Antecedent And Consequence Of Internal Auditors Job Satisfaction And Organization Commitment

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<ul><li><p>Proceeding - Kuala Lumpur International Business, Economics and Law Conference Vol. 2. </p><p>November 29 - 30, 2014. Hotel Putra, Kuala Lumpur, Malaysia. ISBN 978-967-11350-4-4 </p><p>139 </p><p>ANTECEDENT AND CONEQUENCE OF INTERNAL AUDITORS JOB SATISFACTION AND </p><p>ORGANIZATION COMMITMENT </p><p>Endang Pitaloka </p><p>Phd Student of Management Science, Universitas Padjadjaran, Indonesia </p><p>Email: pitaloka.oka@gmail.com </p><p>Irma Paramita Sofia </p><p>Accounting Studies Universitas Pembangunan Jaya, Indonesia </p><p>Email: irma_paramita@yahoo.com </p><p>ABSTRACT </p><p>Telecommunication industry became one of the rapidly growing industry along with the increasing development </p><p>of technology and information needs. In addition to the changes in technology and information, the three largest </p><p>telecommunications companies in Indonesia have ownwership change. Nowdays the majority shareholder of </p><p>Indonesian telecommunication company was owned by foreign investor. Theese changes employee recruitment </p><p>standards . The company seeks many experienced and qualified employees from a rival company, with an offer </p><p>of a better salary package. If the company is not able to retain the best talent, it will cause problems in the </p><p>performance and competitive advantage. This shows the importance of employees commitment and employee </p><p>performance. Employees including internal auditor will give their best performance if get job satisfaction and </p><p>get support from the company. Internal Auditor is one of the functions in the organization whose job is to </p><p>examine the management of the organization and the fairness of the organization's financial statements. The </p><p>importance of their role required internal auditor to give their best performance to the needs of company. </p><p>Telecommunication industry have found difficult to retain good internal auditors. There is need for the </p><p>organization to come up with strategies to retain employees and improve the companys performance. The </p><p>purpose of this study is to analyze how the work environment as antecedent cause job satisfaction and </p><p>organizational commitment, and how job satisfaction, organizational commitment have an impact on </p><p>organizational citizenship behavior. About 162 survey questionnaires were distributed by using in person and </p><p>email. The data were processed using Path Analysis. The results showed that the work environment is </p><p>antecedent of job satisfaction and organizational commitment. Job satisfaction and organizational commitment </p><p>significantly affect organizational citizenship behavior. A conducive work environment lead to job satisfaction </p><p>organization commitment. Job satisfaction and organizational commitment encourage employee to show </p><p>organizational citizenship behavior in achieving organization goals. </p><p>Keywords: Work environment, job satisfaction, commitment, organizational citizenship behavior, internal </p><p>auditor </p><p>mailto:pitaloka.oka@gmail.commailto:irma_paramita@yahoo.com</p></li><li><p>Proceeding - Kuala Lumpur International Business, Economics and Law Conference Vol. 2. </p><p>November 29 - 30, 2014. Hotel Putra, Kuala Lumpur, Malaysia. ISBN 978-967-11350-4-4 </p><p>140 </p><p>INTRODUCTION </p><p>Every organization wants to have employees with competence in accordance with the needs of their </p><p>organization, committed to the organization and have high performance. Therefore any company competing for </p><p>the best employees. Companies need to do something to attract potential employees. One of the things that can </p><p>be done to attract potential employees is to establish a pleasant working environment. </p><p> Jain and Kaur (2014) Work environment involves all the aspects which act and react on the body and </p><p>mind of an employee. If the environment is congenial, fatigue, monotony and boredom are minimized and work </p><p>performance can be maximised. work environment is one of the comprehensive concept because it includes </p><p>aspects of physical, psychological and social working conditions. The work environment can have a positive or </p><p>negative effect on psychological and welfare of employees. In organizations with high job demands and high </p><p>pressures tend to make employee stress. </p><p> Stress can have a negative impact on employee productivity and performance for the organization. </p><p>Difficult working environment would make the employees are not happy and are not comfortable with the </p><p>organization (Bakoti and Babi, 2013). organization seeks to eliminate the negatives of the work environment </p><p>so that employees are satisfied with their works. </p><p> Job satisfaction shows how much an employee likes his work, job satisfaction is a sense of comfort </p><p>and positive experience that an employee have related to his job. Job satisfaction can affect work behavior and </p><p>organization performance. Employees who are satisfied will have high performance thereby improving </p><p>organizational performance (Abdullah and Ramay, 2012) . Creating a supportive work environment is a </p><p>necessity for