Job satisfaction is regard to one’s feeling or state of mind regarding the nature of their work. Job satisfaction can be influenced by variety of factors such as kind of supervision, organization policies & administration, salary & quality of life etc. Theories which rely on extrinsic sources are more typically adopted by economists, albeit by reference to a different terminology, whereas intrinsic sources are more commonly associated with other social sciences (Luchak, 2003).
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The more contented people are within their job, the more satisfied they are said to be. Job satisfaction cannot be described as motivation, although they are linked. Job design aims to improve employee satisfaction and performance through methods like job rotation, job enlargement and job enrichment. Other influences on satisfaction include flexibility at work, salary, job security, relationships with co-workers training etc. Job satisfaction is a very important attribute which is frequently measured by organizations. Other focus of this paper is if the job satisfaction predominantly leads to job retention. The most common way to measure job satisfaction and retention is done by using rating scales. Questions related to general working conditions, pay and promotion, work relationships, use of skills and abilities, work activities and retention have been asked in the questionnaire used. A 5 point scale developed by Singh (1989) measures job satisfaction from highly dissatisfied to highly satisfied and measure job retention from strongly disagree to strongly agree.
Employers have a need to keep employee from leaving and going to work for other organizations. The best way of retaining employees is to provide the job satisfaction and opportunities to build up their careers (Freeman, 1978)
This model was developed with the help of a research paper (Human resource development practices as determinant of HRD climate and quality orientation by Arif Hassan, Junaidah Hashim and Ahmad Zaki Hj Ismail, 2005). In this research paper the model was had variables including career system, work system, development system, self-renewal system and HRD system which were originally designed by Rao (1997). Since the instrument was unable to be located, we re-designed the model by changing the 5 systems into General working conditions, pay and promotion, work relationships, use of skills and abilities and work activities. This information was extracted from a questionnaire (http://www.careerlinklehighvalley.org/portals/1/pdf%20files/Job%20Survival.pdf) which helped us develop and measure the level of satisfaction using these variables.
History
One of the biggest preludes to the study of job satisfaction was the Hawthorne studies. These studies (Mayo 1924-1933), sought to find the effects of various conditions (most notably illumination) on workers’ productivity. These studies ultimately showed that novel changes in work conditions temporarily increase productivity (called the Hawthorne Effect). It was later found that this increase resulted, not from the new conditions, but from the knowledge of being observed. This finding provided strong evidence that people work for purposes other than pay, which paved the way for researchers to investigate other factors in job satisfaction.
Scientific management also had a significant impact on the study of job satisfaction. Taylor’s 1911 book, Principles of Scientific Management, argued that there was a single best way to perform any given work task. This book contributed to a change in industrial production philosophies, causing a shift from skilled labor and piecework towards the more modern approach of assembly lines and hourly wages. The initial use of scientific management by industries greatly increased productivity because workers were forced to work at a faster pace. However, workers became exhausted and dissatisfied, thus leaving researchers with new questions to answer regarding job satisfaction. It should also be noted that the work of W.L. Bryan, Walter Dill Scott, and Hugo Munsterberg set the tone for Taylor’s work.
Some argue that Maslow’s hierarchy of needs theory, a motivation theory, laid the foundation for job satisfaction theory. This theory explains that people seek to satisfy five specific needs in life – physiological needs, safety needs, social needs, self-esteem needs, and self-actualization. This model served as a good basis from which early researchers could develop job satisfaction theories.
Employee retention is a business management term referring to efforts by employers to retain current employees in their workforce. The purpose is to avoid employee turnover and associated costs: hiring and training expenses; productivity loss; lost customers; diminished business; and damaged morale among remaining members of the workforce. Retention is particularly a problem in high stress occupations such as teaching, nursing and social care work. (Wikipedia)
Philosophically, employee retention is important; in almost all cases, it is senseless to allow good people to leave your organization. When they leave, they take with them intellectual property, relationships, investments (in both time and money), an occasional employee or two, and a chunk of your future. Employee Retention Strategies helps organizations provide effective employee communication to improve commitment and enhance workforce support for key corporate initiatives. We also provide full support for your marketing-communication efforts by helping you build customer loyalty by distinguishing and positioning your organization’s unique products and services in today’s crowded marketplace (Rao, 2005)
Effective employee retention is a systematic effort by employers to create and foster an environment that encourages current employees to remain employed by having policies and practices in place that address their diverse needs. A strong retention strategy becomes a powerful recruitment tool.
