objective of this research was to find the level of satisfaction of employees in the organization. The study was done as a part of descriptive research. Convenience sampling technique was used for selecting the sample. The primary data was collected by the means of a questionnaire. The secondary data was poised from the company records and websites. A structured questionnaire was circulated within fifty employees and the data collected was based on the same. Chi-square test and Likert scale method was used to analyze the data. Supreme care has been taken from the beginning of the preparation of the questionnaire up to the analysis, findings and suggestions. The analysis conducted lead to the conclusion that majority of the employees are satisfied. Dissatisfaction with locus to some of the factors was also reported. It was also found that dissatisfaction among employees will adversely affect the work performance and productivity of the organization. Valuable suggestions and recommendations are also made to the company for the better prospects based on the results derived.
A Study on “Job Satisfaction of Employees” was conducted in Cube Engitech Consultant Pvt. Ltd. The Primary objective of this research was to find the level of satisfaction of employees in the organization. The study was done as a part of descriptive research. Convenience sampling technique was used for selecting the sample. The primary data was collected by the means of a questionnaire. The secondary data was poised from the company records and websites. A structured questionnaire was circulated within fifty employees and the data collected was based on the same. Chi-square test and Likert scale method was used to analyze the data. Supreme care has been taken from the beginning of the preparation of the questionnaire up to the analysis, findings and suggestions. The analysis conducted lead to the conclusion that majority of the employees are satisfied. Dissatisfaction with locus to some of the factors was also reported. It was also found that dissatisfaction among employees will adversely affect the work performance and productivity of the organization. Valuable suggestions and recommendations are also made to the company for the better prospects based on the results derived.
A Study on Level of employee Job satisfaction in Bharathi AssociatesProjects Kart
A job satisfaction is one of the key factors affecting the employees performance in each and every organization. This research is focused on understanding the problem statement with the help of questionnaires. Job satisfaction describes how content an individual is with his or her job. It is a relatively recent term since in previous centuries the jobs available to a particular person were often predetermined by the occupation of the person’s parent. There are a variety of factors that can influence a person’s level of job satisfaction. Some of these factors include the level of pay and benefits, the perceived fairness of the promotion system within a company, the quality of the working conditions, leadership and social relationships, the job itself( the variety of tasks involved, the interest and challenge the job generates, and clarity of the job description/ requirements)
This is a project on how employee turnover occurs and how do we make sure that the turnover of employees reduces and the banking industry retains its employees by adopting certain measures.
Project Report on Performance Appraisal System and Effectiveness in Flora Hot...PS NEEMISH
The study covers employees of Flora Hotel Cochin.
A survey was conducted for information about the performance appraisal
system that was used in the company.
The study focuses on type, effectiveness and employee attitude of the
appraisal system.
To help management plan future development and growth.
The sample size of 50 employees was selected at random from all
departments.
A STUDY ON LEADERSHIP BEHAVIOR AND JOB SATISFACTION AMONG HOSPITAL EMPLOYEES ...IAEME Publication
The purpose of the study is to investigate the leadership behaviors and job satisfaction within employees in order to advance the understanding of these concepts as well as to comprehend the relationships among them. The study will gain better understanding of the predictability of job satisfaction based on leadership behavior the study will examine the causal relationships that exist between leadership behavior and job satisfaction in order to determine what direct or indirect impact each of them. The study collected data from employees working in hospitals. The sample size for the study is 120 by adopting purposive sampling technique.
A Study on Level of employee Job satisfaction in Bharathi AssociatesProjects Kart
A job satisfaction is one of the key factors affecting the employees performance in each and every organization. This research is focused on understanding the problem statement with the help of questionnaires. Job satisfaction describes how content an individual is with his or her job. It is a relatively recent term since in previous centuries the jobs available to a particular person were often predetermined by the occupation of the person’s parent. There are a variety of factors that can influence a person’s level of job satisfaction. Some of these factors include the level of pay and benefits, the perceived fairness of the promotion system within a company, the quality of the working conditions, leadership and social relationships, the job itself( the variety of tasks involved, the interest and challenge the job generates, and clarity of the job description/ requirements)
This is a project on how employee turnover occurs and how do we make sure that the turnover of employees reduces and the banking industry retains its employees by adopting certain measures.
