Job Satisfaction Employee
Introduction
The aim of this chapter is to examine the reasons leading to job satisfaction and to explore the relationship between satisfaction and turnover. The chapter also looks at various satisfaction variables and determinants and studies the relevant theories and concepts. It presents the findings from the desk research and follows these findings with the primary data collection methodology in the following chapter.
Employee turnover
Turnover occurs when an employee leaves a specific job or organization permanently and their services are no longer available (Grebner et al., 2003). There is an increased importance given to employee retention by organizations as it is widely believed that reducing employee turnover can serve a useful survival strategy. Foot & Hook (2005) have classified turnover as voluntary and involuntary. Involuntary turnover is frequently defined as movements across organizational boundaries, over which the employee is only slightly affected (Price, 1977), the representation forms of withdrawal from an organization often categorized with strategy (e.g. downsizing), dismissal (e.g. firing), or policy (e.g. compulsory retirement) (Campion, 1991). In contrast, voluntary turnover is defined as movements across organizational boundaries, over which the employee is heavily affected (Price, 1977), the representation forms of withdrawal from an organization often categorized with absenteeism and lateness (Campion, 1991).
Reasons of employee turnover
Lower job satisfaction has been shown to increase the proportion of the workforce intending to quit (Shields and Ward 2001), to increase actual quits, to lower participation rates (Akerlof et al . 1988; Clark 1996; 2001; Laband and Lentz 1998) and to increase absenteeism (Clegg 1983). It also reduces the supply of labour at any given wage or, equivalently, raises the cost of maintaining a workforce of given size. The causes of employee turnover are largely related to a lack of motivation, poor work conditions, monotonous responsibilities, poor management and lack of job satisfaction (Mitchell et al., 2001).
Maslow's motivation model suggests that there should be meaning and significance to human work and only when employees physiological, safety, love, esteem and self-actualization needs are fulfilled, they are satisfied and motivated. When their goals are in line with the company's objective and they are rewarded for attaining those goals with what they perceive as important (Vroom's model), motivation is on a high and there are less chances of employee turnover. When employees work as a part of collaborative team, are given greater autonomy within their roles and have the power of decision making, they tend to find their job meaningful which again serves to increase job satisfaction levels and reduce turnover. Eg. Fortune Survey (2007) for ‘100 best Companies to work for' revealed companies like Google, Genetech, Whole foods market etc had the lowest turnover and the most satisfied employees which establishes a clear correlation between job satisfaction and employee turnover. Job satisfaction is not the only parameter that impacts turn over but it is one of the biggest contributors to reducing employee turnover.
The impact of employee turnover
Many research studies have revealed effective management of job design to be a good predictor of organizational survival and growth. This is because when an employee exits, the organization loses much more than just the employee and the associated cost (William, 2007). It loses the knowledge and expertise which the employee has acquired over the years and the rapport which they have established with the team members. All this makes employee turnover expensive in terms of expenditures and lost knowledge. Steve (2007) states that employee recruitment is a major investment for an organization and losing an employee represents a loss on that investment. What is more concerning, is, when the employee joins a competitor, they can recommend the best practices to the competitors which can work to their advantage. It is because of these reasons that there is a renewed focus of identifying the link between employee turnover and job satisfaction. Job satisfaction and motivation at workplace is considered a crucial HR activity.
The relationship between turnover and job satisfaction
The relationship between job satisfaction and the role it plays on employee turnover has been the subject of concern within academic circles for quite sometime time. Many researches have been conducted and most researches have blamed the lack of job satisfaction as one of the main predictors of turnover. The idea that satisfied employees will perform their work more effectively and will be least likely to look out for new jobs underpins many theories of performance, leadership, reward, and job design (for example, Batt, 2002; Cherns, 1976; Hackman & Oldham, 1976; Morrisey, Cordery, Girardi, & Payne, 2005; Patterson,Warr, &West, 2004). Research conducted by Hom & Kinicki (2001) revealed that a fundamental way of decreasing employee turnover is to raise the level of job satisfaction. Brief & Weiss (2002) confirmed in a study that interactions between job involvement and organizational commitment are indeed significant predictors for indicators of employee retention.
