HR Mavericks

Eddy’s HR Mavericks Encyclopedia

Employee Satisfaction

Employee satisfaction increases the bottom line and makes your job easier. Let's explore how to make this win/win factor shine at your organization.

What Is Employee Satisfaction?

Employee satisfaction is just what it sounds like—how happy your employees are at work—and includes looking at how to measure and use that information. First, let's focus on why that's important.
Companies with satisfied employees deliver long-run stock returns 2.1% or more above industry averages
Company Culture Statistics

Why Is Employee Satisfaction Important?

Long gone are the days when managers ruled with an iron fist. We now know that ensuring employees are happy and satisfied in their job is vital to the success of any organization. We all want to feel appreciated for our work and, of course, be compensated fairly for that work. When a company has a satisfied and happy workforce, the impact is tremendous.
  • Increased productivity. When you like what you do, you do it better.
  • Sales/revenue increase. Many factors lead to increases or decreases in revenue. But when a company invests in its people, the ROI is seen at the bottom line. Anne M. Mulcahy, former CEO of Xerox, is quoted as saying, “Employees who believe that management is concerned about them as a whole person—not just an employee—are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.”
  • Less turnover and attrition. Employees generally stay at a job they like, avoiding costly turnover and therefore making your job easier.The Society for Human Resource Management (SHRM) reported that on average, it costs a company six to nine months of an employee's salary to replace them.

Factors That Affect Employee Satisfaction

Knowing the importance of employee satisfaction is step one. Being able to identify the contributing factors is step two, and a little more difficult. Let’s take a look at some of those factors.

Compensation and Job Security

First and foremost, let’s remember why anyone works: to be paid! Ensure you are paying your employees a living and equitable wage. Salaries should be reevaluated yearly to ensure you are staying competitive in your industry. Along with compensation, job security is important. Working for an unstable company is worrisome. People’s livelihood depends on their employment, and they need to feel secure in that before they can feel any sort of satisfaction.


Company culture is driven by those leading the company. Do you have the right people in those decision-making roles? Great leaders energize their teams. They allow employees to learn, grow and contribute to the success of the company, leading to their satisfaction.

Growth and Advancement

Work can become demoralizing when you know there is no chance for advancement. Yes, there are people who are content with their current roles, but those who want to grow are going to be your top performers. Take a look at your company’s org chart and ensure there are growth opportunities for all levels.


Imagine that you work hard on a months-long initiative, and when it’s complete, you receive an email or note from your boss thanking you for a job well done and telling you how appreciated you are. Wow, that’s a great feeling! Personal thanks should be supplemented by tangible recognition. Recognition includes promotions, bonuses, and performance rewards such as thank-you gift cards and additional benefits.


Communication is the most important factor in employee satisfaction. Great leaders are not just a signature on a document; they communicate well with their staff. Employees feel seen and valued when leaders take the time to communicate with them. What does great communication in an organization look like? It’s big and small, including frequent town halls, monthly newsletters, and access to leaders.

How to Measure Employee Satisfaction

Now that we know what to evaluate when it comes to satisfaction, how do we measure it? How can employers find out if their workforce is satisfied with the company?

Ask Your Employees

So often, employers try to solve or improve without having a basic understanding of how their employees feel. Here are three common methods for collecting that data. Annual surveys.Asking for feedback regularly shows employees that the company cares. Having an annual employee survey is a great way to measure your employees' satisfaction and compare it to previous years. Make sure you define what you are measuring. This is not something you want to put together in a week and send out. You should consider the following:
  • Why are you conducting a survey? What do you want to know?
  • When will you conduct the survey? Does your company have a busy season? To ensure you get everyone to participate, schedule your annual survey around a “quiet time” in the year.
  • Once you have results, what are you going to share with employees? How will you show them you are listening to their feedback?
Make sure to keep your survey short and simple. Ask straightforward questions and look to keep it no longer than 25-30 minutes. Pulse surveys are a bit different. They are short, frequent surveys sent to teams. They typically only have a handful of questions (four to five at the most). Here are a few sample pulse-survey questions. Answer on a scale of 1-5 with 1=Not at all and 5=Absolutely.
  • This job allows me to learn and grow.
  • My manager provides feedback and makes time for me to ask questions.
  • I generally enjoy the work I do and feel that I contribute to the company’s objectives.
  • I feel valued and seen by my leadership team.
Each pulse survey you send out can be centered on a different theme: career growth, feedback on managers, leadership, and culture, for example. Schedule a quarterly survey to address each topic. Suggestion box. Another way to invite feedback from your employees is the traditional (or virtual) suggestion box. Whether a physical box or an online submission form, employees can submit their suggestions and feedback anytime they want rather than waiting for a survey to be sent. Be sure to actually address the suggestions, perhaps during town halls or all-staff meetings. Otherwise you run the risk of employees finding it an empty gesture.

Referral Program

Employee referral programs are essentially a recruiting tool that can be used to measure employee satisfaction. If people like where they work, they will refer the company to their friends and network. Employers offer a referral bonus to their employees, who recommend potential candidates for an open position. Bonuses are usually paid out after the new hire has been with the company for a specified timeframe. Offering a bonus to the current, referring employee also increases their satisfaction, as they feel that they are contributing to the success of the company and are being rewarded for doing so. Setting up a referral program is a great indication of the happiness of your team. If the referrals come pouring in, you are on the right track.

Exit Interviews

People tend to be honest in exit interviews. At that point, they have nothing to lose. If you are concerned about your company’s satisfaction level, take a look at why people leave and address those issues.

How to Improve Satisfaction at Your Company

Change within an organization can be a slow process, but it's important to start somewhere. Action plans should be put in place following the results of any survey. Too often, company surveys are seen as pointless gestures. Before even sending out your survey, ensure there is dedicated time and intent to act on the results. Review the data immediately. Don’t waste time on pretty, lengthy presentations with graphs and charts detailing the results. Yes, these presentations are important, but they are also time-consuming. Compile the raw data and start small. What is the glaring takeaway from your survey? Are your employees feeling unappreciated? Are they complaining about their managers? Identify a problem you will work on. Companies are realizing that changes need to be made to keep up with what employees want. And what employees want matters: a satisfied, happy, and engaged workforce is a productive one.
Irene Cofone

Irene Cofone

Experienced Human Resources Manager with a demonstrated history of working in the marketing and advertising industry, Irene is a passionate professional always looking to elevate the employee experience for teams. Skilled in Staff Coordination, Operations Management, Employee Engagement, Recruitment, Onboarding and Retention. Strong human resources professional with a Bachelor of Science focused in Professional Studies, Minor in History from St. Francis College.
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Frequently asked questions
Other Related Terms
DISC Personality Assessments
Employee Appreciation Day
Employee Feedback
Employee Net Promoter Score
Employee Recognition
Employee Replacement Costs
Employee Retention
Employee Service Awards
Great Resignation
Job Dissatisfaction
Job Security
Negligent Retention
Stay Interview
Stay Strategy
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