This question has been studied for decades and no direct relationship has been established. Despite what would seem to be a slam-dunk connection, happier workers don’t necessarily result in a bumped up bottom line.
A recent study by researchers at Cornell, however, has mapped a path between the two. It is not a direct route. There are three intervening variables:
Keep in mind, this was done in a U.S. nation-wide retail company with close to 800 stores. As the researchers admit, the link between satisfaction and results may well be stronger in industries where the interaction between staff and customers/clients is more involved and complex (e.g. professional services) or where design and manufacturing processes require employees to collaborate well.
So, while satisfied staff is a very important ingredient for business success, we can’t stop there. Managers need to pay attention as well to (1) retaining employees longer in order to develop their knowledge and experience, (2) how responsive they are to those they serve, and (3) ongoing measures of customer satisfaction.
And how the manager operates has a critical impact on how much each of these key factors are in play in the organization.