The Link Between Employee Satisfaction and Productivity

So, your employees are turning up to work every day, they seem happy and you’re not getting any complaints, but are your staff really satisfied? And are they more productive when happy?

Well, research suggests that employees who are satisfied with their jobs are more productive.

In addition, employee satisfaction also has a strong correlation with retention rates, organisational culture and overall success of the business.

But what is the link between happy employees and workplace productivity?

Here are some reasons why happy employees create a more productive workplace.

• When employees feel valued and satisfied, they are more likely to work hard and take pride in their work, creating a positive customer experience and resulting in greater productivity and repeat business.
• Happy employees create a positive work environment. They have a positive influence on those who may not be so happy, which encourages productive teamwork and boosts morale.
• Happy employees have less desire to resign from their jobs, thereby reducing turnover. This ultimately avoids a gap in productivity when people leave the organisation, that otherwise would be spent hiring and training new employees.
• Offering career development opportunities to improve skill sets can enhance employee productivity and show the Company’s commitment to the employee’s long-term growth.
• Prioritising employee health and wellbeing and supporting employees to balance work and life, for example through remote working, can encourage employees to rest and recharge, resulting in fewer sick days, and therefore employees are more satisfied and more productive at work.
• Setting goals will motivate employees to work hard, increasing workforce productivity and increasing the growth and profit of the company.

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On the flip side of all of this, dissatisfied employees can negatively impact the health and performance of the business. For example:

• Decreased Productivity: Dissatisfied employees often show lower levels of motivation, leading to reduced efficiency and output.
• Higher Turnover Rates: Discontent can cause employees to leave, increasing recruitment and training costs.
• Poor Morale: Low morale can spread, affecting team dynamics and overall workplace atmosphere.
• Increased Absenteeism: Unhappy employees are more likely to take sick days or be chronically late.
• Lower Quality of Work: Dissatisfaction can result in mistakes, negligence, and lower standards of work.
• Damage to Company Reputation: Negative word-of-mouth and poor reviews can harm the company’s public image.
• Customer Service Issues: Unhappy employees may provide subpar customer service, affecting client satisfaction and retention.
• Reduced Innovation: A lack of engagement can stifle creativity and hinder the company’s ability to innovate.

So, what is employee satisfaction?

Employee satisfaction refers to how happy and content employees are with their role and their Company. The level of satisfaction is often related to how well the employee’s needs are being met, through factors such as compensation and benefits, career development opportunities, leadership, job security, work life balance and recognition.

Often, employee satisfaction is used interchangeably with employee engagement; however, they are different.

Employee satisfaction is the term used to measure the employee’s contentment and enjoyment of their job, while employee engagement refers to an employee’s passion and motivation to achieve the Company’s goals.

Engaged employees are generally satisfied with their jobs, whereas satisfied employees are not necessarily engaged with their jobs.

How can I measure employee satisfaction?

To get a good indication of your company culture, encourage open communication and employee feedback and understand how satisfied your employees are to know where the potential for improvement is, we need to measure employee satisfaction. There are several ways of doing this, for example by tracking key metrics like employee turnover rates, absenteeism, and productivity.

Another way is through an employee satisfaction survey, which allows us to gather quantitative and qualitative data on what employees like and dislike. This may be through an annual Company-wide survey or more frequent pulse surveys which target specific departments or topics. Pulse surveys are particularly beneficial for collecting real-time information, allowing issues/concerns to be identified and promptly responded to, thereby improving employee satisfaction.

The Employee Net Promoter Score (ENPS) is a metric that can show you how employees feel about your company by asking one simple question: On a scale of zero to 10 (with 10 being “extremely likely”), how likely is the employee to recommend your company to someone else as a good place to work? Net Promoter Scores range from -100 to +100. The higher the score, the more satisfied the employee is. Scores below zero are a warning sign that employees are less satisfied and require action.

The Employee Satisfaction Index (ESI) measures the extent to which employees are satisfied with their job.

You can determine it by surveying employees using the following three questions:

• 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 result is a number between 1 and 100, with a higher score indicating greater employee satisfaction.

How does employee engagement affect customer satisfaction?

Engaged employees are more likely to be motivated, productive, and dedicated to providing excellent customer service, and they tend to have more positive attitudes which customers notice and appreciate. They are willing to go above and beyond their duties to deliver a great service, often resolving issues more swiftly and effectively. Satisfied and engaged employees are more loyal, resulting in experienced staff who build stronger customer relationships. They will work additional hours, deliver on their commitments and are passionate about satisfying the customer to improve the overall business performance.

The link between employee satisfaction and productivity is clear, and if you would like to discuss ways that we can help to implement strategies which boost employee satisfaction in your business, please do give us a call. We’re a friendly bunch and provide outsourced HR support and advice that has a really positive impact on your business. Let us make a difference by calling us on 01473 360160.

Image by Nasim Nadjafi from Pixabay