Closing the Scientist-Practitioner Gap: Employee Satisfaction and Success

Why do employee satisfaction and engagement matter? They’re just based on employee opinions. Do they really have any bearing on hard business outcomes? Turns out, there is a lot of evidence that they have a HUGE impact.

In one of the most telling examples a meta-analytic research study by Harter, Schmidt, and Hayes looked across a multitude of studies to find out exactly why employee engagement is important for organizations. Specifically they looked at business unit level employee engagement data and at business unit level outcomes like customer loyalty, profitability, productivity, employee turnover, and safety across a large variety of industries, 7,939 business units, and 198,514 employees. They hypothesized that they would find positive relationships between these business outcomes and employee engagement. Further, they show exactly how important employee engagement is in showing the magnitude of the differences in these outcomes across engagement levels (top and bottom quartiles of engagement levels).

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).

Further, the authors performed some utility analysis across 5 organizations which had the same business outcome data to understand the magnitude employee engagement has on the business. Comparing the top and bottom quartiles of employee engagement they estimated the organizational impact of bringing the bottom scores to equate with the top scores.