Project Report on Performance Appraisal System and Effectiveness in Flora Hot...PS NEEMISH
The study covers employees of Flora Hotel Cochin.
A survey was conducted for information about the performance appraisal
system that was used in the company.
The study focuses on type, effectiveness and employee attitude of the
appraisal system.
To help management plan future development and growth.
The sample size of 50 employees was selected at random from all
departments.
A STUDY ON LEADERSHIP BEHAVIOR AND JOB SATISFACTION AMONG HOSPITAL EMPLOYEES ...IAEME Publication
The purpose of the study is to investigate the leadership behaviors and job satisfaction within employees in order to advance the understanding of these concepts as well as to comprehend the relationships among them. The study will gain better understanding of the predictability of job satisfaction based on leadership behavior the study will examine the causal relationships that exist between leadership behavior and job satisfaction in order to determine what direct or indirect impact each of them. The study collected data from employees working in hospitals. The sample size for the study is 120 by adopting purposive sampling technique.
Context matters examining ‘soft’ and ‘hard’ approaches to emp.docxdickonsondorris
Context matters: examining ‘soft’ and ‘hard’ approaches to employee
engagement in two workplaces
Sarah Jenkins* and Rick Delbridge
Cardiff Business School, Cardiff University, Cardiff, UK
This paper reports different managerial approaches to engaging employees in two
contrasting organizations. We categorize these approaches to employee engagement as
‘hard’ and ‘soft’, and examine how these reflect the different external contexts in which
management operate and, in particular, their influence on management’s ability to
promote a supportive internal context. The paper extends the existing literature on the
antecedents of engagement by illustrating the importance of combining practitioner
concerns about the role and practice of managers with the insights derived from the
psychological literature relating to job features. We build from these two approaches to
include important features of organizational context to examine the tensions and
constraints management encounter in promoting engagement. Our analysis draws on
the critical organizational and HRM literature to make a contribution to understanding
different applications of employee engagement within organizations. In so doing, we
outline a situated and critical reading of organizations to better appreciate that
management practices are complex, contested, emergent, locally enacted and context
specific, and thereby provide new insights into the inherent challenges of delivering
engaged employees.
Keywords: contextual contingencies; critical HRM; drivers of engagement; employee
engagement; ‘hard’ and ‘soft’ management approaches to engagement
Introduction
This paper presents a qualitative study of two contrasting organizational cases to examine
and explain different management approaches to engaging employees. Our research
demonstrates how contextual contingencies enable or impede management’s ability to
deliver employee engagement. To assess this, we borrow from the early HRM research
(Storey 1989) to distinguish between ‘hard’ and ‘soft’ management approaches to
employee engagement. VoiceTel embodied a ‘soft approach’ to employee engagement –
this centred on promoting positive workplace conditions and relationships between
management and employees, designing work and forging a work environment which was
conducive to promoting employee engagement; enhanced individual employee
productivity was not the primary focus or purpose. In stark contrast, EnergyServ adopted
‘hard’ engagement – this refers to the explicit objective of gaining competitive advantage
through increased employee productivity wherein employee engagement aims to directly
increase employee effort to improve organizational performance. Employee responses
were also very different – VoiceTel’s employees reported high levels of engagement, in
contrast, at EnergyServ, despite senior management’s commitment to, and prioritizing of,
employee engagement, high levels of employee disengagement were evident. Therefore,.
Relationship of Demographic Variables and Job Satisfaction among Married WomenIJLT EMAS
The purpose of this study was to study the relationship
between job satisfaction and demographic variables among
married women who are working in academics. The research
was descriptive and survey study. In this study, women working
in technical educational Institutes, from Indore were studied. for
this 300 working women(N=300) were chosen as per their work
in the Institutes, teaching or Non-teaching. A socio- demographic
questionnaire were used for the purpose. The findings revealed
that on the basis of the age and qualification , there is no relation
between factors studied (work environment, job security, roles &
responsibility etc.) and job satisfaction and on the basis of
designation, income and experience, researcher found the
relation between factors studied (work environment, job
security, roles & responsibility etc.) and job satisfaction.
