How to Measure Employee Satisfaction (+ 6 Ways to Improve It)

Today’s workers are clear about what they want from their jobs, and they don’t think twice about moving to another company if they’re dissatisfied at work. This has been evident from the high quitting rate over the last few years—known as the “Great Resignation.” 

It’s vital to understand what keeps your employees happy and fulfilled at work if you want them to stay long-term. But employee priorities have changed considerably over the last few years, so you might be confused about how to gauge and improve employee satisfaction at your business.

In this guide, we’ll show you how to measure employee satisfaction in different ways. We’ll also share 6 of our most effective tips to improve satisfaction levels and stay aligned with your workers’ needs.

What Is Employee Satisfaction?

Employee satisfaction refers to the level of contentment, happiness, and fulfillment employees feel in their jobs. This includes how they feel in their individual roles, teams, and as part of the company. 

Specifically, employee satisfaction levels are determined by how happy workers are with their: 

• Compensation: Their fixed salary, hourly rates, overtime rates, and bonuses. 

• Benefits: Includes monetary benefits like health insurance, retirement benefits, etc., and benefits that carry a cost the business must cover, such as paid time off (PTO). However, benefits can also cover non-monetary benefits like flexible working arrangements and more. 

• Support and resources: The extent to which workers know their goals and have the support and resources they need to do their jobs. 

• Working relationships: Employees’ relationships with their superiors and peers.

• Career progression: Opportunities employees receive to grow and progress within the company. 

• Work-life balance and well-being: Workers’ stress levels and company work-life balance initiatives. 

• Health and safety: Whether job conditions are physically safe for workers. This also covers employee safety from harassment and discrimination. 

• Alignment with company values: The extent to which the company’s mission and values match employees’ own values. 

The Difference Between Employee Satisfaction and Employee Engagement

“Employee satisfaction” and “employee engagement” are often used interchangeably, but they are subtly different. 

Employee satisfaction refers to the level of contentment workers feel in their jobs and the company overall. It looks at their satisfaction with pay, growth opportunities, job conditions, working relationships, and more. It’s closely tied to their likelihood of sticking with the company.

Employee engagement refers to how motivated and committed workers feel in their roles. This can be driven by factors such as recognition, feedback, training, and so on. Engaged employees are likely to be more productive and go above and beyond for company success. 

While employee satisfaction and engagement are closely related, each can exist without the other. Consider a worker who’s satisfied at work but doesn’t go the extra mile when it comes to performance.

This is known as “quiet quitting” since the employee still retains their job but has silently checked out from their work and company goals. It’s becoming an increasingly common phenomenon in the workplace. 

Conversely, workers can be engaged and driven to excel at work, but they may not be happy with factors such as their pay or career advancement opportunities. This puts companies at risk of losing their best talent and further emphasizes the importance of employee satisfaction. 

Why Employee Satisfaction is Important

Having a satisfied workforce helps you:

Retain your employees

McKinsey has found that the voluntary quit rate has gone up by 25% during the years following the pandemic. Hiring new employees is both costly and time-consuming, and it’s now more important than ever to do everything you can to retain your talent. 

Keeping your team happy and content with their jobs and working conditions will help reduce turnover. It’ll also keep your workforce and operations stable and keep hiring costs to a minimum. 

Attract new talent 

The US job market is currently facing a talent shortage, with 77% of employers struggling to fill in roles. Improving pay, benefits, and growth opportunities can both keep your current employees satisfied and give you an edge when it comes to attracting talent. 

Similarly, satisfied employees are more likely to leave good reviews for your company on social media or on websites like Glassdoor. This can also contribute to more candidates and applications for your company.

Strengthen your reputation with customers 

Satisfied employees are less likely to leave, keeping your business operations running seamlessly. You can deliver quality services to your customers consistently and build a strong reputation in the market. 

In addition to this, satisfied workers are also more helpful and proactive in managing customer relationships. This way, you’re retaining both your employees and your top customers. 

Increase employee engagement and productivity

Though employee satisfaction and engagement are different, one can still impact the other. Employees who are satisfied and happy with their jobs and companies are more likely to be engaged as well. 

Engaged employees are typically better performers. In fact, one study found that happy employees were 12% more productive at work. 

