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Top 3 Drivers of Employee Satisfaction (and Salary Isn’t One of Them)

by Traci Pesch

Rabbit on a benchRecognize This! – Company culture, career opportunities and trust in senior leaders drive employee satisfaction far more than salary.

Have you ever gone down rabbit holes on the web, where you start reading one article, then click an embedded link that seems intriguing, and then do it again in the next article? The next thing you realize, three hours have passed, you missed a phone call with a colleague, and worst, you missed your regular infusion of Diet Coke (okay, maybe that last part is just me).

I have Glassdoor to thank for my latest trip down the rabbit hole through the innocent entry point of their list of the 25 highest paying companies in America. Unsurprisingly, all 25 spots are held by consulting and high-tech firms. Far more interesting to me was this paragraph at the end of the article:

“While the companies on this list pay handsomely and a Glassdoor survey shows salary and compensation are among peoples’ top considerations before accepting a job, Glassdoor research also shows that salary is not among the leading factors tied to long-term employee satisfaction. In contrast, culture and values, career opportunities, and trust in senior leadership are the biggest drivers of long-term employee satisfaction.”

It’s that second link that proved my undoing. As a passionate believer in the importance of core-values-driven cultures, especially those reinforced through recognition, I had to click. It took me to this report from June 2015, which included several thought provoking statements: (largely quoting below, emphasis mine):

“A 10% increase in employee pay is associated with a 1 point increase in overall company satisfaction on a 0-100 scale, controlling for all other factors. In other words, if an employee making $40,000 per year were given a raise to $44,000 per year, his or her overall employee satisfaction would increase from 77 percent to 78 percent. And it’s important to note that there is a diminishing return to happiness for every extra $1,000 in earnings.”

Glassdoor then dug further into the findings to find out, if money isn’t the main driver of employee satisfaction, then what is? They went back to their employer review survey (another link!) to add controls for employee ratings on business outlook, career opportunities, culture and values, compensation and benefits, senior leadership and work-life balance. The results:

“In this regression, all of these control variables were statistically significant predictors of workplace satisfaction. And the model predicts overall satisfaction pretty well, explaining about 76% of variation in employee satisfaction. From this model, we find an employee’s culture and values rating for the company has the biggest impact on job satisfaction. And not surprising given the findings above, we find an employee’s compensation and benefits rating has the second smallest effect on overall satisfaction, ahead of business outlook rating.”

[Tweet “Employee perception of company culture and core values has highest impact on #EmployeeEngagement” @WorkHuman]

Company Culture ImportanceWondering why the culture and values rating is so influential, Glassdoor determined, “An employee’s culture and values rating probably represents a combination of factors that contribute to overall well-being such as company morale, employee recognition, and transparency within the organization.”

Why did this fascinate me so greatly? Culture matters. And every employee in your organization owns, influences and benefits from the culture – whether it’s the culture you want or the one allowed to “just happen.” And let’s not ignore the statement in the original quotation above about the importance of trust in senior leaders. Don’t forget the findings from the latest WorkHuman Research Institute employee survey showing the dramatic impact of recognition on trust for leaders.

Recognition Impact on Trust

What most drives your satisfaction and engagement in your work?

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