A STUDY ON ORGANIZATION COMMITMENT AND JOB SATISFACTION IN SELECTED BUSINESS ...IAEME Publication
The purpose of this study is to analyze the relationship between job satisfaction and organizational commitment. Employees’ productivity is largely related to their level of job satisfaction and in fact, the turnover rate can be reduced with a higher level of organizational commitment. Therefore, it is important for an organization to study the relationships between these two variables. The database was collected from the organization through a well-structured questionnaire. The questionnaire consists of personal data, Questions related to the dimension organization commitment and job satisfaction in Selected BPOs in Tiruchirappalli. Hence the sample size for the study is 110 respondents by adopting Purposive sampling technique.
Workforce engagement: What it is, what drives it, and why it matters for orga...Andrea Kropp
Based on a review of the history of the employee engagement construct and its measurement, we define workforce engagement as the aggregate of the work engagement experiences of individual employees in an organization. In contrast to most research on employee engagement, we study
companies rather than individuals and the companies represent a diverse set of industries. We hypothesize and demonstrate on a sample of (up to) 102 publicly traded companies that
workforce engagement significantly predicts organizational financial (adjusting for industry: Return on Assets, Net Margin but not Tobin's q) and customer metrics (the American Customer Satisfaction Index and the Harris Reputation Quotient) 1 and 2 years after the workforce engagement
data were collected. In addition, using a split‐sample approach to avoid method bias, we hypothesize and show that (a) company organizational practices (the strongest correlate),
supervisory support, and work attributes are significant correlates of workforce engagement and (b) that workforce engagement mediates the relationship between these correlates of engagement and the organizational performance metrics. Implications of the findings for research and practice are discussed.
A Study on Employee Job Satisfaction at Eid Parry Nellikuppam Cuddaloreijtsrd
Job satisfaction or employee satisfaction is a measure of workers contentedness with their job, whether or not they like the job or individual aspects or facets of jobs, such as nature of work or supervision. Job satisfaction can be measured in cognitive evaluative , affective or emotional , and behavioral components. Job Satisfaction is the favorableness or un favorableness with which the employee views his work. It expresses the amount of agreement between one's expectation of the job and the rewards that the job provides. The objective of the study is to know about the employee job satisfaction factors, the relationship between gender and employee job satisfaction. Descriptive research method is used in the study. This study consists of both primary and secondary data. The tool used in this study is correlation. The population size is 50 and the sample size is 30. From the study it was found that there is no significant relationship between gender and employee job satisfaction. S. Jasmeen | K. Haritha | M. Selva Ganapathy "A Study on Employee Job Satisfaction at Eid Parry Nellikuppam Cuddalore" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6 , October 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29189.pdf Paper URL: https://www.ijtsrd.com/management/hrm-and-retail-business/29189/a-study-on-employee-job-satisfaction-at-eid-parry-nellikuppam-cuddalore/s-jasmeen
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Promoting Organizational Citizenship Behaviour Through High .docxbriancrawford30935
Promoting Organizational Citizenship Behaviour
Through High Involvement Human Resource
Practices: An Attempt to Reduce Turnover Intention
Yu Ghee Wee
Mohamed Dahlan Bin Ibrahim
Faculty of Entrepreneurship and
Business
Universiti Malaysia Kelantan
Kota Bharu, Kelantan, Malaysia
[email protected];
[email protected]
Kamarul Zaman Ahmad
College of Business Administration
Abu Dhabi University
Abu Dhabi
United Arab Emirates
[email protected]
Yap Sheau Fen
Department of Marketing, School of
Business
Monash University, Selangor,
Malaysia
[email protected]
Abstract— This study examines the possibility of inducing
organizational citizenship behavior (OCB) through human
resource (HR) philosophy and high involvement HR practices
administered at the workplace. Leader-member exchange (LMX)
is posited to be a potential mediator. Data was collected from
hotel frontline employees and analyzed through structural
equation modeling. Findings show that HR philosophy drives the
formulation of the bundles of high involvement human resource
practices and such philosophy contributes to employees’
willingness in exhibiting citizenship behavior directed at
individuals (OCBI) as well as organizations (OCBO) as a whole.
