The Passion Economy

Finding a strong correlation between “job satisfaction” and “employee performance” has been called the Holy Grail of managerial psychology. While correlation does not necessarily establish causation, it’s a strong hint thereof and would help give credence to a mantra echoed by an industry of consultancies, authors, and career coaches, namely that the more you enjoy your work, the better you’ll do for yourself and for your employer. The road to proving this phenomenon, however, has been long and trying.

In his book The Social Psychology of Everyday Life, English researcher Michael Argyle offers a historical overview of efforts to find a strong correlation between job satisfaction and various aspects of employee performance. In the first major study – an analysis of the link between job satisfaction and employee productivity – researchers Brayfield and Crockett analyzed 26 experiments only to find a weak correlation of +0.15 (1955). A later meta-analysis of 74 studies found a similar correlation of +0.15 (Iaffaldano & Muchinsky, 1985). What about other metrics of employee performance such as absenteeism? A low -0.09 in one meta-analysis (Hackett & Guion, 1985) and -0.22 in another (McShane, 1983). Turnover? -0.23 according to Carsten & Spector (1987). So where does that leave us? Do these studies undermine the notion that if you like your job, success will follow?

Historical research has relied on a flawed measure, argues Marcus Buckingham, former Senior Researcher at Gallup and best-selling author of First, Break All the Rules. Not only is “job satisfaction” too high level a measure to be useful, but to observe a strong correlation with employee performance what’s far more important is to study an employee’s level of “engagement.” To measure employee engagement Marcus created Q12, a survey of twelve questions that he believes get to the root of this phenomenon. Within the Q12, three questions have been shown to have the strongest statistical significance: 1: Do I know what’s expected of me at work?; 2: At work, do I have the opportunity to do what I do best every day?; 3: Are my coworkers committed to doing quality work?

Marcus’ “employee engagement” measure has shown promising results. In a recent Gallup Study of 955,905 people working in 152 organizations across 44 industries, correlation between employee engagement and quality of work was found to be 0.6; safety on the job (say in a manufacturing environment) 0.49; and absenteeism -0.37. In short a more engaged employee produces higher quality work, is safer, and misses work less often. A smaller although statistically significant correlation is also seen with metrics such as productivity, the organization’s profitability, and employee turnover.

With Marcus’s new metric, perhaps the workplace consulting industry gains increased legitimacy or, more accurately, is refocused on the discrete and powerful levers that create better outcomes for employees and the organizations for which they work. And what does this all mean for people who are trying to find the perfect job or entrepreneurs who wish to create the optimal work environment? According to Marcus’ research, create an environment where you know what’s expected of you, do work that taps into your strengths, and surround yourself with people who are committed to the quality of their output. If you can put those in place for yourself or your employees, performance will follow. Here’s to more engaging - and inspired - careers.

As written for the MIT Entrepreneurship Review.