Retention of key employees is critical to the long-term health and success of any organization. It is a known fact that retaining your best employees ensures customer satisfaction, increased product sales, satisfied colleagues and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. (www.employee-retention-guide.com)
Employee retention matters as organizational issues such as training time and investment; lost knowledge; insecure employees and a costly candidate search are involved. Hence failing to retain a key employee is a costly proposition for an organization. Various estimates suggest that losing a middle manager in most organizations costs up to five times of his salary.
Intelligent employers always realize the importance of retaining the best talent. Retaining talent has never been so important in the Indian scenario; however, things have changed in recent years. In prominent Indian metros at least, there is no dearth of opportunities for the best in the business, or even for the second or the third best. Retention of key employees and treating attrition troubles has never been so important to companies.
In an intensely competitive environment, where HR managers are poaching from each other, organizations can either hold on to their employees tight or lose them to competition. For gone are the days, when employees would stick to an employer for years for a better choice.
It is a fact that, retention of key employees is critical to the long-term health and success of any organization. The performance of employees is often linked directly to quality work, customer satisfaction, and increased product sales and even to the image of a company. Whereas the same is often indirectly linked to, satisfied colleagues and reporting staff, effective succession planning and deeply embedded organizational knowledge and learning
The Importance of Retaining Employees
The challenge of keeping employees: Its changing face has stumped managers and business owners alike. How do you manage this challenge? How do you build a workplace that employees want to remain with and outsiders want to be hired into?
Successful managers and business owners ask them these and other questions because-simply put-employee retention matters:
➤ High turnover often leaves customers and employees in the lurch; departing employees take a great deal of knowledge with them. This lack of continuity makes it hard to meet your organization’s goals and serve customers well.
➤ Replacing employees costs money. The cost of replacing an employee is estimated as up to twice the individual’s annual salary (or higher for some positions, such as middle management), and this doesn’t even include the cost of lost knowledge.
➤ Recruiting employees consumes a great deal of time and effort, much of
it futile. You’re not the only one out there vying for qualified employees, and job searchers make decisions based on more than the sum of salary and benefits.
➤ Bringing employees’ up to speed takes even more time. And when you’re short-staffed, you often need to put in extra time to get the work done.
(www.employeeretentionstrategies .com)
The Three Rs of Employee Retention
To keep employees and keep satisfaction high, you need to implement each of the three Rs of employee retention: respect, recognition, and rewards.
Respect is esteem, special regard, or particular consideration given to people. As the pyramid shows, respect is the foundation of keeping your employees.
Recognition and rewards will have little effect if you don’t respect employees.
Recognition is defined as “special notice or attention” and “the act of perceiving clearly.” Many problems with retention and morale occur because management is not paying attention to people’s needs and reactions.
Rewards are the extra perks you offer beyond the basics of respect and recognition that make it worth people’s while to work hard, to care, to go beyond the call of duty. While rewards represent the smallest portion of the retention equation, they are still an important one.
You determine the precise methods you choose to implement the three Rs, but in general, respect should be the largest component of your efforts. Without it, recognition and rewards seem hollow and have little effect-or they have negative effects. The magic truly is in the mix of the three.
Rewards
Recognition
Respect
When you implement the “three Rs” approach, you will reduce turnover and enjoy the following:
➣ Increased productivity
➣ Reduced absenteeism
➣ A more pleasant work environment (for both employees and you!)
