CHAPTER – I

INTRODUCTION
1.1 Introduction to the Study

1.2 Human Resource Management

1.3 Human Resource Management Practices

1.4 Job Satisfaction

1.5 Theories of Job Satisfaction

1.6 Factors Influencing Job Satisfaction

1.7 Consequences of Job Satisfaction

1.8 Importance of Job Satisfaction

1.9 Human Resource Management Practices and

Job Satisfaction

1.10 Conclusion

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1.1 INTRODUCTION TO THE STUDY

Organizations are now confronted with many challenges in maintaining competition

level in this business world. Now, it is difficult to remain in competition without
human resource. It is the need of hour to give importance to human resources and the
management of human resources is becoming very challenging task for organizations.
As for managing technology and capital, organization requires effective management
in the organization same it requires efficient human resource management system for
managing human resource. The human resources play an important role in gaining
competitive advantage in today’s highly competitive global business environment.
Human resource is important in every sector whether it is service or manufacturing
sector, especially the emergence of efficient human resource in banks has made a
drastic change in the economy of India. The factors such as globalization,
liberalization, growing business economies, and continuous improvement in
technology are regularly presenting new challenges and opportunities for people.

Today to sustain in such a competitive era, it is very important to retain good

employees, the employees who are well satisfied with the organization and that
contribute towards the attainment of organizational goal. Job satisfaction represents
one of the most complex areas facing today’s managers when it comes to managing
their employees. Human resource management practices play an important role
among employees for their satisfaction and this satisfaction leads to improvement in
production of the organization or the performance of the firm. People's perceptions
regarding their jobs are also changing. Employees are expecting much from their job
and fulfilling the expectation of employees is the task of management. The success of
an organization depends upon several factors such as performance of the employees,
organization productivity but the most important factor that affects the organization is
satisfied employees. Organization can easily achieve its goals if the employees of an
organization are satisfied with their jobs.

The effective utilization of human resource in any organized effort has always been
an urgent problem for an organization. Researchers and practitioners are always in a
search of universal solution that can be applied to all kinds of organizations for the
universal success. People in organization are different and belong to different places,
but they come together with their ideas, thoughts, beliefs, etc. The human behaviour

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in relation to an organization has assumed a great significance and forms the major
subject matter of various studies conducted in the field of human resources
management to provide the basis for the organizational development process and to
improve the organizational effectiveness. Organization performance and success
depends on the effective utilization of the available resources.

Bank today have realized that there is a need to change or respond to the changes
occurring in the environment whether it is human resource management practices,
technology, business dimensions or the emerging market trends. The people
component is thus becoming the key factor of the strategy; be it for survival or growth
or achieving excellence through people. People management has been the most
intriguing aspect of managing an organization all along. The organizations have
recognized its contribution in the total framework but this aspect is so dynamic that it
does not seem to reach a level of stability. The technology, the system and its
subsystem or the infrastructural resources tend to get stabilized at least for a certain
period in their evolution process, but people management issue tends to remain alive.
An organization is primarily a consequence of the fact that there is an
interdependency implied in the satisfaction of needs of individuals alongside with the
achievement of organizational objectives.

Overall the organizations are striving to achieve the goal sets, through the committed,
motivated and satisfied workers. Therefore, satisfying employees is utmost important
for banks, continuous efforts should be made by the bank for sake of the employees.

The objective behind this research is to study the human resource management
practices in public and private sector banks and impact of these practices on job
satisfaction of employees and also to compare public and private sector banks and
also to find out significance difference between public and private sector banks in
terms of human resource management practices in context of job satisfaction in
Gwalior region. The study also focuses on the best Human Resource Management
Practices in relation to Job Satisfaction, and which bank is more focusing on Human
Resource Management Practices. With the help of this we can also provide some
suggestions to enhance the human resource practices which can improve the
satisfaction level of the employees.

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1.2 HUMAN RESOURCE MANAGEMENT
1
Human resource management (HRM) refers to the policies and practices involved in
carrying out the ‘human resource’ aspects of a management position including human
resource planning, job analysis, recruitment, selection, orientation, compensation,
performance appraisal, training and development and labour relations.

