The development and empirical validation of the Employee Satisfaction Index model

Abstract

‘People are the most important asset of any organisation’ is a highly over-used and under-believed statement. We spend an inordinate amount of time and energy focusing on customer experience, without giving thought to employee satisfaction. Yet employee satisfaction is paramount, because it will determine the success or failure of what the customer experiences. This study proposes an Employee Satisfaction Index (ESI) model with an aim of simplicity, diagnostics and comparability that can explore the causal relationship of employee satisfaction. We surveyed 132 employees working for a high-tech firm. High-tech firms often find themselves operating in business environments fraught with unprecedented, unparalleled, unrelenting, and largely unpredictable change. Therefore, a company's success depends on its ability to attract and continually motivate their employees to contribute their knowledge. Partial Least Squares (PLS) was used to test the theoretical model and to derive an ESI score.

Keywords:

• Employee Satisfaction Index
• Partial Least Squares (PLS)

Acknowledgement

This research is supported by Chung Hua University with project ID CHU-95-TR-05.

Notes

1. PLS requires a minimum sample size that equals 10 times the greater of (1) the indicators on the most complex formative construct or (2) the largest number of antecedent constructs leading to an endogenous construct.

2.

• where h is the number of manifests variable within the latent variables and w _i is the unstandardised weights.