Factor Affecting Employee Satisfaction Engineering Department Thailand Business Essay

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Rationale

Employee satisfaction at workplace is as the heart to every company or organization. Employees who are only partially satisfied at work tend to work less productively causing the company to obtain less productivity, profitability and no sustainable growth. (Zuhail, 2007)

Low job satisfaction leads to low morale, which causes employee to work less and concentrate more on the negative aspects of his/her job. As a result, employee may feel depressed and such feeling may have impact on friends and family. He/She may encounter with problems in his/her personal relationships, marriage, and health. People around him/her are likely to feel the frustration and may need to bear the brunt of it from time to time.

Consequently, employer sees a sharp decrease in productivity, very high turnover rate, and increase in training expenses. At the bottom line, company's profitability is in jeopardy. It is, therefore, very important for companies to manage employee satisfaction in proper ways. The world's top ranking companies have admitted that good human resource system is the key factor to the solution and leads to higher employee satisfaction, higher productivity, and success. (Varawalla, 2009)

Many experienced engineers have resigned from CTCI (Thailand) and moved to competitors' companies such as Toyo Thai and Technip. The company has suffered a great amount of costs for new recruitment, training expenses. Moreover, the company has spent a great deal of money to correct the mistake at construction site due to design mistakes which was the result from new lack-of-experience engineers. Therefore, the company needs to find the factors which able to retain employees and improve their satisfaction toward work.

Research objective

To find the relationship between demographic with level of employee's job satisfaction

To find the relationship between compensation system with level of employee's job satisfaction

To find the relationship between work environment with level of employee's job satisfaction

To find the most important factor that affect employee's satisfaction for Engineering Department at CTCI (Thailand) Co., Ltd.

Conceptual framework

The conceptual framework of this research is composed of three independent variables (demographic, compensation system, work environment) and one dependent variable which is Employee's job satisfaction. This conceptual framework was developed by merging the previous research of Mrs. Duangnuch Tantrakul (Compensation system, performance evaluation career advancement and job satisfaction of employees in Soy Milk Business, December 2008) and Ms. Thanchanok Suksri (An Analysis of Employee High Turnover: Causes and Interventions, A Case Sutdy of ACSG (Thailand) Co., Ltd., 2003)

Figure1. Conceptual framework of Mrs. Duangnuch Tantrakul

(Compensation system, performance evaluation career advancement and job satisfaction of employees in Soy Milk Business, December 2008)

Compensation system:

Salary

Bonus

Welfare

Job satisfaction

Dependent variable

Performance appraisal:

Performance indicators

Evaluation criterions

Fair increment

Independent variable

Career advancement:

Promotions

Contextual performance

Job enrichment

According to Mrs. Tantrakul's research, three factors which are compensation system, performance appraisal, and career advancement were studied for their influence on employee's job satisfaction. Due to limited time, this study only chooses the compensation system as an independent variable as it is the most important and appropriate to the company in focus.

Compensation system:

Salary

Bonus

Welfare

Job satisfaction

Dependent variable

Performance appraisal:

Performance indicators

Evaluation criterions

Fair increment

Independent variable

Career advancement:

Promotions

Contextual performance

Job enrichment

Figure2. Conceptual framework of Ms. Thanchanok Suksri

(An Analysis of Employee High Turnover: Causes and Interventions, a Case Study of ACSG (Thailand) Co., Ltd., 2003)

Demographic

Gender

Age

Year of Service

Education

Position

Monthly Income

Turnover

Dependent variable

Independent variable

Job Satisfaction Factors:

Decision making and problem solving

Internal communication between company and employee

Training support

Promotion and Encouragement

The cooperation in the department

Besides the compensation system, this study chooses the independent variables from Mrs. Suksri's research as shown above. In addition, this study adds "marital status" in demographic factors. Figure 3 illustrates all the independent variables in this research study.

Figure3. Conceptual framework adapted for this study

Dependent variable

Independent variable

Employee's job satisfaction

Compensation system

Salary

Bonus

Welfare

Demographic

Gender

Age

Marital Status

Educational level

Work experiences

Work environment

Working condition

Management Styles

.

According to the above figure, this is the modified conceptual framework of this researcher used in this research study.

The scope and definition of the study

1. Definition of Job satisfaction describes how content an individual is with his or her job. The happier people are within their job, the more satisfied they are said to be. Job satisfaction is not the same as motivation, although it is clearly linked. Motivation is a drive to perform, where satisfaction reflects the individual's attitude towards the situation. The employee satisfaction can be determined by the environment and the situation. The motivation can be determined by the value of reward which employee perceives. Many previous researches found that high job satisfaction employees increase their commitment to the organization, increase productivity, to be loyal and devoted him/ her to the organization.

