Impact of Job Satisfaction on Employee Performance

Introduction

In this paper, we set out to investigate the impact of job satisfaction on employee performance at Fenix Company. Four key objectives outlined the research scope. The first objective was to investigate the factors affecting the job satisfaction of employees in the company. The second objective was to examine job satisfaction of employees at Fenix Company. The third objective was to identify the level of importance of the factors affecting job satisfaction among employees of the company. These factors included (but were not limited to) training and development opportunities, working conditions, supervision, and commitment to the organisation. The last objective was to identify the impact of job satisfaction on employee performance.

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To achieve the study objectives, we used three questions to guide the research process. The first question investigated the factors that affected job satisfaction at Fenix Company. The second question sought to find out the level of importance of factors affecting the job satisfaction of employees of the company. The last research question aimed at understanding how job satisfaction affects the performance of employees at Fenix Company.

Our methodology included two main methods of data collection. In the first method, we obtained the views of 260 respondents using questionnaires. In the second method, we obtained information from two managers using the interview method. The interviews were unstructured and meant to get information that we could not have obtained using questionnaires. Therefore, it supplemented the collection of information from the first part of the data collection process. These two parts of the study (data collection processes) represented the primary research section of the study. We explain the findings of both research processes below.

Analysis and Discussion

Interview Findings

The interview process was aimed at answering two key research questions. The first question was focused on understanding the factors affecting job satisfaction among employees of Fenix Company. The second question we answered using the interview method was centred on investigating the importance of the factors affecting job satisfaction in Fenix Company. In the first question, the respondents’ views highlighted five key factors affecting job satisfaction – working conditions, monetary rewards, relationship with other workers, commitment to the organisation, and training and development opportunities. These key indicators of job performance were used to design our questionnaire whereby we asked employees to rate how these factors affected their overall job performance. The responses are discussed in later sections of this paper.

Our interview process was also characterized by an understanding of the importance of factors affecting job satisfaction. This question was posed to the managers to provide direction in the formulation of the questionnaire. In other words, we needed to identify the factors affecting job satisfaction from the managers (first) before posing a question to the employees regarding how the same factors affected their performance. As highlighted in the above section, the main factors affecting job satisfaction (that we investigated) included reward and compensation (money), training and development opportunities, supervision, commitment to work, and working conditions.

One respondent said that, in his experience, money was an important factor affecting job satisfaction, but its influence was limited to only a selected group of employees. He said that most employees who work in lower cadres of employment were greatly motivated by monetary rewards, but those in the upper echelons of management were more motivated by working conditions, such as flexibility of work schedules, organisational culture and such like factors. The other respondent said that the factors affecting working conditions were the most important issues to consider when evaluating the effects of job satisfaction on employee performance. He disagreed with his counterpart who believed that monetary concerns were the most important considerations for low-level employees because he believed that poor working conditions would force employees to leave the organisation, even if they got a good pay. He supported this claim by saying that many employees today realize that they spend a lot of time on their work and would not put up with bad working terms. Relative to this assertion, he also said companies should optimise working conditions by improving the lighting of the working area, increasing working space and such like factors. This view closely mirrors the key pillars of Herzberg’s hygiene theory, which postulates that poor working conditions often lead to low levels of job satisfaction and similarly low levels of employee performance (Woodside 2017).

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The difference in importance between financial rewards and working environment was the greatest point of departure between the views held by both interviewees. When it came to the other factors affecting job performance, the respondents interchanged their importance. In other words, they said that these factors had the same level of relevance when understanding the relationship between job satisfaction and employee performance.

Questionnaire Findings

From the outset, we sent out 264 questionnaires to a similar number of respondents. However, we only managed to obtain 260 responses. The findings appear below.

Perception towards Reward System (Money)

The first question we asked the respondents was whether they performed well because they earned well (see appendix one). The response is as outlined below:

 Perception towards reward system
Figure 1: Perception towards reward system

According to Bryan and Harish (2017), money often has a lot of power in motivating employees to work better. However, according to our findings, 57% of the respondents disagreed with this view. This finding implied that the employees’ performance was independent of the amount of money they earned. Comparatively, 14.8% of the respondents agreed with this view, symbolizing the body of research, which shows that there is inconclusive evidence surrounding the impact of money on employee performance.

Training and Development Opportunities and Job Performance

The second question on the questionnaire sought to find out the impact of training and development opportunities on employee job performance. The question asked was “Training and development opportunities in the organisation enable me to perform better.” The findings are as shown below.

Training and development opportunities
Figure 2: Training and development opportunities

Four groups of respondents answered this question. The first, second, third, and fourth groups, were comprised of admin staff, technical staff, professionals, and managers, respectively. The statements posed to each group of respondents was the same –“Training and development opportunities in the organisation enable me to perform better.” Their responses are as highlighted above.

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According to the diagram above, 61% of the managers believed that training and development opportunities increased their job performance. A small percentage (14.8) disagreed with this view. Researchers such as Cooper and Rothmann (2013) support this finding because they say that training and development opportunities often improve job performance. We also found that all the employees in the other subcategories (59.1%) believed that training and development opportunities improved their job performance. Those who did not believe this fact were less than 20% in all the subcategories mentioned. This finding implies that most employees of Fenix Company would increase their performance if more training and development opportunities were offered to them. However, higher-ranking employees would appreciate this strategy the most.

Working Conditions

According to Latham (2012), there is a positive correlation between good working conditions and improved employee performance. We also deduced the same relationship in our findings because according to the pie chart below, a greater proportion of our respondents agreed that working conditions would affect their performance.

