Employee Satisfaction and High Performance: Key Links

Introduction

Employees are the greatest asset to an organization because they act as intelligent drivers of firm productivity. It is therefore no doubt that having satisfied employees will lead to high performance. The controversy, however, is that the link between employee satisfaction and employee performance is not entirely direct. This means that even though some individuals are highly satisfied with their jobs, they do not necessarily or directly increase their performance or productivity. Furthermore, performance is multifaceted, and employee satisfaction is only one variable that contributes a small portion of the causes of performance (Weiss 174). Nevertheless, studies have provided convincing evidence of a link between employee satisfaction and the improvement of long-term share price. This paper analyzes the different aspects of this debate and considers case studies of various companies that have been tested for this relationship.

Effect of Employee Satisfaction on Performance

There are various aspects of employment, including supervisors, job dimensions, and social-psychological interactions. Employees are among the most important resources in companies and are, in some cases, the most costly to acquire and retain. Therefore, to sustain high levels of productivity and favorable return on investment, strategic management of personnel is imperative. Effectiveness and high performance rely on employees who are motivated, satisfied, and loyal — workers who will adhere strictly to assigned work schedules, remain productive, and establish long-term tenure with the company. Employers should understand the different job dimensions that are most satisfying to employees so that individuals can be attracted to the company and kept both satisfied and productive (Judge et al. 377).

The effect of job satisfaction on employee performance has elicited considerable interest in the literature. Numerous studies have shown a mild but positive link between employee satisfaction and performance. This link was downplayed by some scholars, and significant linkages between performance and job satisfaction were identified only when researchers focused on qualitative conceptualizations and employee performance measures. This has led to the perpetuation of the notion that satisfied employees provide improved performance and quality of service. The relationship between performance and job satisfaction consequently remains a controversial debate.

There is a view that performance results from satisfaction, a notion related to the early human relations approach. The alternative view is that satisfaction results from performance. Several studies have established minimal relationship between work output and satisfaction, offering scant assurance to proponents of the idea that a satisfied employee is also a productive one. Absenteeism and labor turnover are usually related to dissatisfaction, and although correlations exist, other probable factors also play a role. Problems of absenteeism and turnover cannot be easily solved through generalization of worker dissatisfaction. The satisfaction level of the worker can be constructively improved through opportunities provided in the realm of job design (Buchanan).

Several factors determine individual performance. These include motivation, ability, the desire to do the job, the capacity for the job to be performed, and the work environment — including materials, tools, and the knowledge required. A manager can train or replace a worker who lacks the necessary ability to get the job done, and adjustments can always be made to address a faulty work environment. However, when motivation is the problem, the manager faces a more challenging task. It can be difficult to identify a lack of motivation because of the complex nature of individual employee behavior. Therefore, motivation has a significant influence on performance and, if not handled well, will have negative impacts.

Job Satisfaction Leading to Performance: Theoretical Model

The model of job satisfaction causing job performance conceives of a causal effect. This specification is attributed to the human relations movement and is possibly the oldest of its kind. In these early human relations frameworks, the productivity-morale relationship was simply stated as: higher morale will result in improved productivity. These models are grounded in the broader social psychology literature on attitudes. Behavioral implications are presumed to be carried by attitudes, and the premise that behavior results from attitude is a prominent theme in the literature. Attitude is defined as a learned predisposition to respond consistently in a favorable or unfavorable manner with regard to a particular object.

Fishbein further notes that attitude measures should be consistently related to the behavioral pattern that a person engages in with respect to the object toward which the attitude is directed (Fishbein 78). More recent evaluations suggest that people tend to engage in behaviors whose attitude objects they have evaluated favorably, and tend to oppose or hinder behaviors associated with attitudes they have evaluated unfavorably. Following this logic, behavior on the job can be associated with attitudes toward the job, and performance can therefore be attributed to job attitudes.

Surprisingly, external causal studies have shown a reciprocal relationship between performance and satisfaction. Two studies have demonstrated a unidirectional causal effect in which job satisfaction affects job performance. Keaveney and Nelson, testing complex models for interrelationships among various attitudes — including role ambiguity, intrinsic motivation orientation, role conflict, and psychological withdrawal — established a path coefficient of .12 (ns) between job satisfaction and job performance in a relatively saturated model (Keaveney and Nelson 121).

Conclusion

Based on the many studies supporting the correlation between employee satisfaction and high performance, the linkage is becoming increasingly accepted. Employees are among the most important resources in a company. However, unlike other resources that can be easily modified to suit organizational objectives, employee satisfaction is complex and sometimes specific to the individual employee. To gain a meaningful competitive advantage and differentiate themselves, companies must harness their greatest asset: their employees. Indeed, in the contemporary business environment, employees are the most crucial point of differentiation.