A comparative research on job satisfaction HRM practices: Empirical investigation of few commercial bank employees in Bangladesh Riaz Uddin Ahmed Lecturer, School of Business Britannia University, Bangladesh Email: riaz017@yahoo.com Doi:10.5296/ijhrs.v5i2.7765 URL: http://dx.doi.org/10.5296/ijhrs.v5i2.7765 Abstract This research study was focused on the effect of HRM practices namely recruitment & selection, training & development, salary & benefits, job security, reward supervisory role on job satisfaction of few commercial bank employees of Bangladesh. A sample of 50 respondents were selected romly from ONE Bank Ltd, The City Bank Ltd, ICB Islamic bank Ltd, Prime Bank Ltd Eastern Bank Ltd using purposive sampling method. A survey was carried out with a self-designed structured closed ended questionnaire with five point Likert scale the data were analyzed with descriptive statistics, Pearson correlation multiple linear regression. The findings revealed that recruitment & selection, training & development, salary & benefits, reward have positive effect on employees job satisfaction whereas supervisory role job security has adverse effect. It was recommended to the authorities of said banks that they should emphasize more on these two HRM practices to ensure sustainable growth development of their organization. Keywords: Commercial bank Bangladesh, HRM practice, Job satisfaction, Recruitment Selection, Salary Benefits, Job Security, Reward, Supervisory role 290
1. Introduction In today s cutthroat business environment, organizations are confronted with rising challenges to attain optimize one of the sustainable competitive advantages named Human Resource (HR). Though it is considered to be the most important asset of an organization, very few organizations can successfully exploit its potentials (Ahmed & Schroeder 2002). Organization s success relies on various factors; however employee or HR is regarded as the most crucial factor which directly affects the overall performance of the organization. They can achieve the goal without any obstacles if they are provided with a satisfied workforce. The management of HR (HRM) thus encounter different practices focusing on optimal utilization management of their human resource in order to achieve maximum output a unique competitive advantage (Price, 2004). To maintain competitive advantage achieve the ultimate goal of the organization, it is obvious that HRM practices have great significances. HRM practices are referred to a set of policies practices which boost up the firm s human capital to contribute in the achievement of business objectives (Gürbüz, 2009). Studies (Syed Yah, 2012; Gürbüz, 2009 Price, 2004) have shown that efficient use of human resources management (HRM) practices are crucial to accomplish both long short term objectives. HRM practices thus involve organizational investments in individual employee s training, decision-making, participation, promotion, the use of performance contingent rewards open communication to build up satisfaction among employees toward their job (Meyer & Allen, 1997; Delaney & Huselid, 1996). Job satisfaction is an attitude which is derived from a harmonizing summation of numerous precise likes dislikes with the job (Shrivastava & Gupta, 2015). Robbins (2012) also defined job satisfaction as an individual's general attitude regarding his or her job. This attitude defines the level of satisfaction an employee has for his job act as a single crucial indicator of how employees feel how contented they are with their job. HRM practices are mostly oriented to develop allocate human capital in the best possible ways while providing good environments benefits to reach the long term goal of the organization (Bogdanova et al. 2008). These in turn furnish employees an adequate level of job satisfaction motivation. Numerous research (Price, 2004; Igbal, Malik Ghafoor, 2013; Javed et al, 2012 Syed & Yah, 2012) were carried out regarding the impact of HRM practices on job satisfaction among employees in developing developed countries, however only a hful of them focused on the commercial banking sector of Bangladesh. 2. Research Objectives The primary objective of this study is to examine the impact of different HRM practices on job satisfaction. Other specific objectives are: 1. To explore the relationships between dependent independent variables. 2. To identify variables which have most significant effect on job satisfaction. 3. To come up with recommendations for HR policy makers to improve all HR 291