High involvement HR practices, however, do not elicit OCB but
are significantly related to LMX, a new theoretical insight which
should invite future research. Although exchanges between
supervisors and subordinates are proven to have influences on
employees’ willingness in performing OCB, LMX does not
mediate the relationship between high involvement HR practices
and OCB. Overall, hotel frontline employees participated in this
study exhibit more of OCBO as a whole, rather than OCBI; and
such behavior reduce their intention to leave. Both theoretical
and practical implications as well as avenues for future research
are discussed.
Keywords - Organizational citizenship behavior, human resource
philosophy, human resource practices, leader-member exchange.
I. INTRODUCTION
For decades, researchers have concluded that HR practices
have a major impact on employee productivity and
commitment (Huselid, 1995; Huselid et al., 1997; Pfeffer,
1998; Pfeffer and Veiga, 1999; Vandenberg et al., 1999;
Wright et al., 2005). This essential role of HR practices are
further affirmed when scholars introduced the concept of
―high performance work systems‖, also called ―high
involvement work practices‖ (Walton, 1985; Womack et al.,
1990; Lawler et al., 1995; Wood, 1999) -- a belief that
employees are organizational asset rather than simply an
expense to be incurred (Wood and Wall, 2002). Although
conceptually supported and empirically tested on various
measurement scales and differing dimensions, none of the
studies have firmly reported any significant relationship
between bundles of high involvement HR practices and OCB.
Organ (1988:4) defined OCB as ―individual behavior t.
Promoting Organizational Citizenship Behaviour Through High .docx
Literature review
1. Page |1
EMPLOYEE SATISFACTION AND ORGANIZATIONAL PERFORMANCE: A
SUMMARY OF KEY FINDINGS FROM APPLIED PSYCHOLOGY
Larry E. Cole, Ph.D.
TeamMax, Inc.
5 East Towering Pines
Conway, AR 72032
Tel: 800/880-1728
Fax: 501/327-4116
E-mail: lcole@cei.net
Michael S. Cole, Ph.D.
Department of Management
Texas Christian University
Fort Worth, TX 76109
Tel: 817/257-6796
Fax: 817/257-7227
E-mail: m.s.cole@tcu.edu
INTRODUCTION
In his seminal 1976 review of the job satisfaction literature, Locke observed that more
than 3,300 scholarly articles had been published on the topic of job satisfaction. Harter, Schmidt,
and Hayes’ (2002) search yielded another 7,855 articles having been published between 1976
and 2000. As the increase in research studies suggests, the notion that workplace attitudes (e.g.,
job satisfaction) might be positively connected with performance outcomes continues to intrigue
academic scholars as well as practicing managers. The majority of the research examining the
employee satisfaction-performance relationship has been conducted on the micro-level of
analysis, otherwise known as the individual employee level. For example, research has reported a
positive correlation between individuals’ job attitudes and their performance (r = .17; Iaffaldano
& Muchinsky, 1985). Moreover, a recent meta-analysis found a substantive correlation between
2. Page |2
individual job satisfaction and individual performance (r = .30; Judge, Thoresen, Bono, &
Patton, 2001).1
As Schneider , Hanges, Smith, and Salvaggio (2003) recently observed, researchers’
micro-orientation towards the job attitude-performance relationship is somewhat perplexing,
given that the interest in employee attitudes had much of its impetus in the 1960s when
organizational scientists such as Argyris (1964), Likert (1961), and McGregor (1960) suggested
that the way employees experience their work would be reflected in organizational performance.
