Article | 9 min read

What is employee satisfaction? +10 ways to improve it

Employee satisfaction is the goal of every company. But how do you know if you’re fostering and sustaining it? Here’s what truly matters to employees.

By Peter Alig, Contributing Writer

Published July 19, 2022
Last updated August 4, 2022

In November 2021, U.S. workers left their jobs at the highest rate in 20 years, according to Pew Research. The main reasons? Low pay, few opportunities for advancement, and feeling disrespected at work.

But various factors contribute to employee satisfaction (or a lack thereof). To create a happy workforce, senior leadership needs to talk to team members to understand their unique employee experience and identify areas of improvement.

And, of course, they need to understand the basics of employee satisfaction.

What is employee satisfaction?

Employee satisfaction is the level of contentment team members feel for their roles and their organization. Job satisfaction and workplace satisfaction mean the same thing.

Employee satisfaction vs. employee engagement

Employee satisfaction describes how happy staff members are with their jobs, while employee engagement refers to their level of interest in their work.

Employee engagement is a sign of employee satisfaction, but satisfied employees are not always engaged with their work. A satisfied employee may cheerfully clock in, do the bare minimum, and clock out. An engaged employee is highly self-motivated and wants to go above and beyond what is expected of them on the job.

Why is employee satisfaction important?

When you know how to increase employee satisfaction, you can create a workplace that thrives. Team members enjoy doing their jobs, so they’re more likely to get their work done and stay at your company. Having happier employees often means you’ll have happier customers.

In November 2021, U.S. workers left their jobs at the highest rate in 20 years.

  • Employee retention

    Satisfied employees stick around longer. After 12 years of employee satisfaction research, the iOpener Institute concluded that the happiest workers stay at their companies twice as long as their least happy colleagues.

    Employee turnover is a huge business expense. The U.S. Small Business Administration estimates that the cost of replacing an employee is about 1.25 to 1.4 times the salary.

    Workers want their organizations to give them reasons to stay, but more than half say their employers don’t care enough about keeping them. According to Gallup, 52 percent of exiting employees say that their manager or organization could have prevented their decision to leave by focusing on their satisfaction.

  • Customer satisfaction

    Happy employees bring cheerfulness and enthusiasm to customer interactions. This attitude puts customers at ease and encourages them to build a relationship with your brand.

    A positive customer experience pays off, too. According to an IDC survey, 85 percent of business leaders agree that “an improved employee experience and higher employee engagement translate to a better customer experience, higher customer satisfaction, and higher revenue for their organization.”

10 best practices to improve employee satisfaction

Best practices to improve employee satisfaction, writing on notepad

Companies with a highly satisfied workforce focus on more than making day-to-day tasks more enjoyable. They also focus on understanding employees’ goals and aspirations.

1. Involve employees in decision-making

Before implementing a policy that impacts workers’ daily routines or tasks, give them a voice by involving them in the decision-making process. According to Harvard Business School, doing so will show staff that you trust and value their opinion, which is key to building employee engagement.

Department leaders can gather their team members for strategy sessions, too. Lay out the objectives for the month or quarter, and let employees discuss how to achieve them. Schedule weekly or monthly check-ins to learn how well they’re progressing toward their goals.

2. Create career development roadmaps

When employees understand how to progress from their current position to more senior roles, they feel a sense of purpose—and increased satisfaction.

In a recent study by the Robert Walters Group, 69 percent of millennials said career progression keeps them engaged at work.

Take your call center, for example. Create a document that lists the competencies, output, compensation ranges, and values expected of senior call center agents, supervisors, and managers. Assign new agents mentors from senior staff to answer role-specific questions.

3. Support continuous learning opportunities

A roadmap increases satisfaction. But without the tools needed to move along that path, the satisfaction evaporates.

For many professionals—especially young ones—education is critical to their progression. According to Statista, 47 percent of Gen Z believe workplace learning can lead to new opportunities in their company.

Make sure to assess the quality of those learning opportunities by checking in with employees. Whenever a staff member completes an existing training, send them a quick satisfaction survey where they can rate the experience. During your team check-ins, ask them if they’d like to see other trainings added to the offerings.

4. Provide feedback regularly

Employees don’t want to wait until their annual review to hear input from their manager. Gallup data shows that when employees “strongly agree” they received “meaningful feedback” in the past week, they were nearly four times more likely to feel engaged than their colleagues who didn’t receive feedback.

Ask managers to schedule weekly 30-minute meetings with each direct report. These meetings provide opportunities for managers to speak with team members about strengths and growth areas, enabling employees to create an improvement plan.

5. Offer competitive pay and perks

According to a Payscale survey, only 53 percent of companies are confident in the effectiveness of their total compensation package to attract and retain talent.

One way to gain confidence is to be transparent about how you arrive at your pay rates, such as consulting national salary surveys for various roles. If you offer below-market rates because of generous benefits, make that clear to prospective and current employees.