In addition, there are various ways to create employee satisfaction such as job rotation, job enlargement and job enrichment. Other influences on satisfaction include the management style and culture, employee involvement, empowerment and autonomous work groups. Job satisfaction is very important to the organization and should be measured frequently. The most common way of measurement is the use of rating scales where employees report their reactions to their jobs. Questions relate to rate of pay, welfare, responsibilities, variety of tasks, opportunities to advance, recognition, the work itself and colleague. Some questioners ask yes or no questions while others ask for rate satisfaction on Likert scale 1-5 (where 1 represents "not at all satisfied" and 5 represents "extremely satisfied").

According to (Robbins and Judge, 2007) job satisfaction can be defined as a positive feeling about one's job resulting from an evaluation of its characteristics. A person with a high level of job satisfaction holds positive feelings about the job, while a person who is dissatisfied holds negative feelings about the job.

2. Definition of Compensation

In financial terms, the salary and wages are paid to employees for the work they do in form of money or cash. Other, nonfinancial term, it can be position, stock dividend, special bonus and other thing which offered to attract and retain staff. (Anonymous 1)

3. Definition of Work Environment consists of working condition and management style

-Working condition means the physical environment in which you work, including the actual space, the quality of ventilation, heat, light and degree of safety. (Anonymous 2)

This includes matters such as permitted breaks, the state of heating, lighting, and ventilation of workplaces, the safety and comfort of machinery, vehicles, and other equipment, and disciplinary procedures. (Anonymous 3)

- Management styles mean characteristic ways of making decisions and relating to subordinates. Different management styles can be employed dependent on the culture of the business, the nature of the task, the nature of the workforce and the personality and skills of the leaders. This idea was further developed by Robert Tannenbaum and Warren H. Schmidt (1958, 1973) who argued that the style of leadership is dependent upon the prevailing circumstance; therefore leaders should exercise a range of management styles and should deploy them as appropriate. (Anonymous 4)

4. Definition of Safety and Quality

In 2004, the Center for Quality and Productivity Improvement at the University of Wisconsin-Madison and the Department of Industrial Engineering at the University of Wisconsin-Madison conducted a study measuring safety and quality and the forces that drive them. Both safety and quality were found to be controlled by employees (Hansen, 2004). Some of the top characteristics that were found to create a safe workplace and improve quality included (Loushine, Hoonakker, Carayon, & Smith, 2004) which include employee involvement, management commitment, training and education, and communication between managers and employees. The study also found the benefits of having a safer workplace and a higher quality product. Three of the top benefits included (Loushine et al., 2004) are improve employee job satisfaction, lower employee turnover, and reduced rework.

In conclusion, it means top characteristics of quality and safety (employee involvement, management commitment, training and education, and communication between managers and employees) also affect employee satisfaction.

Assumptions

In this study, the researcher has made the following assumptions:

Assume that all respondents understand the question in questionnaire.

Assume that all respondents give the researcher contribution to answer the questionnaire and support researcher to reach objective of study this research.

Assume that the answer from 20 respondents can represent the answers from the rest of the engineer in the Engineering Department. The total number of engineering employees is 56 persons.

Limitations

The limitation in this research which might affect the result is:

Sample size: as the researcher has distributed only 20 sets of questionnaire, duplicate data is utilized to reach sample size 300 respondents. Consequently, the result from SPSS might have deviation.

No personal income is included as one of independent variables. Most of the respondents are sensitive to this question and do not prefer answering this question. As the result, the researcher does not include this variable in the question. However, if the future researcher has occasion to do so, it will be more benefit as it will provide clear understanding how much influence the salary/ income factor has on employee's satisfaction. Some of employees who dissatisfied with their job and quit the company. The main reason is salary concerned. The other reason may be the concern of future job opportunities/ career advancement, illness or physical condition, working environment, supervisor/ colleague, welfare, and poor working condition.

Limited time to study as this course is taken only two months, therefore the research has met obstacle to collect accurate data and factors.

Human ethics considerations

For the ethical conduct of research on this study, the researcher ascertains that all of information which was received from all respondents, who are engineers of CTCI (Thailand) CO. Ltd., will be kept as confidential. The researcher will distribute 20 sets of questionnaire, collect them, and conduct SPSS analysis. The respondents shall be willing to answer the truth in questionnaire and give accurate result in order to help improve the company in the future.

