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Herzbergs Two Factor Theory Of Job Satisfaction Management Essay

In this chapter, introduction will emphasise on the initial stage of the study. The first section will briefly explain the overview of the study whereas the background of the company can be found in the next section. Next, the following section will focus on product lines of the company. Research problems, research objectives, scope of study, and significance of the study and definition of terms also consist in this chapter.

Overview of the Study

Researchers have done extensively studies on Herzberg’s Two-Factor Theory of Job Satisfaction on job satisfaction of employee (Tan, Teck Hong and Waheed, Amna, 2011). Herzberg’s two-factor theory is probably the most widely known and accepted approach relating directly to job satisfaction (Noell, 1976). Herzberg addresses the problem of job satisfaction in terms of those factors which cause satisfaction (motivators) and those which cause dissatisfaction (hygiene) (Noell, 1976).

Hygiene factors do not lead to satisfaction however it prevents dissatisfaction. Hygiene factors are the factors that keep away from bad feelings at work. On the other hand, the real factors that motivate employees at work are motivator factors (Tan, Teck Hong and Waheed, Amna, 2011). Research done by previous researchers have shown that employees will stay longer in the organization if they satisfied with their job, for example there will be lower turnover and be less absent in the organization (Jewell and Segall, 1990; Locke, 1976). This research will determine which Hygiene factors impact on employee’s job satisfaction.

The important of job satisfaction is it will help in maintaining and retaining the appropriate employees within the organization. Nowadays, quite hard for employer in construction sector to retain and attract new applicant to join their organization. From survey done by Meritaberta.com on 1200 craft workers employed by 21 construction employees the surveyed stated that the five top reasons why their peers leave the construction industry are poor pay and benefits, non permanent employment, poor job safety, poor treatment by supervisors, and poor working conditions. Thus there is a need for these companies to organize the tasks at hand, design systems and processes and re-evaluate and improve current management style (Harmon, 2007). Areas where the competition is constantly increasing and consistently challenging need this improvement. Thus construction industry needs improvement in order to retain and attracting employees.

1.2 Company Profiles

MMC-Gamuda Joint Venture Sdn Bhd, is a joint venture company between MMC Corporation Berhad and Gamuda Berhad (Electrified Double Track Project, n.d.). The joint venture between MMC Corporation Berhad and Gamuda Berhad is 50:50. Electrified Double Track Project is design and builds by the joint venture company. The Electrified Double Tack Project involves the construction of infrastructure works, track and system works and this project duration is 5-year Design and Build Contract.

The overall length Double Track project is a 329-km northern railway project that involves KTM’s main line from Ipoh to KTM’s main line Johor Bahru. Kedah Line length is 157 km from Bukit Mertajam to Padang Besar, while mainline overall length from Butterworth to Ipoh is 171 km. When the project completed, the entire electrified dual tracks from south to north of Peninsular Malaysia will stretch 968-km (Electrified Double Track Project, n.d.)

MMC-Gamuda Joint Venture has clarified each of the project area. 2T Northern Section Packages is from Padang Besar to Ipoh. It has 4 sections consist of section A, section B, section C and section D. Section A is from N1 to N3. N1 is Padang Besar and N3 is Sungai Petani. Section B cover from N4 to N5. N4 is Pinang Tunggal site and N5 is Parit Buntar. On the other hand, Section C covers N6 area which is from Bagan Serai to Padang Rengas. The last section is Section D which covers N7 and N8. N7 is Kuala Kangsar and N8 is Ipoh.

Since the project is still on the progress MMC Gamuda Joint Ventures open branch in each project area. This office will help in management of the project. There a 4 main offices which located in Bukit Mertajam, Kamunting, Alor Star, and Sungai Siput.

1.3 Company Products

The northern Electrified Double Track project Ipoh to Padang Besar involve the design and construction of the infrastructure and systems works for 329-km. Work involves in this project are replace the existing single-track, by laying two new parallel tracks, build new stations and bridges, as well as modern electrification and signaling systems (Electrified Double Track Project, n.d.).

Background of the electrified double track project is, Government have been reactivated the Electrified Double Track project in July 2006 since deferment in December 2003 (Electrified Double Track Project, .n.d). Then MMC-Gamuda Joint Venture has submitted Technical and Financial Proposals to the Government in March 2007 (Electrified Double Track Project, n.d.). On October 2007 Economic Planning Unit lead the negotiations and in finally Letter of Acceptance was issued to MMC-Gamuda Joint Venture on December 2007.

Overall length of Electrified Double Track project is 329-km. This overall length is total from the Mainline which 171-km which is the track from Ipoh to Butterworth. While Kedahline 158-km comprises from Bukit Mertajam to Padang Besar. This project also has total 34 stations to handle this project. There are 7 major station, 14 minor station, 10 halt and 3 depots. All of these station located in Perak, Penang, Kedah and Perlis.

Electrified Double Track project not only focus on track project, however MMC-Gamuda Joint Venture also do tunnel project for this Electrified Double Track project. Tunnel project is still in progress Perak which is in Bukit Berapit 3.3-km and in Bukit Larut 0.33-km. Other main project involve in Electrified Double Track Project is bridge project. There are 194 bridges will be done in this project. These 194 bridge is total from 66 Road Over Bridge (ROB), 8 Road Under Bridge (RUB), 75 River Bridge (RB) and 45 motorcycle/pedestrian bridge. Some of these bridges have been done and the rest is still under progress.

