Sectorial Comparison of Factors Influencing Job Satisfaction in Indian Banking Sector

Sectorial Comparison of Factors Influencing Job Satisfaction in Indian Banking Sector

Bajpai, Naval

Abstract

The present study has been designed to examine the degree of job satisfaction of two public sector and two private sector banks in India. The banks were selected and from each organisation 25 subjects were selected randomly. A questionnaire developed by Sinha (1990) was used for ascertaining the level of job satisfaction. Data were analysed employing one-way ANOVA. The means of four organisations were significantly different from one another. The result indicates that layoff threats, quick turnover, less welfare schemes, and less scope for vertical growth increase job dissatisfaction. On the other hand, secure job environment, welfare policies, and job stability increase the degree of job satisfaction.

Meaning and Nature

According to Weiss and Cropanzano (1996), job satisfaction represents a person’s evaluation of one’s job and work context. This definition is still being debated. It captures the most popular view that job satisfaction is an evaluation and represents both belief and feelings.

It is an appraisal of the perceived job characteristics and emotional experience at work. Satisfied employees have a favourable evaluation of their job, based on their observations and emotional experiences. Saleh (1981) states that job satisfaction is a feeling which is a function of the perceived relationship between all that one wants from his job/life and all that one perceives as offering or entailing. The emphasis here is on all that one wants, whether it is important for self-definition or not. Luthans (1989) states that job satisfaction is a pleasurable, or positive emotional state resulting from the appraisal of one’s job, or job experience, and is the result of the employee’s perception of how well the job provides those things which are viewed as important.

Locke (1976) states that job satisfaction is a collection of attitudes about specific facets of the job. Employees can be satisfied with some elements of the job while being simultaneously dissatisfied with others. Different types of satisfaction will lead to different intentions and behaviour. An employee might complain to the supervisor when dissatisfied with low pay but not with coworker dissatisfaction. Overall job satisfaction is a combination of the person’s feeling towards the different facets of job satisfaction.

He argues that the more important factors conducive to job satisfaction are mentally challenging work, equitable rewards, supportive working conditions, and supportive colleagues. One can also add the importance of good personality-job fit and an individual’s genetic disposition (some people are just inherently upbeat and positive about all things including their job). Employees are concerned with their work environment for both personal comfort and how it facilitates doing a good job. People get more out of work than merely money or tangible achievements. For most employees, work also fills the need for social interaction. Not surprisingly, therefore, having friendly and supportive co-workers leads to increased job satisfaction.

Factors Responsible for Job Satisfaction and Job Dissatisfaction

Employees tend to prefer jobs that give them opportunities to use their skills and abilities and offer a variety of tasks, freedom, and feedback on how well they are doing. Jobs that have too little challenge create boredom, but too much challenge creates frustration and a feeling of failure. Under conditions of moderate challenge, most employees will experience pleasure and satisfaction (Katzell, Thompson, and Guzzo, 1992).

Employees want a fair unambiguous pay system and promotion policies. Satisfaction is not linked to the absolute amount one is paid; rather, it is the perception of fairness. Similarly, employees seek fair promotion policies and practices. Promotion provides opportunities for personal growth, more responsibilities, and increased social status. Individuals who perceive that promotion decisions are made in a fair and just manner are likely to experience satisfaction from their jobs (Witt and Nye, 1992).

The matching of job requirement with personality characteristics is best articulated in Holland’s (1985) personality-fit theory. Holland presents six personality types. These are realistic, investigative, social, conventional, enterprising, and artistic. He proposes that satisfaction and the propensity to leave a job depends on the degree to which individuals successfully match their personalities to an occupational environment. Studies to replicate Holland’s conclusions have been supported by many researchers (for example, Feldman and Arnold, 1985).

A strong indication that overall satisfaction ratings are inflated is that people typically report much lower satisfaction levels for specific aspects of the job. For instance, only 54 per cent of American workers believe that they are paid fairly, 46 per cent say their company promotes fairly, and 41 per cent claim that senior management truly cares about them. Satisfaction with coworkers seems to be one of the few ratings that come close to overall job satisfaction (84 per cent) (Moore, 1997; Baker, 1997).

