Employee satisfaction and commitment Prepared for SHP 1313 students at UTM SKUDAI By: Siti Rokiah Siwok srsiwok@gmail.com

JOB RELATED ATTITUDES & BEHAVIOURS Assessing employee attitudes and behaviours about their jobs is one of the major tasks of IO psychologist. Among the most commonly studied job related attitudes are job satisfaction and organizational commitment. Although job satisfaction and organizational commitment are two distinct construct, they closely related.

JOB RELATED ATTITUDES & BEHAVIOURS Research shows highly positive correlation between job satisfaction and organizational commitment. ( Arnold and Feldman, 1982; O’Driscoll, Ilgen and Hildreth 1992; Stumpf and Hartman, 1984 in Riggio 2009) Part of the reason of the highly positive correlation is due to the desire to avoid cognitive dissonance.

JOB RELATED ATTITUDES & BEHAVIOURS Job satisfaction and organizational commitment are affected by many factors such as ( Riggio , 2009) : Type and variety of work Autonomy given in the job Level of responsibility The quality of social relationships at work Compensation Chances for promotion and growth/advancement in the organization

JOB RELATED ATTITUDES & BEHAVIOURS There appears some consensus that: Organizational values influence organizational commitment Perceived equity rewards influence job satisfaction. Organizational commitment becomes less if the chances of finding another job somewhere else is big.

Job Satisfaction Job satisfaction consists of the positive and negative feelings and attitudes about one’s job. The global approach views job satisfaction as an overall construct. The facet approach views job satisfaction as made up of individual elements, or facets.

Job satisfaction and commitment Job satisfaction and commitment are multifaceted. Examples of job satisfaction facets are pay, supervision, coworkers, promotion, work facility, worksite, work policy etc An employee may be satisfied with one facet, (such as pay) but not another ( such as work facility).

Job related attitudes Although 2 different constructs, job satisfaction and organizational commitment are highly correlated and result in similar employee behaviours. In general, satisfied employees show positive behaviours.

Satisfaction & org. commitment Meta analyses show that satisfied employees tend to be : committed to the organization, and thus less likely to be absent; stay with the organization , punctual, engage in helpful behaviours etc. .

Is it true that the “happy workers are productive workers?”

Job satisfaction and performance The relationship between job satisfaction and performance is not consistent across people or jobs. E.g: For complex jobs, there is a strong relationship between job satisfaction and performance, than jobs of low or medium complexity .

Job Satisfaction and Job Performance Meta-analyses indicate a moderate correlation between job satisfaction and performance (Judge et al., 2001). The Porter-Lawler model (1968) states that job satisfaction and performance are not directly linked, but are related when workers perceive fairness in receipt of work-related rewards.

Organizational Commitment Organizational commitment consists both attitudes and behaviours. Attitudes include: acceptance of the organization’s goals and values, Willingness to exert extra effort on behalf of the organization, and A desire to remain with the organization.

Organizational commitment Commitment related behaviours include organizational citizenship behaviours ( OCB) OCB consists of efforts by employees to promote the organization, its image as well its goals (Riggio, 2009). OCB are positively correlated with job satisfaction and organizational commitment ( Podsakoff, MacKenzie, Paine and Bachrach, 2000 in Riggio 2009) Employees engaged more in OCBs are less likely to turnover compared to those not engage in OCBs ( Chen, Hui and Sego, 1998)

Organizational commitment and OCBs Employees engaged more in OCBs are less likely to be absent ( Lee, Mitchell, Sablynski, Burton and Holtom, 2004 in Riggio 2009) and are more safety conscious ( Gyekye and Salminen, 2005 in Riggio 2009) OCBs also have interactive effects: Supervisors notice OCBs and tend to give more positive appraisals.

Organizational commitment There are three motivational facets to organizational commitment ( Meyer and Allen, 1997): Affective commitment Continuance commitment Normative commitment ( Read Aamodt, 2010 for details )

Affective commitment Affective commitment is the extent to which an employee wants to remain with the organization, cares about the organization and is willing to exert effort for the organization.

