CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Studies have shown that every organization tries to achieve their objectives. In this connection, they must concentrate in many aspects. As human resource of an organization is considered as an important resource, organizations wish to keep well trained and effective work force. Employees, who satisfy with their job, may exert high effort to organization wish to satisfy their employees for getting effective work done. To make the best use of people as a valuable resource of the organization attention must be given to the relationship between staff and the nature and content of their jobs. The organization and the design of jobs can have a significant effect on staff. Attention needs to be given to the quality of working life. The manager needs to understand how best to make work more satisfying for staff and to overcome obstacles to effective performance. Nowadays competition is very high. Therefore, every organization should compete with other organizations. In this connection to achieve competitive advantage the organization should retain work for, organization expects that satisfying employees are more performing. Therefore, there is a need for the organization to satisfy their employees to achieve their objectives. For the employee’s point of view, job satisfaction leads to several benefits such as, reducing moral stress, create new thinking and innovation which lead them to high level, fresh mind good relationship, with co-workers, supervisor and employees.

Job satisfaction can be defined as psychological state of how individual feels toward work. In other words, is it people’s feelings and attitude about variety of intrinsic and extrinsic elements towards jobs and the organizations they performance their jobs in. The elements of job satisfaction are related to pay, promotion, benefits, work nature, supervision, and relationship with colleague (Mosadeghard, 2003). Employees’ satisfaction is considering as all-around module of and organization’s human resource strategy. According to Simatwa (2011) job satisfaction means a function which is positively related to the degree of which one’s personal needs are fulfilled in the job situation. Kuria ( 2011) argues that employees are most satisfied and highly productive when their job offer them security from economic strain, recognition of their effort clear policy of grievances, opportunity to contribute ideas and suggestion, participation in decision making and managing the affair, clear definitions of duties and responsibilities and opportunity for promotion, fringe benefits, sound payments structure, incentive plans and profit sharing activities, health and safety measures, social security, compensation, communication, communication system and finally, atmosphere of mutual trust and respect. Job satisfaction means pleasurable emotional state of feeling that results from performance of work (Simatwa, 2011).

It commences with recruitment of right people and continue with practicing programs to keep them engaged and committed to the organization (Freyarmush, 2004). Sutherland, (2004) contends that companies with high quality human capital perform better in market place and deliver higher and more consistent return to shareholders than companies with madiocra workers. Sustainable competitive advantage requires satisfaction of employee for retention to the knowledge base of an organization. This knowledge is often tacit and hard to transmit within employees. Competitive companies worldwide relied on their employees to provide innovative, advantageous and original solution to problem the companies may have. Employees are to be part of the intangible asset of an organization. They are precious commodity that form a significant part of an organization’s value.

Employees job satisfaction is supremely important in an organization because is it what productivity depend on. If employees are satisfied they would produce superior quality performance in optimal time and lead to growing profit. Satisfied employees are also more likely to be creative and innovative and come up with breakthrough that allows a company to grow and change positively with time and changing market conditions. Employee satisfaction is becoming more challenging for company including those in the micro finance institutions due to number of factors such as the availability of the right talents in some fields, managers-employee relations, competition, differences in the level of employer-employee expectation, high cost associated with hiring new talents, amongst others. Employers’ need for strategic effort directed at satisfying current employees is now urgent than ever to improve retention rate and decreasing associated cost of high turnover. Voluntary turnover is huge problem for much organization (Mitch et al., 2001).

The labour market today is growing and changing fast. It is the responsibility of the leader in the organization to adapt to these changes to be able to make the organization profitable. To be able to do this, it is crucial to satisfy the key employees in the organization since they are the ones that drives the companies forward. According to Young (2006), companies are faced with people leaving to join other companies. The average worker is changing jobs ten times between ages of 18 and 35 continuously. Young (2006) asserts that one answer to this issue is to believe that you can purchase knowledge to replace what you are losing. McCree (2001) suggest that employees today change jobs frequently and do not have companies’ loyalty that existed thirty years ago, when valued employees were hired. The article, ‘The battle for brainpower’ (2006), also states that loyalty to employers is fading therefore companies needs to raise productivity by managing talents better. The hunt for talent has gone global as globalization creates demand and opportunities for most employees.

Employee in an organization have always been key assets as their departure could have significant effect on the implementation of the organization’s business plans and may eventually cause a parallel decline in productivity. As such, employee satisfaction is important in the long-term growth and success of a company. Employee satisfaction would ensure customer satisfaction and effective succession planning (Mello, 2007). Employees satisfaction would also improve investor confidence, as they are concerned with organization capacity to performance in such way that will positively influence the value of their investment in the company, hence there is no question that uncontrolled employee turnover could damage the stability of the company.

Talent and employees job satisfaction are closely related, in that happy brain led to creative brains. Job satisfaction and employee’s happiness should be a big aspiration in employee management due to its impact and productivity, creativity and loyalty of employees. Talented employees want a clear vision of where the organization is going and opportunity to personality grows and developed.

Talent is the naturally above average ability to perform a task. This individual has a natural inclination to perform the task they are talented better than other. The talent is always a skill but a skill isn’t a talent. A skill is the ability to do something well while talent is a natural aptitude. Employees want to feel that their talent and skill enables them to develop in a certain organization through opportunities for growth. Absence of this leads to dissatisfaction and poor performance. This a current case at UNIC PLC Bamenda.