Sinha (1958) studied the job satisfaction prevalent in Indian offices and manual workers, and analysed the causative impacts on satisfaction and dissatisfaction. ‘Interesting work’, ‘social status’, and ‘boss’ were found as crucial factors contributing to satisfaction whereas inadequate salary and lack of security were regarded as important factors causing dissatisfaction. Clerical employees were found to be lower in their satisfaction, indicating a reverse tendency to what is usually observed, that is, increase in satisfaction with occupational level.

Employees who find themselves unable to adjust between work and family, generally seem to be less satisfied with their jobs as well as their life (Perrewe, Hochwarther, and Kiewitz, 1999).

Fair promotional policies in any organisation become their foundation of growth. When an employee gets fair promotion, which is generally based on his true assessment, he gets a type of recognition, and hence, increases his job-satisfaction. Kalleberg and Mastekaasa (2001) examined the impact of intraorganisational (resignations and layoffs) and interorganisational (promotions and downward commitment) job mobility on changes in job satisfaction and organisational commitment. They found that promotions increase employee’s perceptions of the quality of their job and thereby enhance both their satisfaction and commitment. Resignations increase job satisfaction, whereas layoffs have no effect on satisfaction.

It is observed that uncertainty of production is a common problem in the organisations. Although production is based upon pre-planning, but in spite of planning, uncertainty of production cannot be avoided. It is very important to find the linkage of production uncertainty with job satisfaction. Wright and Cerdery (1999) investigated the relationship between job control and affective outcome (job satisfaction and intrinsic motivation) varies with the level of production uncertainty.

The qualification of an employee must match his job, if he feels that his qualification is not matched with his job, naturally he will be dissatisfied. Johnson and Johnson (2000) investigated the effects of perceived overqualification on dimensions of job satisfaction, using the relative deprivation theory. The cross-sectional results supported the hypothesis and suggested that perceived overqualification has a negative effect on job satisfaction.

Some demographic variables, for example, age, race, and employment status, have been found as important factors in determining level of job satisfaction (Sinacore, 1998).

It has been investigated that group level task interdependence, increases the feeling of belongingness and coordination among employees and hence increases the degree of job satisfaction (Vander, Emans, and Van DeVliert, 2001).

It has been observed that routine jobs are boring and they create a type of boredom and monotony. On the other hand, when jobs are challenging in nature, they create an environment of satisfaction. Findings of Jonge, Dollard, Dormann, LeBlance (2000) provide renewed empirical support for the view that high-strain job (high demand, low control) are conducive to ill health (emotional exhaustion, health complaints). Further, it appears that active job (high demands, high control) give rise to positive outcome (job challenge, job satisfaction).

Organisational politics is a vital part of an organisation. Vigoda (2000) stated that perception of organisational politics was found to have negative relationship with job attitudes (job satisfaction and organisational commitment), a positive relationship with intention to leave the job (exit), and a stronger positive relationship with negligent behaviour (neglect). A weak negative relationship was found between perception of organisational politics and employee’s performance as reported by supervisors.

When an organisation cares for its employees, it definitely gets their support in reward. Organisational investment in employee’s well being results in the higher satisfaction in employees. Taylor (2000) suggested that job satisfaction is directly related to company’s investment in employee’s well being.

Sprigg, Jackson, and Parker (2000) examined the consequences of implementing a common form of teamworking and the effects of interdependence and autonomy in particular interdependence as a moderator of the relationship between autonomy and employee’s well being. Results showed that higher job-related strain cause lower job satisfaction.

Style of leadership also plays an important role in determining level of job satisfaction. Foels, Driskell, Muller, and Salas (2000), using a meta analytic integration of research evidence to address the paradox, reveal that there was a significant tendency for groups experiencing democratic leadership to be more satisfied than groups experiencing autocratic leadership.

