Article
Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of Applied Psychology, 87(2), 268-279. doi: http://dx.doi.org/10.1037/0021-9010.87.2.268
Synopsis
Numerous studies conducted in the last few decades had found a strong correlation between individual job satisfaction and individual performance measures. The authors believed that it was more accurate and relevant to gauge the aggregate level of job satisfaction within a business unit level when linking it to performance; individual job satisfaction is affected by many factors which may or may not be under the control of the organization, and which may or may not uniquely impact how the business unit or organization performs. Looking at the aggregate level of satisfaction smoothes out the variability and reduce measurement errors, and thus would produce more accurate information to be used by the organization.
The authors undertook a large-scale meta-analysis study to search for generalizable relationships which were valid across a broad range of organizational types.
Research Questions
The authors stated two hypotheses. Hypothesis 1 was that business-unit employee satisfaction and engagement has a positive relationship with business-unit outcomes including productivity, profit, customer satisfaction, employee turnover, and employee safety. Hypothesis 2 states that the correlations will generalize across organizations, with few exceptions, and could thus be applied almost universally.
Methods
The authors conducted a meta-analysis of studies conducted by The Gallup Organization, using a survey instrument, the Gallup Workplace Audit, which was developed to measure employees’ perception of job satisfaction and the job characteristics which were linked to employee engagement. Data collected from 198,514 individual respondents representing 7,939 business units across 36 industries along with extant data were analyzed to reveal correlations between employee satisfaction and engagement and levels of productivity, profit, customer satisfaction, employee turnover, and employee safety.
Findings
The meta-analysis showed a positive correlation between job satisfaction and employee engagement, and investigated business outcomes. The strongest correlations were found between employee satisfaction/engagement and employee turnover (the strongest), customer satisfaction, and safety. Correlations between employee satisfaction/engagement, and productivity and profitability were still positive but not as strong. The authors found that the results were consistent enough across this large and varied sample to suggest that this correlation can be generalized.
The authors suggested that an organization looking to improve its overall performance should first look at the top-performing business units within the organization. By examining the levels of employee engagement and job satisfaction within those units, and exploring the factors that influenced those levels, the organization can take steps to increase engagement and satisfaction in other units; if the authors are correct about the generalization of the correlations, doing so should result in improved business outcomes in those other units. They noted that organizations should take engagement and job satisfaction seriously due to its impact on business outcomes.
The authors also suggested that further study is warranted, particularly in examining the ‘causal’ link between engagement and short-term business outcomes like employee turnover and customer satisfaction levels (as correlation is not causation).
In larger business units, it would be difficult to accurately link the impact of a single employee’s engagement level and job satisfaction to eventual business outcomes. Taking the collective pulse of the unit’s employees allows management to focus on the overall situation and its impact, rather than be distracted by outliers which could skew their perceptions one way or another.
Implications for HPT
Thomas Gilbert (2007) defined in his Behavior Engineering Model, Motivation = Incentives + Motives. He believed that human motivation would be difficult to understand although others may characterize it as “a favorite nostrum offered as a curative for incompetence” (p. 308). He emphasized that motivation should be understood and engineered from two aspects of equal importance – environmental incentives (consequences) and personal motives. However, he also stated that in an actual performance analysis, attempts to improve ‘motives’ directly would have little success due to lack of leverage to change that component. Largely based on his behavioristic background, he believed that improving the environment components of a job would indirectly influence the motives of workers, although he did not cite any research to support his theory.
Discussion for OPWL-N Members
Have you measured employee engagement as part of a performance analysis? Have you attempted to improve employee engagement in hopes to improve employee retention, customer satisfaction, employee safety, productivity, and profitability, as shown in the meta-analysis study? What motivational strategies (addressing environmental incentives and/or personal motives) have you used to improve employee engagement?
Workplace Oriented Research Central (WORC)
Prepared by OPWL Graduate Assistant, Perri Kennedy
Directed by OPWL Professor, Yonnie Chyung
Posted on March 20, 2012