Impact of Hrm Practices

ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 Impact of HR Practices on Employee Job Satisfaction in Public Sector Organizations of Pakistan Muhammad Javed Faculty of Administrative Sciences Air University Islamabad, Pakistan Muhammad Rafiq (Corresponding Author) Faculty of Administrative Sciences Air University Islamabad, Pakistan Islamabad, 44000, Federal, Pakistan.Maqsood Ahmed Faculty of Administrative Sciences Air University Islamabad, Pakistan Mustajab Khan MS Scholar Muhammad Ali Jinnah University Islamabad, Pakistan Abstract A lot of research has been done on the relationship of HR Practices and employee job satisfaction but the main focus and theme behind those research studies has been the developed countries. The purpose of this study is to observe the relationship between three HR Practices i. e. (Training and Development, Rewards, Recognition) and the employee job satisfaction in the public sector organizations of a developing country, Pakistan.Data has been collected from the employees of various public sector organizations and then regression and correlation have been applied to check the relationship between the dependent and independent variables. Recognition and training and development are a key source of employee job satisfaction in Public sector organizations of Pakistan but rewards do not have any significant impact upon employee job satisfaction. Key Words: Training and development; Rewards; Recognition; Job satisfaction; Pakistan Introduction A lot of researchers have found that HR Practices are positively linked with employee job satisfaction (Wright et al. 2003; Spector, 1997; Huselid 1995); Petrescu & Simmons, 2008). The aim and main focus of these studies have been developed countries. The eyes did not COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 348 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 turn towards developing countries like Pakistan in a great deal. (Aycan et al. 2000) found that so far very little research has been conducted in the field of HR Practices i. e. Training and development, Rewards and Recognition in Pakistan which shows that this particular field still has a lot of space for further research.The main theme of this particular research is to observe the relationship between HR Practices (Training and development, Rewards, Recognition) and Employee Job Satisfaction in public sector organizations of Pakistan. These HR Practices are also known as key drivers of employee performance. Training and development is one of the key elements of employee job satisfaction because it reduces the discrepancies in job tasks and enhances the job skills which in result motivates the employees and lead towards job satisfaction.Employees get extremely motivated through rewards and recognition and these two factors lead towards employee motivation and research shows that highly motivated employees are the most satisfied employees and also the high performers. This study is extremely significant as it is a big insight for the public sector organizations of Pakistan. Normally managers don’t focus upon the relationship of rewards and job satisfaction, recognition and job satisfaction or training and development and job satisfaction.So this study will enable them to make a better strategy in terms of employee job satisfaction and to focus upon those HR practices which actually are the source of job satisfaction for employees. Every individual employee wants satisfaction at job but organization is wasting its resources by focusing on wrong HR practices for employee job satisfaction. This study could be an eye opener for many organizations and may well prove to be a very productive one. Pakistan is one of those countries where people working in the public sector organizations are often not sure about the job satisfaction level.The unsatisfied employees of public sector organizations, when switch to private sector i. e. MNE's, they have been observed to be much COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 349 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 more satisfied, therefore it is very important for the managers to know which HR Practices keep them satisfied and how much important role rewards, recognition and training and development have regarding employee job satisfaction.This study can be very fruitful for HR Managers of Public sector organizations in Pakistan as they would get a very clear idea about the relationship of three important HR Practices and employee job satisfaction and as a result can have much more productive employees and a decreased turn over rate in their organizations. Literature Review HR Practices HR Practices are linked with the management of human resources, activities necessary for staffing the organization and sustaining high employee performance (Mahmood, 2004).The most common HR Practices are recruitment, selection, training and development, compensation, rewards and recognition (Yeganeh & Su, 2008). Six HR practices selective hiring, compensation policy, rewards, recognition, training and development and information sharing have been studied with relation to employee job satisfaction (Dessler, 2007). The present study examines the relationship between three HR Practices i. e training and development, rewards, recognition and employee job satisfaction. Job Satisfaction Job satisfaction means what are the feelings of different employees about the different dimensions of their jobs (Robbins, 2003).The level of satisfaction and dissatisfaction is another aspect which is related to employee job satisfaction (Spector, 1997). Job satisfaction may be the general behavior emerged due to different happenings at the work place; it may be supervisor’s behavior, relationship with peers or the work envi ronment (Janet, 1987) . Various factors such as an employee needs and desires, social relationships, job design, compensation, developmental opportunities and aspects of work-life balance are 350 COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research ijcrb. webs. com MAY 2012INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 considered to be some of the key factors of job satisfaction (Byars & Rue, 1997; Moorhead & Griffin, 1999). According to (Robbins 1999), a satisfied workforce can increase organizational productivity through