Organizational Commitment and Job Satisfaction

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Research on organizational commitment and job satisfaction in Nepal


AbstractThe research was conducted as a part of the EMBA, 3 rd term, MPP course requirement. The purpose of the research was to study the relationship between gender, age, tenure, level and job satisfaction and organizational commitment.

Design/Methodology/ApproachTwo questionnaires (one for job satisfaction and another for organizational commitment) were distributed to 41 staffs at Employees Provident Fund. The sampling method used was stratified sampling method where the questionnaires were distributed to staffs at different sections of EPF. Later interviews were also conducted as a more direct approach in understanding the level of job satisfaction and organizational commitment among the staffs. Interview was conducted with employees serving EPF at various levels and with different job tenure (hence age).

FindingsThere was a positive co-relationship between age and job satisfaction, age and organizational commitment, gender and job satisfaction, gender and organizational commitment. However the relationship was not very strong as expected and as the findings of similar research in other organizations. To study the variation brought about by age, gender, position and job tenure, single-factor ANOVA test was also conducted however the ANOVA tests result suggested that there was no variation in Job satisfaction, organizational commitment across different age group, gender and level. The primary data did show some variation which hinted that the job satisfaction, organizational commitment could have depended on age group, gender and level however when these data were subjected to statistical analysis no variation was seen. Negative correlation was observed between position and Job Satisfaction whose analysis is also presented in the following sections of the report. The findings of the interview indicated toward the dependency of organizational commitment and job satisfaction however the responses in the questionnaire are less aligned with the results of the interview.

Research Limitations/implicationsThe major limitation of the research was the time. The requirement to submit a report within a month left no time to review the data, reassess the response and conduct a well structured interview to a larger number of people. The other limitation could have been the small size of the sample. The questionnaire though distributed to around 60 employees, data could be collected

from only 41 of them. EPF has total employees of around 500 and hence the questionnaire represents the view of only 8 pc of the total employee. Each questionnaire had 7 optional scales from very high to very little and it was also found that the respondents did not find the scales convenient and could not interpret their thoughts/beliefs accordingly. The respondents were given a week to submit their replies and were advised to complete the questionnaire in a single sitting by being fair with their responses. Most of the respondents returned back the filled questionnaire the same day some even within 30 minutes and hence the questionnaire might not have been fairly filled. The other intrinsic factors of the employees like ethnicity, values, family, educational background; culture that is believed to have significant impact on job behavior was not studied.

Introduction and backgroundHuman resources are undoubtedly the most important resources in an organization. The very existence of an organization will be at stake without the efficient human resources, its goal remains unattainable unless its human resources are motivated, satisfied and are committed to the organization. The root source of quality and productivity gains is the employees. It is very important for organizations to see employees as the fundamental source of improvement. The need for ensuring spirit of cooperation, sense of commitment and satisfaction within the organizations sphere of influence had never been such an impending necessity. It becomes very important for people to love what they do and enjoy what they do, the enjoyment factor not only motivates the employee but also increases the efficiency on whole. At present times when organizations are facing tough challenges in retaining their key employees, it has become imperative to add elements in job that keeps employees attached to what they do and stick them to work where they work. This need has been not less important in third world countries like ours where the popular term brain-drain is squeezing companies out of their skilled manpower, intelligent executives and visionary managers. On the other front job satisfaction and organizational commitment have a great impact on the successful performance of an organization? Satisfied and committed employee identifies with the goals and values of the organization, and they put in that extraeffort that plays the crucial role in leading the competition. Job satisfaction is in regard to ones feelings or state of mind regarding the nature of their work. Job satisfaction can be influenced by a variety of factors e.g., the quality of relationship with their supervisor, the quality of the physical environment in which they work and degree of fulfillment in their work, etc. It can also be discovered through examining the employees values. It is good not only for employees but employers, too to increase productivity and decreases staff change day by day. Job satisfaction is the contentedness of individuals with their job. Employee job satisfaction is an attitude that people have about their jobs and the organizations in which they perform these jobs. Methodologically, we can define job satisfaction as an employees affective reaction to a job, based on a comparison between actual outcomes and desired outcomes (Mosadeghrad, 2003b). Job satisfaction is generally recognized as a multifaceted construct that includes employee feelings about a variety of both intrinsic and extrinsic job elements. It encompasses specific aspects of satisfaction related to pay, benefits, promotion, work conditions, supervision, organizational practices and relationships with coworkers (Misener et al., 1996).