initiatives as well as employees job satisfaction. 3. Literature Review It has already been revealed by a large number of researchers that human resources management practices play a significant role in organization to increase employees job satisfaction that in turn increases work performance help organization to achieve its goal successfully. A study was conducted by Katou (2008) to assess the relationship between HRM practices (resourcing development, compensation incentives, involvement job design) organizational performance in the manufacturing sector of Greece. The outcome suggested that organizational performance is influenced by HRM practices business strategies through improving HRM outcomes (skills, attitude, behavior etc). Delaney Huselid (1996) agreed that best HRM practices are aimed to improve the overall performance of employees within the organization which ultimately results in an increased organizational performance through job satisfaction. They studied eleven practices - selection, training, performance appraisal, compensation, information sharing, job design, labour management participation, empower of decision, attitude assessment, recruitment efforts promotion all were found to have significant effect on job satisfaction. According to the examination of Syed Yah (2012) in china, high performance HRM practices have impact on employee job satisfaction. Their findings revealed that job satisfaction is positively correlated with empowerment, grievance hling procedures, job rotation, merit-based promotion, employee participation performance-based pay. With data gathered from 480 blue collar employees of the 35 large firms of Istanbul, Gürbüz (2009) did experiment the impact of HRM on job satisfaction. He used different variables in his study e.g. empowerment, Job rotation, team work, participation contingent compensation. However, the result showed that dominant variable for the job satisfaction of employees is participation of the employees in decision making. Another interesting investigation was carried out by Javed et al, (2012) on the public sector of Pakistan. They tried to measure the impact of reward, recognition training on job satisfaction their findings indicated that recognition training are most crucial than reward. Similar study was carried out by Iqbal et al (2013) on HRM practices adopted by corporate sector of Punjab, Pakistan. The findings of that study suggested that supervisory role possess high positive effect on job satisfaction while compensation policy participation in decision making have no significant effect on job satisfaction. Asta Zivile (2011) researched on the link of HRM with organizational commitment job satisfaction. Empirical result unveiled that HRM practices such as skill enhancing, motivation enhancing engagement enhancing have a positive relation with effective human resource reaction like job satisfaction. A single research carried out by Majumder (2012) has provided a deep insight on HRM practices job satisfaction of employees in different private banks of Bangladesh. His finding suggests that most of the employees are dissatisfied with compensation package followed by reward motivation, career growth, training development, management style, job design responsibilities. Masoodul et al, (2013) used three HRM practices (compensation, empowerment appraisal system) their impact on employee's job satisfaction loyalty. His investigation was carried out on several government owned banks, the finding indicates 292
that compensation is most crucial for developing employee's job satisfaction; meanwhile empowerment can be considered as a significant factor for employee's loyalty. A study on job satisfaction of private bank employees was conducted by Jeet & Sayeeduzzafar (2014) in India. Out of all HRM practices, their empirical output suggests that training, performance appraisal, team work compensation have significant impact on job satisfaction, while participation has no significant impact on job satisfaction of the employees. Similar research was carried out by Oyeniyi et al, (2014) on the staffs of Nigerian banks. They used compensation, promotion, training, performance evaluation supervisory role as influential HRM practices of employee s job satisfaction for their study. The finding revealed that all these practices are positively related to employees' job satisfaction except supervisory role. According to his finding, supervisory role has negative effect on employee's job satisfaction this clearly contradicts the finding of Iqbal et al (2013). In relation to this contradiction, it should also be noted that Javed et al, (2012) prioritized reward over employee recognition training. Therefore, this research was focused on finding the real fact related to job satisfaction of Bangladeshi commercial bank employees included six HRM practices namely recruitment selection (RS), training & development (TD), salary & benefits (SB), job security (JS), reward (R), supervisory role (SR) to draw a solid conclusion. 