Continuance commitment Continuance commitment is the extent to which the employee believes s/he must remain with the organization due the time, expenses and effort that has been pun into it. Continuance commitment is also due to the difficulties in finding another job.

Normative commitment: The extent the employee feel obliged to the organization, and thus feels that s/he must remain with the organization.

What causes employees to be satisfied with and committed to their jobs?

Perspectives to the study of job satisfaction and commitment Personality perspective Environmental perspective Interactional perspective

Personality Perspectives

Individual Differences in Employee Satisfaction Important Findings Consistency across jobs Consistency across time Relationship between life satisfaction and job satisfaction Due to: Genetic predispositions Core self-evaluations self-esteem self-efficacy internal locus of control optimism/positive affectivity

Individual Differences and Job Satisfaction Personal predisposition to satisfied or dissatisfied may be one of the reasons of job satisfaction. Individual difference theory posits that job satisfaction variation is due to the personal tendencies to enjoy/not to enjoy jobs. Utilising Individual difference theory , satisfaction across jobs is consistent.

Personality variables Genetic predispositions Core-self evaluations

Genetic Predisposition Genetic predisposition (30%), a study by Arvey et. al.1989, 1994), due to the presence of inherited personality traits such as “negative affectivity”. Genetic predisposition studies are controversial and received lots of criticism

Core self evaluations A series of personality variables seem to be related to job satisfaction, meaning that some type of personalities have tendency to be satisfied or dissatisfied with their jobs. Judge, Locke and Durham ( 1997) hypothesized that four ( 4) personality variables are likely to be satisfied with their jobs ( and their lives).

Core Self-Evaluations Personality variables are likely to be satisfied with their jobs ( and their lives): Emotional stability Self-esteem Self efficacy External /internal locus of control

Core Self-Evaluation Judge and Bono (2001) Meta-Analysis Corrected Correlations With Core-Evaluation Trait Satisfaction Performance Self-esteem .26 Self-efficacy .45 .23 Internal locus of control .32 .22 Emotional stability .24 .19

Your Predisposition to be Satisfied: measures Interest Inventory Life Satisfaction Measure Core Self-Evaluation self-esteem locus of control affectivity Job Satisfaction History

Others: Culture and intelligence etc Culture plays great role Intelligence…and if you are too “ smart”, you won’t be hired. What about gender?, Race? Age?

What are the other antecedents of job satisfaction?

Environment and Interactional Perspectives

Satisfaction with other aspects of life A number of researchers theorize that job satisfaction is consistent across time AND also to the extent which a person is satisfied with all other aspects of life. People who are satisfied with their jobs tend to be satisfied with life; thus supports the theory that job satisfaction is significantly correlated with life satisfaction. Vice versa. A very important finding. Fancy using “John Travolta method”?

Job expectations and satisfaction etc When job expectations are not being met, job satisfaction is low and employees have the intentions to leave the jobs; consistent with discrepancy theories. Meta-analysis by Wanous, Poland, Premack and Davis (1992) conclude that when employees’ expectations are not met, the result is lower job satisfaction, decrease in organizational commitment and increased intent to leave the organization.

Job expectations and satisfaction etc On the contrary, Irving and Meyer (1994) found most employees’ experiences on the job are most related to job satisfaction. The difference between their expectations and their experiences was only MINIMAL LY related to job satisfaction.

Other antecedents of Job satisfaction are: Good Job-organization fit Job facets Fairness and equity Opportunities for challenge and growth Job rotation, job enlargement and job enlargement

Job Facets Are the tasks enjoyable? Do the employees enjoy working with their supervisors and coworkers? Are coworkers outwardly unhappy

Are Rewards And Resources Given Equitably? Equity Theory Components inputs outputs input/output ratio Possible Situations underpayment overpayment equal payment

Organizational Justice Distributive justice Procedural justice Interactional justice

