The Impact of Job Satisfaction on Employee Loyalty

Introduction 

Job satisfaction and employees loyalty have been identified as the most critical drawbacks faced by human resource management today in relation to managing human resource. There has also been a large concern about the impact of job satisfaction on employees motivation since motivation affects productivity and the overall performance of organizations (Pandey & Khare 2012). Employees are the most important resource in all types of the organization because they represent a large portion of investments in terms of recruiting, training and locating. Most organizations’ management has a tendency of developing their performance appraisal, benefit packages and programs of training based on their companies’ policy. The policies are usually designed to develop loyalty of employees as this results in longer tenure. It is considered that the more employees serve an organization, the more they become valuable to the company.

1.1 Job satisfaction 

The term job satisfaction draws its relevance back in the early 1990s when a scholar, Hoppock (1935) published the first-ever comprehensive study about job satisfaction. Hoppock saw job satisfaction as being affected by different independent variables among them, achievement. This variable was the most important as its professional significance to modern research contributes to persons’ desire to succeed. Job satisfaction involves workers’ feelings in relation to their jobs which plays as subject to motivation. Job satisfaction is, therefore, a person’s perspective about what they do to earn a living which may be influenced by many aspects such as; work environment, management, training opportunity, salary and the nature of the job. Job satisfaction may also represent a combination of desirable and undesirable emotions that employees have about their work. When a person is employed in an organization, the opportunity comes with requirements desires and experiences which determine the level of expectation of an employee. In this case, job satisfaction represents the level at which these expectations are met through real rewards and benefits. Thus the satisfaction closely relates to the behavior of employees at the workplace.

Job satisfaction represents an employee perception of achievement and success on the work. It is viewed to be directly related to personal well-being and productivity as satisfaction entails engaging in a type of work that one enjoys doing it perfectly and being equally rewarded for the efforts. Achievements of other goals which contribute to personal fulfillment results from job satisfaction that is associated with income, promotion, and recognition. According to George (2008), job satisfaction may be referred to as emotions and reliance that employees have about their current opportunity. Workers degree of content about their work may vary from high satisfaction to extreme dissatisfaction on top of having attitudes toward the nature of their work as a whole or some aspects of the job such as supervision and teamwork.

Satisfied workers are essential for the growth of their employer since they aim to deliver the best to the organizations. Every employee desires to have a stable career growth and balance between their work and private life. When employees are contented with their companies, they look forward to giving their best to the wellbeing of their organizations. Job satisfaction from employees view is to be stable, get rewards and recognition and earn a gross salary. Job satisfaction is determined by various factors which are either within the organizations or the outside environment. Various researches have been conducted to establish what causes satisfaction or dissatisfaction in workplace (Chung-Chieh 2013). Internal factors refer to the conditions inside the organizations that affect the performance of employees thus determining the progress of an organization. They include management and promotion chances. External factors such as social and family responsibilities and competition from other opportunities have considerable effects on job satisfaction. There are significant ways in which these factors impact on employees’ workplace satisfaction.

1.3 Job satisfaction and employee loyalty 

Employee loyalty is the psychological commitment of an employee to his/her organization which mostly results from workplace satisfaction. Satisfaction results from the balance between employee’s expectations and the rewards. Employee’s loyalty, therefore, develops as generalized emotional and positive attitudes towards the company. Loyalty and job satisfaction relates. Comparatively, the more satisfied an employee feel relating to his work environment, the more likely that he will develop more sense of responsibility towards his work. Employees’ perspective about their companies leads to the emergence of a behavioral aspect of loyalty (Redmond 2016). Employees whose job expectations are well met by their organizations are more likely to be loyal and work efficiently towards the achievements of the organizational goals through increased productivity and high-quality services output. Employees loyalty which can also be termed as the willingness to continuously offer services to their organizations usually results from the companies willingness and ability to meet their employee's expectations in terms of rewards. In this view, employees are committed to the success of the organizations, and they have a believe that working the respective companies is the best option.

Job satisfaction is essential in relation to employees’ loyalty. Research has it that satisfied employees become loyal to their organizations when they perceive the companies as giving them opportunities to learn, advance and also provide guidelines that they may take to pursue career development in the organizations (Redmond 2016). Career development and training are viewed to be one of the leading factors of loyalty. The benefits package which takes into account aspects such as vacation, sick leave policy, and health care cover contributes to job satisfaction and thus increasing employees’ loyalty.

