The Role Of Employees Satisfaction On Firms Commerce Essay


The purpose of this project examines the factor that engenders employee satisfaction in relation to Beatbullying's performance in the Voluntary sector. Previous key landmark theories argue that money is a major catalyst for employee satisfaction at work. However, the missing link is, what really makes for a satisfied workforce in a charity that has made outstanding impact in the sector through its dedicated workforce who are being paid 'poverty wage'. The outcome will help firms to understand the importance and purpose underpinning an effective incentive system, which enhances employee's satisfaction and the overall organisational performance.

Definition of key concepts.

Employee Satisfaction:

This is the term used to define the degree to which employees are happy, content and able to actualise their career ambitions in their job roles and work environment. Many proponents assert that employee satisfaction is an element in employee motivation. (Heathfield, 2000) Jeavons (1992) notes that the Voluntary sector workforce gives up huge pay in order to work in a "value-expressive" environment.

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Organisational Performance:

"every organisation has work to do…. and some way of measuring how well that work is done" (Caplow, 1967). Organisation performance is an evaluation of the extent to which a firm has achieved its objectives. It assesses the effectiveness (attainment of set goals), efficiency (best use of scarce resources to achieve goals), and the degree of employee motivation/satisfaction to ascertain its performance level. (Harewood 2009)2

Definition of the Voluntary Sector - The Voluntary Sector, also known as the Third Sector, is the charitable sector of the UK, compiled of organisations undertaking social activity for the benefit of the general public. (Cabinet Office) The Learning and Skills Council, 2008, has identified three key characteristics: non-government; value driven, which means that it is primarily motivated by the desire to further, social, environmental, or cultural objectives rather than to make profit per se; principally reinvest surpluses to further, social, cultural and environmental objectives (Learning and skills Council).

The core research objective measures the correlation between employee satisfaction and Beatbullying's (BB) performance. The first section will commence with a justification of the choice of research question and highlight the rationale used to construct the question. The second section will provide the leading literature in the area of employee motivation and incentive structures using text books, journals and the internet. This section commences with a broad view as to why this is considered an appropriate research question. The final section will highlight the methods that will be employed in data collection, the ethical issues associated with the project work and its possible outcomes.

The Research Question/Hypothesis

A hypothesis is a statement, theory or proposition between two variables, the dependent variable and the independent variable, which attempts to explain a fact or observation, usually in terms of a relationship of causation. (Oxford dictionary).

Essentially, the project endeavour was to investigate the relationship, association or correlation between BB's performance within the Third Sector and employee satisfaction. In other words, is BB's impressive performance in the Third Sector attributed to a satisfied workforce?

Can a satisfied workforce enhance firm performance?

Can a firm performance improve without a satisfied workforce?

Do firms with a satisfied workforce outperform firms without a satisfied workforce?

This hypothesis is formed through a process of conceptualisation (Walliman, 2006), thus facilitating the identification of analytical concepts which may arguably be attributed to BB's performance. Therefore employee satisfaction is the independent variable and BB's performance is the main dependent variable.

Walliman (2006) argues that a justification of a hypothesis lies closely with theory and the theoretical assumptions of researcher (Walliman 2006:67). Moreover research into the real world requires the application of background assumptions (Gouldner 1970, cited in Dyson and Brown 2006:1).

The question raises particular issues which I intend to mitigate through the project. The issue of employee motivation is arguably subjective, intangible and difficult to measure, presenting an immediate flaw in the research. By contrast, organisational performance is more tangible.


The rationale for doing this research stems from my own personal area of interest and also working for a charity. The outcome of the project will unravel the puzzle surrounding employees' extra-ordinary commitment, dedication and hard work in the Third sector for a 'poverty wage'. This brings to the fore other factors apart from pay that can induce workers productivity especially during the incumbent economic crisis where expenditures have been drastically reduced at national and business levels.


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This section intends to highlight the academic research and key landmark studies in the area of employee motivation, satisfaction and engagement which underpin organisational performance or improved outputs or outcomes. It will provide a critical analysis of the existing literature and research, with a view to inform the research endeavour and my own position to the study. According to the principles of social research, initial research ideas must be based on reference to other research (Walliman 2006:67).

Definition of Employee satisfaction - Employee satisfaction within the workplace arguably refers to positive employee morale. Furthermore, employee satisfaction is closely associated with productivity. Various academic studies in the area of motivation have identified a relationship between motivation and productivity.

Motivation is a general term applying to the entire class of drives, desires, needs, wishes, and similar forces to satisfy a want (Achieve an outcome); Satisfaction is experienced when the outcome has been achieved (Contentment experienced). ( Koontz, 1988)

Results in to achieve

Feedback which provide


Needs or Expectations

Driving Force

(behaviour or action)

Desired Goals


Needs and expectations at work.

There are various needs and expectations of employees which can be categorised in two broad divisions: Intrinsic and Extrinsic motivation.

