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Job Satisfaction in MNCs

Paper Type: Free Essay Subject: Employment
Wordcount: 5364 words Published: 22nd May 2017

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Job Satisfaction in MNC


Job satisfaction is one of most important fields of study in the subject of human resource management. This important role of job satisfaction function leads the way in assuring high level of job satisfaction among the employees. Job satisfaction function of any HR vertical of an organization is primarily responsible for productivity of employees and the employee turnover. Since these two aspects can make or break the organizations performance in all areas, it requires attention from top management. Job satisfaction function generally is part of the HR vertical with a clear mandate of motivating employee and continuously striving for higher employee job satisfaction through introduction of new policies and frameworks. The topic forms an integral part of organizational effectiveness and that has instigated me to choose this topic of job satisfaction. I shall try to study the existing literature on job satisfaction and will choose multinational companies to study their varied job satisfaction strategies and make analysis.

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Job satisfaction function is a vast topic and cannot be completely covered in this dissertation. Various researchers have already published their research articles on this subject. I shall be developing on it through understanding the different strategies used by MNC’s in today’s business environment for maintaining better levels of job satisfaction. Job satisfaction as stated earlier is a complex topic and hence i will try to break it down to simpler and more realistic frameworks to understand the thought process of an organization to ensuring better job satisfaction amongst its employees.

According to Wood (1973), “job satisfaction is the condition of contentment with one’s work and its environment, denoting a positive attitude.” Locke (1976) stated that, “job satisfaction could be viewed as a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences.”

In other words, it can also be stated that, “job satisfaction was simply a function of the degree to which a job provided the worker with positively values outcomes.” Wanous (1980) said that, “job satisfaction was a match between a person’s need and the reinforcement received from work performed in an organization.”

The HR vertical of any organization shall try to achieve higher levels of job satisfaction through various techniques like awards program, job rotation, internal promotion scheme, family tours and training processes. There is no destination to achieving job satisfaction but the journey is perpetual in nature. Continuous improvement is the name of the game in achieving relatively good job satisfaction amongst the employees. The measure of job satisfaction can only be achieved through comparison in similar industries and through the employee turnover and productivity data.

Job satisfaction is one of the most widely discussed and enthusiastically studied constructs. However, job satisfaction is among the most difficult constructs to define. A review of literature shows that constituted definitions of the construct vary from one researcher to the next. Wood (1973) describe the job satisfaction as “the condition of contentment with one’s work and it’s in my mind, denoting a positive attitude”(p.8.). Locke (1976) stated that job satisfaction could be viewed as “ a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences.” (p.1300)

there are several reasons for studying job satisfaction. “ Organizations major job satisfaction primarily because of its presumed direct relationship to the short-term goals of cost reduction through increased individual productivity and reduced absences, errors, and turnover.” (Cranny et al, 1992). Levels of job dissatisfaction have been found to be related to job turnover, absences, and tardiness.

Turnover rates have been the most consistent major associated with job satisfaction. The potential negative consequences of employee turnover in terms of the impact of organizations. Negative effects of job turnover can include: increased costs to recruit, select and train new employer; demoralization of remaining employees; decreased social relationships among employees; negative public relations; disruption of a hi-fi and two-day activities; and decreased organizational possibilities to pursue growth strategies. In fact, several researchers reported a significant relationship between absenteeism and job satisfaction.

According to Lawler (1977), “the research evidence clearly shows that employee’s decisions about whether they will go to work on any given day and whether they will quit as affected by their feelings of job satisfaction. All the literature reviews on the subject have reached the same conclusion. The fact that present satisfaction influences future absenteeism and turnover clearly indicates that the commercial direction is from satisfaction to behavior.”

The literature also reveals that there is a coalition chip between job satisfaction and variables such as achievement, recognition, the word itself, responsibility, advancement, policy and administration, supervision, salary, interpersonal relations, working conditions, EH, Ted Newell, educational level, job activities, and gender.