Correlations with Perceptions of Justice Colquitt, Conlon, Wesson, Porter, and Ng (2001) Outcome Procedural Justice Distributive Justice Job satisfaction .62 .56 Organizational commitment .57 .51 Trust .61 Withdrawal - .46 - .50 Performance .36 .15 Negative employee reactions - .31 - .30

Is There a Chance for Growth and Challenge? Enriched jobs Variety of skills needed Employee completes entire task Tasks have meaning Employee has input/control employee receives feedback Methods Job rotation Job enlargement Job enrichment

Have Surprises Order lunch for everyone Let everyone leave an hour early __________________

Assign the Right Tasks to the Right People People have different interests People have different skills

Measuring Job Satisfaction and Commitment

Measuring Job Satisfaction Job satisfaction can be assessed by asking how employees feel about their job, either by using questionnaire or interview. The most widely used self-report measures are the Minnesota Satisfaction Questionnaire (MSQ) and the Job Descriptive Index (JDI). The MSQ measures satisfaction with 20 job facets, including supervisor competence, working conditions, task variety, and chances for advancement. The JDI measures satisfaction with five job facets: the job itself, supervision, pay, promotions, and coworkers.

JOB SATISFACTION: OTHER SCALES Faces Scale Job in General Scale Nagy Satisfaction Scale Custom designed inventories

Measuring Organizational Commitment Allen and Meyer Scale ( 1990) Organizational Commitment Questionnaire (OCQ) Organizational Commitment Scale (OCS) Custom-Designed Inventories

How do we increase job satisfaction?

Increasing Job Satisfaction Hire “Satisfied” Employees Eliminate Dissatisfiers Express appreciation and provide proper feedback Increase opportunities to socialize Hold special events and friendly competitions Increase humor Have surprises Assign the right tasks to the right people

Hire “Satisfied Employees” Test for Satisfaction Potential Interest inventory Core self-evaluation Satisfaction history Provide a realistic job preview Look for person-organization fit

Eliminate Dissatisfiers Interpersonal conflict Peers Supervisors Customers Inequity Low pay Job security Poor working conditions Work schedule issues

Hold Special Events and Friendly Competitions Casual or spirit days Increase socialization through parties, picnics, and socials Hold fun contests Celebrate birthdays and special occasions Encourage humor

Express Appreciation and Provide Proper Feedback Liberal use of praise and thanks Positive feedback Service and performance awards _________________

Increase Opportunities to Socialize Picnics Lunches _______________

Hold Special Events and Friendly Competitions Casual days Company logo day ________________

Increase Humor Bulletin boards with humor Attach cartoons to boring memos ________________

Assign the Right Tasks to the Right People People have different interests People have different skills

Consequences of Satisfaction/Dissatisfaction and Negative Work Attitudes Absenteeism Turnover Counterproductive Behaviours Aimed at individuals Aimed at the organizations

Absenteeism

Year Cost of Absenteeism U. S. Absenteeism Rate CCH Survey BNA Survey 2007 2.30 2006 2.50 2005 $660 2004 $610 2.40 1.40 2003 $645 1.90 1.60 2002 $789 2.10 2001 $755 2.20 1.70 2000 1998 $757 3.25 1996 $603 2.80

International Differences – Nutreco (2000) Country Absenteeism Rate (%) Canada 1.6 Ireland 1.9 Poland 2.3 Chile 2.7 United Kingdom 3.2 Spain 3.8 France 4.0 Belgium 6.3 Norway 7.2 Netherlands 7.8

Reason for Missing Work (CCH Survey) Year Illness Stress Personal Needs Family Issues Sense of Entitlement 2007 34 13 18 22 2006 35 12 24 11 2005 21 14 2004 38 23 10 2003 36 2002 33 2000 40 5 20 1998 16 19 1996 28 26 15

Actual Employee Excuses for Missing Work I was sprayed by a skunk. I tripped over my dog and was knocked unconscious. My bus broke down and was held up by robbers. I was arrested as a result of mistaken identity. I forgot to come back to work after lunch. I couldn’t find my shoes. I hurt myself bowling. I was spit on by a venomous snake. I totaled my wife’s jeep in a collision with a cow. A hitman was looking for me. My curlers burned my hair and I had to go to the hairdresser I eloped. My cat unplugged my alarm clock. I had to be there for my husband’s grand jury trial. I had to ship my grandmother’s bones to India. (note: she had passed away 20 years ago) Source: 2004 CareerBuilder.Com Survey