Human resource management includes all the practices and policies involved in the
overall management and development of people. It considers all the aspects of human
resource which are important for an individual as well as organization. Human
resource management act as a process for the attitude of the individuals, which
develops the abilities among employees for their growth and self actualization which
helps individual to contribute towards organizational objectives. Human resource
management is one of the principle mechanism by which managers integrate the
actions of the individuals to keep their behaviour congruent with the interests of the
firm.

Human Resource is considered to be the most precious asset for organization. Human
resource management focuses on the sum-total of inbuilt capabilities and abilities,
acquired knowledge and skills represented by the work, talents and aptitudes of the
employed persons who may be the manager, executives, supervisors, and other
employees. Human resources are the source of achieving competitive advantage
because of its capability to convert other resources such as money, machine, methods
and material in to desired output such as product or service. This resource cannot be
copied by the competitor like other resources such as technology and capital because
it is always unique and make an organization stand different. It should be utilized to
the maximum possible extent, in order to accomplish the individual and
organizational goals.

1
Dessler, G. (2007). Human resource management. New Delhi: Prentice Hall of India Private Limited.
Armstrong, M. (2006). A Handbook of Human Resource Management Practice. 10th Ed. London:
Kogan Page Publishers.

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2
Armstrong defines Human Resource Management (HRM) as a strategic and coherent
approach to the management of an organization’s most valued assets - the people
working there who individually and collectively contributes to the achievement of the
objectives and goals of organization. Human Resource Management involves all
management aspects, decisions and practices that directly affects and are related to the
people, or human resources, who are working for the organization.

3
The term human resource management (HRM) has been relatively adopted in
business organizations in place of personnel management. It is generally the
management of activities which are undertaken to attract, develop, motivate, and
maintain a high performing workforce within the organization. The people who are
working in an organization are humans and they are considered as important resources
of today’s business environment. Management of people is now becoming very
important because other sources of competitive success are less powerful. As
recognized that the basis for competitive advantage has changed and it is essential to
develop a different frame of reference for considering issues of human resource
management and strategy. There are many sources through which success can be
achieved such as product and process technology, protected markets, economies of
scale, etc, but the resource which makes organization look different is only human
resource. On the same lines, understanding that human resources are vital for an
organization, it focuses on ensuring that the organization obtains and retains the
skilled, talented, committed and well motivated workforce for their organization. This
requires that management should take important measures to assess and satisfy future
employee needs and to enhance and develop the capacities of people, their
contributions in work, their potential extent and employability by providing them the
continuous development opportunities. It involves the proper recruitment and
selection procedures, investment in training and development activities which is
directly linked to the needs of the business.

HRM started in early 1800s in England during the apprenticeship and craftsmen era
and it developed further with the organizational revolution in late 1800s. In 19th

3
Bakshi, S., Mathur, N., Bhagat, G., & Kalyankar, D. (2014). HRM Practices and Its Impact On
Organizational Performance. Journal of Research in Commerce & Management, Vol. 3 (5), 245-256.

5
century Frederick W Taylor suggested a combination of organizational psychology
and scientific management of employees and workers. He proposed that the workers
and employees should be managed for the job, job efficiency, worker psychology and
effective wellbeing of employees. In the 1920s, the development of personnel
departments started with the growth of organizations, the government concerns and
interventions, the changes in technology and the rise of unions. 4The term Personnel
Management (PM) led to the start of HRM. The term PM emerged after 2nd World
War as an approach for personnel practitioners to distinguish and separate them from
other management functions and developing the personnel function into professional
managerial function. The function of PM traditionally was to hire and fire personnel’s
other than training and salary payments. Many researchers argued that the HRM term
is similar to the PM term as both are concerned to the obtaining, organizing and
motivation functions of organization’s human resources and assets. The change of
term from PM to HRM was because of evolution and changes in the management
world and the new HRM term was suitable to carry on new ideas, philosophies and
concepts of human resources. The purpose of HRM is to specify employee’s potential
and develop it in line with the needs of the organization. Finally, HRM holds the view
that the management and non-management have a common interest in the success of
the organization

