The Impact On Job Satisfaction Before And After Privatization Accounting Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

This research aims to study the level of job satisfaction before and after privatization based on the following variables directly affecting employee satisfaction:


Skill Variety




The scope of this research is to find out the impact on job satisfaction before and after privatization.

According to researcher, there are few limitations involved in this study:

The sample selected consists of responses from white collar employees of HBL and UBL only.

Minimum job tenure of five years.

The access was limited to public information only as both banks have not shared information that was confidential in nature.

The questionnaire was floated in the head office which is located in Karachi.

The respondent from other banks could not be included in the sample due to lack of time and sources.


The thesis consists of 5 chapters. Chapter 1 discusses about the problem about which the research was carried out and in general the banking industry of Pakistan. Chapter 2 elaborates on the methodology adopted including data sources and collection ways is discussed. In chapter 3, the theoretical background is developed. In chapter 4, the data collected through questionnaire is analyzed and results are concluded. Conclusions are drawn and necessary recommendations are suggested in chapter 5.


H1: There is no difference in the level of satisfaction with respect to information amongst employees working in banks before and after privatization.

H2: There is no difference in the level of satisfaction with respect to skill variety amongst employees working in banks before and after privatization.

H3: There is no difference in the level of satisfaction with respect to closure amongst employees working in banks before and after privatization.

H4: There is no difference in the level of satisfaction with respect to pay amongst employees working in banks before and after privatization.


Privatization, one of the economic policies that characterized the late 1980s and the 1990s. Since the decision to privatize has been mainly driven by political and economic reasons, the economic and financial impact of privatization had been reported in a considerable number of studies (Goodman & Loveman, 1991; Megginson, Nash & Randenborgh, 1992; Parker, 1992; Bishop, Kay & Mayer, 1994; Bishop & Thompson, 1994). However, the literature is scarce on the employee's job satisfaction levels before and after privatization.

Research has reported major restructuring processes with an emphasis on the core business, the adoption of more decentralized and flatter organizational designs, and a removal of layers of middle management and headcount reduction to make operations more cost-effective (Bishop & Thompson, 1994; United Research, 1990). Reductions in the labor force have probably been cited as the major consequences of the change process induced by privatization, since public-sector companies are traditionally associated with over-manning (Parker & Hartley, 1991; Parker, 1992; Haskel & Szymanski, 1994). Other changes have also been reported, such as in the labor relations and employment contracts, as well as compensation practices with the introduction of performance pay (United Research; Parker & Hartley; Bishop & Thompson).

The uncertainties about employment losses in the industry due to privatization are by and large, tenuous. The idea of privatizing the banking industry contradicts those who argue that privatization meant jobs (employment) are lost and unemployment rate is high.


Nationalization is the way to take the industry/sector or assets into public ownership/authority of a government. The word Nationalization basically relates to private assets although it may also mean that assets owned by the lower level of government, for example municipalities (Wikipedia, 2008).

The reason of nationalization is economic and also political. This is an essential idea for few brands of state socialist rules and policy that the means of distribution, exchange and production shall be bought / owned by state.

As the nationalized industries are state owned, the government is accountable for overcoming any debts incurred by these industries. Also, the nationalized industries do not usually get/borrow from the local market instead for shortterm period borrowing.

However, Nationalization takes place with/without compensation to former owners/authorities. When it happens without compensation that means it is a case of expropriation. Some nationalization happens when the government seizes the private property acquired and running illegally.

The dominance of public sector banks at the beginning of the nineties was apparent with a share of 92.2 percent in total assets (Table 18) of the banking sector. The remainder belonged to foreign banks, as domestic private banks did not exist at that time. Similarly, high shares existed for deposits and equity of the public sector banks. With these characteristics, the banking sector at the end of FY90 did not provide a level playing field for competition and growth.

The NCBs (nationalized commercial banks), which dominated the banking sector at the start of the nineties, were characterized by:

High Intermediation Costs

Over-staffing and over-branching

Huge portfolio of Non Performing Loans

Poor Customer Services


Poor Management / Narrow Product Range

Averse to Lending to SMEs/housing and other segments

Undue Interference in Lending, Loan Recovery and Personnel issues


The word Privatization is a very broad term but simply defining, it is the transferal of assets/services delivery from government to private sector. Generally it is used to mean the formation of a company under Companies Act and the subsequent sale of at least 50 percent of the shares to the private shareholders (Beesley & Littlechild, 1994).

