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The Relationship Between Employee Engagement, Employee Satisfaction, Employee Performance, and Retention

By October 2, 2019 One Comment
Snowfly Employee Satisfaction

When I worked in thought leadership at an HRIS software company last year I had the unique privilege of working with Rusty Lindquist, one of my favorite HR thought leaders and one of the two best bosses I’ve ever had. Rusty had put more critical thinking into the HR and employment space than anyone I have ever met, and he was a real stand-up guy.

At that company we would hear, daily, certain words. You figured you knew exactly what each word or phrase meant, but sometimes they were used in weird ways that just didn’t make sense. And sometimes they were interchanged pretty easily, or misused. One day I asked Rusty what the intersection, or relationship, was between each of these: employee engagement, employee Satisfaction, and employee performance. (I put those in that order for a reason :))

He quickly whipped up a diagram that showed that employee performance was a function of employee satisfaction. The more satisfied, or happy, your employees are, the more they perform. They work better and do a better job. They output more, or have happier interactions. They are worth more to your company or organization because of this, and because they take pride in their work. Because of that, they make fewer mistakes and cost less.

Whew… that sounds pretty awesome, right? So the big question, the one that speakers try to address at HR conferences, is HOW in the world do you get satisfied employees? Or, how do you get employees who are more satisfied, and happier with their jobs?

Snowfly Employee Engagement

That, Rusty said, comes from employee engagement. That isn’t how much work an employee does. You can have your highest performing employee who is utterly not engaged. Of course, they are working, and that is great, but they might be so disillusioned with your organization or their boss that they have kind of checked out. It’s their integrity that makes them do great work, but mentally they have moved on. Be careful to not confuse your star employee’s output with their engagement.

Engagement is not output. Engagement is how they feel they are involved with your team, culture, or organization. Do they feel like they are part of the team? Do they feel like their ideas are heard, appreciated, and valued? Do they feel they can communicate with their supervisors, bosses, and anyone higher up?

If that sounds like a byproduct of “culture,” it definitely is. The culture you create impacts how engaged each person on your team is. And, to the point of this blog, higher employee engagement leads to higher employee satisfaction, which leads to higher employee performance. And this, of course, leads to higher retention.

Is that meaningful? Yes, of course. Retention means saving gobs of money. Or, put more professionally, having to replace employees can cost 100% to 300% and more of an employee’s salary. Losing and having to replace anyone on your team can be really expensive!

Keeping an employee who is not engaged, or satisfied, can also be costly. I’ve seen that over the years, where keeping someone who is upset and not heard can destroy your company’s culture. I’ve seen that, where one employee is like a cancer and inserts doubt and negativity. That, too, is expensive and very frustrating to leadership.

Does employee engagement, employee satisfaction, and employee performance have an impact on organizational performance? Without question. They have impacts on the top and bottom lines, and operational expenses.

The big question, then, is how do you move the needle on any of those?

Of course, Snowfly is hyper-focused on this. We’d love to show you how we are impacting company culture and helping your employees feel heard and involved, more satisfied, and see their performance increase. Let’s jump on a call or demo and get talking about your organization, your objectives, and your team!

Snowfly Employee Performance

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