Job Satisfaction: Why Is It Important?

Satisfied employees are more likely to stay with the organization.

Written by Jeff Rumage
Job Satisfaction: Why Is It Important?
Image: Shutterstock / Built In
Matthew Urwin | Sep 15, 2023

Job satisfaction is an important way to measure whether employees like their job. When employees are happy or satisfied, they are less likely to leave their company, which leads to higher morale and more productivity for the organization as a whole.

Job satisfaction is influenced by many factors, like the nature of the work itself, pay and benefits, workplace relationships and career development opportunities. While it’s tricky to quantify, companies still try to keep a pulse on how their employees feel about their jobs. 

One way to gauge job satisfaction is to administer engagement surveys that ask employees various questions, like if they feel they have enough access to learning opportunities, if they find their work fulfilling or if they enjoy working with their manager. Companies may also look at metrics like absentee rates and turnover rates to determine whether employees are satisfied at work.   

Before taking steps to measure — and improve — job satisfaction, companies must first understand what exactly job satisfaction is, why it’s important and what contributes to it.   


What Is Job Satisfaction?

Put simply, job satisfaction refers to whether an employee is happy with their job. This could be based on their salary, their relationship with their manager and other workplace factors.

Job satisfaction is similar but different from employee engagement, which describes an employee’s enthusiasm, passion and commitment to the work (and is a strong indicator of increased productivity, profitability and satisfied customers).

“Job satisfaction is more of an attitude,” said Paul Spector, professor at the University of South Florida’s Muma College of Business, author of Job Satisfaction: From Assessment to Intervention and a renowned researcher in the field of employee well-being and behavior. “It’s the extent to which you have a favorable attitude or favorable opinion or favorable feelings about your work.”

Most engaged employees are satisfied with their job, but not all satisfied employees are engaged in their work. The only real way to gauge employee job satisfaction is by asking employees about their job. Spector, author of the widely used Job Satisfaction Survey, developed 36 questions addressing nine facets of job satisfaction: pay, promotion, supervision, fringe benefits, performance-based rewards, operating procedures, coworkers, nature of work and communication.

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What Factors Contribute to Job Satisfaction?

Job satisfaction is a subjective experience that depends on an individual’s career priorities. One person may be satisfied with a job that is boring but offers high pay and job stability, while another may be satisfied with a job simply because they like their supervisor and their coworkers.

Some researchers have argued that an employee’s temperament influences their level of job satisfaction, and that they’re more likely to be satisfied with their job if they have high self-esteem, belief in their competence, a sense of control over their life and low levels of neuroticism. 

That said, the following factors can have a major impact on employees’ job satisfaction.

Factors Impacting Job Satisfaction

  • Nature of the work 
  • Pay and benefits 
  • Work-life balance
  • Job security
  • Employee recognition
  • Relationship with manager
  • Relationship with peers
  • Career development
  • Feedback and communication
  • Employer reputation and values


Nature of the Work

When asked if they like their job, employees tend to focus on the concrete tasks and responsibilities required by it, according to Spector — perhaps because they see that as the most salient answer to the question. Spector also said employees tend to be more satisfied when their role aligns with their interests and their abilities.

Employees want to find a sense of purpose in the workplace, so companies may want to take measures to keep workers’ everyday tasks interesting. Asking employees to take on new challenges and letting them work on passion projects are great ways to liven up an otherwise dull job and make employees feel more connected to their roles.  


Pay and Benefits

A strong benefits package with ample compensation can be a difference maker when attracting top talent and retaining high performers. About 64 percent of job-seekers list an increase in pay or benefits as their biggest priority, so companies would do well to bolster their benefits with generous compensation and a clear-cut merit pay system.   

Pay transparency plays a role in satisfaction too. According to a study by compensation software company PayScale, employees who work for organizations with low pay transparency were 183 percent more likely to leave than employees at companies with high pay transparency.


Work-Life Balance

When considering job satisfaction, employees are affected by their work-life balance.

For some employees, good work-life balance might mean having enough time outside of work to enjoy family and friends and pursue hobbies and interests. For others, it’s more about the ability to work remotely or on a hybrid basis, which might be particularly important for the satisfaction of employees who have children and could use some extra flexibility.

“I think if you give people flexibility, that maximizes satisfaction,” Spector said. “The people who want to come in every day will come in every day, and the people who don’t, won’t — and that’s fine.”


Job Security

Company downsizings and layoffs can take a toll on employees still with the company, reducing their productivity and the quality of their organization’s products and services. And with the chance of another round of layoffs looming, it can be difficult for employees to focus on their roles and feel motivated to perform well. 

While companies can’t always guarantee job security, leaders can maintain trust with employees by remaining transparent through stressful times and communicating any upcoming business changes. 


Employee Recognition

Employees want to feel appreciated, and a little recognition can go a long way toward satisfaction. While 63 percent of workers don’t think they get enough praise, employees who do receive enough recognition are 56 percent less likely to search for a new job.  

Companies can make workers feel seen through recognition programs, which may include shout-outs, employee awards and pay raises. And organizations with remote workers may also want to adjust their programs to accommodate employees not in the office.  


Relationship With Manager

Managers can have a lasting impact on an employee’s time at an organization. Case in point: relationships with management make up 86 percent of the satisfaction employees feel in workplace relationships. 

According to Amy Spurling, founder and CEO of Compt, an employee stipends platform, there is a lot of truth to the saying that employees “don’t quit companies, they quit managers.”

“Even if you love the company and you love the mission, if your manager’s a nightmare, you’re not going to be very satisfied at work,” Spurling said. “You’re going to be really frustrated and you’re probably going to go somewhere else.”


