Identification of Factors Affecting Employee Satisfaction and Their Relative Importance: An Empirical Study of An Indian Public Sector Organization

There are several factors affecting organizational effectiveness and one of the important factors is employee satisfaction. This study aims to identify the factors affecting employee satisfaction and determine their relative importance, so that suitable strategies could be formulated to enhance employee satisfaction. The primary data was collected from a sample of 50 respondents using a questionnaire based on five point response category of Likert type. The modified Likert scale (i.e. Indices) were employed as variables in the quantitative analysis. Two tailed t-test was employed to test the significance of regression coefficients ; The degree of significance measures the relative importance. IBM SPSS 20 and Excel 2007 software were used to sort the data and undertake quantitative analysis. Altogether six broad factors were identified. Statistical results revealed that all factors are important, however, pay & perks emerged as the most important factor. Group of factors consisting of “pay & perks”, “career & development” and “welfare facilities” is relatively more effective than the Group of factors consisting of “company”, “job” and “work life & culture”. The key contributions and limitations have also been mentioned. Keywords: Employee Satisfaction, Factors, Indices, Standard Scores, Weighted Standard scores. DOI: 10.7176/EJBM/12-33-02 Publication date: November 30 th 2020


Introduction
Employee satisfaction has emerged as one of the most popular organizational concepts in today's globalised economy. Everyone is striving hard to achieve the coveted goals of organizational effectiveness and organizational excellence. Human resource experts have postulated that workers who are satisfied, contribute more in terms of productivity. (Mc Gregor, 1960;Likert, 1961). Maloney & Mc Fillen (1986) have observed that 'higher level of employee satisfaction leads to lower employee turnover and absenteeism. If companies want to improve their performance then they must satisfy and motivate their employees which in turn shall result in their active participation and reflect positively in the organizational performance (Heskett et al.,1994). Employees are more loyal and productive when they are satisfied (Hunter & Tietyen, 1997) and these satisfied employees enhance customer satisfaction and organizational productivity (Potterfield,1999). A research study showed that success of any company is directly linked to the satisfaction of the employees of that company and retention of talent is critical to the growth of any organization (Freeman, 2005). Bhatti & Qureshi (2007) have noted that 'there are several factors impacting the organizational effectiveness and one of the important factors is employee satisfaction. Effective organizations have a culture that promotes and augments employee satisfaction. Chalotra (2013) stated that 'employee satisfaction is essential to the success of any business. A high rate of employee contentment positively leads to a lower turnover rate. Thus keeping employees satisfied in their job roles should be a major priority for every employer'. Kumari (2020) has recently established that 'motivation and satisfaction are the two major components of organizational excellence. It is therefore, imperative to examine the factors affecting employee satisfaction in organizations. The present study is an attempt in this direction.
The rationale for this study is based on attitudes and perceptions of the human mind towards the employee satisfaction. Various parameters are included in the questionnaire to measure the respondent's responses towards employee satisfaction with respect to its determinants. The outcome of this study may be helpful to the decision makers to finalize the way by which one can improve the level of employee satisfaction in organizations. job and its various aspects. Employee satisfaction is a comprehensive term that encompasses job satisfaction of employee and their satisfaction overall with companies policies, environment etc (Spector, 1997). Therefore, while discussing the concept in this section and subsequently in literature review, only those concepts and research works have been included which exhibit direct links to employee satisfaction.
Satisfaction means the level of fulfillment of one's needs, wants and desire. According to Nancy (1977) satisfaction basically depends upon a person's needs and what he/she achieves from the world. Cranny et al. (1992) defined employee satisfaction as 'combination of affective reactions to the different perceptions of what he/she wants to receive compared with he/she actually receives.' Employee satisfaction is the gratification or a pleasurable emotional state resulting from the valuation of their job (Moorehead & Griffin, 1998). It has been argued in operations management that employee satisfaction and loyalty leads to his/her service productivity, profit, fulfillment of customer needs (Silvestro, 2002). Price (2001) defined employee satisfaction as an effective orientation that an employee has towards his or her work.
According to Rollinson, 'Employee satisfaction is described as a pleasurable or positive emotional state resulting from an employee's appraisal of his or her company environment or company experience (Rollinson, 2005). Robinson (2006) has viewed that employee satisfaction is closely related to job satisfaction and the intention to leave or stay with the organization. Bhatti & Qureshi (2007) have defined employee satisfaction as 'a degree to which a worker is happy with his/her job and working atmosphere'. Employee satisfaction may be described as how pleasant an employee feels with his./her position of employment ( Moyes et al., 2008). Chalotra however has viewed that employee satisfaction off late is considered as a brand. Here brand means a promise i.e. a promise to provide higher employee satisfaction than the competitors ( Chalotra, 2013).
Thus employee satisfaction includes treating employees with respect, providing regular employee recognition, empowering employees, offering above industry average benefit and compensation, providing employee and company, a positive environment within the framework of goals, measurement and expectations.

