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People are the cornerstone of a great workplace, so it only makes sense to promote initiatives that keep them happy. Plenty of research shows when employees have the resources they need to succeed, they’re more likely to put down roots, contributing to one organization for years to come.
But if you’re like many people leaders, employee satisfaction seems like an ever-changing metric. Is it possible to actually predict employee happiness when circumstances ebb and flow so frequently? Can you really follow an action plan when satisfaction ratings dip?
On-the-job happiness doesn’t happen without a strategy. We’re here to help you make one.
Learn how to ace employee satisfaction with an understanding of what it is, why it’s valuable to your workforce, and actual strategies you can use to measure it.
What is employee satisfaction?
“Employee satisfaction” is an HR term that describes how content or satisfied workers are with different aspects of their employment experience. As a metric, employee satisfaction considers sentiments about working relationships, compensation, and career mobility.
Employee satisfaction is (mostly) a qualitative measurement. This means that the results of your research efforts are likely anecdotal, based on how employees perceive their work, potential opportunities, and daily experiences. While it’s easy to gather some of this data, other sentiments are harder to track.
Responsible employers make it a habit to ask in-depth questions, like the ones below, about how workers perceive life “on the clock.”
- Are employees satisfied with recurring responsibilities and tasks?
- Is the workload balanced enough to allow time for a good life outside of work?
- Does the employer foster healthy and positive personal relationships?
- Do employees feel passionate about the work they perform, or are they simply working to earn a paycheck?
- Can leaders take proactive steps to address concerns and provide resources when burnout or disengagement creep in?
Although there aren’t perfect answers here, the focus comes down to one thing—mindset. Does your organization prioritize employee well-being as a way to improve retention and job satisfaction? If not, shift gears.
“Employee satisfaction” vs. “employee engagement”
We know—there are lots of employee-focused buzzwords swirling around in contemporary HR culture, but that doesn’t negate their importance. As people-first technology advocates, we’re here to help you make sense of everything as a way to create better corporate culture and team well-being.
Those results begin with a differentiation between satisfaction engagement, which are related but not necessarily identical. At Erudit, we define “Satisfaction” like this:
“The state in which an employee perceives that their needs are fulfilled and finds pleasure in performing their job. It can be related to conditions, personal and work relationships, or the tasks themselves.”
PeopleHum offers a helpful explanation to distinguish satisfaction from engagement:
“Satisfaction, which is important for retention, is not necessarily a predictor of performance, while engagement—which indicates an employee’s passion for their work, among other things—is directly tied to output. Ideally, satisfaction occurs as a result of both factors like compensation and benefits as well as less-tangible elements like engagement, recognition, and strong leadership.
If an organization fails to address both the sides of the equation, they might find they have a complacent team made up of materially satisfied employees who are content to do only what is necessary to remain employed, or a staff of highly engaged employees who are performing well while they look for new opportunities at companies more willing or able to fill their material needs.”
Did you catch that? Satisfaction comes from factors that you control (like base pay) and those you simply need to influence through heartfelt leadership and appropriate responses. Careful attention to these details separates companies that truly value people from those that look at contributors like numbers in a headcount.
Employee satisfaction trends
The Pew Research Center has released up-to-date findings about Americans’ perception of job performance and well-being. The results? Nearly 51% of employees in the United States feel highly satisfied with their job based on factors like management and coworker collaboration.
Unfortunately, those good vibes don’t extend to attitudes about pay, compensation, benefits, and upward mobility. These factors detracted from satisfaction percentages, causing employees to look for new opportunities outside of their current company.
Interestingly, satisfaction reports also illustrate a gender gap. Despite increasing employee satisfaction nationwide, women report noticeably lower job satisfaction than men. There are several explanations for this trend, including the notorious gender pay gap, greater concern over benefits like maternity or family leave, and even anxiety about promotion potential when compared with male colleagues.
Globally, individual contributors (ICs) also report lower levels of job satisfaction than do executives and C-Suite leaders. In its 2023 Employee Experience Trends report, Qualtrics shows that C-Suite leaders score 13% higher than average when rating work-life balance, while ICs fall 4% below the international average.
The importance of measuring employee satisfaction
As a compassionate people leader, you already want your employees to feel like the real MVPs. Fortunately, investing in people initiatives provides perks to everyone, even the company at large.
When you maintain and promote employee satisfaction as a core value, you’ll be more equipped to identify areas of organizational improvement and to develop strategies that enhance well-being during any season or job market. This strategic thinking benefits your current staff and is also a major selling point for recruits and new hires, too.
There’s a tangible connection between employee satisfaction and retention, as well as documented impacts that extend beyond the office walls. Let’s look closely at some of the positive side effects of measuring employee satisfaction.
Productivity
It’s a basic fact of human nature—when we’re happy, we do better work. When employees battle job stress, mental fatigue, and burnout, it’s tough to stay sharp. Over time, lack of career satisfaction bleeds into team contributions, creating ripple effects for everyone.
