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The Essential Guide To Measure Employee Satisfaction: What, How, and When

Maria Petit

Your company is a social system in which the most valuable asset for effectiveness and efficiency is its human capital. Therefore, it’s imperative to keep your employees satisfied. But, how can you measure employee satisfaction? And more importantly, what can you do to increase job satisfaction? 

Worry no longer about this challenge as in this guide, we will discuss the best methods for measuring employee satisfaction, and a few practical tips to improve your work environment if you are falling a bit behind!

Nowadays, employee job satisfaction has become one of the most important metrics for human resource management professionals and business leaders worldwide. By now, we know for sure that a satisfied employee is a productive employee and that a productive employee drives business success. 

But, how come we stumbled upon this conclusion? Let’s look at it more closely!

Employee job satisfaction became an object of scientific study in the early 1930s during the U.S Great Depression. One of the most famous investigations on job satisfaction was The Hawthorne Studies conducted between 1924 and 1932 by the Australian psychologist and organizational theorist, Elton Mayo, at the Western Electric Company’s Hawthorne Works in Cicero, Illinois.

These studies helped lay the foundation for the human relations movement which placed importance on job satisfaction, communication, and employee involvement in the workplace. As well, opened the gate for work motivation theories, and ultimately the Hawthorne effect.

The Hawthorne effect is defined as the tendency of people to work harder when they are being observed

The studies were initially meant to increase worker productivity by manipulating various physical conditions of the workplace, such as lighting and temperature. 

However, the researchers conducting the study found that it was not the physical changes that impacted worker productivity, but rather the act of being observed itself. This was indeed serendipity in the works!

This finding led to the conclusion that employees are motivated not only by working conditions and compensation but also by social factors, such as recognition and appreciation. Decades later, these conclusions are supported by a survey carried out by SurveyMonkey showing that recognition is tied to happiness at work.

Although the Hawthorne effect has been highly debated, it contributed to our understanding of employee motivation and job satisfaction

Fast forward to today, and the research on job satisfaction has only become more robust. Studies have consistently found that employee satisfaction is linked to a number of important outcomes for companies, including:

  • Employee engagement
  • Employee productivity
  • Workers tenure
  • Business profitability
  • Customer satisfaction

Engaged employees are emotionally attached to their work and feel a sense of purpose in what they do. They’re also more likely to go above and beyond their job duties and take pride in their work.

Pretty convincing, right? It’s no wonder that measuring employee satisfaction has become such an important task for companies, especially for human resource management! But, what exactly encompasses work satisfaction? 

What is Employee Satisfaction?

As we stated before, the concept that defines job satisfaction has been around for nearly a century, but it wasn’t until the late 1970s that employee satisfaction became a more prominent issue in organizations.  

Broadly speaking, employee satisfaction could be defined as how content employees are with their job positions or workplace. But this definition sounds a bit too vague and rather incomplete. So, let’s broaden it a bit!

A more comprehensive definition provided by Chariana, 2012 would be: Employee satisfaction is the extent to which employees feel positive and enthusiastic about their jobs, co-workers, work environment, their opportunity for career development, and evidently how pleased workers are about the organization as a whole.

Job satisfaction is the degree to which employees feel that all their needs are being met on the job 

Job satisfaction is widely accepted as a key performance indicator (KPI) of worker well-being and it is usually measured through Employee Satisfaction Surveys. 

These surveys provide organizations with important insights into how employees feel about their job, their team, their manager, the company, and several other factors that can impact job satisfaction.  

Now, one question arises: Is it really that significant for workers to be that happy? 

That would be a YES. And, we are telling you why down below!

How Important Are Satisfied Employees?

There is a strong relationship between the comfort of your human capital and organizational financial success. Employee satisfaction is one of the most important factors to consider as it has a significant impact on employee productivity, creativity, and innovation.

For instance, happy employees are more likely to stay with your company, saving you the time and money associated with recruiting and training new quality talent. Ultimately resulting in increased profits!

It is worth remembering employee turnover can cost your company up to 150% of an employee’s salary!

On the other hand, a study conducted by the University of Warwick found that happiness led to a 12% spike in productivity, while unhappiness led to a 10% decrease. 

Furthermore, another study conducted by the iOpener Institute discovered that happy employees take an average of ten times fewer sick days than unhappy employees. So, not only will pleased employees perform better, but they will also be absent less. 

A satisfied employee is a productive and engaged worker! 

On the other hand, according to Gallup, it is estimated that unhappy employees cost United States businesses $300 billion annually in lost productivity. 

Clearly, measuring employee satisfaction is not only a good way to gauge the health of your workforce, but also is critical for any business to maintain a high-functioning workforce.

But, how do you do it? What can you measure, and when? Let’s hop into our very essential guide!

What Do You Measure In Employee Satisfaction?

Thoroughly measuring satisfied employees can be a complex and time-consuming task. However, here there are key factors for determining job satisfaction. Take a look at the what, the how, and when of job satisfaction.

First, let’s review what you can measure!

Employee Retention Rates 

One of the most important things to measure when it comes to employee happiness is the Employee Retention Rate, which is the percentage of employees who stay with a company over a period of time. 

