Linkage Research and Analyses

Relationship between Employee Opinions and Business Performance

The history of job satisfaction research has been largely disappointing in its consideration of the seemingly logical belief that happy workers are more productive. Simply put, evidence of the relationship between employee satisfaction and individual productivity was found to be lacking as early as the 1950s and in many reviews of the relationship since then. This surprising lack of relationship can be attributed to several factors, including employees' lack of discretion in deciding how to perform their jobs and the lack of reliability in individual performance measures. In contrast, linkage analyses are conducted at the level of the relevant organizational work unit. The organizational measures of performance selected may be more reliable and less prone to rating biases than individual ratings of job performance. Organizational measures also reflect the benefit of the aggregate discretionary individual behaviors that affect unit and organizational functioning and may not be captured in traditional individual performance measures.

Cumulative evidence across many linkage studies suggests a compelling picture. Workplace perceptions have been shown to predict financial measures of success (sales, profits), customer satisfaction, turnover rates, safety, and other relevant business outcomes. The findings are robust, although the range of business outcomes represented in the published studies is somewhat limited and comprises mostly customerfocused outcomes. This is partly attributable to the fact that customer-focused industries tend to be organized around common business practices, and business units tend to be easily identifiable and significant in number. Therefore, linkage research has been largely limited to organizations with multiple homogeneous business units (such as bank branches, hotels, and car dealerships).

Which Employee Opinions Matter?

The fundamental challenge in designing employee surveys is choosing the right questions to ask. There are practical limits to the length of employee surveys, and the number of possible topics to be represented is large. Consequently, employee surveys capture how employees perceive the work environment with varying degrees of specificity. In some surveys, questions focus on very specific organizational practices, such as the availability of specific resources such as computers or management support. In other cases, the questions are broad indicators of satisfaction, such as direct ratings of satisfaction with supervision or the degree of autonomy.

Despite these broad differences in specificity, the relationship between survey data and business performance indicators is robust. Questions about employees' general satisfaction as well as more specific questions about organizational climate are consistently related to organizational outcome measures (at the unit level of analysis). That said, it is [Page 460]considered best practice by many to ask questions that lead to a more direct and actionable interpretation. For example, knowing that 25% of the employees in a job class have received training in a specific operational procedure is more actionable than knowing that 25% of them are satisfied with the overall level of training they have received. Thus, linkage research provides insights into which opinions determine organizational success, but the practical interpretation depends greatly on the specificity of the employee survey questions asked.

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