1.4 Job satisfaction and retention 

On the other hand, employee retention is termed as one of the most challenging areas in human resource management as supervisors struggle to establish reasons for employees quitting their companies, and what can be done to solve the problem. According to Kazi & Zadeh (2011), employees retention is essential since companies incur a lot in the process of training, developing and building organizational citizenship and objectives. In challenging economies, both organizations and employees desire the best resources. Job dissatisfaction leads to employees turnover. The dissatisfaction can result either from extrinsic or intrinsic factors. Employee satisfaction is a valuable measure of retention. When organizations use policies that promote good working conditions, the satisfaction of employees is improved since the latter believe that the former appreciates their skills and commitment in service. As a result, higher job satisfaction leads to employee retention.

2.0 factors influencing job satisfaction 

2.1 Internal factors which influence job satisfaction 

Management

Worker-oriented type of human resource management shows an organization’s commitment to its human resource especially in the latter’s growth and professional development. Research shows that from the social exchange theory perspective, employees respond to such care and investment from the organizations by working diligently towards achieving their organizational goals with favorable evaluations of their work environment. Thus, in organizations where management is characterized by employee centered welfare, there would be experienced a high level of job satisfaction among employees (Clarke & Hill 2012). An open system of management involves clear internal practices that are easily communicated to new employees in a transparent forum through which managers and employees reviews and correct errors. It evident that most satisfied employees work in a system where they receive immediate feedback on their performance, clear guidelines on processes and procedures in addition to dignified treatment by their supervisors and managers. Therefore in organizations where free communication and individual involvement between managers and other employees are encouraged, high level of job satisfaction is experienced.

Contrariwise, results-oriented type of management involves a state of permanent competition with the main perspective being to achieve the set organizational objectives. Such companies prefer stick division of labor than smooth processes and procedure. Work environments associated with limited collaboration and teamwork, lack of mutual interdependence among workers and excessive labor demands, results in high employees’ dissatisfaction. Employees working in organizations characterized by this type of management, associated with extensive pressure for continuous productivity would experience a low level of job satisfaction. The results-oriented management coupled with a rigid system involves excessive control over employees specifically regarding compliance with duties, and strict use of companies resources. Therefore, in organizations characterized by a rigid system of management, it would be obvious that employees would have lower levels of job satisfaction due to stresses, betrayal by the administration and insufficient freedom.

2.2 External factors influencing job satisfaction 

Promotion chances

Promotions are also essential factors of employees work and career life which affects other facets of work experience. They consist of significant aspects of labor mobility which often carry with it increase in wages and salaries, and can have important effects on other qualities such as responsibilities and job satisfaction. Promotions play as effective mechanisms of eliciting greater efforts as workers value it as a way of rewarding their efficiency towards organizational objectives. Actual promotions and expected promotions result in high job satisfaction not only because it is associated with wage increase but also since it elicits a sense of recognition in employees. This provides companies with a non-pecuniary device for extracting extra efforts and positive conduct from employees. Promotions expectations play a significant role in that, employees who have no hope of winning a promotion when an opportunity is given may tend to decrease their productivity due to low job satisfaction. Promotion is also viewed to be more cost effecting to keeping employees happy. Positive promotion expectation causes employees to be optimistic in their jobs thus leading to increased job satisfaction.

Work-life balance

There are significant connections between work-life balance and job satisfaction of an employee. Organizations that provide work-life balance for their employees make them work efficiently to produce good results for the companies. Satisfaction with work-life balance is a key factor of employees’ job satisfaction since when employees are satisfied with their lives to become loyal and increase commitment to their organization. According to research, a well structured work-life balance makes people happy and more content. Organizations that provide employees with just enough time to work have been proven to be effective in goal achievements. This is because it is assumed that employees in these companies work at the optimum of their mind. When tired, they can relax concentrating on their private life. This leads to significant job satisfaction. Stresses of employees have a lot of effects on their job performance. When organizations overburden employees with work, there is little time left for the employees to deal with their private life issues. As a result, employees are unable to concentrate effectively to their duties thus leading to job dissatisfaction.

Salary

This is another external factor that influences employees’ job satisfaction in a great deal. Low-level salary contributes to less motivation at workplace and vise versa. According to research, salary not only increases the level of job satisfaction but also is motivation among employees. Salary compensation also encourages effective workers to remain in their current jobs for a long time working efficiently towards the achievement of organizational and personal goals. Apart from the basic salary that employees are accorded by their companies, generous reward leads to job satisfaction, loyalty and trust. Fringe benefits also contribute a considerable extent towards employee satisfaction. The benefits may include income protection, healthcare, and retirement programs. Organizations that take extra steps to provide such kind of benefits experiences smooth working of employees. The employees tend to work hard to compensate for the perks provided by the companies. Other organizations that only provide little basic salaries without other benefits may cause employee dissatisfaction. This is due to insufficient extra motivation for employees to put more effort. Thus employees of such companies work to meet the minimum requirements.