The Purpose of the Study

The purpose to choose this topic is to analyze the importance of job satisfaction in Multi National Companies (MNCs). The reason to go for MNCs is the increase in the shift over of the employees for future growth. The shifting, thus, includes the satisfaction in the given job role. Through my research, I will try to analyze the causes and effect relationship between the employee and the factors behind job satisfaction in a given MNC.

Aim of the Study

The main aim of the study is to investigate the remains leading to negative and positive job satisfaction in a MNC.

The Objectives of the Study

The key objectives of the chosen topic are:

1. Estimating the causes of employee attitudes.

2. Adjudging the results of positive or negative job satisfaction

3. Measuring the employee attitude

4. To assess facet-specific levels of job satisfaction

5. To measure general job satisfaction,

Literature Review

There are several reasons for studying job satisfaction. “Organizations measure job satisfaction primarily because of its presumed direct relationship to the short-term goals of cost reduction through increased individual productivity and reduced absenteeism, errors, and dissatisfaction has been found to be related to job turnover, absenteeism and tardiness.”

Turnover rates have been the most constraints measure associated with job satisfaction (Atchison & Lofferts, 1972; Brayfield & Crockett, 1955l Dawis & Lofquist, 1981). Mowday (1984) recapitulate the probable pessimistic significance of employee turnover in terms of the impact on organizations. There are various impacts of pessimism in job satisfaction on the turnover of the company such as:

* Increase in the recruitment cost.

* Recruiting new employees and then training them as well.

* It can lead to reduced social relations ships among employees.

* No or only few public relations.

* Reduction in company’s prospects which can hamper the growth.

According to Lawler (2005), “the research evidence clearly shows that employees’ decisions about whether they will get to work on any given day and whether they will quit are effected by their feelings of job satisfaction. The fact that present satisfaction influences future absenteeism and turnover clearly indicates the causal direction is from satisfaction to behavior”.

There is a correlation between job satisfaction and variables such as achievement, recognition, the work itself, responsibility, advancement, policy and administration, working conditions, supervision, job activities and gender.

Research Methodology

Saunders et al (2005) “Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure”.

The research to be followed is a step-by-step process. This makes the entire research process systematic. Only primary research shall be used to draw inferences. The sources used shall be of international repute and will be trustworthy. The main source will be case study and also some books, journals, articles and publications including Internet sources.

Literature review

Job satisfaction in regards to one’s feeling or state of mind regarding nature of their work. Job can be influenced by variety of factors like quality of one’s relationship with their supervisor, quality of physical environment in which they work, degree of fulfillment in their work, etc.

Positive attitude towards job are equivalent to job satisfaction where as negative attitude towards job has been defined variously from time to time. In short job satisfaction is a person’s attitude towards job.

Job satisfaction is an attitude which results from balancing & summation of many specific likes and dislikes experienced in connection with the job- their evaluation may rest largely upon one’s success or failure in the achievement of personal objective and upon perceived combination of the job and combination towards these ends.

According to pestonejee, “Job satisfaction can be taken as a summation of employee’s feelings in four important areas.” These are:

1. Job-nature of work (dull, dangerous, interesting), hours of work, fellow workers, opportunities on the job for promotion and advancement (prospects), overtime regulations, interest in work, physical environment, and machines and tools.

2. Management- supervisory treatment, participation, rewards and punishments, praises and blames, leaves policy and favoritism.

3. Social relations- friends and associates, neighbors, attitudes towards people in community, participation in social activity socialibility and caste barrier.

4. Personal adjustment-health and emotionality.

Job satisfaction is an indicator of employee productivity and employee behavior at work. This may include inter employee relations, pro-activeness of employee, employee absenteeism & no. of feedbacks from employees. These all factors are a direct measure of employee satisfaction of the job. The direct correlation has been established by earlier researchers and moreso there is logical evidence to it in any business or industry.

