Employee Job Satisfaction As a Predictor Of Employee Commitment: A Ghanaian Perspective

The purpose of this paper was to identify the relationship between employees’ job satisfaction in Enterprise Life Insurance Ghana Limited and the dimensions of perceived organizational commitment. A quantitative cross-sectional method was used with a sample size of 85 respondents. A standardized questionnaire was adopted. Linear regression was used to test the research hypotheses of this study. The findings of this study indicated that employee job satisfaction had a significant positive influence on the organizational commitment of Enterprise Life Insurance Ghana Limited employees. They had a high level of job satisfaction and normative commitment is the most perceived by employees.

1. Introduction

The 21st-century world of work is characterized by unprecedented levels of talent mobility as employees seek to satisfy their own individual demands, leading to growing concern among organizations about the job satisfaction and organizational commitment of employees. Employees are an important investment and their satisfaction with their job has a significant influence on the entire productivity of the organization (Tella et al., 2007). The management of people at work is an integral part of the management process. Understanding the critical importance of people in the organization is relatively on its effectiveness to the degree to which they achieve the goals of the organization.

According to Spector (2008) job satisfaction has the capacity to influence the attitude of employees towards their work and various aspects of their jobs. It is believed that job satisfaction is influenced by individual and organizational factors, which also result in some level of emotional reactions that affect organizational commitment (Mowday, Steers & Porter, 1979). The end result of job satisfaction includes but is not limited to better performance, a reduction in turnover, and counter-productive behaviors (Morrison 2008). Job satisfaction involves employees’ emotions and as such, it has a great impact or influence on the organizational well-being with regard to productivity, employee turnover, and absenteeism (Sempane, Rieger & Roodt 2002; Spector, 2008). Therefore motivated employees are important to an organization’s success and understanding and appreciating employees and what motivates them could drive them to exhibit commitment toward the organization (Schein 1996). Employees are regarded as an organization's human capital, which is considered the most important asset of an organization, employee satisfaction is therefore essential to the organization. With this in mind, leaders of organizations are concerned about the job satisfaction and organizational commitment of the employees.

Many successful organizations that have survived over the years are strongly committed to looking out for the needs of their employees because they hold the view that as they promote the satisfaction of its employee they can secure better employee commitment for long-lasting business survival. (Popoola. et al 2007). Commitment is said to be a belief, which reveals the strength of an individual’s attachment or connection to an organization. Scholars and Researchers have argued that reciprocity is a mean underlying commitment and as such employees initiate commitment to the organization when the organization has fulfilled its psychological contract. As Organisations fulfill it obligations such as pay, job security, career development, training, and safety, employers are creating a platform for employees to reciprocate, which can enhance commitment and citizenship behavior and consequently influence employees to stay with the organization.

However, research shows that if employees are not committed to the organization there would be adverse effects on organizational performance resulting from lack of job security, low trust, high stress, and uncertainty (Panayiotis, Pepper & Phillips, 2011). Golden and Veiga (2008) also maintained that low organizational commitment is concomitant to high turnover and absenteeism.

Also, job satisfaction plays a significant role in the determination of employee organizational commitment which often leads to higher levels of performance and productivity. Meyer and Allen (1997) defined commitment as a psychological state that characterizes employees’ relationship with the organization and has implications on employees’ decision to continue membership in the organization. In addition, they stated three dimensions of organizational commitment: affective, continuance, and normative commitment. According to the researchers, affective commitment describes an employee’s emotional attachment to and involvement in an organization, continuance commitment refers to the perceived cost associated with exiting an organization whereas normative commitment is the moral obligation to remain in the organization (Meyer, Stanley, Herscovitch & Topolnytsky, 2002).

In light of the fact that research on the relationship between job satisfaction and organizational commitment, particularly in the Ghanaian Insurance industry context, appears to be limited, the study reported on here set out to add empirical research to the current conceptual base relating to the relationship between these variables as manifested in the Insurance environment.

