What is employee satisfaction? How to measure & improve

15 min read

Last edited:  

What is employee satisfaction? How to measure & improve

Employee satisfaction: The ROI of investing in your people

Keeping employees happy is now more than just an HR job; it's an important part of how a business runs. The idea that happy workers lead to a successful business isn't just a nice theory anymore – it's true, and it works.

This includes everything from better work output to higher-quality customer service, lower staff turnover, and a boost in creative thinking and loyalty. The positive impact of happy employees extends in many directions.

By looking at different examples from the industry, real-life cases, and expert views, we aim to clearly show why putting effort into your team's well-being is more than just beneficial for them—it's a smart business strategy that pays off.

Here are a few findings by Statista that show what's going on with job satisfaction

  • More than half of full-time workers are on the lookout for a better-paying job.
  • Men tend to be happier at work than women, scoring 10% higher in satisfaction surveys.
  • Happy employees stick around for about seven times longer than unhappy ones.
  • Feeling undervalued and not getting respect from bosses are the top reasons people feel unhappy at work.
  • Only 17% of British workers say they love their jobs.
  • Many young people (millennials) leave their jobs because they feel their values don't match with their employers.

What is employee satisfaction?

Employee satisfaction refers to the degree of contentment and happiness employees feel towards their jobs and their company. It is an important metric that assesses if the work environment adequately fulfills the needs of the employees and fosters a positive and supportive workplace atmosphere.

A high employee satisfaction rate often means a happier and more productive team. If your team is unhappy, there's a risk they might leave. Treating your team well leads to a stronger group of skilled people.

Boosting employee satisfaction can be simple. It starts with treating them respectfully, using fair practices, setting clear goals, and creating a positive work environment. Additionally, listening to your employees, implementing their feedback, and providing chances for growth and training show you care about their success, which can make your team even happier.

DevRev OneCRM
DevRev OneCRM

DevRev OneCRM

Go beyond simple ticketing. Use the power of GPT & Analytics to transform customer support

Why is employee satisfaction important?

Employee satisfaction is essential for business success. It reduces turnover, boosts productivity, enhances company reputation, and contributes to the well-being of employees. Moreover, a satisfied workspace is a powerful magnet to attract more talent, making it a cornerstone of organizational success.

According to research done by UBS, 69% of workers are ready to leave their current jobs if they cannot work flexibly.

Focusing on your employees is just as important as your customers. Job satisfaction matters, and keeping employees engaged is key. Engaged employees help create a strong company culture, show loyalty to customers, and boost overall productivity.

What factors lead to employee dissatisfaction?

When people don’t like their jobs, they feel dissatisfied. This can happen for several reasons like bad working conditions, too much work pressure, no chance of promotion, or not getting value. This decreases interest, reduces productivity, and high turnover rates. A few more factors that lead to employee dissatisfaction are listed below.

  • Not enough pay: Feeling underpaid can lead to employee dissatisfaction. Companies should ensure competitive salaries to retain top talent.
  • Limited growth opportunities: Employees need opportunities to advance their careers. Employers should provide clear paths for professional development.
  • Unsupportive bosses: A lack of support from supervisors can demoralize employees. The best way to do this is by fostering a culture of open communication and mentorship.
  • Tough relationships with colleagues: Conflicts among colleagues can create a toxic work environment. Companies should promote teamwork and conflict-resolution skills.
  • Not feeling recognized: Employees deserve to feel valued for their contributions. Therefore, it’s necessary to implement programs to acknowledge and appreciate employee efforts.
  • Struggling to balance work and personal life: Companies should encourage a healthy work-life balance to prevent burnout and dissatisfaction. This may involve flexible work arrangements or stress management programs.

Ways to measure employee satisfaction

Effectively measuring employee satisfaction involves a continuous process of gathering employee feedback and addressing customers’ issues quickly. By employing various methods, organizations can gain insights into the factors influencing employee contentment. This approach allows companies to address their concerns, promote open communication, and ultimately enhance overall job satisfaction in the workspace.

Conducting employee satisfaction surveys

Companies can gather regular and honest employee feedback using tailored pulse surveys from specific departments. This helps them solve issues quickly and boost employee satisfaction rates. Also, include a mix of multiple-choice and open-ended questions for comprehensive insights. This can be done by measuring ESI to understand employees better.

Calculate ESI (Employee Satisfaction Index)

ESI is a simple survey that measures how happy the employees are at work. It’s like asking them about their daily work life and what they think about their jobs. Here’s how ESI is calculated,

The survey also helps the company make smart decisions to keep important team members and make the company look more appealing to new hires. The easiest way to do a survey is by sending it through text message. Sending SMS is a personal and flexible way to ensure employee answer from their phones.