This project also had something special structure which is in Prai, Pulau Pinang there are Prai Swing Bridge. This bridge will swing if there any big ships want to use the way. The length of Prai Swing Bridge is 282m. Another special structure is Marine Viaduct in Bukit Merah. This Marine Viaduct length is 3.5km.

1.4 Research Problems

There are several factors that influence employee’s job satisfaction in the organization. For example, factors that influence employee’s job satisfaction at MMC-Gamuda Joint Venture (MGJV) are job security, salary and benefit, supervision and interpersonal relations.

Exit-Voice-Loyalty-Neglect (EVLN) model identifies four ways that employees respond to dissatisfaction (McShane & Von Glinow, 2010). First is exit, exit includes leaving the organization, transferring to another work unit, or at least trying to get away from the dissatisfying situation (McShane and Von Glinow, 2010). So job dissatisfaction among employees can be measure through turnover rate in the company. Research done by previous researchers also have shown that employees will stay longer in the organization if they satisfied with their job, for example there will be lower turnover and be less absent in the organization (Jewell and Segall, 1990; Locke, 1976). This supported with the company record, that the turnover is high among their employees. From January 2012 until November 2012 the company record showed that 58 of their employees were voluntarily resigned. However, the number of new join less compared to the resignation of employees which is only 26 employees been hired from January 2012 until November 2012. So the turnover rate is 33.72%. Turnover rate was calculated by using the number of employees resigned, then divide by the number of total employees at the end of the year and multiply 100.So the percentage gets showed that the result of the turnover rate in MMC-Gamuda Joint Venture is high. Since early 2012, MMC-Gamuda Joint Venture has freeze recruitment because of the project is 97% almost done. This is why in 2012 only 26 recruitments have been done. So with high turnover problem among their employees during this year, Human Resource Department find difficulty to find a replacement because they cannot hired a new employees even though in certain position is important to be replaced. From turnover analysis as at March 2012 until May 2012, from exit interview done by Human Resource department, the reason most of the employees resigned because of pay or benefit.

Researcher also can see that the turnover rate among employees in 2011 as reported by Malaysia Average Turnover rate for Executive is 15.4%. This showed that Malaysia faced with turnover problem in addition proven by research done by Barnett, 1995; Chang, 1996; Syrett, 1996 that many Asian countries such as Hong Kong, South Korea, Malaysia, Singapore, and Taiwan faced major problem of with voluntary turnover. Furthermore, survey done by Meritalberta.com on 1200 craft workers which employed by 21 construction companies, from the survey, the five top reasons why the employees leave the construction industry because of poor pay and benefits, non-permanent employment, poor job safety, poor treatment by supervisors, and poor working conditions.

Other ways to measure job dissatisfaction among employee in MMC-Gamuda Joint Venture is through look at the attendance record of their employees. Saifuddin, Hongkrailert, N., and Sermsri, S. (2008) stated that absenteeism can measure employee job dissatisfaction. They relate high turnover and high absenteeism with job dissatisfaction, while low absenteeism associated with high job satisfaction (Saifuddin, Hongkrailert, N., Sermsri, S., 2008). In addition, Exit-Voice-Loyalty-Neglect (EVLN) model showed a four ways that employees respond to dissatisfaction (McShane and Von Glinow, 2010). So absenteeism is an example of act that comes out from the EVLN model, which is under neglect (McShane and Von Glinow, 2010). Reducing work effort, pay less attention to the quality of work, and increase absenteeism and lateness are examples of neglect act by employees (McShane and Von Glinow, 2010). It is generally considered a passive activity that but has negative consequences for the organization (McShane and Von Glinow, 2010). This also supported by company record that every month there is about 5 cases in a month about absenteeism. Company faced difficulty to trace real absenteeism problem among their employees because most of their employees work at site so quite hard for management to control what they are doing during working hours. However, the company project right now has been extent for two years because of cannot finish on the date line set before.

As a result a company should identify what their employees need from them in order to improve their performance and productivity. Thus this will help employer and retain their employees. Bull, (2005) stated that job satisfaction is related to improved employee job performance, positive work values among employees, increase employee motivation, and less absenteeism, turnover and burnout.

Job satisfaction can be the important direction to the employees of how to feels about their jobs and also predictors about their work performance or behaviors such as the absenteeism and turnover. In spite of that, job satisfaction also can be defined as what the employees satisfied with their work from the aspect of rewards, the task that they does and also the supervision from the supervisor. According to Locke, (1976), job satisfaction is defined as positive effect of employees toward their jobs or job situations.

Nevertheless, job satisfaction will also impact the organization in order to advance and develop the quality and productivity of workers can produce more effective and efficient in carrying out the tasks entrusted to them (McShane and Von Glinow, 2010). Among the factors that influence job satisfaction is in terms of motivation at work, salaries and benefits in an organization and also the relationship between employees and officers. According to HR Focus Job Satisfaction HR and skill development (2008)” has found that satisfied employees are more likely to stay with their employers and compensation and benefits were ranked equally as the most important ingredients of job satisfaction.

1.4.1 Research Questions

This report intends to finds answer the following:

Does job security have impact on employee job satisfaction?

Does salary and benefit have impact on employee job satisfaction?

Does supervision have impact on employee job satisfaction?

Does an interpersonal relation have impact on employee job satisfaction?

Research Objectives

To determine whether job security have significant relationship towards employee’s job satisfaction.

To determine whether salary and benefit have significant relationship towards employee’s job satisfaction.