Practical significance

The result of this research finding will be used to improve employee's satisfaction in Engineering Department of CTCI (Thailand) CO. Ltd. In order to use the most effective factor to increase employee satisfaction and retain their high performance employee and create loyalty culture in the company. Recently the company has seen many employees, both new generation and the high experience employees who have work with the company, quit the job and work with owner company (Petroleum Authority of Thailand , IRPC Public Company Limited) and competitor company (Technip, Worley Parson). The researcher believes that this study is of benefit to the company to understand their employees more and to provide appropriate satisfaction factors to their employees.

Background information

Several reports indicate that employees are becoming more distracted, anxious or dissatisfied with their work, and that may lead them to change their job as the economy gradually improves. Meanwhile, these disengaged employees are costing their employers. (Butchers, 2010) Since the employee satisfaction at work has decreased significantly and it will be worse in the next few years. It affects employer in term of cost, training time, loss of professional experience employees and it even leads to the reduction of work quality which affect company reputation.

CTCI (Thailand) Co., Ltd. (CTCIT) has operated for more than 20 years in Thailand, It is a subsidiary company of CTCI Corporation (CTCI) of which headquarter is in Taipei. The firm provides EPC services (E= Engineering, P= Procurement, C= Construction). CTCIT has successfully completed a number of projects, either alone or consortium with CTCI headquarter. Based on many years of experience in design, procurement, and construction of petroleum and petrochemical projects, CTCIT has expanded itself into power fields, and accumulated numerously remarkable track records in the kingdom. Therefore, it can conclude that the most important resource of the firm is "people" especially engineering staff. If the engineer lacks of experience and skill, it will affect the quality of design work which might lead to poor performance at construction. However, since a few years ago, the company has faced problem that many high experienced and skill engineers have left the company in order to get higher salary at competitors' companies or owners' companies. Not only the compensation problem but poor work environment such as working hour and management problems caused some of engineers to quit. Hence, the company's top management and human resource department have concentrated on this problem and try to find the best solution to retain employees. According to this issue, it motivates the researcher to study the factor that affects employee satisfaction in the department. As the researcher is an employee to this company, the researcher would like to help the company to overcome the problem and get a professional team work of engineer as it is the core competency.

Literature review

This part is an overview of this research that is going to study the factors which affect employee's satisfaction by searching information from internet, previous research and text book. There are a lot researches for job satisfaction using the same theory "Motivation" such as Maslow's Need Hierarchy, Two-Factor Theory, ERG Theory, McClelland's Needs Theory, Goal-setting Theory, Expectancy Theory, Equity Theory, and Job Characteristic Model. Most of the researches use these theories to find out what they intend to study. However, the researcher has found that most of theories have same characteristics but being interpreted in different ways. For example, the previous research of Mrs. Duangnuch Tantrakul, Compensation system, performance evaluation career advancement and job satisfaction of employees in Soy Milk Business, December 2008, theories of Maslow's hierarchy of need, Herzberg's Motivator-Hygiene Factors Model, and Job Characteristics Model are used. Meanwhile, Another thesis which was done by Ms. Thanchanok Suksri, An Analysis of Employee High Turnover: Causes and Interventions-a Case Study of ACSG (Thailand) Co., Ltd. is to find the cause that lead employees in Sale Department to resign and to propose effective recommendation to improve situation of the company. The research aims to find the way to retain employee and motivate employee to be satisfied with their job and stay with the company. From these two theses, it seems to be the same objective with this research to find the main cause of employees' dissatisfaction factor, to improve employee satisfaction, and offer valuable recommendation to the company in order to keep employee to stay with the company as long as they can because the most important value in every organization is people.

1. What causes job satisfaction?

There are various factors which create employees' job satisfaction such as work itself, meaningful of job, salary or wages, advancement of opportunities, supervision, colleague, quality of work life, and welfare benefit. These are the factors which most affect with high levels of overall job satisfaction. (Robbins and Judge, 2007)

2. The impact of satisfaction and dissatisfaction of employees in the workplace

The possible consequences when employees like their jobs and when employees dislike their jobs can be classified into 3 outcomes:

2.1 Productivity: happy workers are more likely to be productive workers, although it's hard to tell which way the causality runs. Unhappy worker will be vice versa result of productive. From many researchers, they found that organizations with more satisfied employees tend to be more effective than organizations with fewer satisfied employees. (Robbins and Judge, 2007) Comment cite a reference here

2.2 Absenteeism: normally unsatisfied employees will have high rate of absenteeism. But some of the research found that the organization which provides liberal sick leave benefits is encouraging all of their employees including those who are highly satisfied with their job. Therefore, this impact depends on the company regulation and benefit of employees. (Robbins and Judge, 2007) Comment cite a reference here