Organizational commitment has an important place in the study of organizational behavior. This is in part due to the vast number of works that have found relationships between organizational commitment and attitudes and behaviors in the workplace (Porter et al., 1974, 1976; Koch and Steers, 1978; Angle and Perry, 1981). Furthermore, Batemen and Strasser (1984) state that the reasons for studying organizational commitment are related to (a) employee behaviors and performance effectiveness, (b) attitudinal, affective, and cognitive constructs such as job satisfaction, (c) characteristics of the employees job and role, such as responsibility and (d) personal characteristics of the employee such as age, job tenure (p. 95-96). Multiple definitions of organizational commitment are found in the literature. Bateman and Strasser state that organizational commitment has been operationally defined as multidimensional in nature, involving an employees loyalty to the organization, willingness to exert effort on behalf of the organization, degree of goal and value congruency with the organization, and desire to maintain membership (p.95). Mowday, Steers, and Porter (1979) identified commitment-related attitudes and commitment-related behaviors. Porter et al. (1974) discuss three major components of organizational commitment as being a strong belief in and acceptance of the organizations goals, a willingness to exert considerable effort on behalf of the organization, and a definite desire to maintain organizational membership. Sheldon (1971) defines commitments as being a positive evaluation of the organization and the organizations goals. According to Buchanan (1974) most scholars define commitment as being a bond between an individual (the employee) and the organization (the employer), though his own definition of commitment

Employees Provident FundEmployees Provident Fund is a fund management cum social security organization with a history of forty eight years. The organization enjoys being the richest organization in the country and currently employs around 500 employees. The average age of the employee is 42 years and the average tenure is 22 years. The organization has altogether 8 branches and has central office located at Pulchowk. The Thamel branch is the largest in terms of volume of transaction and number of staffs. There are around 300 staffs in the Thamel branch alone. The questionnaire was distributed to staffs in the Thamel branch however the interview was conducted with staffs at Thamel, Biratnagar and Pulchowk. Employees Provident fund has eight department each headed by a department head. Contributor Services and social security department is the biggest department and is responsible for management of funds. EPF is a organization having traditional management practices. The Administrator is the Chief Executive Officer of the organization and is the only power center in the organization. Though there are various departments in EPF it is the Administrator who takes most of the decisions in the operation of the departments. The culture has been to seek approval from the Administrator even in using the legitimate authority given to the department heads and the managers. This practice is reflected in the whole EPF system. In every department managers seek approval from their department head to use their power. There has been less interest shown by the department head, Chief Officer and Administrator in delegating their authority and encourage the independent use of legitimate authority by staffs under them. Due to this reason the decision process in EPF is not swift and many times ineffective. In terms of pay and benefits, EPF is comparatively in better position than other state owned institutions. There are various allowance (medical, cloth), fringe and grade benefits that the employees enjoy. The basic salary scale is same as that of government. Apart from these facilities, EPF staffs can take loan from organization in the form of Social activity loan, home loan, house-maintenance loan, vehicle loan, computer loan etc. at very low interest rate (3 p.a.). Unlike many organizations turn-over has not been a serious problem in EPF though the employees with technical background have shown high turn-over ratio. However the percentage of technical staffs at EPF is very small and hence the turn-over looks negligible on the whole.

