Strategic Human Resource Metrics: Employee Satisfaction

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Strategic Human Resource Metrics: Production & Sales

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
Your next lesson will play in 10 seconds
  • 0:02 Strategic Human…
  • 0:34 Employee Satisfaction Metrics
  • 4:33 Monitoring Employee…
  • 5:33 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Speed Speed Audio mode
Lesson Transcript
Instructor: Noel Ransom

Noel has taught college Accounting and a host of other related topics and has a dual Master's Degree in Accounting/Finance. She is currently working on her Doctoral Degree.

We will focus on the various measurements human resource managers and leaders can use to determine employee satisfaction within an organization. Some of the measurements the lesson will focus on include employee satisfaction with development and engagement or satisfaction rating.

Strategic Human Resource Metrics

Frank wants to measure employee satisfaction within his firm, and he needs to determine the feelings and perceptions of the employees working at his company. Frank is the owner of a hardware store, and the store has had great profits each year, but lately, Frank feels as if his employees are not as motivated as they used to be in the past. Frank values his employees, so he needs to understand how they view their roles at the hardware store. Frank investigates the various employee satisfaction metrics that he can use to get answers to some of his questions about his employees.

Employee Satisfaction Metrics

Some of the metrics Frank will use to determine employee satisfaction are employee satisfaction index, manager quality index, voluntary turnover, employee productivity index, and unscheduled absence rate.

The employee satisfaction index is a measurement of how happy or pleased an employee is with their current job. The employee satisfaction index will help Frank determine if a relationship exists between employee satisfaction feedback and an employee's desire to voluntary leave the company. The employee satisfaction index is based on a series of three survey questions answered by the employee that include how the employee feels about the company. The questions are rated on a scale from 1 to 10 (1 being the worst value, and 10 being the most favorable value). The formula for the index is:

(The total value of the three questions / 3) - 1 / 9 * 100

Frank collects the survey answers, and the total of all of the survey answers is 25. Using the formula, Frank calculates the employee index rate as (25/3)-1/9 *100 = 81. The higher the number, the better employee satisfaction rating.

Manager quality index measures employee satisfaction with their managers. Managers measure employee satisfaction with their managers through the use of surveys. Each survey can contain different types of questions depending on what management wants to discover about the perceptions of their employees. As with the employee satisfaction index, the scores from the manager quality index can be totaled and averaged by the number of questions. The higher the score, the greater the satisfaction of employees with their managers.

The engagement rating measures employees' commitment to their jobs. Employee engagement is usually measured by a series of questions within an employee survey. The formula for the engagement rating is the total number of employees who responded positively to the survey divided by the total number of employees who participated in the survey times 100. For example, Frank measures his employees' engagement and the total number of employees who positively responded to the survey is 7 divided by the total number of employees who participated in the survey, which is 11, * 100. Therefore, the total survey results indicate that Frank's employee engagement rating is 63%. At least more than half of his team is engaged based on the survey results, but Frank would like this rating to be higher than 63%.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account