University Project: Impact of Employee Satisfaction on Performance

This professional project report examines the impact of employee satisfaction on employee performance within the Australian workplace. It addresses three research questions, focusing on factors influencing satisfaction, the importance of employee performance for organizational productivity, and the direct relationship between satisfaction and performance. The report reviews relevant literature, including Herzberg's Two-Factor Theory and Discrepancy theory, and employs secondary data analysis using sources like ABS Australia and OECD Australia. Qualitative data analysis, specifically thematic analysis, is used to analyze the collected data, with findings presented through graphs and charts. The study concludes with recommendations aimed at increasing employee engagement and productivity within the workplace, offering valuable insights for leadership management and human resources professionals. The report emphasizes the importance of motivation, workplace environment, and leadership in driving employee satisfaction and, consequently, performance.

Running head: EMPLOYEE SATISFACTION AND EMPLOYEE PERFORMANCE
Professional Project: Impact of Employee Satisfaction on Employee Performance
Name of the Student
Name of the University:
Author’s note:

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Executive Summary
The main purpose of this report is to explore the impact of employee satisfaction on employee
performance. This report sets three research questions and this report aims to meet these research
questions. The first question tries to focus on factors of employee satisfaction within the
Australian workplace. The second question is about employees' performance that can bring
productivity to the organisation. The last question of this report focuses on the impact of
employees' satisfaction within the workplace that can bring employees' performance.
In the literature review section, previous literature based on the similar topic has been reviewed.
Theoretical understanding of the subject area of employees' satisfaction has been explained in an
argumentative way. Herzberg's Two Factor Theory and Discrepancy theory have been described
to offer the insights of the motivation and job satisfaction of the employees that can provide
employees' performance. Employees' performance is related to the employees' motivation,
employees' interest in work, workplace environment, leadership and incentives criteria.
In order to conduct the report, data has been collected from secondary data sources like ABS
Australia and OECD Australia. This report is solely depended on secondary sources. Secondary
sources of information have been analysed in qualitative data analysis technique. Thematic
analysis has been conducted to analyse the sources of information. The researcher segregated the
information into four themes to analyse the data with graphs and pie-charts.
This study concludes relating questions to findings and analysis. Recommendations have been
given on increasing employees' engagement within the workplace and increasing productivity of
the employees.

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Table of Contents
1. Introduction..................................................................................................................................4
1.1 Problem statement..................................................................................................................4
1.2 Research aim..........................................................................................................................5
1.3 Research questions.................................................................................................................5
2. Literature review..........................................................................................................................6
2.1 Concept of employees’ satisfaction and employee performance...........................................6
2.2 Theoretical understanding of employees’ satisfaction...........................................................6
2.3 Factors that drive employee satisfaction within organisations..............................................7
2.4 Impact of employee satisfaction on employee performance..................................................8
2.5 Reasons behind low employee performance..........................................................................8
3. Research Methodology..............................................................................................................10
3.1 Data collection procedures...................................................................................................10
3.2 Data analysis........................................................................................................................10
4. Findings and analysis.................................................................................................................12
5. Discussion..................................................................................................................................18
5.1 H1: Employee satisfaction can impact on employee performance.......................................18
5.2 H1: Employee performance can influence organisation's productivity................................18
6. Conclusion.................................................................................................................................20
6.1 Addressing aim and research questions...............................................................................20

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6.2 Limitations...........................................................................................................................21
6.3 Recommendations................................................................................................................21
Reference List................................................................................................................................23

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1. Introduction
The main purpose of this study is to find out the relationship between employee
satisfaction at the workplace on organisational performance. Secondary research is conducted to
get the information related to the employees' satisfaction at the workplace and detailed analysis is
done to show the connection between two variables. Employees' satisfaction determines the
organisational performance to meet the objectives of the organisation. In this study, problem
statement of the research area and aim, objectives are stated clearly. In the literature review
section, theoretical perspectives of the scholarly articles are reviewed. Data collection method
and data analysis are selected in methodology section and secondary data analysis is done based
on the research objectives.
1.1 Problem statement
Employee satisfaction comes from good salary, compensation, motivation, the interest of
work and fringe benefits that the employers provide to the employees. As stated by Abbas et al.,
(2014), lack of employee satisfaction hinges on fulfilling relationship between management and
employees to be productive and it can influence the success of the organisations. Employees
become happy when their desires get fulfilled, however, the hostile atmosphere in the workplace
does not bring employee satisfaction. When employees do not like to work in the workplace due
to lack of job satisfaction, this vibe spreads throughout the workplace. According to Den Hartog
et al., (2014), job satisfaction, employee commitment and employee productivity can bring
comparative advantage. The employees may leave the organisations and it lowers the employee
morale. High turnover can bring the unproductive time for the organisation as it reduces the
employee performance. Lack of employee satisfaction can lead to low employee performance