The higher levels of job satisfaction is evident in an organization through lower absenteeism rates, low employee turnover, high employee productivity , proactively level of employees, labor unrest issues and participation in managerial decisions. Obviously, every organization desires for higher levels of employee job satisfaction; however it is a long drawn process with continuous improvement and direct focus from the senior leadership team of the organization.

Job satisfaction cannot be used interchangeably with organizational morale; which the possessions of feeling have being accepted by and belonging to a group of employees through adherence to common goals and confidence in desirability of these goals.

Morale is the by-product of the group, while job satisfaction is more an individual state of mind.


Different authors give various definitions of job satisfaction. Some of them are taken from the book of D.M. Pestonjee “Motivation and Job Satisfaction” which are given below:

As per Weiss, “Job satisfaction is defined as a pleasurable, emotional, state resulting from appraisal of one’s job. “An effective reaction to one’s job.”

For Blum and Naylor, “Job satisfaction is general attitude, which is the result of many specific attitudes in three areas namely”:

1. Precise occupation features.

2. Personal distinctiveness

3. Group association exterior from the work

According to Glimmer, “Job satisfaction is defined, as it is result of various attitudes the person hold towards the job, towards the related factors and towards the life in general.”

Job satisfaction is defined as “any contribution, psychological, physical, and environmental circumstances that cause a person truthfully say, I am satisfied with my job.”

Mr. Smith stated, “Job satisfaction is defined, as employee’s judgment of how well his job on a whole is satisfying his various needs”

According to Locke, “Job satisfaction is defined as a pleasurable or positive state of mind resulting from appraisal of one’s job or job experiences.”


The term job satisfaction was brought to lime light by hoppock (1935). He revived 35 studies on job satisfaction conducted prior to 1933 and observes that Job satisfaction is combination of psychological, physiological and environmental circumstances. That causes a person to say. “I m satisfied with my job”. Such a description indicate the variety of variables that influence the satisfaction of the individual but tell us nothing about the nature of Job satisfaction.

Job satisfaction has been most aptly defined by Pestonjee (1973) as “a job, management, personal adjustment & social requirement. Morse (1953) considers Job satisfaction as dependent upon job content, identification with the co., financial & job status & priding group cohesiveness.”

One of the biggest preludes to the study of job satisfaction was the Hawthorne study. These studies (1924-1933), primarily credited to Elton Mayo of the Harvard Business School, sought to find the effects of various conditions (most notably illumination) on workers’ productivity.

Hawthorne Studies

It is considered to be one of the best researches done on the job satisfaction. It was conducted by Mayo, Roethlisberger & Dickson during the late 1920s and early 1930s at the Western Electric Company. Western Electric Management enlisted the help of Harvard business School professor is Elton Mayo, F.J Roethlisberger, and William Dickson, to help increase the output of workers assembling telephone release. The research started out as an investigation of the effects of physical working conditions on worker productivity, but ended up very differently.

Mayo, Roethlisberger & Dickson originally begin experimenting with the amount of lighting, expecting that productivity would rise as elimination increased to an optimum level. However, the hypothesis that productivity would write just as elimination increased to an optimum level was strongly disapproved why, after several experiments in large departments of the plant, it was discovered that changes in productivity occurred quite independently of B level of elimination.

Mayo, Roethlisberger & Dickson then started experimenting by introducing rest pauses of different lengths and different frequencies during the work day, supplying coffee breaks at various points in the day, and shortening the length of the world today at the work week. The results of the second part of the experiment were more amazing there was an upward trend in output, regardless of the introduction or withdrawal of rest periods, lunches, coffee breaks, shorter workdays, or shorten workweeks. Furthermore, avoid the experiment ended after a year, and the original conditions of work were restored in all previous privileges withdrawn,” the daily and weekly output rose to our point higher than at any other time.” (Mayo, 1933, pp.62-63)

In addition, morale among the relay assembly room workers improved dramatically. There was a sharp increase in the amount of socializing among workers after ours. Moreover, absenteeism decreased 80% (Roethlisberger & Dickson 1939). According to Dawis & Lofquist (1981),” the Hawthorne studies have been credited with limiting research into the causes of job satisfaction and dissatisfaction.”

