Job Satisfaction and Employee Turnover Interaction

Subject: Employee Management
Pages: 7
Words: 2038
Reading time:
9 min
Study level: PhD

Introduction

The management topic that has been chosen for this study is the influence and importance of job satisfaction on staff turnover. Employee turnover has been a subject of interest for many scholars, managerial practitioners, and organizational managers over the past decade. Employee turnover happens when employees willingly depart from their employments which eventually forces managers to replace them (McKenna 2000). In employee turnover, there is voluntary leave from their jobs whereas in worker layoffs workers’ contracts are terminated at the employer’s discretion. This is occasioned by certain business conditions such as mergers and acquisitions or reduced company financial profits. The severity of employee turnovers usually depends on the type of industry and business the organization deals with as well as the economic health of the country (Jex 2002).

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With regards to job satisfaction, it is the general attitude that employees have towards their jobs within an organization. Job satisfaction is usually influenced by certain factors some of which include the type of work that the employee is doing, equitable rewards, benefits and compensation, working conditions, and the type of managerial or leadership style that is used to manage employees within the organization (Kinicki and Kreitner 2006: Phillips 2005). Job satisfaction within an organization is important as it affects the emotional and psychological well-being of employees which in turn affects their job performance within the organization (Callaway 2006). This research study will seek to determine the influence and importance of job satisfaction in employee turnover rates in organizations that operate under the various industries around the world.

Literature Review

The issue of worker turnover has been of keen interest to managers and researchers where both parties have tried to determine the effect of certain aspects of work on employee turnover within organizations (Mudor and Tooksoon 2011). Considerable research has shown that the major causes of employee turnover within organizations include job dissatisfaction and low organizational commitment which contributes to the rates of employee turnover that exist in organizations (Iverson and Currivan 2003). Job dissatisfaction is usually caused by poor working conditions, poor compensation and benefits, and also poor worker-manager relationships which cause some employees to leave employment. Low organizational commitment usually arises when employees lack the proper motivation to perform their work duties and their loyalty to the organization is low (Lambert et al 2001: Kail and Cavanaugh 2010).

Apart from job dissatisfaction, another factor that contributes to high employee turnover rates is the prospect of receiving a better salary in another organization. This mostly occurs in the higher levels of management but in some cases, employees who have high satisfaction in their jobs voluntarily leave which is usually attributed to compensation benefits and wages that are better than those being offered by the organization (Griffeth and Hom 2006). Considerable research has however shown that receiving better compensation and benefits is not the main cause of employee turnover within organizations. Researchers such as Maslow, McGregor, and Herzberg noted that employees left their jobs based on the inability of managers to meet their basic work needs which did not necessarily relate to pay and compensation. These researchers highlighted that pay or compensation was not a direct determinant of whether employees would be satisfied with their jobs (Vidal et al 2007).

Other contributing factors to employee turnover include poor managerial practices where employees working under poor leadership and ineffective managers are under pressure to resign from their jobs because of the general feeling of being undervalued and ignored. If the managers within the organization undervalue their employees or make a lot of demands from them, they might increase the risk of employee turnover (Grigoroudis and Siskos 2010). Poor management policies might also contribute to high employee turnover rates especially if they are related to worker benefits and incentives that are not considerate to employees’ needs. Employee turnover is generally a serious obstacle to the overall productivity and performance of an organization because having fewer staff members makes it difficult to perform general business operations (Griffeth and Hom 2004).

The impact of job satisfaction on employee turnover is usually based on intrinsic and extrinsic levels where intrinsic satisfaction deals with the degree of satisfaction employees usually experience when they perform their work. Extrinsic satisfaction refers to the feeling of comfort and ease that employees have towards their superiors, peers, and the organization in general (Mathis and Jackson 2008). Job satisfaction is important at the organizational level as satisfied workers are important contributors to the effectiveness and efficiency of the organization (Robbins 2009). While there is no accurate conceptualization of job satisfaction in existence within the organization, various researchers such as Naumann believe that intrinsic and extrinsic job satisfaction is positively correlated to organizational commitment which refers to the belief and trust that employees have in organizational value and objectives and how these aspects affect their attitudes toward the organization(Callaway 2006).

Employees are generally satisfied with their jobs if they are content with the nature of their work within the organization and they are also satisfied with the type of relationship they have with their supervisors, co-workers, and managers (Koy 2001). The relationship that exists between job satisfaction and employee turnover is discordant given that job satisfaction is viewed to be a positive aspect while employee turnover is viewed to be negative for an organization (Phillips and Phillips 2011). A causal study conducted by Elangovan (2001, cited by Termsnguanwong 2009) revealed that job stress was a major contributor to the discordant relationship that existed between job satisfaction and employee turnover where organizational commitment yielded support to the causal relationship between the two aspects which is demonstrated by the diagram.

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Support to the causal relationship between the two aspects

Organizational commitment in the diagram above demonstrates the direct effect it has on employee turnover within organizations. According to Elangovan, organizational commitment will negatively impact employee turnover as long as a commitment within the causal relationship is negatively affected by job satisfaction. Such an implication means that any interventions directed towards reducing employee turnover rates within organizations should be focused on improving organizational commitment by the employees instead of job satisfaction (Amah 2009). Other studies conducted to demonstrate a similar study as that shown by Elangovan include Igbaria and Guimaraes in 1993 as well as Stepina and Boyle in 2003 who developed a theoretical model to explain the influence of organizational commitment on job satisfaction (Termsnguanwong 2009).