9 Ways to Measure Employee Satisfaction

An employee satisfaction survey is a great way to get direct feedback from workers on how they’re feeling about their jobs and the company. You can include questions that directly measure satisfaction levels. For example:

Do you feel you have the support and resources required to do your job?

• Yes
• No

To what extent are you satisfied with the career growth opportunities provided to you? 

• Very satisfied 
• Satisfied 
• Neutral 
• Dissatisfied 
• Very dissatisfied

You can also add questions that are specific to satisfaction initiatives in your company. This makes it easier to test the effectiveness of your strategy and refine it accordingly. For instance: 

Are you satisfied with our new childcare benefits policy? 

• Yes
• No
• Not applicable

We recommend using a mix of rating scales, multiple-choice, and open-ended questions. This way, you can identify trends but also get some additional context when you’re analyzing results. 

Use simple language and a readable font—i.e., Arial or another sans serif font in size 12—to ensure that questions are easy to understand. 

Additionally, clearly explain how employees are expected to answer questions—for example, what rating scale numbers mean. This way, there’s no room for misinterpretation when workers are reading questions. 

Anonymizing surveys also helps you gather honest feedback from workers. 

Once you’ve gathered responses, you can analyze results across workers, teams, locations, or departments. Using graphs and charts is also a great way to spot any emerging themes or trends. 

An employee net promoter score (eNPS) is based on the scores workers give you in response to a single question:

How likely are you to recommend this company as a great place to work?

1- Very unlikely

2 – Unlikely

3 – Neutral

4 – Likely

5 – Very likely

This question helps you ‌measure workers’ happiness and loyalty to the company.

Calculating your eNPS

Respondents who pick 4 or 5 are called “promoters.” Those who pick 3 are “neutral,” and those who choose 1 or 2 are known as “detractors.”

The eNPS is calculated using the following formula:

[(Number of promoters / Total responses) – (Number of detractors / Total responses)] x 100

For example:

[(80/150) – (20/150)] x 100 = 40

Interpreting the results

You will get a score that lies between -100 and 100. 

A score above 0 indicates that ‌overall satisfaction is positive. Higher scores indicate greater satisfaction and loyalty toward the company. Negative scores indicate that the overall sentiment is negative and that your employees don’t think your company is a great place to work. 

An employee satisfaction index (ESI) is another measure of employee satisfaction levels at work. It’s usually calculated using the results of a custom employee survey created specifically for this purpose. 

To determine your ESI, create a survey containing only a few questions that best cover work satisfaction at your company. Use the same rating scale for all questions. 

For example, you could ask employees the 3 questions below:

1. To what extent are you satisfied with your salary? 

• Very satisfied 
• Satisfied 
• Neutral 
• Dissatisfied 
• Very dissatisfied

2. To what extent are you satisfied with the opportunity for flexible working?

• Very satisfied 
• Satisfied 
• Neutral 
• Dissatisfied 
• Very dissatisfied

3. To what extent are you satisfied with the career opportunities in the company? 

• Very satisfied 
• Satisfied 
• Neutral 
• Dissatisfied 
• Very dissatisfied

Assigning weights

You then assign a percentage weight to each question based on how important they are to your employees. You could do this by seeking input from a small group of workers themselves or your HR team. If you’re unsure, you could assign an equal weight to each question as well. 

The total weight for all questions should add up to 100%. For instance: 

• Salary: 50% (= 0.5)
• Flexibility: 30% (= 0.3)
• Career growth: 20% (= 0.2)

Calculating your ESI

Once you have the results for each question on the survey, you can use the below formula to find your ESI:

(Average score Q1 x Weight) + (Average score Q2 x Weight) + (Average score Q3 x Weight)

For example:

If you received an average score of 3.2, 2.5, and 4.1 for questions 1, 2, and 3, respectively, your ESI would be: 

(3.2 x 0.5) + (2.5 x 0.3) + (4.1 x 0.2) = 3.17

Interpreting the results

Your ESI will be anywhere between 1 and 5. The higher the score, the more satisfied your employees are at work. 

This method helps identify what’s specifically working well and what isn’t. Plus, you can view these results in the context of what’s important to your workers since you’re assigning weights to the questions. These responses leave you with strong, actionable insights. 

One of the most robust ways of measuring employee satisfaction is to look at how many workers leave your company within a specific period of time. This is called your turnover rate, and studies have shown that the less satisfied employees are, the more likely they are to leave. 

