Table of contents
  1. Employee Satisfaction vs. Employee Engagement
  2. Why Employee Satisfaction Matters
  3. How To Measure Employee Satisfaction
  4. How To Improve Employee Satisfaction
  5. Conclusion

The level of employee satisfaction within your organization indicates how happy and fulfilled your staff feels in their roles.  Both financial rewards and non-financial rewards can contribute to employee satisfaction. Financial rewards can include pay and benefits. Non-financial rewards can include friendly company culture and having strong relationships with colleagues.

Employee Satisfaction vs. Employee Engagement

The terms ‘employee satisfaction’ and ‘employee engagement’ are often used interchangeably. However, there are important differences between the two.  An engaged employee is dedicated to helping your company achieve its goals and to performing to the best of their ability. A satisfied employee, however, is a person who feels happy and content within the role.  In theory, an employee can be one of these without being the other. An employee may, for instance, feel satisfied with their pay and benefits. However, this same person may not be particularly motivated by, or engaged with, their current role.

Why Employee Satisfaction Matters

All good leaders want their employees to be happy because they value them as human beings. However, there are also business benefits to high employee satisfaction levels.

Employee retention

Training new employees can be extremely expensive. However, you can save time and money if your current employees stay at your company for as long as possible. One way to achieve this is by creating an environment in which colleagues feel valued and happy. With record numbers of employees leaving their roles during the Great Resignation, employee retention is more important than ever.

Increased productivity

It is well-documented that satisfied employees are more likely to go the extra mile. In fact, one study found that happy people are approximately 12% more productive in the workplace.


If an employee feels that you value their hard work, they are more likely to stay loyal to your business. For instance, they will speak highly of your company when talking to others within your industry or to friends and family. Satisfied employees may also recommend your business as a good place to work, which can be extremely helpful with recruitment.

How To Measure Employee Satisfaction

Satisfaction surveys

One of the most common and simplest ways of assessing satisfaction levels is through employee surveys. Often known as pulse surveys, many companies carry these out on an annual basis. However, you could gain more accurate results by conducting these surveys more regularly, such as every three months. Allowing your employees to answer anonymously may help ensure that they are honest in their responses. When writing your questions, try not to ask for any detail that could lead you to identify a particular individual. Some employees may be reluctant to be critical of their role or their managers if they fear they will be identified as being difficult. If you send out satisfaction surveys, it is important that you act on your findings. Otherwise, your employees may believe that there is little point in filling in future surveys, which could be a missed opportunity for your business.

Your Employee Net Promoter Score

The Employee Net Promoter Score (eNPS) is a system that allows you to measure levels of employee satisfaction. It involves asking your employees one question:  On a scale of 1 to 10, how likely are you to recommend your company as a place to work? To gain more information, you can then ask additional questions. You may, for example, ask the reason they have chosen this score or what they would change about their job.

Staff turnover

If a high number of employees suddenly leave your organization, you may have a problem with your satisfaction levels. Should this happen, take an honest look at your business. You can then assess any changes that could have caused employee satisfaction to drop and lead to high turnover.  If you run exit interviews—and this is always a good idea—you can use these to gain constructive feedback from departing employees. Make it clear that these interviews are not about blame, but about finding ways to create a better working environment.

A suggestion box

Although it might sound old-fashioned, introducing an employee suggestion box can be a useful way of measuring satisfaction. It may be helpful to place this in a quiet area of the workplace, where your employees can feel confident that their suggestions can be submitted anonymously. 

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How To Improve Employee Satisfaction

Every employee will have a different idea of what will make them happy in the workplace. However, there are plenty of things you can do that are likely to increase overall satisfaction levels.

Fair compensation and attractive benefits

Fair pay and attractive benefits are key to employee satisfaction. At the very least, you should consider offering a benefit package that includes:

If you are in a position to offer a more generous package, you could consider benefits such as:

  • Free food and drink
  • Wellness packages
  • Subscriptions to membership bodies

Better communication

To feel satisfied, employees need to feel that they are informed about developments in the business or changes to their role. Try to make sure that you regularly communicate important information in an easy-to-understand manner. Effective communication can take two forms. First, your business’s leaders can update your employees as a group. Second, your employees should have regular one-to-one meetings with their line managers. They can use these to discuss any issues specific to their performance and their roles. Note, the same principle applies to bad news about your business, such as a drop in your profits. It is better that your employees hear this directly from you than from another source.

Set realistic goals

If your employees are set targets they can never meet, they are unlikely to feel satisfied in their roles. They may feel that they are failing in their goals and lose confidence in their abilities. In extreme cases, setting unrealistic expectations could cause your employees to suffer from difficulties with their mental health. To help set realistic goals, you should be specific about the result that you would like to achieve from a particular task. If an employee feels that their objective is clear, they will likely feel more confident in their approach. It can also help to explain the criteria by which you will judge whether the goal has been achieved.

Flexible working

The COVID-19 pandemic changed the way people work all over the world. Many employees now expect greater flexibility in when, and where, they work. Allowing employees to work from home or set their own working hours is an effective way to increase satisfaction. Of course, you should only offer flexible working if it makes practical, and financial, sense for your business.

Invest in your employees’ development

By investing in training and development, you can show your employees that you would like them to progress within your organization. Having a sense of purpose can greatly improve your staff’s happiness levels. They may see themselves as having a career, rather than simply a job to pay the bills.

Treat your employees as individuals

All employees will have their own ideas about what is needed for job satisfaction. As a result, there is no one-size-fits-all solution to improving employee satisfaction. While some employees may appreciate a celebration on their birthday, others may find this embarrassing. Tailoring rewards and recognition to each employee will demonstrate that you value them as people with unique personalities. 

Encourage social interaction

If your employees feel a sense of camaraderie, they are more likely to be satisfied in their roles. You might, for example, try organizing social gatherings for public holidays or catering team lunches. If your employees are working from home, you could create social groups on employee communication forums or host team lunches via video conferencing. 

Create a culture of respect

For most people, it is impossible to feel happy in a situation in which they do not feel respected. As a business leader or HR professional, you are responsible for creating the culture in your business. Make it clear that you will not accept any form of discrimination or bullying in the workplace.

Get involved in good causes

For many employees, working in an organization that reflects their values is an important part of job satisfaction.  By setting up charity programs or sustainability initiatives, you can show your employees that your business cares about more than profits. Consider giving your employees paid time off for working on charitable projects or matching donations they make to charity. Before you implement these programs, you should to check that your business can afford to do so.


As well as being good for your team members, employee satisfaction is also good for business. Luckily, there are many ways in which you can measure and improve satisfaction levels. One thing is certain: you are far more likely to achieve satisfaction in the workplace by treating your employees as people, listening to their needs, and responding to their feedback.