Which Is More Important For A HR Professional: Cost Or Employee Satisfaction? - CiteHR
Boss2966
Industrial Relations
Skhadir
Strategic Business Management Includes Revenue
Ngurjar
Management Consulting, Management Development,
Princybhatt10
Hr Generalist
Rdkanna
Working As A Manager - Hr
+5 Others

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Assuming that the two options are opposing forces in a given situation, what would be your way of choosing?
Both r important for the organization.but employees satisfaction are more imp than cost becoz happy employees r productive employees........ Rgds, anju godara
Dear Nikhil,
yes anju is right .both are important bt wnevr we have to choose only one from both dat tim we should go for employee satisfaction. bcz dey are assets for org.so we have to keep happy dem. if we dnt go for it dey may leave org so it may be lead cot of recruitment . so better is go for employee satisfaction.
Rgds,
Pranoti Bhatt

Welcome back Mr. Gurjar,

My advise to all employers including HR "TAKE CARE OF YOUR EMPLOYEES, YOUR EMPLOYEES WILL TAKE CARE OF YOUR ORGANISATION". It doesn't mean that, we should blindly follow this quote.

COST & EMPLOYEE SATISFACTION are not opposing forces. Its a part of ORGANISATION'S OPERATIONAL FACTORS. The COST incurred for EMPLOYEE SATISFACTION must be correlated with and recovered through "EMPLOYEE PERFORMANCE". It has to be a PROPORTIONAL FIGURE.

Prime responsibility of HR is EMPLOYEE SATISFACTION. "COST" only matters to TOP MANAGEMENT or EMPLOYER because they are concerned about "PROFITS" but, not EMPLOYEE SATISFACTION. The back bone of any organisation is, its EMPLOYEES. Without employees, an organisation can't do anything irrespective of the projects in hand to be executed.

If MANAGEMENT/HR knows "How to GENERATE Rs.100 by spending/investing RS.10", i am sure EMPLOYEE SATISFACTION IS NOT A BIG DEAL and more over it is "WISE MANAGEMENT".

With profound regards

Why don't you try purchasing TOYOTA CAMRY for the price of TOYOTA COROLLA without compromising on QUALITY STANDARDS......can you?

"If you pay PEANUTS you will get MONKEY's"

With profound regards

Hi,

It was nice to read different and interesting views on the matter. Yes, company cost and employee satisfaction are both very important and strong factors, which are key to the success of company. Company cost and employee satisfaction are not two opposite factors. These two go hand in hand. Company cost is a wide term and does not only mean salaries of employees and money spent on employee welfare and employee engagement. It also includes the cost spent on using the raw material, machinery and overtimes etc. When employees are not satisfied with salary and other benefits, they will work half heartedly, so the quality will hamper and employees may need to rework on the product to improve quality. As a result cost ie money spent on raw materials, tools, overtime etc and even money spent on salary for the time workers worked on low quality product will go in vein. So, it will cost more to the company. If after giving little more salary and other benefits, employees are satisfied, they work at their best and automatically company cost ie company money spent on other factors will be saved.

So, I would like to conclude that if employees are satisfied then cost of company is automatically saved.

Interesting perspectives.
Do you think HR is 'not' supposed to see the costs?
Do high-paying companies always have the best talent?
Does higher cost (salary + welfare ++ etc. etc.) mean more productivity?
Does more satisfaction mean more productivity?
Or am I reading your responses wrong!!!

Hi,
First of all I would like to say that it is not nice and polite to judge any other person's perspective. If you have different views then mention it. I will accept those happily.
Secondly, I never said that you should give high salary or spend high costs on welfare.. I said employees should be satisfied with what u offer. So, it should be up to market standards. And what u offer as welfare should be safe and innovative enough to motivate employees.
Whenever company appoints an employee, it checks that he/she is talented enough for the job/role. So would not like to answer this nasty question - "Do high-paying companies always have the best talent?"
However, I do not think I am answerable to anyone to explain my views. Further, I would not like to have hot discussions here. So, would not discuss it further in this thread.
Have a good day.

Chitra and SAK,
I agree with what you are saying, but most of the answers are indicating that in the Cost-vs.-Employee Satisfaction equation, the HR must focus on Employee Satisfaction more than the Cost...
Chitra, no offence, but your views can be questioned and discussed. And it is good to learn from a different perspective even if the decision could be hot at times... :-) We will keep it professional, though.
About my misreading, SAK, the post was indicating the causal approach... So, I asked. However, your clarification tends to say that Cost is more important than Employee Satisfaction. Maybe, you could give us with an answer to explain which of those are truly meant to be...
Reg,
Nikhil

Dear Mr. Gurjar,

You had misinterpreted my comments. I was favouring EMPLOYEE SATISFACTION but not the COST FACTORS. Yes, you are right, it is all about COST-Vs-EMPLOYEE SATISFACTION, as every organisation has it own LIMITS and RUN THE SHOW within BUDGET LINES.

"EMPLOYEE SATISFACTION" is a PRODUCTIVITY FACTOR enabling organisation to PERFORM BETTER and MUCH BETTER, but NO ORGANISATION would love to spend "BEYOND ITS LIMITS". A portion(%) of the "PROFIT GENERATED" as agreed(ACHIEVED TARGETS) is shared between employees, this involves PLANNING and operates on applicable/accepted TERMS & CONDITIONS.

If i happen to be an entrepreneur, i have my "TARGETS TO BE ACHIEVED" on TOP OF THE PRIORITY, while keeping in mind THE OPERATIONAL EXPENDITURE or so called COST FACTORS. Here, COST FACTORS includes EMPLOYEE SATISFACTION LEVELS. I should be knowing "HOW TO ACHIEVE MY TARGETS WHILE ENSURING MY EMPLOYEES SATISFACTION LEVELS, BUT NOT IGNORING THEM, AS THEY ARE PART OF MY BUSINESS OPERATIONS/ACTIVITIES".

Therefore, both are not OPPOSING FACTORS, they go hand-in-hand. If i knew how to get things through my employees, i should also know how to SATISFY them. This is the BASIC LOGIC.

In INDIAN CONTEXT, most of the organisations concentrate on "MORE PROFITS - NOT JUST PROFIT", the best example for TYPICAL INDIAN MENTALITY, as we are least worried about PERFORMING ASSETS(our EMPLOYEES), hence ATTRITION RATIO IS HIGH, RETENTION STRATEGIES ARE NOT PRACTICED EFFECTIVELY, etc. Whereas, if you study WESTERNER'S APPROACH, they purely operate on "GIVE & TAKE POLICY". They knew "HOW TO RETAIN THEIR EMPLOYEES(SATISFACTION LEVELS ARE MET TO THE MAXIMUM EXTENT) WHILE MAKING EVERYTHING CLEAR IN BLACK & WHITE".

If you have further clarifications, kindly do feel to revert. Will provide you sufficient amount of inputs, while ensuring your SATISFACTIONS LEVELS.

With profound regards


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