Age

Research shows that job satisfaction tends to increase with age advancement. However, job satisfaction and tenure are usually in opposite connection in that tenure advancement decreases job satisfaction. As people age, they become more satisfied with their job partly because of increased experience in the field they work and also due to salary increment that is associated with employee long term commitment to organizations. But with advancement in job tenure, individuals may have limited opportunity for advancement or develop boredom to their work. Older employees express high job satisfaction since they don’t like shifting from one organization to another. On the other hand, young employees usually have a great desire for exploration of different companies. This makes them less satisfied with their current occupation, and they sort to shift to various organizations.

2.3 The connection existing between job satisfaction and employee loyalty 

As mentioned previously, job satisfaction is a significant factor that enhances and supports the overall result of employees’ loyalty to their organization. Job satisfaction has been referred to as a pleasurable feeling resulting from the fulfillment of one’s expectations from their organizations. Job satisfaction also is a specific perspective of work with which employees view their job which is influenced by favorable and unfavorable feelings of one’s connection to work. In all organizations, employees represent indispensable factors, and they represent critical resources to the organizations particularly if they are loyal and committed to the success of these organizations. (Rajput, Singhal & Tiwari 2016). The important organizational objective is job satisfaction which is important for a competitive advantage of the organization. Most researches have it that organizations practices affect employees’ behavior. Employees’ loyalty is the most significant factor in companies’ success. In the absence of their commitment and loyalty, which is critical to an organization’s infrastructure and progress, it would be impossible to achieve organizations’ missions, visions, and goals. Loyalty generally refers to a person’s sentiment of connection to his/her organization. It is expressed in both actions and thoughts and commitment of the person to be identified with the company. Satisfied employees express a high level of loyalty and thus have no intentions of looking for alternative jobs. Loyalty, study says that it is derived from the premise of satisfaction. Therefore employees’ loyalty and job satisfaction work hand in hand. Various antecedents that impacts job satisfaction also affect employee loyalty. (Rajput, Singhal & Tiwari 2016). In this view, if the conduct of the organizations and its environment is for the employees who dominate it, it means that employees have the freedom to do their work within the stipulated time and values which interprets to a high degree of job satisfaction. It has also been established that the relationship between job satisfaction and employee loyalty would be desirable if the organizations provide opportunities to learn, grow and clear guidelines for career advancement.

2.4 The contribution of job satisfaction to employee loyalty 

Job satisfaction is recognized for its impact on organizational success. Factors influencing job satisfaction have significant effects on employees loyalty. These factors include empowerment, reward, and recognition, decision making participation and workplace environment. According to Viswanathan & Chopra (2015), it is evident that there is a powerful and constructive correspondence between job satisfaction and employee loyalty.

Empowerment

In the recent past, national and international market competition has become the order of the day. As a result, employers and companies have been compelled to develop a positive attitude towards their employees’ empowerment. Giving authority, knowledge, and facts to employees is associated with employees’ freewill to decisions on how to conduct their daily chores within the organizations. Business researches believe that the most competitive advantage an organization has is the quality of its employees (Rajput, Singhal & Tiwari 2016). The measure of improving job quality focuses on supporting the participation of employees in decision making. If organizations want to get positive results from its processes, the most efficient way is through empowerment of junior employees on facts and authority which would strengthen organizational effectiveness. Employee empowerment and increase in their authority boost internal motivation and job satisfaction. The empowered employees develop ownership of their responsibilities in the organizations which interprets to loyalty to their companies.

Reward and recognition

There are different types of schemes put in place by organizations for the benefits and recognition of their employees. A reward may be termed as something given or received for a service provided. Perks received by employees for performing duties on behalf of their organizations are also rewards. Acknowledgment of an employee’s contribution to the success of an organization is referred to as recognition. Reward and recognition is a vital factor in relation to job satisfaction. According to Pandey & Khare (2012), managers should consider organizational success as the consequences of employees’ job satisfaction. Management systems with no rewards and recognition to employees’ efforts lead to loss of motivation due to job dissatisfaction. Loyalty, in this case, maybe minimal as many employees may be intrinsically considering of activities and organizations which would recognize their efforts. Extrinsic rewards are essential motivating factors for employees. Whenever an employee is given recognition in the form of reward, he/she puts more effort in work promoting his loyalty to the organization due to personal satisfaction.

