Employee Engagement Vs. Employee Satisfaction

Despite Employee Engagement being recognized by more and more companies as a critical business issue, I sometimes get questions from HR / Leaders on whether they should focus on Employee Engagement as a metric or Employee Satisfaction. My immediate response is Satisfaction is a “one-way street” (what can you do for me), whereas Engagement is a “two-way street” (what can you do for me and what I can do in return). Engagement is a two-way contract. Also, there is evidence that Engagement, being a multi-dimensional construct, has greater validity and linkages to business outcomes such as revenues, profitability, growth, attrition etc.

Recently, I set about doing some simple analyses to validate this. In a particular organisation, I found that teams of top quartile managers (based on their Engagement scores) had an attrition level which was almost half of the attrition in the bottom quartile managers’ teams. On the other hand, top quartile managers (based on their Satisfaction scores) had an attrition level only about 10% lower than that compared to the bottom quartile managers. It seemed from the analysis that as teams move higher on Engagement, their attrition levels drop more sharply as compared to when scores are merely moving up on Satisfaction. Employee Engagement does seem to be a better metric and more strongly related to business outcomes.

As an HR practitioner, are you exploring the links between your employee surveys and business metrics?

15 thoughts on “Employee Engagement Vs. Employee Satisfaction”

  1. Extending this logic, can we isolate the set of behaviours/criteria of ENG versus SAT ? Maybe we will find that the construct itself differs from alignment standpoint

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    • Thanks for your comment Anand. Indeed the constructs are different. Satisfaction comes across as more uni-dimensional, whereas Engagement is more holistic and multi-faceted.

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  2. ‘Satisfaction’ is a strange word. Would you ever want your employees to be satisfied with their jobs? or your customers to be satisfied with your product?

    The way i see it – ‘satisfied’ employees are ones who don’t hate their jobs. ‘Engaged’ employees are ones who love their jobs. Huge difference

    I read recently about market research studies done by US car companies into Customer Satisfaction. They had great satisfaction ratings (80-90% of customers were satisfied or very satisfied with their car) while at the same time, their market share was shrinking.

    Satisfied customers were quite happy to change to other brands.

    I think its the same with employees. A satisfied employee might still be happy to change to a better job.

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    • Thanks for stopping by my blog, Chris. I have worked on several customer engagement studies and consistently found that satisfaction is only a part of the overall relationship. It touches more on the rational side, but not on emotional and motivational sides.

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  3. Great post, Abhishek. And the point on attrition levels is critical. Nearly every report or article I read now seems to mention employees’ desire to jump ship, and actions they are now taking to do so.

    As the economy continues to improve, I believe we’ll see more attrition problems, especially in the high-tech and bio-tech/bio-pharm industries. In the US, more employees are now quitting than being laid off (cited here: http://blog.globoforce.com/2010/12/yes-quitting-is-real-even-in-this.html

    Company leaders better wake up to the need to help employees engage in their work or they’ll wake up to a decimated workforce.

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    • Derek, thanks for stopping by my blog as always. More employees quitting than being laid off in US – that’s a startling piece of data.

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