➣ Improved profits
Furthermore, an employer who implements the three Rs will create a hard-to leave workplace, one known as having more to offer employees than other employers. You become a hard-to-leave workplace-one with a waiting list of applicants for any position that becomes available-purposefully, one day at a time. (Rao, 2008)
Models of job satisfaction
Affect Theory
(Locke, 1976) Range of Affect Theory: is arguably the most famous job satisfaction model. The main premise of this theory is that satisfaction is determined by a discrepancy between what one wants in a job and what one has in a job. Further, the theory states that how much one values a given facet of work (e.g. the degree of autonomy in a position) moderates how satisfied/dissatisfied one becomes when expectations are/aren’t met. When a person values a particular facet of a job, his satisfaction is more greatly impacted both positively (when expectations are met) and negatively (when expectations are not met), compared to one who doesn’t value that facet. To illustrate, if Employee A values autonomy in the workplace and Employee B is indifferent about autonomy, then Employee A would be more satisfied in a position that offers a high degree of autonomy and less satisfied in a position with little or no autonomy compared to Employee B. This theory also states that too much of a particular facet will produce stronger feelings of dissatisfaction the more a worker values that facet.
Dispositional Theory
Another well-known job satisfaction theory is the Dispositional Theory. It is a very general theory that suggests that people have innate dispositions that cause them to have tendencies toward a certain level of satisfaction, regardless of one’s job. This approach became a notable explanation of job satisfaction in light of evidence that job satisfaction tends to be stable over time and across careers and jobs. Research also indicates that identical twins have similar levels of job satisfaction.
A significant model that narrowed the scope of the Dispositional Theory was the Core Self-evaluations Model, proposed by Judge (1998). Judge argued that there are four Core Self-evaluations that determine one’s disposition towards job satisfaction: self-esteem, general self-efficacy, locus of control, and neuroticism. This model states that higher levels of self-esteem (the value one places on his/her self) and general self-efficacy (the belief in one’s own competence) lead to higher work satisfaction. Having an internal locus of control (believing one has control over herhis own life, as opposed to outside forces having control) leads to higher job satisfaction. Finally, lower levels of neuroticism lead to higher job satisfaction.
Two-Factor Theory (Motivator-Hygiene Theory)
Frederick Herzberg’s Two factor theory (also known as Motivator Hygiene Theory) attempts to explain satisfaction and motivation in the workplace. This theory states that satisfaction and dissatisfaction are driven by different factors – motivation and hygiene factors, respectively. Motivating factors are those aspects of the job that make people want to perform, and provide people with satisfaction, for example achievement in work, recognition, promotion opportunities. These motivating factors are considered to be intrinsic to the job, or the work carried out. Hygiene factors include aspects of the working environment such as pay, company policies, supervisory practices, and other working conditions.
While Hertzberg’s model has stimulated much research, researchers have been unable to reliably empirically prove the model, with Hackman & Oldham suggesting that Hertzberg’s original formulation of the model may have been a methodological artifact.[ Furthermore, the theory does not consider individual differences, conversely predicting all employees will react in an identical manner to changes in motivating/hygiene factors. Finally, the model has been criticised in that it does not specify how motivating/hygiene factors are to be measured. (Herzberg, 1968)
Job Characteristics Model
Hackman & Oldham (1971), proposed the Job Characteristics Model, which is widely used as a framework to study how particular job characteristics impact on job outcomes, including job satisfaction. The model states that there are five core job characteristics (skill variety, task identity, task significance, autonomy, and feedback) which impact three critical psychological states (experienced meaningfulness, experienced responsibility for outcomes, and knowledge of the actual results), in turn influencing work outcomes (job satisfaction, absenteeism, work motivation, etc.). The five core job characteristics can be combined to form a motivating potential score (MPS) for a job, which can be used as an index of how likely a job is to affect an employee’s attitudes and behaviors. A meta-analysis of studies that assess the framework of the model provides some support for the validity of the JCM.