Relationship With Peers

Developing closer connections with coworkers can also boost job satisfaction levels among employees. In fact, employees who have a best friend at work are 17 percent more likely to strongly agree with the statement that they’re extremely satisfied working in their current place of employment.

Besides being able to look forward to company happy hours and hangouts outside of work, employees with tight bonds may find it easier to collaborate with each other and meet deadlines. Feeling like they can rely on their teammates for support when needed takes a lot of pressure off of employees and leads to a more relaxed environment.  


Career Development

Being able to build one’s career is something employees value, but many businesses have failed to respond accordingly. A Pew Research study found that only 33 percent of workers are satisfied with promotion opportunities at work and 44 percent are satisfied with opportunities to learn new skills. Companies that invest in upskilling initiatives can then set themselves apart as attractive landing spots for ambitious workers looking to grow as professionals.     


Feedback and Communication

Feedback is essential for job satisfaction. With proper feedback, employees can ensure they and their manager are on the same page, which goes a long way toward building trust. Unfortunately, less than half of workers are satisfied with the amount of feedback they receive.  

Companies can change this by emphasizing employee communication, which starts at the managerial level. By scheduling frequent one-on-ones with direct reports, managers can create a safe space for employees to ask questions and receive constructive criticism. This gives employees the attention they need to become better at their jobs while also feeling seen by team leaders.    


Employer Reputation and Values

More than half (54 percent) of workers would take less pay to join a company with better values, and 56 percent wouldn’t take a job at a company with disagreeable values. Speaking about their company with pride means something to employees, so businesses must go beyond giving lip service to their company mission statement

Companies can practice the values they preach by offering volunteer days to employees, donating profits to local charities and enlisting workers to provide free services to underserved communities. These actions make employees feel better about the business and could encourage them to advocate for their company as a place to work.

More on Employee EngagementHow to Improve Employee Engagement: 16 Effective Tips


Why Is Job Satisfaction So Important?

Companies and professionals have much to gain from job satisfaction. Below are some of the main advantages that come with it. 


Higher Employee Engagement

If employees have high job satisfaction, they are more likely to be engaged in their work, perform at a high level and contribute to a positive work environment.  

Mindy Honcoop, founder of fractional HR consulting firm Agile in HR, likens job satisfaction to a bellwether for an organization’s culture.

“If you start to see your satisfaction start to become inconsistent and decrease,” Honcoop said, “you can almost guarantee that your team health and your overall engagement is going to decline even more.”


More Profits

Engagement is a key people metric for organizations, since it’s often related to profitability. When comparing teams with the lowest and highest levels of engagement, those with higher levels of engagement were found to be 23 percent more profitable. Organizations that invest in making their employees happy empower them to focus on their jobs without distractions, leading to more productivity — and more profit. 


Lower Turnover 

Employees who are satisfied with their job are also more likely to stay with the organization, Spector added. This isn’t surprising since employees who leave their jobs often cite factors closely tied to low job satisfaction — poor pay, lack of advancement opportunities, feeling disrespected and weak benefits. 

Convincing employees to stick around is a significant business advantage, because each employee who leaves the company takes valuable institutional knowledge and client relationships with them. It also necessitates the costly, time-consuming process of recruiting, hiring and training their replacement.

More on Employee EngagementWhy Is Employee Engagement Important?


How to Improve Job Satisfaction

Companies that want to get serious about improving job satisfaction should start by listening to employees. That way, they can learn about the issues that matter to employees, the resources they need to do their jobs better and their ideas for how the organization’s culture can improve.


1. Listen to Employee Feedback 

Organizations can get a sense of an employee’s job satisfaction through regular conversations, listening sessions and surveys.

When workers express dissatisfaction or negative feelings on surveys, Spurling said it’s important for managers or human resources teams to dive in and find out the root causes of those negative feelings. By talking with employees, managers can learn more about the causes of their team’s dissatisfaction, what issues they face and what resources can be put in place to help them do their job.

“They’re sounding an alarm bell to say, ‘Hey, something is off here, and we need to fix it,’” Spurling said. “You want that negative feedback from your employees when things are going south so that you can fix it.”


2. Provide Career Development Resources

Career development programs have been shown to increase job satisfaction and employee retention. Companies can implement management training programs to nurture future leaders, but they should also develop employees who want to grow and advance their career beyond the management track. Through career pathing, managers can help employees adopt long-term goals, develop a career development plan and advance their skills and work experience to meet the employee’s goals. 

Spector also suggests organizations create fair and transparent criteria for promotions, so that employees know how they are being evaluated and what steps they can take to advance within the organization. It’s hard to be satisfied with your job if it’s unclear how to advance in it.


3. Promote Employee Wellness

Organizations can also invest in their people’s satisfaction by promoting wellness. This might include providing more flexible work arrangements, keeping workloads reasonable and encouraging employees to take time off for rest and relaxation.

An organizational culture that encourages managers to check in with employees about their well-being — and for employees to check in with each other — contributes to satisfaction too.

Similar to the way that companies plan features in their product roadmap, Honcoop said companies may want to consider creating an HR product roadmap for establishing a culture of well-being. 

“It’s all about ecosystem health,” Honcoop said. “When we have a company culture with ecosystem health, that means the employees are healthy…and then your end-consumers and customers are happier too, which does positively impact the community and society. You just have greater positive outcomes at all levels.”​


Frequently Asked Questions

Some important factors of job satisfaction include pay and benefits, work-life balance, workplace relationships, job security and career development opportunities.

Job satisfaction is important because higher job satisfaction is often linked to higher employee engagement levels, more profits and lower employee turnover.

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