When asked how you measure success at your company, you probably think of things like increased revenue, greater profit margins, and improved productivity. All these metrics are great indicators of how well your business is doing, but employee satisfaction is another critical metric that HR uses to gauge a company’s success.
The Importance of Employee Satisfaction
If you don’t have satisfied employees, you likely won’t have increased revenue or greater profit margins, and your business can suffer. Finding good talent isn’t easy, so ensuring your employees are happy is the best way to retain them. A talented, unhappy employee will be looking for a position with your competition.
In business, the customer always comes first. If you don’t satisfy your customers, you won’t have any. This same principle applies to your organization; only your employees are the customers. You continuously strive to improve the customer experience, which should be true for the employee experience. The bottom line is that greater job satisfaction leads to greater employee engagement.
An important distinction to make here is that employee satisfaction and employee engagement are different. A satisfied employee is not necessarily a high-performing one or one who is engaged with their job. Employee engagement goes beyond employee satisfaction and is what you ultimately strive for. Engaged employees might work extra hours on a project, help others outside their scope of responsibility, and show dedication and enthusiasm. Engaged employees help promote a strong company structure, increase loyalty to the company, and enhance productivity.
10 Ways to Measure Employee Satisfaction
Measuring employee satisfaction correctly entails gathering feedback regularly and responding to issues as they arise. Here are 10 ways to measure employee satisfaction:
1. Conduct surveys
A tried-and-true method to track employee satisfaction is using surveys. The standard has long been to send out the same formal, companywide annual survey to all employees, but this method is on the decline as newer and more effective ways to conduct surveys are on the rise. One such approach is the use of pulse surveys. Instead of sending out the same questions to everyone, pulse surveys target a specific group of people within the organization, such as your sales department or your operations team.
Tailoring a list of 10 to 15 questions about how people in a specific department feel at work and what they’d like to see improve offers you better and more useful feedback. As the name implies, pulse surveys occur more frequently than traditional yearly surveys, giving you more specific data in a more timely manner. This allows you to find possible solutions to important issues for your employees more often.
Surveys are also a great way for every employee to feel like their voice is being heard, which is a critical component of employee satisfaction. Because surveys are generally anonymous, the results tend to be honest, providing valuable insights. An employee is much more likely to tell the truth about their problems and concerns with the company if they know you won’t be able to match them with their responses.
Using multiple-choice questions makes your analysis quicker and easier, but adding some open-ended questions to your surveys allows employees to provide candid, anonymous feedback that can expose unfavorable trends you are unaware of.
2. Employee net promoter score
An Employee Net Promoter Score (eNPS) asks your employees three important questions:
- On a scale of 0 to 10, how likely are you to recommend our company as a workplace?
- What do you like about the company?
- What do you dislike about the company?
The eNPS was created by a researcher from Bain & Company as an alternative to lengthy, traditional satisfaction surveys that were challenging to create or analyze. The eNPS is easy for employees to complete and easy for you to evaluate. Based on their response to the first question, the employees are divided into three categories: promoters, passives, or detractors.
Promoters
Promoters are those employees who respond to the first question with either 9 or 10, which is a good indication that an employee is satisfied. Your promoter employees are strong assets to your company and can give you valuable insights into what is going right within your organization with their responses to question 2. They can also be essential in recruiting new talent. Anonymous surveys indicate that those in leadership positions are more likely to be promoters than employees in other positions. Other promoters tend to be employees who have just started with the company or those who have been with the company for many years.
Passives
Passives respond with a score of 7 or 8, which may seem high but indicates that the employee is neither happy nor unhappy with their job but feels neutral. Passive employees don’t tend to have a strong opinion about your organization, either good or bad. You should target these employees because you have the best chance of turning them into promoters.
Detractors
Detractors are the employees who give the first question a score of 6 or below, which, unfortunately, means that they are not satisfied with their jobs and could be at risk of leaving the company. If they do stay, that might be just as bad as they could be dragging down morale for everyone around them. But detractors are giving you useful information, so their input is as important as that of promoters and passives. This is where the third question on the eNPS form (what do you dislike about our organization?) becomes valuable. You learn why the detractors don’t like the company, and they can give you some great ideas for improving your organization.
Once you have completed the surveys, you can calculate your eNPS by subtracting the percentage of detractors from the percentage of promoters to get a score somewhere between 100 and -100. The passives don’t count for or against your final eNPS.
For example, if you have 100 employees, 40 of whom are promoters, 30 of whom are passives, and 30 of whom are detractors, you would have an eNPS of 10 (40 promoters—30 detractors = 10). Any score above zero is considered positive, so 10 would be a good result. A score between 10 and 30 is considered great, and a score above 40 would be extremely good.