organizations who want job satisfaction (Mokaya et al, 2013). Job satisfaction is the key to </p><p>productivity and employee performance, job satisfaction also explain the behavior of employees (Mehboob and </p><p>Bhutto, 2012). </p><p> The work environment also has a relationship with organizational commitment. Commitment refers </p><p>to the focus and the desire of attachment of an individual to a certain task or his work (Abdullah and Ramay, </p><p>2012). If the employee works in a good working environment, the employee 's organizational commitment will </p><p>increase. Organization with committed employees, will have low employee turnover rate. For the achievement </p><p>of stability and to retain the competitive position, it is necessary to enhance the commitment level of employees. </p><p>Attractive work environment helps make the employees more committed, enhances their motivation and </p><p>satisfaction level. Organizational commitment is affected by different outcomes like work environment, </p><p>motivation, turnover, and organizational support (Danish et al, 2013). </p><p> Job satisfaction and organizational commitment is an important element in the organization. Both of </p><p>these factors can affect employee behavior and performance of employees. This is confirmed by Uludag et al </p><p>(2011 ) which states job satisfaction, motivation, and organizational commitment affect organizational </p><p>citizenship behavior (OCB). Organ defined organizational citizenship behavior as unconditional behavior which </p><p>is shown by an employee beyond from what is asked by organization and the responsibility is given to </p><p>organization. The behavior like that is not received the official recognition as the organization demand to its </p><p>employ although OCB can encourage the efficiency. The organizational citizenship berhaviors (OCB) appears </p><p>due to its employee has the motivation to do more than Companys hope to reach its goal. </p><p>Job satisfaction and organitation commitment are important to organization success. Both can impact </p><p>on employee retention and employee behavior. It is believed that internal motivation, emotional association of </p><p>belongingness to the organization, regard for the organizations goals, and a willing team commitment are </p><p>instrumental in fostering the construct of organizational citizenship behavior (Uludag et al, 2011). </p><p> Abdullah and Ramay ( 2012) also showed job satisfaction and commitment influence OCB. OCB </p><p>arise because employees have the urge to behave more than requested by the organization to achieve its </p><p>objectives. In other words OCB encourages corporate efficiency. </p><p> Organizational citizenship behavior (OCB) is a consequence of the work environment. OCB is also </p><p>the reciprocal of the organization with employees, employees who are satisfied with their job will exhibit OCB. </p><p>According to Organ (1988), OCB is an important factor that can contribute to the survival of the organization. </p></li><li><p>Proceeding - Kuala Lumpur International Business, Economics and Law Conference Vol. 2. </p><p>November 29 - 30, 2014. Hotel Putra, Kuala Lumpur, Malaysia. ISBN 978-967-11350-4-4 </p><p>141 </p><p>Therefore, it is very important to understand the variables that significantly and positively assist in creating this </p><p>OCB behavior . </p><p> Telecommunication industry became one of the rapidly growing industry along with the increasing </p><p>development of technology and information needs. In addition to the changes in technology and information, the </p><p>three largest telecommunications companies in Indonesia have ownwership change. Nowdays the majority </p><p>shareholder of indonesian telecommunication company was owned by foreign investor. Theese changes </p><p>employee recruitment standards. The company seeks many experienced and qualified employees from a rival </p><p>company, with an offer of a better salary package. If the company is not able to retain the best talent, it will </p><p>cause problems in the performance and competitive advantage. This shows the importance of employees </p><p>commitment and employee performance. Employees will give their best performance if get job satisfaction and </p><p>get support from the company. </p><p> The purpose of this study is to analyze work environment as antecedent of job satisfaction and </p><p>organization commitment, and how job satisfaction, organization commitment have an impact on organizational </p><p>citizenship behavior. </p><p>RESEARCH QUESTION </p><p>The major motivation of this research is to examine how work environtment as antecedent affect job satisfaction </p><p>and organization commitment, and how job satisfaction and organization commitment influence organizational </p><p>citizenship behavior of internal auditor in telecommunicaton industry. </p><p>More specifically, it seeks to answer the following research questions: </p><p>1. Can work environment affect job satisfaction? 2. Can work environment affect organization commitment? 3. Can job satisfaction affect organizational citizenship behavior? 