This study broke down the relationship between workforce satisfaction and financial performance, examining each link in the chain (employee behaviors and customer satisfaction) to determine ways in which HR practices can be designed to enrich
an organization’s financial results.

THE STUDY QUESTIONS

In this study, the researchers ask the following questions:

To what extent does the level of workforce satisfaction affect a firm’s bottom line?

Will increased employee satisfaction necessarily yield better financial  performance?
If not, how can HR policies and procedures be retooled to improve financial performance?

RESULTS

While financially successful businesses tend to have satisfied employees, the reverse is not necessarily true. Workforce satisfaction does not lead directly to better financial performance.

If the relationship between employee satisfaction and financial performance was “direct,”
workforce satisfaction would lead directly to profitability, and intervening factors would
simply affect the relationship in various ways.  On the contrary, each of the intervening factors (employee retention, employee responsiveness to customers, and customer satisfaction) is vital to financial performance.

In addition, the farther one travels along the path, the more likely it becomes that financial performance will be affected by non-employee related factors, such as customer expectations or economic c