Human resource management is a functional and activity area of business that

attempts to developed programmes, policies, practices and activities related to
employees to promote and encourage employees to work for organization. People join
organizations with certain motives of their life like security of job, for earning
handsome salary and better prospects in future and satisfaction from social and
psychological needs and also to fulfil the personal and family desires. It is the
responsibility of management to recognize the basic fact and provide appropriate
opportunities and environments to employees at work to satisfy their needs. The
human resource carry various sources such as talent, knowledge, attitude, skills,
enthusiasm and decision making power carry for the accomplishment of

4
Bibi, A., Lanrong, Y., Haseeb, M., & Ahmed, I .(2012). The effect of HRM Practices on Employee’s
Job Satisfaction in the Universities of Pakistan. Business Management Dynamics, 1(12) 01- 14.

6
organizational as well as individual goals. Efficient and effective practices can only
help organization to retain the talented and skill full employees at work place.

The HRM’s goal is to maximize the organization’s productivity by optimization of the

effectiveness and productivity of its employees and by the improvement of
employees’ work and treatment of them as a important asset. Human resource
management encompasses its efforts for the promotion of employee, for their
satisfaction from job, for their overall personality development and compliance with
the help of employment laws. HR managers determine HRM’s future activities and
they plan for the implementation of human resource management procedures for
helping the organization to realize their goals.

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Human resource management is inclusive and a proper systematic approach to
manage the people working in the organization. It also copes with the ways how the
environment and culture within the organization is managed. The effective and
efficient management can lead organization to achieve its goals and objective through
which the performance and productivity of organization improves. The concept of
human resource management was traditional earlier but now it has changed according
to the needs. It is now more than the traditional outsourced activities that were related
to personnel, transactional roles and administration. It is not a demarcated area but a
broader concept and according to the time, it is becoming more enriched and hence
provides the organization with an edge against its competitors. Effective use of human
resource management practices adds value by inspiring the employee through various
activities and programs that have a significant impact on the business. However, this
cannot be ignored because the fact that these are the traditional terminologies and
with the passage of time, with more enriched knowledge, these traditional expressions
are becoming less common theoretically. Sometimes, due to misperception even
industrial relations and employee are listed as synonyms, although these refer to the
employee behaviour and the relation between the people working in the organization
and the management.

5
Jahanian, A., & Nawaz, N. (2012). Human Resource Management & Productivity: A Comparative
Study among Banks in Bahawalpur Division. European Journal of Business and Management, 4(8),
253-261.

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The word human resource management is a relatively recent title for all aspects of
managing people in organization. Human resource management is directed mainly
towards managerial needs of the people in organization, which focus on proper
planning, monitoring, directing and controlling rather than on problem solving and
mediation, whereas traditional personnel management is committed to the idea that
employee’s needs should be looked after, since employees are effective and efficient
when they are fully satisfied with each and every things with the organization, thus
the human resource role is constantly evolving and it is required to move forward
from traditional human resource to administrative approach and consider human
resource management as a main contributor to organization’s success.

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Human Resource Management is an entire different perspective. Human resource
management is also a management of employees in a reliable, honest and in
professional manner as it plays a critical and important role in all sectors of economy
from corporate sector to banking sector, from political sector to education sector, from
IT sector to publishing sector and from non-profit organizations to human right
organizations. The human resource management’s goal is to maximize the
organization’s productivity by optimization of the effectiveness and productivity of its
employees and by the improvement of employees’ work. Human resource
management encompasses efforts for the promotion of employee satisfaction,
personal development and compliance with employment laws. Individual human
resource management refers to helping the employees to recognize their strengths and
weaknesses, and improve and develop strengths more and deal with their weakness,
and successfully make their contribution to the organization. HRM deals with
developing and realizing the talents of human resource, fostering organizational
development and implementing programmes and strategies for enhancing cooperation
and communication between employees and employers. Business strategies are linked
with the long term plans which concern the whole of the organization and its
resources. Business strategies tend to be formulated by senior managers within the
organization. Today major organizations are giving a high priority to people
management in their corporate objectives and plans. This human capital is the main
source of adding value to organizations products.

