Pay Satisfaction And Job Characteristics As Predictors Of Organizational Commitment Among Private Sector Workers

PAY SATISFACTION AND JOB CHARACTERISTICS AS PREDICTORS OF ORGANIZATIONAL COMMITMENT AMONG PRIVATE SECTOR WORKERS

CHAPTER ONE

INTRODUCTION

1.1    Background Of The Study

Job satisfaction has been an important topic over the years (Akfopure, 2006). The relationship between man and work has always attracted the attention of philosophers. A major part of man’s life is spent at work. Work is social reality and social expectation to which men seem to confirm. It not only provides status to the individual but also binds him to the society. An employee who is satisfied with his job would perform his duties well and be committed to his job, and subsequently to his organization. Thus, it is of utmost importance for employers to know the factors that can affect their employees’ job satisfaction level since it would affect the performance of the organization as well.

Employees are among the most important determinants and leading factors that determine the success of an organization in a competitive environment. Besides that, if managed properly employee commitment can lead to beneficial consequences such as increased effectiveness, performance, and productivity, and decreased turnover and absenteeism at both the individual and organizational levels (Fiorita, Bozeman, Young & Meurs, 2007). An employee who is satisfied with his job would perform his duties well and be committed to his job, and subsequently to his organization. Thus, it is of utmost importance for employers to know the factors that can affect their employees’ job satisfaction level since it would affect the performance of the organization as well (Awang, Ahmad & Zin, 2010).

Through workers, organisations can garner a competitive advantage. Committed employees take pride in organisational membership, believe in the goals and values of the organisation, and therefore display higher levels of performance and productivity (Steinhaus & Perry, 1996). In the eyes of employees they believes that they have done a lot for their organization and they also have emotional involvement in their organization. However, their management has very little involvement in their growth and development of employees. Many managers have little understanding of how to satisfy their employees and how these employees’ satisfaction levels influence their intention to leave their positions (Feinstein, A., 2002). In fact, because of this limited understanding, managers’ efforts toward employee satisfaction can sometimes create more dissonance than cohesion between employees and management, leading to decreased performance and excessive employee turnover (Locke, 1969).

However, it is also sometimes hard to find suitable people for certain positions. So once an ideal candidate is chosen, organizations will like to make a great effort to retain those employees. Therefore, in order to meet the changing needs and demands of private organization in the global world, it is necessary to develop an organizational climate and culture to satisfy the employees. So, it is important to increase job satisfaction and to put organizational commitment into practice. According to Locke (1976), job satisfaction can be generally defined as the employee’s feelings towards his or her job. It is a pleasurable emotional state resulting from the appraisal of one’s job and as an attitudinal variable that can be a diagnostic indicator for the degree to which people like their job.

According to Meyer, John P., Stanley, David J., Herscovitch, Lynne, Topolnytsky, Laryssa. (2002), job satisfaction is a determinative of organizational commitment. The main difference between organizational commitment and job satisfaction is that while organizational commitment can be defined as the emotional responses which an employee has towards his organization; job satisfaction is the responses that an employee has towards any job. It is considered that these two variables are highly interrelated. In other words, while an employee has positive feelings towards the organization, its values and objectives, it possible for him to be unsatisfied with the job he has in the organization.

1.2     Problem Statement

Malaysia experience in the development of quality assurance in higher education over the last decade and the introduction of the Malaysian Qualifications Framework which will underpin the quality assurance system in the near future. The impact of economy recession in the mid-nineties, globalization and information explosion have vast consequences on the educational policies. Major focus was given to education and training as it is deemed to the survival of the nation in an increasingly competitive advantage in world market.

Cross border education has created challenges to national policies, regulation and quality issues. The immediate challenge is the setting the scene for the implementation and this involves extensive training, involvement and commitment of all staff in higher learning education institutions.

However, higher education institutions found to have a problem in which a total of 59.5% (Nor Salina Saidin, 1994/1995) lecturer reported intention to resign. This negative effect to the institution in terms of replacement cost and disrupted work and affect the government’s vision to build a knowledgeable society and sustain economic growth and competitiveness.

This is of particular interest for Higher Learning Education Institutions, because the costs of hiring and training new employees are high. Therefore, the organization should try to keep a constant workforce, which also helps to reduce the risks of deterioration in services offered to its customers. Generally, it is expected that employees are more likely to stay with their organization and be highly committed when they can see a strong linkage between the organization and their work.