6. Define the workplace culture

Satisfied employees know how to do their jobs well, but they also probably know why their work matters. A shared company culture or vision gives meaning to a worker’s day-to-day tasks.

According to Gallup, “Only four in ten U.S. employees strongly agree that the mission or purpose of their organization makes them feel their job is important.”

Whatever your company’s “greater good,” put it in writing and tell employees how to uphold it as they engage with customers.

7. Celebrate employee milestones

While you should always recognize top performers, find ways to show appreciation for your entire team and their hard work. Harvard Business Review notes, “Awards can be seen as an elite opportunity for a chosen few—and leave the majority of the workforce feeling left out and overlooked.”

Commemorate all employees’ milestones, like birthdays and work anniversaries, to make them feel appreciated. Celebrations can be as simple as a team lunch or a batch of cookies.

8. Provide opportunities for social interaction

Set aside time for employees to get to know one another—team connectedness boosts everyone’s happiness at work. According to Wildgoose’s 2021 Workplace Friendship & Happiness Survey, 57 percent of employees say that having a best friend at work makes their job more enjoyable, and 22 percent claim it makes them more productive.

Try scheduling a team-building retreat twice per year. These retreats not only foster teamwork but also give employees an outlet for social interaction.

9. Encourage work-life balance

Employees without work-life balance tend to bring stress to the workplace, which lowers job satisfaction. A study by the IBM Institute for Business Value found that 51 percent of employees consider work-life balance the most critical organizational attribute for engagement.

Work-life balance includes everything from being able to work from home to parental leave policies. Start polling employees to learn what work-life balance looks like to them, then implement initiatives that align with your company culture and business goals.

Say unlimited PTO is the most frequent response to your poll, but it isn’t possible for your organization. Consider a compromise by offering employees an additional week of PTO or a short sabbatical after a specific tenure.

10. Set up flexible work schedules

Since the pandemic, workers have become increasingly vocal about what they want their schedule to look like. A recent McKinsey survey revealed that 52 percent of employees prefer more flexible working models, which include both hybrid and remote work.

Flexible scheduling only leads to satisfaction if every team member feels like they have access to the same knowledge and receive the same treatment regardless of their exact working hours. Make sure productivity and communication standards are identical across roles.

Employee Experience Trends Report

Learn how companies in 21 countries are harnessing the collective power of their people to get ahead.

How to measure employee job satisfaction

How to measure employee job satisfaction, measuring tools

To get the most accurate read on your employee satisfaction levels, use multiple measurement techniques.

  • Employee satisfaction surveys

    Use employee satisfaction surveys to discover what staff members like or dislike about working at your company. Use a mix of quantitative and qualitative questions so the surveys are easy to fill out but still informative for your HR department.

    A quantitative question might ask, “How satisfied are you with the feedback you receive at work?” and prompt employees to rank their satisfaction on a scale of 1 (very dissatisfied) to 5 (very satisfied). Once all the surveys are submitted, divide the sum of positive responses (responses from 4–5) by the total number of responses collected. Then, multiply the result by 100. The percentage represents your satisfied employees. Compare the scores over time to see if satisfaction improves.

    Also ask qualitative questions, such as: “What do you like (and dislike) most about our feedback system?” This allows respondents to elaborate on their ratings and tell you exactly what needs improving.

  • Employee Net Promoter Score® (eNPS®)

    Employee Net Promoter Score® is a simple metric that asks a single question: How likely are you to recommend this company to others seeking employment? Recipients respond on a scale from 1 (extremely unlikely) to 5 (extremely likely).

    eNPS® gauges how loyal your workers are to your organization, which is an indicator of job satisfaction.

    To calculate eNPS®, divide responses into three groups—promoters (those who answered 4 or 5), passives (those who answered 3), and detractors (those who answered 2 or 1)—and use this formula:

    eNPS® formula

    You’ll get a number between -100 and 100. A score higher than zero means the overall sentiment is positive. According to a Nailted survey, tech companies have an average eNPS® score of 35.

Workplace satisfaction is about more than employee well-being

Former Campbell Soup CEO Doug Conant famously said, “To win in the marketplace, you must first win in the workplace.” Winning in the workplace means creating satisfied and engaged employees who delight customers and help boost your bottom line.

To grow and measure employee satisfaction, invest in software like Zendesk for Work. This tool enables you to automate IT and HR workflows, tap into your team’s expertise, and keep an eye on sentiment trends.

When coupled with the right workplace initiatives, the right tools empower you to enhance the employee experience—and improve employee satisfaction in the process.

Net Promoter, Net Promoter Score, and NPS are trademarks of NICE Satmetrix, Inc., Bain & Company, Inc., and Fred Reichheld.

Employee Experience Trends Report

Learn how companies in 21 countries are harnessing the collective power of their people to get ahead.

Employee Experience Trends Report

Learn how companies in 21 countries are harnessing the collective power of their people to get ahead.

Read the free report