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Job satisfaction, over time and in context, best predicts voluntary turnover

Job satisfaction has long been the gold-standard predictor of voluntary turnover in organizations. To put it simply, happy employees are most likely to stay put.

But how do we measure an individual’s satisfaction in the workplace? Until now, only in the moment—and without accounting for the attitudes of co-workers.

Now a groundbreaking study out of the University of Washington Foster School of Business measures job satisfaction over time, and in the context of colleagues. In doing so, the researchers have dramatically increased the ability of organizations to predict whether or not an employee will choose to quit.

“The old measurement of job satisfaction was a good predictor of a given employee’s likelihood to leave a job,” says Tom Lee, a professor of management at the Foster School. “This takes it from good to great.”

The paper and its authors—Lee and Terence Mitchell of the Foster School, Dong Liu of the Georgia Institute of Technology, Brooks Holtom of Georgetown University, and Timothy Hinkin of Cornell University—have won the prestigious 2013 “Scholarly Achievement Award” from the Academy of Management’s Human Resources Division.

Trending

To capture a dynamic measurement of job satisfaction, the researchers surveyed more than 5,200 employees in 175 business units of a hospitality company that operates upscale golf courses and fine dining restaurants.

But rather than a one-time snapshot of satisfaction, they issued repeated surveys over a period of four years. This allowed them to chart each employee’s trajectory of job satisfaction, and then compare this to their subsequent decision to stay or go.

As you might expect, those becoming less satisfied in their jobs were more likely to seek new employment than those becoming more satisfied.

More significantly, though, the trajectory of job satisfaction proved a far better predictor of voluntary turnover than any single measure of job satisfaction.

“The finding delivered the kind of insight that seems obvious—after it has finally been articulated,” says Lee. “It’s easier to chart trajectory from dynamic rather than static data. Trending matters.”

Cohesion

So do co-workers’ attitudes. Using the same dynamic data on job satisfaction, the research team was able to analyze the effect of colleagues’ job satisfaction on individual and unit-level voluntary turnover. Through a kind of contagion effect, groups of discontented colleagues can erode an employee’s sense of job satisfaction and hasten his likelihood of eventually leaving the organization.

“We know that groups and the work environment are critically important,” Lee says. “Augmenting an individual’s trajectory is the trajectory of co-workers. And this is enhanced when the group is cohesive.”

So when a group is cohesive, its cumulative attitude about the job—less groupthink than groupfeel—has a significant effect on an individual’s own perceived job satisfaction and subsequent flight risk.

When the group is not so tight, it has a far lesser effect on individual attitudes.

The price of turnover

Lee believes that this study will help restart the discussion about “morale,” or group job satisfaction, which had become a relic of the Industrial Age. The modern organization is powered by teams, and the interdependence of those teams’ members can be ignored only at an organization’s peril.

Especially since the cost of turnover has grown so high—even through the relatively weak job market of the recent Great Recession.

“Turnover has become ever more expensive in the Information Age,” Lee explains, “both in the cost of losing good employees and their intellectual capital, and in the cost of recruiting and training new ones.”

The power of satisfaction

Job satisfaction is a powerful variable that mediates a number of workplace activities and attitudes, according to Lee. “It predicts not only voluntary turnover,” he says, “but also performance, absenteeism, corporate citizenship—many behaviors.”

Organizations would do well to understand the forces that lead to the retention or voluntary exit of good employees. Lee offers that managers should be aware of the effects of morale on individuals’ job satisfaction, and expand their efforts to measure satisfaction over time and in organizational context.

“Most companies do an annual satisfaction study of some kind,” Lee says. “But they typically don’t monitor how individuals and groups change over time, and they rarely take into account the influence a business unit can have on job satisfaction and turnover.

“If they want a better predictor of turnover, this is a new tool they can use.”

“When Employees are Out of Step with Coworkers: How Job Satisfaction Trajectory and Dispersion Influence Individual- and Unit-level Voluntary Turnover” is published in the February 2012 Academy of Management Journal.