To determine whether supervision have significant relationship towards employee’s job satisfaction.

To determine whether interpersonal relations have significant relationship towards employee’s job satisfaction.

1.6 Scope of Study

In conducting a research, limitations and constraints are elements that unavoidable. For instance, it is impossible for a researcher to conduct a research in all MMC-Gamuda Joint Venture because researcher might not be able to collect data from all employees in all branches. In addition, the researcher does not have enough sources or capital to conduct such big project. The scope of this study is employees the MMC-Gamuda Joint Venture Sdn. Bhd based in Kamunting, Perak. It will focus on how these four Hygiene Factor Theory of Herzberg affect job satisfaction among MMC-Gamuda Joint Venture Sdn. Bhd. employees. The questionnaire was handed out to the workforce in MMC-Gamuda employees in Taiping, Perak area in order to obtain their opinion and views regarding these issues.

Limitation of Study

Problem is inevitable in any research and this researcher will face several limitations during the completion of the study. Some of the limitations faced in this research are time constrain, lack of cooperation, lack of experience and the availability and confidentiality of data.

1.7.1 Time Constrain

The questionnaire had been distributed to the employees from several departments in MMC-Gamuda Joint Venture to be filled in. Some employee involved in this research work at site and had caused them unaware of the urgency of the questionnaire to be return back. This process took longer time than it is expected to be completed. Apart of questionnaire, the researcher also has lack of time to collect the information from many resources in order to establish a good research.

1.7.2 Lack of Cooperation

Another limitation faced by the researcher in doing this study is the reluctance of respondents in giving full cooperation. Respondents not give accurate answers for the questionnaires distributed to them during the work because of their work commitment and due to confidentiality.

1.7.3 Availability and Confidentially of Data

The researcher faces problems in gaining employees and organization’s data from MMC-Gamuda Joint Venture because of their strict rules as well as their private and confidential regulations. There are some important data in the company, which is labeled as private and confidential. It cannot be distributed to outside parties or person who is not working for the company. This is to avoid any misuse of information, which is considered confidential thus restricting the ability of the researcher to do proper research.

1.8 Significance of Study

1.8.1 To the Organization

This research study is beneficial to the organization itself. Organizations will be able to avoid less job satisfaction among their employees. Less job satisfaction will lead an employee to exit. So this will give a problem to the organization to find another employee to fill the vacancy. Thus, this research study help an organization to know what action they should do and focus in order to ensure their employees feel satisfied with their job. High job satisfaction among employees in organization, the organization will have fewer turnovers among their employees. This will help the organization to save time and financial costs such as training costs and recruitment costs to replace the employee who leave the job because of no job satisfaction. Evidently, a new employee might unfamiliar with the company’s structure and progress. He or she might need more time to catch up with the company’s working procedures. Hence, the company might need to assign a “buddy” to him or her for teaching purposes. Additionally, company might also need to implement any training courses to the new employees and thus such training courses incur quite a number of costs which burden the company. In contrast, if the employees’ turnover intention is low, the company does not need to organize such training courses or assign “buddy” to the new employees. The old employees are able to increase company’s productivity and remain company’s reputation at the same time because the old employees have familiar with the company’s progress.

1.8.2 To the Body of Knowledge

The study is significance towards the university because the research can be use as reference to the university especially for Faculty of Business Management. Valuable knowledge of the research topic especially in the Human Resource’s context and the information of the company can be obtained by students.

1.8.3 To the Researcher

The study is significance towards the researcher because it is compulsory to fulfill the requirement in completing the Bachelor of Business Administration (Hons) Human Resource Management. An understanding the impact of job security, salary, interpersonal relations, and supervision on employees job satisfaction of employee will make the researcher better understand what people out there need from organization. The researcher will also know which one of the factor affect most toward job satisfaction among private sector employees.

1.9 Definition of Terms

1.9.1 Job Security

Job security as the extent to which an organization providesstable employment for employees (Herzberg, 1968)

1.9.2 Salary and Benefit

Salary also is a form of periodic payment from an employer to an employee, which is specified in an employment contract (Sharma and Bhajpai, 2011).

Legally required benefit programs include social security, workers compensation while discretional programs include health benefits, pension plans, paid time off, tuition reimbursement, recognition award, foreign service premiums, responsibility allowance, child care, on campus accommodation, promotion, annual increment and a host of others( Cascio, 2003; Bernadin,2007).

1.9.3 Supervision

Technical competence and fairness of the supervisor (Herzberg, 1968).

1.9.4 Interpersonal Relations

In which interaction with a superior, subordinates or peers is the major factor (Fuller et al., 2008).

Herzberg, 1968 define interpersonal relations as interaction between respondent and another person.

1.9.5 Job Satisfaction

How people fell about their jobs and different aspects of their job (Spector, 1997). Ellickson and Longsdon (2002) support this view by defining job satisfaction as the extent to which their employees like their work. Job satisfaction can be defined as how people evaluate the different feature of their jobs and how they feel positively and negatively about their jobs (Locke, 1976).

CHAPTER TWO

LITERATURE REVIEW

2.0 Literature Review

2.1 Job Satisfaction

In 1959 the outgrowth of a research study project on job attitudes conducted by Herzberg, Mausner and Snyderman show that Herzberg's two-factor theory of job-satisfaction is not new. Job satisfaction is important to an organization's success (Md. Rifayat Islam, Md. Tauhid Rasul, G. M. Wali Ullah, 2012). However, has been relatively little research into the determinants of job satisfaction in the construction industry using Herzberg's two-factor theory. Therefore, this paper endeavours to address this literature gap.

