The Relationship between Employee Satisfaction and Hospital Patient Experiences


The following white paper from The FORUM: Business Results Through People examines the vital link in the hospital industry between employee satisfaction and the satisfaction and quality of patient care, based on extensive research conducted at a major New York City hospital. Although this study was initially com- pleted in 2009, health care continues to grow and now represents more than 17 percent of the U.S. economy and will grow as the population ages and coverage increases under Federal regulation . Health care is an enormously people-intense industry, and the importance of employees can hardly be under- estimated. The changes taking place in health care require employees to be very engaged and to perform at the highest level in order to comply with increased regulation and ensure patient safety and satisfaction.

Critical condition: the talent crisis facing health care

In the healthcare industry, as in other service-related businesses, the benefits of having engaged, empowered, loyal employees can lead to increased retention, lower costs, enhanced reputation and a profitable business picture.

As the healthcare business becomes more competitive, every advantage is important, but all too often, hospital administrators do not always consider employee performance and satisfaction as a competitive edge.

In this competitive environment, healthcare administrators are increasingly feeling the pressure to manage costs and provide new treatments and better outcomes for patients. In an industry where success is being driven more and more by patient satisfaction scorecards, reliable access to and retention of top talent is essential to meet the demand for quality patient care.

According to an April 2008 study by Futurestep, “nowhere is the (talent staffing) problem more severe than in the health care environment, where talent shortages put lives at risk.” As the U.S. population ages, the healthcare industry continues to grow in size and importance, now representing 17 percent of GDP. For seniors, 40 percent of their total economic consumption is directed to healthcare spending. Within the next 10 years, overall healthcare spending as a percentage of GDP is likely to rise to 20 percent ($2.9 trillion).

Despite temporary hiring freezes in certain healthcare markets, industry growth is expected to continue, and health- care organizations will continue to find it difficult to recruit and retain high-quality professionals. The reasons are twofold — first, a growing proportion of the workforce is retiring or resigning, and secondly, there are an insufficient number of new graduates in the medical and healthcare administration fields.

The situation is especially acute in the nursing profession, where shortages exist globally. According to the American Organization of Nurse Executives, the average nurse turnover rate at acute-care hospitals is 21.3 percent, with higher turnover rates in critical care units. Much of the turnover is attributed to job stress and burnout linked to reduced staffing. And, says a Spherion report on healthcare staffing, “hospitals are diverting patients, losing revenues and compromising patient care due to inadequate staffing levels. The overall state of affairs has reached a critical point.”

Additionally, healthcare organizations are looking beyond financial performance measures, giving more focus on how to deliver higher quality care. While some improvements in care quality can be reached through investments in technology and infrastructure, the most dramatic improvements are achieved through people.

FORUM study unveils key findings

So, the key question is how do service-based organizations, such as hospitals, determine their level of employee engagement, and what impact does it have on patients? To answer this ques- tion, researchers Jimmy Peltier and Andy Dahl of the University of Wisconsin and Frank Mulhern of Northwestern University conducted an exploratory study to investigate the relationship between employee satisfaction and patient satisfaction at a major New York City hospital. Key overall findings from the study include:

  • Hospital departments that have higher levels of employee satisfaction provide better experiences for patients.
  • Patients that have higher levels of satisfaction are most likely to recommend the hospital to others when they are treated in the high employee satisfaction departments, compared to those treated in the low employee satisfaction departments. Word of mouth, more than any other source of marketing / promotion, is a primary driver in patient healthcare decisions.
  • Individual employee recognition, as well as the need and value of increasing recognition of staff members in higher positions, were identified as key contributors to employee satisfaction.
  • In addition, recognition at the hospital was not only viewed as acknowledgement for a job well done, but also as being able to participate in decision making, and being listened to by management and fellow professionals. This practice results in “more respect and visibility,” which in turn enhances employee satisfaction.
  • Programs and activities at the hospital that are designed to contribute to employee satisfaction need to be viewed strategically, rather than offered as short-term efforts, or efforts initiated on multiple fronts, which weakens the overall impact of the program. In addition, multiple programs may be distracting to meeting the demands for patient care.
  • The expanded use of computers for diagnostic testing and vital signs monitoring has eroded the patient ’s feeling of being personally cared for. As the popularity of electronic health and prescription records expands, healthcare employees need to exercise “the personal touch” in caring for patients.
  • A key conclusion of the study is that, in addition to what healthcare workers do, emphasis needs to be placed on how the employees feel about what they do. Patient experiences will not be good if employees are not happy.

