Which Comes First Employee Attitudes or Organizational Financial and Market Performance?

• Published in: Journal of applied psychology Vol. 88; no. 5; pp. 836 - 851
• Main Authors: Schneider, Benjamin, Hanges, Paul J, Smith, D. Brent, Salvaggio, Amy Nicole
• Format: Journal Article
• Language: English
• Published: Washington, DC American Psychological Association 01-10-2003
• Subjects: Attitude; Biological and medical sciences; Business Organizations; Commerce; Data Collection; Earnings per share; Economic performance; Economics; Employee attitude; Employee Attitudes; Employees; Financial Management; Financial performance; Fundamental and applied biological sciences. Psychology; Human; Humans; Job Performance; Job Satisfaction; Job Security; Marketing; Motivation. Job satisfaction. Attitude; Occupational psychology; Organization theory; Organizational behavior; Organizational Case Studies; Organizational Culture; Organizational Effectiveness; Organizational research; Psychology; Psychology. Psychoanalysis. Psychiatry; Psychology. Psychophysiology; Return on assets; Salaries; Social psychology; Studies; Human; Employee; Attitude; Financial market; Job satisfaction; Performance; Financial result
• ISSN: 0021-9010; 1939-1854
• DOI: 10.1037/0021-9010.88.5.836

Employee attitude data from 35 companies over 8 years were analyzed at the organizational level of analysis against financial (return on assets; ROA) and market performance (earnings per share; EPS) data using lagged analyses permitting exploration of priority in likely causal ordering. Analyses revealed statistically significant and stable relationships across various time lags for 3 of 7 scales. Overall Job Satisfaction and Satisfaction With Security were predicted by ROA and EPS more strongly than the reverse (although some of the reverse relationships were also significant); Satisfaction With Pay suggested a more reciprocal relationship with ROA and EPS. The discussion of results provides a preliminary framework for understanding issues surrounding employee attitudes, high-performance work practices, and organizational financial and market performance.