Spector (1997) refers job satisfaction as how people feel about their jobs and the different aspects of their jobs. Ellickson and Logsdon (2002) support this view by defining the job satisfaction as the extent to which employees like their work. Schermerhorn (1993) defines job satisfaction as an emotional response of employees towards various aspects of an employee’s work. C. R. Reilly (1991), defines job satisfaction as the feeling that a worker has about his job or a general attitude towards work or a job and it is influenced by the perception of one’s job. J.P. Wanous and E.E. Lawler (1972) refers job satisfaction is the sum of job aspect satisfaction across all aspects of a job. Abraham Maslow(1954) suggested that human needs from a five-level hierarchy ranging from physiological needs, safety, belongingness and love, esteem to self-actualization

Job satisfaction and dissatisfaction also depend on the expectation what’s the job supply to an employee and not only depends on the nature of the job (Hussami, 2008). Job satisfaction is complex phenomenon with many aspects (Fisher and Locke, 1992); job satisfaction influenced by many factors, for example salary, working environment, autonomy, communication, and organizational commitment (Lane, Esser, Holte and Anne, 2010; Vidal, Valle and Aragón, 2007; Fisher and Locke, 1992).

Previous studies done by past researcher generally found that salary, occupational stress, empowerment, company and administrative policy, achievement, personal growth, relationship with others, and the overall working condition associated with job satisfaction (Hong, Tan Teck and Amna Waheed, 2011). This also supported by previous study done by Kabir and Parvin (2011), variety of factors can influence a person’s level of job satisfaction. Example of these factors are the level of pay and benefits, the fairness of the promotion system within a company, the working conditions, leadership and social relationships and the job itself (Kabir and Parvin, 2011).

Locke (1976) indicated that a person's physical health, mental health and social life commonly affected by job satisfaction. Moreover, Rain, Lane and Steiner (1991) wrote that life satisfaction is connected to job satisfaction, where employees who are satisfied with their jobs tend to be happy with their lives as well, and vice versa.

On the other hand, Breed and Breda (1997) indicated that absenteeism, complaints, and labour unrest also affected by employee’s job satisfaction. Therefore, workers who satisfied with their job will be more productive and retained in the organisation for a longer period, however unsatisfied workers will have a greater tendency to quit their jobs (Crossman, 2003). A satisfied worker performs better while perform their job and also provide better service to customers, which could result in improving customer satisfaction. According to Dawson (2005), positive employee behaviour associated with employee satisfaction.

While job dissatisfaction associated with high absenteeism among employees, turnover in the organization, labour problems, labour grievances, attempts to organize labour unions and a negative organizational climate (Nezaam Luddy, 2005). Cherrington’s (1994) found that employees show their dissatisfaction by being late or staying absent from work.

2.2 Herzberg's Motivation-Hygiene Theory

Herzberg’s Two- Factor Theory is form from two groups of factors known as the motivation factors and hygiene factors (Riley, 2005). Company policy and administration, wages, salaries and other financial remuneration, supervision, interpersonal relations, working conditions and job security are the factors of Hygiene factors (Riley, 2012).

In 1959, Herzberg published his analysis of the feelings of 200 engineers and accountants from over nine companies in the United States. These professionals were asked to describe experiences in which they felt either extremely bad or exceptionally good about their jobs and to rate their feelings on these experiences. Responses about good feelings are generally related to job content (motivators), whereas responses about bad feelings are associated with job context (hygiene factor). Motivators involve factors built into the job itself, such as achievement, recognition, responsibility and advancement. Hygiene factors are extrinsic to the job, such as interpersonal relationships, salary, supervision and company policy (Herzberg, 1966).

Herzberg perceived motivational and hygiene factors to be separated into two dimensions affecting separate aspects of job satisfaction. This belief differed from the traditional approach of viewing job satisfaction and dissatisfaction as opposite ends of the same continuum (Herzberg, 1966). Hygiene factors prevent dissatisfaction among employees but they do not lead to satisfaction of employees towards their job. They are necessary only to avoid bad feelings at work, while motivators considered the real factors that motivate employees at work.

The two-factor theory was tested by many other researchers, who showed very different results. Some research has shown that hygiene factors are actually motivators, (Herzberg, 1966). The results of Herzberg's theory if it is conducted in different industries, the result can vary. The differences are because of intensity of the labour requirement and the duration of employment (Nave, 1968).

Under Herzberg's (1966) theory, workers who are satisfied with both motivation and hygiene factors would be top performers, and those who are dissatisfied with both factors would be poor performers. However, Christopher (2005) argued with Herzberg. He said that Herzberg's results show accurate only under his original methodology.

Hodgetts and Hegar (2005), have defined hygiene factors as the environmental factors that associated with negative feelings. Even though hygiene factors do not motivate employees, however the absence of hygiene factors increases dissatisfaction (Hartel, Fujimoto, Strybosch, Fitzpatrick, 2007).

Therefore, the basic principle of the Two-Factor Theory is that if an employer or manager is trying to increase job satisfaction and ultimately job performance for an employee or coworker, then they need to address those factors that affect one’s job satisfaction.

The relationship between satisfaction and dissatisfaction of the traditional concept and Herzberg’s Two Factor Theory is different. According to Herzberg, the opposite of “Satisfaction” is “No Satisfaction” and the opposite if “Dissatisfaction” is “No Dissatisfaction”. While the traditional concept is “Satisfaction” and the opposite of satisfaction is “Dissatisfaction.