less distraction caused by absenteeism or turnover, few incidences of destructive behavior, and low medical costs. Training and Development Training is focusing on fixing a specific issue (Doyle, 1997). Training often answers the question â€Å"what happens if† Development on the other hand takes a more global approach.Training is related with current performance and progress of an employee while development is r elated with the future performance and progress (Miller, 2006). Training is anything offering learning experience (Paul & Anantharaman, 2003) Training helps employees is more specific with their job and organization and as a result increases employee job satisfaction and makes them work better. H1: Training and development is significantly and positively related with employee job satisfaction. Recognition Recognition is appreciation of employee’s performance in formal or an informal way.Recognition is one of the driving force towards motivating employees, it also highlights how much an employee’s performance is appreciated in an organization for the amount of work he/she has put in (Miller & Lawson, 1999). Recognition maintains a strong bond between motivation and performance and as a result the level of motivation of employee’s stays very high almost all the time (Flynn, 1998). Recognition increases level of job satisfaction and satisfied employees are a valuab le asset for any organization (Entwistle, 1997). Recognition is often considered to be of two major types, cash and non-cash awards.Different sectors need different ways of recognition to be applied, some sectors or segments of population may like cash and prizes to be a easy and better way of motivation while others may like non-cash COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 351 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 awards because they feel that if cash is to be given as recognition than they already have salaries and other bonuses which get consumed very quickly (Holmes, 1994) . H2: Recognition is significantly and positively related with employee job satisfaction.Rewards Rewards are usually referred to as intangible returns including cash compensation and benefits. Reward system is set of mechanisms for distributing both tangible and intangible returns as part of an employment relationship (Rue & Byars, 1992). Rewards are also termed as the need of an employee because when reward will be linked with the employee’s desire it will motivate him/her to a very high level (Kalleberg, 1977). It certainly shows that what an employee wants after performing a certain task. It has been revealed in the past researches that rewards are very strongly correlated with job satisfaction.Rewards are positively linked to employee job satisfaction (Gerald & Dorothee, 2004). Their research extracted one important element that employees are more satisfied with those rewards that they actually perceive. (Clifford, 1985) argues that employee Job satisfaction may be determined through job rewards. There are a lot of differences between different authors related to the dimensions of rewards and employee job satisfaction but one thing upon which almost all agree upon is the element of rewards that are perceived by employees (Kalleberg, 1997). H3: Rewards are significantly and positively r elated to employee job satisfaction.COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 352 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Theoretical Model of the Study VOL 4, NO 1 INDEPENDENT VARIABLES DEPENDANT VARIABLE Training and Development Recognition Employee Job Satisfaction Rewards Methodology The population for this study was public sector organizations of Pakistan, (ZTBL, NDC, SME Bank ltd). 180 questionnaires were distributed to get response of employees while 140 useful responses were received back (77%). Convenient sampling had been used to gather data.The scale used for this research is highly reliable as it has been related to scales of many past researches. This questionnaire checks the impact of HR Practices (Training and development, rewards, recognition) on employee’s job satisfaction. Relationship of HR Practices and job satisfaction has been tested on a 17 items scale. All the items of scale h ave been taken from renowned past researche studies (Clifford, 1985) job satisfaction, (Rogg, Schmidt, Shull & Schmitt, 2001) training and development (beer, 1987) recognition, (Spector, 1995) rewards. COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 53 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 Job satisfaction has been measured through a 3 item scale, training and development has been measured through 6 items scale, and 4 items have measured recognition while another 4 items have measured rewards. Questionnaires were filled under our personal supervision. The statistical tests were applied upon the data through statistical software SPSS. Degree of association was measured by using Pearson coefficient. Causal relationship between HR Practices and job satisfaction was estimated by using Regression analysis.According to the data collected the respondent’s average age for 25 or below segment is 31. 4 , for 26-35 is 26. 4, for 36-45 is 30. 0 and 46 or above segment is 12. 1; 55. 7% of the respondents are male while 44. 3% are female. The detail description of demographics is given in table 1. Table: 1 Demographic profile of respondents Sr # No 1 Age Indicators Categories 25 or below 26-35 36-45 46 or above 2 Gender Male Female 3 Nature of Job Permanent Temporary Contract 4 Income level 25,000 or below 26,000-35,000 36,000-45,000 46,000 or above Frequency 44 61 17 18 78 62 68 63 09 44 37 42 17 Percentage 31. 43. 6 12. 1 12. 9 55. 7 44. 3 48. 6 45. 0 6. 40 31. 4 26. 4 30. 0 12. 1 COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 354 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Data Analysis and Results Reliability Analysis VOL 4, NO 1 Cronbach alpha is the tool used to check the reliability of any scale. According to the statistical analysis the value of cronbach alpha ranges between 0. 698-0. 847. Normally 0. 6 is the minimum acceptable range for cronbach alpha. The overall reliability of scale items is found to be 0. 92. the detailed description of the value of cronbach alpha is given in table 2. Table: 2 Cronbach Alpha of Scale Items Construct/variable Job satisfaction Training and development Recognition Rewards Number of items 3 6 4 4 Cronbach alpha 0. 