Literature Review
Employee satisfaction has been the most attractive subject of research in the field of organizational studies. Large number of studies appeared on various aspects of employee satisfaction specially its association with productivity and corporate culture (Taylor & Cosenza, 1997;Bhatti & Qureshi, 2007) , with organizational commitment ( Bateman & Strasser, 1984 ;Kuruzum et al., 2008 ;Gulnu et al., 2010 ;singh & Jaiswal, 2016 ;Mangaraj & Patra, 2017), with motivation ( Judge & Hulin, 1993 ;Khanna, 2017) and with motivation and organizational excellence ( Kumari, 2020). Some empirical studies examined the cases of organization of different sectors of the economy, mainly the service sector (Mahesha & Akash, 2011), chemical sector (Abid et al., 2013), education sector ( Madan & Gupta, 2015) and steel sector ( Mangaraj & Patra, 2017). But only a few studies have taken up the issue of the factors determining employee satisfaction. These are as under. Alam et al. (2012) have theoretically identified the various variables affecting employee satisfaction such as organizational development factors, job security factors, work task factors, policies of compensation and benefits factor and opportunities which give satisfaction to employee such as promotion and career development. They have also suggested ways by which one can improve employee satisfaction. Sinha (2013) identified five major factors, out of 23 variables considered during the survey, and observed that employees are satisfied only with five factors such as employment and work environment, working relation, salary & future prospects, training & work involvement and job rotation. Chalotra (2013) examined the predictors of employee satisfaction such as employee training, employee empowerment, team work, management leadership, employee compensation and concluded that establishing a long-term relationship between management and employees can enhance satisfaction. Employee empowerment, employee compensation, teamwork and management leadership are good predictors of employee satisfaction.
Jaiswal and Chandra (2014) examined the relationship of employee satisfaction with various aspects of training and development practices like training programs, training usefulness, training facilities, training methods and training types and observed strong correlation among variables of training and development and employee satisfaction.
They further noted that employees can be satisfied if they are given opportunities for better training and development. Palaniammal et al. (2015) have discussed the role of various factors responsible for employee satisfaction and observed positive association of employee satisfaction with factors like, salary, good relationship with colleagues & supervisors, motivation, career development, job involvement, productivity, reward and recognition, job security, medical & children education facilities. Further, they inferred that the success of employee satisfaction relies on the good appraiser-appraisee working relationship all through the process. Swaroopa & Sudhir (2017) have examined various variables responsible for employee satisfaction Such as organizational development, job security, work task, policies of compensation & benefit and opportunities which gives satisfaction to employees like promotion & career development, leadership, job satisfaction, motivation, rewards and cultural differences and concluded that employees are satisfied but the organization need to improve European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.12, No.33, 2020 some of the facilities so that employee would become highly satisfied and the productivity and performance levels increase.
A group of researchers have observed that job design is a prime factor affecting employee satisfaction ( Hom & Kinicki, 2001;sageer et. Al., 2012;Abid et al., 2013).
Thus review of literature has indicated that large number of studies appeared on various aspects of employee satisfaction and of various sectors of the economy, mainly of private organizations. The present study is, therefore, undertaken as a systematic attempt to identify the factors affecting employee satisfaction in a public sector organization namely the Central Coalfields Limited (CCL) located at Ranchi, the capital of Jharkhand state in India. The CCL, Ranchi is a mini-ratna public sector company and one of the subsidiaries of Coal India Limited, a maha-ratna company and the largest coal producing unit in the world. In view of the above, the objectives of this study are the following.
• To identify the major factors affecting employee satisfaction.
• To determine the relative importance of identified factors affecting employee satisfaction.

Identification of Factors Affecting Employee Satisfaction
In the light of the review of literature and the motivational activities and facilities made available by the organization to the employees of Coal Company under study, altogether six broad factors affecting employee satisfaction identified for detailed investigation. These are the company, job, pay & perks, career & development, work life & culture and welfare facilities, as detailed below.

The Company
The Company is a place of work. The organization should have a culture that encourages the employee satisfaction. The employees must be satisfied in working with the company. They must consider it as the best company to work and must say that I am proud to tell people, I work for this company (Spector, 1997). There is every likelihood that an employee of a branded company is satisfied. Company branding is intended to induce employee branding identification and a psychological connection between the employee and the brand.