Satisfaction DissatisfactionTraditional Concept

Dissatisfaction No DissatisfactionHerzberg’s Concept

No Satisfaction SatisfactionHygiene Factors

Motivation Factors

Figure 1: Relationship Scales of Satisfaction & Dissatisfaction

Sources:Herzberg, F. (1968). One more time: how do you motivate employees? Harvard Business Review, vol. 46, no. 1, pp. 53-62

2.2.1 Job Security

According to the Employee Job Satisfaction survey report June 27 2010 by Society for Human Resource Management (SHRM) Annual Conference in San Diego, the report stated that job security and benefits are the top two “very important” contributors to job satisfaction (Hastings, 2010). The importance of job security is also agreed by HR professionals as it ranked it second.

Job security is an important determinant for employee turnover (Arnold and Feldman, 1982). Ashford et al., (1989) found that job insecurity is leads to reduced employee’s satisfaction and commitment. Employees job performance also reduce because of job insecurity (Rosow and Zager, 1985).

Job dissatisfaction is the outcome of insecurity among employees (Ashford et al., 1989; Davy et al., 1991). Job security, working conditions and the nature of work, low wages and lack of promotion, low job autonomy found to have adverse affect on the level of job satisfaction of employees (Guest, 2004; Silla et al., 2005)

2.2.2 Salary and Benefit

Salary is a form of payment from an employer to an employee, which is specified in an employment contract (Sharma and Bhajpai, 2011). Important reward to motivate the behavior of employees is through pay (Taylor and Vest, 1992). Even though other factors are important to enhance job satisfaction of employees but satisfaction from pay is important. Katzell (1964) stated that pay satisfaction depends on the difference between perceived pay and the amount of pay a person feels should be received.

It also been supported from the findings of previous study, pay one of the most important factors influencing employee level of job satisfaction. Most employees rated pay as the most influential factor related to job satisfaction. Pay refers to the amount of financial compensation that an individual receives as well as the extent to which such compensation is perceived to equitable (Bull, 2005). Sharma and Bhajpai, (2011) added that that dissatisfaction with pay caused an employees have low job satisfaction, reduces employees motivation and performance, increased absenteeism and turnover intentions, and more pay related grievance and lawsuits among the employees (Sharma and Bhajpai, 2011). It also supported by Cable and Judge (1994), satisfaction with pay influence overall of employees job satisfaction, motivation and performance, absenteeism and turnover intentions among the employees and may be related to pay-related grievance and lawsuits.

Salary was found to be the main factor for the motivation and job satisfaction of salaried employees (Kathawala, Moore and Elmuti, 1990). Salary also identified as a motivator for an employee in put commitment with the organization which this will enhances attraction and retention of employees (Zobal, 1998; Moncarz et al., 2009; Chiu et al., 2002). Pay also identified as a communicator, which shows how much an employee is valuable for its organization (Zobal, 1998).

From the Employee Job Satisfaction survey report June 27 2010 by the Society for Human Resource Management (SHRM) Annual Conference in San Diego, compensation or pay fell to fifth place for the first time after been appeared in the employees’ top five list before (Hastings, 2010). While on HR professionals’, compensation/pay not listed out as top five important.

According to Luthans (1998), salaries also instrument in satisfying the higher level needs of people and not only help people to achieve their basic needs. Previous research done by Voydanoff (1980) has shown that the most significant variables in explaining job satisfaction were monetary compensation. One the other hand, Groot and Maassen van den Brink (2000) provide different evidence for the relationship between pay and job satisfaction. They did not found evidence for a relationship between compensation and job satisfaction in their earlier research; however their subsequent research revealed the opposite result. However changes in compensation whether it increase or decrease have associated impact on the level of employee’s job satisfaction (Hamermesh, 2001).

On the other hand, the issuance of benefits (or lack of) also influences employee job satisfaction. Benefits give workers a feeling that they are appreciated and being taken care of. Out of pocket medical expenses are so high that a person often seeks medical insurance in a job. An employer who does not provide some type of benefit is not going to be able to keep a top notch group of employees as theirs will seek benefits elsewhere.

Benefits refer to the part of the total compensation package provided to the employee in whole or in part by payments from the employer and it's did not include the pay for time spent on work (Milkovich & Newman, 2008). Besides, benefits are group membership rewards that provide security for employees and their family member. Benefits are a non-compensation paid to employees. Some benefits are mandated by law, for example social security, unemployment compensation and worker compensation. Employees' benefits include pension, health insurance, fringe benefits, welfare and etc (Lee, Hsu & Lien, 2006). Benefits are a critical part of an employee's total compensation package. Besides, benefits can be treated as the payment or entitlement, such as one make under an insurance policy or employment agreement, or public assistance program or more generally, something of value or usefulness.

According to Carter (2008), benefits are provided to the employee in return for their contribution to the organization, which is for doing their work and it is forms of value that other than payment. Zhou, Qian, Henan and Lei (2009) however argued that benefits are provides flexible and market competitive health benefits to support employment brand and support attraction and retention. Example o employee's benefit are retirement benefits, work-life balance (for example, sick leave, vacation, jury duty and etc), insurance, transportation, housing accommodation, disability income protection, allowances (for example, dental, medical, transportation, housing, mobile phone and etc).