When it comes to productivity and satisfaction, the numbers tell the story. Unhappy workers are 10% less productive during the day. On the contrary, higher job satisfaction raises employee productivity and even produces 37% more sales volume.
Researchers at the University of Oxford, MIT, and Erasmus University also discovered the following connection between workplace happiness and productivity: “Happy workers do not work more hours than their discontented colleagues—they are simply more productive within their time at work.”
Engagement
Engaged employees take ownership of their performance and future. They’re excited to perform meaningful work, eager to achieve goals, and willing to collaborate with their peers.
If results are indicative of success, then job satisfaction rates point to higher engagement.
Not surprisingly, these factors go hand-in-hand when improving employee retention. This is where real-time employee sentiment analysis wins. By monitoring employee engagement in realistic scenarios, managers can wisely intervene and build happier teams right away.
Customer satisfaction
Satisfied employees tend to have a positive effect on those around them. From engaging in positive “watercooler chats” in Slack to unleashing all-star performance on tricky assignments, happy workers simply know how to influence those around them.
This is even true when it comes to serving customers. When employees have positive employer sentiments, that sense of loyalty extends to customers. When they feel genuinely valued, customer-facing employees go the extra mile, solving customer questions or concerns and bringing positive energy to external communications.
Company success
Not only do A-list performers get more accomplished in a day’s work, but they also save organizations thousands of dollars in lost productivity and rehiring costs every year. Plus, top performers could be the ones to generate impressive sales, design innovative marketing campaigns, or bring fresh ideas to the table.
The Harvard Business Review does, however, point out an interesting paradox. Sometimes, the company’s best interest doesn’t always align with employee happiness. Ron Carucci reports, “As employees rise within their organization, their responsibilities shift from considering how their team feels to shaping organizational ethos. Doing what is right for their company and doing what will make their employees happiest are not always mutually exclusive.”
In these situations, it’s helpful to have pre-established trust with employees. Happy workers might be willing to “take one for the team,” in the short-term, sacrificing present well-being for long-term gains. But when the storm is over, it’s important to reset and refocus.
In other words, don’t let employee discomfort or sacrifice become commonplace.
6 methods of measuring Employee Satisfaction
Measuring employee satisfaction is not a new practice, and workplace feedback from organizations like The Conference Board date back to 1987. Obviously, lots of things are different than they were in the eighties, which begs the question—shouldn’t we also adjust our methods of measurement?
In this section, we’ll lay out options for monitoring and measuring employee satisfaction. With each practice, compare:
- How much preparation is necessary
- What you’ll need to do to analyze and apply findings
- How each method boosts employee or team morale
1. Distribute employee surveys
Many employers stick to what they know in terms of HR policies. As a result, traditional employee feedback surveys are still the common standard in many corporate workplaces.
The majority of today’s workplace survey tools are digital. Whether it’s a secure web form or confidential email survey, corporations often ask questions about team culture, job performance, coworker communication, and even employee alignment with remote work policies.
Surveys aren’t necessarily bad (per se), but exclusivity comes at a price. According to Workhuman, many employees feel survey disillusionment, due to past negative experiences or the time-consuming nature of submitting detailed answers. Plus, when employers don’t take action on what employees share, it’s tough to rebuild trust in future questionnaires. Employees might feel less inclined to share transparently, especially if survey questions contain bias or come from a third party source.
>> Learn more: The Limitations of Employee Engagement Surveys and How to Overcome Them <<
2. Use the Employee Net Promoter Score (eNPS)
The Employee Net Promoter Score is based on one simple question: “On a scale of zero to ten, how likely are you to recommend our company as a place to work?”
Based on the rating, employees are assigned a title of Promoter, Passive, or Detractor. Detractors are on the lowest end of the spectrum and are the least satisfied with their current work or role at a company. Calculate your eNPS percentage with the following formula:
% of Promoters – % of Detractors = eNPS Percentage Score
eNPS is an aerial view of your employees’ perception of current work and whether they’d recommend a particular job to a colleague. Employers should focus on additional metrics to paint the full picture.
3. Conduct face-to-face interviews
In-person (or video) conversations are a personal way to find out how employees are really doing. Since they’re individual and usually private, employees may feel more secure about answering honestly or sharing work-related concerns.
Even so, there are some drawbacks to asking blunt conversations via interviews.
- Employees could feel like they’re being put on the spot.
- The level of trust with a specific interviewer might vary from person to person.
- Employees may not fully understand how their feedback will be used or applied.
- Some workers might be hesitant to have the conversation recorded.
As a method of measurement, interviews can enhance other types of feedback processes. Since the level of comfort varies, always provide team members with an “opt out” choice if they’d prefer to submit answers through another channel.
4. Host town hall events to gather feedback
Many organizations sponsor team hall events (also called all-hands meetings), inviting everyone in the company to hear news and announcements from leadership. The goal is to create a culture of transparency and to generate buy-in from everyone. Fellow, an innovative team gathering platform, explains the value this way:
“Town halls are the best way for upper management to connect with employees on other levels, creating more transparency into organizational decisions… Long term, making the whole team feel included can improve employee retention and overall employee satisfaction.”