This metric is important to measure as it gives you an idea of how satisfied your employees are with their job positions. If your Employee Retention Rate is high, it means that your employees are happy with their work and are less likely to leave.

HOW: You can calculate your Employee Retention Rate by taking the number of employees you have at the end of a period of time and dividing it by the number of employees you had at the beginning of that same period, and last multiplying that number by 100.

For example, if you have 100 employees at the beginning of a year and 95 employees at the end of the year, your Employee Retention Rate is 95%.

Source: Upwork

WHEN: You should measure your Employee Retention Rate at least once a year or on a quarterly basis. This will help you to identify any trends or changes in employee satisfaction levels over time. 

Employee Turnover Rate 

Employee turnover is the rate at which workers leave your company. A high employee turnover rate can be costly and indicative of problems within your organization, such as poor management, low morale, and lack of job satisfaction.

HOW: You can calculate your Employee Turnover Rate by taking the number of employees who left your company during a period of time and dividing it by the average number of employees you had during that same period. Then, take that number and multiply it by 100.

For example, if 10 employees left your company in a year and you had an average of 100 employees during that year. Your Employee Turnover Rate would be 10%.

WHEN: The Employee Turnover Rate time period can vary according to the size of the company. Smaller companies take longer time frames, such as quarterly or yearly. 

Employee Engagement 

This is the measure that shows you how committed and motivated workers are to their positions. A high level of employee engagement is linked to improved performance, lower turnover, higher levels of job satisfaction, and customer retention. 

HOW: There are a number of ways to measure employee engagement. One way is to conduct a periodic job satisfaction survey or a poll. An alternative method is through performance metrics, such as customer satisfaction scores or sales figures. 

WHEN: It’s not enough to measure employee engagement once or twice a year. Changes in the commitment of your staff from one period to the next must be understood and addressed. This is why a three-four month interval should do the work.

Employee Net Promoter Score (eNPS) 

The Employee Net Promoter Score (eNPS) is a metric that measures employee satisfaction and loyalty. It’s based on the same principles as the Net Promoter Score (NPS), which measures customer satisfaction. 

HOW: To calculate your eNPS, you first need to survey your employees and ask them: How likely are you to recommend our company as a great place to work to your family and friends? 

You then need to segment your responses into three groups: 

  • Promoters (9-10): these are workers who are satisfied with their work and are likely to recommend your company to others. 
  • Passives (7-8): these are employees who are satisfied with their jobs but are not likely to recommend your company to others. 
  • Detractors (0-6): these are workers who are dissatisfied with their jobs and are unlikely to recommend your company to others. 

Then, you will need to take the percentage of promoters and subtract the percentage of detractors. For example, if you have 50% Promoters and 10% Detractors, your eNPS would be 40%. 

A score of 0 to 30 is considered poor, a score of 31 to 60 is considered fair, a score of 61 to 80 is considered good, and a score of 81 to 100 is considered excellent. 

WHEN: Employees will become fatigued, less inclined to engage, and less likely to provide extra input if they are asked too frequently, but if they are asked too infrequently, you will not get the data you need to make genuine improvements. Try to establish a healthy balance at least twice a year, and once per quarter is a good idea.

Employee Emotions

Employee emotions are important to measure as they can have a significant impact on job satisfaction. Emotions such as happiness, sadness, anger, and anxiety can all affect an individual’s ability to perform their job effectively. 

HOW: You can measure employee emotions by conducting surveys or using software that tracks sentiment, you can also measure employee emotions by observing their behavior. For example, if employees are regularly taking sick days or calling in late, this could be an indication that they are unhappy with their job. 

One interesting approach to tracking your staff’s emotions could be emojis. Yes, those little icons we cannot live without! This strategy is especially helpful if you are managing a remote team. 

A very new study found out you can predict employee dropout based on whether they used emojis or not. According to Mei, one of the study’s authors, employees who don’t use emojis are three times more likely to drop out of remote work. Impressive, but not entirely unbelievable. Don’t shy away from millennials’ tendencies!

WHEN: Employee emotions should be monitored on a regular basis to ensure that employees are happy and productive.

However, these are not the only ways to know how happy your staff is!

What Are The Best Methods To Measure Job Satisfaction?

The best methods to measure job satisfaction will vary depending on the organization and its specific needs. Surely surveys are often used for this purpose, but they are not the only method!

It’s important to understand that measuring satisfaction in the working environment is not a one-time event!

When it comes to measuring job satisfaction, there is no one-size-fits-all solution. The best approach is to use a combination of methods to find the right one that fits your organization. So, let’s review some of them: 

Satisfaction Surveys 

Employee satisfaction surveys are the most commonly used method to measure job satisfaction. These surveys can be conducted online, over the phone, or in person. 

For example, the city of Minneapolis conducts an employee satisfaction survey every two years. The most recent survey was conducted in 2019 and had a participation rate of 77%. The survey covers a variety of topics, including job satisfaction, pay, benefits, training, and development opportunities. 