2.2.3 Supervision

Various researchers demonstrate that a positive relationship exists between job satisfaction and supervision (Koustelios, 2001; Peterson, Puia & Suess, 2003; Smucker, Whisenant, & Pederson, 2003). Supervision forms a pivotal role relating to job satisfaction in terms of the ability of the supervisor to provide emotional and technical support and guidance with work related tasks (Robbins et al., 2003).

According to the study conducted by Friedlander and Margulies (1969), management & friendly staff relationships affect the level of employees job satisfaction. However, this results different with view of Herzberg (1966) that supervision is unrelated to the level of job satisfaction.

Wech (2002) stated that supervisory behavior strongly affects the development of trust in relationships with employees. This support research done by Sherman & Bohlander (1992) that the supervisor’s attitude and behavior toward employees may also be a contributing factor to job-related complaints. So these show that, supervisors contribute to high or low morale in the workplace (Ramsey, 1997).

A study done by Brewer and Hensher (1998) found that supervisors whose leadership styles emphasise consideration and concern for employees generally have more satisfied workers rather than supervisors who practicing task structuring and research demonstrates that a positive relationship exists between job satisfaction and supervision (Koustelios, 2001; Peterson, Puia and Suess, 2003; Smucker, Whisenant, & Pederson, 2003). So supervisors with high relationship behaviour strongly impact on job satisfaction (Graham and Messner, 1998).

For development-orientation, mentoring is used (Scandura and Williams, 2004). Employees intend to remain with the employer when a supervisor provides mentoring, thus it also affects the protégés skill development (McManus and Russell, 1997). By providing access to outside organization, non-supervisory mentor may increase the mentee’s confidence (Scanduraa and Williams, 2004). The immediate supervisor support is very important in organizational change (Griffin, Patterson and West, 2001). Support of supervisor is not very crucial in satisfaction but it has positive impact on satisfaction (Griffin, Patterson and West, 2001).

2.2.4 Interpersonal Relations

Work groups have a direct effect on the job satisfaction of employees (Ozdemir, 2009). For example, a good relationship among their teammates, employer or acceptance of an employee among their peers will increase job satisfaction. However, when an employee feels him or herself stranger inside of a group, employees tend to losses motivation and morale and shows low performance at work (Ozdemir, 2009).

Several studies examine the influence of supervision, management and co-worker social support towards employee job satisfaction. An employee’s level of job satisfaction might be depends on employees personal characteristics and the characteristics of the groups she or he belongs to. According to the Society Human Resource Management, the social context of work has a significant impact on a worker’s attitude and behavior relationships with both co workers and supervisors are important. They added some studies have shown that the better the relationship between the workers and their officemate, and the better the relationship with their immediate boss, the greater the level of job satisfaction (Arne L. Kalleberg and Loscocco, 1983).

With managerial actions and supervision, the productivity and performance of subordinates can be improved (Alamdar Hussain Khan, Muhammad Musarrat Nawaz, Muhammad Aleem and Wasim Hamed, 2011). However it was differently found by Brown and Mcintosh (2003) that social relation, supervisor’s relationship has little influence on job satisfaction at workplace. (Roelan, Koopmans and Groothoff, 2008) also found that job satisfaction is not the result of satisfaction with supervisors.

However on the other hand, Lambert et al., (2001) stated that co-workers one of the vital factors that is important determinant of job satisfaction. James (1996) found that working in a team has significant impact on the satisfaction level of employees as it affects their performance. Research done by Schermerhorn, Hunt, Osborn (2005) also found that the hygiene factors like pay, promotion, and satisfaction with co-workers influence the employee feeling towards job satisfaction.

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

Research design is a framework, structure and strategy which specify the methods used for collecting and analyzing the information. It can be defined as a plan of outlining how the information of the proposed research can be gathered for evaluation and assessment. A research design was used on guiding the data collection and data analysis techniques for this research. The purpose of this research design is to identify and target the population of the respondent, select the sample from the targeted respondents, determine the number of participants required and how to record the particular research data.

3.2 Research Framework

Independent Variables Dependent Variable

Job Satisfaction

Moyes and Redd (2008)

Job Security

Moyes and Redd (2008)

Salary and Benefits

Moyes and Redd (2008)

Supervision

Moyes and Redd (2008)

Interpersonal Relations

Moyes and Redd (2008)

Figure 3.1: Research Framework

Developing a theoretical framework is one of the steps of conducting a research. According to Sekaran (2003), a theoretical framework is a conceptual model of how one theorized or makes logical sense of the relationships among the several factors that have been identified as important to the problem. Developing such a conceptual framework will helps researcher topostulate and hypothesizesand test certain relationships and thus can improve researcher understanding of the dynamics of the situation. From the theoretical framework, then, testable hypotheses can be developed to examine whether the theory formulated is valid or not (Sekaran, 2003)

Two types of variables are being tested in this research study, which are independent variables and dependent variable. An independent variable is the one which gives an impact on dependent variable either in positive way or negative way whereas a dependent variable can be defined as a variable of main concern to the researcher (Sekaran, 2003). While dependent variable is the variable of primary to interest the researcher (Sekaran, 2003). In other words, dependent variable is the primary problem that the researcher wants to have a look on it and come out with a solution. An independent variable exists along with the dependent variable. Furthermore, independent variables can influence dependent variable in positive and negative way. For instance, when there is a positive relationship exists between both variables, an increase in independent variable will cause an increase in dependent variable and vice versa. On the other hand, an increase in independent variable causes a decrease in dependent variable can be explained as a negative relationship exists in both variables.

