With the increase of competition in the business world, companies feel the need to optimize their performance as much as possible. Making the smallest differences can compound into significant consequences, like the risk of a competitor outclassing another company. Hence, leaders today want to improve employee job performance and job satisfaction as much as possible.
However, the relationship between these variables of evaluating performance vs. satisfaction at work isn’t as straightforward as it seems. Do these two factors conflict, do they support each other, or is something else going on here? People sometimes see that job satisfaction and job performance as mutually exclusive goals. However, research suggests that these two tend to come together, even though the exact relationship between them is still unclear. Nevertheless, companies would do well by aiming to improve both.
In this article, we first discuss the common perceptions that people have when it comes to satisfaction and performance in the workplace. In particular, we focus on perceived trade-offs between them. What follows next is a discussion of the current literature that aims to dissect how these two factors interrelate. Finally, we introduce the concept of engagement as a middle ground, as well as ways that enterprises can encourage their employees to become more engaged with their world.
When you ask some people what they think of job satisfaction and performance, you should expect to hear many responses. Many leaders feel these correlate and that it’s in the best interest of the company to target both when it comes to organizational development.
However, a significant number of people believe that the two display an inverse relationship. In their eyes, favoring one gives employees less of the other factor. Hence, these people believe that employees must be able to sacrifice some of their comforts to become more productive at work.
Sacrificing Happiness for Productivity
The perceived trade-offs between satisfaction and performance have a lot to do with familiar tropes that perpetuate in entrepreneurial sectors. A common belief encapsulates this by the phrase, “No pain, no gain.” These people believe that work and productivity need to come at the expense of happiness. They perpetuate the idea that encountering difficulty and suffering is an integral part of the journey towards higher productivity.
This belief makes sense to some degree. For instance, workers who lack enough discipline to put in the hard work are unlikely to find success in practice. Employees who tend to give up quickly at the slightest obstacle find themselves unable to reach their full productivity at work.
Another related reason for the perceived trade-off between job satisfaction and job performance has to do with stretch goals. These targets refer to milestones that lie at the boundary of what’s currently possible within an organization. They call them stretch goals because of the belief that people need to exert more than their usual workload to accomplish them.
Stretch goals, when used properly, can further increase productivity. It challenges people to exceed their limits and to give their fullest effort. A good number of employees flourish under pressure, especially when they have the chance to hone their skills further. Stretch goals also help companies get even more work out of their employees, which adds to their collective productivity.
However, stretch goals can easily backfire. When employees feel too pressured, their job satisfaction might drop as their stress levels increase. They might force themselves to sacrifice activities that help them remain happy at work, such as taking breaks or eating regular meals. They might have to work harder than usual for extended periods to have a better chance of achieving their stretch goals. Even then, workers find no guarantee that they will succeed, and failure might make them feel that all their efforts were for nothing.
Paradoxically, stretch goals can also lead to more mediocre results. When people feel intense time pressure, they might resort to drastic measures to reach their deadlines. For example, they might start taking home parts of their work, or they might commit to frequent overtime work. They might also skip measures such as double-checking that can lead to more frequent mistakes. The elevated stress levels can reduce their ability to see and correct errors.
As a result of all these mechanisms, the overreliance on stretch goals can lead to lower performance and satisfaction. In many cases, stretch goals allow for modest increases in productivity at the expense of job satisfaction.
Deriving Productivity from Fear
Additionally, a reason why trade-offs between satisfaction and performance exist has something to do with the mindset of some executives. These people advocate for a hardline approach when it comes to managing people. They believe that too much coddling makes employees weak and complacent. Instead, they advocate for policies that increase work output and emphasize order and discipline. Some leaders take it further by promoting fear, as they believe that fear is an excellent motivator for employees.
To drive up productivity, these executives believe that one needs to sacrifice job satisfaction. The results of these mindsets are mixed. While it is true that fear can spur some people into more significant action, the more common effect is that people disengage from work. Intimidation can only go so far when managers use them to force their people to work harder.
Imagine this scenario: you are a new employee at a company that believes satisfaction is inimical to performance. Your boss always criticizes your work and never congratulates you even during the times you succeed. Instead, they impose strict punishments on you whenever you fail to achieve quotas.
If you were that person, you would probably adjust by becoming more compliant. The constant fear you feel will make you work harder and push you beyond your limits. However, the stress will eventually wear you down, making you less productive in the future. When this happens, you become at risk of disengaging from work or seeking employment elsewhere.
To summarize, there are three common mechanisms by which job satisfaction and performance can correlate inversely. People may believe that sacrificing comfort leads to more exceptional performance. Implementing stretch goals can also trade the former for the latter. Finally, executives might believe that intimidation is a necessary ingredient in extracting as much productivity as possible from their subordinates.