Why Employees Are Absent No consequences for attending or missing work Illness and personal problems Individual differences Unique events

Increasing Attendance by Having Consequences for Missing Work Rewards for Attending Financial incentives Well pay Games Financial bonuses Paid Time-off Programs Recognition programs Discipline for Not Attending Clear Policy and Record Keeping

Increasing Attendance by Reducing Employee Stress Overload Conflict peers supervisors Boredom Safety Issues

Increasing Attendance by Reducing Illness

Types of Wellness Programs SHRM 2008 Survey % Offering Some form of wellness program 58 24-hour nurse line 50 Health screening programs 41 Smoking cessation program 40 Weight loss program 31 On-site fitness center 21 Stress reduction programs 14 On-site medical care 12

Effect of Absence Control Methods Meta-Analysis Results # of Studies Effect Size Well pay 4 .86 Flextime 10 .59 Compressed work schedules 5 .44 Wellness programs .37 Feedback 3 Discipline 9 .36 Recognition 6 .30 Financial incentives 7 .17 Games .08

CCH Absence Control Surveys Absence Control Method Percent Using Effectiveness Rating 2003 2005 2007 Disciplinary action 96 90 89 3.3 3.4 Performance appraisal 84 79 82 2.9 3.0 Verification of illness 75 76 74 3.2 Paid leave bank 59 67 60 3.6 3.5 Personal recognition 62 66 57 2.5 2.6 No-fault systems 63 Bonus programs 52 51 3.1 Buy-back programs 548 58 53

Turnover

Why Do Employees Leave? Unavoidable Reasons Advancement Unmet Needs school ends job transfer illness family issues Advancement more responsibility better pay Unmet Needs Escape From people management coworkers customers working conditions stress Unmet Expectations organization job career

Why Are Your Employees Leaving? Exit Interviews Attitude Surveys Salary Surveys pay benefits time off

The Cost of Turnover Visible Costs Per Hire Advertising charges Agency fees Referral bonuses Staff time & benefits processing applications interviewing Overhead Travel Costs staff applicants Relocation Costs Miscellaneous Costs

The Cost of Turnover Hidden Costs Loss of Productivity employee leaving other employees vacant position new employee (1 year) Inefficiency Overtime Training Costs

Estimating the Cost of Turnover Industry Norms rate is 1.4% per month cost is 1.5 times salary Custom Statistics www.advantagehiring.com/calculators/calc_turnover.shtml www.uwex.edu/ces/cced/publicat/turn.html

Financial Savings From Turnover Reduction Last Year 5 employees leave each month (60 per year) Average salary is $20,000 Cost of turnover is 60 * $20,000 * 1.5 = $1,800,000 This Year 4 employees leave each month (48 per year) Average salary is $20,000 Cost of turnover is 48 * $20,000 * 1.5 = $1,440,000 $360,000 saved through reduced turnover

Reducing Turnover Compensation Issues Match the market Use job evaluation to ensure internal equity Offer retention/tenure bonuses (stay for pay)

Increasing Salary and Benefits Will only work if: Employees are leaving due to low compensation or benefits The turnover rate is high The salary increase will be a meaningful amount

Reducing Turnover Selection Issues Conduct realistic job previews Look for person-organization fit Study predictors of people who leave

Reducing Turnover Organizational Issues Provide training Show appreciation Mediate conflicts Meet employee needs safety social growth

Strategic Use of Benefits to Attract and Retain Applicants By Providing Health care for domestic partners Daycare benefits Meal benefits Paid time-off Flexible schedules Tuition/books You Can Attract/Retain Gay employees Dual career families and parents on public assistance Students and retirees Young people Homemakers/parents Students

satisfaction, commitment, absenteeism, turnover and programmes that can be implemented : additional notes

Job Satisfaction, Organizational Commitment, and Employee Attendance Voluntary absenteeism is when employees miss work because they want to do something else (i.e., not because they are ill or unable to work). Involuntary absenteeism occurs when employees have a legitimate excuse for missing work–typically illness. Involuntary absenteeism is inevitable; organizations can try to eliminate voluntary absenteeism, but this is difficult because it is difficult to distinguish between voluntary and involuntary absences.