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and employees spend time gossiping and complaining to fellow workers. As opined by Cullen et
al., (2014), lack of employee performance can be observed when absenteeism, conflict among
employees, turnover, disorganised employees are increased as well as productivity.
1.2 Research aim
The aim of the research is to explore the impact of employee satisfaction on the
performance of the employees in Australia.
1.3 Research questions
 What are the factors that can bring employee satisfaction within an organisation?
 To what extent employee performance is important for an organisation to bring
productivity?
 What is the relationship between employees’ satisfaction on employee performance
within an organisation?

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2. Literature review
2.1 Concept of employees’ satisfaction and employee performance
Employee satisfaction concept is used to describe if the employees contend and happy or
not and employers try to fulfil the needs and desires at work. Employee satisfaction is ensured
through injecting employee motivation, positive employees' morale and employee goal
achievement in the workplace (Dusterhoff, Cunningham & MacGregor, 2014). HR managers
within an organisation first ask the employees to treat them with respect, empower the
employees, recognise their potential and the management needs to offer industry average
benefits to the employees. Satisfied employees make a better contribution to fulfilling the
objectives of the organisation. Satisfaction brings the best performance of the employees (Fock
et al., 2013). The job-related works need to be done in a proper way and organisational policies
and practices should be followed to ensure the employee performance.
2.2 Theoretical understanding of employees’ satisfaction
a) Two-Factor theory of Herzberg:
Herzberg stated that motivation and hygiene factors are associated with the job
satisfaction in the workplace. Motivation in the workplace is like an inner voice which drives
persons to grab the organisational and personal goals (Herzberg, Mausner & Snyderman, 2014).
Motivators in the workplace provide satisfaction and these motivators are achievement,
responsibility, recognition, work, advancement and personal growth. Improving the motivator
factors can increase the job satisfaction of the employees. On the other side, hygiene factors in
the workplace are working condition co-workers' relation, supervisors' quality, base wage, salary

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and policies and rules. Hygiene factors are important as without the presence of hygiene factors,
the employees get demotivated.
b) Discrepancy Theory
Discrepancy theory explains the source of dejection and anxiety in the workplace for the
employees. Employees try to fulfil the responsibilities in a workplace that he/she is assigned to
do. Once, the employees cannot fulfil the responsibility, they feel anxiety for not being
performed well. The hopes and aspirations of the employees do not get fulfilled for not
performing well and employees have to learn about their obligations and duties in a workplace
(Gayathiri et al., 2013). When staffs fail to receive their achievement and desired goals, they feel
agitated. Huang & Rundle-Thiele, (2014) supported this by saying if the employees achieve the
desired goals, then the management must praise and rewards the employees.
2.3 Factors that drive employee satisfaction within organisations
Employees find the work that they feel interested about and within an organisation,
managers can break down the work into smaller teams to give the responsibility to the right
persons. In a small business, micromanagement is observed. The employees engage themselves
to work in their designated places to avoid the blame of looking for others to give the
responsibility (Hussin, 2015). In the workplace, the positive work culture is very important to
accomplish the team goal and management needs to ensure that managers cultivate effective
team building policy to generate positive work culture. McCann, Graves & Cox (2014)
supported this by saying professionals find the growth opportunity in the workplace and they
offer soft skills. Moreover, the employees try to find trust in the leadership skills as the leaders

