Impact of employee engagement on employee and customer satisfaction

By on August 24, 2012

Human beings were once considered a mere ‘factor of production’ employed for producing the offerings. Gradually, the business firms started realizing that human resources are indispensable to the survival and success of business. They gained importance in corporate scenario and were referred to as ‘human resources’. Over the time, competition became harder and human resources became means to gain competitive advantage. The employees became an investment and the new term ‘human capital’ came into existence. Today organizations are struggling against attrition as it involves physical loss of the manpower. But there is another serious problem of lack of employee engagement. Employees continue to be an integral part of the organization but several times they do not feel engaged to the organization resulting into poor or zero productivity.

What is employee engagement?

Employee engagement has been defined by Gallup (2009) as, “the individual’s involvement and satisfaction with as well as enthusiasm for work”. Another definition provided by Maslach et al (2001) describes engagement as “a positive, fulfilling, work-related state of mind that is characterized by vigour, dedication,and absorption.”  Various characteristics associated with employee engagement includes:

  • Enthusiasm towards work.
  • Commitment to the organization.
  • Feeling of organizational pride.
  • Alignment of individual and organizational goals.
  • And discretionary efforts towards accomplishment of organizational objectives.

Realizing the benefits attached to employee engagement most of the companies today conduct employee engagement surveys to measure engagement. Though there is no universally accepted measure of employee engagement. In simple terms, an engaged workforce is said to be the one who takes pride in being part of the organization and advocates the organization. Such employees are satisfied with their job and intend to stay longer.

What drives employee engagement?

Sound HR practices are a pre-requisite to employee engagement. Employees should be provided with job training and career development opportunities. Their performance should be appraised and rewarded fairly. Strong leadership also play an important role in driving engagement. The manner employees are treated by top management and the motivational practices adopted by immediate supervisor influences the engagement level. Organizational culture is critical in driving engagement. It is believed that people-centrist organizational culture leads to better engagement. Informal communication should flow throughout the organizational hierarchy as it makes employees share the feedback as well as grievances. This makes employees feel a part of the organization.

Employee engagement leads to employee and customer satisfaction

There is a complete chain from employee engagement to the organization’s success. Engaged employees act as an asset to the organization. When the employees feel engaged to the organization, they do not need external motivation. They put discretionary efforts towards organizational success.

Fig 1: Employee engagement leading to Customer satisfaction
Fig 1: Employee engagement leading to customer satisfaction

Happy employees, happier customers

Employee engagement leads to a psychological bonding with the company. They develop a sense of ownership and responsibility towards their job as well as the organization. This makes employees enjoy their job better which leads to job satisfaction. Satisfied employees tend to stay longer in the organization. This results in good employee retention. Corporate Leadership Council (2004) provides that engaged employees are less likely to leave. This further drives employee productivity as employees give their best and it adds to the service value. Customers get this added value and feel satisfied. Satisfied customers tend to make repeat purchases. Which leads to generation of a loyal customer base for the company. This ultimately results in organizational profitability and growth.


  • Albrecht, S. (2010). Handbook of Employee Engagement: Perspectives, Issues, Research and Practice. UK: Edward Elgar Publishing Limited.
  • Armstrong, M. 3rd Edition. (2010). Armstrong’s Handbook of Reward Management Practice: Improving Performance through Reward. Kogan Page Limited.
  • Farmer, N. (2008). The Invisible Organization: How Informal Networks can Lead Organizational Change. England: Gower Publishing Limited.
  • Gallup (2009). Workplace Audit. Washington DC: Gallup Inc.
  • Maslach, C., Schaufeli, W. & Leiter, M. (2001). “Job Burnout”. Annual Review of Psychology, 52.