CHAPTER ONE

INTRODUCTION

1.1  Background of the Study

Attainment of a high-level performance through productivity and efficiency has always been an organizational goal of high priority. In order to do that, highly satisfied work force is an absolutely necessity for achieving a high level of performance advancement of an organization. Satisfied worker leads to extend more effort to job performance, then works harder and better. Job satisfaction can be defined as psychological state of how an individual feels towards work, in other words, it is people’s feelings and attitudes about variety of intrinsic and extrinsic elements towards jobs and the organizations they perform their jobs in. The elements of job satisfaction are related to pay, promotion, benefits, work environment or nature, supervision, and relationship with colleagues, Mosadeghard (2003). Employees’ satisfaction is considered as all-around module of an organization’s human resource strategies.

According to Simatwa (2011) Job satisfaction means a function which is positively related to the degree to which one’s personal needs are fulfilled in the job situation. Kuria (2011) argues that employees are the most satisfied and highly productive when their job offers them security from economic strain, recognition of their effort clean policy of grievances, opportunity to contribute ideas and suggestions, participation in decision making and managing the affairs, clean definitions of duties and responsibilities and opportunities for promotion, fringe benefits, sound payment structure, incentive plans and profit sharing activities, health and safety measures, social security, compensation, communication, communication system and finally, atmosphere of mutual trust respect.

Job satisfaction means pleasurable emotional state of feeling that results from performance of work, Simatwa (2011). It commences with the recruiting of right people and continues with practicing programs to keep them engaged and committed to the organization, Freyermuth (2004). Sutherland, (2004) contends that companies with high quality human capital perform better in marketplace, and deliver higher and more consistent returns to shareholders, than companies with mediocre workers. Sustainable competitive advantage requires satisfaction of employees for retention to the knowledge base of an organization. This knowledge is often tacit and hard to transmit between employees. Competitive companies worldwide rely on their employees to provide innovative, advantageous and original solutions to problems the company may have. Employees are deemed to be part of the intangible assets of an organization. They are a precious commodity that forms a significant part of an organizations value.

Employee satisfaction is becoming more challenging for companies including those in the telecommunication industry due to a number of factors such as availability of the right talent in some fields, manager-employee relations, competition, differences in the level of employer employee expectations, the high cost associated with hiring new talents, among others. Employers’ need for strategic effort directed at satisfying current employees is now urgent than ever to improve retention rates and decrease the associated costs of high turnover. Voluntary turnover is a huge problem for many organizations, Mitchell 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 drive the company 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 37 continuously. Young asserts that one answer to this issue is to believe that you can purchase knowledge to replace what you are losing. McCrea (2001) suggests that employees today change jobs frequently and do not have the company loyalty that existed 30 years ago when your valued employees were hired. The article, “The battle for brainpower” (2006), also states that loyalty to employers is fading therefore companies need to raise productivity by managing talent better. The hunt for talent has gone global as the globalization creates demands and opportunities for most employees.

Employees 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). Employee satisfaction would also improve investor’s confidence, as they are concerned with organization’s capacity to perform in such ways that would 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.

In the Cameroon context, MFIs in Cameroon face numerous operational challenges, including high staff turnover, inadequate training, limited financial resources, and regulatory constraints. One critical internal factor that influences the overall effectiveness of these institutions is the level of job satisfaction among their employees. Job satisfaction, which encompasses aspects such as compensation, working conditions, management practices, and opportunities for growth, has been widely recognized as a key determinant of employee motivation and performance. In Cameroon, where economic instability, inflation, and unemployment continue to shape the labour market, understanding the dynamics between job satisfaction and employee performance within MFIs is especially relevant. Employees in this sector are not only expected to meet financial targets but also to uphold social missions, often under challenging circumstances. Employees often face high workloads, limited career mobility, factors that can lead to dissatisfaction, burnout, and high staff turnover (Nguene,2016). This dual expectation can impact their job satisfaction and, consequently, their productivity and commitment to organizational goals.

This study aims to explore the relationship between job satisfaction and employee performance in selected microfinance institutions in Cameroon. By examining how various aspects of job satisfaction influence employee outcomes, the research seeks to provide actionable insights for managers and policymakers to improve workforce engagement and institutional performance within the sector.

1.2 Statement of the Problem

The productivity of employee in the microfinance sector has dropped steadily (MIX, 2022). Job satisfaction, is a very important aspect in an organization especially to the employees of the organization. Due to a constant observation by the researcher in MUFID-WUM, he discovered that there was lack of commitment among the employees of the organization to their job. The researcher was more concern to know why the employees were not committed to their job and he decided to distribute questionnaires to employees of the organization. Regarding the different responses given by the responders, he discovered from the observation that the researcher was inspired to write on the effect of job satisfaction and employees performance in MUFID-WUM. To investigate and know the relationship between employees and job satisfaction. To know how employee’s satisfaction can lead to performance.

1.3  Research Questions

1.3.1Main Research Question

What is the effect of job satisfaction on employee performance in Mutual Finance for Development ltd?

1.3.2Specific Research Question

1. How does the work environment influence employee performance in Mutual Finance for Development Ltd.?
2. What is the effect of compensation and benefits on employee performance in Mutual Finance for Development Ltd.?

• To what extent do career advancement opportunities affect employee performance in Mutual Finance for Development Ltd.?

1.4 Objective of the Study

1.4.1Main Research Objective

To examine the relationship between job satisfaction and employee’s performance Mutual Finance for Development Ltd

1.4.2 Specific research Objective

1. To investigate how work environment affects employee’s performance in Mutual Finance for Development Ltd.
2. To examine how compensation and benefits influence employees’ performance in Mutual Finance for Development Ltd
3. To examine how career advancement opportunities affect employees’ performance in Mutual Finance for Development Ltd.