Getting started: how the study was conducted

The approach involved a review of current literature on healthcare performance, primary data collection through an online forum and interviews with key hospital staff, and an empirical analysis of employee and patient satisfaction data.

The literature review focused on employee engagement, employee satisfaction, and patient satisfaction in healthcare settings, and provided a foundation for the key people-related issues facing health care.

In the empirical analysis, the primary objective was to assess the relationship between employee satisfaction and patient satisfaction. While the research was limited to a healthcare setting, the concepts can easily be applied to other service- or people- based industries, such as retail and hospitality.

The research phase: feedback and ideas for improvement

The research consisted of two components. First, the team established a 31-member advisory committee that participated in an online forum about their perceptions about the quality of service and the motivation, satisfaction and performance of employees. Secondly, the team conducted quantitative analysis that matched employee satisfaction survey data with patient satisfaction survey data to assess the relationship between employee satisfaction and patient experiences.

Key findings from the advisory committee forum include:

  • Advisory committee members identified the hospital’s current “best practices” for increasing employee loyalty, retention and motivation. These include recognition of employee milestones and accomplishments, promoting a family-like atmosphere among long-term employees, and support of financial bonds including salary and benefits.
  • Areas identified for improvement include better communication of goals, decisions, and information between departments, greater empowerment and involvement in decision making, and continuing to improve work relationships, especially between supervisors and their departments and between physicians and nurses.
  • The behavior of physicians has a major impact on the level of engagement with non-physician staff. Physicians who are disrespectful, make negative comments or treat patients as (in the words of one committee member) “non-human intangible entities” lead to reduced engagement in non- physician staff. When an employee feels like a valuable team member and feels respected by others, higher levels of engagement are likely.
  • The consensus from the advisory committee was that the level of employee engagement at the hospital is high and has had a positive impact on the quality of care and patient satisfaction.

Based on the literature review and input from the advisory committee, the graphic below was designed to illustrate the link between employee engagement levels, employee satisfaction, patient satisfaction and organizational financial performance.

Employee, patient satisfaction data “in sync”

The University of Wisconsin/Northwestern University research team compared the results of the hospital employee and patient satisfaction surveys to determine whether there was a link between the way employees feel about their jobs and the quality of the patient experience. Researchers used a variety of statistical methods to evaluate the relationship.

But most importantly, they found, in a side-by-side comparison of key questions from both surveys, that the highest scores on the employee survey tracked positively with the highest scores on the patient satisfaction/quality of care survey. Researchers concluded that the patient, either consciously or not, infers that the care received is better merely because of the environment created by having more satisfied employees.

Conclusion: people performance boosts healthcare quality, business results

The upshot is clear — more satisfied employees lead to more satisfied patients. A key aspect of this study is that health- care administrators can add “quality of patient care” to the list of benefits of having satisfied employees, not to mention the other key benefits of increased retention, lower overall costs, and repeat visits and positive word-of-mouth recommendations by patients.

Hospitals compete aggressively to attract patients, particularly for high-revenue services such as cardiac care. There are a variety of dimensions that factor into the competitive landscape, including hospital location, technology, physician reputation and the hospital’s image in its service area. Based on the findings of the study, one can now include the level of hospital employee satisfaction as a competitive factor.

The FORUM: Business Results Through People, affiliated with Northwestern University, is an organization for thought leadership advocating that the most effective way business leaders create and sustain organizational values is through partnership with people. The FORUM invites leaders in the healthcare industry to comment on this white paper and share their experiences with employee engagement and how it is affect- ing patient care at their institution. To add your insights, please contact Managing Director Susan Peterson via email at To view the full text of the research paper, plus additional people-centered leader- ship research, go to The FORUM is located in Naperville, Ill. and can be reached via phone at 630-369-7780.