Another study conducted by Slattery and Selvarajan (2005) demonstrated that job satisfaction and organizational commitment had an impact on the rate of turnover amongst temporary workers or employees engaged temporarily. Their study focused on examining how job satisfaction and organizational commitment were related to temporary agencies and organizations and also how temporary worker attitudes influenced their turnover intentions towards the client organization they working for (McBey and Karakowsky 2000). The results of the study showed that temporary employees had similar levels of job satisfaction when compared to permanent employees.

This followed the general assumption that satisfied employees were more committed to the organization and they had a lower intention of quitting when compared to employees who had poor or low job satisfaction (Altarawmneh and Al-Kilani 2010). The results of the study also demonstrated that organizational commitment acted as a mediator in the relationship between job satisfaction and employee turnover for both the employee and the organization. Slattery and Selvarajan (2005) highlighted in their study that organizational commitment in turnover intentions acted as a function of job satisfaction and as an explaining determinant of employee turnover rates in organizations.

Aims and Objectives of the Study

The main aim of conducting the study will be to determine the influence and importance of job satisfaction on the rate of employee turnover within organizations. The objectives of the study will include:

  • To determine the impact or effect job satisfaction has on employee turnover.
  • To determine the importance of job satisfaction in reducing employee turnover within organizations.
  • To determine the causal factors that contribute to employee turnover rates within organizations.

The research questions that will be addressed by the study will include:

  1. Does job satisfaction negatively or positively affect employee turnover?
  2. What are the current levels of employee turnover rates affected by job dissatisfaction in their workplace?

Research Methodology

The type of research technique that will be used in this study will be qualitative research which involves reviewing various pieces of literature and academic journals to gain a perspective of the topic that is the understudy. Qualitative research is a technique that is used to collect and analyze information that lacks any numerical basis and data. Cases are selected purposefully in qualitative research with the main aim of gaining a contextual background for the study (Denzin and Lincoln 2005). Qualitative research will be suitable for this study as it will enable the researcher to answer certain important questions that will be raised during the study. Qualitative research in this study will also enable the researcher to determine how job satisfaction is important in employee turnover as well as the relevance of job satisfaction in reducing the rates of employee turnover within organizations. Qualitative approaches are more beneficial than quantitative approaches as they allow for a diversity of responses to the various questions posed within the study. They also allow the researcher and the research findings to adapt to any new developments or issues that might take place during the data collection and analysis process (Lindlof and Taylor 2002).

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The potential respondents of this study will be employees working for an ICT company based in Cambridge, UK where the effect of job satisfaction on employee turnover will be investigated. Other aspects that affect employee turnover such as organizational commitment, working conditions, competitive salaries or wages in the ICT as well as perceived job alternatives in the industry will also be investigated in the study (Khosrowpour 2002). This particular focus on the ICT industry is mostly attributed to the dynamic nature of the technological environment which constantly faces the introduction and development of new technological innovations. The dynamic nature of the industry means that the employee turnover is high as most employees look for jobs in ICT companies that offer better salaries, wages, and benefits. The rate of employee turnover is also high given the demanding nature of work responsibilities and duties (Abrahamson et al 2006).

Another reason for focusing on the IT industry according to Burk and Richard is that job satisfaction within this industry has a direct relationship with an employee’s choice of staying with an organization. The estimates of employee turnover costs within the IT industry amount to between 70% and 200% and the areas of business that are mostly affected by these high costs include advertising, IT training, information system design and development, and also program developer search fees. The highest numbers of employee turnovers within the ICT industry according to Abrahamson et al (2006) come from employees who occupy positions such as software developers, computer engineers, and programmers as they often experience low morale and motivation.

Limitations of the Study

The major limitation of this study is the lack of adequate information that can be able to provide a direct link between job satisfaction and employee turnover within organizations. The amount of literature that exists on the subject has propagated that an indirect link exists between the two aspects with two notable studies by Elangovan (2001, cited by Termsnguanwong 2009), Slattery and Selvarajan (2005) demonstrating that job satisfaction directly affects organizational commitment which in turn affects employee turnover. The limited amount of literature and scholarly articles that would describe the relationship between job satisfaction and employee turnover made it difficult to gain substantive information for the study.

Conclusion

The purpose of this study has been to conduct a literature review on the influence and importance of job satisfaction on employee turnover rates within organizations. The study has revealed that job satisfaction influences the rates of employee turnover in an indirect way where job satisfaction affects worker commitment to the organization which in turn affects the turnover intentions of employees within the organization. The discussion has also highlighted the fact that job satisfaction is important in reducing the rates of turnover as employees who are satisfied with their work will have a lower intention of leaving the organization for alternative employment.

References

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Amah, O. E. (2009) Job satisfaction and turnover intention relationship: the moderating effect of job role centrality and life satisfaction. Research and Practice in Human Resource Management, Vol.17, No.1, pp. 24-35.

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