The most important argument for privatization of publicly/government owned operations are the predictable increase in efficiency that can upshot from private ownership. The private owners give more importance to profit maximization through which efficiency increases as compared to government, which tends to be less concerned about profits.

Most companies get funds from small group of investors and start as private companies. As their business grows, they access the ownership/authority transfer and equity market for financing by the sales of shares. This process is subsequently reversed in some cases, when a group of shareholders or a private organization purchases all the shares from a public organization which makes the organization private and therefore eradicates it from the stock market.

The results of privatization have been mainly reported from the economic, financial and strategic perspectives. These include the reduction of the public sector deficit and of constraints on corporate financing (Bishop Kay & Mayer, 1994), improvement of efficiency of other state activities (Goodman & Loveman, 1991), efficiency and productivity improvements deriving from market incentives to managers and workers (Bishop et al.; Parker, 1992), transference of management control to the private sector (Bishop et al.), decrease in levels of employment and relative wages (Haskel & Szymanski, 1994) and development of coherent corporate strategies and a shift towards the foal of value maximization (Megginson, Nash & Randenborgh, 1992).

Europe has provided several examples of large-scale privatization programs, namely UK and Portugal. In 1995, the cited these two countries as the first and third largest privatizing countries respectively in the Western world. While the changes in the external environment, that originate generally from introduction of competition & from deregulation, have been abundantly analyzed, the same cannot be said about the changes in the internal environment and particularly, their less tangible effects for the employees, human resource policies and organizational culture (Nelson, Jackson & Cooper, 1995).


There is a range of alternative service delivery techniques that could be used to increase the efficiency and increase/maximize the services quality. Depending on the service, some methods will be more suitable than others. Few techniques are as follows searching for techniques of cutting costs and increasing/growing delivery:

Contracting Out (also called "outsourcing"): The government deals with a private company, to deliver services for profit or non-profit organizations.

Management Contracts: In this technique, the part of the job is contracted out to a private company. The type of services that are provided involves waste-water plants, convention-centers, arenas, airports and sport clubs.

Public/Private Competition: (managed competition / market testing). This technique explains that when public services are open to competition, the in-house public companies are permitted to take part in bidding process.

Franchise: Within a certain geographical location, the private firms are given the most exclusive rights to provide the facilities and services.

Internal Market. In house providers and outside suppliers serve departments in order to purchase helping and support services for example printing, maintenance, computer repairing and learning / training. For departments business In-house contactors of support operations are required to run as independent business units challenging against outside contractors. In this way market forces are brought to stand with an organization. On the other hand internal customers have rights to reject the offerings/facilities of the internal service providers if for what ever reason they don't like their quality or their rate is very high.

Vouchers. Here the government pays for the facilities. Individuals are given tradable certificates to buy the service from the open market. The private sector provides the services that promote the service. To provide greater independence of choice, vouchers gives consumer pressure to tolerate, producing incentives for customers to shop for services and also for service suppliers to provide low-cost, high-quality services.

Commercialization (service shedding). The government stops offering a facility and let the private division accept the function.

Self-Help (transfer to nonprofit sector). The Neighborhood firms and community groups usually takes over the facility or government asset for example a local park. New suppliers of the service directly benefits from the service. Governments gradually discovering that by turning non-core services for example zoos, fairs, remote parks, museums and recreational programs to nonprofit companies, they are able to certify that such institutions do not drain the budget.

Volunteers. They deliver all or part of a government facility. Their activities are conducted from government's volunteer program or through a nonprofit organization.

Corporatization. In this technique, government organization is restructured along business lines. Usually it is mandatory to pay taxes, operate in accordance to commercial principles and raise capital on market. The government corporation focuses on increasing profits and attaining a favorable ROI (return on investment).