2.3 Turnover: most of unsatisfied employees will quit from their job. In fact, the organization typically makes an effort to keep these people as they have superior performance. So these employees will get pay raises, praise, recognition, increased promotional opportunities and so forth. Just the opposite tends to apply to poor performers. Few attempts are made by the organization to retain them. There may even be subtle pressures to encourage them to quit. (Robbins and Judge, 2007) Comment cite a reference here

3. Motivation Theories

3.1 Maslow's Need hierarchy Theory: Abraham Maslow (1954) hierarchy of needs has classified human needs into five needs.

3.1.1 Physiological such as hunger, thirst, shelter, sex, and other bodily needs

3.1.2 Safety such as security and protection from physical and emotional harm

3.1.3 Social such as affection, belongingness, acceptance, and friendship

3.1.4 Esteem such as internal esteem factors such as self-respect, autonomy, and

achievement; and external esteem factors such as status, recognition,

and attention

Self-actualization such as to become what one is capable of becoming including growth, achieving one's potential, and self-fulfillment.

Abraham Maslow mentioned that these needs must be satisfied before the next need

becomes dominant. (Robbins and Judge, 2007)

Figure4. Maslow's Hierarchy of Needs

Source: http://www.qudos-articles.co.uk/news.html

According to Maslow's theory, he has explained that the lowest level of pyramid is for satisfying basic need such as food, water, and warmth. Once this level of need is satisfied, it will be move to a higher level which is safety need such as safety and security. Then the process repeat, once the second level of need is satisfied, people will move to a higher level of need. The third level of need in pyramid is friendship, love, and intimacy. The fourth level of need is self esteem need and the fifth level of need is self-actualization, which is a process of growing and developing as a person to achieve individual potential.

3.2 ERG Theory: Clayton Alderfer (1972) had reworked of Maslow's need hierarchy theory and proposed ERG theory which represent for existence (similar to Maslow's physiological and safety needs), relatedness (similar to Maslow's social and status needs), and growth (similar to Maslow's esteem needs and self-actualization). In this theory, Alderfer argued Maslow's lower human need not necessary to be gratified before move to another level. (Robbins and Judge, 2007)

3.3 Two-Factor Theory (Motivation-hygiene theory): Frederick Herzberg (1959) had proposed this theory. Herzberg had compare of Satisfiers (Achievement, Recognition, Work itself, Responsibility, Advancement, Growth) and Dissatisfiers (Company policy and administration, Supervision, Relationship with supervisor, subordinates, and peers, Work conditions, Salary, Personal life, Status, Security). According to Herzberg, the factors leading to job satisfaction are separate and distinct from those that lead to job dissatisfaction. Therefore, managers who seek to eliminate factors that can create job dissatisfaction may bring about peace but not necessarily motivation. They will be placating their workforce rather than motivating them. (Robbins and Judge, 2007)

Figure5: Herzberg's Two-Factor Theory (Motivation-hygiene theory)

Source: http://maaw.info/ArticleSummaries/ArtSumHerzberg6803.htm

3.4 McClelland's Need Theory: this theory was developed by David McClelland and his associates. He classified human needs into three needs: achievement, power, and affiliation as follows: (Robbins and Judge, 2007)

Need for achievement: The drive to excel, to achieve in relation to a set of standards, to strive to succeed.

Need for power: The need to make others behave in a way that they would not have behaved otherwise.

Need for affiliation: The desire for friendly and close interpersonal relationships.

Figure6: McClelland's Needs Theory

Source: http://www.novabizz.com/NovaAce/Behavior/Need_Theories.htm

3.5 Equity Theory: In this theory, it was developed by John Stacey Adams in 1963

Employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs), and they compare their input-outcome ratio to be equal to the relevant others with whom they compare themselves, a state of equity is said to exist. If they compare with the others and perceive as their outcome is less than the others, they will feel inequity due to underrewarded. But if they compare their outcome with the other and it is more than the others, they will perceive as inequity due to over rewarded. These all perceptions will possible lead them to change in six ways such as change their inputs, change their outcomes, distort perceptions of self, distort perceptions of others, choose a different referent, and leave the field. (Robbins and Judge, 2007)

Figure7: Equity theory

Source: Equity theory -Theories Used in IS Research, http://www.fsc.yorku.ca/york/istheory/wiki/index.php?title=Equity_theory&printable=yes

3.6 Job Characteristics Model (JCM): developed by Hackman and Oldham. They have identified five core job dimensions: skill variety, task identity, task significance, autonomy, and feedback. They also suggest that if the job has designed in a way that increases the present of these core characteristics three critical psychological states can occur in employees:

1. Experienced meaningfulness of work

2. Experienced responsibility for work outcomes

3. Knowledge of results of work activities

According to this theory, when these critical psychological states are experienced, work motivation and job satisfaction will be high.