Intrinsic Motivation is related to 'psychological' rewards such as the opportunity to use one's ability, a sense of challenge and achievement, receiving appreciation, positive recognition, and being treated in a caring, valued and considerate manner.

Extrinsic Motivation is related to 'tangible' rewards such as salary and fringe benefits, security, promotion, contract of service, the work environment and conditions of work. Such tangible rewards are often determined at the organisational level.

As a starting point, the following is a useful, broad, three-fold classification for employee satisfaction at work.

Economic rewards- such as pay, fringe benefits, pension rights, material goods and security. This is an instrumental orientation to work.

Intrinsic satisfaction- This is derived from the nature of the work itself, interest in the job, and personal growth and development. This is a personal orientation to work and concerned with 'oneself'.

Social relationships- such as friendships, group working, and the desire for affiliation, status and dependency. This is a relational orientation to work and concerned with 'other people'

An employee's motivation, job satisfaction and work performance will be determined by the comparative strength of these set of needs and expectations, and the extent to which they are fulfilled.


There are many competing theories which attempt to explain the nature of motivation. They help to explain the behaviour of certain people at certain times. However, the search for a generalised theory of motivation at work appears to be in vain. As with leadership, Handy suggests that the search for the definitive solution to motivation problem is another endless quest for the Holy Grail in organisation theory.

Scientific Management and the work of

F.W. Taylor

The Hawthorne experiments and the

Nature of work motivation

Development of many competing theories

On the nature of work motivation

Emphasis on what motivates individuals.

Major writers under this heading include:

A. Maslow , F Herzberg, Alderfer, McClelland

Emphasis on the actual process of motivation

Major theories under this heading include:

Expectancy theories, Equity theory

Goal theory, Attribution theory.

(L Mullins,1999)





In this section, three existing models of motivation for work setting will be described:

a.) Maslow's Hierarchy of Needs

b.) Alderfer's existence-relatedness-growth (ERG) and

c.) Herzberg's motivator-hygiene.

Following this discussion will be a review of current application of employee satisfaction in the Third

Maslow's Hierarchy of Needs

One of the most famous authors concerning motivation is A.H. Maslow. In 1943 he developed the 'hierarchy of needs model', which is very often presented as a pyramid of needs. Although the model is over 60 years old it is still widely used and applied in different situations and remains valid today for understanding human motivation, management training, and personal development. However, the model has not been without its critics.

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Maslow's hierarchy of needs is often depicted as a pyramid consisting of five levels: Physiological, Safety, Belonging, Esteem and Self-actualization. According to Maslow (1954), individual needs move from the bottom toward the top, and lower-level needs must be satisfied before entering higher-level needs which could drive behaviour. Furthermore, only unsatisfied needs can influence behaviour, those already been satisfied do not motivate. That is to say, a person starts at the bottom of the hierarchy, and initially seeks to satisfy basic needs (e.g. food, shelter).Once these physiological needs have been satisfied, they are no longer a motivator, then the needs move up to the next level- Safety. At work, it could include physical safety as well as protection against unemployment etc. After safety need has been satisfied, people want a sense of belonging.

As a result, for workplace motivation, it is important that management understands which need actives individual employee motivation. However, as mentioned earlier, there are some limitations to the hierarchy of needs.

Wahba and Bridwell (1976) concluded that Maslow's model presents the work motivation with a paradox: The Theory is widely accepted, but there is little evidence to support it.

Firstly, no clear evidence was found that human needs can be classified into five categories.

Secondly, it is not clear that an individual will focus exclusively on one unsatisfied need.

Finally, no research evidence support that satisfaction of needs at one level activates the next level of needs.


Herzberg (1966) suggested a two-step approach to understand employee Motivation and Satisfaction:

Hygiene factors are based on the need for avoiding unpleasantness in a business work. If these factors are considered inadequate by employees, then dissatisfaction will arise in the work. It includes: Company policy and administration, Wages, Salaries; Quality of inter-personal relations; Working

conditions; Feelings of job security, etc. (Calder, 2000)

Herzberg's Motivator-Hygiene Theory cited 16.10.09 at

The existence of motivator factors is to create job satisfaction. They are based on an individual's need for personal growth. If they are effective, then they can motivate an individual to contribute more effort to achieve more performance. Motivator factors include: Status; Opportunity for advancement; Gaining recognition; Responsibility; Challenging or stimulating work, etc. (Calder, 2000)

The main difference between Herzberg's and Maslow's theory is that Herzberg argued only the higher levels of the Maslow Hierarchy (e.g. self-actualization, esteem needs) act as a motivator. The remaining needs can only cause dissatisfaction if not addressed. (Calder, 2000)



Incentives are indispensable tools for organisational inducement, and are key to assisting corporate planners understand the impetus for the organization. An organizational incentive interpolates the intention of new employees entering the firm, and the procedures it follows to compensate and penalise its employees respectively. Incentive techniques can strengthen or dampen employees and team behaviour (Allcorn, 1995).

