What Indicates a Great Organizational Culture: Employee Satisfaction or Employee Engagement?

by Alexander Wollboldt 09/01/2018

I remember back in the 90’s when I took my first steps still as intern in the corporate world the term Employee Satisfaction was the measurement to decide if a company was good to work for or should be placed lower in the ranking of desirable work places. Nowadays, the term Employee Satisfaction, although still being used seemed to have switched to a more frequently heard term: Employee Engagement. So what indicates a great organizational culture: Employee Satisfaction or Employee Engagement? What are the most desirable employers or best firms to work for?

 

What is Employee Satisfaction?

When we try to look for a definition of Employee Satisfaction, we normally end up with descriptions such as “when people are happy at work and content with their job”. Happiness and contentment have a lot to do with the definition of one’s individual pursuit of meaning and purpose in relation to an outcome that it is aligned with.

At the same time one need to be able to celebrate it in order to create happiness. In an organizational context this simply means that the environment needed to be set up in a way that individuals, namely the employees, can fit their aspirations and personal life goals into it in such ways that they could put into effect the criteria of employee satisfaction. And the way a lot of companies measured and still are measuring those outcomes are in form of employee climate surveys with multiple qualitative and quantitative questions that are more or less relevant to decide the level of employee satisfaction.

Gallup’s research showed that although traditional idea of employee satisfaction relates to a meaningful outcome, still, it is a “broad, attitudinal outcome, like organizational loyalty or pride.” It is difficult to address these outcomes with just providing fancy incentives such as play stations, free canteen food, important sounding job titles and so on. On the other hand, engagement predicts satisfaction, as well as many other concrete business outcomes. It is easier to measure, and relatively easy to improve.

 

The Ingredients of Employee Engagement

When Gallup studied thousands of employee satisfaction surveys of different organizations, including most desirable employers in the world, they found out that there are four specific areas that are relevant not only to address the positive outcome of employee satisfaction but the additional factors necessary to improve and drive business results.

They came up with a survey that they called Q12-Employee Engagement Survey comprising 12 questions that consider the value contribution of the individual and her/his work team as well as basic and long term contribution by the organization to empower its employees. At the same time the Q12-Employee Engagement survey was structured in a way that it follows steps from question 1 all the way to question 12 that enables organizations to translate the survey outcomes to structured actionable items.

 

Building Block #1: Basic Needs

The Basic needs of an employee are the knowledge and understanding of what is expected of her/him at work. This is not limited to a mere job description but it also requires the deeper understanding of what the organization stands for, how they operate their business and how it will impact people in a greater sense. At the same time the organization through its managers will have to ask the question if it provides its employees with the necessary equipment and assets that are necessary to fulfill their tasks.

 

Building Block #2: Individuals

Does the organization recognize and let the employee use its talents and strengths in a way that it creates motivation and alignment with one’s purpose? Do the managers seem to care about the wellbeing of their team members as individuals? Once those questions are positively answered this should translate also in a continuous support in development of the individuals in those respective areas.

 

Building Block #3: Teamwork

Teamwork typically means that there is a group of imperfect individual contributors that works together depending on one another’s talents, skills and knowledge in order to achieve excellence. This demands that not only individual opinions are respected by one another but also that every member of the team realizes the importance and relevance not only towards themselves but also towards a greater impact on the outside world.

Only this awareness and attitude can lead the performance of a team to commitment towards excellence and a team spirit that sticks the people together over time. Since there is an alignment of individual purpose and meaning the group can also celebrate successes together in a much deeper and lasting sense.

 

Building Block #4: Growth

The tip of the building blocks that defines a fully engaged employee is the question on personal growth and development. It’s in summary the long term organizational recognition and action plan of an individual’s contribution to a successfully operating team that translates into incremental business results. Is an organization able to identify individual strengths and how do they invest in those areas to develop them further in terms of training and time?   

In summary it is clear that there has been a progression of the initial sentiment of organizations that employee satisfaction is relevant to a great team culture and positive business outcomes. At the same time it has also shown to be rather difficult to direct the knowledge of such rather “broad and attitudinal outcome”-directed measurements of satisfaction surveys into relevant actionable items.

The definition of Gallup-coined term “Employee Engagement” however seems to give us much more relevant information not only about how an employer makes efforts to satisfy her/his employees but also on how well an individual is able to contribute and grow with the same organization over time.      

Alex Wollboldt is a Certified Management Accountant (CMA), – Consultant (CMC) and Gallup Strengths Coach and has a decade of corporate professional history as Finance Head and Director in manufacturing and service industries in different locations such as Germany, Japan and the Philippines. He is a founding partner at Wissen Solomon, a business consultancy that provides businesses through consulting and coaching expertise in the area of digitization, marketing, finance, operations and organizational development. Alex also acts as co-director for OSG Global Consultancy taking care of various areas involving private equity investments, financial advisory, M&A mostly in the Philippines and other South East Asian countries.

Alexander Wollboldt

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