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Is your team happy? Learn how to measure employee satisfaction and why

Erin Rupp

Writer & Remote Expert

How happy are your employees? Do they enjoy coming to work? Do they feel like their work is meaningful?

If you aren't sure how to answer these questions — or worse, if you answered no — it's time to take a closer look at employee satisfaction.

Employee satisfaction is a common performance measure, but it's also complicated. Creating a happy workplace begins with understanding how to measure employee satisfaction. Here's what you need to know.

What is employee satisfaction?

Employee satisfaction is a measure of how happy employees are in their workplace. This metric helps employers predict other significant factors, like productivity, turnover, and attendance.

Factors that influence employee satisfaction measurements

Image source: Zippia

In theory, job satisfaction seems simple — you either like your work or night, right? But it's more complicated than that. Research by Zippia shows many factors influence job satisfaction, including how much an employee:

  • Feels respected. 72% of respondents rated respect as the most essential value for employee satisfaction.
  • Views their work as meaningful and fulfilling. For 35% of employees, making a difference and contributing to the greater good is the most significant.
  • Finds compensation fair. Do their careers offer fair wages and advancement opportunities? This is crucial for some employees (20% and 15%, respectively).
  • Maintains a positive work-life balance. Is there enough time for workers to do what they enjoy outside of work? Does their job allow them to balance work and family
  • Embraces the company's culture. According to a recent survey, company culture and mission can impact job satisfaction by as much as 42%.

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Employee satisfaction vs. employee engagement

It's important to note that employee satisfaction and employee engagement are not the same. Satisfaction measures how happy an employee is. Employee engagement measurements show how motivated and invested they are in their work.

While the two factors are similar, it's important to consider them separately. Generally, engaged employees are also satisfied (most people won't do anything extra if they're unhappy). But, happy employees might be okay without engaging. Focusing on one doesn't tell the whole story. 

Why is it important to measure employee satisfaction?

A happy workforce is essential to an organization's success. Research links high levels of employee satisfaction with outcomes like:

  • Increased productivity. Keeping your team satisfied is the key to high performance. Zippia found that happy workers are 13% more effective than unhappy workers.
  • Higher retention and lower turnover. Research shows that job satisfaction improves employee retention. Considering the high costs of turnover, this is a big deal.
  • Enhanced engagement. Research shows job satisfaction can lead to greater employee engagement and performance.

Perhaps most importantly, measuring employee satisfaction helps you identify areas for improvement and track progress over time.

How to measure employee satisfaction

The goal of happy employees is obvious, but how do you measure it? 

Measuring employee satisfaction goes beyond asking your team, "Are you happy at work?" — though that's a great place to start. To make an accurate assessment, you need to select the right targets and ask the right questions.

What do employee satisfaction surveys measure? Here are a few common factors:

  • Compensation and benefits. Do employees feel like their pay is fair? Do they have access to the benefits they need?
  • Workload and hours. Do employees feel like they have a reasonable workload? Do they have a good work/life balance?
  • Autonomy and independence. Do employees feel like they have the freedom to do their jobs the way they want to?
  • Career growth and development. Do employees feel like they're able to advance in their careers? Are they given opportunities to develop new skills?
  • Management and leadership. Do employees feel like their managers are doing a good job? Do they have the support they need to succeed?
  • Work environment. Do employees feel like they have the resources they need to do their jobs? Is the physical work environment comfortable and safe?
  • Company culture. Do employees feel like they fit in with the company culture? Do they feel like they share the company's values?

Choosing which areas to measure will depend on your company's specific needs. The key is selecting the factors that will give you the most insight into your team's unique experiences.

How to gauge employee satisfaction using key performance indicators (KPIs)

A benchmark or standard should guide measurements for accurate results. Using key performance indicators (KPIs) can help you establish clear objectives, set goals, and track your progress. 

Finding the right KPIs for employee satisfaction can be tricky, but several metrics can help. Two common KPIs for employee satisfaction are:

The employee Net Promoter Score (eNPS) as a measurement of employee satisfaction

The eNPS builds off the Net Promoter Score, a standard measure of customer loyalty. The eNPS is a great KPI because it's simple, easy to calculate, and easy to track over time.

The eNPS has only one question: "On a scale of 0 to 10, how likely are you to recommend our company to a friend or family member?" 

