What is Employee Satisfaction (& The Difference Between Satisfaction & Employee Engagement)

August 18, 2020
by Damian Keane

How many times did you have a hard-working, dedicated, and conscientious employee quit on you without any warning? Probably not too often but often enough, right? And it still baffles you when it happens.

They pushed hard… didn’t take days off… stayed late to wrap things up… 

… and, all of a sudden, that employee hands in their notice letter.

This happens to managers all over the world. In fact, 2018 was a record-breaking year for voluntary termination, with 41.4 million US employees quitting their job.  

Most of the time, these employees don’t give a concrete reason for leaving but in nearly 50% of the cases, it can be traced back to one thing — poor employee satisfaction.

These employees might have been hard-working and engaged but something fundamental was missing and they grew resentful, found a better job and left… leaving you scrambling as you tried to find and train their replacement (and costing the company tens of thousands in the process).

Satisfaction is a difficult metric that often gets tangled up with engagement. The truth is — engaged employees can still be dissatisfied and you have a narrow window of opportunity to turn that around and get them to stay and grow with the company.

To let you in on the secrets of doing just that, in this post we’ll focus on:

Let’s dig in.

What is Employee Satisfaction (& What Factors Into It)?

A rather simplistic (but useful) definition of employee satisfaction says that “employee satisfaction is an expression of how content is an employee within their role — and how easy it is for them NOT to look for another (maybe better) job because the current one they’re in meets their basic needs”.

The factors that we look at when examining employee satisfaction are compensation, benefits, work-life balance, job conditions, and support and recognition. That’s because they are:

1- either monetary (or can be assigned monetary value), or;

2- They are so central to employee wellbeing that they cannot be ignored (for example, getting time off or working in a safe environment).

Let’s examine them more closely.

  • Compensation - you can forget about high employee satisfaction if you’re underpaying your employees — people generally don’t feel satisfied or happy if their basic needs are not met. Keep two things in mind here:

    1- always position competitively against similar companies (and think globally because employees will move for a better paycheck), and;

    2- pay enough so that the employees feel they can have an above-average quality of life (relative to where they’re located).
  • Benefits -forget about free monthly Kindle e-book editions or paid training when thinking about satisfaction (things like that impact engagement more). Instead, focus on benefits that have a clear monetary value attached to them — childcare support, paid time off, and comprehensive healthcare plans.
  • Work-life balance - most people work to live, and not the other way around. Even if your employees are keen and committed overachievers, you should still make sure that they have a good work-life balance to avoid burnout.
  • Job conditions - people want to feel safe at their workplace, both from physical danger and from mental or emotional abuse from superiors or colleagues. Again, we’re talking about a pretty basic but a fundamental need here — if people feel in peril, threatened, harassed, no amount of money or perks will be able to fully compensate for that.
  • Recognition - it’s important for employees to see that their efforts are being recognised and appreciated by their peers and bosses. This factor impacts both employee satisfaction and employee engagement.

Job satisfaction is, effectively, a foundation on which long-term employee engagement can be successfully built. Here’s how employee satisfaction and employee engagement look like when compared on Maslow’s Hierarchy of Needs:

What is Employee Satisfaction-06

But, this also means that satisfied employees don’t have to be engaged employees. Of course, ‘satisfied’ is preferred to ‘dissatisfied’ but satisfaction should not be your end goal. 

Your organizational goal should always be high employee engagement.

There’s a stark difference between having just satisfied employees and having satisfied and engaged employees. That difference is usually the difference between your company just plodding along (with a 0.5% YoY ROI) and your company being transformed into the leader of the pack in your industry.

The Difference Between Employee Satisfaction & Employee Engagement

The best way to explore these differences — and to really home in on what separates satisfaction from true engagement — is to compare the following three scenarios:

What is Employee Satisfaction-07

To which of these people would you happily sign off on a big, fat bonus check?

Without a doubt, Kim, right? She’s engaged, driven, and hard-working — a real asset to her company.

On the other hand, Tom (who is merely satisfied with his work) is most likely coasting. He gets the job done and earns his salary but has he plateaued? Will he be willing to bite hard to land that new, difficult client? Probably not. And so you end up with an employee who’s a missed opportunity machine.