Historically, the job satisfaction-performance linkage has been primarily discussed by theorists
from the Socio-technical and Human Relations schools of thought. According to the Socio-
technical approach (e.g., Emery & Trist, 1960), organizational performance depends on
congruence between the technical and social structures of the organization. Building on this
notion, the Human Relations perspective posits that satisfied workers are productive workers
(e.g., Likert, 1961; McGregor, 1960). Thus, organizational productivity and efficiency is
achieved through employee satisfaction and attention to employees’ physical as well as socio-
emotional needs. Human relations researchers further argue that employee satisfaction
sentiments are best achieved through maintaining a positive social organizational environment,
such as by providing autonomy, participation, and mutual trust (Likert, 1961). Based on this
logic, employee satisfaction is believed to influence the development of routine patterns of
interaction within organizations. Through mutual interactions, employees develop relationships
with coworkers that also prescribe behavioral expectations and influence behaviors (e.g., norms
or informal standards of acceptable behavior). For example, an unhappy employee could be
1
A meta-analysis statistically combines the results of several studies that address a set of related
research hypotheses. A meta-analytically derived correlation is a more accurate estimate of the
true population correlation coefficient.
3. Page |3
prevented from lowering their performance by control mechanisms (e.g., standards of
measurement, supervisory influence); however, widespread dissatisfaction among employees
could lead to a strike or sabotage that might hinder an organization’s effectiveness. Alternatively,
dissatisfied employees might choose to maintain performance levels (due to control mechanisms)
but neglect to inform supervisors of important information that, over time, would result in lower
organizational effectiveness or efficiency. Thus, employees’ job satisfaction sentiments are
important because they can determine collaborative effort. Consistent with this reasoning, Likert
(1961) has argued that collaborative effort directed towards the organization’s goals is necessary
for achievement of organizational objectives, with unhappy employees failing to participate
(effectively) in such efforts. In sum, available theory supports the contention that the satisfaction
level of employees (as a whole) may relate to performance at the business-unit and/or
organizational levels.
From a practical vantage, conducting research at the business-unit and/or organizational
level is believed important because this is the level of analysis at which employees’ survey data
are commonly reported to client organizations (Harter et al., 2002). Empirical research at higher
level units of analysis (strategic business units or SBUs, across many organizations, etc.) also
afford applied researchers and managers with the opportunity to establish empirical linkages to
salient outcomes that are directly relevant – including profitability, productivity, efficiency,
employee turnover, safety, and customer loyalty and satisfaction.
REVIEW OF THE LITERATURE
Although it has been more common to investigate employee attitude data at the
individual employee level, researchers have begun to explore similar relationships at the
business-unit level and the organizational level. Research conducted under the rubric of
4. Page |4
organizational climate has had success in aggregating individual employees’ perceptions and
investigating their relationship to both organizational-level and individual-level outcomes (see,
e.g., Schneider, White, & Paul, 1998; Zohar & Luria, 2005). In addition, there are a handful of
studies that have explored the relationship between aggregated employee job satisfaction
attitudes and organizational (or unit-level) performance.
Ostroff (1992), studying a sample of 364 schools, investigated the relationship between
employees’ attitudes and organizational performance. Ostroff found that aggregated teacher
attitudes such as job satisfaction and organizational commitment were concurrently related to
school performance, as measured by several performance outcomes such as student academic
achievement and teacher turnover rates. Across 12 organizational performance indexes, the
magnitudes of the correlations between teacher satisfaction and performance ranged from .11 to
.54, with a mean of .28. When the unique characteristics of the schools were statistically
controlled for, teacher satisfaction and other job-related attitudes continued to predict many of
the organizational performance outcomes. Results were strongest for teacher satisfaction; thus,
organizations with more satisfied employees tended to be more effective than organizations with
dissatisfied employees. This study indicates that satisfaction is an important social process factor
that fosters organizational effectiveness. The major limitation of this study pertains to the nature
of the study sample; all organizations were secondary schools. The extent to which similar
relationships would hold for organizations in other types of industries (manufacturing, service,
etc) and occupations cannot be determined.