Figure8: Hackman and Oldham's Job Characteristics Model

Source: http://performancetech.blogspot.com/

In summary, the researcher has found that all these theories are quite similar idea about motivation factor but explain in different way which can be used to relate with the study of researcher "The study of factor that affect employee's satisfaction" as following factors: Compensation and Working Environment. In addition, most of the previous research uses many factors to study which might not be necessary for the research's company. As the researcher has limited time to study and require improving the company situation, the researcher has decided to choose the most affected factor to study in this research.

Data required

In this part, the research has decided to use quantitative method to convert the answer from 20 respondents in tabulate by using SPSS program. In addition, the question in questionnaire was designed to use nominal scale, ordinal scale, and interval scale which is Likert scale (5 points scale rating; 5 = strongly agree, 4 = agree, 3 = neutral/ neither agree nor disagree, 2 = disagree, 1 = strongly disagree). The questionnaire has two parts as table one: Part one is about demographic data such as gender, age, marital status, education, and how long that employee has worked with the company. Part two: is to measure employee's job satisfaction to each factor such as compensation system and working condition.

Table 1: Arrangement of Questionnaire

Part

Main Variables

Sub-Variables

Question No.

Level Measurement

1

Demographic profile

Gender

No. 1

Nominal Scale

Age

No. 2

Ordinal Scale

Marital status

No. 3

Nominal Scale

Educational level

No. 4

Nominal Scale

Work experience

No. 5

Ordinal Scale

2

Compensation system

Salary

No. 1-4

Interval Scale

Bonus

No. 5-7

Interval Scale

Welfare

No. 8-10

Interval Scale

Work environment

Working condition

No. 11-14

Interval Scale

Management styles

No. 15-18

Interval Scale

Data sources

In this research, the researcher has used "Primary Data" method to collect the data by launching questionnaire to employees who are engineer at CTCI (THAILAND) CO., LTD. The company locates at 17-19th Floor Phairojkijja Tower 400, Bangna-Trad K.M. 4, Bangna, Bangna, Bangkok 10260 Thailand. Beside of this, the researcher has used "Secondary Data" from text book, training document about Happy workplace of Human Resource Department, previous research, and internet.

Data collection technique(s)

In this study, the researcher has used divide the job into two phases. Phase one: the researcher will conduct pilot test and Phase two: to collect data from survey method (questionnaires).

1. Pilot test

The researcher will first launch four questionnaires to respondents in order to be confident that the respondents understand the question in questionnaire. The purpose of doing pilot test is to improve the question in questionnaire, in case any of four respondents fall to misunderstand the question. This method will give a reliability and validity of questionnaire.

2. Survey method

At Phase two: after conducting the pilot test, the researcher will use survey method to collect the data by launching 20 sets of questionnaire to 20 respondents (convenience sampling) who are engineering and self collect it by hand. This process will help to keep personal respondent data as confidential. After the collection questionnaire, the researcher will key in raw data to Statistical Package for the Social Sciences (SPSS) and analyze the result. At this stage, the researcher has gotten only 20 answering questionnaire from respondent which quite small amount; therefore, the researcher will duplicate those 20 answers by 15 times in order to reach 300 sample sizes and proceed further analyze. These are the procedure which done for collecting primary data. For the secondary data, the researcher has searched information such as text book, article, training document from Human Resources Department, and internet then read through it and summarizes it.

Data analysis

In this study, the quantitative data which is questionnaire will be use Statistical Package for the Social Sciences (SPSS) to analyze the data. The questionnaire has divided into two parts. Part one asks about respondent demographic question such as gender, age, marital status, education, and work experience. Part two asks about factors which motivate employees' job satisfaction. In order to test the relationship between three independent variables (demographic, compensation system, work environment) and one dependent variable (employee's job satisfaction), the researcher will use Pearson Correlation, where 'r' is the Pearson correlation coefficient ranging from -1 to 1. The positive value of 'r' means positive correlation between independent variable and dependent variable while negative value of 'r' means negative correlation between independent variable and dependent variable. In addition, the statistic tool for this research includes frequency, percentage, mean, standard deviation, Pearson Correlation, and Sig. (2-tailed). After all the finding result has finished, the researcher will summarize and interpret inform of wording and summary table.

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