And Amanda (who is engaged but likely not satisfied) is working hard right now but how long can that be sustained? If the next funding round doesn’t go as expected, and she doesn’t get a substantial raise, her engagement levels will drop, and she’ll start looking for a new job.

As you can tell, both employee satisfaction and engagement are important but true engagement breeds the kind of employees that every company would love to have. However, you can’t sustain long-term engagement if your employees are fundamentally unsatisfied so your number #1 priority when building an engaged workforce is to make sure that people like their job, are adequately compensated for it, and feel safe and appreciated while doing it.

Only then you can work on those factors that build actual engagement:

  • A sense of belonging - the first brick on the road to high employee engagement is connecting your company’s values to those of your employees. If your company cares about the same things as your employees — has the same ‘why’ and communicates it well — it encourages people to consistently put in more effort.
  • A sense of ownership - employees feel that they have a stake in the company only when the lines of communication are open and flowing. That happens when you a) trust employees with company information and don’t hold things back (so a culture of secrecy and top-down communication is a big no-no), and b) when you trust employees to make the right decision for the company.
  • Opportunities for growth - investing in your employees further builds trust, signalling that you’re recognising their potential. Often, things like paid courses and training events are better retention and engagement incentives than even the most extravagant compensation and benefits plans.

Need a detailed blueprint to help you jump-start your organisation’s employee engagement initiatives? We’ve created a comprehensive and detailed guide to help you with that! Learn all there is about employee engagement, why it’s important, and now to start growing it in your own teams today!

Download Ambassify’s Ultimate Guide to Employee Engagement (PDF)

3 Effective Ways to Increase Both Employee Satisfaction & Employee Engagement

Most traditional managers tend to do the worst possible thing when confronted with diminishing employee satisfaction and engagement — they do nothing at all.

This is because they feel that turning the tide would require complex institutional changes that are beyond their grasp. 

And while it’s true that sometimes company values need to change (and that this needs to involve the top brass at the company), there are still small tweaks you can make if you’re an HR manager or a department head to ensure that your employees are motivated and productive.

  • Let go of control - people are generally happier when they feel in control. Relinquish some of the control afforded to you by your managerial position by encouraging employees to organise their own work schedules when possible, or to choose a day when they work from home.
  • Reduce stress - some jobs are stressful in and of themselves but that doesn’t mean you can’t do something about it. Poor mental health has a major impact on satisfaction and engagement, and undue stress is a big contributor. Do your best to reduce commuting stress by staggering arrival times, adjusting your late arrival policies, and having flexible telecommuting policies.
  • Create an atmosphere of growth - this doesn’t mean just providing education and training opportunities (although it’s a big part of it). It also means acknowledging when employees meet and exceed certain benchmarks and celebrating their successes.

There’s nothing more satisfying than being recognised and rewarded for a job well done. Read our exhaustive write up on 25 Employee Recognition & Rewards Ideas and get inspired to reward your employees with something fun and unique.

Fine-Tune Employee Satisfaction & Drive Engagement With Ambassify

Employee satisfaction is a vital cog in the engagement machine. Without it, you won’t be able to sustain employee engagement in the long run, and you’ll see your turnover go up and productivity go down.

On the other hand, make sure that your employees are satisfied, add and tweak a few extra elements, and presto! — you have truly engaged and dedicated employees.

Engaged teams and employees:

  • report a 41% reduction in absenteeism;
  • have a 59% lower turnover rate than the average;
  • are 21% more profitable than disengaged employees;
  • bring in 43% more in revenue than their disengaged counterparts, and;
  • are 87% more likely to stay with the company long-term.

To get here, you need a system that helps you identify dissatisfied and unhappy employees. Ambassify’s pulse survey feature can help with that, allowing you to fire off short, frequent, and anonymous surveys that will give you the sense of employee satisfaction in your company (and which specific areas need to be worked on).

Once your overall employee satisfaction is at reasonable levels, you can focus on building an engaged network of employees through targeted engagement and advocacy campaigns. To learn more about all the amazing benefits Ambassify brings to the table, schedule a 30-minute demo call with our employee engagement and satisfaction specialists.


Heads up: LinkedIn Elevate is being discontinued. Are you currently using this platform for your employer branding, employee advocacy or employee engagement initiatives? Then Ambassify is the perfect LinkedIn Elevate Alternative for you.


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