4. Can organization commitment affect organizational citizenship behavior? </p><p>BENEFITS OF RESEARCH </p><p>1. The research is hoped to give the benefit for knowledge development of human resource management, </p><p>specifically, related to working environment, job satisfaction, organizational citizenship behavior, and </p><p>Organizational Citizenship Behavior (OCB). </p><p> 2. The research is also hoped to give the contribution for corporate to apply the behavior of Organizational </p><p>Citizenship in planning and implementing some policies to support OCB. </p><p>LITERATURE REVIEW </p><p>WORK ENVIRONMENT </p><p>Nowday most of organizations pay attention in employees needed. They tries to provide positive working </p><p>environment so the employees will be happy and satisfied. They believe that happier the employees are, more </p><p>delightful the customer will be (Mehboob and Bhutto 2012). </p><p>Woodman et al (1993) examined two work environment characteristics in organization 1) group </p><p>characteristics includes norms, consistency in group, problem solving approaches used in the group; 2). </p><p>organizational characteristics including rewards, recognition, strategy, structure, resources, organizational </p><p>culture and technology. Both characteristics have the potential to encourage innovation and creativity. </p><p>According to Mehboob and Bhutto (2012) the concept of work environment is comprehensive one </p><p>including the physical, psychological and social aspects that mark up the working condition. Work environment </p><p>involves all the aspects which act and react on the body and mind of an employee. </p></li><li><p>Proceeding - Kuala Lumpur International Business, Economics and Law Conference Vol. 2. </p><p>November 29 - 30, 2014. Hotel Putra, Kuala Lumpur, Malaysia. ISBN 978-967-11350-4-4 </p><p>142 </p><p>Workplace environment plays a vital role in motivating employees to perform their assigned work </p><p>(Chandrasekar, 2010). The working environment factors are: 1) Space and facilities required doing the job, 2) </p><p>Relationship with superiors at the workplace, 3) Equality of treatment at the workplace, 4) Communication </p><p>system at the workplace, 5) Environmental actors are conducive to work, 6) Procedures to identify and control </p><p>hazards (Chandrasekar, 2010). </p><p>While Wallgren (2011) stated the working environment factors are: 1) variety in tasks, 2) job </p><p>autonomy, 3) praise for a job well done, 4) the chance to acquire new skills and 5) the sense of accomplishment. </p><p>Mehboob and Bhutto (2012) described work environment as the environment in which people are working. </p><p>Such as, it is very wide category that incorporates the physical scenery (e.g. noise, equipment, heat), </p><p>fundamentals of the job itself (e.g. workload, task, complexity) extensive business features (e.g. culture, history) </p><p>and even extra business background (e.g. industry setting, workers relation). </p><p>According to Mehboob and Bhutto (2012) characteristics of work environment are: 1) apparent and </p><p>open communication, 2) stability of work-life, 3) impartiality, 4) consistency and predictability situation. </p><p>The definition of the working environment in this research is any attribute in the organization includes physical </p><p>and nonphysical affecting employees in doing through employment. Phssical factors such as space and </p><p>facilitties. Nonphysical factors such as fairness treatment at the workplace, communication climate, rules and </p><p>procedures at the workplace. </p><p>JOB SATISFACTTION </p><p>Job satisfaction is individuals positive emotional reaction to a particular job (Nadiri and Tanova 2010). It </p><p>reflects the positive emotion of employees towards the work and organization. Job satisfaction is related to </p><p>self-perception of needs fulfillment through work (malik et al, 2010). Job satisfaction level of an employee is </p><p>manifestation of his positive and negative feelings about his workplace and work itself (Arif and Cohan 2012). </p><p>According to Robbin and Judge (2011) job satisfaction is a collection of positive and/or negative feelings that an </p><p>individual holds toward his or her job. </p><p>Huang and Liu (2012) defines job satisfaction as: the gap between actual and expected earnings </p><p>compared by the personnel with related others on salary raise and promotion according to the ratio of their </p><p>devotion and earnings. According to Bakoti, Babi (2013) job satisfaction is a sense of comfort and positive </p><p>experience that an employee have related to his job. </p><p>Job satisfaction shows how much an employee likes his work as well as the level of his preoccupation </p><p>with work. Job satisfaction can affect work behavior, and through that, the organizational performance. </p><p>Kreitner and Kinicki (2012) identified five factors determined job satisfaction: need fulfillment (e.g. salary </p><p>needs, family needs); discrepancies between what is expected and what actually happens; fulfillment of work </p><p>values, equity or fairness of treatment; and dispositional (genetic) components where certain congenital </p><p>personality traits lead to job satisfaction. </p><p>According to Smith, Kendall and Hulin (Mohammad et all 2011), all sources of job satisfaction fall </p><p>into two categories: intrinsic and extrinsic satisfaction. Intrinsic sources originate from within the individual and </p><p>have psychological value. Such satisfactions are essentially self...</p></li></ul>