1.1 Research Hypotheses

H1: There is a positive significant relationship between job satisfaction and affective commitment

H2: There is a positive significant relationship between job satisfaction and continuance commitment

H3: There is a positive significant relationship between job satisfaction and normative commitment

2.Theoretical Background

2.1 Job Satisfaction

Job satisfaction remains a nebulous concept with many definitions. Job satisfaction has been defined and measured both as a global construct and as a concept with multiple dimensions or facets (Lund, 2003). Alternatively, job satisfaction has been referred to as one’s positive attitude toward his or her assigned tasks or job (Daft, 2010). Job satisfaction is also regarded as the extent to which an employee feels positively or negatively about his or her job (Odom et al., 1990). According to Price (1997), job satisfaction can also be defined as the degree to which employees have a positive affection or orientation towards employment by the organization. In addition, Arnett et al. (2002) stated that job satisfaction is referred to as the evaluation of employees’ affection for their job. This helps employers to note that employees will treat customers of the organizations with utmost respect and sincerity. From the above definitions of job satisfaction, it can be seen that scholars have used many terms to define it but almost all of the different definitions share the belief that job satisfaction is a work-related affective reaction (Worrell, 2004). For example, Bowen and Cattell (2008) also defined job satisfaction as the sincere feelings of an employee towards his or her job

2.1.1 Dimensions of Job Satisfaction

The concept of job satisfaction has been regarded as complex in its application (McCormick & Ilgen, 1985). Locke (1976) has presented employee job dimensions which have been proven to contribute significantly to employees’ job satisfaction. Each job dimensions represent characteristics associated with job satisfaction. The dimensions include:

1. Work Itself: Luthans (2005) has argued that employees get satisfaction from work that is much more interesting and challenges them to initiate new solutions and ideas whiles providing them with some level of status.
2. Pay: Luthans (2005) has further posited that pay such as wages and salaries does not only assist people to meet up with their basic needs but it is also an instrument in satisfying the higher level of standard of living as a result of the rising cost of living.
3. Promotions: Bull (2005) believes that employees are satisfied when the future prospects are good for personal growth, increased responsibility and increased social status.
4. Working Conditions: According to Luthans (2005), if people work in a clean, friendly environment, they will find it easier to come to work. If the opposite should happen, they will find it difficult to accomplish tasks.
5. Supervision: The quality of the relationship that exists between supervisor-subordinate has a significant, positive influence on the employee’s job satisfaction (Ting, 1997).
6. Co-Workers: Mowday and Sutton (1993) also suggested that job satisfaction is related to interactions that exist among workers.

2.2 Organizational Commitment

The concept of organizational commitment's major concern in research is the lack of agreement in construct definition. According to Mathieu and Zajac (1990), organizational commitment refers to employee’s attachment, identification, and involvement in an organization. Moreover, organizational commitment is strongly influenced by the leadership, culture, norms, and values of an organization (Sagie, 1993). In other words, organizational commitment is described as loyalty to a social unit (Price, 1997). In reference to that, Lee et al. (1999) has viewed organizational commitment as employees' loyalty to an organization and enlistment of employees in the development of his or her goals or purposes.

According to McNeese-Smith (1995) and Reilly and Orsak (1991), organizational commitment faces many consequences such as consistent attendance, high performance, increase retention, and increased productivity. Where organizational commitment is achieved, eventually it will lead to increase job satisfaction, increase job performance, lower counterproductive behaviors, and lower employee turnover (Jenkins & Thomlinson, 1992; Mathieu & Zajac, 1990; Schlesinger & Haskett, 1991).

Meyer and Herscovitch (2001, p. 301) propose that commitment is a force that binds an individual to a course of action of relevance to one or more targets. Additionally, Meyer and Herscovitch (2001, p. 311) argue that commitments include behavioral terms‘ that describe what actions a commitment implies. Specifically, these terms can take the form of focal and discretionary behavior. A focal behavior is one believed to be integral to the concept of commitment to a particular target, such that all three mindsets should predict this behavior. It is the behavior to which an individual is bound by his or her commitment.