Increased upward communication and its reward also results in job satisfaction. Avtgis (2000) indicated that people who reported increased communication and high reward in communication also reported greater relational satisfaction and greater perceived organisational influence.

Banking sector in India

After 1969, commercial banks are broadly classified into nationalised or public sector banks and private sector banks. The State Bank of India and its associate banks along with another 20 banks are public sector banks. The private sector banks include a small number of Indian scheduled banks, which have not been nationalised, and branches of foreign exchange banks. After 1991, the banking scenario has been changed completely. The impact of globalisation and privatisation has affected work culture of both, public sector and private sector banks. These are witnessing a fundamental shift in working attitude and work style due to open economy and increased competition. We came a long way from the days of protectionism of Indian banking industries. The entry of private sector banks and foreign banks has forced public sector banks to adopt a new customer-centric work environment.

A comparison between public and private sector banks would make a significant contribution to the existing body of knowledge on job satisfaction. This discussion is timely. In India, the old concept of public sector economy has been completely changed. The government is working in the direction of selling profit-making oil companies. So after liberalisation there is a complete change in the Indian environment. It has been discussed earlier that in India, private sector jobs do not have the required reputation and prestige as compared to government jobs. Indians seek satisfaction through the ownership of a company. If it is a private company then satisfaction will be very low and people will try to switch to a government job. In India, government jobs are symbols of status, prestige, security, and social acceptance. Private sector jobs are the second choice of Indians. In India the 5,000 Rs (about S$195) per month salary of a government sector employee is perceived better than the 20,000 Rs (about S$782) per month salary of a private sector employee. So, there may be various factors responsible for job satisfaction or dissatisfaction. But in Indian case, the factor that seems to be very closely linked with job satisfaction or dissatisfaction is the ownership of an organisation-whether it is a public or private sector company.

Since job satisfaction is considered an important aspect of work culture, public sector and private sector variations seem to affect the job satisfaction of these organisations. Since public-private sector background is an important factor in shaping the work culture of an organisation, the work culture also seems to have its root in the culture from which it is generated. Therefore, job satisfaction is likely to be affected by public-private sector differences.

A natural assumption can be made that work culture of public-private sector banks would be different because such banks have different cultural roots. It has been observed that the work culture of public sector banks was based on the social economy concept, in which profitability was secondary. After nationalisation, public sector banks used to serve social welfare in terms of social banking through special employment and poverty alleviation programmes. Despite many adverse criticisms and comments, the Indian government had persisted in using bank funds to finance various social sector schemes for employment generation and poverty alleviation. On the other hand, private sector banks work towards profitability. There is a basic work culture difference between public and private sector banks due to their different objectives. Although after 1991, the working style of public sector banks has been changing, but the previous impact of social banking policy on work culture of public sector banks cannot be ignored. Being an important aspect of work culture, job satisfaction level of these banks should also be different.

However, the arguments above are assumptions and there is a need to verify them. The present study is designed to examine the specific problem whether job satisfaction of the employees working in public and private sector banks is different. It is hypothesised that job satisfaction of the employees working in different types of banks would differ significantly.

Method

Subjects of the present study were selected from managerial and nonmanagerial staff of public and private sector banks from Chhattisgarh. Two public sector banks and two private sector banks were selected for the study. A total of 100 subjects were selected equally from the four organisations selected for the study.

Job satisfaction was measured using the scale developed by Sinha (1990). A single item on four-point rating scale ranging from quite dissatisfied to quite satisfied was taken. These items were, (1) pay (2) working conditions (for example, safety, heat, noise, dust) (3) service conditions (for example, security, promotion, welfare) (4) relation with superiors, peers and workers, and (5) company as a whole, (Sinha, 1990).

