A current hot topic in the world of I/O is the relationship between happiness at work and work productivity. Everyone can see the ‘human-benefit’ of having a happy workplace, and the idea that increased job satisfaction and a harmonious workplace are inherently good things makes obvious sense.

However, the link between job satisfaction and work productivity is far less clear. Historically, the relationship has been less definitive. Vroom (1964) reported an average correlation of .14 between satisfaction and performance. Iaffaldano & Muchinsky (1985) backed this up, suggesting that the average correlation was around .15. More recently, a definitive meta-analysis by Tim Judge and his colleagues (2001) reported an uncorrected average correlation of .18, and a corrected correlation of .30. These studies have fuelled the argument that there is little association between job satisfaction and job performance, at least at the individual level.

In a keynote address at the NZPsS conference, Cynthia Fisher from Bond University (Queensland) delivered an update on this view. (Thanks to Professor Michael O’Driscoll, Waikato University, for posting a summary of the address on I/O Net). Cynthia presented an array of recent evidence which might cause us to rethink some of the assumptions we have made about the relationship between satisfaction and performance. The summary appears to be that while job satisfaction may have limited impact on task performance, it does lead to a higher level of contextual performance (e.g. positive work behaviours); attitudes do matter in terms of people’s job performance.

While important, I believe this sidesteps the core questions organisations often ask, like ‘will this increase our revenue?’ Recent attempts to link job satisfaction to productivity have likewise sidestepped this intrinsic question. A highly functioning workplace is not the same as one that is generating large profits for shareholders.

Another keynote address (UK) was brought to my attention by Professor Paul Barrett:

Peccei, R. (2004) Human Resource Management and the search for the happy workplace. Inaugural Addresses Research in Management Series: Erasmus Research Institute of Management: http://publishing.eur.nl/ir/repub/asset/1108/EIA-2004-021-ORG.pdf, 0-0.


The analysis of the impact of human resource (HR) practices on employee well-being at work is an important yet relatively neglected area of inquiry within the field of human resource management (HRM). In this inaugural address, the main findings from ongoing research based on data from the 1998 British Workplace Employee Relations Survey (WERS98) are presented. These suggest that the HR practices that are adopted by organisations have a significant impact on the well-being of their workforces and that this impact tends, on the whole, to be more positive than negative. The effects, however, are more complex than is normally assumed in the literature. In particular, preliminary results indicate that the constellation of HR practices that help to maximise employee well-being (i.e. that make for happy workplaces), are not necessarily the same as those that make up the type of ‘High Performance Work Systems’ commonly identified in the literature. This has important theoretical, policy and ethical implications for the field of HRM. These are discussed along with important directions for future research.

Like many areas of I/O psychology, the relationship between job satisfaction and work performance is a complex system. Our research in the area is at times clichéd and like many so-called great findings in psychology, are occasionally nothing more than old-fashioned common sense. A classic example of this is a paper published last year:

Harter, J.K., Schmidt, F.L., Asplund, J.W., Kilham, E.A., & Agrawi, S. (2010) Causal impact of employee work perceptions on the bottom line of organizations. Perspectives on Psychological Science, 5(4), 378-389.

Selective paragraphs from the abstract border on the obvious and demonstrate how far our discipline needs to go if it is going to come to an understanding of complex relationships. Some of the more ‘insightful’ comments include:

  • ‘Perceptions of work conditions have proven to be important to the well-being of workers’.
  • ‘Customer loyalty, employee retention, revenue, sales, and profit are essential to the success of any business’.
  • ‘Managerial actions and practices can impact employee work conditions and employee perceptions of these conditions, thereby improving key outcomes at the organizational level’.

As is often the case, a truly insightful discussion on this topic is not found in psychological literature but in an issue of The Economist (July 2010). An article noted that wellness programmes are now part of the corporate landscape with more than half of America’s largest companies offering smoking and fitness programmes. Over a third have gyms and canteens are termed ‘nutritional centres’. This focus on wellness is also extending to mental health programmes. This is driven by two fronts: Doctors note that over a third of health-related issues they see have a psychological base, and management gurus are now talking much more about the psychological impacts of the modern workforce. The article goes on to argue that the rationale for these interventions is as much financial as it is psychological. Mental health has been estimated to cost British employers $26 billion a year. American research suggests presentism (being at work but not really functioning i.e. present) costs twice as much as absenteeism.

Taking the argument one step further, The Economist states that job satisfaction and work performance equation requires deeper analysis. What does this body of work mean for the relationship between the private and public distinction for employers? How much responsibility should an employer take for staff wellbeing? What is the scientific basis for many of the interventions? If employers are to introduce measures to improve wellness, how do they know what is most likely to bring about the desired outcomes? Is the focus on wellness necessarily good for productivity?

The relationship between job satisfaction and worker well-being and work performance is complicated. Talent is often at extremes of the bell curve and does not always naturally fit the classical model of wellness. Understanding the various interactions is a valid line of research for psychology but one that will not be short-circuited by clichés. We must never lose sight of the core function of business – which is to make, distribute and reinvest profit – and job satisfaction must impact this core function if it is to be a meaningful psychological construct embraced by the industry.