After establishing the typical trade-offs between job satisfaction and job performance, it’s now time to investigate what research literature has to say about the relationship between these two factors.
Modeling Job Performance and Job Satisfaction
For several decades, researchers have worked to identify how different factors affect productivity. It might seem evident that job satisfaction leads to better performance, and the first few studies in this field investigated this very inquiry. However, alternative theories arose as people tried to increase their understanding of this delicate balance.
One of the main problems that hound researchers are the difficulty of pinning down an exact definition for these two concepts. For instance, what does it mean when one is performing well at their job? Is it when they can finish workloads at astounding rates, or is it when they can offer outputs that are immaculately free of errors? Is creative output better than standardized production that’s free of errors? What if their main contribution is maintaining harmony within their teams, rather than a more tangible output?
For instance, we wrote an article entitled “Workplace Productivity And Individual Thermal Satisfaction (7 Factors That Influence And Six Tips To Achieve Thermal Satisfaction),” where we delve deeper into the different definitions of productivity.
The same ambiguity surrounds satisfaction. For example, is someone happy at work when they only have to accomplish light tasks? Is there satisfaction when an employee works with difficult material but manages to feel pride with their work? What if someone is happy with their roles but finds their colleagues intolerable?
Due to all these varying meanings, anyone who researches hard enough will see several models on satisfaction and performance. These models do not necessarily conflict, and each of them contributes various suggestions that can help organizations find a better balance between the two factors.
1. Direct Causation Models
The oldest models consider how one of the factors above affects the other. These models assume that a simple relationship exists between satisfaction and performance at work. Additionally, their simplicity allows many people to extract useful information without much effort. However, they should be taken not as absolute rules but rather as generalized guidelines that may not be accurate all the time.
Job Satisfaction Leads to Job Performance
The first direct model suggests that job satisfaction leads to job performance. Contrary to the previous discussion on trade-offs, theories under this category believe that happy employees inarguably lead to better workers.
Despite being the oldest theory, this model is still a relatively radical idea when it appeared decades ago, where workers’ rights were still far from ideal. Many companies did not see the need to provide employees with things that people take for granted nowadays, such as flexible work hours. Many bosses believed that satisfaction does not significantly affect performance, so there was no monetary benefit in improving working conditions.
The idea that performance is a direct function of job satisfaction is relatively straightforward. When a person is happy, they tend to have higher levels of motivation to work hard at their jobs. Employees may feel a sense of gratitude, and they may decide to give back by offering superior performance.
This theory is more prominent in collectivist cultures, where there is an emphasis on how members of the company relate to one another. However, this model mostly fails in individualistic cultures, where concepts such as giving back may be less prominent.
Alternatively, workers may have a higher capacity to think better and work harder since they do not have to worry too much about stress. Here, researchers treat unhappiness as a sign that someone lacks an essential aspect of their work. When someone is dissatisfied, that means they have one or more needs that need attention. Happiness only occurs when an employee fulfills all of their needs, freeing their mental and physical faculties to focus on the work at hand.
Job Performance Leads to Job Satisfaction
Somewhat unintuitively, many researchers also suggest the opposite relationship. Under this alternative model, job performance determines job satisfaction, not the other way around. When people do well at work, he or she tends to be happier with their jobs.
There are two common explanations of why excellent performance can lead to satisfaction. One account acknowledges the effects of rewards on employees’ perceptions of their work. As such, many companies provide tangible benefits for high-performing workers, such as pay raises and promotions.
Perhaps of equal importance are the more intangible benefits of excellent performance, such as public recognition and prestige. In particular, accomplishing difficult work with flying colors can raise someone’s confidence and their own beliefs in their abilities. If you’ve ever felt fulfilled after surpassing a difficult roadblock, then you know how the resulting feelings bolstered your desire to work on even more challenging work.
Satisfaction–Performance Feedback Loop
What’s remarkable about these two primary schools of thought is that they can work in parallel. Hence, excellent performance in one task can lead to an increase in general satisfaction with your current work. As you become happier with your work, you tend to put in more effort to succeed. Hence, feeling fulfillment with your job puts you in a position for future success in later endeavors.
This phenomenon is an example of a positive feedback loop. It suggests that working on improving job satisfaction or job performance can lead to increases in both and, in turn, can self-propagate. A positive feedback loop can propel individual employees to greater heights in their careers, allowing them to contribute significantly to their companies while still maintaining their passion for their work. Companies also benefit a lot from encouraging these positive spirals into their employees.
At the same time, the exact reverse scenario can also happen. Suppose that an employee finds themselves unable to fulfill their roles at work. Their belief in their abilities can decrease, and they may also face punishment or shame. Their discontent can translate to lower motivation to work hard, resulting in further decreases in productivity.