Survey example,

Some survey uses verbal scale and statements like this,

While others adopt a numerical satisfaction scale like this,

Calculate employee net promoter score

The employee net promoter score measures how satisfied employees are by asking them a simple question, “How likely are you going to recommend your workplace”.

Employees can rate their experience on a scale of 1 to 10, falling into three groups,

  • Promoters (rated 9 or 10)
  • Passives ( rated 7 or 8)
  • Detractors (rated 6 and below)

Here’s how to calculate eNPS,

eNPS = Percentage of promoters - Percentage of detractors

For instance, if you have 100 employees and 40 are happy (promoters), 30 are okay (passives), and 30 are not happy (detractors), your eNPS will be 10 (40 -30 = 10). Therefore, any score above zero is good.

Rate of absenteeism

Frequent absenteeism in the workplace is a sign of inadequate working conditions, ineffective leadership, or poor work-life balance indicating potential employee dissatisfaction. This creates a ripple effect by burdening others and increasing their workload, leading to stress and job dissatisfaction.

Absenteeism serves as a red flag that demands swift attention. Talk directly with employees who are often absent and discuss the situation with managers, supervisors, and co-workers. This helps to figure out the root cause of the problems and fix issues quickly.

Here’s how to calculate the rate of absenteeism

Absenteeism rate = number of absences/number of workdays

Employee turnover rate

The employee turnover rate refers to how often employees leave their jobs, and it’s strongly connected to their job satisfaction. Unhappy employees are more likely to look for new opportunities, which is a big problem for companies. This can mess up how things work, making it less productive and causing issues within the team.

On the other hand, if employees are happy, they’re more likely to stick with the company. If the organization faces higher turnover, it’s essential to establish an environment where employees foster positive relationships, experience meaningful challenges in their work, and perceive their contribution as valuable. Using this approach helps to retain employees but also enhances overall workplace satisfaction.

Here’s how to calculate the employee turnover rate,

Ways to improve employee satisfaction

Improving employee satisfaction includes various strategies aimed at creating a positive and supportive work environment. When employees feel valued, appreciated, and engaged, chances are to develop an active and healthy workforce. Here are a few ways to improve employee satisfaction.

Listen to your employees

This strategy emphasizes paying attention to your team members' thoughts, concerns, and ideas. Actively listening promotes a culture of open communication and can lead to improved morale, collaboration, and problem-solving within the workplace.

  • Schedule regular one-on-one meetings with your employees to discuss their work, progress, and concerns.
  • Encourage employees to feel comfortable to approach for any concerns or suggestions.
  • Implement a suggestion box or online platform where employees can anonymously provide feedback and ideas.
  • Create opportunities for employees to connect and share their thoughts through informal activities like team lunches or social events.

Give credit for good work

Acknowledging and appreciating the efforts of employees is crucial for motivation and job satisfaction. Recognizing and rewarding good work not only boosts individual morale but also contributes to a positive work environment.

  • Publicly acknowledge and appreciate employee achievements.
  • Create a culture of recognition and appreciation.
  • Offer monetary or non-monetary rewards for outstanding performance.
  • Encourage employees to celebrate their successes.

Encourage a healthy lifestyle

Promoting a healthy lifestyle among employees involves initiatives such as wellness programs, access to fitness facilities, and support for work-life balance. This leads to increased productivity, reduced absenteeism, and improved overall well-being.

  • Offer healthy snacks and beverages in the workplace.
  • Provide access to fitness facilities or discounts on gym memberships.
  • Promote healthy habits through wellness programs and workshops.
  • Create a supportive environment for employees to manage their mental health.

Make work comfy

Creating a comfortable work environment contributes to employee satisfaction and performance. This involves providing comfortable seating, appropriate lighting, and a well-designed workspace that considers the physical and psychological well-being of employees.

  • Provide a clean, organized, and well-maintained workspace.
  • Make sure the workplace is well-designed to prevent discomfort and injuries.
  • Create a comfortable and inviting atmosphere with natural light and plants.
  • Allow employees to personalize their workspace to reflect their individuality.

Keep communication open

Fostering transparent and open communication is necessary for a healthy work culture. When information flows freely between management and employees, it helps build trust, resolve issues, and ensure everyone is on the same page regarding expectations.

  • Be transparent with employees about company decisions and changes.
  • Encourage open and honest communication between employees and management.
  • Create multiple channels for communication, such as email, intranet, and face-to-face meetings.
  • Address employee concerns promptly.

Help employees grow

Supporting professional development and providing opportunities for skill enhancement, including retraining employees , demonstrates a commitment to the growth of employees. This can involve training programs, mentorship, and initiatives that empower individuals to advance in their careers.

  • Encourage employees to take on new challenges and responsibilities.
  • Offer tuition reimbursement programs or other financial support for education.
  • Create a culture of mentorship and coaching.
  • Recognize and reward employees for their growth and development.