Value of Employee Retention Model
An Employee Retention Model is a philosophical and newly touted theory. It states that to keep employees, we must understand what they like and do not like. What they do not like we need to address, focusing on the masses’ needs. We work to meet the overall big picture first. Once we have the process in place, we have more chances to help employees meet their individual needs.
We can never satisfy all employees, but if we have a workplace that is driven to help all team members feel good about what they do, employees will more likely want to stay in this culture.
All teams of people go through four stages of the group adaptation process before the team will work to its potential: (Tuckman, 1970)
Forming – group is starting to deal with each other and minimal work gets done.
Storming – group is starting to address internal conflicts and is are sorting out and negotiating to just get along. Work is still minimal.
Norming – group members are accepting their roles and are clear of their expectations. They know what they can and need to do. Safety is high so the corporation is functioning highly. Each member of the team is much more willing to help each other.
Performing – group members are all working independently, doing their jobs to maximum potential. The team is performing at an outstanding level. The team has learned how to increase productivity, make decisions, share resources, and create independent satisfaction.
If there is a great turnover in staff, many teams are always in the first two phases of the Tuckman model. The goal is to get as many teams in the workplace as possible to the FOURTH PHASE of PERFORMING.
Job satisfaction and emotions
Mood and emotions while working are the raw materials which cumulate to form the affective element of job satisfaction. Moods tend to be longer lasting but often weaker states of uncertain origin, while emotions are often more intense, short-lived and have a clear object or cause.
There is some evidence in the literature that state moods are related to overall job satisfaction. Positive and negative emotions were also found to be significantly related to overall job satisfaction.
Frequency of experiencing net positive emotion will be a better predictor of overall job satisfaction than will intensity of positive emotion when it is experienced.
Emotion regulation and emotion labor are also related to job satisfaction. Emotion work (or emotion management) refers to various efforts to manage emotional states and displays. Emotion regulation includes all of the conscious and unconscious efforts to increase, maintain, or decrease one or more components of an emotion. Although early studies of the consequences of emotional labor emphasized its harmful effects on workers, studies of workers in a variety of occupations suggest that the consequences of emotional labor are not uniformly negative.
It was found that suppression of unpleasant emotions decreases job satisfaction and the amplification of pleasant emotions increases job satisfaction. The understanding of how emotion regulation relates to job satisfaction concerns two models:
Emotional dissonance. Emotional dissonance is a state of discrepancy between public displays of emotions and internal experiences of emotions, that often follows the process of emotion regulation. Emotional dissonance is associated with high emotional exhaustion, low organizational commitment, and low job satisfaction.
Social interaction model. Taking the social interaction perspective, workers’ emotion regulation might beget responses from others during interpersonal encounters that subsequently impact their own job satisfaction. For example: The accumulation of favorable responses to displays of pleasant emotions might positively affect job satisfaction performance of emotional labor that produces desired outcomes could increase job satisfaction (Gupta, 2009)
Relationships and practical implications
Job Satisfaction can be an important indicator of how employees feel about their jobs and a predictor of work behaviors such as organizational citizenship, absenteeism, and turnover.
Further, job satisfaction can partially mediate the relationship of personality variables and deviant work behaviors.
One common research finding is that job satisfaction is correlated with life satisfaction. This correlation is reciprocal, meaning people who are satisfied with life tend to be satisfied with their job and people who are satisfied with their job tend to be satisfied with life. However, some research has found that job satisfaction is not significantly related to life satisfaction when other variables such as non-work satisfaction and core self-evaluations are taken into account.
With regard to job performance, employee personality may be more important than job satisfaction. The link between job satisfaction and performance is thought to be a spurious relationship; instead, both satisfaction and performance are the result of personality (Gupta, 2009).
CHAPTER 2
REVIEW OF LITERARTURE
REVIEW OF LITERARTURE
There is also a large human resource development (HRD) literature that emphasizes the influence of “high-performance workplace practices” on job satisfaction and hence employee performance. Relatively few attempts have been made to combine the job satisfaction and HRD literatures. A primary objective of this paper is to present new empirical evidence on the impact of HRD practices on workers overall job satisfaction and retention.
