Job Satisfaction - Principles of Management

Job Satisfaction in Management

Job satisfaction , a person’s evaluation of his or her job and work context, is probably the most studied attitude in management. It is an appraisal of the perceived job characteristics, work environment, and emotional experiences at work. Satisfied employees

Is Everyone Satisfied?

Job Satisfaction in Management

have a favorable evaluation of their job based on their observations and emotional experiences. Job satisfaction is really a collection of attitudes about different aspects of the job and work context. You might like your coworkers but be less satisfied with your workload, for instance.

How satisfied are employees at work? Surveys suggest that more than 85 percent of Americans are satisfied with their jobs, a figure that has remained amazingly consistent over the past two decades (see Figure above). In fact, the percentage of Americans who say they are “completely satisfied” has actually increased over the years.

Around the world, employees in Denmark and India are reportedly the happiest at work. Most studies place Americans in the upper quartile of countries in terms of job satisfaction. In contrast, job satisfaction seems to be quite low among employees in China, South Korea, and Japan, as indicated in Figure below.


In the highly competitive fashion industry, Hugo Boss Industries commands an impressive brand image and market share (30 percent for business suits in some markets). The Swiss company’s success is due in part to a bonus plan that rewards managers based not just on return on capital and other hard numbers but also on the soft numbers like employee satisfaction.

Hugo Boss and many other firms closely monitor employee morale and reward managers who keep morale high because attitudes and well-being affect employee behavior to some degree.

A useful template to organize and understand the consequences of job dissatisfaction is the exit–voice–loyalty–neglect (EVLN) model . As the name suggests, the EVLN model identifies four ways in which employees respond to dissatisfaction:

  • Exit refers to leaving the organization, transferring to another work unit, or at least trying to make these exits. Employee turnover is a well-established outcome of job dissatisfaction, particularly for employees with better job opportunities elsewhere. Conversely, companies whose employees have high job satisfaction report some of their industries’ lowest turnover rates.

For instance, when asked if she thought about working somewhere else, Vancouver City Savings Credit Union accounts manager Lara Victoria quickly replied, “No, they’d have to push me out. It’s worth every minute of it here.” An important observation for managers is that exit usually follows specific “shock events,”

Is Everyone Satisfied?


such as when employees believe their managers treat them unfairly. These shock events generate strong emotions that energize employees to think about and search for alternative employment.

  • Voice refers to any attempt to change, rather than escape from, a dissatisfying situation.
    Voice can be a constructive response, such as recommending ways for management to improve the situation; or it can be more confrontational, such as filing formal grievances. In the extreme, some employees might engage in counterproductive behaviors to get attention and force changes in the organization.
  • Loyalty has been described in different ways. The most widely held view is that “loyalists” are employees who respond to dissatisfaction by patiently waiting—some say they “suffer in silence”—for a problem to work itself out or get resolved by others.
  • Neglect includes reducing work effort, paying less attention to quality, and increasing absenteeism and lateness. It is generally considered a passive activity that has negative consequences for the organization.

Which of the four EVLN alternatives do employees use? It depends on the person and situation. As we have noted, people’s feelings translate into different behavioral intentions based on their past experiences and personal preferences. Also, someone’s intention to use the exit, voice, or other response depends on circumstances. With poor job prospects, employees are less likely to use the exit option. Those who identify with the organization are also more likely to use their voices rather than leave. Reactions to job dissatisfaction also depend on people’s personal values and personalities.


One of the oldest beliefs in the business world is that “a happy worker is a productive worker.” At one time management experts said that this phrase is inaccurate. Now, based on better research methods, they have concluded that happy workers actually are more productive workers, but only to some extent. There are a few reasons why this moderate association between job satisfaction and performance isn’t stronger.

One argument is that general attitudes (such as job satisfaction) don’t predict specific behaviors very well. As we learned with the EVLN model, job dissatisfaction can lead to a variety of outcomes rather than lower job performance (neglect). Some employees continue to work productively while they complain (voice), look for another job (exit), or patiently wait for a problem to be fixed (loyalty).

A second explanation is that job performance leads to job satisfaction (rather than vice versa), but only when performance is linked to valued rewards. Higher performers receive more rewards and consequently are more satisfied than poorly performing employees who receive fewer rewards. The connection between job satisfaction and performance isn’t stronger because many organizations do not reward good performance.

The third explanation is that job satisfaction might influence employee motivation, but this has little influence on performance in jobs where employees have little control over their job output (such as assembly-line work). This point explains why the job satisfaction–performance relationship is strongest in complex jobs, where employees have more freedom to perform their work or to slack off.


Outback Steakhouse Inc. has become a phenomenal success story in America’s competitive restaurant industry. In 1988 Outback’s four partners opened a restaurant in Tampa, Florida, based on popular images of casual lifestyles in the land Down Under. Today Outback’s 65,000 employees work in 1,100 restaurants around the United States and Canada. Although the Australian theme launched the company’s success, Outback founder and CEO Chris Sullivan says the quality of staff deserves as much credit.

Specifically, the company hires energized employees and creates a culture that supports them so they stay with the company and provide excellent service. This service makes customers happy, which brings them back and encourages them to recommend Outback to friends. The result of such customer satisfaction is higher sales, which improve company profits.

Outback Steakhouse is one of many firms where managers believe that customers are happier when employees are happier. “I realized a long time ago that there was a strong correlation between employee satisfaction and customer service,” says Gary Pon, CEO of Pinnacol Insurance in Denver. Virgin Group founder Richard Branson echoes this view.

“It just seems common sense to me that if you start with a happy, well-motivated workforce, you’re much more likely to have happy customers,” says Branson. Managers at Wegmans are so convinced that satisfied employees provide better customer service that the Rochester-based grocery chain’s motto is “Employees first, customers second.”

Management research generally agrees that job satisfaction enhances customer satisfaction. A few years ago Sears Roebuck & Co. calculated that a 5-point improvement in the retail giant’s job satisfaction survey scale increases customer satisfaction ratings by 1.3 points, which in turn improves revenue growth by 0.5 percent. Marketing experts have developed the “employee –customer–profit chain” model shown in Figure below, which illustrates how employee satisfaction translates into customer satisfaction and profitability.

Employee–Customer– Profit Chain Model

Employee–Customer– Profit Chain Model

There are three reasons why happy employees tend to result in happy customers. First, as we have mentioned, job satisfaction is related to employee performance—particularly higher motivation to provide friendly service. This increased effort includes trying to serve customers more effectively. Second, employees are usually in a more positive mood when they feel satisfied with their jobs and working conditions.

Employees in a good mood display more naturally friendly service, which most customers interpret as higher-value service. Third, employees with higher job satisfaction are less likely to quit their jobs, so they have better knowledge and skills to serve clients. Lower turnover also gives customers more consistent service. There is some evidence that customers build their loyalty to specific employees, not to the organization, so keeping employee turnover low tends to build customer loyalty.

Before leaving this topic, we should mention that job satisfaction does more than improve work behaviors and customer satisfaction. Job satisfaction is also an ethical issue that influences the organization’s reputation in the community. People spend a large portion of their time working in organizations, and many societies now expect companies to provide work environments that are safe and enjoyable.

Indeed, employees in several countries closely monitor ratings of the best companies to work for—an indication that employee satisfaction is worth considerable goodwill to employers. This fact is apparent when an organization has low job satisfaction. The company tries to hide this situation, and when morale problems become public, corporate leaders are usually quick to improve employee attitudes.

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