Using employee scores, group them by number as Promoters (9-10), Passives (7-8), or Detractors (0-6). Then you can calculate your eNPS as follows:

The final score will range between -100 and 100. What is a good employee satisfaction score? Positive numbers are considered good, and any score over 50 is exceptional.

How to calculate the Employee Satisfaction Index (ESI)

The ESI is like the eNPS but asks about expectations as well. It’s a valuable KPI since it provides an easy way to measure both employee satisfaction and expectations. 

To calculate your company's ESI, ask employees to answer three questions on a scale of 1 to 10:

  • How satisfied are you with your job?
  • Do you think your workplace meets your expectations?
  • Is your workplace close to your ideal job?

Based on this, you can calculate your company's ESI with the following formula:

This results in a score between 1 and 100, with a higher number indicating greater employee satisfaction. 

How do you measure employee satisfaction: the best methods to try

There are many ways to measure employee satisfaction. The best way to know how satisfied your employees are is to ask them. Giving employees a voice is crucial to maintaining a happy and productive workforce. 

Consider how to assess employee satisfaction based on your knowledge of your team. While some prefer face-to-face conversations, others prefer anonymity. Here are some ideas to get you started:

1. Employee surveys

Employee satisfaction surveys are a common method of measuring happiness levels. You can collect data from a large number of employees at once with a minimal amount of effort.

Pros: Surveys are easy to conduct and inexpensive. They also provide a low-pressure way for people to voice their concerns without worrying about what others think.

Cons: Surveys don't always work, though — strategic questions and analysis are essential. They also aren't efficient for obtaining detailed information. 

2. One-on-one meetings

If you want more detailed feedback, consider one-on-one meetings. Sitting down with employees is a great chance to discuss how they feel at work and how you can help them.

Pros: One-to-ones are great for identifying specific concerns. They also allow you to build a rapport with your employees and show you care.

Cons: One-on-ones can be time-consuming, especially to determine employee satisfaction at a large company. And if you aren't careful with your inquiries, it can feel like an interrogation.

3. Observations

Another way to get employee satisfaction feedback is to observe employees at work. You can learn a lot by walking around, seeing what's happening, and chatting.

Pros: Observations are great for getting a firsthand look at what's happening in the workplace. They can also point out issues you might not be aware of.

Cons: Observations can be time-consuming and may not give you the whole picture unless you observe every person and department. It can also be difficult to observe remote teams.

4. Exit interviews

Having a chat with departing employees can be a valuable source of feedback. You can ask them about their positive and negative experiences, why they're leaving, etc.

Pros: Exit interviews are great for getting honest feedback. These employees have nothing to lose, so they're more likely to be truthful.

Cons: These interviews can be emotional and biased depending on the circumstances of the departure.

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5 tools to measure employee satisfaction

If measuring employee satisfaction seems a bit overwhelming, don't worry. There are some great tools to help make the process easier. Here are a few of our favorites:

1. Make surveys easy with Typeform

Price: Starts at 25 USD/mo, free trial available

Difficulty: 0-1

Typeform is an excellent tool for creating and distributing employee surveys. This popular tool has many features such as custom-branded surveys and question branching.

2. Measure employee satisfaction and take action with Gomada

​​Price: Starts free

Difficulty: 0-2

Gomada’s virtual team building platform can increase employee satisfaction by engaging your employees. Using Pulse Surveys, Gomada recommends team building activities based on your group's needs.

3. Make one-on-ones more fun with Officevibe

Price: 0-$, trial available

Difficulty: 1-2

Officevibe simplifies one-on-one meetings by integrating meeting agendas, notes, and follow-ups in one place.. You can also use it for employee surveys, recognition, and more.

4. Reward your team with Awardco

Price: Not provided, usage-based

Difficulty: 2-3

Show your employees you care by rewarding their hard work. With Awardco, you can offer a variety of reward choices, encourage peer recognition, and more.

5. Integrate satisfaction company-wide with BambooHR

Price: Not provided, free trial available

Difficulty: 3-5

BambooHR is an all-in-one human resources (HR) tool built for small to medium businesses. With its focus on people, it makes everything from payroll to employee satisfaction surveys simple.

Happy employees are the key to a happy team

Employee satisfaction is an essential measurement for any company. A happier, more connected team is possible. All you need to do is understand how to measure employee satisfaction and take action.

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