Build a friendly work culture

Creating a friendly work culture promotes a sense of belonging among employees. Encouraging positive relationships, teamwork, and a welcoming atmosphere contributes to a workplace where individuals feel valued and motivated.

  • Organize team-building activities and social events.
  • Encourage employees to interact and connect outside of work.
  • Create a sense of community and belonging.
  • Celebrate holidays and special occasions together.

Respect work-life balance

Recognizing and respecting the requirement for a balance between work and personal life is essential for employee well-being. Policies that promote flexible work hours, remote work options, and reasonable workload expectations contribute to a healthier work-life balance.

  • Encourage employees to take advantage of paid time off.
  • Set clear expectations about work hours and avoid expecting employees to be available 24/7.
  • Discourage the practice of working overtime.
  • Promote a culture of respect for personal time.
  • Encourage employees to maintain a healthy work-life balance.

By implementing these strategies, you can create a more positive and supportive work environment that will help improve employee satisfaction and engagement.

Additional ways to boost employee satisfaction

Give more autonomy to your team

Micromanagement can make employees feel like they’re not trusted and valued, which leads to decreased morale. This can increase employee stress and anxiety, increase the risk of errors, and high the turnover rate. Therefore, it is necessary to avoid micromanaging your employees and encourage middle managers to strike a balance between guiding their teams.

Encourage teamwork to foster open communication

Teamwork fosters a sense of belonging among employees by making them feel satisfied. It promotes open communication and creates a sense of accomplishment. It provides opportunities to learn from each other, reduces stress, improves work-life balance, and creates a supportive work environment that fosters employee satisfaction and productivity.

Provide learning resources to enhance skills

Access to learning resources empowers employees, enabling them to boost their skills, knowledge, and competencies, ultimately providing the way for career growth opportunities. This equips them with problem-solving abilities, enhances their adaptability, boosts employee engagement, and fosters an environment that motivates employees, ensuring the best possible employee experience.

Give flexible work options to empower work-life balance

Implementing flexible work arrangements empowers employees to navigate their personal and professional responsibilities, fostering a healthier work-life balance. This, in turn, has the potential to promote motivation, engagement, and overall job satisfaction. Flexible work options can also position organizations competitively in the job market, offering the opportunity for remote work or hybrid models. Ultimately, this approach contributes to cultivating a workplace based on employee needs by promoting satisfaction and enhancing retention.

Invest in employee benefits to reduce financial stress

Organizations need to prioritize employee well-being programs by offering robust healthcare, family perks, and retirement plans showcasing genuine care, alleviating financial stress, and supporting family responsibilities. This strategy not only attracts and retains top talent but also cultivates a positive work culture. By promoting long-term planning, it enhances employee experience, engagement, and productivity, providing a competitive advantage in the job market.

Prioritizing employee happiness: A smart investment for success

Employee satisfaction is essential for the success of any organization. Using AI-powered CRM tools can help to improve both employee satisfaction and productivity in several ways.

For example,

  • They can automate many repetitive tasks, freeing up employees' time to focus on more strategic and value-added activities.
  • They can also provide employees with real-time insights into customer data and behavior, enabling them to deliver more personalized and effective customer service.
  • In addition, a CRM tool can facilitate better communication and collaboration between employees, breaking down silos and fostering a more connected and supportive work environment. As a result, using OneCRM tools can help to reduce stress and burnout, leading to a more positive and productive work experience for employees.

Investing in an AI-powered CRM tool like DevRev helps to foster employee happiness. Also, companies can reap numerous benefits, including increased productivity, efficiency, and engagement; enhanced customer service and a strengthened organizational culture.

Frequently Asked Questions

A KPI (Key Performance Indicator) for employee satisfaction is a measurable help metric that helps organizations assess and track the level of satisfaction and contentment among their employees. These KPIs provide valuable insights into the overall well-being, engagement, and motivation of the workforce by enabling companies to identify pain areas to foster a more positive and productive work environment.Some of the common KPIs for employee satisfaction include ESS, eNPS, employee turnover rate, absenteeism, and more.

It’s an outline of a company’s approach to supporting employees to achieve a healthy balance between their professional responsibilities and personal lives. It typically includes provisions for flexible working hours, remote work options, leave policies, and measures to prevent overwork.

The 5Es of employee engagement are an organization’s framework, including expectation, empowerment, enabling environment, equity, and evaluation. These 5E’s provide a holistic approach to fostering employee engagement by providing clear expectations, empowering employees, creating a positive work environment, ensuring equity, and providing ongoing evaluation.

Akshaya Seshadri
Akshaya SeshadriMember of Marketing Staff

Akshaya Seshadri is a seasoned content marketer who possesses more than five years of expertise in the product industry.