Employee Satisfaction or Employee Engagement or only the means and ends. I recommend you concentrating on the results. Satisfaction or engagement should translate into the operational efficiency.
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Those five ratios will show how far the employees or satisfied or engaged. In addition to these ratios, calculate Inventory Turnover Ratio (ITR) as well. This is the one single ratio that speaks volumes about purchase-production relations, purchase-sales relations, relations with vendors and so on. In a manufacturing sector (yes, including top notch MNCs) bringing coordination among purchase, production and sales is perennial challenge. I have seen at least three companies wherein employees have stuck to the company but then their ratios remained poor.
I am not against employee satisfaction or engagement as such. However, this jargon creates a trap for HR and HR starts enjoying cosiness of it without checking the ground realities.
My views are little radical. This is because of my exposure to large of number of industries for my training assignments.
All the best!
Dinesh V Divekar
I appreciate your radical view, though i wanted to imprest upon the focus for capturing the taste of employees' pertaining to the satisfaction level or their engagement level, what you highlighted is coming from a more operations' point of view!.
Ours, being a productivity driven setup these ratios and metrices shared are very vital for organisation's performance, but from a people centric approach, diagonising the satisfaction & enangement cant be derived out of it.
Moreover, production has to happen at any cost, yield has to be more, ratios must be maintained, but whether my employees are actually enjoying doing so and at what level, is what i wanted to capture!
Ok. In that case to answer your query, I would like to give priority to "Employee Engagement" over "Employee Satisfaction". This is because employee may be satisfied because of various reasons like less time to commute from home to workplace, steadiness of job, invisible protection by labour union, salary above market standards etc. However, such employee may not be engaged. Engagement is comprehensive than satisfaction.
Other seniors may give their views.
Dinesh V Divekar
It is nice to see that a HR person is keen on the Employee Satisfaction and their 'engagement'.
Comparatively speaking the 'Satisfaction' index is easier to measure than 'Engagement'. It is more important to measure the trend than the absolute figure, which will vary according to location, industries and such. Also, the measures help in locating the stronger and weaker areas in each of those indices, so that the weaker areas can be strengthened.
'Engaged' employees are likely to be more 'satisfied'. Generally speaking a figure of 75% satisfaction level will be very good. But then you have to stratify it on the basis of the years of employment, designation, areas of work etc. That kind of break up will reveal the weak areas.
'Engagement' is more difficult to quantify as such but consists of many items like participation in teamwork (at work and in recreational activities), camaraderie, etc. Even the face of the employee while at work and how he takes instructions, how he behaves during discussions tells a lot about how well he is 'engaged'.
Two of my question may be add some value to my frends comment thread
First one - how the employee can be engaged ? Secondly - Why the employees feels satisfied.
Engagement - If proper job description is in place, Responsibilities are with commensurate authority, Tasks are according to the employees knowledge, skill & keeping in view qualification.
Satisfaction - Its comes through work environment, boss sub ordinate relationship, job security, career development, organisation future, compensation etc.
Some common factors which boost & facilitate both engagement & satisfaction are - Motivational programs, employees welfare, reward and recognition schemes, grievance handling cell etc.
Both the term engagement & satisfaction go hand in hand.
Agreed with Mr Ramamurthy's statement of 75% of satisfied employees is very good ratio.
once we initiate a pro employee culture and initiatives, we need to work more on employee engagement programs. If we have OPTIMUM engagement activities, chances are that satisfaction will proportionately build up.
But engagement activities aren't the sole base for increasing satisfaction among employees.
Employee satisfaction is more of a final product in reaction to engagement activities, promotion policy, annual salary revision, disciplinary mechanism, grievance addressal, functioning of canteen, caring feeling and several other factors.
Engagement activities, if properly DRIVEN will certainly yield you significant results.
And to improve or achieve higher employee engagement, employee satisfaction is needed.
So, in this way, ROI, Employee engagement and employee satisfaction are linked and affect each other.
I would say you need to have higher rate or % for employee satisfaction as only then you can improve or get higher rate of employee engagement and finally you earn big profits and better ROI.