Organizational commitment has been defined as a psychological state that binds an employee to an organization, thereby reducing the incidence of turnover (Allen & Meyer, 1990), and as a mindset that takes different forms and binds an individual to a course of action that is of relevance to a particular target (Meyer & Herscovitch, 2001). Although, a wide variety of definitions of organizational commitment exist yet one of the recent definitions by Levy (2003) stated that organizational commitment is defined as the strength of an employee’s identification with and involvement in the organization.

2.2.1 Dimensions of Organizational Commitment

Based on the multidimensional nature of organizational commitment, there is growing support for a three-component model proposed by Allen and Meyer (1990).

2.2.1.1 Affective Commitment

According to Rouzbahani et al., (2013), this is the situation where there is an emotional bonding among the employee as he or she identifies with the organization's culture, values, objectives, and goals. It refers to the state where individuals or employees in an organization effectively identify themselves to the goals of the organization.

To other researchers, affective commitment is defined as the employee's positive emotional attachment to the organization and a belief in its values. Allen and Meyer (1990) described the affective commitment as the desire component of organizational commitment. An employee who is affectively committed strongly identifies with the goals of the organization and desires to remain a part of the organization. In the work of PSUWC (2013) affective commitment involves staying with the organization because you want to.

2.2.1.2 Continuance Commitment

Rouzbahani et al., (2013) has argued that continuance commitment is performing a continuous activity for an organization for recognition while comparing the costs associated with leaving the organization. Continuance commitment is the need component or the gains versus losses of working in an organization. It is the perceived economic value of remaining with an organization compared with leaving it or the costs associated with leaving the organization. An individual may commit to the organization because he or she perceives a high cost of losing organizational membership (Becker 1960). Things like economic costs such as pension accruals and social costs like friendship ties with co-workers would be costs of losing organizational membership.

2.2.1.3 Normative Commitment

The individual commits to and remains with an organization because of feelings of obligation for moral or ethical reasons. These feelings may derive from a strain on an individual before and after joining an organization. An organization, for example, may have invested resources in training an employee who then feels a 'moral' obligation to put forth effort on the job and stay with the organization to 'repay the debt.' The employee, therefore, stays with the organization because he or she ought to. Normative commitment further describes the feeling that people express with the need to stay in the organization (Rouzbahaniet al., 2013). The individual in the organization feels the social and moral pressures to remain with the organization (Sutherland, 2010).

Meyer and Allen (1991) reiterated that employees with normative commitment will remain with a particular organization on the conviction that it is the right and moral thing to do for the organization.

3. Empirical Review

According to Aamodt (2007), when employees are satisfied they tend to be committed to an organization, and consequently, they are more likely to attend work, stay with an organization, arrive at work on time, perform well and engage in behaviors helpful to the organization. Thus, there is a strong relationship between job satisfaction and organizational commitment (Adeyinka, Ayeni & Phopoola, 2007).

Al-Hussami (2008) conducted research on the topic “A study of nurses' job satisfaction: The relationship to organizational commitment, perceived organizational support, transactional leadership, transformational leadership, and level of education” in the South-Eastern United States. He found that there was a significant relationship between job satisfaction and organizational commitment. Also, he found that nurses' strongest attitudes towards organizational commitment and job satisfaction were their feelings of strong loyalty to their organization and satisfaction with the job itself. Harrison, Newman, and Roth (2006) and Moynihan and Pandey (2007) combined job satisfaction and organizational commitment to examine work motivation. They found high relationships between job satisfaction and organizational commitment in US public and private organizations. In Indonesia, Eliyana, Yusuf, and Prabowo (2012) found that job satisfaction factors (ability utilization, compensation, co-workers relationships, working condition, recognition, and achievement) simultaneously have a significant relationship with organizational commitment among production employees of PT Jaya Readymix Concrete.