Pros: 

  • They provide detailed insights into how employees feel about their jobs. 
  • They are relatively easy to administer. 
  • They can be anonymous, which makes employees more likely to give honest feedback. 

Cons: 

  • They require a significant amount of planning and coordination. 
  • They can be costly to administer. 
  • Employees may not be willing to participate if they feel their feedback will not be anonymous. 
  • Finally, surveys only provide a snapshot in time and may not be representative of employee satisfaction over the long term.

Minnesota Satisfaction Questionnaire

One of the most popular ways to measure job satisfaction is through the Minnesota Satisfaction Questionnaire (MSQ). The MSQ is a tool that can be used to assess an individual’s overall satisfaction with their job. 

The MSQ consists of 56 items that are each scored on a scale of 1 to 6, with 1 being “very dissatisfied” and 6 being “very satisfied.” The total score for the MSQ can range from 56 to 336. 

In general, a score above 300 indicates a high level of satisfaction, a score between 250 and 299 indicates a moderate level of satisfaction, and a score below 249 indicates a low level of satisfaction. 

One-On-One Interviews

Another common method for measuring employee satisfaction is through one-on-one interviews. This method allows managers to get direct feedback from their employees about what they like and don’t like about their jobs. 

They can be conducted in person, by phone, or even via email. This feedback can be incredibly valuable in identifying areas where employees are struggling and implementing changes to improve satisfaction. 

These interviews typically involve asking employees open-ended questions about their jobs and how they feel about various aspects of their work.

TAKE NOTE: One-on-ones should not be used as a replacement for surveys or other methods of measuring job satisfaction. Instead, they should be used in addition to these other methods to get a more complete picture of employee satisfaction. 

Focus Groups

Focus groups are a common method for measuring employee satisfaction. Focus groups typically involve a small group of employees who meet to discuss their jobs and how they feel about various aspects of their work. They are a good way to get detailed information about worker satisfaction.

TAKE NOTE: Focus groups can be time-consuming and expensive to administer. Additionally, it can be difficult to find employees who are willing to participate in a focus group.  

Exit Interviews 

Exit interviews are a valuable tool for understanding why employees are leaving the company. They can provide insight into problems that may be affecting employee satisfaction. Exit interviews should be the last thing an employee does before leaving the company.

While exit interviews can be conducted in person, they are often done over the phone or via email. 

Pros: 

  • They can provide valuable insights into why employees are leaving the company. 
  • They are relatively easy to administer. 

Cons: 

  • They require a significant amount of planning and coordination. 
  • As happens with the surveys, employees may not be willing to participate if they feel their feedback will not be anonymous. 

If after reading so far here, you realized your workplace is not offering the best conditions, we are bringing good news. You can still improve your efforts!

How To Improve Job Satisfaction?

Yes, we shouldn’t forget the basics: a livable salary, good working conditions, and access to development opportunities.

Though, why not go beyond the standard benefits and offer your workers a lot more? 

Some companies offer:

Employee Assistance Programs (EAPs), wellness programs, and/or Employee Resource Groups (ERGs) to improve job satisfaction. 

EAPs 

These are confidential counseling services that can help employees deal with personal problems that may be affecting their job performance. 

Wellness programs offer a variety of health and fitness services to employees. These programs can help employees reduce stress, improve their overall health, and feel more satisfied with their job positions. 

ERGs 

These are groups that provide support and networking opportunities for employees with shared interests or backgrounds. They can help your staff to feel more connected to the company and improve job satisfaction. 

Other methods for improving job satisfaction include providing training and development opportunities, offering Employee Stock Purchase Plans (ESPPs), and investing in employee involvement activities. 

Additionally, don’t forget to offer flexible work arrangements, such as telecommuting or flexible hours

The most important thing is to remember that every organization and employee is different. What works for one company may not work for another. It’s important to tailor your approach to the specific needs of your organization and employees. 

The Role of Managers and Job Satisfaction

We already know there are many factors that contribute to a happy employee, but one of the most important is the role of managers. 

Managers play a vital role in creating a positive work environment and ensuring that employees are satisfied with their jobs

Unfortunately, not all managers are equally effective at promoting employee satisfaction. In fact, some managers may unintentionally do things that negatively impact employee satisfaction. 

If you’re a manager, there are a few things you can do to ensure that your employees are satisfied with their work: 

  1. Create a positive work environment. 
  2. Encourage open communication between employees and managers.  
  3. Make sure that employees feel like they are valued and appreciated. 
  4. Help employees set realistic goals and provide constructive feedback on their progress. 
  5. Encourage employees to take advantage of opportunities for professional development. 

Wrapping Up

Employee satisfaction is a critical metric for any business. By measuring employee satisfaction, you can identify problems within your organization and take steps to improve the overall health of your workforce.  

It is important to choose the right metrics and measure them on a regular basis. Yes, surveys are a great way to measure employee satisfaction, but they should be tailored to the specific needs of your organization and employees. 

Additionally, managers play a vital role in promoting employee satisfaction. By creating a positive work environment, encouraging open communication, and valuing employee feedback, managers can help to ensure that employees are satisfied with their jobs.

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