The relationship between the job satisfaction of a company's workforce and its financial success is complex, but a new study in the journal Economic Research-Ekonomska Istraživanja has determined that satisfied workers can lead to greater success for an organisation.
Danica Bakotić of the University of Split, Croatia, studied the performance of 40 large and medium-sized Croatian companies using 10 different financial indicators, including earnings, labour costs and return on assets. She issued questionnaires on job satisfaction to nearly 6000 of their combined employees, quizzing them on 11 different aspects of their work, including pay, job security, hours and management. Their overall job satisfaction was the average value of all the factors combined.
Through this, Bakotić was able to conclude that "companies with more satisfied workers were more successful." Bakotić also found low-intensity links between a company's financial performance and the job satisfaction of its employees.
With all the data in front of her, Bakotić concludes: "It could be stated that job satisfaction more strongly determines organizational performance than organizational performance determines job satisfaction."
Although Bakotić's sample is small, her study offers important lessons for managers and business owners keen to get it right for their workers as well as their shareholders. Napoleon, whom she quotes at the start of her study, may have been right when he said: "The effectiveness of the army depends on its size, training, experience and morale, and morale is worth more than all the other factors together."
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