The term employee satisfaction seems to describe quite clearly what it is about: keeping employees satisfied in their workplace. However, as simple as the concept may sound, achieving high levels of employee satisfaction can still be tricky. Many layers and factors pertaining to it may not be as visible at a first glance. Therefore, we have compiled a guide, which will give you a good overview on how to define and measure employee satisfaction.

Table of Contents

    What is employee satisfaction?

    Employee satisfaction describes the level of satisfaction employees experience in their day-to-day work. Satisfaction levels are tied to operational aspects of the company, workload and responsibilities, communication within the team and with management, as well as a range of personal factors. From large-scale impacts to smaller aspects, satisfaction is determined through a blend of all of these different factors. Gauging the levels of employee satisfaction at first can therefore be daunting. For a first glance, consider this list of influences on satisfaction as a starting point:

    • work environment: reaching from a less tangible idea of a ‘healthy work environment’ in psychological terms to the physical aspects of accessibility, comfort of office furniture, break rooms, rest rooms, etc.
    • team work and communication: This can be how the team works together, how internal communication among colleagues and with managers is handled and organised, as well as the general relations among colleagues
    • work load and responsibilities: This relates to whether employees are satisfied with the variety of tasks, the amount of work expected to be done within certain deadlines, as well as not feeling micro-managed but being entrusted with responsibilities and valued for the work they put in
    • compensation, pay, and benefits: Employees should feel like their pay accurately reflects their hours of work and responsibilities. It therefore relates both to the general wage, as well as any benefits or bonuses.
    • leadership and management: The way a company is managed and the relationship of the leadership suite to its employees plays a key factor in how employees feel about their workplace.

    This list only serves as a brief overview, but it highlights how complex evaluating employee satisfaction becomes when one digs down into it. In addition, obviously, employee satisfaction is only a part of your overall Voice of Employee. Satisfaction levels are only a fraction of what makes up your overall employee experience at your company. It most prominently, perhaps, intertwines or is confused with employee engagement. So, what is the difference and how are the two related?

    What is the difference between employee satisfaction and employee engagement?

    While employee satisfaction and engagement are related and influence on another, there are some key differences. First of all, they both pertain to different aspects and levels of employee experience. Satisfaction is a gauge for an employee’s overall feeling at the job, their happiness and mood as a result of the list of factors above. Engagement, however, is a bit less tangible in that it relates to the more psychological levels of motivation and commitment to the company, as well as the alignment of personal values with those of the business. This means, you can be satisfied with a job for instance, in that you like your position, colleagues, and pay, yet you do not feel strongly about what the company does and your contribution for it, which makes you satisfied but not necessarily super engaged.

    Therefore, the driving factors influencing both differ, and so do the metrics, with which you want to measure either – as we will discuss on more detail further on in the article. Here’s the key difference in which factors contribute to high employee satisfaction and high employee engagement.

    • Employee Satisfaction: Employee satisfaction is primarily driven by factors such as fair compensation, work-life balance, job security, supportive relationships with supervisors and colleagues, and a positive work environment. It places more emphasis on meeting employees’ tangible and measurable needs.
    • Employee Engagement: Employee engagement is influenced by a combination of factors, including meaningful work, career development opportunities, supportive leadership, a positive organisational and company culture, and effective communication. It focuses on the emotional and psychological aspects of the employee-organisation relationship.

    As a summary, you can conclude that employee engagement goes a step beyond satisfaction by emphasising the motivational and psychological aspects that drive employees to go the extra mile and make a meaningful contribution to the organisation. Satisfied employees are more likely to be engaged, but are not necessarily guaranteed to. However, you will most likely never find a highly engaged employee who is not also satisfied in their job.

    If you are curios to find out more about employee engagement, check out our 10 tips to increase employee engagement, or get started with our ultimate guide to employee engagement software!

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    Why is employee satisfaction is important?