Significant value of F indicates that the means of four organisations taken in the present study are significantly different from one another. A close study of Table 1 indicates that job satisfaction of Pvt-1, Pvt-2, Pub-1, and Pub-2 were 13.74, 13.96, 15.48, and 15.88 respectively. At a glance it seems that there is a big difference between private and public sector banks in terms of the degree of job satisfaction. The F ratio is found to be 8.9575 (3,96; p

It has been observed that degree of job satisfaction of private sector banks was found to be significantly lower than in public sector banks. At least two reasons were found to be responsible for the low job satisfaction level of employees of private sector banks. When data were analysed, surprising results were found. In the study, job satisfaction was measured by a tool developed by Sinha (1990). Job satisfaction was measured on the basis of five variables. These are (i) pay, (ii) work condition (for example, safety, heat, noise, and dust), (iii) service conditions (for example, security, promotion, and welfare), (iv) relation with superiors, peers, and workers, and (v) company as a whole. Among four variables, the degree of difference is not noticeable. But low scores of the third variable, service conditions, were found to be responsible for overall low degree job satisfaction in private sector banks.

Employees of private sector banks perceive that their jobs are not secure. In fact, the effect of an open economy, globalisation, and privatisation can be seen more easily in private sector banks than in public sector banks. In private sector banks, the environment in highly competitive and job security is based on performance and various other factors. Though it is true that this environment provides a challenging job profile, it also creates a less secure environment. Industriousness, dedication, devotion, and commitment are not enough to secure a job. The high level of performance of an individual is also based on various factors. These may be market situation, existence of competitor, and government policies. Where these factors are adverse in nature, performance automatically suffers. During this period, employees feel insecure, which reduces overall job satisfaction.

In public sector banks, welfare policies are clearly defined and legally enforced. Retirement, pensions, gratuity, and other related welfare policies are effectively executed. So there is no problem with social security. In private sector banks, welfare activities are neither well planned nor well executed. Employee turnover is very high and job security is very low. Most employees are from middle class Indian families. These employees have seen the golden period of public sectors and government jobs during their growing stages. So the effect of welfare schemes of government jobs and public sectors cannot be easily eradicated from their psyche. Private sector employees are ready to work hard but they demand pensions, security, and sometimes an easy lifestyle.

These findings in the banking sectors could be extended to explain the job situation in other service sectors. In terms of security, promotion, and welfare policy, there is a clear difference between public and private sector employees. It was stated earlier that when we compare the job satisfaction of employees in public and private sector banks or in other service sectors, the public and private sectors become the main factor of comparison. In India, the public or private sector factors neutralise all other factors of comparison. For example, in India, a public sector insurance company like LIC will always be preferred by a new entrant, if he has a choice.

Increasing Job Satisfaction Level of Employees of Private sector Banks

It has been found that employees of private sector banks were less satisfied with their jobs compared to employees of public sector banks. To increase their satisfaction, private sector banks need to improve job security. Noer (1993) had observed that layoff threats are one of the greatest blows to employee loyalty, even among those whose jobs are not immediately at risk.

Parnes, Nestal, and Andrisani (1973) observed that long tenure of working in organisations increases the job satisfaction of employees. As stated earlier, the Indian middle class is very protective towards family members, so private sector banks must launch special schemes to safeguard the interests of family members of employees. This may be education facilities for children, pension schemes for employees, accommodation for employees, gratuity, and other retirement benefits.

In the light of the findings, job security is one of the most important ingredients of job satisfaction. Secure job environment enhances the degree of job satisfaction. Management must create an environment of job security among employees. Indians work with emotions, so any legal job contract will not motivate them. Instead, there should be a psychological or emotional bond between employees and the organisation.

Due to the different social, economic and cultural backgrounds, the hire and fire system is not effective in India. In fact, Indian culture is neither individualistic nor collective, rather it is “Karm” (according to Indian mythology it is do your duty, don’t worry about results) oriented. Indians always accept effective leadership. So when management can provide effective leadership and a secure job environment, Karm (job duty) will be in the right direction.

Apart from job security, management must provide job stability. There should be a challenging environment. The job structure should comprise horizontal as well as vertical growth. The job should provide enough scope for the employees in terms of promotion and transfer.

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Naval Bajpai Deepak Srivastava

Department of Management

Bhilai Institute of Technology, Durg (CG), India

Copyright Singapore Institute of Management 2004

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