Employee relations Featured

12:28pm EDT October 25, 2006
There’s a big difference between a well-paid employee and a happy employee. Companies that attract new charges solely on the basis of hefty salaries face the prospect of losing hires to the next company with deep pockets. On the other hand, employees who are drawn to a company based on a reputation for providing challenging work and open lines of communication are apt to stay for the long haul.

Creating an environment where employees are satisfied with their jobs leads to energized and motivated workers, says James Harwood, adjunct professor at Woodbury University.

“Satisfied employees tend to be more committed to helping an organization achieve its purpose,” he says.

Smart Business spoke with Harwood about how management can improve employee satisfaction, how programs should be evaluated and the relationship between satisfaction and retention.

Why is it so important for companies to strive for high employee satisfaction levels?
There’s a correlation between employee satisfaction and the bottom line. Satisfied employees are more committed to the purpose of an organization. In addition, they are more productive, more dedicated and will strive to help an organization meet whatever its stated purpose is. On the other hand, dissatisfied employees can lead to poor morale and decreased productivity, which ultimately has a negative impact on a company’s profitability.

How can management enhance employee satisfaction?
A lot of times management has the false impression that more money is what leads to higher employee satisfaction levels. No one would argue that money is important to people, but a lot of other factors can have an impact on employee satisfaction. For instance, relationships with a supervisor or manager, how well the employee gets along with coworkers, whether or not he or she feels part of a team that’s working on something important, and the connection between his or her individual job and the final output of the organization. Management should be thinking about all these things and doing what it can to enhance satisfaction through methods other than just pay raises.

What types of programs designed to increase employee satisfaction are most effective?
If you don’t know the answer to this question, the first thing to do is to get employee input. To a certain extent, it’s situational, so managers need to have good relationships with their employees so that they understand what motivates them. Then they can use that information to implement effective programs. I’m a big believer in employee surveys as great ways to find out what motivates and keeps employees satisfied. Participative management is also effective when it’s practical. Involving employees in key decisions and key projects is generally a positive approach to enhancing satisfaction levels.

Once in place, how should a program be evaluated?
Organizations should do some form of survey at least once a year. If they survey on a regular basis, they should see some changes and they will have a baseline measurement for use in evaluating the results of future surveys for improvements in the chosen focus areas. It could be a written survey or a more informal type of survey. If you’ve had a positive impact with employee satisfaction programs, you’re going to see the feedback from employees. Also, retention levels are important to look at. Organizations that don’t have healthy cultures and don’t have a satisfied employee base are going to experience a fair amount of turnover, which can be costly.

How important a role do high employee satisfaction levels play in retaining key employees?
There is a significant relationship between satisfaction and retention. Organizations that conduct exit interviews often hear from the departing employee things that were happening inside the organization that led to their dissatisfaction. Usually, what happens is that, over time, certain factors cause a person to decide to start looking somewhere else for work. It could be a relationship with a manager. It could be that he or she believes individual input is not valued. It could be poor relationships with coworkers. It could be boredom or lack of a challenge. Over time, all of these factors lead to decreased levels of satisfaction and cause people to want to seek work elsewhere.

We spend a significant percentage of our life at work, so if we are unhappy with what we’re doing, we’re going to be motivated to find work at a different organization where we believe our full potential can be reached.

JAMES HARWOOD is adjunct professor at Woodbury University and president of Total HR, a human resources, administration and strategic consulting firm. Reach him at (818) 248-0133 or james@totalhrmgmt.com.