3.3 Research Hypotheses

There are four hypotheses in this study:

Hypothesis 1

H1: There is significant relationship between job securities and employee’s job satisfaction.

H01: There is no significant relationship between job securities and employee’s job satisfaction.

Hypothesis 2

H2: There is significant relationship between salaries and employee’s job satisfaction.

H02: There is no significant relationship between salaries and employee’s job satisfaction.

Hypothesis 3

H3: There is significant relationship between interpersonal relations and employee’s job satisfaction.

H03: There is no significant relationship between interpersonal relations and employee’s job satisfaction.

Hypothesis 4

H4: There is significant relationship between supervision and employee’s job satisfaction.

H04: There is no significant relationship between supervision and employee’s job satisfaction.

3.4 Data Sources

3.4.1 Primary Data

Such data gathered for research from the actual site of occurrence of events are called primary data (Sekaran, 2003).In this research, the primary data that will be used is the questionnaires. There will be a set of questionnaires that will be distributed to each respondent in order to get the answer for all the questions regarding the focus of this study.

The main purpose for these questionnaires is to collect the personal data of the respondents, their reaction and opinion about this research. From their answer of questionnaires, the data will be collected and will be interpreted to know the problems that may arise according with the purpose of the research whether the respondents tick the level of agreed and disagree about this research studies.

However, researcher will choose self-administered questionnaires as a data collection method. Refer to Zikmund (2003), self-administered can be defined as a questionnaire that is filled in by the respondent rather than by conducting an interviewer. Questionnaire is important data collection method to gather and provide information for these studies.

3.4.2 Secondary Data

Sekaran (2003), described secondary data as data gathered through such existing sources. Additionally, secondary sources of data can be obtained internally or externally. Data can either be collected from organisation internally or through Internet or other published information externally. Several sources of secondary data cover books and periodicals, journals, magazines, newspapers, annual reports of companies, government publications, data bases, and statistical abstract. Researcher can obtain these sources of data easily from Internet and library. These secondary data provide a lot of information for research and problem solving. Other than that, it enhances the understanding of researchers if they had any doubt and ambiguity regarding the research topic or variables conducted. Furthermore, seeking for secondary data is savings time and costs because researchers can gather the data needed with a few clicks from Internet. In a meanwhile, both primary and secondary data will be used in this research. Secondary data such as online journals, online newspapers, and government publications will be referred in order to obtain more sources for further understanding of this research topic.

3.5 Sampling Design

According to Sekaran (2003), sampling is the process of selecting a sufficient number of elements from the population. A sample is a subset of the population (Sekaran, 2003). Sampling will be used because the total population is in the large amount and it will be constraint to gather the all information for the research from the total population. Therefore, a sample is used to produce more reliable result and reduce the fatigue also error (Sekaran and Bougie, 2010).

3.5.1 Target Population

The target population of this study is the respondents at MMC-Gamuda Joint Venture Kamunting Office and the total population is 173 employees. The large numbers of employees at this organization is difficult for this study to use the total population (Sekaran and Bougie, 2010).

3.5.2 Sampling Frame

According to (Sekaran, 2003), the sampling frame is a (physical) representation of all the elements in the population from which the sample is drawn.The sampling frame of this study consists of the 118 employees at MMC Gamuda Joint Venture Kamunting Office. All employees at MMC Gamuda Joint Venture come from different departments and positions were included in this sampling frame.

3.5.3 Sampling Method

Refer to the Sekaran and Bougie (2010), there are two techniques in sampling which are probability and non probability sampling. This study used the probability sampling as sampling technique where all employees will have opportunity for being chosen as a respondent. Under probability sampling, this study used simple random sampling which every element in the population has a known and equal chance of being selected as a subject. Furthermore, this method is used to minimize bias (Sekaran and Bougie, 2010).

3.5.4 Sample Size

Sekaran (2003) defined sample size as a total amount of sample which selected as the subject of the research. According to Roscoe (1975), sample sizes which are larger than 30 and less than 500 are the most appropriate for any research. She added that a sample size of 30 for each category is necessary when the sample is divided into subsamples.

The sampling size that has been selected in this study is 118 respondents (Sekaran and Bougie, 2010). The respondents that involved in this research are the employees at MMC Gamuda Joint Venture Kamunting Office. The researcher have choose respondents from 7 departments which are Human Resource and Administration Department, Account Department, Contract Department, Quality Control Department, Infra, Design and Technical Department and Commercial Department. It means all of the respondents have same chances to be chosen (Sekaran and Bougie, 2010).

3.6 Measurement and Scaling

A scale is a tool that distinguishes people’s opinion or ideas from one another on the variables of interest to the particular study (Sekaran, 2003). Four types of scales can be categorized between each other. There are nominal scale, ordinal scale, interval scale, and ratio scale.

According to research methods for business text book, a nominal scale is a scale of assigning subjects to certain groups. For instance, variable of respondents’ gender is assigned into code numbers 1 and 2 and thus it enables researchers to categorized gender into two groups, male and female. This research studies used nominal scale for demographic profile in Section A. Secondly, this studies also used interval scale for independent variables and dependent variable questions which is in section B and section C. Interval scale let researcher measure the distance between any two points on the scale (Sekaran and Bougie, 2010). Interval scale also would indicate whether the first preference is to the same extent, a lesset extent, or a greater extent than the second (Sekaran and Bougie, 2010)

3.7 Data Collection

3.7.1 Questionnaire Design

The research instrument was a structured questionnaire constructed in English. It is use to obtain the necessary data to answer the research questions and eventually to achieve research objectives. The questionnaire consists of three sections:

Section A: Personal Information

Section B: Independent Variables (Job Security, Salary and Benefit, Supervision and Interpersonal Relations)

Section C: Dependent Variable

Section A used close-ended question. In the closed ended type of questions, the respondent is asked to select from a fixed list of replies. Sample also has to choose any one of the options given or multiple options. This facilitates coding and helps in quantifying the answer to the question.