Calculating your turnover rate

You can calculate turnover using the below formula:

(Number of workers who left the company during a specific time period / Total number of workers in the company during the specific time period) x 100

For example:

(5 employees who left in 1 year / 150 employees at the company during that year) x 100 = 3.33%

Interpreting the results

High turnover rates indicate lower satisfaction levels in your company. However, there’s no single rate that serves as an ideal for all companies, as turnover rates vary wildly across industries.

Remember to benchmark your turnover rate to the industry standard. This is because satisfaction levels could be influenced by factors not specific to your company, such as the nature of the work. 

Look at tardiness and absence rates at work as another possible indicator of dissatisfaction at work. Employees who are unhappy with their jobs are more likely to avoid time spent at work by coming in late or skipping work regularly. 

Calculating your lateness and absence rates

Absence rates are calculated as:

(Number of days absent / Total number of days available for work) x 100

Lateness rates are calculated as:

(Number of days late / Total number of days worked) x 100

You can calculate absence and lateness rates for any time period you want—for example, monthly absence rate or yearly lateness rate.

Interpreting the results

Higher rates indicate employee dissatisfaction at work. Speak to workers who are consistently late or absent to understand more about why this is happening. This way, you can identify whether the underlying factors are linked to low satisfaction or low engagement levels.

Organize one-on-one interviews or focus groups with team members and ask them for feedback on the overall company culture or specific business initiatives. For example, ask them about the company’s wellness initiatives—how they feel about them, and if they have any suggestions. 

Another important way to get workers’ honest opinions about the company is to conduct exit interviews. While insights from an exit interview can rarely be used to retain that employee, you can use them to improve the employee experience for remaining team members. 

Suggestion boxes are a great way to gather honest feedback on the company. Workers are likely to be more open about their concerns when sharing suggestions anonymously than in an interview that identifies them. 

Some companies set up an “ask me anything” channel on team chats. These also allow users to ask questions or make suggestions anonymously. 
Exercise caution when using anonymous employee suggestions. You may find yourself at the receiving end of unreasonable suggestions since workers can’t be identified. It’s not possible to act on every suggestion, so prioritize those that align with your strategy.

Another way to gauge employee satisfaction levels is to look at what reviews workers leave for your company on social media and websites like Glassdoor. 

It’s more common to see reviews from those who have left the company, but you might see opinions from your existing workers as well. 

Lower ratings and poor reviews indicate that there could be some issues with your company culture and working practices. 

Finally, simply observing your workers can help give you more insight into their satisfaction levels. You can assess their moods and attitudes at work, quality of work and productivity levels, and so on. Look out for anomalies—e.g., more errors at work or team conflicts—to identify and address areas of concern. 

6 Ways to Improve Employee Satisfaction

Stay connected with your employees

Conducting an occasional employee survey is important to identify deeper employee satisfaction themes. But staying connected with employees regularly lets you spot and address emerging issues promptly before they escalate. 

Conduct regular one-to-one or group check-ins with your employees—either in person or through your work chat app. This is a great way to gather feedback in real time and make small, continuous improvements to employee satisfaction levels. 
Company events—held in person or virtually—are another way to keep workers connected, even across multiple locations. This helps strengthen team spirit which contributes to overall satisfaction levels.

Offer competitive pay and benefits 

With ‌rising costs of living, competitive salaries and hourly rates are a great way to keep your workers satisfied. Consider paying slightly above the market if your budget permits it. 

For companies that can’t go higher in pay, consider offering alternative perks and benefits. You could, for instance, provide good healthcare and/or retirement benefits. 

Moreover, today’s workers place a high value on non-monetary benefits. PTO, mental health days, and flexible working arrangements help provide them with a better work-life balance. These benefits can give you a competitive edge in the job market and help increase employee satisfaction in your team. 

Set goals and provide adequate support and resources

Employees are more satisfied with their jobs when they know what needs to be done. Set SMART goals for your workers. They should be specific, measurable, achievable, relevant, and time-bound.

For example, a goal for a salesperson might be to increase sales by 15% in the next 3 months. Track employees’ progress against these goals and provide consistent feedback. 

Additionally, ensure workers have the necessary support and resources to do their jobs. For instance, if a team is understaffed or lacks appropriate training, they’re less likely to do a good job. This can lead to poor morale and low satisfaction at work. 

