Article

November 7, 2024

How to measure employee satisfaction: Best methods and key metrics to track

Team LumApps

6 minute read

Why is Measuring Employee Satisfaction Important?

Business owners have all heard the old saying, "The customer is always right." This generally means that customers and their needs must be satisfied.

The same principle extends to the company's employees since they are also the company's customers. If employees aren't satisfied with some aspect of their working conditions, their pay or benefits package, or the training they receive, they are more likely to seek a job elsewhere.

Importance of Measuring Employee Satisfaction

Measuring employee satisfaction accurately shows how your employees feel about the company and their work. This information can be used to improve the following:

Productivity

Dissatisfied employees will put in a different level of effort on the job than those who feel satisfied. Satisfied employees are likely to be twice as productive as compared to dissatisfied employees.

Employee Retention

Retaining employees is challenging if they aren't happy. Satisfied employees are much less likely to actively look for another job and leave for a different employment opportunity.

Company Culture

Dissatisfied employees can create a toxic atmosphere. Their negative attitude can impact how other employees see the company and behave at work. Satisfied employees are more supportive of their coworkers and more enthusiastic about the work environment.

Recommended article: Top 10 Ways to Improve Employee Satisfaction

Employee Engagement

Time to start or overhaul an engagement strategy? Capitalize on Employee Engagement Opportunities.

6 Methods for Measuring Employee Satisfaction

Some employers think all is well if they never get negative employee comments. This can be a mistake. If employees never speak up about their concerns, it may indicate they don't feel comfortable enough to be honest.

Asking an employee to step into a manager's office to answer questions about whether they are satisfied with their job is likely to elicit a false response. It puts the employee on the spot. An employee may be concerned that if they tell the truth their job may be in jeopardy - even if the manager says that their responses won't impact their job duties, income, or consideration for future opportunities.

You can use the following methods to measure employee satisfaction:

1. Employee Satisfaction Surveys

Asking employees to complete a satisfaction survey is a very effective way to measure employee satisfaction. It provides a baseline employee satisfaction measurement.

The key to getting honest answers from employees is to make the survey anonymous. Employees are wary about opening up to their employers. Anonymous feedback is much more likely to be honest. This type of survey helps to assure employees that their voices are being heard by management.

Multiple-choice questions can make measuring employee satisfaction faster and easier. Include some open-ended questions that will allow employees to share their thoughts about job satisfaction.

Instead of sending the same job satisfaction survey to everyone in the company, use pulse surveys. The work environment is different for warehouse employees than for those who work in an administrative capacity. A pulse survey focuses on a specific group of people. For example, you could send a survey with one set of questions to the warehouse staff and another to the administrative team.

Google Forms are easy to use when sending employee satisfaction surveys. For a more specialized program, choose software like OfficeVibe.

For more information on enhancing employee satisfaction and improving the overall employee experience, visit our dedicated page on employee experience.

2. One-on-One Meetings

One-on-one meetings that put employees on the spot are less reliable than conducting anonymous surveys for measuring employee job satisfaction. Instead, schedule individual meetings between employees and managers regularly (weekly, biweekly, or monthly). These meetings can be called coaching sessions if such a term will make employees feel more comfortable. During the meetings, discuss the following:

How the employee currently
How well the employee is progressing in their career goals
The employee's job performance
Whether any obstacles are preventing the employee from reaching their goals

Some follow-up questions could include:

What types of things keep you inspired and engaged while on the job?
What tasks or activities would you like to spend more time performing?
Do you have access to all the resources required to complete your tasks?
If you could make any changes to your job, what would they be?
Do you have any concerns about your job or career opportunities?
Are your employment expectations realistic?
Are there any things that the company could improve?

3. The Employee Net Promoter Score (eNPS)

The Employee Net Promoter Score (NPS) measures employees' feelings about their company. The NPS is calculated based on the employees' response to one question: “On a scale of zero to ten, how likely are you to recommend our company as a workplace”.

Based on their responses, employees can be divided into these groups:

Detractors

Anyone who responds between zero and six is a detractor. These people aren't happy in their job and probably have one foot out the door. They are ready to leave the company at any time. Detractors can tell management a lot about how the company can improve.

Passive

Employees who responded with seven or eight are passives. They don't feel strongly about the company. It's vital to avoid turning these employees into detractors. Instead, take steps to turn them into promoters.

Promoters

Staff members who answered nine or ten are promoters. Promoter employees can share insights into what the company is already doing well.

The company measures this employee satisfaction survey using this formula: Subtract the percentage of detractors from the percentage of promoters.

ePNS = Percentage of Promoters - Percentage of Detractors

This will result in a score ranging from -100 to 100.

Positive scores are considered good scores. Any score below zero indicates that a company has some work to do on employee satisfaction.

4. Absenteeism Rate

A high absenteeism rate in a company could point to several issues, such as bad management, poor working conditions, or an absence of work-life balance. It can also be a sign of employee dissatisfaction.

Absenteeism puts pressure on other employees to cover for their missing colleagues. This causes a ripple effect within the company, leading to increased stress and higher levels of job dissatisfaction.