For decades, job satisfaction has been one of the most extensively researched concepts in work and organization psychology (Arnold et al 1998). Job satisfaction is believed to reflect and individual’s affective or cognitive assessment of his or her working conditions and job attributes (Weiss and Croanzano 1996); it has been traditionally used to confirm the effectiveness of job redesign and motivation conditions at work. Since the 1980s, however, an increased number of studies indicated that job satisfaction is influenced by personality disposition (Bouchard 1989, Staw and Ross 1985). This provoked a new approached to job satisfaction, which involved particularly the pursuit of two questions: firstly, to what extent is job satisfaction determined by personality? A meta-analysis of stability of job satisfaction concluded that up to 35% of the variance in job satisfaction might reflect stable. Unchangeable trait in contrast to changeable environment condition (Dormann and Zapf 2001). The second question relate to the type of personality variable that could be the building blocks of a trait-based part of job satisfaction. The research primarily focused on affective trait such as negative affectivity and positive affectivity (Brief and Roberson 1989). Negative and positive affectivity are believed to underlie job satisfaction as they decrease the threshold to experience negative and positive emotions, respectively; and in fact, they do explain considerable variance in job satisfaction (Thoresen, Barsk and Chermont 2003).

A recent deposition approach to job satisfaction goes beyond affectivity; the model of core self-evaluation (Locke and Kluger 1998). The industrial and business sectors of various countries specially developing counties including India (where the per capital income is very low) are facing the problem of job dissatisfaction among employees and high rate of turn over. Job satisfaction is a feeling or state of mind regarding the nature of their work. Job satisfaction can be influenced by a variety of factors as supervision, organization policies and administration, salary and quality of life. Employers have a need to keep employees from leaving and going to work for other organizations. The best way of retaining employees is to provide the job satisfaction and opportunities to build their careers. ‘The good hope is hard to find, is even truer these than ever before because the job market is becoming increasingly tight’’. (Eskildesen and Hammer 2008).

One of the biggest preludes to the study of job satisfaction was the Hawthorne studies, the original purpose of the Hawthorne studies was to examine how different aspects of the work environment, such as lighting, the timing of breaks, and the length of workdays, had on worker productivity. These studies from (1923-1933), primarily credited to Elton Mayo, who sought to find the effects of the various conditions (most notably illumination) on worker’s productivity. These studies lunately show that novel changes in work condition temporarily increase productivity which is called the (the Hawthorne effect), were by Lands Berger define as it as a short-terms improvement in performance caused by observing workers. It was later found that the increase results, not from the new conditions but from the knowledge of being observed. This finding provided strong evidence that people work from purposes other than pay, which paved the way for researchers to investigate other factors in job satisfaction.

1.2 Statement of the Problem

Employee satisfaction is increasing in importance, as the competition for talent is high and still growing. It is not hard for a competitor to compete with individual elements such as salaries and benefits. Boyeins (2007) focuses on the reason of involuntary turnover, voluntary turnover, and promotion for employees to leave a company. Furthermore, he says that the two types of turnover are the most devastating for organization. The effect of voluntary turnover includes loss of performance, knowledge, expertise, relationship and loss of time and resource that it took to training the employees. This lead to feeling of insecurity and affect the performance of the employees who are left because of the constant disruption of services and too much change which thus affect the general performance of the company.

Employee turnover rates have, within the last decade become a wide epidemic Beam J (2014). Employees in micro finance institutions no longer feel the sense of company loyalty that once existed. Increasing number of corporate mergers and acquisition have left employee feeling detached from the company that they serve and by concerns of overall job security. This has led the employees to focus more on job hunting rather than performance thereby hurting the general performance of the company. With the problem of increasing employee turnover in the micro finance institutions, one wonders if the growth and expansion of micro finance institution are going to be realized. It therefore calls for a greater action to be taken to find out how to retain the organization’s valuable employees and the factors likely to affect them remain in the industries to help achieve company objectives. This research study seeks to investigate the factors that may influence employee satisfaction and how these factors affects retention of employees of micro finance like the case of UNICs plc. Therefore, it is up to the managers of micro finance institutions to find a way to increase job satisfaction, especially where the job is tough and the pay is low.

1.3 Research Questions

1.3.1 Main Research Question

Does job satisfaction affect employee performance in Micro finance institutions in Bamenda?

1.3.2 Specific Research Question

1. What is the effect of work environment on employee performance in Micro finance institutions in Bamenda?
2. How does the level fair promotion and rewards effect employee performance in Micro finance institutions in Bamenda?
3. What is the effect of recognition on employee performance in Micro finance institutions in Bamenda?
4. To what extent does training and development affect employee performance in Micro finance institutions in Bamenda?
5. Does job security affect employee performance in Micro finance institutions in Bamenda?

1.4 Objective of the Study

1.4.1 Main Objective

To determine the effects of job satisfaction on employee performance in Micro finance institutions in Bamenda.

1.4.2 Specific Objective

The specific objectives of this study are to;

1. Assess the effect of work environment on employee performance in Micro finance institutions in Bamenda.
2. Analyse how the level of fair promotion and rewards affect employee performance in Micro finance institutions in Bamenda.
3. Investigate the effect of recognition on employee performance in Micro finance institutions in Bamenda.
4. Assess the extent to which training and development affect employee performance in Micro finance institutions in Bamenda.
5. Assess how job security affects employee performance in Micro finance institutions in Bamenda.