There should be a strong correlation between happy employees and increase organizational performance. It would seem that if people feel good about their jobs, their happiness would be reflected in the quality of their work and may have a positive feedback from their customers and this will contribute to organizational success. Unfortunately, this equation doesn’t always balance. In order to ensure that employees give the high commitment, employer should give high job satisfaction that should get by the employees. However, the top management of the company have little understanding of how to satisfy their employees and how this employee’s satisfaction level influences their commitment to the company. With regard to this problem, this study was conducted to examine the relationship between the organizational commitment and job satisfaction among employees.

When employees experience low job satisfaction and organizational commitment, it can be very costly. This may be a result of low pay (for lower level positions) and little opportunity for advancement. Absenteeism may also be a very costly issue because it can result in reduced productivity when lowly committed employees do not see any link between the tasks they do and the organization’s profitability. To solve the problems of high turnover and absenteeism, it is important to analyze the two variables being studied and determine the factors that would affect commitment.

At times, employees may not leave an organization even when they are dissatisfied or do not feel committed to the organization. This makes studying the two variables serve an even greater importance. When workers are dissatisfied, this may create grievances, which can lead to a lower level of organizational commitment.

Another reason why researcher are interested in studying whether job satisfaction would lead to organizational commitment is because this may increase productivity. A manager should investigate their employees’ level of satisfaction, which can signal whether there is commitment from their workers. Employees’ productivity is largely related to their level of job satisfaction and in fact, the turnover rate can be reduced with a higher level of organizational commitmen. Therefore, it is important for an organization to study the relationships between these two variables.

Analyzing the relationship between job satisfaction and organizational commitment is particularly crucial nowadays, as people often do not work at the same organization or job throughout their lifetime. It is also sometimes hard to find suitable people for certain positions. So once an ideal candidate is chosen, organizations will like to make a great effort to retain those employees. If two employees exhibit different levels of job satisfaction and that job satisfaction can be proven to lead to organizational commitment, the employer will likely hire the employee with the higher level of job satisfaction. This is because the employer can expect the more satisfied individual to stay with the organization. Another reason as to why satisfaction will lead to commitment is that a higher level of job satisfaction may lead to a better family life and a reduction in stress. The reason why satisfaction will lead to the commitment is that a higher level of job satisfaction may lead to good work life and reduction in stress (Cote & Heslin, 2003). An employee’s feelings of jobs satisfaction may affect his or her emotions. This feeling will affect the worker’s behaviors inside and outside the organization. As Wilson and Rosenfeld (1990) pointed out, is that positive and negative attitudes towards work may exert powerful effects on many forms of organizational behavior. When a worker is dissatisfied with his or her job, the employee may have negative emotions. The consequence is that he or she may start to think about quitting. The decision process will begin with the individual identifying and evaluating alternatives, about whether to quit or to stay on in their job. The sequence of decisions will change the employee’s commitment level. As humans, employees are also subject to problems of dissatisfaction at workplace. If they are not satisfied, they may not be committed to deliver the best. In addition, there is a possibility that their job performance may not achieve the target. This would of course lead to other adverse effects to the organization. Hence, there is a strong need to understand the factors that contribute toward job satisfaction among employees so that steps can be taken by the management to create conducive working environment that is in line with their expectations. According to Allen and Meyer (1990), commitment refers to the attitude of the employees toward their organization. Normally, the employees will commit if they are really satisfied with their present job. The satisfaction normally depends on what the employees can get or receive from the job.

Managers would be most interested in knowing about the relationship between job satisfaction and organizational commitment, because it would become clear as to how important and worthy it would be to retain their most satisfied employees. In turn, having this knowledge would motivate managers to satisfy their employees. This would ultimately benefit the organization, as it is expected that these same employees will be highly committed. When employees are committed, their personal goals may go in line with those of the organization that they work for.

