Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis
Harter, J.K., Schmidt, F.L. and Hayes, T.L. (2002)
Journal of Applied Psychology
Vol. 87, pp. 268-79.
Across all business outcomes the researchers demonstrated a strong relationship between employee engagement and the business results. As hypothesized, employee satisfaction and employee engagement had positive and significant correlations with customer satisfaction, profitability, & productivity and negative relationships with both turnover and safety. The correlations for overall satisfaction and employee engagement were highest for customer satisfaction–loyalty (.32 and .33, respectively) and employee turnover (-.36 and -.30), followed by safety (-.20 and -.32), productivity (.20 and .25), and profitability (.15 and .17). Further, the findings for business unit performance are very positive (.37 for overall satisfaction and .38 employee engagement).
- Customer satisfaction/loyalty – Employees with higher engagement received 2%-4% higher customer satisfaction ratings. For most large organizations with several business units this would be a difference in millions of dollars.
- Profitability – On average, business units in the top quartile on the employee engagement measure produced 1%-4% higher.
- Productivity – Business units in the top quartile on employee engagement had $80,000 to $120,000 higher monthly revenue or sales. At the lower end of $80,000 difference per month, this difference translates into $960,000 per year per business unit.
- Turnover –Turnover was broken into high and low turnover companies.
- High turnover companies the difference between the top and bottom quartiles ranged from 14% to 51%.
- Low turnover companies the difference between the top and bottom quartiles ranged from 14% to 51%.
Article by Brandon Jordan