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must show empathy towards the employees. Right help from the leaders ensures the employee's
satisfaction.
2.4 Impact of employee satisfaction on employee performance
Human resources are the vital assets for the organisation and employees expect that
management would listen to their concerns. When the employees feel that their concerns are
addressed by the management, they fell satisfied. According to Nabirye et al., (2015),
management must give good pay package, compensation, extrinsic motivation and health and
safety infrastructure to attract the employees. Training of employees, employees’ recognition,
treating the employees with respect, recognition and industry-average benefits all are essential to
meet the satisfaction level. As pointed out by Ram (2013), employee performance deals with
strategies of the management and managers allocate the work to the employees. Employees just
fulfil these with responsibilities along with comprehensive performance.
2.5 Reasons behind low employee performance
In an organisation, the employees expect that communication will be effective with
seniors and co-workers, superior-subordinate communication will be good and strategic
employee recognition system will also be helpful. In addition, as argued by Shmailan (2016), not
only external factors, internal factors like employees' emotion (emotional dissonance, social
interaction), genetics, mood and personality of the employees are an important factor behind the
employee performance and satisfaction. The employees can get underpaid within an organisation
from what they expect. In an organisation, limited career growth and advancement are other
factors that lower the performance and relationship with co-workers are an important factor also.
In addition, as stated by Shooshtarian, Ameli & Aminilari (2013), lack of interest of the
employees can lower the employee performance and sometimes, the management cannot

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motivate the employees. Poor management cannot organise, plan and control the organisations,
therefore, it can slow down the employees’ performance (Yao, Chen & Cai, 2013).
Based on the theoretical perspective hypotheses of this research are:
H0: Employee satisfaction cannot impact on employee performance
H1: Employee satisfaction can impact on employee performance
H0: Employee performance can influence organisation's productivity
H1: Employee performance cannot influence organisation's productivity

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3. Research Methodology
3.1 Data collection procedures
Data collection aim of the research is to find out the employee satisfaction issues in the
companies to the industry, companies. This study is descriptive study and it is based on
secondary sources to do the in-depth study. In this research, the researcher has used common
sources of secondary data. Secondary data are collected from secondary sources like books,
journals, articles, government reports, organisational annual reports and websites (Mackey &
Gass, 2015). Secondary sources of information are available from previous research and these
are all cost-saving and cost-efficient. Secondary data can also present issues and it is economical
as it saves expenses of primary data collection.
In this research, the researcher has collected data from ABS Australia and OECD
Australia websites. Australian Bureau of Statistics (ABS) is the centre for facts and stats about
Australia related information. Industry and organisational related information have been
collected from ABS Australia. Premium versions of the reports could not be downloaded because
of accessing issues. OECD Australia information has also been gathered for justifying economic
growth of industry and companies in Australia. Annual reports of the companies have been
downloaded from the companies’ websites. The information and data are focused on secondary
analysis of quantitative data, from census and surveys.
3.2 Data analysis
In this research, quantitative data have collected and it has been analysed through
qualitative data analysis technique. Taylor, Bogdan & DeVault (2015), mentioned that
qualitative data analysis is the procedures and process that are collected from the understanding,

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explanation and interpretation of the situation and people that are investigating. Qualitative data
is based on mainly subjective data and observation of the people (Neuman & Robson, 2014)
Qualitative data analysis has been done based on the thematic analysis. The researcher has
segregated the collected data into four themes and each of theme been supported by a graph or
tables. These data have been collected from annual reports and financial websites have been
analysed through statistical analysis. As stated by DeFusco et al., (2015), thematic data analysis
is the common form of qualitative data analysis and it mainly focuses on examining, pinpointing
and emphasising the recorded data. Themes are mainly pattern that is related to the phenomenon
based on research questions. The collected data from secondary sources have been gone through
some process before analysis, familiarisation with data, searching of theme, reviewing of the
theme, defining the themes in the report. Through qualitative data, the researcher has focused on
finding the themes. The same type of data has been collected from ABS and OECD websites.
The statistical and percentile data have been amalgamated and presented in Excel graph to
visualise the findings.

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4. Findings and analysis
Thematic analysis
Theme 1: Factors bring employees satisfaction in Australia
In Australia, major industries are financial industries, business consultancy firm, metals and
mining industry, healthcare and pharmaceuticals industry. In each of the industry, many
employees are working from both foreign and local. As stated by Kalokerinos, Von Hippel &
Henry (2015), Europe and the USA both are struggling in handling the public debts, however,
Australia has been handling these issues from 2008 economic downturn.
Figure 1: Distribution of employee earning (factor of employee satisfaction)
(Source: Abs.gov.au, 2018)