These researches eventually illustrated that original alterations in job situations provisionally enhanced efficiency (called the Hawthorne Effect). It was later found that this increase resulted, not from the new conditions, but from the knowledge of being observed.

This finding provided strong evidence that people work for purposes other than pay, which paved the way for researchers to investigate other factors in job satisfaction.

Scientific management (aka Taylorism) also had a significant impact on the study of job satisfaction. Frederick Winslow Taylor’s 1911 book, Principles of Scientific Management, argued that there was a single best way to perform any given work task. This book contributed to a change in industrial production philosophies, causing a shift from skilled labor and piecework towards the more modern approach of assembly lines and hourly wages.

The initial use of scientific management by industries greatly increased productivity because workers were forced to work at a faster pace. However, workers became exhausted and dissatisfied, thus leaving researchers with new questions to answer regarding job satisfaction.

It should also be noted that the work of W.L. Bryan, Walter Dill Scott, and Hugo Munsterberg set the tone for Taylor’s work.

Some argue that Maslow’s hierarchy of needs theory, a motivation theory, laid the foundation for job satisfaction theory. This theory explains that people seek to satisfy five specific needs in life – physiological needs, safety needs, social needs, self-esteem needs, and self-actualization. This model served as a good basis from which early researchers could develop job satisfaction theories.

Maslow’s hierarchy of needs

Abraham Maslow, in a classic paper published in 1943, outlined the elements of an overall theory of human motivation. Maslow viewed human motivation in terms of a hierarchy of five needs: psychology: needs; safety need; belonging there is an alarm needs; S team needs; and, the need for self actualization (Maslow, 1970).

According to Maslow, 1970, in the majors are motivated to fulfill whichever need was pre-portend, almost fourfold, for them at a given time. The pre-potency of the meat depended on the EBV twirls current situation and recent experiences. Starting with physical needs, which were most basic, each meat must be at least partially dissatisfied before the Indian visual experience to the desire to satisfy a need at the next higher level. Maslow’s need hierarchy is illustrated in 1.

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According to Sergiovanni (1984) and Davis and Newstrom (1989), physiological needs more likely to serve as motivators among workers in today’s society, as most jobs issue or the fulfillment of physiological needs, such as food and shelter. However, higher level needs (belonging is and loved needs, S team needs, and the need for self actualization) may influence levels of employee motivation (Davis & Newstrom, 1989).

Levels of job satisfaction:

Level can be defined as an extent, major, or degree of achievement. Job satisfaction is a difficult construct a defined. Job satisfaction can be defined generally as the degree to which individuals feel positively or negatively about their jobs.


Ø Job satisfaction is an important indicator of how employees feel about their job and a predictor of work behavior such as organizational, citizenship, Absenteeism, Turnover.

Ø Job satisfaction can partially mediate the relationship of personality variables and deviant work behavior.

Ø Common research finding is that job satisfaction is correlated with life style.

This correlation is reciprocal meaning the people who are satisfied with the life tends to be satisfied with their jobs and the people who are satisfied their jobs tends to satisfied with their life.

Ø This is vital piece of information that is job satisfaction and job performance is directly related to one another. Thus it can be said that, “A happy worker is a productive worker.”

2.4 Job Satisfaction: Importance to worker & organization

Job contentment and work-related achievement are main factors in individual satisfaction, self-worth, sense of worth, and self-development. To the employee, job satisfaction brings a pleasant expressive state that can often lead to a affirmative work attitude. A pleased worker is more likely to be imaginative, flexible, innovative, and dependable.