Ryan, Schmitt, and Johnson (1996) investigated similar relationships between aggregated
employee attitudes, firm productivity, and customer satisfaction. The authors measured these
relationships at two points in time from 142 branches of an auto finance company. Results
5. Page |5
indicated employee morale was related to subsequent business performance indicators, customer
satisfaction sentiments, and turnover ratios. These researchers attempted to study the causal
relations among the variables; however, their attempts lead to mostly inconclusive findings.
Interestingly, they did find evidence suggestive of customer satisfaction as a causal influence on
morale (a finding that is opposite of the directionality assumed by the literature). Although a
tentative finding, Ryan et al. (1996) discussed several possible explanations for it. For instance,
the customer satisfaction index was monitored closely by unit managers and success or failure
likely translated into management practices that influenced employees’ job attitudes. Moreover,
the researchers speculated that the particular setting may be unusual in that customer satisfaction
might be inversely related to the amount of contact with the organization (e.g., customers
without problems with the processing of their payments are likely to have less interaction with
company representatives than customers with such problems). Similar to Ostroff’s (1992) study,
the major concern with Ryan et al.’s (1996) research is that the data were all from one
organization which limits the generalizability of the findings.
In a unique study conducted by Harter et al. (2002), the authors conducted a meta-
analysis of studies previously conducted by The Gallup Organization. The study examined
aggregated employee job satisfaction sentiments and employee engagement, with the latter
variable referring to individual’s involvement with as well as enthusiasm for work. Based on
7,939 business units in 36 organizations, the researchers found positive and substantive
correlations between employee satisfaction-engagement and the business unit outcomes of
productivity, profit, employee turnover, employee accidents, and customer satisfaction. More
importantly, these researchers explored the practical utility of the observed relationships. For
example, business units in the top quartile on the employee engagement measure yielded 1 to 4
6. Page |6
percentage points higher profitability. Similar findings were found for productivity. Specifically,
business units in the top quartile on employee engagement had, on average, from $80,000 to
$120,000 higher monthly revenue or sales. Based on these data, it seems clear that aggregated
measures of employee satisfaction and employee engagement are meaningfully related to
business outcomes at a magnitude that is important to many (if not all) organizations. In
comparison to prior studies, the strength of Harter and his colleagues’ research is the large
number of participants (n = 198,514), business units (n = 7,939), and firms (n = 36) included,
thereby providing a level of precision and statistical power rarely found in scholarly (i.e., non-
proprietary) research.
Schneider et al. (2003) report analyses of employee attitude survey data aggregated to the
organizational level of analysis. These authors explored the relationships between several facets
of employee satisfaction and organizational financial (return on assets; ROA) and market
performance (earnings per share; EPS) using data from 35 organizations over a period of eight
years. Thus, in contrast to previous studies, Schneider and his colleagues’ study was able to
make some inferences about directional causality (i.e., are employee attitudes a stronger cause of
organizational performance than the reverse). Their results showed consistent and statistically
significant positive relationships (over varied time lags) between attitudes concerning
satisfaction with security, satisfaction with pay, and overall job satisfaction with financial (ROA)
and market performance (EPS). Although these findings are consistent with applied researchers’
and managers’ implicit beliefs, their study was not without some surprises. One of the more
surprising findings was related to overall job satisfaction and the performance criteria. Results
demonstrated that the causal directionality flows from financial and market performance to
overall job satisfaction. This latter result does not deny the fact that there were significant
7. Page |7
relations going from overall job satisfaction to ROA and EPS; nevertheless, the reverse direction
relationships tended to be stronger in magnitude. Moreover, the relationship between satisfaction
with pay and the performance indicators appeared to be reciprocal in nature. The obvious
strength of this research study is the longitudinal nature of both the aggregated employee data
and the financial and market performance data. By collecting longitudinal data on both sets of
variables, these researchers were able to examine and begin to disentangle a set of very important
but complex relationships.
Are companies with happy workers more productive companies?