The Job
The Most important information to have regarding an employee in an organization is a validated measure of his/her level of job satisfaction. Job satisfaction is closely linked to the individual's behavior in the workplace (Davis et al., 1985) and individual's perception and evaluation of the overall work environment (Shempane, 2002). An employee is said to be satisfied with the job if he/she is satisfied with the kind of work doing, get enough relevant training for performing the job, satisfactory working conditions, getting recognition of good performance and very bravely say, overall I am satisfied with my present job.

Pay& Perks
Individual has infinite needs and money provides the means to satisfy these needs. Therefore, pay is one of the fundamental components of employee satisfaction. Parvin and Kabir have viewed that money is a good motivator, actually all employees work for money. Good salary and good compensation are key factors in satisfying the employee ( Parvin & Kabir,2011).

Career & Development
Opportunities like promotion and career development, along with other factors, help to improve employee satisfaction (Heskett et al., 1994). In fact, promotional opportunity is an utmost desire of the employee and that being promoted is related to performance on the job and how strongly the individual desires the promotion. Purohit stated that while it is true that individuals search for satisfaction in their work environment, they also attach importance to the opportunities for promotion that these job offer (Purohit, 2004).

Work life & Culture
Organizational culture is a system which includes shared assumptions, believes and values that govern people's behaviour in an organization. This also plays an important role in retaining an employee in an organization (Kapoor, 2017 p. 303). The work life & culture also includes the initiatives of creating a co-operative environment, policy of appreciating employees and balancing work with personal life. The work life balance is an employee's perception of how a proper balance between personal time, family care and work are maintained with minimal conflict.

Welfare Facilities
Welfare includes anything that is done for the comfort and improvement in employees and is provided over and above the wages. According to Welfare Department, CCL, 'welfare has always been given the top priority as a European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.12, No.33, 2020 subject matter of the organization and hence in every top management meetings like Board Meeting, Meeting of the Functional Directors, CGM/ GMs, Coordination Meeting etc, welfare is always the first point on the agenda (Welfare Department, CCL). Anitha found that improved welfare facilities, reward system along with other factors lead to increase in the level of employee satisfaction ( Anitha, 2011).

The Data
This study is based on the primary data collected from a sample of 50 respondents i.e. executives (selected out of 328 executives in five major disciplines in CCL comprises of about 65% of total executives as on 30.09.2019) using well structured questionnaire. After careful and prudent evaluation it was decided that judgment sampling technique would be the best for the selection of respondents and therefore the same was used for collecting data. The questionnaire tool is used because the focus of the study is on the single company i.e. coal company. It took about six weeks time during November-December 2019. The secondary data mainly published and unpublished information available in the CCL Headquarters at Ranchi as well as the relevant materials available on the websites have been used.

Research Methodology
Research Methodology has been discussed In two parts. First part deals with conversion of Likert scales into Indices for their use in the proposed model. Second part is about formulation and estimation of structural response model in determination of the relative importance of factors affecting employee satisfaction.

Conversion of Likert scales into indices for their use in the proposed model :
Likert scale or summated scale is generally used in quantitative analysis. Summated scale brings in genuine value addition to any kind of multivariate analysis. It minimizes measurement error and depicts complicated and convoluted ideas and parameters in the form of a single measure (Hairs et al., 2010). Researchers however have noted that 'A cross-sectional design and data collection method might have inflated the relationship between the three organizational variables examined (Kumari, 2020 p. 196). This conversion addresses the possibility of inflating the relationships between the variables based on cross-sectional Likert scales.
In this study the average summated scales computed for each of six identified factors as well as the combined employee satisfaction, have been converted into unit free variables by standardizing them and subsequently the standard score of six variables and for each of 50 respondents have been computed. The weighted standard scores; weight being the number of question/statements included in measuring the concerned variables, have also been computed. Using few arithmetic calculations, all standard scores and weighted standard score were converted into indices and used in the proposed model. The process of converting average summated scales into indices is appended as Appendix-I. 5.2.2 Formulating and estimating the structural response model for determining the relative importance of factors affecting employee satisfaction: The following structural response model has been formulated to examine the relative importance of the factors. I ESi = a + b1 ICOi + b2 IJOi + b3 IPPi + b4 ICDi + b5 IWEi + b6 IWFi + ui Where, IESi = indices of the weighted standard score representing the average response of ith respondent towards overall employee satisfaction. ICOi = Indices of the standard score representing the responses of i th respondent towards employee satisfaction with respect to the Company. IJOi = Indices of the standard score representing the response of the i th respondent towards employee satisfaction with respect to the Job. IPPi = Indices of the standard score representing the responses of i th respondent towards employee satisfaction with respect to Pay & Perks. ICDi = Indices of the standard score representing the responses of i th respondent towards employee satisfaction with respect to Career & Development. IWCi = Indices of the standard score representing the responses of i th respondent towards employee satisfaction with respect to Work life & Culture. IWFi = indices of the standard score representing the responses of i th respondent towards employee satisfaction towards Welfare Facilities. a = Constant term. b = Regression coefficients. u = Usual random error term. The parameters estimated using Ordinary Least Squares method. R 2 , Adjusted R 2 and F-values also computed. Two tailed t-test and F-test conducted using standard procedure (Koutsoyannis, 1978). The degree of significance of regression coefficients are taken to indicate the relative importance of the factors affecting employee satisfaction. European Journal of Business and Management www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.12, No.33, 2020 20 The IBM SPSS 20 and Excel 2007 are employed for data sorting and analysis.

