It's not the ultimate measure, just one measure amongst many. Some others are:
-employee retention
-employee absenteeism
-level of union action; strikes, lockouts, go-slows
-number of employee grievances/complaints
-number of OH&S incidents/accidents
-productivity rates
-error rates
-number of customer complaints
Perhaps the most telling indicator is face-to-face conversation – asking employees about the quality of their working life. This will give invaluable qualitative information that cannot be gleaned from numerical indicators.
Just on closing, I'm much more partial to evaluating levels of engagement, as opposed to levels of satisfaction. An employee can be quite satisfied working for an employer, but highly disengaged with the work.
Vicki Heath
Human Resources Software and Resources
http://www.businessperform.com