Long-Term Lease / Asset Sale. The government trades or gets into long-term lease for assets for example airports, from real-estates to private organizations or gas-utilities, turning physical capital in financial capital. In an arrangement of sale-leaseback, governments trade the asset to private sector unit and lease/rent it back.

Private sector forms capital and manage public infrastructure for example airports and roads, recovering cost from user charges. Numerous techniques are being used for privately operating/running and building infrastructure.

In Build Operate Transfer (BOT) arrangements, private sector usually builds, designs, finances and also operates the facilities and services over contract.

A difference is the BTO (Build-Transfer-Operate) model, in which the title allocates to the government at the completion of construction.

Lastly, with BOO (Build-Own-Operate) arrangements, private sector maintains permanent ownership and manages the facility on contract.


In Pakistan, for the policy makers, the notion of Privatization is not new. PIDC (Pakistan Industrial Development Corporation) established in 1952. Over 50 industrial undertakings were established by this corporation and such units were shifted from public to private sector after successful management and operation.

In early 70's, the nationalization policy amplified the size of the public sector to an uncontrollable extent and thus failed to deliver what was expected from it. The new policies were introduced by the new government in July 1977 of denationalization, disinvestment and decentralization to bring back the confidence of private investors. The government declared denationalization of around 2000 Agro-based industries and offered a number of State Owned Enterprises (SOE) on Management contract and introduced performance signaling system in order to improve their performance and bring efficiency in operation and management (Bokhari, 1998). In late 80's the privatization of State Owned Enterprises became a significant instrument of government's economic policy.

The British firm M/s N.M. Rothschild was appointed as the consultants in 1989 by the new government to carry out a research on privatization strategies and potential candidates' selection. The report "Privatization and Public Perception in Pakistan" was submitted by the consultants that recommended privatization on widespread ownership source as a suitable strategy for Pakistan. Following are the seven companies got short listed after analysis of 50 companies, as potential first candidates for prevalent offers:

SSGC was recommended as the first candidate for offer and for further companies the report recommended a minority stake could be divested during the five year program to the consortia of workers and private sector parties.

In 1991, the privatization process became effective and the government announced the agenda of privatization that covered a wide range of areas for example the banks, industries, the infrastructure facilities, the development financial institutions and also telecommunications.


The privatization process is an open and transparent way that is aimed at selling government property with a vision of obtaining the best possible price depends on the nature/type of the asset which is being privatized, on the amount of shares that is offered for privatization and whether a transfer of management/employees are involved. The Board of PC (Privatization Commission) chooses as to what type of process to be followed. The process of Privatization in Pakistan is:


The first step towards identification of an individual to get himself privatized. The contract requires the Privatization Commission to submit a document of the proposed transaction to the Board and the document has to justify the importance of privatization of the property, outlines the possible way of privatization, and sometimes look for guidance on problems linked to matters such as restructuring, pricing problems, legal issues, regulatory framework and also consideration. However, once validated by the Board, it is submitted for approval to the Cabinet or subcommittee "The Cabinet Committee on Privatization" (CCOP).

Hiring of Financial Advisor (FA)

In main dealings, the Board approves the FA and the hiring process is done by transaction manager. Then the terms of reference for FA is settled, expressions of interest from potential FAs are asked, an evaluation team is constituted and the firm that are short listed are asked to submit the technical and financial plans in a corporate layout/format. The evaluation team then sums the proposals and then maximum ranked companies are invited for agreement (contract) signing and negotiations. In 2001, the rules and regulations of hiring a financial advisor got approved by the Board to create transparent procedures that were mostly followed over the last decade.

Due Diligence

The next step, after hiring of FA is to carry out financial, legal and technical due diligence. This helps in recognizing any legal hindrances, assessing the condition of assets and investigating the accounts of the firm so as to place a price on the company. For main privatizations in infrastructure, utilities or banking, the FA is responsible for this function. After due diligence, the FA confirms the privatization plan. The plan includes recommendations on any required restructuring, to specifying the total of assets or shares to be privatized. For major privatizations or when the proposed privatization method is different from initial plan and the plan is submitted to the Board, CCOP or full Cabinet for acceptance / approval.