Regardless of the title, or the institutions where they work, the employees shoulder heavy responsibilities toward ensuring development in their organization. In spite of our amazing technological advances, people do the work of the organization and are ultimately responsible for its success. Unfortunately, most organizations, large and small, fail to provide the component that engages the hearts of their people or encourages them to work at their potential. It is undeniable that people and job satisfaction contributes toward ensuring development in a country. Hence, the system in management should be strategically planned in order to produce the best results for all concerned. Their roles are broad and challenging. They also need to keep up with new knowledge, new technologies and new techniques in order to deliver the best to their organizations.

1.3     The Purpose of The Study

This research is undertaken in order to determine the relationship between components of organizational commitment and job satisfaction among staff in higher learning education institutions in Kelantan and to identify which among the three components of organizational commitment (affective, continuance and normative organizational commitment) is the most important driver that relates to job satisfaction. In addition, this study is to examine the relative importance of demographic variable of employee on the different components of organizational commitment and job satisfaction. It is seen that in some of the empirical surveys, the relations among organizational commitment (Allen et.al. 2000; Vandenberg and Scarpello, 1994; Meyer, Allen and Smith 1993), job satisfaction (Morrow 1993; Meyer, Allen and Smith 1993) and demographic characteristics (Allen et. al. 2000; Scarpello and Vandenberg, 1992) were studied.

1.4       Research Objective

Specifically, this study mainly seeks to achieve the following objectives:

1. To determine the relationship between organizational commitment and job satisfaction.

1.5       Research Question

Based on the discussion above, and to accomplish the objective of this study, three research questions have been formulated:

1. What is the relationship between organizational commitment and job satisfaction?

1.6       Significance of The Study

The significance of this study can contribute many advantages to many parties such as human resource management in forming their strategy and the analytical and empirical researches. Study and previous literature focused on the aspects of the relationship between organizational commitment and job satisfaction among academic staff in educational institutions, whether at the primary, secondary and public higher education. However, this study attempts to focus on organizational commitment and job satisfaction among the academic and non-academic staff in both public and private higher education institutions.

The findings of the research would, first of all, enlighten the public and private sectors management on the level of job satisfaction and work commitment among the public and private higher learning education institutions staffs, especially in Kelantan. On top of that, it would provide valuable information to the management in understanding the factors that affect job satisfaction. As job satisfaction has often been perceived as an important contributor toward job performance and work commitment level, it is of utmost important that the management knows and understands these factors. This would assist the management in creating conducive working environment so as to increase job satisfaction, hence work commitment.

This research would also be useful for the Kelantan State Government as well as Ministry of Higher Learning Education and Ministry of Human Resource. Knowing the factors that can contribute to job satisfaction among the public and private sectors employees would facilitate the Kelantan State Government and Ministry in making decisions pertaining to the profession so as to benefit the employees, as well as the organizations. The findings of the research would definitely contribute to the body of knowledge especially regarding job satisfaction among staff of the organization in the country.

Researcher hopes that this study will help the management of the organizations to have the opportunity to be more aware about job satisfaction and employees commitment towards the institution. Besides that, by determining this matter, the organization might be able to recognizes the factor that may affect organizational commitment and directly to the job satisfaction. This is importance to retain the valuable and minimize the turnover. In order to face the decreasing in economy, the employers should more alert and concern more towards satisfaction of employee.

Lastly, researcher hopes that this knowledge would further contribute to the body of knowledge and be a useful source of information including for future research regarding this subject matter.

1.7    Definition of Key Terms

1. Organizational Commitment : Organizational commitment defined as an employee’ strong belief in and acceptance of an organization’s goal and values, effort on behalf of the organization to reach these goals objectives and strong desire to maintain membership in the organization (Hunt & Morgan, 1994).
2. Affective Organization Commitment : The effective emotional attachment to identification with, and involvement in the organization (Allen & Meyer, 1990).

• Continuance Organization Commitment : The wish associated with leaving the organization (Allen & Meyer, 1990).

1. Normative Organization Commitment : A feeling of obligation to continue employment (Allen & Meyer, 1990).
2. Job satisfaction : The term job satisfactions refers to the attituted and feelings people have about their work. Positive and favorable attitudes towards the job indicate job satisfaction. Negative and unfavorable attitudes towards the job indicate job dissatisfaction (Armstrong, 2006).

PAY SATISFACTION AND JOB CHARACTERISTICS AS PREDICTORS OF ORGANIZATIONAL COMMITMENT AMONG PRIVATE SECTOR WORKERS

 

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