Job satisfaction was once a hot topic in academia. From the 1960’s through till the late 1980’s, management theorists looked at the question from every angle, trying to find ways to create a contented labour force. By this, they meant: “one less concerned with money rewards and less inclined to unionise[i]”. Researchers expected to find a strong correlation between job satisfaction and productivity. However, when this proved elusive, research funding dried up. More recently, a bunch of new research has helped the democratic labour movement better understand what workers want, and how we can deliver it.
In 1999 the most extensive workplace survey in the USA since the 1970’s — “What Do Workers Want?[ii]” — reported that:
- Most employees want a voice in how their workplace operates;
- Most employees support the formation of labor-management committees, to which they elect representatives to run the organization and settle conflicts.
It also showed that giving workers the opportunity to express their opinions would raise job satisfaction and increase productivity and profitability. The book that summarised the study provided a particular boost for unions as well, showing that:
- Nearly 90 percent want some sort of independent employee organization at their workplace.
- Many non-union workers favor the creation of unions, and virtually all union members support their union.
So lets make our first assertion, in relation to the question of job satisfaction.
1) workers want collective involvement in decision making!
Research from three years earlier[iii] had also shown that job satisfaction does not depend on absolute pay, but on pay relative to others of the same education and job qualification. In Los Angeles, social workers were found to be comparable to probation officers in skill, effort, responsibility, and working conditions. Even so, social workers were paid an average $20,000 less. In the state of Illinois, job analysis showed that registered nurses had jobs which scored much higher in skill, effort, responsibility and working conditions than electricians, but were paid $12,000 less per year. There is not a single country in the world where pay equity is the norm.
Traditionally, economists have argued that it is self-interest that drives the demand for higher pay. In fact there is evidence that this is true for those at the highest-paid end of the scale. As far as directors are concerned, money appears to be a motivating factor, while job satisfaction is not.[iv]” But for most people satisfaction depends not on objective income, but on the relative amount compared to others in the organisation, and to others in the same occupation. Job satisfaction is related to perceptions of fair pay, rather than high pay. In other words…
2) workers want equal pay for work of equal value!
This difference of attitudes towards pay explains why those on higher scales (eg CEO’s) seem to believe that performance-based pay systems will create higher productivity. In their case, it may well be true. But such a belief runs counter to the evidence for most workers. In 2003 an OECD paper[v] found massive problems with performance pay in public services: “One conclusion from the experience of OECD countries… is that the technique is functioning well in none of these countries’ public services. In addition, it has created side effects that are difficult to deal with.” A parallel study in Australia[vi] showed that performance pay could lead to:
- demotivation of staff
- workplace divisiveness and erosion of co-operation
- an undermining of teamwork
- reduction in open feedback within the workplace
- increased administrative burdens and costs
And in an update to this research, it was further shown that performance levels had been damaged, rather than improved, by the introduction of performance pay.
Professor Richard Layard, director of the Centre for Economic Performance at the London School of Economics, complains about this narrow, economistic view of human nature, which finds its expression in individual incentives and targets, competitive rankings and comprehensive performance systems[vii]. As he points out, competition for money and status is a zero-sum game; and the more opportunities there are for making comparisons, the greater that dissatisfaction will be.
3) workers want co-operation, not competition!
Why should managers care about job satisfaction? Didn’t all those years of study fail to establish a clear link between happy workers and productive ones? New evidence is leading to a radical rethink of what “job satisfaction” actually consists of. And yes, it is very definitely linked to production levels. In fact, in the right circumstances, job satisfaction and high productivity can reinforce each other.
In 2001 a survey of 2,500 Canadian employees concluded that good employment relationships are the key ingredient of a “good job” The study also showed a strong synergy between job satisfaction and productivity growth[viii].
This echoed a finding from two years previously, which has been called the first evidence of a comprehensive link between good people management and business success. Professor Michael West and Malcolm Patterson from the UK Institute of Work Psychology published an eight-year study[ix] showing that the organisations which performed best were those which:
- avoided aggressive management styles
- made sure their staff were never bored
- allowed them to feel they had a stake in the company’s performance.
