How to Effectively Measure Employee Satisfaction

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How do you measure success at your company? A bunch of metrics might leap to mind — increased revenue, greater profit margins, more customers, enhanced productivity. Maybe even the extent to which your HR software supports your most precious asset: your people. But have you stopped to consider how employee satisfaction fits into the picture?

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Measuring Employee Satisfaction

 

Satisfied employees are critical to any company’s success. The fight for good talent is as fierce as ever, thanks to the shrinking talent pool. Your organization needs to make sure that your employees are happy or you risk losing them to the competition.

You’re probably familiar with the idea that as a business, you need to put the customer first. In marketing, everything you do revolves around the customer.

The same principle applies in HR. Only in this case, your employees are the customer. Given that, it makes sense that their satisfaction is something you should take seriously. And if the needle swings to dissatisfaction, it should become even more of a priority.

This article will lay out some reasons why tracking employee satisfaction is important. Then we’ll look at how to measure job satisfaction and the importance of acting on what you find.

What Is Employee Satisfaction?

Employee satisfaction, also called job satisfaction, is a common measurement used within HR functions. It refers to the level of contentment an employee feels with their job and workplace experience, as well as their attitude toward their company.

Employee satisfaction is considered one of the main metrics for gauging overall workplace sentiment. Measuring employee satisfaction also helps determine their needs and motivations, as well as how your company can help them grow.

Common tools for gathering such data have included surveys and annual reviews, along with measuring your employee Net Promoter Score — known as eNPS.

Employee engagement is another common term, and it’s often confused with employee satisfaction. After all, aren’t satisfied employees also engaged?

Not necessarily.

Unlike employee satisfaction, employee engagement looks beyond whether someone shows up every day, doesn’t complain and seems “satisfied.” Multiple definitions of employee engagement exist, but the majority all drive at the same thing: emotional connection and commitment to a company. It has a strong sense of purpose, which may not be true of employee satisfaction

So, what affects whether workers are satisfied? Glassdoor conducted a study this year to answer that question.

The top three drivers of satisfaction were:

  1. A company’s values and culture
  2. The quality of an organization’s senior leaders
  3. Career opportunities

On the reverse side, compensation and benefits, a company’s business outlook, and work-life balance were considered less important.

Although these findings are based solely on data from Glassdoor’s users, it provides a framework for understanding what employees consider valuable.

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Why Should You Measure Employee Satisfaction?

A better question might be, “Why would you not measure employee satisfaction?”

Not tracking a KPI is the business version of driving blindfolded. You might have a general idea of where you’re going, but without the ability to see, you don’t know when to make adjustments if you start veering off course.

Likewise, without tracking the level of satisfaction among your employees, it’s impossible to steer away from negative trends. Or, on the flip side, to stay in the fast lane of what’s working well. Failure on either side can lead to unhappy employees who aren’t committed to their jobs and ultimately your company’s mission.

With that in mind, let’s get practical for a minute. Here are three reasons why you’re better off tracking the satisfaction (or lack thereof) of your employees:

3 Reasons to Measure Employee Satisfaction

 

1. Employee satisfaction is an essential piece of overall business success

Companies that motivate and engage their employees stand a better chance of outperforming their competitors.

While it can actually be hard to prove that job satisfaction directly causes higher productivity, research suggests there’s a correlation.

The London School of Economics and Political Science (LSE) recently conducted a study using Gallup data. And it found a correlation between employee satisfaction and enhanced company performance. It makes sense that happy employees are more productive.

Moreover, the study also found that satisfied employees have a positive impact on customer loyalty and profitability. So beyond just boosting productivity levels, employee satisfaction can bring dedicated customers and add to your company’s bottom line.

2. Employee satisfaction helps retain employees

Employee retention is facing a crisis, according to the 2019 Employee Engagement Report from TINYpulse. Over 40% of employees are likely to leave their company for a 10% pay raise. That’s up from 23% a few years ago.

Loyalty is hard to come by. And the key difference-maker according to the report is company culture. Sure, people quit bosses, chase after higher-paying jobs and so on. But an organization’s culture plays a major factor in whether someone will stick around.

Given that, it shouldn’t come as a surprise that employee satisfaction can help right the ship. The LSE report mentioned above showed a negative correlation between satisfaction and turnover rates. Which means a satisfied workforce is one that fewer employees leave.

Employee engagement research by Qualtrics points in a similar direction.

Qualtrics found that managers play a key role in driving job satisfaction. And in turn, managers who help employees handle their workload and regularly acknowledge good work were two of the three drivers for employee retention.

In other words, workers with good managers are more likely to be satisfied and stay with a company.

3. Employee satisfaction leads to employee engagement

Yes, we talked about how satisfaction and engagement aren’t synonymous. But greater satisfaction in a job can pave a natural path toward higher levels of engagement.

When employees are engaged, it fosters a strong company culture, greater loyalty and increased productivity.

Engaged employees are invested not just in their day-to-day roles, but also in your company’s long-term success. They don’t merely come to do their jobs. They bring innovative ideas and exceed expectations.

In a volatile age where over 40% of millennials and 61% of Gen Z workers are likely to leave a job within two years, creating an engaged workforce is a competitive edge.

So, measuring job satisfaction has a lot of benefits. But how do you go about it?

It’s not as easy as asking your employees if they enjoy working for you. The process of measuring employee satisfaction starts from day one and includes finding out who they are and what their goals are with your company.

But that’s only part of the process. You also need the right tools to make sense of the data and drive strategic decisions.

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How to Measure Employee Satisfaction With New Tools and Tech

Traditionally, taking the pulse of your company was limited to annual surveys and reviews.