Empirical Findings and Discussion
This section has two parts. First, presenting the descriptive statics of six identified factors, specially the number of items and their reliability coefficients. Second, estimating and presenting the structural responses model for determining the relative importance of the factors affecting employee satisfaction.

Descriptive Statistics
The descriptive statistics of six identified factors especially the number of items and reliability coefficients are presented in Table 6.1 Table -6.1 exhibits that the scale of all six factors affecting employee satisfaction as well as the combined employee satisfaction have Cronbach's alpha more than the limit of reliability i.e. 0.70 ( Nunnally, 1978). This means all scales are acceptable and their reliability is ideal for further results. These results also indicated that all 49 items of different factors are valid and much suitable to measure the attitude of employees towards employee satisfaction in the organization.

Statistical Results
The results of structural response model are presented in Table 6.2. The degree of significance of the coefficients of independent variables indicates the relative importance of the identified factors affecting employee satisfaction.  www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.12, No.33, 2020 level of significance [P(t > 2.39) = 0.01].
This might indicate that pay & perks career & development and welfare facilities are relatively more important factors affecting employee satisfaction as compared to company, job and worklife & culture. The adjusted R 2 value is 0.728 indicating that 72.8 percent variation in dependent variable is explained by six identified independent variables. The F-value at appropriate degree of freedom is very high (22.81) and highly significant at 1 percent level of significance [P (F>7.08) =0.01] indicating a god fit of the structural response model. The detailed results are appended as Appendix-II.

Conclusion
The results of the structural response model revealed that pay & perks is the most important factor affecting employee satisfactions. However, a group of factors namely pay & perks, career & development and welfare facilities is relatively more effective than the factors like company, job and work life & culture. In brief, all factors are important but a group of factors has a little edge over the other group.

Key Contribution and Limitations
Likert scale is generally used in quantitative analysis. The methodology used in this study for converting the Likert scale into indices of 50 sample respondents and using them in structural response model may be considered as an extension of existing knowledge in measuring the variables in organizational studies. It addresses the possibility of inflating the relationships between the variables based on cross-sectional Likert scales. Further the study of factors affecting employee satisfaction in the case of Coal Company fulfils the research gap that existed in the coal sector of the economy.
The sample was confined to only 50 respondents. Greater sample size could have produced more constructive results. The quantitative analysis is based on respondent's responses which are subject to respondent-bias. The respondents might also have experienced a confirmatory bias in attempting 49 questions/ statements related to employee satisfaction, considered in the questionnaire. Further, this study has not taken the demographic factors viz. age, gender, qualification, experience etc into consideration, which as a limitation can be addressed in future researches as an extension of this work. Appendices Appendix-I : Process of converting averages summated scales into Indices. Average summated scales was first computed from the five point Likert scores ( numerical values assigned for each responses : 1 = SD, 2 = D, 3 = N, 4 = A, 5 = SA), by summating the scores of each of the questions / statement included in measuring individual factors and dividing them by respective number of questions/statements for each of 50 respondents. Thereafter computed the weighted standard scores for each of 50 respondents. The formula used are as under. zIj = standard Scores of i th respondent and jth factor. =( xij -xij / Sxij) I = 1,2,3,………..n = 50, J = 1,2,3………..m-06 Where, xij = Average summated scale of i th respondent and j th factor. xij = Arithmetic mean of the average summated scale of i th respondent and j th factor. Sxij = Standard deviation of i th respondent and j th factor. Then Zwij = Weighted standard scores of i th respondent and j th factor. = ∑ nj zij ∑ nj ; I = 1,2,3,………..n= 50 J = 1,2,3………..m= 06 Where, zij = Standard scores as defined earlier.
nj= Number of items (questions/ Statements) included in measuring j th factor. An index was then prepared with 2 added to it to avoid negative sign and multiplied by 100. Indices so prepared from the standard scores of i th respondent and j th factor are considered as independent variables (6 Nos.) and indices prepared from the weighted standard score is considered as dependent variable in the structural response model.