Socially EPF is a respected organization, though unlike most of the other government organization no high social status is associated with jobs at EPF still the employees at EPF are highly recognized. The employees carry high level of pride on being introducing them as staffs of EPF. Most of the employees opine that the clean, fair and transparent image of EPF gives them a distinct recognition. EPF staffs also claim that EPF is one of the very few government institutions that provide prompt service.

Literature ReviewJob satisfactionJob satisfaction is defined as the degree to which an individual feels positively or negatively about his or her job (Goodman et al, 2007). Job satisfaction can be conceived of as a multi-dimensional concept that includes a set of favorable or unfavorable feelings by which employees perceive their job (Davis and Newstrom, 1999). Another definition for job satisfaction is; it is an emotional response to tasks, leadership, peer relationships and organizational politics, as well as other physical and social conditions of the workplace (Stewart, 1998). Lockes definition of Job satisfaction considers cognitive, affective and evaluative reactions or attitudes when he defines job satisfaction as a pleasurable or positive emotional state resulting from the appraisal of ones job or job experience. Job satisfaction is a result of employees perception of how well their job provides those things that are viewed as important. Tziner and Vardi (1984) defined work satisfaction as an affective response or reaction to a wide range of conditions or aspects of ones work such as pay, supervision, working conditions and/or the work itself. Others define it as an affective orientation towards anticipated outcome (Wanous & Lawler, 1972) or a statement to describe the feelings of employees about their work (Arches, 1991). This statement expresses the gap between what individuals feel they should receive from their work (ideally speaking) and what they derive from the actual situation. A sense of satisfaction or its absence is, thus, an individuals subjective, emotional reaction to his or her work (Abu-Bader, 1998).

Organizational CommitmentAs an attitude, organizational commitment is most often defined as (1) a strong desire to remain a member of a particular organization; (2) a willingness to exert high levels of effort on behalf of the organization; and (3) a definite belief in, and acceptance of, the values and goals of the organization (Luthans, Organizational behavior 10th edition). Furthermore, Batemen and Strasser (1984) state that the reasons for studying organizational commitment are related to (a) employee behaviors and performance effectiveness, (b) attitudinal, affective, and cognitive constructs such as job satisfaction, (c) characteristics of the employees job and role, such as responsibility and (d) personal characteristics of the employee such as age, job tenure (p. 95-96). Meyer and Allen (1991) and Dunham et al (1994) identified three types of commitment; affective commitment, continuance commitment, and normative commitment. Affective commitment is defined as the emotional attachment, identification, and involvement that an employee has with its organization and goals (Mowday et al, 1997, Meyer& Allen, 1993; OReily & Chatman). Continuance commitment is the willingness to remain in an organization because of the investment that the employee has with nontransferable investments. Normative

commitment (Bolon, 1993) is the commitment that a person believes that they have to the organization or their feeling of obligation to their workplace. Guest (1991) concludes that high organizational commitment is associated with lower turnover and absence, but there is no clear link to performance. It is probably wise not to expect too much from commitment as a means of making a direct and immediate impact on performance. It is not the same as motivation. Commitment is a broader concept and tends to withstand transitory aspects of an employee's job. It is possible to be dissatisfied with a particular feature of a job while retaining a reasonably high level of commitment to the organization as a whole.

GenderSeveral researchers have examined the relationship between job satisfaction and gender (Mason, 1995). However, the results of the many studies concerning the relationship between job satisfaction and gender of the employees have been contradictory. In fact, from the 1950s to date, the findings regarding gender differences in job satisfaction have been inconsistent (Hickson and Oshagbemi, 1999). While some studies have found women to be more satisfied than men (Ward and Sloane, 1998), other studies have found men to be more satisfied than women (Forgionne and Peters, 1982). Many researches have shown that the job satisfaction across different gender is often dependent on the type of the job. For example gender differences were found to be apparent in the job satisfaction levels of university teachers. Female faculties were more satisfied with their work and co-workers, whereas their male colleagues were more satisfied with their pay, promotions, supervision and overall job satisfaction.

