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Strategic Human Resource Metrics: Employee Satisfaction

Strategic Human Resource Metrics: Employee Satisfaction
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  • 0:02 Strategic Human…
  • 0:34 Employee Satisfaction Metrics
  • 4:33 Monitoring Employee…
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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%.

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