Studies suggest that employee satisfaction plays a primary role
in helping companies achieve financial goals (Koys, 2003). The
logic for this argument is if a company takes care of its employees,
the employees will take care of the customers. It is true that
customers tend to have a better experience with organizations that
have higher levels of employee satisfaction and engagement.
Taking care of employees can be defined as providing better pay,
ongoing training, and making employees feel secure (Gursoy and
Swanger, 2007; Koys, 2003; Schneider, 1991). Satisfied employees
are more likely to be motivated and harder working than
dissatisfied ones. However, even though company employees
who are willing to work together, who are able to work beyond
expectations, and who put themselves into the manager’s shoes
tend to work more efficiently, provide better services and,
therefore, create higher customer satisfaction (Koys, 2003), several
studies report that examination of the direct relationship between
employee satisfaction and financial results tend to yield insignificant
results suggesting an insignificant direct relationship
between employee satisfaction and financial performance. Some
studies even suggest a negative relationship between employee
satisfaction and customer satisfaction. For example, Tornow and
Wiley (1991) reported a consistent negative relationship between
employee satisfaction (with such items as pay and benefits) and
financial results. However, most other studies suggest an insignificant
direct relation between employee satisfaction and
financial performance. For example, Wiley (1991) was unable to
find any significant direct relationship between overall employee
satisfaction and financial performance. Similar findings were
reported by Bernhardt et al. (2000) that the relationship between
employee satisfaction and financial performance was ‘‘virtually
nonexistent.’’ Based on the preceding discussion, the following
hypothesis is proposed