AgeThere have been many investigations into the relationship between age and different forms of job satisfaction. Significant variations across age are commonly found, with older employees tending to report higher satisfaction than younger ones (e.g. Doering, Rhodes & Schuster, 1983; Glenn, Taylor & Weaver, 1977; Warr, 1992), Observed age differences in overall job satisfaction are greater than those associated with gender, education, ethnic background or income (Clark, 1993;. Weaver, 1980). Herzberg, Mausner, Peterson & Capwell (1957) suggested that in general, morale is high among young workers. It tends to go down during the first few years of employment. The low point is reached when workers are in their middle and late twenties or early thirties. After this period, job morale climbs steadily with age. Thus there is a U-shaped pattern between job satisfaction and age. Again researches conducted in different European countries have come up with different results for example the data from surveys carried out in the Czech Republic, Denmark, Finland, Italy, the Netherlands and Sweden suggest an increasing level of job satisfaction with age, however in Austria and Romania, the trend is that job satisfaction decreases with age.

PositionThere have been no conclusive findings on the effect of position on job satisfaction and organizational commitment. The impact of position on job satisfaction depends on the authority, span of control, pay and fringe benefits etc. It also depends upon the nature of job itself. Higher position generally means higher pay and higher benefits. Wages and salaries are recognized to be a significant but cognitively complex and multidimensional factor in job satisfaction (Luthans).

Research QuestionWhat is the level of correlation between the job satisfaction and organizational commitment among the employees at EPF? What is the correlation between the predictors (age, gender, tenure, position) and the dependent job dimensions (job satisfaction and organizational commitment)?

Research MethodThe research team distributed two questionnaires one for job satisfaction and the other for organizational commitment. The former had 16 questions that tried to study different aspects of job satisfaction like general satisfaction, pay and fringe, job security, satisfaction from co-workers and perceived opportunities. Each questions had a scale of 1 to 7. 41 respondents filled the questionnaire that represents 8% of the total workforce at EPF. A structured interview (individual and group) was conducted as a direct approach to understand the level of job satisfaction and organizational commitment. The sampling was stratified sampling as the respondents were classified according to age, gender and level. The respondents were classified under three age groups the youngest being of age less than 31 and in the early stage of career while the another range included employees between 31 and 40 in stable career period while the other group consisted of employees having age greater than 40 who were either in the stable period or at retiring stage. The other approach was to group the respondents in terms of the position which includes three groups, the sub-ordinate staffs are data entry operators, tellers, and messengers, the other group was that of the officers who supervise the subordinates, sanction and approve transactions and the third group consisted of managers who supervise the whole section, make plans and who is responsible for the entire operation of their section.

InstrumentsAs stated in the earlier paragraph we used two sets of questionnaire for job satisfaction and organizational commitment each. Apart from this interviews were also conducted as a direct approach to study the level of job satisfaction and organizational commitment. The interviews focused on assessing interest in jobs, colleagues, perceived opportunities, leadership, communication and recognition.

Theoretical frameworkThe dependent variables in the study were job satisfaction and organizational commitment which are affected by independent variables like age, gender, level and tenure.

HypothesisHypothesis 1

Gender Vs. Job SatisfactionHypothesis Null hypothesis There is no difference in the mean job satisfaction between the male and female employees Alternate hypothesis There is some difference in the mean job satisfaction between the male and female employees Method Student t-Test was used to check the difference in the mean of the samples and the results are shown below: At first F-test was conducted to check whether the t-Test for equal variance should be used or t-Test for unequal variance needs to be used. The result of F-test at 0.05 level of confidence is shown below F-Test Two-Sample for Variances FEMALE 69.46166 667 97.89650 606 12 11 0.501639 721 0.114061 402 0.387357 752 MALE 62.41241 379 195.1530 19 29 28

Mean Variance Observations df F P(F


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