Leadership Effectiveness, Employee Job Satisfaction, and Organizational Performance in the Healthcare Industry

Eight percent of hospitals, whether rural or urban, are projected to close, resulting from contributing factors of poor organizational performance. Understanding the contributing factors of poor organizational performance is critical for healthcare leaders to improve operational outcomes to improve organizational performance. Grounded in the path-goal leadership theory and Herzberg’s motivation-hygiene theory, the purpose of this quantitative ex post facto research study was to examine the relationship between leadership effectiveness, employee job satisfaction, and organizational performance. Archival data were analyzed for 86 individuals who completed the 2020 Employee Retention Satisfaction Survey. The multiple regression results indicated the full model, containing the 2 predictor variables (leadership effectiveness and employee job satisfaction), was able to predict organizational performance, F (2, 83) = 88.88, p \u3c .001, R2 = 0.68. Employee job satisfaction was the only significant contributor to the model. A key recommendation for leaders of healthcare organizations is to develop role-specific job descriptions that outline the position function and communicate expectations of performance to promote role clarity, thus increasing employee satisfaction and improving organizational performance. The implications for positive social change include adopting effective leadership behaviors and competencies to influence improvements in employee satisfaction and organizational performance in the healthcare industry in Mississippi, which can be translated to other hospitals