Added Patterson, who led the research: “It appears that a happy workforce is a more productive workforce. It is a simple message to bosses, but is backed up with hard evidence.”
A 2004 report in the American Psychological Society Journal confirmed this: “The costs of unhappy workers to economic productivity are enormous. Policies aimed at producing a happier workforce make sense both because they can enhance well-being in an important realm of life and because they can increase economic productivity and profitability.[x]”
Work by Mihaly Csikszentmihalyi suggest the need for “flow” at work — a balance between the challenge of the task and the skill of the performer. Major companies such as Microsoft, Ericsson and Toyota have shown that this is great for both managers and workers (see http://goo.gl/Pud4j and http://goo.gl/pwvUj).
In the light of these and other new studies, we can now show that a link does exists between job satisfaction and higher performance, but why haven’t we been able to define it? Economists are having to develop a wider view. Workers are not units in isolation, and work does not happen in a social vacuum. Earlier studies got the wrong answers because they asked the wrong questions, and in the wrong way.
“For one thing, researchers recognized certain errors in the early reviews, and also realized that seemingly small correlations…” (ie between job satisfaction and productivity) “could amount to huge productivity differences when applied to organizations and to nations. In addition, scientists noticed that certain types of behaviors are consistently related to job satisfaction. Job satisfaction is reliably related to “organizational citizenship” (helping others and the organization not specifically related to one’s assigned tasks) and to the absence of bad citizenship (eg stealing from the employer)…. more satisfied employees are more practical, helpful, and friendly… satisfied workers have lower turnover and absenteeism, and are more punctual, cooperative, and helpful to other workers.”
The significance of this change in perspective cannot be overstated. Workplace culture – the relationships between workers; and between workers and management; and between the organisation and society – looks set to become the dominant industrial relations issue of the next few years. As competition for markets and resources becomes more intense, improving social dynamics within the workplace will make or break an organisation. Workers both want and need an independent, collective voice in this process.
Management experts David Sirota, Louis Mischkind and Michael Meltzer have surveyed over four million workers in 89 countries over the past 30 years. Their new book, The Enthusiastic Employee – How Companies Profit by Giving Workers What They Want[xi], reports that 90% percent of employees become indifferent to their workplace over time. The top 10% of companies today are those which meet three goals which the vast majority of employees desire: equity, achievement and camaraderie. These goals apply to all workers, whether they are baby boomers, Gen X, Gen Y, or Gen D (digital). With an enthusiastic workforce, the authors report, employee turnover can be reduced by as much as 80% and performance can be increased by 25%.
It is a good moment to remember the words of management theorist Frederick Herzberg, who in many ways launched this field of enquiry in the late 1950’s: If you want someone to do a good job, give them a good job to do.[xii]
Of course this all means very little to a telecommunications worker in the Democratic Republic of Congo who has not received any pay for the last 55 months! The ILO reports that one half of the world’s workers – some 1.4 billion people – are unable to earn enough to lift themselves above the $US2 a day poverty line[xiii]. Is “job satisfaction” a relative thing, then? For most people on Earth, does job satisfaction mean nothing higher than the fulfillment of basic survival needs?
In 1954 the leader of the humanistic school of psychology A.H. Maslow[xiv] identified what he called a “Hierarchy of Needs”. Maslow is famous for his argument that once one need is met, it ceases to act as a motivator, and is replaced by needs of a “higher order”.
The Hierarchy of Needs
1. Biological and Physiological needs – air, food, drink, shelter, warmth, sex, sleep, etc.
2. Safety needs – protection from elements, security, order, law, limits, stability, etc.
3. Belongingness and Love needs – work group, family, affection, relationships, etc.
4. Esteem needs – self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc.
5. Self-Actualization needs – realising personal potential, self-fulfillment, seeking personal growth and peak experiences.
Achieving satisfaction, according to Maslow’s famous model, is about fulfilling successive needs. This approach was a radical departure from the two chief schools of pyschology of his day: those of Freud and B.F. Skinner. Freud, for instance, saw little difference between the motivations of humans and animals. In this respect, he and contemporary market economists share a similar territory.