Enacting needed Regulatory and Sectorial Reform

For several main transactions, the capacity to privatize and the quantity of proceeds realizable depends on the level of regulated price for public enterprise inputs or outputs and sectorial / regulatory policies.

Property Valuation

To obtain independent assessment of the price of property being privatized, Privatization Commission depends primarily on external companies. To obtain a reference price for property, the FA carries out the assessment. In most cases, the commission contracts with an outside valuation organization or accounting firm. The techniques used for the valuation depends on the type of business and usually more than one technique is used in determining the value. These techniques are: the discounted cash flow method, stock market valuation and asset valuation at book / market value. The correct value is reliant on several difficult to quantify variables for example the country risks, a perception of future macro-economic performances and also includes corporate psychologies and strategies. The true value can be determined only from the market. Thus it is essential to focus on designing proper transaction structures, advertising in relevant media, in choosing and applying suitable pre-qualification standards for bidders and following a suitable bidding procedure to obtain a fair price for the privatization.

Bid and Pre-bid process

EOI (Expressions of Interest) are given invitations through publicity in the related media. The PC Ordinance 2000 implies few advertising processes. Depending on the types of transactions, Expressions of Interest describes broad qualifications that prospective bidders must have. Bidders who submit an EOI and meet the requirements of broad qualifications and criteria are then provided with Request for Proposals (RFP) packages which contain the detail pre-qualification requirements, directions to bidders, draft sales contract and other related documents and reports. After that interested parties submits a statement of qualifications (SOQ), which is assessed to decide whether interested party fulfills the necessary qualifications requirements. Then Pre-qualified bidders are given a definite time period to carry out their private due diligence, after which they are invited in a pre-bid conference where their queries and concerns are addressed. This meeting is beneficial for the potential bidders to understand the bidding procedures and processes that need to be followed (for example an open auction, sealed bids or some other combinations). The bidding is conducted openly, where all bidders and media are invited for transparency.

Post-bid Issues

After the bidding and identification of uppermost bidder, the Privatization Commission Board makes a commendation to the CCOP regarding accepting or rejecting the bid. Reference amount is a key determinant in the commendation, although the PC Board recommends the sale no matter if the proposed price is below the reference amount. Once the price of bid and bidder are accepted, the PC then issues a letter of acceptance to the winning bidder, specifying terms and conditions of sale. The PC then completes sale purchase agreement/settlement document, then collects the sale proceeds and finally transfers property. The PC issues the summary facts of the transaction in the official newsletter, within 30 days of the sale.

The privatization process is long for major transactions, mainly to assure transparency. After getting CCOP approval for privatization, it usually takes about 18 months for closing a main transaction, although when no main restructuring of the organization is required. Following agreement of the plan, the bidding and marketing process takes another five or six months, while it takes another 2 months following bidding to get approvals, settle sale documents and close transactions.


To prepare the public sector banks for privatization, the following steps were taken in the Pakistani banking sector (Hussain, 2004):

Amendment in Banks (Nationalization) Act 1974.

This Act, under which the banking sector in the country was nationalized during the seventies, was amended in 1990, to pave the way for privatization of the nationalized commercial banks.

Abolition of the Pakistan Banking Council

The Pakistan Banking Council, established subsequent to nationalization of the banking sector in the seventies, was abolished in 1997.

Downsizing in NCBs

In order to reduce the surplus staff in the nationalized commercial banks, voluntary separation packages were offered to employees. This resulted in downsizing of the work force of the three big NCBs (HBL, NBP and UBL) by 11,101 staffers out of a total of 39,277.

Closing of unprofitable branches

As part of the downsizing exercise, 1,646 branches of NCBs were closed down.

Recapitalization of NCBs

The balance sheets of public sector banks were cleaned up and their accumulated losses wiped off by the injection of new equity in Habib Bank and United Bank. A total of Rs. 46.6 billion was injected as equity in these two banks prior to their privatization.

Establishment of CIRC

The Corporate and Industrial Restructuring Corporation (CIRC) was established in 2000 for acquiring Non-Performing Loans of NCBs. Non-Performing Loans (NPL) worth Rs. 47.4 billion have been transferred to CIRC at a discount so far for disposal.

