The Enthusiasm Edge

Worker satisfaction has a major impact on the bottom line, suggests research behind the new book The Enthusiastic Employee. Although some managers may consider this common sense, others will be surprised. After all, for years management thinkers have debated the degree to which worker satisfaction pays off in organizational results.
The book’s co-authors reportedly base their findings on over 30 years of research conducted by industrial organizational psychologists at Sirota Consulting. “In that time, we collected over 4 million survey responses from employees all around the world,” write David Sirota, Louis A. Mischkind and Michael Irwin Meltzer (p. xxiv).

They view employee attitudes as existing along a continuum from anger to neutrality to satisfaction and then to, at the highest level, enthusiasm. Why use the term “enthusiastic” rather than just “highly satisfied”? Because, they explain, something qualitatively different seems to be occurring at companies where many employees are highly satisfied: “On average, organizations with enthusiastic employees are much higher performing organizations than the rest” (p. 35).

In 2004, Sirota Consulting looked at 28 large companies. Among those found to have very high morale, share prices rose 16%, compared with industry averages of just 6%. Meanwhile, the increases at “low morale” organizations were just 3% (“Giving Employees, 2005”). Some experts will see such findings as troubling in light of research from The Conference Board that shows continuing declines in U.S. job satisfaction (“U.S. Job,” 2005).

Employees with high morale simply seem to do better work. Sirota’s research suggests that enthusiastic employees boost the quality of their work by up to 75%, as measured in terms of defect rates. Likewise, high customer sales and satisfaction rates are correlated with worker satisfaction.

So, what’s the secret to generating high satisfaction in the workforce? Sirota and colleagues say it isn’t so much what managers should do, it’s what they shouldn’t do. They shouldn’t squelch the enthusiasm with which the large majority of employees enter their new jobs. Most of what managers really need to do is 1) treat employees fairly from a financial, safety, and psychological viewpoint, 2) ensure that their work gives them a sense of achievement and pride, and 3) make sure there’s a feeling of camaraderie in the workplace.

“A great company for employees,” they write, “is one that largely meets all their needs for equity, achievement, and camaraderie. Until that happens, it is no more than a ‘good’ company” (p. 26). In fact, satisfaction rises dramatically when all three needs are met, as opposed to just one or two of them.

The basic mistake managers tend to make is to create work policies that are geared toward that small minority (they estimate about 5%) that are basically “allergic” to work. Managers set up systems to keep close tabs on this 5% and punish them when they step out of line. “So people who come in wanting to work, and hoping to take pride in their work, find themselves treated as if they are children or criminals,” Sirota is quoted as saying in Knowledge@Wharton (“Giving Employees,” 2005).

The idea of treating employees like adults and, more to the point, like trusted partners is a running theme in The Enthusiastic Employee. In this, it concurs with a study from the Families and Work Institute called the National Study of the Changing Workforce. That study found that the ingredients of an “effective workplace” include manager support, co-worker support, job autonomy, learning opportunities, and involvement in decision-making. It also found that companies with higher scores in these areas tend to score well in terms of worker engagement, satisfaction and retention.

Workspan magazine reports of the study: “More than twice as many employees in effective workplaces (82%) express high levels of job engagement and commitment as employees in ineffective workplaces (36%). Nine times as many employees in effective workplaces (81%) express high levels of satisfaction with their jobs as employees in ineffective workplaces (9%) (Bond, Gallinsky, & Hill, 2005, p. 19).

So, it looks as if there are strong correlations between employee satisfaction and certain kinds of management practices as well as between satisfaction and corporate performance. But does this mean that a company can succeed merely by raising employee satisfaction levels?

Sirota and colleagues don’t go quite that far. They argue that there’s strong evidence that high morale has a positive impact on business success, but they admit that, statistically speaking, the cause and effect could go the other way. That is, better business performance could lead to higher satisfaction. Ultimately, though, they believe the “relationship between morale and performance is reciprocal” (p. 47). Therefore, it’s imperative for businesses to manage in such a way as to create a virtuous cycle where success and satisfaction are continuously reinforcing one another.



For more information about The Enthusiastic Employee, click here.
For an interview with David Sirota, click here.

For an article on The Enthusiastic Employee, click here.

For a news release from The Conference Board on U.S. job satisfaction rates, click here.

For a PDF version of a special report based on data from the Families and Work Institute’s National Study of the Changing Workforce, click here.

Documents used in the preparation of this TrendWatcher include:

Bond, James T., Ellen Gallinsky and E. Jeffrey Hill. “Flexibility: A Critical Ingredient in Creating an Effective Workplace.” Workspan, February 2005, pp. 17-20.

“Giving Employees What They Want: The Returns Are Huge.” Knowledge@Wharton, May 4, 2005.

Sirota, David, Louis A. Mischkind and Michael Irwin Meltzer. The Enthusiastic Employee: How Companies Profit by Giving Employees What They Want. Upper Saddle River, NJ: Wharton School Publishing, 2005.

“ U.S. Job Satisfaction Keeps Falling, The Conference Board Reports Today.” Conference Board News. February 28, 2005.

Welles, Judy. “Fixing the Workplace.” Federal Computer Week, ABI/INFORM, March 28, 2005, p. 29.