Organizations must constantly find new methods of engaging, and motivating their employees to sustain their creativity, efficiency, productivity and loyalty. The degree of a firms performance depends on its capacity to design formal and informal structures that attracts and retains the best human resource. (Brudney and Condrey, 1993).

Dimensions of Incentives

What constitutes an incentive for employees in an organisation? Given the fact that money is a powerful and most acceptable form of rewards, it is only a part of reward methods an organisation can employ. There are several forms of incentives that can be used to fortify behaviours that undermine the interests of the firm.


Many organisations offer various kinds of financial incentives, based on their capacity to generate profits. Firms in the private sector grant financial incentives that are almost impossible for not-for-profit or government organisations to offer. These include pay for achieving set targets, bonuses for increased profit levels and many firms now give stock option plans; a kind of joint ownership scheme.


A group of researchers quizzed some employees who work in the voluntary sector on other types of fringe benefits that would stimulate their motivation apart from money. The employees surprisingly, mentioned internet access to source relevant materials, job security, good conditions of employment friendly and cosy work environment, flexible work times, and working from home, acknowledgement and appreciation of their achievement(s), career progression, opportunities to explore their competencies, a sense of belonging with the firm, and involvement in planning and decision making.

Other forms of incentive for people in the voluntary sector are intrinsic elements. Employees are motivated by their calling to serve the public and make a difference in people's lives therefore they forfeit other economic incentives for their 'calling'. All these incentives enhance employee's job satisfaction and productivity which eventually increases firm's performance.

Dossier on Incentives.

Incentives are relative from one individual to the other. Therefore, to obtain information on various forms of incentives, firms must seek ways of knowing the views and opinions of employees about the incumbent incentive systems. This can be done during appraisal, through questionnaires or structured interviews.

Evaluating the Incentive Systems.

In assessing the incentive systems, firms must examine the importance and purpose underpinning the system. The Incentive structure which is a combination of economic and non-economic rewards should not distract people from the organisational goals but geared towards increasing employee's job satisfaction and overall performance of the firm.

Organisational performance.

Every organisation and its employees are motivated to act in predictable ways that conforms to the culture of the firm. However, it is important to discover what constitutes the driving force for organisational performance. Having a clear cut understanding of what drives an organisation to excellence can be an extraordinary instrument for enhancing its performance. (Lusthaus, 2002)


Introduction to Beatbullying.

The award winning charity, Beatbullying is the UK's principal bullying prevention charity. It was established in 1999 and registered in 2002. Beatbullying enables young people to lead off on-line brutality crusades in their schools and neighbourhood, and shapes the scope of local vicinity to foster the work.  BB has promptly and in a roundabout way engaged over eight hundred thousand youths over the past seven years, helping and supporting young people, who are victims of anti-social behaviours, re-orientating them on the right attitude of youths who bully, reducing and preventing bullying in schools and communities across the UK.

The Appllication of Motivational Theories to Beatbullying.

There are thousands of articles about effective ways to motivate employees. It has been said for years in many reports that money alone is a very poor motivator, but many companies still use money as incentive for employee satisfaction. Imberman (2007), pointed that although many employees claim money is the only thing that will drive their motivation higher, Employee contribution and involvement in the decision making process is something that can increase employee satisfaction (Management by Objective).

In the Third sector, it is very obvious that pay is a very poor motivator. Hence, the Herzberg motivator-hygiene theory as discussed above very much applies to Beatbullying.

The extrinsic factors that influence employee satisfaction in Beatbullying are work/life balance. Employees are given 28 days holiday a year, plus 2 weeks at Christmas. Staff also has the option of taking 5 "duvet" days a year, extensive maternity and paternity leave, a flexible working hours system is in place. There are generous pension options and health cover schemes to each employee.

Beatbullying values every staff and their input is constantly sought. There are always opportunity for cross-departmental work and projects, and everyone's input is valued. There is a culture of "best idea wins", and employees are given the opportunity, freedom and support to flourish, take ideas and expand them, and given the opportunity to make mistakes and learn from them.


From the theory of Needs and Expectations at work, I can deduce that the bases for employee satisfaction in Beatbullying are INTRINSIC. The fact that their abilities are utilised, their ability to make a positive impact or difference in people's lives, involved in the decision making process, receive appreciation and a positive recognition for a well executed task and many other factors goes a long way to give them a sense of self esteem and actualization. It also justifies the point that employee satisfaction is a factor that attributes to Beatbullying's success in the third sector.


No organization can survive today by maintaining the status quo. Even top-performing organizations need to achieve at higher levels to maintain their competitive edge. But it takes more than a new business model to push performance and productivity beyond the norm.

What is needed is a satisfied workforce.