Beyond Compensation: How Leaders Can Build Both Employee Engagement and Job Satisfaction from the Bottom Up
As a leader, you’ve likely wrestled with the challenge of keeping your team both motivated and happy. You might have noticed that the employee who seems driven to hit every deadline isn’t necessarily the one who seems content at work. Or perhaps you’ve seen someone who genuinely enjoys their colleagues and work environment but lacks the fire to go above and beyond. This isn’t a contradiction—it’s the difference between engagement and job satisfaction, and understanding this distinction is crucial for effective leadership.
The Critical Difference: Engagement vs. Job Satisfaction
While these terms are often used interchangeably, they represent fundamentally different aspects of the employee experience. Engagement is about motivation and drive—the internal push that makes someone want to excel, stretch their capabilities, and give their best effort. Job satisfaction, on the other hand, is about contentment with one’s work experience.
Here’s where it gets interesting: you can have one without the other. An employee might be highly motivated by bonuses, promotions, or the fear of negative consequences (such as being reprimanded or terminated), and still feel deeply unsatisfied with their daily work experience. Conversely, someone might adore their boss, enjoy their colleagues, and feel content with their role, yet lack the drive to push beyond the minimum requirements.
So what does a manager do when drive or satisfaction are lacking in an otherwise qualified and valued team member? Too often, we see the proposed solution as “Promote! More money!” What if there’s no budget for a raise? And if there is, does this solve the issues? In our experience, the answer is no, not for the long term.
The good news: The most effective solutions are within reach of the individual people manager.
While top-down factors like compensation and benefits matter, the most powerful levers for influencing both engagement and satisfaction are often right at your fingertips. The Job Characteristics Theory by Hackman and Oldham provides a roadmap for creating work that naturally fosters both engagement and job satisfaction through five key elements:
1. Variety: Breaking the Monotony
Employees thrive when their work engages multiple skills and presents different challenges. This doesn’t mean completely restructuring roles but rather finding creative ways to introduce variety into daily tasks. Consider involvement in task forces, job rotation opportunities, cross-training initiatives, or shadowing programs that allow team members to develop new capabilities while breaking up routine work.
2. Identity: Creating Ownership of the Whole
Nothing kills satisfaction quite like feeling like a cog in a machine. When employees can see how their work contributes to a complete, meaningful outcome, their sense of ownership and pride can increase dramatically. Instead of assigning isolated tasks, look for ways to give team members responsibility for entire processes or projects from start to finish.
3. Significance: Connecting Work to Purpose
Every role, no matter how specialized, contributes to something larger. Your job as a leader is to help employees see these connections. For example, if you’re leading a team for a company that provides a wellness product or service, help team members understand how their daily work contributes to bringing wellness to people (thank you, Mindbody!). If that connection isn’t immediately obvious, take time to draw the lines between their tasks and the ultimate impact on customers, communities, or delivering the organization’s mission.
4. Autonomy: Giving Voice and Choice
People are naturally more invested in outcomes they’ve had a hand in shaping. This doesn’t mean abandoning all structure or oversight, but rather finding meaningful ways for employees to have input in decisions that affect their work. Whether it’s choosing how to approach a project, helping set their own deadlines (within reasonable parameters), or having input on team processes, regular doses of autonomy can dramatically increase both engagement and satisfaction.
5. Feedback: The Foundation of Growth
Perhaps no single factor is more critical (or more frequently mishandled) than feedback. Many managers operate under the misguided belief that “no news is good news,” only speaking up when something goes wrong. The irony is that untrained managers often overlook giving positive feedback because they assume good work speaks for itself. Others avoid constructive feedback to sidestep potential conflict. This creates a snowball effect where problems fester, teams become aware of issues before the affected employee does, and organizational performance suffers. Both of these scenarios create a feedback vacuum that leaves employees guessing about their performance and missing opportunities for growth.
Making Feedback Work
Effective feedback isn’t just about frequency—it’s also about quality and approach. Both positive recognition and constructive guidance are essential for employee development. When employees convey they aren’t receiving adequate feedback, you can empower them by teaching them how to ask the right questions to get the information they need.
Consider implementing regular manager-employee check-ins (aka one-on-ones) that go beyond project status updates to include discussions about what’s working well, what could be improved, and what support the employee needs to meet the desired outcome and be successful in their role.
The Bottom-Up Approach to Leadership
While organizational policies and total compensation matter, the most immediate and powerful influence you have as a leader comes through these day-to-day interactions and decisions about how work gets structured and communicated. By focusing on these five key areas — variety, ownership, significance, autonomy, and feedback — you’re not just improving individual job satisfaction; you’re creating conditions where engagement and job satisfaction naturally flourish.
The best part? These changes only require awareness and a little skill-building. Using these practices helps you step back and remember to see your team members as whole people with needs for growth, purpose, and recognition, rather than simply resources to deploy.
Remember, sustainable high performance comes not from squeezing more effort out of satisfied employees or trying to make motivated-but-discontent employees satisfied through promotions and compensation alone. It comes from creating work experiences that naturally foster both the drive to excel and the satisfaction that makes that drive sustainable over time.
As you reflect on your own team, ask yourself: Are you inadvertently creating conditions that divorce engagement from satisfaction? What small changes could you make now to help your employees feel both motivated to do great work and genuinely satisfied with their daily experience? The answers to these questions might be simpler—and more powerful—than you think.
Do you have leaders or new managers who are working on strengthening these skills? Is your organization trying to boost retention? Organizations work with us to help their leaders and employees thrive through leadership skills group training and coaching solutions. Let’s discuss your leadership challenges.