Workplace environment

According to Prabhakar (2016), it is relevant that harmonious workplace environment results in favorable job satisfaction which corresponds to improved employee loyalty towards the organization. Different factors also affect job satisfaction of employees in the workplace environment. First, interpersonal relationships between an employee and co-workers or supervisors influence job satisfaction (Prabhakar 2016). Employees whose supervisors employ a close relationship develop high levels of job satisfaction than others. Also, employees who receive support and cooperation from colleagues are more satisfied with their work. Secondly, the stability of tenure. One of the managerial propositions of control by Henry Fayol involves the significance of security within the company workplace surroundings. It is argued that if employees are pleased with the security of their occupations, they will be loyal to their employers. Hence, the stability of tenure is significant in workplace as it provides stability in the employee's rate of turn over to the organizations. Third, the moment organizations provide an opportunity for the growth of their employees; the companies are expected to receive loyalty due to rudimentary job satisfaction. As per Prabhakar (2012), various studies relating to employees satisfaction identifies crucial areas that are essential to the satisfaction of employees within the job environment. Career growth opportunity occupies a major position in this area.

Participation in decision making

A better employment relationship is based on the level of trust between the managers and the junior employees. Empowering employees to make decisions is a sign of trust in their capabilities. When employees are involved in major decision making in the organization, they feel a sense of importance which help to boost their loyalty to the organizations. Job satisfaction can be achieved through participation in decision making. Giving employees the authority to make decision fulfills the desire of their ego and employees behavior is channeled towards the betterment of organizational goals. Research reveals that when employees are involved in important information and planning process, their participation will be high thus leading to higher job satisfaction. There is an important connection between participation in decision making and how they impact on employee job satisfaction (Rajput, Singhal, & Tiwari, 2016). When employees are actively involved in discussing issues affecting their work performance, commitment to organization increases, absenteeism rate reduces and job satisfaction increase.

3.0 Conclusion 

Job satisfaction as feelings of content expressed by employees is influenced by various factors which are both intrinsic and extrinsic. These factors include management, promotion chances, work-life balance, and salaries. Employee job satisfaction is attained to its optimum when the organizations exercise democratic type of management which allow employees to be directly involved in discussing issues affecting them, equal chances of promotion are given to all employees, favorable conditions for work-life balance and compensation equal to the level and amount of services provided. However, when organizations fail to consider these factors, levels of job satisfaction among employees decrease.

Employee loyalty is expressed as a sign of employee content with their organizations. Job satisfaction leads to employees long term commitment to the organization interpreted as job retention. Employee retention gives organizations an opportunity to retain valuable employees and also maintaining organization performance which contributes to definite competitive advantage. When organizations meet employees expectations and offer a commitment to employees investment, job retention is usually positive. Moreover, when employees are satisfied with the level of treatment given by their employers, their loyalty to the organization automatically increase. There is also a positive correspondence linking job satisfaction and employee loyalty. The underlying factors of job satisfaction have been proven to have a direct connection to employee loyalty. These factors include empowerment, reward and recognition, workplace environment and participation in decision making.

References 

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Kazi, G. M., & Zadeh, Z. (2011). The contribution of individual variables: Job satisfaction and job turnover. Interdisciplinary journal of contemporary research in business, 3(5), 984-991.

PANDEY, C., & KHARE, R. (2012). IMPACT OF JOB SATISFACTION AND ORGANIZATIONAL COMMITMENT ON EMPLOYEE LOYALTY. International Journal of Social Science & Interdisciplinary Research, 1(8), 26-41. Retrieved March 15, 2019.

Prabhakar, A. (2016). Analysis of high job satisfaction relationship with employee loyalty in context to workplace environment. International Journal of Applied Research, 10(7), 241-264.

Rajput, S., Singhal, M., & Tiwari, S. (2016). Job Satisfaction and Employee Loyalty: A study of Academicians. Asian Journal of Management, 7(2), 105-111

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Viswanathan, V., & Chopra, K. (2015). Study on factors affecting Job Satisfaction, Loyalty, and Commitment among managerial staff with reference to e-Publishing organizations in ITES / BPM industry. International Journal for Research in Applied Science & Engineering Technology, 3(12), 458-465.