Employee satisfaction: Why it matters and how to improve
Learn how to measure and boost employee satisfaction to create a workplace people love.
Employee satisfaction is the foundation of any successful business. When employees feel valued and motivated, they’re happier and more productive. Conversely, companies can encounter significant challenges when they do not, including communication breakdowns, decreased morale, and high turnover rates.
Tracking and improving employee satisfaction are two essential pillars of any business strategy. But they’re often overlooked. Discover employee satisfaction, its importance, and how to measure it to create a beloved workplace.
What is employee satisfaction?
Employee satisfaction measures how content and fulfilled employees feel in their jobs. Several factors contribute to employee satisfaction, such as compensation, work-life balance, morale, job security, and recognition.
Why is employee satisfaction important?
Employee satisfaction is vital for an organization’s overall success, and there are several important reasons for its significance. Here are a few to reflect on as you evaluate your employees' job satisfaction.
- Businesses with a high level of employee satisfaction are more productive and agile than those with lower levels of employee satisfaction. A University of Warwick study shows happy employees are 12% more productive than their dissatisfied counterparts. Satisfied employees are deeply engaged in their work, less likely to procrastinate, and more eager to collaborate.
- Organizations with satisfied employees find hiring and attracting top talent easier. Happy employees are brand ambassadors. They are also likely to score their company higher on an employee Net Promoter Score® (eNPS) survey and be Promoters. According to Glassdoor research, 77% of job seekers prioritize company culture and employee satisfaction when looking for their next adventure. Businesses with highly satisfied employees are more likely to attract these workers.
- High job satisfaction increases employee retention. This is good news because replacing an employee can be expensive. The Work Institute’s 2020 Retention Report suggests that replacing an employee can cost the company about 33% of that employee’s salary.
- Satisfied employees create a better work environment. Workers who report high workplace satisfaction are supportive, collaborative, and innovative. Their morale stays high, even during challenging times. By contrast, dissatisfied and unhappy employees can contribute to workplace toxicity.
Employee satisfaction vs. employee engagement
Although employee satisfaction and employee engagement sound similar, they’re not quite the same.
Satisfaction measures whether employees are content in the workplace. In other words, do they feel good about showing up to work every day? Engagement, by contrast, reflects whether they’re emotionally committed to their work. It’s whether they’re willing to go the extra mile for the organization.
Both satisfaction and engagement are important. Satisfied employees are less likely to look for other jobs, and engaged employees work hard to contribute to the business. Companies should monitor and improve employee satisfaction and engagement.
What are the key drivers of employee satisfaction?
Recognition and appreciation
Acknowledging individuals' contributions to the workplace is a powerful way to boost employee morale. According to a Gallup-Workhuman report, recognition is one of the most important drivers of employee satisfaction.
Recognition and appreciation can take various forms. Popular ones include verbal praise, a written thank-you, and formal awards. Regular acknowledgment can make employees feel valued and motivated and improve workplace satisfaction.
Career development and growth opportunities
Professional development is crucial for employee satisfaction levels. This is particularly true today when employees are more career-driven and hungry to learn than ever before. Deloitte data indicates that three-quarters of employees believe development opportunities are important for overall job satisfaction and retention.
To retain top talent, organizations should offer career advancement opportunities like training programs and mentorship to highlight clear pathways for professional development. Leadership development programs and workshops are helpful too.
Work-life balance
Burned-out employees are dissatisfied employees who report negative employee experiences. Conversely, employees with a positive work-life balance are more productive.
Support employees and empower them to maintain a healthy work-life balance with comprehensive employee benefits. Consider implementing family leave policies, flexible work arrangements, physical health benefits, and mental health resources to support psychological well being.
Managers can also create a supportive work environment by regularly checking in with direct reports to ensure they're managing their workload.
Fair compensation and benefits
Providing competitive compensation and benefits is foundational to employee satisfaction. Boost morale by offering fair competitive pay, benefits, and bonuses.
Make sure you’re consistently reevaluating salaries to ensure they match up to industry benchmarks. A transparent pay structure can also help improve satisfaction and morale.
Positive work environment and culture
A supportive and inclusive workplace boosts engagement significantly, according to research by McKinsey. Creating a supportive, inclusive, and collaborative work environment enhances employee satisfaction. Businesses can manage organizational health and build a positive culture by promoting diversity and inclusion, encouraging teamwork, and celebrating achievements.