4. Research Methodology The study of this research was conducted with a self-designed structured closed ended questionnaire with five point Likert scale, where 1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree 5 = strongly agree. Using purposive sampling method, questionnaires were distributed to a sample size of 50 respondents who were chosen romly from different branches of five commercial banks: ONE Bank Ltd, The City Bank Ltd, ICB Islamic bank Ltd, Prime Bank Ltd Eastern Bank Ltd. Though the researcher considered reaching a large size of sample, due to busy time schedules of bank employees their engagement in various activities the number of respondents was restricted to 50. Data collected from dependant independent variables were assessed, analysed interpreted with descriptive statistics, Pearson correlation matrix multiple regression. All these statistical methods were applied with the aid of a well renowned statistical tool SPSS (Statistical Product Service Solution). 5. Hypothesis The study of this research therefore develops frames the following hypotheses to accomplish research objectives: H1: Recruitment & selection is positively related with employee s job satisfaction. H2: Training & development is positively related with employee s job satisfaction. H3: Salary & benefits are positively related with employee s job satisfaction. H4: Job security is positively related with employee s job satisfaction. H5: Reward is positively related with employee s job satisfaction. 293
H6: Supervisory role is positively related with employee s job satisfaction. 6. Relationship framework model of variables For the better conceptual understing of the underlying link between dependant independent variables, a model of relationship framework can be formulated developed based on the findings of literature review. 7. Model Specification For further analysis of the relationship between dependent variable (job satisfaction) independent variables (recruitment & selection, training & development, salary & benefits, job security, reward, supervisory role), a multiple linear regression model has been developed to find out the significance level of influence the independent variables impart on dependent variables. With the use of SPSS, the model can be depicted as: Y = β0 + β1*x1 + β2*x2 + β3*x3 + β4*x4 + β5*x5 + β6*x6 + Є In this equation, Y represents dependent variable that is job satisfaction X1, X2, X3, X4, X5 X6 refers to independent variables which are recruitment selection, training & development, salary & benefits, job security, reward, supervisory role respectively. While β1, β2, β3, β4, β5 & β6 constitutes coefficient of variables with β0 constant value, Є denotes the residual error of regression. 294
8. Data analysis, interpretation & discussion [Table-A] Descriptive Statistics N Minimum Maximum Sum Mean Std. Deviation Job Satisfaction 50 1 5 165 3.30 1.111 Recruitment Selection Training Development 50 3 5 210 4.20.606 50 3 5 190 3.80.606 Salary Benefits 50 4 5 235 4.70.463 Job Security 50 4 5 230 4.60.495 Reward 50 3 5 210 4.20.606 Supervisory Role 50 2 4 135 2.70.789 Valid N (listwise) 50 Table-A with descriptive statistics of dependant independent variables suggest that employees on average are satisfied with their job (mean value 3.30). This is further supported with the individual mean value of recruitment selection, training development, salary benefits, job security reward. However, supervisory role scored the lowest mean value indicate that there might not be enough link between employees' job satisfaction any supervisory role that their job comes with. 295