A Likert scale has been used for section B, and section C. All of these sections has six statements and the level of agreement of respondents is measured on a scale 1 to 6. The Likert scale is designed to examine how strongly subjects agree or disagree with statement on a on a six-point scale which are 1 = disagree very much, 2 = disagree moderately, 3 = disagree slightly, 4 = agree slightly, 5 = agree moderately, 6 = agree very much. According to (Zikmund, 2003), Likert scale is one of the extremely popular for measuring attitudes. It is because this method is simple to administer. Besides that, this scale is easy to construct and more reliable than other scale (Tittle et al., 1967). Many researchers also used six-point scale because it can avoid the probability for the respondents to answer neutral (Gwinner, n.d). Furthermore, the only the respondents who possess the experience towards the study will answer positive or negative. However, if the majority of the respondents did not possess any experience, it will lead them to answer neutral (Gwinner, n.d).

3.7.2 Pilot Testing

Pilot test is non-statistical method use to validate the content of the instrument (questionnaire). It is essential to pilot test the questionnaire as fully as possible before distributing it. At the very least, have colleagues or friends vet through it and play the role of respondents, even if they know little about the subject. However, if possible it is best to find a small set of respondents who are comparable to members of the population from which the sample for the full study will be taken (Hussey & Hussey, 1997). In this research, pilot testing is conducted to a small respondent who are related to this study. After the questionnaire is completed, it been reviewed for errors and tested using Statistical Package for Social Science (SPSS) before distribution. In this study, the researcher pick randomly 30 respondents from different background to conduct pilot test and the result for this pilot study shows that all the variables are reliable as the Cronbach’s alpha value is more than 0.723 (refer appendix 2)

3.8 Data Analysis Method

The data analysis is done after collecting the survey questionnaires from the targeted respondents where it will be arranged properly and be prepared for the statistical computation for the evaluation and assessment for the next stage. The questionnaires collected from the respondents are checked for its validity before it is entered in the statistical software called Statistical Package for the Social Science version 18 (SPSS 18) to analyze the data and to obtain the answer for the research question. SPSS is designed especially to find an accurate data through statistical analysis. The SPSS software helps researcher to test the hypotheses and interpreting result through various statistical techniques.

3.8.1 Reliability Test

Reliability test is considered as really important because this test determines the Cronbach’s alpha, is a reliability coefficient that indicates how well the items in a set positively correlated to one another (Sekaran and Bougie, 2010). Cronbach’s alpha technique was implemented in this research study. It is used to measure the reliability and strength of the data collected from questionnaire survey. Reliability test is crucial because the consistency will bring an impact to the findings in the later stage. Reliability analysis also was conducted to make sure that the data generated from the questionnaires are reliable and consistent to be used in this study. According to SekaranandBougie(2010), Cronbach’s alpha value less than 0.60 is considered poor, those in 0.70range, acceptable, those over 0.80 are good. The closer the Cronbach’s alpha is to 1, the higher the internal consistency reliability (Sekaran and Bougie, 2010)

3.8.2 Descriptive Analysis

Descriptive analysis produces an analysis of the demographic profile of respondents who participated in the survey. It brings convenience to researchers to extract data such as the frequency and percentage of gender and age of the respondents who participated in the survey. The use of the analysis is that it transforms the data collected into a more understandable and interpretable form.

3.8.3 Pearson’s Correlation Analysis

Correlation analysis measures the closeness of the relationship between two or more variables. It ranges from r = -1 to r = +1. The measure of goodness between the variables should fall within the range of 1 to -1. If the r = 1, there is perfect direct linear relationship between 2 variables. Besides, if r = -1, there is negative relationship between 2 variables. If r is close to 0, it means there is no relationship between the variables. If r is positive, it means that as one variable gets larger the other gets larger. If r is negative it means that as one gets larger, the other gets smaller (often called an "inverse" correlation).

3.8.4 Multiple Regression Analysis

Multiple regression analysis is a statistical technique design to predict values of a dependent (or criterion) variable from knowledge of the value of two or more independent (or predictor) variables (George &Mallery, 2001). This type of analysis is conducted to check the significant difference among the independent variables contribution towards the virtual product development in the companies. It is then developed to illustrate the degree of contribution of the independent variables. Regression results provide information on the statistical significance of the independent variables and strength of association between one or more of the predictors and criterion. By applying this multiple regression analysis to a set of data results in what are known as regression coefficients, one for each explanatory variable (Landau & Everitt, 2004).

3.9 Conclusion

This chapter explains in depth various elements of the research designs that took place. It gives description on how the study will be conducted and the thorough analytical method where the whole elements took place. There are various means by which data can be collected and analyzed. In this chapter, the researcher has described the different type of data and discussed various measurement scales for recording and describing quantitative data. The analysis and interpretation of the research data then forms the major part of the research study. Next, the following chapter will continue the data analysis and further findings of the study.

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