Drever (1964) described job satisfaction ”as an end state of feeling.” Singh
(1990) pointed out that the job satisfaction is a part of life satisfaction, the nature of one’s environment off- the- job. Similarly, a job is an important part of life, job satisfaction influences one’s general life satisfaction as an effective reaction, feeling of employees with job, supervision, coworkers, salary/pay and his/her current and future career progress.
Couples of theories on job satisfaction have been developed by psychologists and management scholars. They tend to assign different degrees of importance to sources of satisfaction, which can be classified as either intrinsic or extrinsic. Intrinsic sources depend on the individual characteristics of the person, such as attitudes. Extrinsic sources are situational, and depend on the environment, such as workplace climate. Theories which rely on extrinsic sources are more typically adopted by economists, albeit by reference to a different terminology, whereas intrinsic sources are more commonly associated with other social sciences (Luchak, 2003).
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Traditionally, economists have embraced job satisfaction with “professional suspicion” (Freeman, 1978 p. 135) because it is a subjective variable. In 2000, it was still possible to state that the study of job satisfaction by economists is “still in its infancy” (Blanchflower and Oswald, 2000, p. 8). However, the empirical analysis of job satisfaction either implicitly or explicitly draws on the theoretical models discussed above, and in so doing job satisfaction is specified as a function of several individual and job characteristics, and ultimately interpreted as a utility function (Clark and Oswald, 1996; Easterlin, 2001).
Some studies show that certain HRM practices, such as working in teams, greater discretion and autonomy in the workplace and various employee involvement and pay schemes, do motivate workers and hence generate higher labour productivity (Cully 1999; Boselie and Wiele, 2002). However, overall job satisfaction need not increase if effort is a “bad” and the aim of workers is to maximise the returns from the exerted effort.
In terms of the relationship between pay and job satisfaction, Clark and Oswald (1996) show that a workers’ reported level of well-being is weakly correlated with their income, whereas Belfield and Harris (2002) find no evidence of such a relationship for those working in higher education. There is mounting research into the weakness of the link between income and life satisfaction, as in the happiness studies of Layard (2003, 2006) and Clark (2005) showing that despite rising wages there are stagnant levels in job satisfaction. Other studies show that it is relative income, rather than own income, that matters for job satisfaction (Clark and Oswald, 1996). Still, some studies contest the importance of relative income at lower pay levels (e.g. McBride, 2001), or highlight the importance of real income (Greene and Nelson, 2007). While examining pay and promotion criteria, job satisfaction of employees can be judged through the system of wage payment Aswathappa (2003). Different organization adapts different type of wage payment system. Along with wages and salaries they are paying incentives, perquisites and non-monetary benefits so the level of satisfaction can differ from organization to organization.
Evidence from the Workplace Employment Relations Survey” examined that their significant increases in satisfaction with the sense of achievement from work between 1998 and 2004; a number of other measures of job quality are found to have increased over this period as well. It also finds a decline in the incidence of many formal human resource management practices. The paper reports a weak association between formal human resource management practices and satisfaction with sense of achievement. Improvements in perceptions of job security, the climate of employment relations and managerial responsiveness are the most important factors in explaining the rise in satisfaction with sense of achievement between 1998 and 2004 (Brown and Forde, 2008)
Khan (2006) suggests that job satisfaction is a combination of psychological and environmental circumstances that makes a person satisfied. This statement is also supported by Rao (2005) that personal feelings do play a role in a person’s satisfaction level.
Need fulfillment theory, equity theory, two factor theory and discrepancy theory are four essential models (Rao, 2005) which would help this research paper to be qualitative. Gupta & Joshi (2008) concluded in their study that Job satisfaction is an important technique used to motivate the employees to work harder. It had often said that, “A HAPPY EMPLOYEE IS A PRODUCTIVE EMPLPOYEE.” Therefore with the help of these references, we are hopeful to have positive results in our research.
