How to Measure Employee Satisfaction

Employee giving a rating to their satisfaction regarding their workplace

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 another critical metric that HR uses to gauge a company’s success is employee satisfaction. 

Why is Employee Satisfaction so Important? 

Because if you don’t have satisfied employees, you likely won’t have increased revenue, greater profit margins, and your business can suffer. Finding good talent isn’t easy, so making sure that 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, and the same 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 not the same. 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’re ultimately striving for. Engaged employees might work extra hours on a project, help others outside of their scope of responsibility, and show dedication and enthusiasm in their work. Engaged employees help promote a strong company structure, increase loyalty to the company, and enhance productivity. 

4 Ways to Measure Employee Satisfaction 

Measuring employee satisfaction correctly entails gathering feedback regularly and responding to issues as they arise. Here are 4 ways that you can measure employee satisfaction. 

1. Conduct surveys

A tried and true method to track employee satisfaction is by 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, as in 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 pertinent issues that are important to 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 to employee satisfaction. Because surveys are generally anonymous, the results tend to be honest, which provides valuable insights to you. An employee is much more likely to tell the truth about the problems and concerns they have 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 not aware 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 place to work?
  • 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 the lengthy, traditional satisfaction surveys that were not easy to create or analyze. The eNPS is easy for employees to complete and easy for you to evaluate. The employees are broken down into three categories, promoters, passives, or detractors, based on the response to the first question. 

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 is actually an indicator that the employee is neither happy nor unhappy with their job, but rather feels neutral. Passive employees don’t tend to have a strong opinion about your organization, either good or bad. These are the employees that you should target 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 exactly the detractors don’t like the company, and they can give you some great ideas on how you can improve your organization. 

Once you have the completed 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. 

As an example, if you have 100 employees and 40 are promoters, 30 are passives, and 30 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 over and over. 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 get a better idea of the issue. 

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 an employee is, the less likely they are to leave the company. If you are seeing a high turnover rate in your organization, 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

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. By evaluating and implementing solutions to the results, you 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 wellbeing, and help you retain top talent. Gaining an understanding of 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 as well as helps your organization to become more successful in today’s competitive landscape.

About Pete Newsome

Pete Newsome is the president of 4 Corner Resources, the nationally acclaimed staffing and recruiting firm he founded in 2005. His mission back then was the same as it is today: to do business in a personal way, while building an organization with boundless opportunities for ingenuity and advancement. When not managing 4 Corner’s growth or spending time with his family of six, you can find Pete sharing his sales and business expertise though public speaking, writing, and as the host of the Hire Calling podcast.