For the organization, job satisfaction of its workers means a work force that is enthused and dedicated to high quality performance. Augmented output- the quantity and quality of output per hour worked seem to be a by creation of enhanced class of working life. It is vital to note that the literature on the association between job happiness and output is neither definite nor consistent.

On the other hand, research dating back to Herzberg’s time (1957) has shown at least low association between high confidence and high efficiency and it does seem logical that more satisfied workers will be likely to add more worth to an organization.

Discontented employees, who are stimulated by fear of loss of job, will not give 100 percent of their effort for a very long time. Although apprehension is a powerful motivator, it is also a brief one, and also as soon as the threat is lifted performance will decline.

Employment satisfaction profits the organization and includes reduction in complaints and grievances, employee absenteeism, work force turnover, and termination; as well as improved regularity and worker morale. Job liking is also linked with a improved work force and has been found to be a good pointer of prolonged existence.

Even though only slight connection has been found amongst job satisfaction and productivity, Brown (1996) writes that few employers have discovered that satisfying or delighting work force is one of the most important prerequisite to satisfying or delighting customers, thus ensuring the growth of “bottom line” of the organization.

Job Satisfaction: Employee’s Responsibility

If job contentment is a worker advantage, certainly the employee must be talented to add to his or her own contentment and comfort on the job. The following suggestions can assist an employee to find his or her own satisfaction at job: search for opportunities to display skills and aptitude. This repeatedly leads to even more demanding work and higher responsibilities, with assistant increases in salary and other recognition and rewards.

* Build up extraordinary communiqué skills. Company’s value and rewards excellent reading, listening, writing and speaking skills.

* Be acquainted with more. Obtain new work related information and skill that helps you to complete job more economically and effectively. This will take off monotony and often gets one noticed.

* Reveal creativity and initiative. Merits like these are respected by most companies and often come with in recognition as well as improved responsibilities and promotions.

* Initiate teamwork and man management skills. A big part of job related achievement is the aptitude to work well with others to get the job done.

Accept the diversity in people. Accept people with their differences and their imperfections and learn how to give and receive criticism constructively.

See the value in your work. Appreciating the significance of what one does can lead to satisfaction with the work itself. This help to give meaning to one’s existence, thus playing a vital role in job satisfaction.

Learn to de-stress. Plan to avoid burn out by developing healthy stress management techniques.


Hoppock, the earliest investigator in this field, in 1935 suggested that there are six major components of job satisfaction. These are as under:

The way the individual reacts to unpleasant situations,

The facility with which he adjusted himself with other person

The relative status in the social and economic group with which he identifies himself

The nature of work in relation to abilities, interest and preparation of worker



Herzberg, mausaer, Peterson and capwell in 1957 reviewed more than 150 studies and listed various job factors of job satisfaction. These are briefly defined one by one as follows:

1. Intrinsic aspect of job

It includes all of the many aspects of the work, which would tend to be constant for the work regardless of where the work was performed.

2. Supervision

This aspect of job satisfaction pertains to relationship of worker with his immediate superiors. Supervision, as a factor, generally influences job satisfaction.

3. Working conditions

This includes those physical aspects of environment which are not necessary a part of the work. Hours are included this factor because it is primarily a function of organization, affecting the individuals comfort and convenience in much the same way as other physical working conditions.

4. Wage and salaries

This factor includes all aspect of job involving present monitory remuneration for work done.

5. Opportunities for advancement

It includes all aspect of job which individual sees as potential sources of betterment of economic position, organizational status or professional experience.

6. Security

It is defined to include that feature of job situation, which leads to assurance for continued employment, either within the same company or within same type of work profession.

7. Company & management

It includes the aspect of worker’s immediate situation, which is a function of organizational administration and policy. It also involves the relationship of employee with all company superiors above level of immediate supervision.

8. Social aspect of job

It includes relationship of worker with the employees specially those employees at same or nearly same level within the organization.

