Employee satisfaction or job satisfaction is, quite simply, how content or satisfied employees are with their jobs. Employee satisfaction is typically measured using an employee satisfaction survey. Factors that influence employee satisfaction addressed in these surveys might include compensation, workload, perceptions of management, flexibility, teamwork, resources, etc.

These things are all important to companies who want to keep their employees happy and reduce turnover, but employee satisfaction is only a part of the overall solution. In fact, for some organizations, satisfied employees are people the organization might be better off without. Satisfaction doesn't mean high performance or engagement. HR ideas and strategies focused on how to improve employee satisfaction oftentimes have results that demoralize high performers.

Employee satisfaction and employee engagement are similar concepts on the surface, and many people use these terms interchangeably. The importance of knowing the difference between satisfaction and engagement is critical for an organization to make strategic decisions to create a culture of engagement. Employee satisfaction covers the basic concerns and needs of employees. It is a good starting point, but it usually stops short of what really matters.

Employee Satisfaction versus Employee Engagement

Consider the following definition of employee satisfaction:

Employee Satisfaction Definition:

Employee satisfaction is the extent to which employees are happy or content with their jobs and work environment.

Compare that with this definition of employee engagement.

Employee Engagement Definition:

Employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work.

By contrast, Passion, commitment, and most importantly, discretionary effort... Engaged employees are motivated to do more than the bare minimum needed in order to keep their jobs. They have a strong sense of purpose and leadership. They love to be challenged. Engaged employees are the engine of a company, and their performance is proof of this. The importance of engagement cannot be overstated. Satisfied employees are merely happy or content with their jobs and the status quo. For some, this might involve doing as little work as possible. An employee satisfaction survey will not diagnose key factors that can help an organization improve engagement and performance.

Turnover vs. Unwanted Turnover

Some level of turnover is healthy for all companies. Employees who are not adding value or who are not a good fit for the company leave, making way for fresh new perspectives and new energy. We could call this healthy turnover. By contrast, unwanted turnover happens when a company loses talented employees that they want to keep.

Talented and motivated employees expect more from companies. For these employees, job satisfaction includes a different set of criteria. They want to be engaged and empowered. They want to be challenged and pushed. They want their work to have meaning. They want a sense of purpose. A culture of continuous improvement and the importance of professional development opportunities for employees to grow and advance their careers, to better their performance, are key factors that contribute to the engagement of high performers.

Why is employee satisfaction a potential problem?

The problem with employee satisfaction is that it does not focus on the things that are important to your most talented staff. A happy or content employee might be quite satisfied with a job that requires very little effort. This employee might be perfectly content doing the bare minimum required to keep his or her job. These employees are likely "very satisfied" with their jobs. They usually lack leadership and purpose. Their performance might be "good enough". They are unlikely to leave the company, but they are not necessarily adding value.

As opposed to satisfied employees, engaged employees add value by pushing limits, driving growth and innovation. Organizations that embrace a value-centric, engagement focus, too, have to push limits, Companies with an engagement strategy provide informal and formal learning experiences in order to create significant opportunities for employees so employees feel valued and recognized for their work. Engaged employees will often snatch up these opportunities, satisfied employees often will not.

Employee satisfaction surveys can lead an organization down the wrong path. As a company, if you focus on increasing the wrong kind of employee satisfaction, you risk entrenching those employees who are adding the least value while driving your most talented employees out.

See also: What is employee engagement?

Satisfaction and Engagement Semantics

Many people use the terms "satisfaction" and "engagement" to refer to not just the basic core needs of job satisfaction, but also the added meaning, motivation, and commitment of "engagement". There is nothing wrong with that. As long as your company measures and understands the importance of striving for the factors that we include in our definition of engagement, it really does not matter what you call it.

By employing an engagement survey, asking the right questions, measuring the right factors with benchmarked results, questions and results backed by statistics, your organization can construct a strategic plan to improve employee engagement and, in turn, performance. If this is what you're doing, call it what you like.

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