The concept of Employee Morale was first explored in the 1920's followed by Employee or Job Satisfaction in the 1930's.  This initial work spawned a wide variety of approaches to defining and measuring satisfaction. (Remember Comparison Theory, Expectation-Achievement Discrepancy, Instrumentality, Equity-based Models, Social Influence, or the Two-Factor Model from your college studies?)

Conclusions about the impact of job satisfaction on key business results varied greatly over the decades depending on how satisfaction was defined, the measurement technique used and the quality of the research.  As a result, just like customer satisfaction, the value of addressing employee satisfaction came to somewhat of a dead-end.  Satisfaction turned out to be a necessary but not sufficient factor in impacting key organization outcomes.

The more promising concept of Employee Engagement arose in the 1990's.  In general, engagement's correlation to measures such as employee retention, customer service and productivity tended to stronger than those found with satisfaction.  Emphasis placed on correlation because correlation was often misinterpreted as causation.  Therein lays the rub with engagement - the old chicken-or-the-egg paradox.  Measuring and addressing employee engagement has its benefits.  But the debate about engagement actually leading or predicting meaningful results rolls on.  In addition, there is some indication that improvements made by addressing engagement may be tough to sustain over time.

Enter Organizational Culture.  Organizational Culture had a genesis similar to satisfaction - widely diverging definitions and fuzzy concepts that were interesting but not very useful.  That was the case until the research conducted at the University of Michigan by Dan Denison and his colleagues.  Their work identified the factors that comprise the perception of any organization's culture, factors that could be reliably measured, understood and improved.  The initial and subsequent research found strong correlation of the culture factors to revenue growth, return on investment, quality, employee satisfaction and customer satisfaction.  Even better, Denison's more recent research confirmed that culture is a leading indicator of organization performance measures such as Return-on-Assets, Sales Growth and Market-to-Book Ratio. 

Engagement trumps satisfaction but culture trumps engagement.  Organization leaders can drive future business results by understanding and improving their organization's culture.