9. Communication

It includes job situation, which involves spreading the information in any direction within the organization. Terms such as information of employee’s status, information on new developments, information on company line of authority, suggestion system, etc, are used in literature to represent this factor.

10. Benefits

It includes those special phases of company policy, which attempts to prepare the worker for emergencies, illness, old age, also. Company allowances for holidays, leaves and vacations are included within this factor.


Reasons why employees may not be completely satisfied with their jobs:

1. Conflict between co-workers.

2. Conflict between supervisors.

3. Not being opportunity paid for what they do.

4. Have little or no say in decision making that affect employees.

5. Fear of losing their job.



Absenteeism means it is a habitual pattern of absence from duty or obligation.

If there will be low job satisfaction among the employees the rate of absenteeism will definitely increase and it also affects on productivity of organization.

In the above diagram line AB shows inverse relationship between job satisfaction and rate of turnover and rate of absenteeism.

As the job satisfaction is high the rate of both turns over and absenteeism is low and vise a versa.


In human resource refers to characteristics of a given company or industry relative to the rate at which an employer gains and losses the staff.

If the employer is said to be have a high turnover of employees of that company have shorter tenure than those of other companies.


As employees leaves organization due to lack of job satisfaction. Then Human resource manager has to recruit new employees. So that the training expenditure will increases.

Key parameters for Job Satisfaction

1. Training and Job Satisfaction-

Most of the literature in this area has focused on the impact of education and skills on job satisfaction rather than the effect of training as such. The relationship between skill acquisition and job satisfaction is not straightforward. First, there is the distinction between general and specific skills. The portability of general skills may raise job satisfaction as it is easier to move to other jobs where satisfaction is higher. In contrast, specific skills bind the worker to the firm and may reduce satisfaction by creating a barrier to exit as workers will lose a portion of the return on such skills if they move. This leads on to the question of the matching of individual skills and levels of education with job requirements. If workers are mismatched in terms of skill and education requirements, this may lower job satisfaction, as evidenced in the earlier literature.

In one of the few studies to focus on skilling, Allen and van der Velden (2001) differentiated between education and skill mismatches, finding only a weak relationship between the two. Importantly, they found a significant negative relationship between skill mismatch and job satisfaction, while the link between education mismatch and job satisfaction was insignificant.

Training may influence workplace performance directly by raising output per worker, or be measured indirectly through its impact on the wage on the assumption that this is equal to the marginal productivity of labour. However, this will not be the case if there are imperfections in the product or labour markets.

The nature of training has been examined in a number of studies. Thus Barrett and O’Connell (1998) found that specific training had a bigger impact on wages and productivity than general training. Mason et al. (1996) found that both value added and product quality were higher where workers were trained to take charge of several production lines at once. Cosh et al. in a series of papers (1998, 2000 and 2003) found that training had a strong and significant effect on employment growth in small firms when it was undertaken regularly rather than on an ad hoc basis. Especially for larger firms there was also an association between intensity of training and profitability. Training may also stimulate innovation in the workplace (Bartel and Lichtenberg, 1987). Therefore it is doubtful whether different types of training impact either equally or positively on performance.

Finally, training can have an indirect effect on performance if it increases job satisfaction by, for example, making it easier for employees to perform the job or feel more valued (as in Akerlof’s 1982 conceptualisation of the labour contract as a gift-exchange). Petty et al.’s 1984 meta-analysis confirms such outcomes. In contrast, if workers feel dissatisfied they may react in a number of ways (Farrell, 1983): through a sense of loyalty they may stick it out; use a voice mechanism (Freeman, 1978, Freeman and Medoff, 1984); neglect their responsibilities to the employer by absence, lateness, striking or reduced effort (Akerlof and Yellin, 1986); or exit (Jovanovic, 1979, Burdett and Mortenson, 1998).

2. Quits and Job Satisfcation-

Until recently there had been


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