The management topic that has been chosen for this study is the importance of job satisfaction and its influence on the 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).
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In employee turnover, personnel voluntary leave their jobs whereas in worker layoffs, workers’ contracts are terminated at the employer’s own 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).
With regards to job satisfaction, it is a 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 the employee performs, 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 a company is important as it affects the emotional and psychological well being of the employees that in turn affects their job performance at the work place (Callaway 2006). This research study will seek to determine the influence and importance of job satisfaction in employee turnover in organizations that operate various industries around the world.
The issue of workers’ 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 inappropriate working conditions, poor compensation and benefits and also bad worker – manager relationships which make some employees leave employment. Low organizational commitment usually arises when employees lack 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 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. This is usually attributed to compensation benefits and wages that are better than those offered by the organization (Griffeth and Hom 2006).
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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 that did not necessarily relate to payment and compensation. These researchers highlighted that payment and compensation were 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 their jobs because of a general feeling of being undervalued and ignored. If the managers within the organization undervalue their employees or demand too much from them, this 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 workers’ benefits and incentives that are not considerate to employee’s 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 in 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 values 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 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 one that is discordant in nature given that job satisfaction is viewed to be a positive aspect while employee turnover is meant to be negative for any organization (Phillips and Phillips 2011).
Causal study conducted by Elangovan (2001, cited by Termsnguanwong 2009) revealed that job stress was the 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. This process is demonstrated in the diagram.
In the diagram above, organizational commitment demonstrates the direct effect it has on employee turnover within organizations. According to Elangovan, organizational commitment will negatively impact the employee turnover as long as 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 shown by Elangovan include Igbaria and Guimaraes’ research in 1993 as well as Stepina and Boyle’s work in 2003 where a theoretical model to explain the influence of organizational commitment on job satisfaction was developed (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 on temporary basis. Their study focused on examining how job satisfaction and organization commitment were related to the temporary agencies and organizations and also how a temporary worker’s attitude influenced their turnover intentions towards the client organization they work for (McBey and Karakowsky 2000). The results of the study showed that temporary employees had similar levels of job satisfaction when compared to the permanent personnel.
The general assumption follows that satisfied employees are more committed to the organization and have a lower intention of quitting when compared to the employees who have a poor or low job satisfaction (Altarawmneh and Al-Kilani 2010). The results of the study also demonstrate that organizational commitment acts 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 factor 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 importance of job satisfaction and its influence on the rate of employee turnover within organizations. The objectives of the study will include to determine the following:
- the impact or effect that the job satisfaction has on employee turnover;
- the importance of job satisfaction in reducing employee turnover within organizations.
- the causal factors that contribute to employee turnover rates within organizations.
The research questions that will be addressed to by the study will be:
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- Does the job satisfaction negatively or positively affect employee turnover?
- What are the current levels of employee turnover rates affected by job dissatisfaction in their work place?
The type of research technique that will be used in this study is qualitative research which involves reviewing various pieces of literature and academic journals so as to gain a perspective of the topic that is under study. Qualitative research is a technique that is used to collect and analyse 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 course of the study. Qualitative research in this study will also enable the researcher to determine how important the job satisfaction is in employee turnover as well as its relevance in reducing the rates of employee turnover within organizations.
Qualitative approaches are more beneficial than quantitative ones as they give a diversity of responses to 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).
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 examined 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 taking into account the demanding nature of work, responsibilities and duties (Abrahamson et al 2006).
According to Burk and Richard, another reason for focusing on the IT industry is that job satisfaction within this industry has a direct relation 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. According to Abrahamson et al (2006), the highest numbers of employee turnovers within the ICT industry 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 provide a direct link between job satisfaction and employee turnover within organizations. The amount of literature that exists on the subject propagates that there is an indirect link existing between the two aspects with two notable studies by Elangovan (2001, cited by Termsnguanwong 2009) as well as 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 substantial information for the study.
The purpose of this study is to conduct a literature review of the importance of job satisfaction as well as its influence on the 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.
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