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In the year 2016, a survey has been made on an employee earning, earning of the
employee is one of the factors of employee satisfaction. Weekly earning of the employees in the
job in average was $1000 and mean weekly earnings of the employees was $1200 (Abs.gov.au,
2018). In Australia, over 24% of the employees did not get leave entitlement and they did not get
paid sick leave and holiday leave as well. Apart from employee earning, appreciation at work,
good relationship with the co-workers, good work-life balance, job security, company's financial
stability and attractive fixed salaries. One thing is to note that the weekly earnings of the
employees were raised by $38 from 2015. In workforce composition, the employees' satisfaction
is associated with the number of hours working, diversity of employment arrangement and a mix
of industries and occupations.
Theme 2: Performance of Australian employees
Performance of the employees is judged through how the employees execute workplace
the activities. The organisations in Australia in most of the industry assess the performance of the
employees in quarterly and annual basis in helping the employees to suggest the areas for
development. In the year 2014, 12 million employees undertook training in the workplace to
enhance the employees’ performance and this figure increases almost 13% in the year 2016
(Magee, Caputi & Lee, 2016). This enhancement in the training for better performance was
partly due to the beginning of the training in the workplace. The organisations in Australia
provide external and internal both types of training to improve the employees’ performance.
Industry 2014 (%) Average spent (%)
Mining 90% 5.2%
Electricity 90% 4.4%

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Public administration 90% 3.2%
Finance 89% 3.2%
Construction 84% 2.4%
Recreation 82% 1.9%
Table 1: Training undertaken for employees by industry basis (2014)
(Source: Abs.gov.au, 2018)
24%
16%
37%
23%
Factors affecting employees'
performance
Work-life condition
Leadership
Working condition
Compensation
Figure 2: Factors affecting employees’ performance
(Source: Oecd.org, 2018)
In Australia, some of the major factors of employees' performance are associated with the
work-life condition, leadership, working condition and compensation. Australia’s economic
condition is among OECD’s lowest government debt in the year 2016. The reasons behind the
economic growth are natural resources and location of trade. Therefore, the Australian
companies expect that the employees must perform well in financial sector and mining sector.

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Theme 3: Motivating factors for Australian employees
Australia is a developed nation and companies in Australia provide enough motivation to
the employees. Most of the companies provide a better opportunity for the training and
development of the employees. Management of Australian companies spent $1,500m on the
employee engagement and employees' recognition. Companies in Australia spent almost $290m
for the community engagement (Jimmieson et al., 2016). In addition, 4% of the total income
spent by the companies for employees' motivation in the year 2016 and manufacturing sector
spent the highest amount of revenue for employees' motivation to sell their products.
Pay rise Good work Recognition Hard work Promotion Annual
Leave
(Extra)
0%
5%
10%
15%
20%
25%
30%
35%
34%
23%
13% 15%
4%
11%
Motivating factors for employees'
performance
Figure 3: Motivating factors of the Australian Organisations
(Source: Oecd.org, 2018)
Companies spent money on recognition scheme and they also spend their money on staff
provident fund scheme and leadership scheme as well. The companies in Australia spend their
revenue for delegation of reward and staff social gathering scheme. Small businesses in Australia

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donated almost $260m for the employees' motivation. Therefore, it is clear that the company is
spending maximum amount to the marketing and employees' motivation so that the employees
do not leave the organisations.
Theme 4: Productivity factors in Australian employees
The Australian companies believe that manpower is very important for them to increase
the productivity of the organisation. Therefore, the companies spend maximum amount on
training and motivation of the employees. The companies employ equipment and machines so
that the employees must get the accessories and capacity. As stated by Hussin (2016), the
management spends money on maintenance of the tools and machinery. The companies spend
time for inspection of finished products, production time and time for repair of the equipment. In
finance and manufacturing sector, the companies spend maximum amount to gather financial
power in order to meet the requirements. The management spends money for movement of
materials and man.
Competitive compensation
Bonuses
Retirement plans
Flexible work location
Supplement of training
Education
Vacation time
0% 5% 10% 15% 20% 25% 30% 35%
33%
23%
21%
27%
12%
4%
16%
What Australian employees' value at
work
Figure 4: Productivity Factors by employment size (2016)

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(Source: Abs.gov.au, 2018)
The Australian organisations (more than 42%) monitored KPI of the employees and more
than 79% of the employees measure the financial factors like sales, market share, profit and ROI.
Productivity factors within the organisation are affected by the age group of the employees. If the
employees belong to middle age group, the ROI will be returning to the organisations.