698 0. 824 0. 760 0. 847 Correlation Correlation analysis has been carried out to check the extent to which two quantitative variables vary together, including the strength and direction of their relationship. The strength of the relationship refers to the extent, to which one variable predicts the other; it can be observed in table 3.Table: 3 Correlations Satisfaction Job Satisfaction Training & dev Recognition Reward Correlation Correlation Correlation Correlation 1 . 469(**) . 650(**) . 684(**) 1 . 550(**) . 615(**) 1 . 952(**) 1 Training Recognition Reward As shown in the above table, training and development, recognition and rewards all a re found to be positively correlated with dependent variable job satisfaction. The value (r= . 469) suggests that training and development is positively correlated with job satisfaction, (r= . 650) COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 355 ijcrb. webs. comMAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 shows that recognition is also positively correlated with job satisfaction and (r= . 684) shows that rewards are also positively correlated with job satisfaction. Correlation analysis showed that there is positive relationship between job satisfaction and independent variables. Table: 4 Regression Analyses Model 1 R . 710(a) R Square . 504 Adjusted R Square . 493 Std. Error of the Estimate . 26238 Table: 5 Coefficients (a) Standardized Variables Unstandardized Coefficients B (Constant) Training Recognition Reward . 25 . 266 . 088 . 443 Std. Error . 343 . 085 . 205 . 206 . 243 . 086 . 453 Coefficients Beta 2. 696 3. 14 5 . 430 2. 147 . 008 . 002 . 668 . 034 t Sig. As shown in the above table of coefficients (a), training and development is positively affecting the dependent variable job satisfaction as the beta value is (. 266). It is shown in the table that recognition also has a positive effect on the job satisfaction, represented by beta value (. 088) and rewards also have positive effect on the job satisfaction, represented by beta value (. 443).Independent variables, training and development and rewards are having a positive and significant relationship with the dependent variable but recognition is not having a significant relationship. The value of R square is . 504 which means that 50. 4% variation in dependent variable can be explained by independent variables. On the basis of above analysis, hypotheses 1 and 3 are accepted but hypothesis 2 has been rejected. Previous researches had shown the same results. COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 356 ijcrb. we bs. com MAY 2012INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Table: 6 Hypotheses Testing Hypotheses H1: Training and development is significantly and positively related with employee job satisfaction. H2: Recognition is significantly and positively related with employee job satisfaction. VOL 4, NO 1 Result Accepted Rejected H3: Rewards are significantly and positively related to employee job satisfaction Accepted Conclusion and Future Recommendations The findings of this research can be implemented in different ways in public sector organizations of Pakistan.First of all training and development has a weak correlation with employee job satisfaction which clearly indicates that training and development is not a strong driver of job satisfaction in public sector organizations of Pakistan. Therefore serious amount of consideration should be given to this aspect. Before allocating any sort of training activities to employees training need analysis should be conducted s o that managers should exactly know that which kind of training should be given to employee.If employee will feel training to be interesting and is according to the need of an employee than employees will actively participate in trainings and that training will be much more productive and source of satisfaction for employees. Employees will not only learn more but they will also exhibit the learned skills at the workplace as well which will enhance the employee performance and that will lead towards enhancement of organizational performance and then organizations will have satisfied employees.Rewards and recognition are both strongly correlated with employee job satisfaction which is an indication that how important employees perceive rewards and recognition for them in the public sector organizations of Pakistan. Rewards and recognition are both very useful and recognized tool of employee job satisfaction but both these variables act other way around if COPY RIGHT  © 2012 Institu te of Interdisciplinary Business Research 357 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 1 here is no equity. So it is very important for managers in public sector organizations to eliminate discrimination while giving rewards or recognition. Pakistan is a developing country and employees of public sector organizations love to get rewards as compared to recognition, monitory rewards are of great importance because past researches show that monitory benefits for employees of public sector organizations of developing countries have great significance towards job satisfaction and this study also supports this particular argument.This is why the analysis of data shows that rewards are extremely significant but recognition is not. Future researchers need to study the relationship of job satisfaction and other HR practices in relation with public sector organizations of Pakistan. When other HR practices will also be investigated that will provide a very clear and broader picture to managers and it will be very easy for them to decide that which factors lead towards job satisfaction and which do not in public sector organizations of Pakistan.The in-depth analysis of compensation, promotion and performance evaluation practices can be very fruitful for the managers of public sector organizations and those studies will certainly increase the profitability and level of job satisfaction of employees. COPY RIGHT  © 2012 Institute of Interdisciplinary Business Research 358 ijcrb. webs. com MAY 2012 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS References: VOL 4, NO 1 Ahmad , I. , Khalil , M. I. , (2007). 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