This study intends to examine employee's willingness to leave or join another firm and the impact of job satisfaction on their decision. For the purpose of this research, it tries to understand the relationships between job characteristics, including employee's personal characteristics, job satisfaction and intentions to quit. It examines the relationship between job satisfaction and employee turnover with the help of Lloyds TSB case. Employee turnover in Lloyds TSB's organizational process will be studied and analyzed in detail. Its association with job satisfaction and other internal variables will be studied.
Reducing Employee turnover
Previous researches conducted by (Clark 1997; 2005; Clark and Oswald 1996) have also revealed that organizations that consider employees as subordinates, treat them as an integral part of the company's success have found low absenteeism and employee turnover rates. On the contrary, those that fail to build an effective employee-employer relationships and share information with the employees, usually have higher turnover rate. It is also believed that employees are more likely to remain with organizations that offer them the flexibility to design or modify their work schedule. But, academicians like Drakopoulos and Theodossiou (1997) have argued that employee turnover cannot solely be blamed on job satisfaction and workplace environment. External factors and personal characteristics can equally affect employee turnover rates and the intent to leave. Researchers and practitioners also argue that other external factors such as unemployment rates and the economy can directly affect turnover. But, there is a general concurrence within the research community towards the aspects of the work environment and the nature of work itself. Wieland & Timm (2004) believe that satisfaction at workplace and the concerned job role and responsibilities have a direct impact on employee turnover.
The determinants of satisfaction
Personal and job characteristics determine satisfaction with domains or aspects of the job, such as remuneration or whether there is recognition for good work (Salamin & Hom, 2005). Proper training, scope for career progression, type of people at workplace, workplace culture, responsibilities and job role, the remuneration package and the reward and recognition package; all contribute towards satisfaction / dissatisfaction. Griffeth et al. (2000), state that among the most reliable personal correlates of turnover, is the tenure-turnover relationship. They cite that based on attraction-selection-attrition (Schneider, 1987) and job matching (Garen, 1998) quits decline as tenure increases. During entry, new hires learn if they fit with the firm's culture and values and can derive satisfaction from available rewards and “experiencing” the job. During early employment, misfits exit the workplace, while those who fit display fewer turnovers as seniority accrues. Job incumbents also accumulate more benefits as they log more time in the firm (e.g., pension and seniority-based promotions; Mitchell & Lee, 2001). Accordingly, seniority is one of the reasons which deter resignations because veteran employees would relinquish tenure-driven benefits or opportunities if they leave.
Lloyds TSB case
In an industry like financial services, where people are the assets and are critical to a company's success (or failure), workforce satisfaction should be a prime concern of managers who are responsible for creating and delivering growth for their companies (George & Zhou, 2002). The enthusiasm and passion of a motivated and creative workforce usually shows through in the products they produce, and also results in a more stable base of employees with reduced turnover and lower recruiting costs (Illies, R., & Judge; pg 367).
The upheaval in the financial services industry because of the credit crunch and the related frenzy, among other factors has in many cases significantly changed the workloads and job descriptions of almost every person in financial services. Job security and job satisfaction have reached its nadir. A recent study carried out by Judge et al., (2007) has revealed that compensation and job security remain significant areas of concern. Fear of losing one's job is most acute in the financial services industry because of the credit crisis, with most employees feeling vulnerable.
The study examines in depth the specific causes of satisfaction and dissatisfaction, as well as the current state of the industry, personal perspectives on compensation, status, training by both industry sector and job function. It will also look at the level of optimism in the industry and the perceived outlook for the future.
We provide a professional essay writing service that thousands of our customers use as an effective way of improving their grades, improving their research and saving them lots of time.
