Magazine article Workforce Management

The Myth of Employee Satisfaction

Magazine article Workforce Management

The Myth of Employee Satisfaction

Article excerpt

5 Questions PHIL ROSENZWEIG, author of The Halo Effect

Workforce Management: What is the halo effect?

Phil Rotenzwelq: The halo effect has to do with human beings' general tendency to let an overall impression about something shape particular judgments. For example, if I think that an individual is a high-performing manager, I will probably look at various things they do and have a generally better impression of him/her. This happens because it is very hard for us to separately evaluate many different things about a person or a company.

WM: What should HR executives take away from your book?

RoMnzweig: What you have to do is measure the thing you are interested in according to metrics that are independent of performance. When it comes to human resource management, you want to ask things like "How many people who I make an offer to do I hire? How many midcareer people do I keep versus attrition?" You want to look at things that are objectively measurable.

You [can] simply ask, "Are my employees happy?" You can measure that, but whether satisfied employees drive performance or high performance drives employee satisfaction is very hard to untangle.

In my book, I mention a study that tries to untangle this, and what they concluded was that high-performing companies lead to employee satisfaction more than employee satisfaction leads to high-performing companies.

That's actually not especially good news for HR managers. HR managers probably say, "We want to keep our employees happy because that leads to high performance." And it probably does, but the opposite causality is probably even stronger. High-performing companies tend to have satisfied employees.

WM: Does that mean HR executives shouldn't try to improve employee satisfaction?

Rostnzweig: No, they probably should. But they should not justify those initiatives with the simplistic idea that the direction of causality is from employee satisfaction to high performance. …

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