CHAPTER 3
OBJECTIVES OF STUDY
OBJECTIVES OF STUDY
This study is conducted to judge the level of Job Satisfaction of employees who are working in diverse companies across Karachi. The title of this study is – A study of the effect of employee’s satisfaction with HRD practices on their job retention.”
OBJECTIVES OF THIS STUDY
To Study the basic characteristics of Job satisfaction & Employee retention
To analyze the job satisfaction among employees in Karachi and reasoning of dissatisfaction among the employees
To identify the variables influence the job satisfaction
To measure the Human resource development practices and its effect of employee satisfaction and retention
To judge the level of job satisfaction of employees on various parameters.
General Working Conditions
Pay and Promotional potential
Work Relationships
Use of skills and abilities
Work Activities
HYPOTHESIS
HR practices offering better working conditions has a positive effect on employee satisfaction (H1)
HR practices offering better pay and promotional criteria has a positive effect on employee satisfaction (H2)
HR practices offering better work relationships has a positive effect on employee satisfaction (H3)
HR practices using better skills and abilities has a positive effect on employee satisfaction (H4)
HR practices offering better work activities has a positive effect on employee satisfaction (H5)
HR practices offering better working conditions has a positive effect on employee retention (H6)
HR practices offering better pay and promotional criteria has a positive effect on employee retention (H7)
HR practices offering better work relationships has a positive effect on employee retention (H8)
HR practices using better skills and abilities has a positive effect on employee retention (H9)
HR practices offering better work activities has a positive effect on employee retention (H10)
CHAPTER 4
RESEARCH
METHODOLOGY
RESEARCH METHDOLGY
Sample: For the purpose of the present study, the sample consisted of 250 employees from companies across Karachi
Tools:
In this study, two psychological tools in the form of questionnaire were used which are as discussed below:
Job Satisfaction scale: This was a 5 point scale where minimum being was highly dissatisfied and maximum being was highly satisfied. The following reference was used: (http://www.careerlinklehighvalley.org/portals/1/pdf%20files/Job%20Survival.pdf)
Job retention scale: This was a 5 point scale where minimum being was strongly disagree and maximum being was strongly agree. The following reference was used: (www.salisbury.edu/…/Job%20Satisfaction%20Questionnaire.doc)
Method of Data Collection
The broader purpose of the present study is to explore the relationship among employee job satisfaction and employee retention due to HRD practices. Data will be collected from employees of various companies in Karachi. A questioner technique will be used in order to obtain data and employees will be asked to give the answers of questions in accordance to their best knowledge. Questionnaire will be divided in to three parts employee satisfaction, employee retention and demographics.
Instrument
Questionnaires were circulated among the employees in different companies which we personally visited and briefed them about our research work and provided them with necessary knowledge to fill the questionnaires. The questionnaire had three sections:
Section A: Job Satisfaction
First part asked about the level of satisfaction with their general working conditions which included hours worked, flexibility at work, location. Second part of this section is pay and promotion criteria where questions on salary, promotion, benefits and job security were asked which then leads to the third part about the work relationships which measured relationships with co-workers, supervisors and subordinates. Fourth part questioned about the skills and abilities which included the utilization of skills support from additional training and education. Fifth and final part examined the work activities; job responsibilities, degree if independence and opportunities for changes in tasks.
Section B: Retention
In this section we tested the respondents with their agreement level on leaving the job in upcoming future, avoiding tasks assigned to them, switching jobs in less than 3 months, being late to work etc.
Section C: Demographics
In the last part of the questionnaire, the respondent’s were asked to give their personal information like name, gender, age bracket, overall working experience etc.
DATA COLLECTION
Both primary and secondary data had been used in present study.
Primary Data collected through personal interview in the form of questionnaire.
Secondary Data was collected from various journals, books, magazines and internet.
POPULATION
The population of the current study is the 250 employees of companies across Karachi.
SAMPELING TECHNIQUE
Convenience sampling technique was used to select respondents through out the sampling and random companies were selected across Karachi.
SAMPLE SIZE
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