Resolution of non-performing loan problem

An incentive scheme for settling long outstanding non-performing loans was designed under the guidelines of SBP to clean up the balance sheets of NCBs.

Issuance of tax refund bonds to NCBs

Tax refund bonds amounting to Rs. 6.5 billion have been issued to NCBs.

Installation of professional management in NCBs

In order to streamline the working of NCBs, the State Bank put in place professional management in HBL, NBP and UBL. The Boards of Directors were reconstituted with private sector individuals of integrity and eminence.

Promulgation of Privatization Ordinance

To further strengthen the privatization process, the government promulgated the Privatization Ordinance in 2000. The Ordinance strives to ensure that privatization is carried out in a fair and transparent manner.

Revival Committee for Sick Units

CRSIU (Committee for the Revival of Sick Industrial Units) formed by Government of Pakistan. Purpose of this committee was to restructure loans of sick industrial units, in order to make them viable.

The other important point is that fortunately, Pakistan had a very able cadre of bankers working in international banks. Citibank, ABN-Amro, Bank of America, to name a few, have many Pakistani bankers at senior and middle management positions. These persons were brought in and inducted to take over the management of the three big banks. Whether, in absence of such a readily available pool of banking professionals it would have been possible to restructure these state-owned banks can only be conjectured.


Banks privatized so far: So far, 6 banks have been privatized while shares of the National Bank of Pakistan have been floated through an Initial Public Offering (Table 19). Details of the privatized units are given below:

1. Muslim Commercial Bank Ltd - Fully divested and now owned and controlled by a domestic private group.

2. Allied Bank of Pakistan Ltd - 51 percent shares sold to the Allied Management Group (AMG) representing employees of the ABL.

3. Bankers Equity Ltd - 51 percent shares were sold to a domestic private Consortium but eventually the entity was forced into liquidation. An unsuccessful privatization episode.

4. Bank Al Falah Ltd - Fully divested, controlled and owned by a foreign group

5. United Bank Ltd - 51 percent shares sold and management transferred to a group of private foreign investor and expatriate Pakistani.

6. Habib Bank Ltd - 51 percent shares sold and management transferred to a private foreign group.

7. National Bank of Pakistan - 23.2 percent shares divested through Stock Exchange.

Rupees in BillionTable 19: Units privatized to date

1991 - June 2002

July 2002 - June 2003

July 2003 - Jan 2004

To Date



Amount Realized


Amount Realized


Amount Realized


Amount Realized










US $ 710 million

Source: Privatization Commission

By March 2004, the share of the assets of state owned banks in the banking system of Pakistan had declined to only 18.6 percent (Table 20). On the other hand, private sector banks, whose share was nil back in 1990, now own 76 percent of assets of the entire banking sector. This includes the share of foreign banks, which increased, from 7.8 percent in 1990, to 10 percent in 2004. Similarly, shares of the public-sector banks in total usually deposits and equity also declined while that of private and foreign banks rose over this period of 14 years.


Job satisfaction has been defined by Locke (1976) as how employees feel about their work, and low job satisfaction has been linked to undesirable outcomes in the workplace. The undesirable outcomes come in many forms. For example, higher levels of turnover are related to dis-satisfied workers. Low job satisfaction has been linked to lower worker productivity and performance. Higher levels of job satisfaction have shown to be related to positive outcomes. Spector (1997) commented that among managers, job satisfaction is considered as important influence on employee behavior and organizational effectiveness. Spector believes that job satisfaction "can be considered as a global feeling about the job or as a related constellation of attitudes about various aspects or facets of the job". Increase in job commitment also leads to increase in employee satisfaction. By selectively designing jobs to include substantial levels of autonomy, verity and feedback, employee's level of commitment and satisfaction to the organization should increase.


Initially, this question may seem to have an obvious answer. After all, it seems eminently logical that a happy employee is a "better" employee, which is often defined as a "more productive" employee. However, thousands of studies have been carried out seeking to establish a positive and unmistakable correlation between high job satisfaction and high productivity with nothing conclusive being proven. Researchers have attempted to correlate job satisfaction with efficiency, absenteeism, turnover, and various other aspects of performance with decidedly mixed results. Blackburn & Bruce (1992) explain, "Managers and workers alike pursue job satisfaction in the often naive belief that it leads directly and surely to that other workplace ideal - high performance. The fact is, however, that sometimes satisfied employees perform better, and sometimes they do not".

