Does Favorable Job Attitudes Make Organizations More Profitable?

This statement appears to be true.

A recent study of 2,178 business units suggested that job attitudes measured at one point in time predicted organizational financial performance roughly six months later.   In the study, job attitudes were measured through employees’ responses to 12 questions (such as, “At work, my opinions seem to count”) and financial performance was measured in terms of revenue and profit margin.

Why does employee job satisfaction appear to pay off?

The authors of this study uncovered two explanations: Satisfied employees are less likely to quit, and they engender stronger customer loyalty.   Low turnover and high customer loyalty both helped make organizations more profitable.

This study also found some evidence for what might be called a virtuous cycle: Having satisfied employees tends to improve subsequent financial performance, which tends to improve later employee satisfaction even further.

No organization can be all things to all employees, but this study does suggest that attention to improving employee attitudes is well rewarded. The authors of this study conclude, “Improving employee work perceptions can improve business competitiveness while positively impacting the well-being of employees.”


Source: J. K. Harter, F. L. Schmidt, J. W. Asplund, E. A. Killham, and S.Agrawal, “Causal Impact of Employee Work Perceptions on the Bottom Line of Organizations,” Perspectives on Psychological Science 5, No. 4 (2010), pp. 378-389.