One major issue regarding many of the reviewed studies relates to the causal nature of the
relationship between aggregated employee satisfaction and organizational (or unit-level)
performance. The implicit belief both in academe and practice is that the relationship runs from
employee satisfaction sentiments to organizational effectiveness and efficiency outcomes.
Moreover, this implicit assumption is apparent in the research studies reviewed here. That is, the
attitude data were typically collected at one time period and performance outcomes were
concurrently collected or at multiple time periods following the collection of the employee
attitude data. The study conducted by Schneider et al. (2003) suggests that collecting data in this
fashion may lead researchers to draw erroneous conclusions because their data prevent them
from discovering significantly stronger relationships for performance causing satisfaction. It
could be argued, for example, that employees who are in higher performing organizations are
more likely to be satisfied than those in lower performing organizations simply because their
organizations are doing well. Indeed, this causal pattern was found in the study conducted by
Schneider and his colleagues (2003). Specifically, their data supported causal relationships
between financial and market performance outcomes and employees’ overall job satisfaction and
8. Page |8
satisfaction for security. Although more research is needed before concrete conclusions are
drawn, Schneider et al.’s (2003) research demonstrates that employees can derive satisfaction
from the knowledge or feedback that their organization is performing well and is accomplishing
its goals – a finding that is in stark contrast to the presumption found in the academic literature
(see, e.g., Likert, 1961).
When we consider the studies collectively, directional causality may work in both
directions; employee satisfaction causes organizational performance and vice versa. Therefore,
it seems most likely that reciprocal relationships exist and that, as noted by Gross and Etzioni
(1985), “organizational reality and human happiness go hand and hand” (p. 4). Thus, although
directions of causality remain unresolved, initial evidence suggests that aggregate employee
attitudes have connections with organizational performance outcomes.
What can we do to create happy employees, then?
Given the fact that significant and practically important relationships exist between
aggregated employee attitudes and organizational performance, it is important to question what
factors contribute to satisfaction. The predominant view has focused on the situational context
(e.g., supervisory support) as a cause of satisfaction and has argued that high-performance work
practices and thus a positive working climate foster employee satisfaction (see, e.g., Bowen, &
Ostroff, 2004; Wright, Dunford, & Snell, 2001; Wright, Gardner, Moynihan, & Allen, 2005).
This rationale is consistent with recent research on the impact of financial and nonfinancial
incentives (e.g., training) on business-unit outcomes. For example, Peterson and Luthans (2006)
used a quasi-experimental, control group design and found that both types of incentives had a
significant impact on store profit, customer service, and employee turnover. Initially, the
financial incentive had a greater effect on all three outcomes (as one might expect). But over
9. Page |9
time, however, the financial and nonfinancial incentives exhibited equally significant impacts on
two of the three outcomes (the exception was employee turnover).
A brief comment on the need for a multidimensional measure of performance.
Researchers have suggested that organizational effectiveness most likely reflects the
combination and interaction of employee work behaviors that promote organizational
performance (e.g., Ostroff, 1992). In other words, the definition of organizational performance
may be too limited and narrow. Outcomes such as attendance, compliance, following of rules,
cooperation, sabotage, and so on may also be important; however, such outcomes are usually not
included in organizational performance criteria. Accordingly, we suggest that organizations
wishing to explore the empirical connections between aggregated employee attitudes and
organizational outcomes consider a wider range of performance-related outcomes.
CONCLUSION
The current understanding of how aggregated employee attitudes influence and are
influenced by important business outcomes is limited. Based on the evidence to date, we
conclude that employee satisfaction is related to meaningful business outcomes and that these
relationships generalize across companies (and industries). Research efforts directed at further
exploring these issues are sorely needed, and we believe there is potential for longitudinal
research in the area of aggregated employee satisfaction. For example, future research should
emphasize research designs that study changes in employee satisfaction and the causes of such
changes. Through such longitudinal designs, the connections between aggregated job attitudes
and performance can be more fully understood. At this point, evidence of directionality would
suggest not only some directionality from employee attitudes to business outcomes (as well as
the reverse) but also a reciprocal relationship in some cases!
10. P a g e | 10
REFERENCES
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