Job Satisfaction and Turnover

Does high employee job satisfaction result in low turnover? Research has uncovered a moderately inverse relationship between satisfaction and turnover. High job satisfaction will not, in and of itself, keep turnover low, but it does seem to help.
On the other hand, if there is considerable job dissatisfaction, there is likely to be high turnover. Obviously, other variables enter into an employee’s decision to quit besides job satisfaction. For example, age, tenure in the organization, and commitment to the organization may play a role. Some people cannot see themselves working anywhere else, so they remain regardless of how dissatisfied they feel. Another factor is the general economy. When things in the economy are going well and there is little employment, typically there will be an increase in turnover because people will begin looking for better opportunities with other organizations. Even if they are satisfied, many people are willing to leave if the opportunities elsewhere promise to be better. On the other hand, if jobs are tough to get and downsizing, mergers, and acquisitions are occurring as in recent years, dissatisfied employees will voluntarily stay where they are. Research findings verify that unemployment rates do directly affect turnover. On an overall basis, however it is accurate to say that job satisfaction is important in employee turnover. Although absolutely no turnover is not necessarily beneficial to the organization a low turnover rate is usually desirable because of the considerable training costs and the drawbacks of inexperience plus the loss of the tacit knowledge that those who leave take with them.
Research has only demonstrated a weak negative relationship between satisfaction and absenteeism. As with turnover, many other variables enter into the decisions to stay home besides satisfaction with the job. For example, there are moderating variables such as the degree to which people feel that their jobs are important. For example, research among state government employees has found that those who believed   that their work was important had lower absenteeism than did those who did not feel this way. Additionally, it is important to remember that although high job satisfaction will not necessarily result in low absenteeism, low job satisfaction is more likely to bring about absenteeism.
In addition to those noted above, there are a number of other effects brought about by high job satisfaction. Research reports that highly satisfied employees tend to have better physical health, learn new job related tasks more quickly, have fewer on the job accidents, and file fewer grievances. Also, on the positive side, it has been found that there is a strong negative relationship between job satisfaction and perceived stress. In other words, by building satisfaction, stress may be reduced.
Overall, there is no question that employee satisfaction in jobs is in and of itself desirable. It cannot only reduce stress, but as the preceding discussion points out, it may also help improve performance, turnover, and absenteeism. Based on the current body of knowledge, the following guidelines may help enhance job satisfaction.
Make job more fun: World class companies such as Southwest Airlines have a fun culture for their employees.  Southwest management makes it clear that irreverence is okay: it’s okay to be yourself and take the competition seriously, but not yourself. Having a fun culture may not make jobs themselves more satisfying but it does break up boredom and lessen the chances of dissatisfaction
Have fair pay, benefits, and promotion opportunities:  These are obvious ways that organizations typically try to keep their employees satisfied. An important way to make benefits more effective would be to provide a flexible, so called cafeteria approach. This allows employees to choose their own distribution of benefits within the budgeted amount available. This way there would be no discrepancies between what they want, because it’s their choice.
Match people with jobs that fit their interests and skills: Getting the right fit is one of the most important, but overlooked, ways to have satisfied employees. This, of course, assumes that the organization knows what those interests and skills are. Effective human resource management firms such as Disney, Southwest Airlines, IBM, and Microsoft, put considerable effort into finding out interests and skills of potential new hires, as well as existing employees, in order to make the match or fit with the right job.
Design jobs to make exciting and satisfying:  Instead of finding people to fit the job as in point above, this approach suggests designing jobs to fit the people. Most people do not find boring, repetitive work very satisfying. For example, the Canadian aerospace firm Nordavionics was losing too many of their talented engineers. They found that they could increase job satisfaction and reduce turnover by being more sensitive to and providing their engineers with more challenging work and professional growth. Unfortunately, too many jobs today are boring and should be changed or eliminated as much as possible. Examples include providing more responsibility and building in more variety, significance, identity, autonomy, and feedback.
In summary, most organizational behaviour scholars as well as practicing managers would argue that job satisfaction is important to an organization. Some critics have argued, however, that this is pure conjecture because there is so much we do not know about the positive   effects of satisfaction.
On the other hand, when job satisfaction is low, there seem to be negative effects on the organization that have been well documented.