[Table-B] Pearson Correlation Coefficients, N = 50 Job Satisfaction Recruitment Selection Training Development Salary Benefits Job Security Reward Supervisory Role Job Satisfaction Recruitment Selection Training Development 1 0.212 1 0.242 0.111 1 Salary Benefits 0.575 ** 0.218-0.218 1 Job Security 0.408 ** 0.272-0.272 0.802 ** 1 Reward 0.364 ** -0.389-0.167-0.145-0.068 1 Supervisory Role -0.012-0.085 0.512 ** 0.028 0.209-0.299 1 Table-B with the result of coefficient correlation reveals that with exception of supervisory role all the correlations are positive highly significant. As the values of these correlations are high, H1, H2, H3, H4 & H5 can be accepted in support of the statement that HRM practices (recruitment selection, training & development, salary & benefits, job security reward) are positively related with job satisfaction. In a narrow analysis of correlations, salary & benefit was found to be highly significantly related with job satisfaction (0.575, <.01). It unveils that the more emphasis management lend on this HRM practice the more increased job satisfaction get in time. Therefore, H3 can be accepted it can be suggested that salary benefit should receive the first priority for increasing employee s job satisfaction. Moreover, when it comes to the development of sustainable growth of organization, employee s increased job satisfaction is highly important. Furthermore, job security proved to have the second highest significant correlation (0.408, <.01) with job satisfaction. Thus, H4 is supported it is suggested that if the management focus more on this practice, employee s job satisfaction will be higher accordingly. The reason behind this could be due to the higher competition in job market the scarcity of 296
available job with a rising rate of unemployment in Bangladesh. International Journal of Human Resource Studies HRM practice of reward manifested a higher degree of correlation (0.364, <.01) with employee s job satisfaction, thus H5 can be accepted. It should be noted that if management highlight this practice with proper investment then job satisfaction of employees will be improved. Employee s opportunity of training development have (0.242, <.01) fairly high degree of correlation with job satisfaction advise that H2 can be accepted. This correlation also indicates that management focus on this HRM practice will do more to improve employee s satisfaction toward their job. Training development perceived to be an escape from workload thereby bring motivation to work resulting an increased workability knowledge. Meanwhile, recruitment selection practice of HRM demonstrated relatively lower but positive correlation (0.212, <.01) leaving the H1 be accepted. Thus, it is evident that if this practice gets focused by the management it will still make the overall job satisfaction higher. A fair recruitment selection transmit a vibe of fairness to employees, this in turn results in an increased level satisfaction at the job. However, supervisory role depicted to be insignificant negatively related (-0.012) with employee s job satisfaction. It implies that if employees were offered any additional supervisory role, it would lead them to a reduced satisfaction at job. Therefore, H6 is rejected. This may be as a result of poor mentoring relationship that employees encounter in their working life. [Table-C1] Model Summary Model R R Square Adjusted Square R Std. Error of the Estimate 1.911 a.830.807.488 a. Predictors: (Constant), Supervisory Role, Salary Benefits, Recruitment Selection, Reward, Training Development, Job Security [Table-C2] ANOVA a Model Sum of Squares df Mean Square F Sig. 1 Regression 50.244 6 8.374 35.108.000 b 297
Residual 10.256 43.239 Total 60.500 49 a. Dependent Variable: Job Satisfaction b. Predictors: (Constant), Supervisory Role, Salary Benefits, Recruitment Selection, Reward, Training Development, Job Security [Table-D] Coefficients a Unstardized Coefficients Stardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant) -14.878 1.323-11.248.000 Recruitment Selection Training Development.500.154.273 3.237.002.865.171.472 5.051.000 Salary Benefits 2.045.283.852 7.224.000 Job Security -.385.318 -.171-1.211.233 Reward 1.199.146.654 8.193.000 Supervisory Role -.032.146 -.023 -.219.828 a. Dependent Variable: Job Satisfaction In a quest for further analysis interpretation, all of the HRM practices were placed in a multiple linear regression test in SPSS to explore their level of prediction with job satisfaction. Table-C1 Table-C2 reveals that predictor variables namely recruitment & selection, training & development, salary & benefits, job security, reward supervisory 298