The more often you ask employees these questions, the better reading you’ll have on the health of your organization. You’ll be able to track how your eNPS changes over time and gain insight on how to improve it. Because you’re only asking three questions, employee participation tends to be higher than with long surveys. That translates to better, more comprehensive feedback for you to evaluate and act on. However, you don’t want to send these out too often because employees will get fatigued answering the same questions repeatedly. Usually, twice a year or every quarter are good time frames to use.
3. Rate of absenteeism
Excessive absenteeism in the workplace could indicate several issues within your organization, including poor working conditions, bad leadership, or a lack of work-life balance. It can also be a good indicator of employee dissatisfaction. Absenteeism has a ripple effect on the company as it puts a burden on other employees to get the work done, which causes more stress and job dissatisfaction. Absenteeism is a red flag that you need to address quickly. A good way to do this is by talking with those employees with high absentee rates and finding out directly from them what the reason is. You can also talk with supervisors, managers, and co-workers to better understand the issue.
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4. Employee turnover rate
Job satisfaction is inversely related to employee turnover. Unhappy employees will tend to seek employment elsewhere. Employee turnover is one of the highest costs for an organization. It increases disruption in the workplace, reduces productivity, and negatively affects cohesion among team members. Conversely, the more satisfied employees are, the less likely they are to leave the company. Suppose you are seeing a high turnover rate in your organization. In that case, you must begin working toward fostering an environment where employees develop good relationships, feel challenged in their work, and feel like they matter.
Related: Highly Effective Strategies for Employee Retention
5. One-on-one meetings
Sometimes, there’s no better forum for open and honest communication than a one-on-one meeting between an employee and their manager. One-on-ones can be formal, like a designated meeting with a start and end time to discuss employee satisfaction. They can also be informal, like a casual chat, to check in on the team member’s well-being. Both are effective ways for managers to gauge their employees’ happiness levels while also building trust and maintaining an open line of communication.
6. Employee satisfaction index
The employee satisfaction index, or ESI, is a useful tool for identifying this important organizational metric. Like the net promoter score, it gives a numerical reading of how employees collectively rate their happiness.
An ESI survey asks a series of simple questions, prompting employees to respond on a scale of 1 to 10. Questions might include things like ‘How satisfied are you with your job?’ and ‘How closely does your company align with your ideal workplace? ‘
To calculate your ESI, sum up all scores and divide the total by the highest possible score. Multiply the result by 100 for your ESI.
Here’s an example. Let’s say you ask three questions for a maximum total score of 30. If one employee responds to your three questions with an 8, 9, and 8, the formula will look like this:
(8 + 9 + 8) / 30 * 100 = 83.3
An ESI between 80 and 100 is considered excellent. A score below 50 is concerning and grounds for taking serious steps to improve employee satisfaction.
7. Performance reviews
Annual or quarterly performance reviews are an opportune time to assess a team member’s job satisfaction and, if necessary, discuss it. Pay attention to specific flags, like a decline in productivity or an increase in sick days, that aren’t explained by other factors, as these can indicate lagging satisfaction.
8. Internal promotion rate
Internal promotions are a positive feedback loop regarding employee satisfaction. Employees who feel satisfied with their jobs are likely to strive for promotions. When employees are promoted from within, it encourages feelings of commitment to the organization and job engagement, which further breeds satisfaction. Promoting current employees should be key to your engagement and retention strategies.
Keep tabs on how many internal promotions are made within a given period and how those compare to your total hires. Ideally, promotions should be given preference over outside hires whenever possible.
9. Focus groups
Hold small group discussions to provide employees with a “safe space” to share their honest feelings and experiences and gather useful feedback. Use a neutral moderator, like someone from outside the organization or someone who doesn’t manage anyone within the group, to ensure you receive genuine information.
10. Public reviews
Some big indicators of employee satisfaction are out there in public for the world to see on social media and sites like Glassdoor. Review your company’s page on these sites regularly to monitor for positive feedback and constructive criticism. While it’s true that disgruntled employees are more likely to post negative reviews than happy employees are to post positive ones, public forums are a useful place to identify organizational problems that could be putting employee satisfaction at risk.
Measure Your Company’s Employee Satisfaction For Happier Employees
Measuring employee satisfaction helps you see whether your workers are happy with their jobs or not. If they aren’t happy, it can give you insight as to why. Evaluating and implementing solutions to the results can help boost employee satisfaction and cultivate a positive work environment that promotes employee engagement.
This will help your organization perform at a higher level, improve overall employee health and well-being, and help you retain top talent. Understanding what your employees want from their workplace and what makes them perform at their best doesn’t happen automatically. It takes effort on your part, and by utilizing the right tools, you can create a company culture that fits your employees’ needs and helps your organization to become more successful in today’s competitive landscape.