Job security
Successful and healthy organizations instill a strong sense of job security into their employees. Employers can boost confidence by offering long-term contracts, transparent communication about the company’s performance, and clear performance expectations. Secure employees are more likely to feel satisfied and engaged.
Autonomy and empowerment
Giving employees autonomy leads to greater satisfaction. Employees who are empowered to make decisions are more engaged than their counterparts. A Gallup study found that employees who believe they have decision-making power are 22% more productive and 18% more likely to stay with their current employer.
Companies can empower employees by setting clear goals, providing necessary resources, and supporting independent problem-solving. Provide employees with resources like training, webinars, and technical tools so they have what they need to succeed. Regular feedback from managers also goes a long way toward empowering employees to make key decisions.
How to measure employee satisfaction
Measuring employee satisfaction is essential for identifying strengths and areas for improvement. Effective measurement methods include surveys, feedback sessions, and analysis of key performance indicators. Here are a few methods you can use.
Employee satisfaction surveys
Employee satisfaction surveys are important tools for measuring employee satisfaction. Some companies and teams elect to use anonymous surveys to encourage open feedback. Organizations can choose from a wide array of survey types, including the following.
- Pulse surveys: These are short and frequent surveys. They’re designed to capture employee sentiments in real time. Use them after making organizational changes or to address immediate issues. This enables you to get a quick glimpse into what your team is feeling at the moment.
- Annual surveys: Annual surveys are more comprehensive than pulse surveys. They’re meant to provide a holistic view of employee satisfaction and track long-term trends. Send out annual surveys ahead of strategic planning sessions and before setting organizational goals.
- Exit interviews: When an employee decides to leave the company, consider conducting an exit interview. Exit interviews provide opportunities to learn why your company is experiencing turnover. They help identify potential areas for improvement. Offer all employees who leave the company an exit interview. Make sure to thank them for their time and feedback once you’ve chatted with them about their time at the company.
Effective employee satisfaction survey questions
It’s not easy to design an employee satisfaction survey that results in high response rates. The questions must be well-crafted, open-ended, and directed. Here are a few examples to help you get started.
- Are you satisfied with your current role and responsibilities?
- Do you feel like you have opportunities to grow in your career?
- How would you rate your work-life balance?
- Do you feel recognized for your contributions?
- Does your team provide the support you need?
Related reading: The 20 best employee satisfaction survey questions
Employee satisfaction measurement tools and metrics
Tools like satisfaction indexes, Net Promoter Scores® (NPS), and employee engagement platforms provide valuable insights into employee satisfaction.
Satisfaction indexes
In satisfaction indexes, data is aggregated from employee surveys. This provides an overall score that reflects satisfaction levels across the company. Satisfaction indexes are useful for tracking trends over time and identifying specific areas that need improvement. They can be benchmarked against industry standards to help identify where the business stands relative to competitors.
With a satisfaction index, you can get detailed insight into where departments or demographics stand on a specific issue. That way, you can make more granular decisions about what to focus on.
Employee Net Promoter Scores
The eNPS measures the likelihood of employees recommending their workplace to others. By asking a single, powerful question—"How likely are you to recommend this company as a great place to work?"—NPS offers a snapshot of employee sentiment.
The simplicity of the eNPS survey provides a major advantage. For one, the results are easy to compare between teams, departments, and industry benchmarks. Moreover, the results are intuitive. Since the survey only consists of one question, NPS surveys typically boast high response rates.
Related reading: Calculate Your Net Promoter Score® (NPS)
Employee engagement platforms
These platforms offer a sophisticated set of tools for assessing and enhancing satisfaction. Many platforms enable organizations to solicit real-time feedback, send out pulse surveys, and gather detailed analytics.
Employee experience platforms provide essential features like customizable surveys that meet organizational needs. They facilitate quick survey distribution to measure real-time employee satisfaction or response to projects. Lastly, they often include tools to acknowledge employee accomplishments by colleagues and managers.
Boost employee satisfaction with SurveyMonkey
Prioritizing employee satisfaction is essential for success. To create a happier, more productive workplace, organizations must first measure and track employee satisfaction.
Ready to get started? Sign up with SurveyMonkey today!
Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.