6
Dransfield, R. (2000). Human Resource Management.Studied in Economics and Business. Helley
Court, Jordan Hills: Heinemann Educational Publishers.
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7
Without human resource no organization, industry, business, firms cannot be staffed
and managed, because the human resource is an most important one as a means of
production. Organizations are made up of people and functions through people only.
Without people organization cannot exist. The importance of cooperative endeavour
cannot be over emphasized. The resources like money, material and machinery,
methods are collected, coordinated, directed and utilized through human related
resource. It is a matter of common knowledge that every business organization
depends for its effective execution not only on its other resources like material or
financial resources but also on the human resources employed. Human resource is
more important in service industries whose value is delivered through information
that is personal interaction with the outsiders or customer, the need of human
behaviour comes here and plays a significant role and shows the overall picture of
organization. The overwhelming importance of this factor is due to its uniqueness.
There is no evident to what people can accomplish when they are motivated to use
their potential to create new and better ideas. A manager can buy workers time,
physical presence etc but cannot buy his enthusiasm, his initiative, his loyalty and
devotion, his satisfaction from present job etc. Development of competencies by
facilitating training and career related programmmes among human resource help
organization in gaining sustained competitive that are firm specific and cannot be
copied. People are dynamic even flexible and behave differently in same situation in
quite different ways. They have great potential to grow and develop and provide the
right climate to the organization and can achieve their pre determined objective.

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Globalization has forced organization and their human resources functions to
redefine their strategies, policies and practices. It is necessary for the management to
invest considerable time and money to learn the changing scenario of the human
resource department in the 21st century. In order to survive the competition human
resource department should continuously update itself with the transformation in
human resource suitable human resource policies and practices that would lead to the
achievement of the organization as well as the individual's goals should be
formulated.

7
Bibi, A., Lanrong, Y., Haseeb, M., & Ahmed, I .(2012). The effect of HRM Practices on Employee’s
Job Satisfaction in the Universities of Pakistan. Business Management Dynamics, 1(12) 01- 14.
8
Patil, S. (2011). Impact Of Globalization On Human Resource Management– A Case Study Of Indian
Industries. Research Paper Commerce, Vol. 1(2), 1-4.
9
Emphasize on new human resource initiatives and practices focused on the better
quality needs, customer-oriented, higher productivity and stress management, team
work and leadership building for employees. The researcher has thrown light on the
emerging HR trends and discusses HR issues in various industries like financial
services, banking, IT, power, healthcare etc. It is valuable for practicing HR managers
of every organization and also for those who have a significant interest in the area of
human resource management, to understand the growing importance of these human
resources and recognize the need to build up effective HR practices, strategies and
policies to combat HR issues arising among the employees in the 21st century. There
is no doubt that part of an organization’s knowledge resides in the people who form it
who work for it. The potential of employee in terms of knowledge contribute towards
the achievement of an organizational competitive advantage. It is generally accepted
that firms can create a competitive advantage from human resources and from their
management policies and practices. 9Effective and good human resource management
will create and retain good employees who are qualified, satisfied and motivated for
good performance, and also the benefits from having adequate and qualified
employees are numerous. Some examples are higher profitability, less rotation, higher
product quality, lower costs in manufacturing and a faster acceptation and
implementation of the organizational strategy. Human resources are one of the few
organizational resources with the potential not to become obsolete and to be
transferable to a variety of techniques, products, services and markets. Human
resource management focus on the needs of shareholders and implement such policies
that make balance between management of diverse workforce and shareholders taking
account individual as well as group difference in employment, personal needs,
working style, aspiration and the provision of equal opportunities for all.

The aim behind in developing human resource strategies, policies and practices is to
ensure that organization effectively doing everything concerning the employment and
development of people and the relationship that exist between management and the
workforce. The human resource function can play a major part in the creation of an
environment that enables people to make the best use of their capabilities and to
realize their potential to the benefits of both the organization and themselves. The

9
Pablos, P., & Lytras, M. D. (2008). Competencies and Human Resource Management: Implications
for Organizational Competitive Advantage. Journal of Knowledge Management, Vol. 12, 48-56.
10
accusation that human resource management treats employees as means to end is
often made. However it could be argued that if organization exists to achieve some
ends which they obviously that can only be achieved through people. The concern of
management for commitment and performance from those people is not unnatural and
its not attributable to the concept of human resource management it existed in the
good old days of personnel management before human resource management treat
people as ends and what management provide in return.