Job Satisfaction, Organizational Commitment, and Employee Attendance Turnover can also be categorized as voluntary or involuntary. Involuntary turnover occurs when an employee is fired or laid off. Voluntary turnover occurs when competent and capable employees leave to work elsewhere. Meta-analyses (Griffeth et al., 2000) indicate that low job satisfaction and low organizational commitment are related to higher turnover.

Job Satisfaction, Organizational Commitment, and Employee Attendance A strong predictor of employee turnover is absenteeism, particularly the rate of absences immediately before the employee leaves. Turnover intentions refers to workers’ self-reported intentions to leave their jobs. Voluntary turnover is costly, and research indicates that employees who feel they are not treated fairly are more likely to leave an organization (Griffeth and Gaertner, 2001).

Increasing Job Satisfaction and Organizational Commitment Changes in job structure can be used to increase satisfaction and commitment. Job rotation is the systematic movement of workers from one type of task to another to alleviate boredom and enhance worker training. Job enlargement involves the expansion of a job to include additional and more varied work tasks. Job enrichment involves raising the level of responsibility of a job by allowing workers a greater voice in planning, execution, and evaluation of their own work activities.

Increasing Job Satisfaction and Organizational Commitment Changes in pay structure can be used to increase satisfaction and commitment. Skill-based pay is compensation in which workers are paid based on their knowledge and skills rather than their organizational positions. Merit pay is compensation in which employees receive a base rate and additional pay based on performance. Gainsharing is compensation based on effective group performance. Profit-sharing is a plan where all employees receive a small share of an organization’s profits.

Increasing Job Satisfaction and Organizational Commitment Flexible work schedules can be used to increase satisfaction and commitment. Compressed work weeks are schedules that decrease the number of days in the workweek while increasing number of hours worked per day. Flextime is a schedule that commits an employee to working a specified number of hours, but offers flexibility in regard to beginning and ending times for each day.

Increasing Job Satisfaction and Organizational Commitment Benefits programs are perhaps the most common way for employers to increase employees’ job satisfaction and commitment. Benefit programs can include flexible working hours, a variety of health care options, retirement plans, career development, health promotion programs, and employee-sponsored childcare. On-site child care programs increase job satisfaction, but have little effect on employee absenteeism (Goff et al., 1990).

Positive Employee Attitudes and Behaviors Organizational citizenship behaviors (OCBs) involve efforts by organizational members that advance or promote the work organization and its goals. OCBs are positively correlated with both job satisfaction and organizational commitment (Podsakoff et al., 2000). Employees who engage in OCBs are less likely to leave the organization and have lower voluntary absenteeism (Chen et al., 1998; Lee et al., 2004).

Positive Employee Attitudes and Behaviors Recently, there has been an explosion of research examining the role of positive affect (positive emotions that affect mood in the workplace) in affecting job satisfaction and positive employee behaviors. Dispositional (traitlike) positive affect is linked to higher job satisfaction and performance, and lower absenteeism and turnover (Pelled and Xin, 1999). Emotionally positive workers are more likely to engage in OCBs than emotionally negative workers (Bachrach and Jex, 2000).

References Aamodt, M.G (2007). Industrial and organizational psychology. An applied approach (5th ed) Belmont, CA: Thomson Aamodt, M.G (2010). Industrial and organizational psychology. An applied approach (6th ed) Belmont, CA: Wadsworth Riggio, R. E. ( 2009). Introduction to Industrial/Organizational Psychology (5th ed). New Jersey: Pearson/Prentice Hall.