In the research literature on successfully managing employees, few areas of study garner as much attention as employee satisfaction and its effects on productivity, employee turnover rates, and overall employee performance, which is measured in a variety of different ways. Yet, the results of research on the effects of employee satisfaction are mixed (Gill, Sharma, Mathur, & Bhutani, 2012). One issue is that employee satisfaction is measured in a variety of contexts, environments, and industries. Another issue is that the measured effects of employee satisfaction vary tremendously. Böckerman and Ilmakunnas (2012) sought to address each of these issues by developing a study in which a number of productivity measures were employed and divided the results by industry.
In the Böckerman and Ilmakunnas (2012) study, researchers pulled data from two separate databases. The first database contained information on the employee satisfaction levels of employees. The second database contained information on the productivity of employees. Employees in various industries whose information could be used from both databases were included in this study. The research question that the researchers sought to answer is whether there is any relationship between job satisfaction and productivity. Thus, the researchers ran cross-analyses on the data to determine whether employees who had higher employee satisfaction levels also had higher levels of productivity. By drawing from two separate databases, in which two separate surveys were conducted, the researchers minimized the likelihood that any errors or bias in the survey processes were responsible for the results. The researchers also used various other data to determine whether there were any mediating factors, such as industry type, that may explain why previous studies have found correlations between employee satisfaction and productivity.
Information from a total of 312 individuals who had data in both datasets was used in the study. The results indicated that job satisfaction and productivity across all industries had a correlation of .3, indicating that there may be a significant association between the two. In addition, the researchers found that any value added to productivity by increased employee satisfaction was highly dependent on the specific industry that the employee worked in. In fact, the results revealed that only in the manufacturing sector was job satisfaction found to increase productivity. The researchers found that employee satisfaction levels could be used to explain around 20% of value added per hour worked in the manufacturing sector, but there was no significant value added per hour in other sectors. Thus, the results provide strong evidence against previous findings that seem to indicate that employee satisfaction played a prominent role in increasing employee productivity in all sectors.
Böckerman and Ilmakunnas (2012) set out to determine whether employee satisfaction really mattered in terms of production. The researchers recognized a strong need for such research because previous research on the subject conflicted heavily and often relied on insufficient samples or a poor productivity measure. Böckerman and Ilmakunnas (2012), therefore, relied on a composite productivity measure, that included a number of productivity measures that were included in the employee survey database. The researchers, thus, avoided being too heavily dependent on a single productivity measure. In addition, and perhaps most importantly for this project, the researchers analyzed the results by industry. Given my interest in the fashion retail and merchandise industry, the results of this study help me better understand the role that employee satisfaction fits into this industry. Specifically, Böckerman and Ilmakunnas (2012) included a productivity measure for the retail and merchandizing sector that relied on the sales of individual employees. The researchers concluded that employee satisfaction had no significant effect on the ability of employees to make sales.
What makes these findings so important is that they provide strong evidence against going overboard on promoting employee satisfaction to increase sales. In fact, because the results indicate that employee satisfaction rates could not significantly explain differences in production in the retail and merchandise industry, it seems that managers in this industry should not focus too heavily on improving employee satisfaction to increase productivity or sales. Nevertheless, there was still a correlation found between employee satisfaction and productivity. This may simply be the case that employees who can be more productive in the retail and merchandise industry are more satisfied with their jobs as a result. After all, many employees in this industry work off of commission, meaning that the more sales that they earn individually, the more that they are paid.
With so much research interest on employee satisfaction and employee productivity, it is tempting for managers to dedicate an abundance of time and resources to increasing employee satisfaction. Instead, the results of the Böckerman and Ilmakunnas (2012) study seem to indicate that only managers in the manufacturing industry should make employee satisfaction a priority, at least as it concerns increasing employee productivity. Better in my chosen industry is focusing on boosting production by other, more proven means, such as by increasing brand awareness, improving customer satisfaction, and being more efficient in marketing. At the very least, the Böckerman and Ilmakunnas (2012) results clarify the role that employee satisfaction plays in increasing employee productivity. Such information will be extremely useful in my industry, as it will both improve my focus and help me better industry how that industry operates.
- Böckerman, P., & Ilmakunnas, P. (2012). The job satisfaction-productivity nexus: A study using matched survey and register data. Industrial & Labor Relations Review, 65(2), 244-262.
- Gill, A., Sharma, S. P., Mathur, N., & Bhutani, S. (2012). The effects of job satisfaction and work experience on employee-desire for empowerment: A comparative study in Canada and India. International Journal of Management, 29(1), 190-204.