This scenario is an example of a negative feedback loop. It serves as a warning to organizations that neglect their employees’ well-being. Under unfavorable conditions, workers can quickly spiral downwards. The worst-case scenario involves employees leaving while unfinished work piles up. Surely no company wants to be stuck in this type of environment.
Hence, the main takeaway for business executives is that they should closely monitor their employees’ satisfaction at work alongside their performance. Since these two factors tend to affect each other, leaders should make sure that they can take good care of their employees while providing them with opportunities to prove their mettle.
2. Indirect Models
Indirect models make the discussion on job satisfaction and job performance more nuanced. They now consider the possibility of intervening factors that can influence both of these factors. Indirect models believe that there are many more models that affect the behavior of any employee. Hence, they try to paint a more realistic picture of productivity, at the cost of sacrificing simplicity and ease of understanding.
The most basic form of this model tries to account for a third factor that affects both satisfaction and performance. Hence, both factors tend to change in unison even if they may not be influencing each other directly.
Maslow’s Hierarchy of Needs
Maslow’s hierarchy of needs is a perfect example of third-party models. This model presents all human needs as levels in a pyramid. The lowest level refers to physiological needs such as food and rest. As one ascends the pyramid, they encounter higher needs, such as safety and support. Finally, they reach the pinnacle and encounter self-actualization, or the fullest realization of one’s potential.
This hierarchy clearly states that unfulfilled needs serve as obstacles that prevent people from reaching their highest potential. These roadblocks prevent employees from being more productive at work. However, unmet needs also tend to leave employees unsatisfied, since discontent is a signal that people lack something they need. Hence, people unable to meet all of their needs tend to perform worse at work and tend to become frustrated with their roles.
The main takeaway from Maslow’s hierarchy of needs is that companies must ensure that they can take care of their employees’ needs. Even in our modern workplaces, there are still many corporations that neglect the basic needs of their workers. These organizations tend to underpay and overwork employees. These practices deny people the necessities that they require to work at their best. Hence, it’s unsurprising to find these places full of frustrated and underperforming employees.
Aside from physiological needs, another important concept that many managers ignore is the importance of psychological safety. Like what it suggests, psychological safety only occurs when a person feels free from psychological harm. This concept usually rises in the context of teamwork, where members are free to express their thoughts without fear of unjust punishment or discrimination.
Psychological needs are a subset of security needs, which is also one of the basic human needs found in Maslow’s theory. Hence, psychological safety is necessary for anyone who wants to gain better performance and satisfaction at work. Unfortunately, many organizations have policies that undermine psychological security.
For example, as mentioned earlier in this article, many executives who rely on fear and intimidation create working environments that tend to make people feel insecure. In such hostile environments, it’s difficult for anyone to put forward their ideas without endangering themselves. Leaders here tend to deliver swift punishments and are not open-minded enough to accept alternatives.
Psychologically insecure environments develop employees who are less likely to speak up about concerns. Instead, they bottle up their complaints, allowing problems to persist while their dissatisfactions continue to fester. At the same time, people contribute less in discussions since the safest action is to remain silent. Hence, both satisfaction and performance drop.
Employee Engagement as the Middle Ground
Even now, the exact relationship between job satisfaction and job performance is still out of our grasp. The current consensus is that the real relationship between these two factors is complicated. To make it easier to apply in real life, people rely on more specific models that explain particular sections of the full relationship. These basic models, many of which can be found earlier in this article, present a significant disadvantage: people need to know many of these models to get a full understanding of satisfaction and performance at work.
An alternative is to consider a slightly different concept that tries to account for both factors at the same time. That line of thinking is what people may have thought when they formed the idea of job engagement.
An excellent way to understand job engagement is to consider two universal archetypes for the typical office worker. Imagine employee A as someone who values their work and sees fulfillment in what they do. This worker works hard and tries to provide the best output they can give. However, they remember to respect their natural limits, as they also recognize the need for relaxation. Their motto is to enjoy work and not to take themselves too seriously.
Now, imagine employee B who finds themselves detached from their work. They may be perfectly capable of the tasks that their boss assigns to them, but they still fail to deliver satisfactorily. Their abilities and skills are not at fault; however, they might exhibit low levels of motivation. They may not see themselves as a good fit for their current role, or they might outright hate their jobs.
Of course, the first employee displays higher levels of work engagement that the second employee. However, notice that employee A is also more likely to be happier at work. They are almost certainly better workers than employee B. Notice also that there isn’t much consideration at their skill levels. For all we know, employee B might have work skills superior to employee A.
Engagement is similar but distinct from satisfaction and performance. For example, we wrote an article, “Difference Between Employee Engagement And Job Satisfaction,” which introduces the differences between engagement and satisfaction.