Recent trends towards more holistic views of psychology make clear the importance of work in the individual's overall enjoyment of life. A miserable employee cannot leave the dissatisfactions of an unhappy job at the office at the end of the day. While earlier generations may have viewed their jobs predominantly as a source of income, today's employees see their careers as more. Blackburn & Bruce (1992) write, "Most of today's workers expect to derive much more satisfaction from their work then their grandparents ever dreamed was possible".

Blackburn & Bruce explain, "Whether or not satisfaction and performance are directly and strongly correlated is not actually the issue. The actual issue is that in order to attract and retain qualified employees in the upcoming tight labor market, employers will have to treat people as their most important asset".



There are two types of sources available for data collection regarding research purpose i.e. primary and secondary data. In this research study, both primary and secondary sources are used. Secondary data is obtained from the books, journal/articles and internet while primary source is dependent on the questionnaire survey. The researcher depends on both the sources for theoretical and empirical data. As there is very scarce published material available about the impact of privatization on job satisfaction, so researcher had to rely on questionnaire survey results for empirical data.


The instruments used for collecting data for this research consisted of questionnaire for surveys and SPSS as testing tool.


For this research, a questionnaire based on the design of Wood, Chonko & Hunt (1986) survey was used as the measuring instrument to determine employees' job satisfaction before and after privatization. The job satisfaction measures consists of 14 items scored on a Likert-type format (with 1 = Strongly Disagree and 5 = Strongly Agree). Seven of the job satisfaction items were developed by Wood et al., from pre-tested responses and they focused on various elements of the respondents jobs. Additionally, seven items were selected from the Job Characteristic Inventory (Sims, Szilagyi & Keller, 1976). These 14 items were then grouped into four basic factors namely, Information, Skill Variety, Closure and Pay, replicating the approach taken by Wood et al. Researcher has added two informative questions about respondent i.e. Age and Tenure.


A pilot test was conducted to detect weakness in design and instruments. Pre-testing refers to the testing of the questionnaire on a small sample of respondents in order to identify and eliminate potential problem. Here, the researcher intended to conduct a pretest to evaluate the questionnaire for clarity, bias, ambiguous questions, and relevance to organizational setting of HBL and UBL. For this reason, the researcher distributed 6 questionnaires among 6 professionals. Pre-test of 5-10 representative respondents is usually sufficient to identify problems with a questionnaire.


A self-administered questionnaire was filled out by 50 respondents (25 in each bank). A total of 48 usable questionnaires were returned. Not every respondent got equal chance to become the part of this research and the research is conducted on the basis of convenience i.e. Convenience Sampling Technique. Convenience sampling technique is a method of non-probability sampling in which a particular group of people are selected but it does not come close to sampling all of the population. The researcher used this type of technique because it is quick, inexpensive and simple and subjects are readily available.


The sample size for my research is 48 respondents, which includes:

Male / Female


Age group: 25 or above

Karachi based



H1: There is no change in the level of satisfaction with respect to information amongst employees working in banks before and after privatization.

4.2.1 RESULT FOR H1:

Based on the statistical tests carried out p is less than α therefore the hypothesis is rejected; which means that there is a significant change in the level of job satisfaction with respect to information in employees before and after privatization.

H2: There is no change in the level of satisfaction with respect to skill variety amongst employees working in banks before and after privatization.

4.2.1 RESULT FOR H2:

Based on the statistical tests carried out p is less than α therefore the hypothesis is rejected; which means that there is a significant change in the level of job satisfaction with respect to skill variety in employees before and after privatization.

H3: There is no change in the level of satisfaction with respect to closure amongst employees working in banks before and after privatization.

4.2.1 RESULT FOR H3:

Based on the statistical tests carried out p is less than α therefore the hypothesis is rejected; which means that there is a significant change in the level of job satisfaction with respect to closure in employees before and after privatization.

H4: There is no change in the level of satisfaction with respect to pay amongst employees working in banks before and after privatization.