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Human resource management is undergoing a massive transformation that will
change career paths in uncertain ways. Employees are placing greater emphasis on
business insight and outsourcing many administrative functions, which will force
human resource professionals to demonstrate new skills and compete for new, job
titles, academics, HR consultants and HR professionals.

Human resource management is today one of the leading free resources for human
resource professional in the world. A combination of a powerful social network where
thousands of business professionals interested in human resource, human capital
management and talent strategy can exchange ideas and give new insight to the
human resource management. Human resource management is designed to elevate the
profession of human resource in such strategic and business centric level. The main
objective behind the human resource management regardless of work being done is to
maximize the value added by all employees to achieve the objective of organization at
the right time and place and under the right condition.

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Human resource as asset, needs to be managed continuously in the tune with the
organization needs. Today’s most competitive organization are working to ensure
from employees that who eagerly and able to address towards competitive challenges
are developed. To sustain a competitive advantage a firm’s human resource should be
rare and cannot be imitate by others. If competitors have same talent similar to the
firm’s no advantage can be gained over competitors. Organization that manage their
human resource effectively have policies and practices that support the goals of
providing good products and services to customers creating financial returns on the

10
www.economictimes.indiatimes.com.

11
Jackson, S., Schuler, R., & Werner, S. (2011). Managing Human Resource. 11th Ed. South Western,
Lengage Learning.

11
investments of owners and shareholders, contributing to society and meeting the
needs of employees. The employees add value to resources and convert into valuable
products and services that generate profits, their skills and talents transform the
organization resources in forms of return. Employees who are most closely associated
with the activities that generate valued returns are given opportunity to add value in
their career too. They are referred as core employees and are closest to the essential
work of the organization. Core employees have different position in the organization,
they add value to an organization in a variety of ways through research and new and
innovative product development, production, problem diagnosis, services delivery and
in many others things. Core employees are helpful in improving the efficiency of
organization by reducing cost by analyzing the environmental to identify new markets
opportunities, carrying out necessary administrative tasks and facilitating coordination
among core employees. The best organization gives importance to managing human
resource effectively and focused on the current employees.

Successful organizations particularly adapt to bringing out the different kinds of

people together to achieve a common purpose. This is the main essence of human
resource management. This involves wide variety of activities, including analyzing a
company’s competitive environment and designing job so a firm’s strategy can be
successfully implemented to beat the competition. This requires identifying the right
people through recruitment and selection procedures, providing training , motivating
and appraising these people, developing competitive compensation policies to retain
them and grooming them to lead the organization in the future. Competing through
people is a major theme of human resource management in today’s day to day life.
Managers of all types have to carry out the specific activities for a company to
effectively do so. In today’s highly competitive environment in which competition is
global and innovation is continuous process requires organization to adapt and
became a key to capturing opportunities and overcome obstacles for the survival.

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Years ago the human resource personnel were often relegated to conducting
administrative tasks but that has changed now. Executives know that human resource
professionals can help them improve not only a company ‘s bottom line by

12
Snell, S., & Bohlander, G. (2012). Managing Human Resource. Cengage Learning. Business and
Economics.

12
streamlining employment costs but the top line by forecasting labor trends, designing
new ways to acquire and utilize employees, measuring their effectiveness and helping
managers enter new markets. All successful organization communicates their
objectives to every member of the organization so that everyone is pulling in the same
direction. If the organization is to gain the commitment of its employees it must also
find out about the personal development aspirations of the individuals that make up an
organization.

1.3 HUMAN RESOURCE MANAGEMENT PRACTICES

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HRM practices refer to organizational activities directed at managing the pool of
human resources and ensuring that the resources are employed towards the fulfilment
of organizational goals. These practices may differ from one organization to another
and from one country to another. Many researches on human resource management
practices have been conducted from time to time and researchers have identified
different practices by different names.