Furthermore, Daneshfard and Ekvaniyan (2012) studied the comparison between job satisfaction and organizational commitment in employees, managers, and members of the delegation in Islamic Azad University (IAU) of Kogiluyeh and Boyer Ahmad province. They found that the relationship between employee job satisfaction and organizational commitment is positive and significant. Also, in Pakistan, Iqbal (2010) investigated the impact of job satisfaction and job control on organizational commitment in air traffic controllers of the Civil Aviation Authority (CAA). The study revealed that there was a positive impact of job satisfaction on organizational commitment. In the same country, Pakistan, Anis, Rehman, Ur-Rehman, Khan, and Humayoun, (2011) investigated the relationships between retention of employees, employee job satisfaction, perceived supervisory support, and compensation by considering organizational commitment as mediating variable in the pharmaceutical industry. They found there was a positive relationship between compensation and organizational commitment.

According to Eslami and Gharakhani (2012), managers need to actively improve job satisfaction in order for employees to achieve a higher level of organizational commitment. They examined the role of job satisfaction in organizational commitments. The findings indicated that all three considered factors of job satisfaction (Promotions‚ Personal relationships‚ and Favorable conditions of work) have positive and significant effects on organizational commitments. Moreover, Mehdi, Zahra, and Mahshid (2013) investigated the relationship between job satisfaction and organizational commitment among hospitals nurses in Kazeroon City, Iran. The researchers found that job satisfaction had a significant, positive relationship with affective, continuance, and normative commitment. Similarly, Mohamed, Kader, and Anisa (2012) found a significant and positive relationship between job satisfaction and each of the dimensions of organizational commitment (affective, continuance, and normative) when they investigated the relationship between job satisfaction, organizational trust, and organizational citizenship behavior from two private banking organizations in Tiruchirappalli District, India.

Despite the numerous studies with found significant relationships, however, some studies have found no significant relationship between job satisfaction and organizational commitment. For instance, Ismail (2012) conducted research to identify the relationship between organizational commitment and job satisfaction among employees at higher learning education institutions in Kelantan. The findings revealed that job satisfaction did not significantly relate to all the dimensions of commitment; affective, continuance, and normative commitment. He described the cause of the insignificant relationship to the context of the study and argued that the context of the study is very crucial in determining the relationship between job satisfaction and organizational commitment.

3.1. Conceptual framework

Figure 1 below was captured out of the review of existing literature, the theoretical foundation of this study, research objectives, and hypotheses. Figure 1 shows that job satisfaction will influence organizational dimensions of affective commitment, continuance commitment, and normative commitment.

 

4. Methodology

In this study a cross-sectional survey and a quantitative method was used to collect data from respondents to achieve the purpose of the study. A cross-sectional survey is described as snapshot of a study population at a particular point in time (Cohen, Manion & Morrison, 2005). According to Aliaga and Gunderson (2000) the quantitative method of research usually deals with with explanations given to a phenomenon by gathering data that are numeric for mathematical based analysis.

The population for this study is drawn from employee of Enterprise Life Insurance Ghana Limited. The sample of this study consisted of 85 employees. Questionnaire was used as the instrument for gathering data for the study. It was basically closed-ended structure type. A 7-item scale of job satisfaction which was developed by Taylor and Bowers (1974) was used to measure job satisfaction. A five point Likert-scale ranging from 1= “completely unsatisfied”, 2= “unsatisfied”, 3= “neutral”, 4= “satisfied”, and 5= “completely satisfied” was used. An example of the items is “All in all, how satisfied are you with your supervisor”. An 18-item scale of organisational commitment questionnaire (OCQ) developed by Meyer and Allen (1997) was used to measure affective, continuance and normative commitment. The rating scale was ranging from 1= “strongly disagree” 2= “disagree”, 3= “neutral”, 4= “agree”, and 5= “strongly agree”. A representative item is “My manager helps me to develop strengths”.

All data analysis, and all computations were done by employing the use of Statistical Package for Social Science (SPSS). The methods of analysing the data for the purpose of achieving the study objective was done through the use of descriptive statistics and regression analysis.