What the concept of engagement does is that it bundles work satisfaction with job performance. By only considering a unifying factor, people can more readily analyze how one element is interrelated with other determinants. More compellingly, the focus on engagement alone allows leaders to make more definite plans to improve both satisfaction and performance among employees.
Seven Ways to Promote Greater Job Engagement
Now that the concept of engagement unifies job satisfaction and performance, the question is how to stimulate greater participation from employees. Fortunately, experience alone describes many methods to mold workers who engage more in-depth with their roles at their jobs.
1. Develop a positive work culture
Remember the discussion earlier on psychological security? One surefire way to dissuade insecurity is to establish and maintain a productive work culture. For instance, workplaces should be inclusive of everyone, regardless of age, race, sexuality, religion, and other social classifications.
A positive work culture emphasizes openness and freedom of expression. Individuals should be free to voice out unpopular opinions without fear of retaliation. People within a positive work culture should embrace diverse ideas. While leaders should not ignore mistakes, the focus should be on providing constructive criticism designed to make employees learn from their errors.
Promoting a positive culture can be harder than it sounds, especially for old establishments with rigid social dynamics. However, the benefits of better employee engagement justify the laborious effort required to change organizational cultures.
2. Establish trust
Keeping in line with the emphasis on psychological security, leaders should also encourage better relations among different coworkers. A healthy support system is necessary to combat stress since people can rely on each other in their hour of need. Without proper stress management techniques, the workplace can become a ripe ground for conflicts that can erode trust.
At the same time, leaders should encourage their employees to trust their bosses, despite the difference in seniority or rank. Everyone should feel comfortable interacting with their superiors. Despite what hardliners may believe, bosses should treat their employees as partners, not just as subordinates that they can order around.
3. Offer good compensation packages
One potential danger with engagement is that leaders may assume that it’s enough to keep people motivated. In reality, the relationship between commitment and motivation is not a one-way street. Even employees with high levels of engagement can eventually detach from their roles if they lose their motivation.
Hence, leaders should still provide tangible rewards, such as competitive compensation and generous benefits. They should make sure that employees get the rewards that they deserve for all the hard work they provide. By motivating employees this way, companies can make sure that employees continue to maintain high levels of engagement.
4. Provide ample opportunities for career advancement
Another source of job engagement is a sense of accomplishment, as well as the general belief in one’s abilities. High self-efficacy leads to better engagement at work, as workers become more confident at taking on more roles at work.
Companies would do well to provide many opportunities for their members to advance their careers. Examples include clear paths for career progression, as well as challenging but doable work.
It’s not enough to provide many opportunities for career advancement. The company should also ensure that leaders distribute these opportunities equitably. People who show enormous potential should receive the best opportunities. Hence, executives should deal with any corruption that leads people to favor others unfairly. Favoritism and nepotism in the workplace can cause this method of promoting engagement to backfire.
5. Be generous with giving recognition
Another good source of motivation is recognition. Unfortunately, many leaders see praise and recognition as cheap rewards that only work for attention-seekers. As a result, they fail to recognize good work, which can easily demotivate hardworking employees.
Leaders, to remedy this problem, should be more willing to give well-deserved recognition. There should be clear policies that delineate the criteria for exemplary work. Workers who exceed these targets should get the praise they deserve, which can be something as simple as a congratulatory message.
6. Let employees decide the work routine that suits them best
A surefire way to dampen spirits is to deny employees the opportunity to render work that they like. For example, many employees might be unwilling or unable to comply with the usual 8-to-5 work schedule. By refusing their requests, companies lose potential high-performers and give the impression that they do not listen to the needs of their substituents.
Given the progress of technology, innovations such as virtual offices and flexitime have become more affordable for many companies. Hence, leaders should try these options out and offer those that will benefit their employees the most.
7. Break up routines occasionally
Repetitive work allows employees to become more efficient with their routines. Unfortunately, it also bores them out of their minds. Unless you want disengaged employees, you need to make sure that your employees maintain their interest in their work. However, this lesson is something that many organizations still have to learn.
Breaking routines doesn’t have to be disruptive. Even something as necessary as holiday parties can work as long as organizers implement them properly. Subtle changes in scenery and the inclusion of fun activities that promote bonding should also be effective at keeping employees at high levels of engagement.
Are there other ways to promote engagement at work? Yes. The methods in this article are by no means comprehensive. We have an article entitled “How do Employee Engagement Impact Performance and Practical Tips to Improve It” that teaches other methods for encouraging employee engagement.
Is there a real conflict between job satisfaction and job engagement? Earlier in this article, we talked about perceived trade-offs between these two factors. However, subsequent discussions into research theories suggest that happiness and engagement have a more positive relationship. The existence of the concept of engagement also indicates that these two tend to affect each other positively.