Maslow’s model takes us far beyond the narrow view of neo-liberal economics. It also suggests how the struggle for job satisfaction is likely to unfold in the developing world. Job satisfaction is not an abstract ideal; it evolves according to the nature and social context of work. Unions in rich countries must look beyond the business unionism model, with its narrow focus on financial gains. Improvements in workplace culture, participation, autonomy and personal development are objective needs, not optional extras. Similarly, unions in poor countries need to focus all their efforts on winning basic needs for their members. Until these have been met, paternalistic attempts by labour foundations to guide their struggle towards “higher goals” are not solidarity, they are subversion.
Does all this mean that we can never quite arrive at job satisfaction? Ultimately, this is the same question that lead academics on their wild goose chase in the ’60s, ’70s and ’80s. Job satisfaction is not a destination. It cannot be pinpointed on the industrial relations map with individualised surveys, then sneaked up upon by way of a competitive rewards system. In fact the methodology for improving job satisfaction is much the same as it is for improving public services, and the two should not be seen in isolation. It is about people sitting down and collectively assessing the situation, then identifying positive and realistic alternatives. Having done this, it is about working to close the gaps. This is the crux of the matter — the true link between job satisfaction and increased productivity. It is about the going, not the getting there.
This article is written by Peter Hall-Jones, the New Unionism Network’s communications coordinator. He can be contacted at firstname.lastname@example.org. An earlier and shorter version of the article was first published by Public Services International in their journal Focus in 2004.
[i] From Disparate Measures in the Workplace… Quantifying Overall Job Satisfaction, Professor Michael Rose, Department of Social and Policy Sciences, and Work and Employment Research Centre, University of Bath (paper presented at the 2001 British Household Panel Survey Research Conference, 5-7 July 2001, Colchester, UK). See http://www.iser.essex.ac.uk/bhps/2001/docs/pdf/papers/rose.pdf
[ii] What Workers Want, Richard B. Freeman and Joel Rogers. Ithaca, NY, Cornell University Press, 1999. Freeman is from Harvard University and the National Bureau of Economic Research, and Joel Rogers is from the University of Wisconsin-Madison. Newsweek magazine named Rogers one of the top 100 people to watch in the new millennium. See http://www.news.wisc.edu/629.html
[iii] Satisfaction and comparison income, Journal of Public Economics, 61, p359-381, AE Clark and A Oswald 1996
[v] Performance Related Pay in the Public Service, Francisco Cardona OECD/SIGMA (first presented to the second conference of the Institute of Public Administration and European Integration October 2002)
[vi] Performance Management and the Psychological Contract in the Australian Federal Public Sector, Michael O’Donnell, University of Canberra and John Shields, University of Sydney – Faculty of Economics and Business Journal of Industrial Relations, Vol. 44, pp. 435-457, 2002
[vii] Happiness: Lessons from a new science, Richard Layard Penguin UK 2005
[viii] What’s a Good Job? The Importance of Employent Relationships, Graham Lowe and Grant Schellenberg Canadian Policy Research Networks Inc., 2001
[ix] People Power, London School of Economics Journal Centre Piece, Professor Michael West and Malcolm Patterson of the Institute of Work Psychology, 1998.
[x] Towards an Economy of Well-Being, American Psychological Society Journal 2004 http://www.psychologicalscience.org/pdf/pspi/pspi5_1_4-20.pdf
[xi] The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want, David Sirota, Louis A. Mischkind, and Michael Irwin Meltzer Wharton School Publishing 2005
[xiii] Half the world’s workers – some 1.4 billion people – are trapped in grinding poverty unable to earn enough to lift themselves and their families above the US$2 a day poverty line, according to The ILO World Employment Report 2004-2005. The report also states that focusing economic policies on creating decent and productive employment opportunities is vital for reducing global poverty, as called for in the Millennium Development Goals. The report breaks new ground with its analysis of the linkages between employment, productivity and poverty reduction. For more details in English, French or Spanish see: http://www.ilo.org/public/english/bureau/inf/pr/2004/54.htm