5. Findings and Discussion

5.1. Descriptive Statistics

Table 1 below clearly shows the descriptive statistics of the variables in this study revealing the mean, standard deviation, kurtosis and skewness score of the variables. From Table 1 the mean result of those that emphasize that they are affective committed to the organization was 3.21 with a standard deviation of 1.14. This result shows that on the average the respondents agreed that they are affective committed to the organization.

Also, in respect to continuance commitment the mean result was 3.13 while the standard deviation result was 1.00. It shows that on the average the respondents agreed to the fact that they are committed to the organization and ready to stay with the organization as long as they can.

Again, in respect to normative commitment most of the respondents supported that they are committed representing a mean result of 3.70 and a standard deviation of 0.92.

Also, the result shows that all in all employees are highly satisfied with the work itself, pay, promotions, working conditions, co-workers and supervision representing a means score of 3.21 with a standard deviation of 1.06.

It can therefore be concluded that in respective to commitment of employees the most perceived one is normative commitment. This is because it had a higher means score with a least mean score of 3.70 and 0.92 respectively as compared to affective and continuance commitment.

Lastly the kurtosis and the skewness from table 4.6 clearly show that the data is normal.

Table 1: Descriptive Statistics

Variable(s)	Mean	SD	kurtosis	Skewness
Affective Commitment	3.21	1.14	-0.94	-0.35
Continuance Commitment	3.13	1.00	-0.83	0.37
Normative Commitment	3.70	0.92	1.15	-0.97
Job Satisfaction	3.21	1.06	-0.54	-0.50

Source: Field data (2020)

 

5.2. Testing of Hypotheses

In testing for the hypotheses set for the study the researcher used a linear regression to determine the relationship that exist between the job satisfaction and the dimensions of organizational commitment (affective, continuance and normative commitment).

Table 2: Relationship between Job Satisfaction and Affective Commitment

	Coefficients	Standard Error	t Stat	P-value
Intercept	0.77	0.37	2.07	0.04
Job Satisfaction	0.76	0.11	6.86	0.00

Dependent Variable: Affective Commitment; R = .70; R Square = .49; F value = 47.03

From table 2, the R value as .70 signifies a significant positive relationship between job satisfaction and affective commitment (P<.05). But this relationship tends out to be a strong one. The R Square value of .49 indicated that 49% of the variability of employee affective commitment is related to job satisfaction of employees’ while the remaining 51% is the unexplained variability.

From table 2 the F value helps in determining the fitness of the model. There was a high F value of 47.03, with significant level of 0.00 is achieved which is significant. The model is therefore fit.

Table 2 shows the regression outcome, which shows the dependence of affective commitment (dependent variable) on job satisfaction (independent variable). It is evident from the table that there is a significantly positive relationship between job satisfaction and affective commitment, since the significant level was less than (0.05). Also, Table 2 further shows a regression coefficient (β) value of .76 for job satisfaction. The sign of the regression coefficients value was positive and therefore is regarded to have a positive effect. It therefore means that as job satisfaction of employees increases, the level of employees’ affective commitment will as well increase. It can further be explain that the regression coefficient (β) value of .76 means that a unit change in job satisfaction will lead to 76% change in affective commitment in a positive direction. Since the coefficient was in the same direction as hypothesized, the hypothesis that states ‘There is a significant positive relationship between job satisfaction and affective commitment’ was supported.

Table 3: Relationship between Job Satisfaction and Continuance Commitment

	Coefficients	Standard Error	t Stat	P-value
Intercept	2.05	0.43	4.74	0.00
Job Satisfaction	0.34	0.13	2.61	0.01

Dependent Variable: Continuance Commitment; R = .35; R Square = .12; F value = 6.82

From table 3, the R value as .35 signifies a significant positive relationship between job satisfaction and continuance commitment (P<.05). But this relationship tends out to be a weak one. The R Square value of .12 indicated that 12% of the variability of employee continuance commitment is related to job satisfaction of employees’ while the remaining 78% is the unexplained variability.

