What’s the Difference Between Employee Satisfaction and Employee Engagement?

September 11, 2020

Trick question: If an engaged employee is a productive employee, then is employee satisfaction something organizations should be working to achieve? The answer is yes. But since this is a trick question, you can assume the answer is also no. That’s because many organizations assume employee satisfaction and employee engagement are the same thing––and by doing so, they waste time and effort on initiatives that don’t deliver the end results they’re seeking.

But does that mean organizations shouldn’t care about employee satisfaction? Absolutely not. Satisfied employees are more likely to be engaged and productive. Believing that satisfied employees will be automatically productive and engaged, however, is a mistake. In this article, we’ll untangle the difference between satisfaction and engagement so you can better understand how to create engaged employees who are also satisfied at work, and how you can leverage satisfaction to drive engagement.

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What Is Employee Satisfaction?

Satisfaction is a measure of the discrepancy between what’s expected and what actually happens. That expectation comes from comparing needs and wants to an assessment of what’s realistically possible—for example, if you need food and you want lobster, but you’re served a hamburger, you’ve fulfilled the need for food, but your satisfaction depends on your ability to align your desire for lobster with the reality of the burger. Employee satisfaction is the fulfillment of expectations related to employment. So if your needs, wants, and assessment of what’s fair in the market lead you to expect a salary of $50,000, anything less will be unsatisfactory.

But compensation is only one of many factors that determine satisfaction. Employee satisfaction is determined by an employee’s emotional and analytical assessment of their entire situation, and to what degree an employee feels satisfied depends on how their expectations align with what they actually experience. That experience includes elements like communication, recognition, career development, workplace atmosphere, perks, and much more, not to mention actual compensation.

In the end, the smaller the discrepancy between expectation and reality, the more satisfaction employees are likely to feel about their jobs. In that sense, it’s also a measure of security; high satisfaction can create feelings of stability and safety, lower stress, discourage job-hunting, and at best, allow employees to focus on work with less distraction. Meanwhile, dissatisfaction breeds uncertainty, apathy, and resentment; unsatisfied employees are less loyal, less likely to recommend their employer to job-seeking friends, and less motivated to give their best effort at work.

It’s easy to see, then, why employee satisfaction is an important component of a good employer/employee relationship, and why employers should be invested in both measuring and maintaining it. But satisfaction is only one part of the story.

What Is Employee Engagement?

If employee satisfaction is the feeling of contentment that an employee gets out of a job, employee engagement might be most easily expressed as what motivates an employee to put effort into their job. It’s related to employee satisfaction in the same way love and happiness are related; both are feelings, often coexistent and causally connected, but while happiness and satisfaction are internal, love and engagement involve a relationship. In other words, in order to love or be engaged, you need something (or someone) to love or be engaged with.

In that way, employee engagement encompasses much more than the idea of satisfaction, and in fact, the concept of employee engagement is literally and philosophically a step beyond that of job or employee satisfaction: psychologists seeking a better term than “job satisfaction” to describe the employer/employee relationship examined additional factors like motivation, interest, enthusiasm, involvement, etc. and arrived at the word “engagement” as the cumulative term for all of these ideas.

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Like satisfaction, engagement arrives from not one, but multiple sources; the drivers of engagement are often complex and multifaceted in themselves, and engagement is never the result of one thing. And while some of these drivers are external, others, like the personal wants and needs that help determine satisfaction, depend on the individual themselves. Engagement experts’ opinions vary on to what degree, but all of the following elements have a significant impact on an employee’s engagement level:

  • Resources – whether what’s provided is sufficient to get the job done
  • Expectations – how clearly the employee understands what is required of them
  • Feedback – how clearly and consistently work is evaluated
  • Recognition – how the organization rewards success
  • Compensation – how fairly the organization pays employees compared to market rates
  • Importance – how valuable the employee feels their contribution is to the organization
  • Purpose – how the employee feels they are contributing to society as a whole
  • Camaraderie – how connected an employee feels to their coworkers

The Relationship Between Satisfaction and Engagement

Confused yet? It’s easy to see why, because while the two ideas are related, and in some ways very similar, they are also critically different. Satisfied employees can be complacent and unproductive if they aren’t engaged in their work. Likewise, otherwise engaged employees may become unproductive and disengaged if they are unsatisfied with their employer.

The point is, employee satisfaction doesn’t equate to employee engagement, and you need both to get the best performance out of your workforce. Assuming otherwise has led many companies down an expensive path to a confusing destination, because achieving one of these without the other doesn’t produce the kind of results they are seeking.

How does this happen? Here are some classic examples of where organizations come up short:

  • Over-prioritizing perks – when companies focus on perks like free food, game rooms, and creature comforts without paying attention to real engagement issues like career development or alignment
  • Undercompensation – when the work may be rewarding, feedback is constructive, and work atmosphere is positive, but compensation lags behind the market or creates financial concerns for employees
  • Overcompensation – when excessive pay attracts the kind of employees who are only motivated to do the bare minimum required to earn a paycheck
  • Unclear expectations – when a lack of direction leaves highly motivated, fairly compensated employees feeling frustrated and unsure of their value
  • Career stagnation – when employees are satisfied and engaged in their current roles, but have no clear path to advancement or skill development/diversification

Any of the above could result in exactly the kind of negative outcomes we’re told can be avoided by focusing on job satisfaction: undesirable turnover, poor productivity, low morale, and hiring and retention problems, to name a few.

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Creating Satisfaction Through Engagement

Both employee satisfaction and employee engagement are steps to a more important goal—developing a workforce of loyal, productive, and happy employees. Developing both the right way means starting with engagement. Rather than looking at one area to increase satisfaction, such as higher compensation or creating workplace camaraderie, step back and examine all the factors that influence the employer/employee relationship and focus on strengthening that bond holistically. Ask questions, seek feedback, and increase communication about initiatives or changes that come out of those discussions. Make sure that you are addressing employee needs and resources and communicating a vision for the company that makes it easy for employees to find alignment. Train managers to deliver clear expectations and consistent, constructive feedback. Constantly promote your company values and ensure they are exemplified at every level. In short, focus on culture, first and foremost and at all costs.

How to Gain Insight Through Employee Satisfaction

If you can accomplish all of the things mentioned in the previous section, you’ll be building employee satisfaction for the right reasons. That kind of satisfaction not only brings stability to your workforce, but also allows you to unlock an invaluable asset: employee satisfaction data as an indicator of engagement. This is the hidden benefit you create by prioritizing engagement over employee satisfaction; by increasing the likelihood that the latter is a result of the former, you make satisfaction—which is measurable through survey tools and performance reviews—a KPI.

If there’s one advancement in business strategy that’s gained a lot of attention in the last five years, it’s the idea of measuring employee engagement. But the differences between employee satisfaction and employee engagement aren’t immediately visible or even easy to explain (as this article clearly shows). However, if you take the time to study both concepts in depth, you’ll soon appreciate how being able to identify the origins of satisfaction and engagement within your workforce opens the door to valuable insights about your organization, its people, and its performance.

Rob de Luca
Copy Director | BambooHR

Rob de Luca is the copy director for BambooHR. Since 2016, he has written extensively on culture and best practices in the HR industry. He believes culture is the key to organizational success and that every HR professional has the potential to become a culture champion and strategic business partner.