But times are changing to reflect a more dynamic, agile workplace. Checking in on employees once a year isn’t a very practical approach if that’s all you do.

Everyone touts the need for real-time insights. Employee satisfaction metrics are no different. The value lies in enabling managers to respond immediately to the currents in your company, rather than waiting for results as used to be the case.

Namely Employee Performance Overview

HR systems like Namely allow users to track performance metrics in real time.

 

Think of your relationship with employees like a relationship with a spouse. Constant communication and check-ins create a healthier, more positive environment, where issues don’t have time to fester under the surface and cause tension.

Continual touchpoints — pulse surveys, conversations with managers and more — also make employees feel heard and paid attention to. And they help managers take action when it matters most.

Fortunately, the tools at your disposal are becoming more advanced. It’s now easier than ever to find out what your employees think, feel and want at any given time. Let’s dive into a few examples.

Conduct Surveys

Surveys are one of the best ways to track employee satisfaction and the culture developed in your office.

But while the process might seem daunting, it doesn’t have to be. It can actually be as simple as a list of 10 questions about how people feel at work and what they’d like to see improve. As long as the questions are structured correctly and don’t contain bias that encourages responses the employer wants to hear, they can be valuable.

Annual surveys have long been the standard. And Gartner data from 2018 found that three in four companies still use that method.

However, the use of formal, company-wide surveys has been steadily decreasing. By 2020, Gartner predicts that annual surveys will only be used 63% of the time, while alternative data sources will climb to 80%.

One way companies now collect employee data is via pulse surveys. The approach is similar to annual surveys but digs into the sentiments of a specific group of people — your sales department, for example.

iSolved Pulse Surveys

Examples of pulse surveys used to gather feedback on different topics.

 

Gartner describes a pulse survey as taking a subset of questions you’d likely find on an annual survey and targeting it at a slice of your company rather than everyone.

Pulse surveys, as the name implies, occur more frequently. They also take much less time to complete since they’re not comprehensive like annual surveys.

Surveying your employees about specific issues and asking for their input is a great way to find the best possible solution. Not to mention, it makes everyone feel heard.

Making surveys anonymous is important to ensure that the results are honest and provide valuable insights. Employees will be more willing to point out problems or voice concerns if their name isn’t attached to their responses.

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Review Employee Performance

Employee performance reviews are an important part of running a business. Without them, it’d be difficult to measure progress and set clear goals for your company.

When used correctly, employee performance reviews provide many benefits.

However, in a 2018 survey by Conference Board, the performance review process earned one of the lowest satisfaction levels from respondents — 32%.

Simply holding performance reviews isn’t enough. You need to conduct them in a way that’s beneficial to employees.

As mentioned, the traditional yearly review isn’t the most effective approach if used alone. Holding regular personal meetings with your employees is one good way to gain insights into workplace morale and general office culture.

It’s also important to get to know your employees individually. Doing so can go a long way towards understanding their common concerns and what solutions might be available.

With a face-to-face meeting, employees feel more valued and can voice their personal opinions about the workplace. This gives you valuable insight and sends the message to employees that you care enough to listen.

Employee performance reviews also help track the company’s overall performance. There are numerous employee performance management solutions that help make the process easier. These solutions offer features such as real-time performance tracking, goal management and self-assessment tools.

BambooHR Employee Performance Chart

This chart is one way to track employee performance across a company.

 

Performance management software gives insight into which employees are the most and least productive. This lets you address low performance to significantly increase overall productivity.

It also allows you to hold more constructive, solution-oriented performance review meetings. Task reassignment, work events and employee development strategies are all great ways to improve employee engagement and keep your workforce happy.

The important thing is to look at employee performance reviews as beneficial to both your organization and employees. The goal should be figuring out how to help each employee become more productive and reach their full potential at your company.

Hold Conversations

Let’s face it: life at the office gets busy.

In-person meetings sound good in theory, but they can be hard to put into practice. That’s why tools like Hyphen exist. Along with polls and surveys, it provides an innovative conversation platform that lets company leaders converse with employees.

Employees can vote on ideas and share thoughts. And leaders have a means for listening to their workers and gaining valuable insights they can act on. More importantly, Hyphen integrates directly with other apps. Conversations take place in the regular flow of activities instead of disrupting work.

Bringing It All Together

Understanding the importance of employee satisfaction and using the platforms available to gather that data is only half the battle. It won’t provide value unless your organization acts on the findings.

For example, if patterns emerge that suggest employees aren’t happy with set work hours, you could consider adding flexible schedules as a benefit.

No matter what the specific situation, gathering feedback isn’t worth the effort unless you take action on it. That’s one reason why it’s important to look for systems that let you continuously gather insights.

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Where to Go From Here

Measuring employee satisfaction helps your business perform at a higher level and retain top talent. It also cultivates an environment where employees can move beyond mere satisfaction to active engagement. Because high job satisfaction doesn’t equal excellent performance, and your goal should be to aim for the latter.

At the same time, the tools used for collecting employee sentiment are evolving. As you search for the right HR solution, we recommend thoroughly researching systems. Check out our free comparison report to kickstart your search and make sure you end up with the capabilities you need.

Understanding what your employees want from a workplace and what makes them perform at their best takes effort. And finding the right tools to support the process takes time.

But the time and effort are well worth it to create a culture that matches your employees’ needs and positions your organization to be successful in today’s competitive landscape.

What steps have you taken to measure employee satisfaction at your company? What are your favorite tools to use? Let us know in the comments!

Zachary TotahHow to Effectively Measure Employee Satisfaction

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