Modern employees crave knowledge about future planning, so this style is perfect for leaders who are willing to project plans and field questions.
5. Incorporate the Employee Satisfaction Index (ESI)
The ESI is similar to the eNPS, but it includes three general questions instead of one. The ESI asks employees:
- How satisfied are you with your current workplace?
- How well does your current workplace meet your expectations?
- How close is your current workplace to the ideal one?
Many teams choose to incorporate the ESI index into more robust surveys or feedback tools. With only three questions, it’s difficult to monitor the factors that contribute to how employees feel. Even so, ESI is a benchmark to see how companies stack up against similar organizations. This is especially true if and when employee turnover is high at a specific time.
6. Use AI for workforce insights to see what’s working
Even if you have in-depth survey processes, you can easily miss smaller pieces that contribute to the larger puzzle. It’s like trying to fly a plane with one hand tied behind your back—not productive (or safe). Documented survey responses still miss the exchanges that make or break employee well-being.
AI-powered workplace insights help you create an environment that prioritizes corporate values while helping employees feel appreciated. With Erudit, one simple tool mines business communications and provides anonymous sentiment reports—all without asking employees to submit redundant surveys.
Erudit automatically analyzes 37 measurable employee satisfaction metrics. Not only does this improve the employee experience (from onboarding to offboarding), but it uses real behavioral psychology to give leaders action plans and meaningful to-dos. It’s the only people-first solution that protects employee privacy while ensuring personal, meaningful responses.
Employee satisfaction metrics to track
Although employee satisfaction is a quality rating, several measurable values show how a company prioritizes people. These include worthwhile metrics such as employee turnover rate, absenteeism, engagement levels, performance ratings, and corporate feedback scores.
HR specialists and department heads take note—these metrics showcase trends over time and are critical for creating policies that keep employees engaged.
Employee turnover rate
Employee turnover rate describes how many employees depart a current position to pursue a new opportunity. Although some reasons for turnover are professional, others are personal in nature (pursuing new education, caregiving responsibilities, or supporting a partner).
As a general rule, responsible employers aim to keep turnover rates low. That’s because recruiting, rehiring, and onboarding new employees are costly—both to teams and to corporations at large.
Low turnover rate indicates that an organization focuses on people-forward policies that encourage fair pay, upward career mobility, and even healthy work-life balance.
Absenteeism
Employee absenteeism measures often employees skip out on the job or miss work without explanation. And no matter how valid the reasons might be, most employers expect a consistent track record to keep business moving.
When employees routinely miss work, it’s important to know whether the root cause is personal or job-related. Personal factors, like medical appointments or caregiving duties, might be out of the employer’s direct control. But if an employee goes MIA because they have zero flexibility in terms of workplace policies, or if their absences are directly tied to work-related issues, it’s time for a cultural audit.
Higher satisfaction naturally results in more participation and activity. And in a growing hybrid work world, those factors are valuable when employees don’t share a physical location.
Burnout
At Erudit, we’re proponents of a healthy workplace mentality. We dedicate resources to analyzing a psychological problem like burnout, which has the following definition:
“Burnout is a syndrome associated with prolonged, overwhelming exposure to work-related stressors, and thus, is associated with depression, anxiety, and exhaustion. It is characterized by a negative emotional response generated in the psychological, emotional, and even physical sphere of an individual.”
When employees lack mental stamina, job performance struggles. Not only that, but those employees are less inclined to show loyalty to a company. Without a proactive stance on measuring burnout, it’s easy to miss red flags and valid concerns.
>> Download the Report: Measuring Burnout and Engagement <<
Job performance ratings
Creating a predictable schedule for employee performance reviews is helpful, both for managers and for team members. Employee performance ratings are another way to predict who feels highly satisfied with their work. But remember, correlation doesn’t always equal causation.
There are many reasons why employees score lower on job performance ratings, including:
- Personal concerns that affect their mental healthy or daily work ethic
- Lack of adequate on-the-job training or preparation
- Negative dynamics among team members, or between a manager and direct report
Whether your job review system is in place to identify top performers or develop improvement plans, keep it respectful. Employee job ratings should be fair and transparent, opening the door for two-way communication.
Protect your best asset—your people
If you’re here, you’re likely already prioritizing the best thing your organization has going for it—its employees. And while it’s not always possible to fabricate genuine happiness, employee wellness initiatives do make a substantial difference in every workplace.
Ready for a cultural revamp? The ball is in your court. Put these methods of measuring employee satisfaction to good use. Tracking metrics like turnover, burnout, and engagement have benefits for everyone, from stakeholders to intro-level interns, and it won’t be long before you see the positive impacts.
Let’s get your employee satisfaction numbers on a right path for growth and longevity.
Start your free Erudit trial now, including a free Culture Assessment from behavioral psychologists.
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