Journal of Applied Psychology 1992, Vol.77, No. 6, 963-974 Copyright 1992 by the American Psychological Association. Inc. 0021-9010/92/S3.00 The Relationship Between Satisfaction, Attitudes, and Performance: An Organizational Level Analysis Cheri Ostroff Industrial Relations Center University of Minnesota Previous research has consistently shown little relationship between job satisfaction, job attitudes, and performance for individuals, but little work hasinvestigated theserelationshipsat the organiza- tional level of analysis. This study investigated the relationship between employee satisfaction, other job-related attitudes(commitment, adjustment, and psychological stress), and organizational performance. Organizational performance data were collected for 298 schools employee satisfac- tion and attitude data were collected from 13,808 teachers within these schools. Correlation and regression analyses supported the expected relationships between employee satisfaction/attitudes and organizational performance. Implications of these findings are discussed. The notion that job satisfaction and job attitudes are related to job performance continues to intrigue organizational re- searchers. Yet the bulk of evidence shows the correlation be- tween satisfaction and performance to be relatively low (Bray- field & Crockett, 1955 laffaldano & Muchinsky,1985 Locke, 1976 Vroom, 1964). A recent meta-analytic study(laffaldano & Muchinsky, 1985) estimated the true population correlation be- tween satisfaction and performance to be.17. A variety of rea- sons, such as measurement problems (Fisher, 1980), research design characteristics (laffaldano & Muchinsky, 1985), the mod- erating effects of job characteristics (Ivancevich, 1978), con- straints on performance (Bhagat, 1982 Herman, 1973), person- ality characteristics (Steers, 1975), and rewards (Porter & Lawler, 1968 Schwab&Cummings, 1970), havebeen offered to explain the small degree of correlation. With the exception of the moderating effect of rewards, the satisfaction-performance research has still failed to produce strong and unambiguous findings. In this study I take a different approach and examine such relationships at the organizational level of analysis. Most research examining the satisfaction-performance rela- tionship hasbeen done solelyon individuals withinan organiza- tion. Early theorists (e.g., Likert, 1961 Mayo, 1933 McGregor, 1960) implied that employee satisfaction and well-being are re- lated to performance, but they did not explicitly hypothesize about the appropriate level of analysis (e.g., individuals, groups, or organizations)to which their theories applied. The literature in the human relations school does not unambiguously declare that increased satisfaction leads to increased performance, and whether this relationship was implied to hold at the individual I am grateful to Rich Arvey, Paul Sackett, and three anonymous reviewers for their helpful comments on earlier versions of this article. Special thanks to the National Association of Secondary School Prin- cipals for financial support of this project. Correspondence concerning this article should be addressed to Cheri Ostroff, Industrial Relations Center, University of Minnesota, 537 Management and Economics Building, 271 19th Avenue South, Minneapolis, Minnesota 55455. level is debatable (Organ, 1977). It is likelythat a study of satis- faction-performance at the organizational level would show that organizations that have more satisfied employees are more productive and profitablethan organizations whose employees are less satisfied. Furthermore, the satisfaction-performance relationship at the organizational level may be stronger than the relationship at the individual level (B. Schneider & Schmitt, 1986). Similar arguments can be applied to other job attitudes, such as employee commitment, adjustment, and stress. Research has shown some significant relationships between individuals' commitment and performance (Meyer, Paunonen, Gellatly, Goffm, & Jackson, 1989), commitment and turnover (Porter, Steers, Mowday, & Boulian, 1974), stress and performance (Beehr & Newman, 1978), and stress and turnover (Parasura- man & Alluto,1984). Ata more general level,some haveargued that commitment may result in high performance and may de- crease turnover (Randall, 1987 Salancik, 1977). Employee stress has been purported to be eroding the bottom line. Stress has been related to lower productivity and to higher medical costs and absenteeism (A. Miller, 1988). Yankelovich (1979/ 1983) concluded that one major factor contributing to slow pro- ductivity in the United States is workers' attitudes. He believed it is important to gain workers' commitment and to make work satisfying in order to deal with the productivity problems in the United States. A few studies have also examined these relationships at the organizational level. Angle and Perry (1981) showed that em- ployee commitment was related to turnover intentions at the organizational level (but not to organizational efficiency). Schmitt, Colligan, and Fitzgerald (1980)showed that at the indi- vidual level, there was little correlation between psychological stress (perceived work pressure),satisfaction, and other job atti- tudes and physicalsymptoms however, the relationships at the organizational level were much stronger. There has been a considerable amount of rhetoric about the relationships among employee satisfaction, attitudes, and well- being and organizational performance however, with the ex- 963

