What comes first – Satisfaction or Performance?

October 11, 2009

A very interesting article was published  recently on the TheStreet.com –  “Satisfaction Does Not Boost Performance”.  The article outlines the outcomes from a number of studies that overwhelmingly show that satisfaction programs will not only help business performance, they may not even improve satisfaction.  Some key points from the article:

  • In 1976, “The Handbook of Industrial/Organizational Psychology,” summarized 3,300 job satisfaction studies dating back to 1955 and found, “… negligible relationships between satisfaction and level of performance or productivity.
  • In 2009, Ed Lawler of the University of Southern California and author of “Talent,” said definitively: “Satisfaction does not lead to performance; it is caused by it.”
  • In a 2009 CFO Magazine article, Richard Beatty of Rutgers University, stated that “HR people try to perpetuate the idea that job satisfaction is critical, but there is no evidence that engaging employees impacts financial returns.”

Many companies see satisfaction as an input to performance not recognizing that it is an output. By aiming to seek performance from satisfied employees (rather than realizing that high performing employees tend to be satisfied) most such programmes leave performance to chance.  It is based on flawed logic seeking the simple solution.  Organisations that try to create one size fits all engagement programmes often end up with very happy employees that may have no desire to perform.

The final line from the article sums it up. “Find the right people, put them in roles that use their talents and give them support to be successful. Happiness will take care of itself.”

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Assumptions about Managing People

October 7, 2009

Bob Sutton writes a blog about the  links between managerial knowledge and organizational action.  He has a very interesting and challenging post based on a closing discussion at the Singapore Human Capital Summit. As Bob said, his aim was to challenge the assumptions of the audience rather than come up with a definitive list.

Bob Sutton’s Top 10 List of Flawed Assumption About Managing People

1.  HR ought to be all about spotting, hiring, and breeding individual talent (HR could pack a bigger wallop by focusing on teams and networks more).

2.  HR should focus on finding, hiring, and developing the very best people (Bad is stronger than good – about 5 times stronger  — so screening-out, reforming, expelling the very worst people is more crucial to collective performance).

3. Find some great superstars and pay them whatever is necessary to keep them happy… and certainly a lot more than everyone else (The best organizations pay higher than competitors, but have more compressed pay).

4. Competition makes people, teams, and companies stronger (Unless people and teams are rewarded for undermining one another rather than helping each other… dysfunctional internal competition is one of the most pervasive problems in American firms).

5. Harmony and having a shared vision are crucial to success (Perhaps for routine work; but creativity depends on battling over ideas. Part of HR’s job should be to teach people how to “fight as if they are right and listen as if the are wrong”).

6.  The key to success is copying practices used by the best companies. (The best companies may be succeeding despite rather than because of their HR practices).

7.  Every company needs a great performance review system. (Are they really worth the time and effort? Do they do more harm than good?).

8. Taking a leadership position brings out the best in people. (This is a dangerous half-truth.  Giving people power over others turns them into  self-centred jerks).

9.  The most important thing HR can do is to find and develop great senior leaders (Having an organization with a high proportion of good bosses is probably more important).

10.  The best organizations have the best people, “the people make the place.” (There are huge differences in talent, but the best organizations typically have the best system and not necessarily the best raw talent).