role were found to be significant joint predictors of employee s job satisfaction [F(6,43) = 35.108; R2 = 0.83; P<.01]. Which means 83% of the variability of employees job satisfaction in selected banks is accounted for by the variables in the model. Therefore, it can be agreed that HRM practices are essential tools to enhance employee s job satisfaction. Table-D shows that recruitment & selection (β = 0.500, t = 3.237, P<0.01), training & development (β = 0.865, t = 5.051, P<0.01), salary & benefits (β = 2.045, t = 7.224, P<0.01) reward (β = 1.199, t = 8.193, P<0.01) are significant positively related with job satisfaction. However, job security (β = -0.385, t = -1.211, P>0.01) supervisory role (β = -0.032, t = -0.219, P>0.01) were found to be insignificant negatively related with job satisfaction. 9. Conclusion Recommendation In line with most of the previous research on job satisfaction, this research also finds the existence of significant relationship between employees job satisfaction HRM practices. The study of this research suggests that among six practices of HRM; recruitment & selection, training & development, salary & benefits, reward were significant indicators that affect employees job satisfaction of the mentioned banks. However, job security supervisory role did not demonstrate enough effect on employees job satisfaction. Therefore, it is recommended that management should allocate substantial fund to invest on practices associated with employees job security supervisory role, overcome any discrepancy that are imparted on employees job satisfaction. References Ahmad, S., & Schroeder, R. (2002). The Importance Of Recruitment And Selection Process For Sustainability Of Total Quality Management. Int J Qual & Reliability Mgmt, 19(5), 540-550. doi:10.1108/02656710210427511 Asta, S., & Zivile, S. (2011). Human Resource Management Practices Linkage With Organizational Commitment And Job Satisfaction. Economic And Management Review, 16, 921-927. Bogdanova, A., Enfors, H., & Naumovska, S. (2008). Work Environmental Stressors The link between employees wellbeing performance (Ph.D). Jönköping University. Delaney, J., & Huselidh, M. (1996). The Impact of Human Resource Management Practices on perceptions of organizational performance. Academy Of Management Journal, 39(4), 949-969. doi:10.2307/256718 Gürbüz, S. (2009). The effect of high performance HR practices on employees job satisfaction. Istanbul University Journal Of The School Of Business Administration, 38, 110-123. Iqbal, H., Malik, M., & Ghafoor, M. (2013). Impact of HR Practices on Job Satisfaction: An Empirical Evidence from corporate sector of Punjab- Pakistan. Interdisciplinary Journal Of Contemporary Research In Business, 5(2), 442-454. 299
Javed, M., Rafiq, M., Ahmed, M., & Khan, M. (2012). Impact of HR Practices on Employee Job Satisfaction in Public Sector Organizations of Pakistan. Interdisciplinary Journal Of Contemporary Research In Business, 4(1), 348-363. Jeet, V. (2014). A Study of HRM Practices its Impact on Employees job Satisfaction in Private Sector Banks: A Case Study of HDFC Bank. International Journal Of Advance Research In Computer Science And Management Studies, 2(1), 62-68. K.O, O., M.A, A., & Mufutau, O. (2014). Effect of Human Resource Management Practices on Job Satisfaction: An Empirical Investigation of Nigeria Banks. IJARBSS, 4(8). doi:10.6007/ijarbss/v4-i8/1093 Katou, A. (2008). Measuring the impact of HRM on organizational performance. Journal Of Industrial Engineering And Management, 1(2). doi:10.3926/jiem.2008.v1n2.p119-142 Majumder, T. (2012). Human Resource Management Practices Employees Satisfaction Towards Private Banking Sector in Bangladesh. International Review Of Management And Marketing, 2(1), 52-58. Masoodul, H., Saad, H., Muhammad, F., & Ashar, I. (2013). Impact of HR Practices on Employee Satisfaction Employee Loyalty: An Empirical Study of Government Owned Public Sector Banks of Pakistan. Middle-East Journal Of Scientific Research, 16(1), 01-08. Meyer, J., & Allen, N. (1997). A Three-Component Conceptualization Of Organizational Commitment. Human Resource Management Review, 1(1), 61-89. doi:10.1016/1053-4822(91)90011-z Price, A. (2004). Human resource management in a business context. Australia: United Kingdom. Robbins, S., & Judge, T. (2013). Organizational behavior (15th ed., pp. 70-86). Upper Saddle River, N.J.: Prentice Hall. Shrivastava, G., & Gupta, P. (2015). Hr Practices: A Comparative Study Of Public And Private Sector Banks In Indore. Altius Shodh Journal Of Management & Commerce, 1(2), 318-323. Syed, N., & Yah, L. (2012). Impact of High Performance Human Resource Management Practices on Employee Job Satisfaction: Empirical Analysis. Interdisciplinary Journal Of Contemporary Research In Business, 4(2), 318-342. 300