From table 3 the F value helps in determining the fitness of the model. There was a low F value of 6.82, with significant level of 0.01 is achieved which is significant. The model is therefore fit.

Table 3 shows the regression outcome, which shows the dependence of continuance commitment (dependent variable) on job satisfaction (independent variable). It is evident from the table that there is a significantly positive relationship between job satisfaction and continuance commitment, since the significant level was less than (0.05). Table 3 shows a regression coefficient (β) value of .34 for job satisfaction. The sign of the regression coefficients value is positive and therefore can be said to have a positive effect. It therefore means that as job satisfaction of employees increases the level of employees’ continuance commitment will inreturn increase. The regression coefficient (β) value of .34 which was obtained can also imply that a unit change in job satisfaction will lead to 34% change in continuance commitment in a positive direction. Since the beta coefficient was in the same direction as hypothesized, the hypothesis that states that ‘There is a significant positive relationship between job satisfaction and continuance commitment’ is supported.

Table 4: Relationship between Job Satisfaction and Normative Commitment

	Coefficients	Standard Error	t Stat	P-value
Intercept	2.76	0.40	6.91	0.00
Job Satisfaction	0.29	0.12	2.48	0.02

Dependent Variable: Normative Commitment; R = .34; R Square = .11; F value = 6.16

From table 4.4, the R value as .34 signifies a significant positive relationship between job satisfaction and normative commitment (P<.05). But this relationship tends out to be a weak one. The R Square value of .11 indicated that 11% of the variability of employee normative commitment is related to job satisfaction of employees’ while the remaining 79% is the unexplained variability.

From table 4.4 the F value helps in determining the fitness of the model. There was a low F value of 6.16, with significant level of 0.02 is achieved which is significant. The model is therefore fit.

Table 4.4 shows the regression outcome, which shows the dependence of normative commitment (dependent variable) on job satisfaction (independent variable). It is evident from the table that there is a significantly positive relationship between job satisfaction and affective commitment, since the significant level was less than (0.05). Table 4 shows that the regression coefficient (β) value of .29 for job satisfaction. The sign of the regression coefficients value was positive and therefore it can be acknowledged as having a positive effect. It means that as job satisfaction of employees increases the level of employees’ normative commitment will as well increase. The regression coefficient (β) value of .29 therefore means that a unit change in job satisfaction will lead to 29% change in normative commitment in a positive direction. Since the beta coefficient was in the same direction as hypothesized, the hypothesis that ‘There is a positive significant relationship between job satisfaction and normative commitment’ is supported.

6. Conclusion

Most research conducted on job satisfaction and organizational commitment has placed much attention on the significant positive relationship that exists between these two variables. It was found in this study that employees’ affective, continuance and normative commitment are predicted by their job satisfaction in Enterprise Life Insurance Company Limited. Hence, employees will be committed to the course and progress of the firm if they are foremost satisfied with their job. Satisfied employees have the company at heart and are prepared to assiduously work for the firm’s progress without contemplating on leaving for another firm. Similarly, satisfied employees see no reason in leaving a firm that provides them with the contentment they seek from their job. Employees therefore believe that they need to be appreciative of the firm’s endeavoring efforts in making them satisfied with their job by morally becoming committed to the firm.

The researcher is of the view that management of Insurance Companies should pay special attention to motivators such as pay, supervision, relation with co-workers, satisfaction with the job itself as well as the organization, chances of future advancement, and progress in the organization in order to improve and sustain the job satisfaction of employees which would subsequently yield committed employees for their company and the insurance industry at large.

In addition, it is therefore recommended that further studies could look at mixed method approach to give much insight about the relationship that exists between job satisfaction and organizational commitment in the insurance industry or other financial sector such as the bank or pensions.

 

AUTHOR: Aziizu Issifu, student at LIGS University, supervised by the lecturer Grigory Sergeenko.