Offer good career progression opportunities 

Help your workers grow their careers within your company so they don’t seek job satisfaction elsewhere. You can do this by providing them with professional development opportunities, mentoring, and training. 

Sometimes, dissatisfaction comes from boredom or workers feeling that their skills aren’t being used to their full potential. In these cases, consider moving workers to a different role, promoting horizontal growth. 

Ensure safe and healthy working conditions

Workers who don’t feel safe in their working environment are likely to be dissatisfied. Conduct regular safety checks—especially if your business operates with heavy machinery and specialized tools, or at job sites that can pose dangers to workers. 

You can also provide employees with onsite health check-ups if it fits your budget. 
A safe working environment isn’t limited to keeping employees physically safe. Ensure that your company also has clear policies on harassment, bullying, and discrimination. Make your policies easily accessible to workers, such as through a digital employee handbook, so they know how to report any behavior that threatens their mental or physical safety. 

Use specialized software like Connecteam

As the importance of employee satisfaction continues to be recognized, there’s a growing number of software solutions dedicated to measuring and increasing satisfaction levels. And Connecteam is the best employee satisfaction software out there!

With Connecteam you can:

Measure employee satisfaction levels with surveys and time and attendance reporting

Connecteam lets you create and publish surveys and analyze results. You can use one of the ready templates or create custom surveys from scratch. Connecteam will send workers auto-reminders to complete their surveys to help maximize participation. 

Results can also be anonymized to help you gather honest responses. This makes it much easier to conduct regular employee satisfaction surveys or run shorter pulse surveys to calculate your eNPS or ESI scores. 

Additionally, you can also use Connecteam’s live polls to gather instant feedback from employees.

Furthermore, Connecteam’s automated timesheets and digital reports can help you track workers’ time and attendance so you can identify workers who are consistently late or absent.

Set goals and provide support using project and task management tools

With Connecteam, you can create and assign tasks and projects to workers. This is a great way to set goals and tasks for your employees. You can track progress against these goals and identify any workers who require additional support. 

Communication tools help you stay connected with employees from anywhere

Connecteam has built-in communications tools that are invaluable when it comes to connecting with your team. 

Use the in-app chat to converse with workers in real time, in one-on-one or group settings, and share important announcements company-wide using the updates feature. You can also use these tools for regular check-ins and feedback sessions with your workers. 

These tools create a sense of community in your company and keep workers involved in business operations and decisions regardless of their location. 

Custom forms and built-in knowledge base help keep your workplace healthy and safe 

Connecteam lets workers complete custom forms—such as safety checks, incident reports, and more—that you can track in real time. This way, you can always ensure workers’ health and safety and address any urgent issues immediately. 

The employee directory is also useful in case you need to contact a worker or their emergency contact in unforeseen situations. 

Additionally, with Connecteam’s knowledge base feature, employees can access safety manuals at their fingertips. They can also view and download the employee handbook and discrimination and harassment policies so they always know their rights at work and how to take action if they feel unsafe. 

Conclusion

Satisfied workers are more likely to stay with you long-term, promote your company in the job market, and go the extra mile to deliver quality work. That’s why it’s important to measure satisfaction levels in your company and take active steps to improve it.

Surveys are an effective way to measure satisfaction levels and can also help you calculate your eNPS and ESI scores. You should also track lateness, absenteeism, and turnover rates, as these all reflect employee dissatisfaction.

Increase satisfaction levels by staying connected with your workforce and gathering regular feedback. Good pay, benefits, growth opportunities, and a safe working environment also make workers feel valued.

Finally, software like Connecteam offers many powerful tools to help measure and improve employee satisfaction levels.

FAQs

What tool measures job satisfaction?

Connecteam is the best tool to measure job satisfaction. It offers features to run employee satisfaction surveys within minutes. You can also use its live polls to collect real-time votes from workers from anywhere. In addition, Connecteam lets you track lateness and absenteeism rates, which correlate with employee dissatisfaction. 

What are the 5 major sources of work satisfaction?

The 5 major sources of work satisfaction are:

1. Pay and company benefits 
2. Working relationships with managers and peers 
3. Resources and support required for the job 
4. Career progression opportunities 
5. Safe and healthy job conditions

You can improve all these factors using an all-in-one employee management app like Connecteam.