Job Performance and Job Satisfaction: An Integrated Survey

The empirical evidence from the econometrics of self-reported job satisfaction and from organisational psychology on job performance confronts economic theory with some puzzling results. Job performance is found to be positively correlated with job satisfaction, whereas effort is assumed to be a disutility in the theory. Economic incentives are not found to be the main motivations of job performance; in some cases, indeed, they are even counterproductive. Interest in the job is found to account better for job satisfaction. This paper proposes an integrated approach to these issues by (i) conducting an interdisciplinary critical survey, (ii) proposing a simple economic framework within which to explain the puzzles. The key idea behind this framework is that intrinsic motivations and self-esteem help explain both job satisfaction and job performance. The employer can thus adopt other, more friendly actions, besides using incentives and controls to enhance performance by employees.