Organizational Behavior Case Study The Effects of Employee Satisfaction Organizational Citizenship Behavior and Turnover on Organizational
The correlational study, “The Effects of Employee Satisfaction, Organizational Citizenship Behavior, and Turnover on Organizational Effectiveness: A Unit-level, Longitudinal Study,” by Daniel J. Koys attempts to identify whether positive employee attitudes and behaviors influence business outcomes or whether positive business outcomes influence positive employee attitudes and behaviors. Koys investigates the relationship between the Human Resource (HR) outcomes of employee satisfaction, organizational citizenship behavior (OCB), and turnover in Year 1 and the business outcomes of customer satisfaction and unit-level profitability in Year 2. ... Koys then combined the information with the information from organizational records. ... Customers from 24 of the 28 restaurants were surveyed for customer satisfaction at Year 1 and Year 2. ... VARIABLES Koys hypothesized that the independent variables were the human resource outcomes of employee satisfaction, OCB, and turnover. The dependent variables were identified as the business outcomes of profitability and customer satisfaction. ... During these 2 years, hourly employees from all 28 participating restaurants were surveyed to measure their satisfaction using a 4-item scale based on a restaurant industry study. ... Managers were given a 5-item survey based on organizational citizenship behavior (OCB) dimensions to rate employees’ OCB. ... Turnover rates were obtained from company records. Total hourly employee turnover was recorded without distinguishing between voluntary and involuntary turnover. In the same two years, customers were surveyed in 24 units using a 4-item scale to determine their level of satisfaction. ... Customer satisfaction survey scores were aggregated to the unit level. ... Koys’ first set of regression analysis found that HR outcomes in Year 1 account for 14% to 31% of the variance in Year 2’s organizational effectiveness (profitability and customer satisfaction). His second set of regression analysis showed that Year 1’s organizational effectiveness accounted for 0% to 7% of the variance in Year 2’s HR outcomes. In summary, after analyzing the data, Koys found that three times more variance in organizational effectiveness in Year 2 is explained by human relations outcomes in Year 1. ... In contrast to past studies (performed in low-customer-contact organizations) where employee satisfaction did affect profitability with customer satisfaction as an intervening variable, Koys’ research found that employee satisfaction did not predict profitability directly. Although HR outcomes, predominantly employee satisfaction, in Year 1 were found to predict customer satisfaction in Year 2, Koys indicates that the direction of causality between employee satisfaction and organizational effectiveness requires further research. He states: “There may be a reciprocal relationship between employee satisfaction and customer satisfaction” (Koys 6-7). OCB did not predict customer satisfaction while employee satisfaction did not predict profitability. The effect of turnover on customer satisfaction had a slight negative correlation. The correlation may have been stronger if voluntary and involuntary turnover had been recorded separately. Koys’ results: Koys warns profit-oriented managers not to exclude employee satisfaction based on existing theories that employee satisfaction contributes to customer satisfaction, which in turn, contributes to profitability To determine true causality, Koys recommends more longitudinal research on all the relationships among employee satisfaction, OCB, customer satisfaction, and profitability. CRITIQUE Koys’ research was based on a correlational study. Since the intent of Koys’ study was to determine whether HR outcomes influence business outcomes or vice versa, a research method that could establish causality would have been more effective.