If more employees are suddenly absent from work, it is a red flag that needs to be dealt with immediately. Ask employees with higher-than-average absentee rates why they are not coming to work regularly. Consult with managers and coworkers to see whether they can provide any information that would help to clarify the situation.

5. Employee Satisfaction Index (ESI)

The Employee Satisfaction Index (ESI) measures employees' satisfaction with their job.

The ESI uses the following questions to determine employee satisfaction levels:

How satisfied are you with your workplace?
How well does your workplace meet your expectations?
How close is your workplace to your ideal job?

The employees are asked to answer each question with a rating from one to ten. The ESI is then calculated.

ESI= (((Question Mean Value/3) -1 x 100) / 9)

The result is a number between 1-100. Higher numbers indicate a greater number of satisfied employees in the workplace.

6. Turnover Rate

When employees aren't happy in their place of work, they may start to look for another job. Employee turnover costs employers a lot of money. It reduces productivity, disrupts the workplace, and negatively affects other team members.

The more satisfied employees are with their employment situation, the less likely they are to change jobs. A high turnover rate indicates a problem in the company. It means managers and executives must work together. Employees want to be appreciated and be challenged by their work. Most employees also want to have positive relationships with each other.

7 Most Used KPIs to Track Employee Satisfaction

The following are examples of the employee satisfaction measurement tools most often used by employers:

1. Glassdoor Rating

Glassdoor is one of the most popular and authoritative employer review websites. Employee satisfaction ratings on the website range from 0-1.5 “Very Dissatisfied” to 4-5 “Very Satisfied”

This website uses an algorithm to highlight its most recent employer reviews. These reviews are given more weight so site visitors get the most current satisfaction scores about the company. Former employees can also post comments about working at the company.

2. Informal Conversations

An excellent way to measure employee satisfaction is to ask employees directly. Informal conversations about how employees feel about work can be conducted during break times. For example, a manager can invite an employee out for lunch or a coffee. Try to choose an employee who is easy to talk to as the conversation will flow much better.

Here are the types of questions that could be asked during an informal interview:

What are the kinds of things the company is doing well?
What parts of your job do you feel aren't working well?
If you could change something about your job, what would it be?
What tasks do you enjoy doing and wish you could do more often?
What do you wish you could do more of at work?
Do you feel your team is successful at working together? Why or why not?
Do you see yourself working here five years from now? Why or why not?

3. Suggestion Box

A company can also go low-tech and ask employees to put their ideas for improving the company into a suggestion box. If anyone is concerned they will be recognized by their handwriting, they can print their suggestion to keep it anonymous.

Suggestion boxes can also be virtual. A business can set up an online suggestion box for employees to share their thoughts anonymously about how the company can improve. The advantage of having an online suggestion box is that employees can access it anywhere using their mobile devices.

4. Performance Reviews

Performance reviews are a crucial part of running a company. They make it easier to measure progress and set goals for the business.

Companies that hold regular meetings with their employees often find them an excellent way to gain insights into workplace morale and office culture. The performance review is an opportunity to discuss solution-oriented plans to address productivity concerns. The employee should also feel free to discuss task reassignment and employee development strategies at this time.

5. Internal Promotion Rate

According to a report from The Society for Human Resource Management, only 19% of respondents said they were “very satisfied”; with the job openings available from their employer. A further 29% stated they were “somewhat satisfied” with opportunities to “climb up the ladder.”

In the same study, forty per cent of employees said that career advancement with their current employer was “very important” to their job satisfaction.

A company's promotion rate is a good indicator of its performance with its advancement opportunities.

Promotion rate = (Total number of promotions / Total number of employees) x 100

Measuring internal promotions indicates a company's willingness to invest in its employees. It shows that the business has good growth opportunities, which can lead to a higher retention rate and better employee satisfaction.

6. Successful Hires Within the Company

An excellent way to judge employee satisfaction and engagement is to consider how successful a company is at retaining new hires after the probation period. If new hires leave during the probationary period or within a few months of being hired, it is a sign that the Human Resources team needs to evaluate one or more of the following:

Company culture
Hiring processes
Onboarding procedures

7. Exit Interviews

Conducting an exit interview to get insights about employee satisfaction may seem strange. However, an employee who has given notice has no reason not to be honest with the company's Human Resources department. When asked what the company could do better, this person could have valuable insights that the company can use. The departing employee can also provide their opinion about what the company is doing well.

Specifically, an employee with one foot out the door can share their thoughts about what could have been done to make their job better. They can answer the question, "Is there anything the company could have done to make you stay?" It is worth keeping in mind that people change jobs for many reasons (spouse transfer, family responsibilities, return to school, a better-paying position/job closer to home elsewhere, etc.)

Recommended article: Top 10 Employee Engagement KPIs

Leveraging an advanced employee experience platform, like Lumapps, plays a significant role in enhancing employee satisfaction through offering modern intranet intranet solutions. By implementing the methods and key metrics discussed in this guide, employers can effectively evaluate employee satisfaction levels and proactively attend to any issues.

Lumapps is your go-to solution for not only measuring employee satisfaction, but also maintaining a highly engaged, motivated, and content workforce.

Employee Engagement

Time to start or overhaul an engagement strategy? Capitalize on Employee Engagement Opportunities.

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