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5. Discussion
In this section, the findings of the above section are discussed and reviewed with
literature. The main purpose of this study is to find out the relationship between employees
satisfaction and employees' performance in the Australian context.
5.1 H1: Employee satisfaction can impact on employee performance
The findings show that employees perform well if their needs are fulfilled by the
companies. The employees’ first desire is the good salary and compensation. Employees want
responsibility in the workplace to be more productive and significant sense of satisfaction in the
workplace brings out productivity. In Australia, the management needs dedication from the
employees without any absenteeism and less turnover. Employees can give referrals for new
recruitment and it reduces the recruitment cost for the organisation. In Australia, the age-
difference of the employees is high and aged-workforce works in the management. The
employees expect growth in the organisation; however, a procedural change is not seen in the
Australian workplace. In the financial sector of Australia, the employees work safely and in an
integrated way as the financial sector provides large capitalisation as mentioned in McCann,
Graves & Cox (2014). In mining sectors of Australia, the employees work safely and Australia
ranks 2nd place in the mining industry in the world as it has huge natural resources.
5.2 H1: Employee performance can influence organisation's productivity
Employee performance is responsible for employee motivation strategy of the
organisations. In Australia, the companies provide job satisfaction, achievement, rewards and
recognition to the employees. These inject employee motivation, teamwork and respect.
According to Nabirye et al., (2015), employee performances are comprised of employee

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satisfaction and motivation. Productivity is the contribution of small account for the bigger
purposes of the organisation. These findings also go consistently with the results from literature
by Ram (2013). Productivity is lower for Australian region as aged-employees' percentage is
high in Australia and strategic plans, skills, supply chain and environmental management provide
a contribution to effective productivity.

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6. Conclusion
6.1 Addressing aim and research questions
The aim of the research is to find out the impact of employee satisfaction on the
performance of the employees in the Australian industries. Three research questions are given to
underpin the research aim successfully.
The first question is about factors of employees' satisfaction within an organisation, the
employees expect fair behaviour from the management with good perks and compensation.
These add satisfaction. The employees remain to focus on organisational activities and the
employees feel attached towards the organisation.
The second question is about employee performance can bring productivity as
meaningful works can motivate the employees and good communication flow among the
employees is needed to become satisfied. In addition, hands-on-management means combine
goals for the employees to meet the objectives of the organisation. Positive management
practices and framework help to grab the goals of the organisations, expectations and
measurement.
The third question is about the relationship between employee satisfaction on employee
performance. When the employees remain within the organisation, the companies expect higher
revenue and less operation cost. Satisfied employees contribute well to the work process and it
supports the employers' needs. If the employers' do not meet the requirement of the employees,
the productivity levels get lowered. The result is same as to the previous literature by Abbas et
al., (2014).

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6.2 Limitations
The first limitation of the research is that it has been done on the general basis of
Australian companies, not a specific industry or company. There are two variables in this
research study; however, these variables have not been linked with any specific organisations.
The second limitation of the research is that it has been done based on secondary data as
official and websites statistics may reflect on their perspectives. These documents may lack the
authenticity and biases may be there which they cannot omit.
6.3 Recommendations
The findings from secondary sources confirm that companies give good work environment,
training and incentives to the employees. The employees only face lack of engagement and
productivity issues.
In the Australian companies, employees' engagement is needed as engaged staffs invest
extra hours in office works and they take the initiative to do something for the success of the
organisation. In order to engage the employees in the workplace, the companies need to take
inspiring leadership as leaders need to provide opportunities for growth. Engaged employees can
adequately use their skills and they are encouraged as well.
In the Australian context, increasing employees’ productivity is very important as in
small businesses of Australia, the companies face productivity issues. The average age group in
the Australian businesses is high and the fresher do not get the opportunity to flourish. The
companies should match the tasks to skills. The companies need to communicate effectively with
the employees and the management should keep clear goals.

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This study focuses on overall Australian companies across all sectors, however, in future;
research could be made on a selected industry in order to underpin the concept of employees'
satisfaction and employee performance. Small and medium-size companies need to be aware of
the employees' satisfaction issues as well by providing the necessary things to the employees. It
can be suggested that future study on employee productivity can be also made based on primary
data collection to show the direct impact on the employees.

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