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August 27 2010 - Employees' perceptions of work conditions have a significant impact on the performance of their organizations, according to research from Gallup, Inc. published in Perspectives on Psychological Science.

Lead author James K. Harter explains that numerous studies have linked attitudes to employment to mood outside work and health outcomes such as coronary heart disease. The current study was based on more than 2000 business units of ten companies (including retail stores, factories, and sales offices). Researchers analyzed employee satisfaction surveys and retention rates, customer loyalty, and company financial performance to identify relationships between employee job satisfaction and outcome measures. 

Results indicate that employee work perceptions predict organizational success. Where employees have positive perceptions of their jobs, their organizations benefit from higher retention, increased customer loyalty, and improved financial outcomes. The study found that employees' perceptions of their jobs have a greater effect on organizational outcomes than the reverse.

Researchers suggest that an important role for managers seeking to improve employee satisfaction and company success would be to "clarify expectations for employees by helping employees see the ultimate outcomes the organization is working to achieve and how they play a role in achieving those outcomes."

The authors commented:

"One implication is that changes in management practices that improve employee perceptions of specific work situation variables will increase business-unit outcomes, including financial outcomes."

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