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What Is Employee Satisfaction? - Examples & Factors

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  • 0:01 What Is Employee Satisfaction?
  • 0:38 How Is It Measured?
  • 2:27 Company Impact
  • 3:03 Increasing Satisfaction
  • 4:01 Lesson Summary
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Lesson Transcript
Instructor: Carol Woods

Carol has taught college Finance, Accounting, Management and Business courses and has a MBA in Finance.

In this lesson we will discuss employee satisfaction. Do you know why employers care about satisfaction, and what impact it has on business results? Do you know how to measure it for your workplace? Learn what it is, how to measure it, and how to increase it.

What Is Employee Satisfaction?

happy worker

In human resource terms, employee satisfaction means employees are contented with their work and position. To be contented, they likely enjoy much of their work, they feel management is fair and cares about them, and they are comfortable in their work environment - both with other staffers, and with the resources they have available to complete their jobs.

It ties in closely with employee turnover, since unhappy staffers are more likely to seek positions elsewhere. It is expensive to replace employees, so many HR departments have a goal of keeping employee satisfaction at a high level so turnover stays low.

How Is It Measured?

bar chart

Employee satisfaction can be measured 2 ways: indirectly, by watching trends in employee turnover; and directly, by asking employees about their level of satisfaction via surveys, interviews, and focus groups.

In indirect measurement, management watches the trends in employees leaving the organization, and assumes that satisfaction levels are adequate when turnover levels are at or below industry norms. They may also drill down to watch for specific departments or functions with higher-than-average or higher-than-usual turnover, and implement direct measurement actions in those areas to determine causes for the increase in separations.

Direct measurement methods involve asking employees about their level of satisfaction. For example, an anonymous survey could be mailed or emailed to all employees asking for their level of satisfaction with different aspects of their jobs. Interviews and focus groups might also be conducted, in which staffers are questioned in person.

Surveys and interviews may be conducted by company personnel or outside consultants may be brought in so that employees feel freer to share their opinions, knowing that information will remain anonymous when presented to management.

Questions asked might include:

  • Are they satisfied with their specific jobs and their tasks?
  • Do they feel that they have the support and resources they need to do their best work?
  • Is management providing appropriate direction?
  • Do they think compensation, benefits, and work conditions are adequate?
  • Are they considering leaving the company?

Once the results are in, information will be analyzed, and various breakdowns (such as by department or by type of question) may be reviewed to see if there are specific areas that need to be addressed. This information would then be presented to senior management, along with any specific recommendations for change based on the results.

Company Impact?

The specific impact of job satisfaction can be hard to quantify, but a higher level of employee satisfaction would be expected to result in:

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