Chicken and Egg Question answered … almost!

Does the organisation perform better because the employees are satisfied or are the employees satisfied when the organisation performs well?

Your company’s success, dare I say survivial, could well depend on your answer to this critical question.

When one observes how most organisations operate one could reasonably assume that the predominant belief expects the latter to be true; that is, if the organisation performs better the employees should be happier and thus perform better! But that isn’t really how it works in practice. 

In a paper published by Daniel Koys in December 2006 entitled “The effects of employee satisfaction, organizational citizenship behavious, and turnover on organizational effectiveness: A unit-level, longitudinal study.” he had this to say;

“Cross-lagged regression analyses show that employee attitudes and behaviors at Time 1 are related to organizational effectiveness at Time 2. Additional cross-lagged regression analyses show no significant relationship between organizational effectiveness at Time 1 and the employee attitudes and behaviors at Time 2. These results add to the evidence that HR outcomes influence business outcomes, rather than the other way around.“

What is your experience?  

You can view the abstract and purchase the research paper here:  http://www3.interscience.wiley.com/journal/119928793/abstract?CRETRY=1&SRETRY=0