964 CHERI OSTROFF ception of the study by Angle and Perry (1981), little empirical work has been conducted to support these linkages. A study of the relationships between satisfaction, attitudes, and organiza- tional performance is needed. Linkages Among Satisfaction, Attitudes, and Performance The argument that satisfaction or attitudes and performance are related and the confusion overthe appropriate levelofanaly- sis appear to have a long history. B. Schneider and Schmitt (1986) argued that researchers and managers casually observed that the morale of the workers seemed to be higher in organiza- tions that were efficient and effective than in ineffective and inefficient organizations. Researchers then concluded (perhaps erroneously) that this relationship held for individual measures of job satisfaction and job performance. Writers in the areas of organizational theory and organizational effectiveness have also argued for satisfaction-performance relationships. It has been proposed that satisfaction and the happiness of personnel heighten organizational effectiveness. Organizations that alien- ate workers through their practices will be less effective and efficient. Satisfied employees usually work harder and better than frustrated ones (Etzioni, 1964 Gross & Etzioni, 1985). Satisfaction-performance connections have often been dis- cussed by theorists from the sociotechnical and human rela- tions schools. According to the sociotechnical school (Emery& Trist, 1960), organizational effectiveness depends on both the technical and social structure of the organization. Some social psychological structures may be superior to others, both for employee satisfaction and productivity. Organizational effec- tiveness results when there is congruence between social and technical organizational domains. Theorists taking the human relations or human resource ap- proach (e.g., Likert, 1961 Mayo, 1933 McGregor, 1960) suggest that satisfied workers are productive workers. The effective functioning of organizations requires both (a)the manufactur- ing and distribution of a product or service at a profit and (b) keeping individuals and groups working effectively together toward the organization's goals (Roethlisberger, 1959). Organi- zational productivity is achieved through employeesatisfaction and attention to workers' physical and emotional needs (Likert, 1961 McGregor, 1960). Whether or not an employee will give his or her services wholeheartedly to the organization and pro- duce up to potential depends, in large part, on the way the worker feels about the job, fellow workers, and supervisors. Satisfaction and positive attitudes can be achieved through maintaining a positive social organizational environment, such as by providinggood communication, autonomy, participation, and mutual trust (Argyris,1964 Likert, 1961). Employee satisfaction and sentiments influence the develop- ment of routine patterns of interaction. Through daily associa- tions with others, employees develop relationships at work that fall into routine patterns, patterns that prescribe behavioral expectations and influence behaviors. Positive attitudes result in patterns that are directed toward achieving the organiza- tion's objectives (Roethlisberger, 1959). Furthermore, Organ (1977) posited that the satisfaction-performance hypothesis espoused by human relations theorists could be explained by a social exchange in which employees accorded some manner of social gift would experience satisfaction and feel an obligation to reciprocate, perhaps in the form of increased productivity. The satisfaction and attitudes of employees are important factors in determining their behavior and responses at work, and it is through these behaviors and responses that organiza- tional effectiveness can be achieved. Thus, the satisfaction and well-being of employees can result in organizational effective- ness through salient productivity-related behaviors of employ- ees (Kopelman, Brief, & Guzzo, 1990 McGregor, 1960 Roeth- lisberger, 1959). Kopelman et al. (1990) suggested three categories of perti- nent behaviors for organizational effectiveness: attachment, performance, and citizenship. Attachment behaviors include attending to and staying in the organization. Because the cost of turnover and absenteeism is quite high, the effective func- tioning of the organization requires prevention of such behav- iors (Lawler, 1973). However, others have argued that turnover can produce a higherlevel ofoutput whenunproductive employ- ees are replaced with more productive employees (Mobley, 1982). Performancebehaviors refer to job-related tasks and ac- tivities comprising the employee's formal organizational role. Adequate performance of job duties is critical for achieving productivity. Finally, citizenship or prosocial behaviors include cooperation and collaborative efforts. Consideration of employ- ees' attitudes and sentiments is important because they deter- mine collaborative effort. Collaborative effort that is directed toward the organization's objectives is necessary for achieve- ment of organizational goals, and unhappy employees cannot effectively participate in such efforts (Likert, 1961 Roethlis- berger, 1959). These predictions are somewhat similar to those made regarding group cohesiveness and norms (e.g., Cartwright & Zander, 1968). Satisfied employees will be more likely to engage in collaborative effort and accept organizational goals that can increase productivity,whereas dissatisfied employees either may fail to work collaboratively or may work collabora- tively but divert effort away from the achievement of organiza- tional goals. Thus, satisfaction and attitudes influence individuals' behav- iors organizational effectiveness is, in large part, a function of these behaviors. Because of interactions and dependencies in the work process, it has been argued that organizational perfor- mance is not a simplesum of individual or unit performanceor productivity (Mahoney, 1984). Measures of organizational effec- tiveness most likely reflect the combination and interaction of the salient organizational behaviors that promote organiza- tional performance. This not only suggests that satisfaction and attitudes should be related to organizational effectiveness, but it can also ex- plain, in part, the failure to find satisfaction-performance rela- tionships at the individual level. The definition of performance in individual-level studies may have been restricted too nar- rowly. Outcomes such as attendance, predictability, compli- ance, following of rules,cooperation, drug use, sabotage, and so forth may also be important (Fisher, 1980 Organ, 1977). Such outcomes are not usually included in performance measures. Perhaps a wider range of performance-related variables should be included in studies. Furthermore, individual performance may be constrained or facilitated by many other situationa\