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What is employee satisfaction and employee engagement – and why do they matter?

Talk about employee satisfaction and employee engagement generates a lot of noise in our industry, with events being created to improve both. However, the two are often confused and we believe we need a clear understanding of each to ensure that we deliver on our customers business objectives.

Whilst both satisfaction and engagement are crucial components of an organisation’s culture it is employee engagement that generally drives business performance in the long term. Therefore, it’s vital to understand the difference to facilitate well-informed strategic decisions that have an impact on growth.

So, what is the difference?

Herzberg’s Motivation-Hygiene Theory suggests that employees have two main influences: job motivation and job satisfaction. Organisations that debate whether satisfaction creates motivation or vice versa may be somewhat missing the point as they both run side by side. A satisfied employee may not be motivated and sometimes a dissatisfied employee may be well motivated.

A salesperson, for example, may be dissatisfied with their targets, their sales area, and their work-life balance (or these days, more likely, their work-life integration). But this may drive them to perform better, to push themselves harder, to get to the next level and to achieve their own and the company’s targets. Dissatisfaction may be a prime motivator, if not necessarily a healthy one. Now clearly, creating dissatisfaction is not usually a viable business goal or objective but we all have come across companies who deliberately create tension, who manufacture dissatisfaction, to push performance. This tactic is often found in sales-driven companies.

While your business approach or personal opinion on this derives from your own culture and experience, we think that satisfaction and engagement do need to be treated differently.

Employee satisfaction generally refers to employees’ contentment and happiness at work. This is driven by hygiene factors such as job security and working conditions, a safe environment, pay and benefits and a satisfactory work-life balance (integration). All of which fulfil employees’ needs while influencing retention, as traditionally, satisfaction has usually been enough to retain employees. And the opposite is also true. If employees are discontented or feel that their needs are unmet, then they are more likely to look elsewhere. From either perspective, it’s clear that a stable workforce is usually beneficial to a company.

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Employee engagement, however, is usually driven by the motivation factors of responsibility, recognition and challenging work – both of which drive productivity and direct the extent to which people are personally involved in the success of an organisation.

It is true that personal involvement and identification with company values and mission gives people the desire for the company to succeed – and thus they are motivated to invest themselves more and strive to improve. Recent studies have shown that an engaged workforce is more likely to stay, more likely to work harder, and perhaps most importantly, most likely to be pulling in the right direction. An engaged employee knows what their employer is trying to achieve and will be supporting and moving towards the same goals.

Though an employee could be happy at work (high employee satisfaction), they could also be disengaged – doing the minimum of actual work, chatting at every opportunity and leaving promptly. For some people, this would be a satisfying work environment. They may view their position only from their own perspective and how it affects them. These employees usually need additional motivation factors to engage them with more challenges, which of course may lead to recognition and responsibility – hopefully creating an upward spiral of engagement and improved productivity.

Clearly then, high satisfaction does not necessarily equate to high engagement or high performance. But likewise, an employee could be highly engaged yet not satisfied, if, for example, they were concerned about job security or uncompetitive pay.

However, satisfaction can more easily be improved with identifiable and improvable hygiene factors, (flexitime, pay rise, bonus etc.). Engagement, of course, depends upon the motivation drivers of each individual and is mainly influenced by managers who need to understand their employees enough to create optimum circumstances for optimum performance.

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So, what specific motivation factors are realistically creatable in the workplace to make highly engaged and high performing organisations take employees beyond job satisfaction to being engaged?

Firstly, a compelling strategic narrative that explains the business’ background, the vision for its future and the way in which an employee contributes to this increases an employee’s sense of attachment and belonging.

Secondly, training managers to be visible, approachable and consistent. These managers give coaching and support, both stretching and empowering people.

An employee voice program enables employees to influence matters that affect them in the workplace through strong communication channels. Being part of the solution encourages improvement, innovation and ultimately, productivity.

Finally, integrity. Evidence suggests that high levels of integrity correlate with commercial success in terms of profitability, competitiveness, sales, growth and morale. In practice, business integrity means meeting commitments, having a strong and consistent moral code that meets the expectation of your customer, and fundamental honesty. It could be paraphrased as doing the right thing even when there’s no one there to see it.

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By creating an authentic summary of the culture, values and leadership style of an organisation, it can then develop an action plan to help inform strategic planning and deliver long term results through optimum employee engagement. Many organisations, across every sector, find that one way to support and continue to support engagement is through a series of events and roadshows. It is no coincidence that many of the most successful, forward-thinking organisations, with the most engaged work forces, also run events focused on creating teams which are all pulling in the same direction – where engagement and motivation work hand in hand.

And this is the case whatever the size of the company. From internal events for our team of 16 to an 800-strong conference for AutoTrader, we have run events where the whole team can share in the company’s direction and develop plans and culture together. The shared experience of employees and clients enables everyone to gain the same perspective.

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