Working conditions
Figure 3: Working conditions

The above findings support the interview responses where one manager said that working conditions were important considerations in evaluating job satisfaction standards.

Supervision and Commitment to the Organisation

Supervision and commitment to organisation did not emerge as strong factors affecting employee performance because fewer than 50% of the respondents believed that these factors affected their performance at work. Most of the respondents either responded “neutrally” or disagreed with the effects of these factors on their job performance.

Regression Analysis

The main data analysis method used in this paper was the SPSS technique. We used the multiple linear regression analysis to investigate the relationship between the dependent and independent variables. It was also used to identify variables that provided the best description of total variance associated with the dependent variable scores. The findings appear below.

Table 1: Regression Analysis

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Colinearity statistics
β t Significance Tolerance VIF
Working conditions .351 5.605 .000 .824 1.910
Reward System .129 2.027 .044 .611 1.959
Relationship with workers .224 3.575 .000 .725 1.904
Supervision .086 1.426 .155 .665 1.769
Commitment to organization .016 .259 .796 .707 1.971
  • B – nonstandardized beta
  • t – statistics
  • VIF – Variance inflation factor
  • R = 0.673
  • Adjusted R2 = 0.453
  • F = 44.006

According to the above regression table, we find that employee satisfaction accounted for at least 43% of the variation in employee performance. If we evaluate the impact of multivariate assumptions on our findings, we find that if the VIF were more than ten, there would be a problem in our analysis. According to Musse (2012), multi-colinearity implies that if the independent variables showed a very close linkage, it would be difficult to estimate their relationship with the dependent variable. This is because they would cause strange results. However, the VIF values we derived did not pose such a challenge because they ranged between acceptable levels of 1.769 and 1.971. The implication for this range is the reduction in problems of multi-colinearity. If we evaluate the same problem in terms of tolerance level, we find that values which are greater than 0.5 are more desirable. This is because they indicate lower problems associated with multi-colinearity. The values we obtained are within the acceptable limits and therefore do not cause this kind of problem.

A closer look at our regression analysis shows that the factors affecting job satisfaction: namely, working conditions, monetary rewards, and relationship with workers were statistically significant because they had statistically significant values of 0.000, 0.000, and 0.001 respectively. The variables were statistically significant because they had p < 0.05. Stated differently, they were responsible for the 45.3% variance reported in employee performance. If we evaluate the impact of the variables on employee performance, viz-a-viz beta values, we find that working conditions, relationship with other workers, and monetary rewards significantly affected employee performance. Their beta values were β = 0.351, β = 0.224 and β = 0.129 respectively. These findings support the views of previous research studies conducted by Nielsen et al. (2015), which showed that the same variables had a significant contribution to employee performance. Based on our results, we see that supervision and commitment to organisation did not show a significant contribution to the employee performance because their beta values were β = 0.086 and β = 0.016 respectively. Thus, from these findings, we can determine that employee performance relates to job satisfaction. Although these findings are elaborate, it is important to point out that they only represent the views of 20% of employees at Fenix Company. This fact may affect the generalizability of the research information because 20% is a relatively small sample of employees compared to the general employee pool at the company.

Summary

Based on the empirical results we gathered in this chapter, we could attest to the fact that, job satisfaction affects employee performance in Fenix Company. The interview responses showed that working conditions, commitment to organisation, relationship with other workers (teamwork), monetary reward, and supervision were the main factors affecting job satisfaction. These findings helped to answer our first research question, which centred on finding out the factors affecting job satisfaction in Fenix Company. The interview findings also helped us to answer the second research question, which sought to find out the level of importance of job satisfaction factors on employee performance because we found out that working conditions, training opportunities and monetary factors were the most important variables, followed by relationship with other workers, commitment to organisation, and supervision in that order. Through these findings, the four objectives of our research study were met.

Reference List

Bryan, C & Harish, C 2017, Handbook of research on human factors in contemporary workforce development, IGI Global, New York.

Cooper, C & Rothmann, I 2013, Organizational and work psychology: topics in applied psychology, Routledge, London.

Latham, G 2012, Work motivation: history, theory, Research, and Practice, SAGE, London.

Musse, A 2012, The influence of rewards and satisfactions on employees’ performance in organization: rewards and employees’ performance, GRIN Verlag, New York.

Nielsen, K, Lackmaker, J, Känsälä, M, Saari, E, Isaksson, K & Nielsen, M 2015, Resource: a literature review on the relationship between resources, employees well-being and performance with specific attention to Nordic issues, Nordic Council of Ministers, Finland.

Woodside, A 2017, The complexity turn: cultural, management, and marketing applications, Springer, New York.

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NerdyRoo. (2022, July 9). Impact of Job Satisfaction on Employee Performance. Retrieved from https://nerdyroo.com/impact-of-job-satisfaction-on-employee-performance/

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"Impact of Job Satisfaction on Employee Performance." NerdyRoo, 9 July 2022, nerdyroo.com/impact-of-job-satisfaction-on-employee-performance/.

1. NerdyRoo. "Impact of Job Satisfaction on Employee Performance." July 9, 2022. https://nerdyroo.com/impact-of-job-satisfaction-on-employee-performance/.


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NerdyRoo. "Impact of Job Satisfaction on Employee Performance." July 9, 2022. https://nerdyroo.com/impact-of-job-satisfaction-on-employee-performance/.

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NerdyRoo. 2022. "Impact of Job Satisfaction on Employee Performance." July 9, 2022. https://nerdyroo.com/impact-of-job-satisfaction-on-employee-performance/.

References

NerdyRoo. (2022) 'Impact of Job Satisfaction on Employee Performance'. 9 July.

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