4.2.1 RESULT FOR H4:

Based on the statistical tests carried out p is higher than α therefore the hypothesis cannot be rejected; which means that there is no significant change in the level of job satisfaction with respect to pay in employees before and after privatization.







H1: There is no change in the level of satisfaction with respect to information amongst employees working in banks before and after privatization.




H2: There is no change in the level of satisfaction with respect to skill variety amongst employees working in banks before and after privatization.




H3: There is no change in the level of satisfaction with respect to closure amongst employees working in banks before and after privatization.




H4: There is no change in the level of satisfaction with respect to pay amongst employees working in banks before and after privatization.





5.1 Discussion

After interviewing 48 bank employees through a questionnaire based on factors of job design and their impact on the level employee satisfaction a comparative model was developed to determine whether there is a change in the level of job satisfaction before and after privatization. The results rejected the hypothesis that there is no change in the level of satisfaction of employees before and after privatization. It was found that the level of job satisfaction was significantly higher in employees after privatization.

In all, 14 variables connected to job satisfaction were selected divided into four clusters namely information, variety and freedom, closure, and pay and security, based on the study by Wood, Chonko & Hunt (1986). The job satisfaction measures consists of 14 items scored on a Likert-type format (with 1 = Strongly Disagree and 5 = Strongly Agree). Seven of the job satisfaction items were developed by Wood et al., and other seven items were selected from the Job Characteristic Inventory (Sims, Szilagyi & Keller, 1976). These 14 items were then grouped into four basic factors namely, Information, Skill Variety, Closure and Pay, replicating the approach taken by Wood et al.

Data was collected from two privatized banks, Habib Bank Ltd and United Bank Ltd. Sample was drawn from a cross section of managerial level employees from both organizations and consisted of respondents who had considerable job tenures to enable them to compare the variables affecting job satisfaction before and after privatization.

Statistical tests to calculate the p value for each set of items in the four factors were carried out. It was found in the case of the first three hypotheses that p was less than α (alpha) and hence, the hypotheses that there was no change in the level of job satisfaction in employees with respect to information, skill variety and closure, before and after privatization, were rejected. In the last hypothesis test it was found that the p value exceeded α, indicating that there was no change in the level of job satisfaction with respect to pay amongst employees before and after privatization.

5.2 Implications

While it was found that the level of job satisfaction is being significantly affected by the first three variables selected i.e. information, skill variety and closure, the data indicated that this was not the case in terms of salary. It is true that pay might be a strong indicator for assessing job satisfaction, it is, however, not the only variable affecting employee satisfaction by any means and even some classical theories, most notable amongst them being Herzberg's Two Factor Theory, have listed pay as only one variable amongst many, responsible for creating satisfaction (or dissatisfaction) in employees. Hence, the researcher is strongly compelled to arrive at the conclusion that there is a noticeable and verifiable (based on the data collected in this study) difference between level of job satisfaction of employees' who are working in privatized banks, before and after privatization. For all other three factors information, skill variety and closure, the observations clearly hint at an increase in satisfaction level after privatization.

Privatized companies seem to develop "stronger" cultures and focus on creating not only improved distinct accountability and co-ordination and inter-organizational communication, but also an increased concern for team spirit, for human resources and for their development (Cunha & Cooper, 2002). The results from their cross sectional analysis confirm significantly higher perception of occupational stress in the public company than the privatized ones.

5.3 Conclusion

Change over of management from public sector "government" to the private, is a significant incident in an organization's life. It affects the core values of a company, its culture, structure, policy frameworks, and last but not the least, the personnel working for the company. It has generally been assumed that the private sector offers its employees more in terms of professional growth and development, salary, perks etc. However, this proposition is questionable and remains to be tested as far as the banking sector of Pakistan is concerned. This research study has shed some much-needed light on the problem and has discovered that there are sufficiently strong indications to suggest that differences do exist in employee perceptions with regard to at least three variables affecting job satisfaction: information, skill variety and closure. The same could not be found for the fourth variable selected, i.e. salary. These findings substantiate the classical ideas about the perceived lack of relationship between salary and job satisfaction, which relegate pay to the level of a hygiene factor.