    As mentioned before, satisfaction is a good pre-requisite for high levels of engagement as well. But that is not the only benefit of high levels of employee satisfaction. It benefits most important your employees, but in addition also your company. The perks of high employee satisfaction include:

    • higher engagement: satisfied employees are more likely to be engaged and therefore motivated, creative, innovative, and productive.
    • improved loyalty and employee retention: if employees are happy in their role, they are less likely to quit or search for a job elsewhere. Retaining employees also reduces the cost of hiring and training new recruits.
    • increased revenue: employees who are more engaged and passionate, are more eager and more productive, translating in most cases to higher revenue for your business. In combination with a reduced employee churn rate, you will definitely be saving some money.
    • good word of mouth: how a company treats its employees is synonymous with how it is perceived in the public eye. You should be treating employees well for their sake obviously, but it does go a long way for your marketing as a company and the values you stand for.
    • higher customer satisfaction: employee satisfaction and customer satisfaction are causally related to some degree, which means you can increase the happiness of your customer and your revenue by improving your employee’s satisfaction in the first place.

    While this is only an overview of the manyfold benefits of high customer satisfaction, it goes a long way to show how valuable it is to invest in employee satisfaction. We mentioned the relation between employees and customers briefly, so let’s have a closer look at that as well.

    How employee satisfaction affects customers satisfaction

    It is no secret that the satisfaction of your employees is related to that of your customers. Not in all aspects, of course, but most importantly in customer-facing ones. If you are speaking to someone on the phone or via email, their mood and tone can play a huge factor in how you perceive that interaction as a customer.

    “When employees aren’t happy at work, their interactions with customers can, and almost always will, suffer. Over the course of time, this can have serious repercussions for a business.”

    ‘How Employee Satisfaction Affects Customer Satisfaction,’ Forbes.

    Employees set the tone for a positive or negative customer experience. Of course, there are areas where this does not apply. If a customer is unhappy with the quality of a product, it has nothing to do with an employee working in a customer service centre directly. However, if a problem with a product is handled well by an employee in a call-centre, it may still go a long way to soothing the customer experience. For more insights, into how customer experience and employee experience affect each other, visit our article on the link between EX and CX.

    How to measure employee satisfaction

    The best way to measure employee satisfaction is to go straight to the source: your employees. Gathering feedback via employee satisfaction survey is most efficient and effective way to gain valuable data. Make sure to choose the right survey software to seamlessly incorporate your satisfaction surveys into your overall employee experience feedback strategy. As a starting point, feel free to look at Netigate EX – our dedicated employee experience platform.

    As we discussed, employee satisfaction is only a fraction of your wider employee experience. Most commonly, companies conduct annual employee satisfaction surveys to track levels over time. They are quite in-depth and cover all the bases discussed above, which factor into employees’ satisfaction. Make sure, to divide your survey up into the different themes and use specific questions for each section to gain actionable data. Check out our guide on conducting employee satisfaction surveys, as well as some of our notes on what not to ask in employee satisfaction surveys to be sure to avoid common mistakes.

    How to improve employee satisfaction

    Let’s say, you’ve conducted an annual survey, but now you’re wondering where to go from there? Gathering data is only the first step, but it will be completely futile if you do not put your survey results into action. With the right employee survey software, you will be able to compile reports and use the latest text analysis tools to tease out trends and areas for improvement, as well as identify those aspects that are positively contributing to your employee satisfaction already.

    The key step is to turn these insights based on feedback data into action plans. Once you have identified what needs to be improved, come up with short-term action points and long-term goals to work towards to. Being consistent in collecting feedback will allow you to track your progress over time and see which changes are fruitful and which need to be re-evaluated.

    Also make sure to use your employee survey software to its full potential by putting your data into context. This can be done through a completed feedback loop, which is enhanced through conducting a variety of different surveys: from eNPS surveys to track engagement, 360 degree leadership evaluations, to onboarding and exit interviews, as well as shorter pulse surveys in response to specific changes or developments.

    Curious to get started on your employee satisfaction journey? Why not check out Netigate EX for a dedicated employee experience platform, or book a demo to see what Netigate can do to support you!