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Lado and Wilson (1994) describe human resource management practices as ‘a set of
distinct but interrelated activities, functions and processes that are directed at
attracting, developing and measurement, supportive environment and market
organization maintaining (or disposing of) a firm’s human resources’. The human
resource management practices contribute significantly to the accomplishment of a
firm’s objectives and to creating and adding value for its customers and physical
resources. If these human resource management practices are implemented properly
in the organization, the employees can be more satisfied and committed to their work
in the organization and they show their extra role for organization’s benefit. Good
human resource management practices help in attracting and retaining talent, train
people for challenging roles, develop their skills and competencies, increase
productivity & profits, satisfaction and enhance employee commitment towards the
organization.

13
Schuler, R. S., & Jackson, S. E. (1987). “Linking Competitive strategies with Human Resource
Management Practices”. Academy of Management Executive, Vol. 1(3) 207-19.
14
Lado, A., & Wilson, M. (1994). ‘Human Resource Systems and Sustained Competitive Advantage:
Competency-based Perspective’. Academy of Management Review, Vol 19, 699-727.
13
An appropriate range of human resource policies, processes and practices are
developed and implemented effectively, which will make a substantial impact on firm
performance. Every organization is continuously engaged in variety of human
resource management practices whether they are small or large organization. Human
resource activities include the formal human resource policies developed by the
company as well as the actual ways these policies are implemented in the daily
practices of supervisors and managers. In some organization the formal human
resource policies and daily practices are closely aligned. In many organization
however, the formal policies are regarded as statements of expectations and
aspirations, but they are implemented in actual daily practices. The more these
policies and practices are aligned and the more systematic companies are in creating
human resource activities to fit the organization and its environment, the more
effective the organization is likely to be. When an organization systematically aligns
all these thing and integrates all its policies and practices, it creates a systematic
human resource management system. It takes many human resource management
policies and practices working together as a system to get the best results. These
practices can only make a difference between a successful organization and
unsuccessful one.

The following are the human resource management practices which are considered for
this study

REWARD MANAGEMENT

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Reward is perceived as compensation to the employee by organization for his or her
services. It contains various forms of compensation such as comfortable office,
favorable relationship inside the organization, having decision making power, various
further growth opportunities and sense of achievement and so forth these kinds of
forms which is difficult to measure in various currencies. It is given to an individual’s
after his accomplishment of goals or projects or submission of creative ideas. It is
familiar concept using by organization which motivates and satisfied employees at
their work place.

15
Jackson, S., Schuler, R., & Werner, S. (2011). Managing Human Resource. 11th Ed. South Western,
Lengage Learning.

14
It aims at purposefully designing ways to compensate employees for their efforts
made for the organization. It encourages employees by fulfilling desire for monetary
gain for their efforts made towards the workplace. It simply allows employees to
receive a share in the financial gains made by the organization through their
contribution. Rewarding by organization clearly states that efforts of employees are
fairly and generously contribute for an organisation benefits.

Reward management is mainly concerned with the making such strategies and
policies that are accordance with organization for employees. The proper formulation
and implementation of strategies and policies that aim to reward people fairly,
equitably and consistently are important for the organization. It focuses on analyzing
and controlling benefits and remuneration for the sake of employees. Reward
management aims to create and efficiently operate a reward structure for an
organization which directly contributes towards achievement of organization goals.
Reward structure usually consists of practices related to pay policy, salary and payroll
administration. The reward management strategies and practices of an organization
contribute to the improvement of organizational performance by developing and
operating reward systems which help to attract, retain and engage the people upon
which the business relies.

Harvard business school professor and management consultant Rosebush Moss

Kanter defines a reward as something special, a special gain for special achievements
done by employees in favor of organization, a treat for doing something above and
beyond. There are however certain basic truths in management that you can always
rely on. One is, “you get what you reward” sometimes referred to as the greatest
management principle in the world. From the extensive research the human behaviour
is shaped by its consequences and that is the most powerful ways to enhance
employee performance by providing positive consequences for that performance.

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Rewarding helps in the fulfilment of the need to be fairly rewarded to the employees
for their talents, capabilities, efforts and contribution made by employees. Rewarding
aims at offering competitive wage/salary/bonus packages, sharing the fruits of
people’s mutual efforts generously and fairly, and to distribute gains widely with all,

16
Shah, M. J., Rehman, M. U., Akhtar, G., Zafar, H., & Riaz, A. (2012). Job Satisfaction and
Motivation of Teachers of Public Educational Institutions. International Journal of Business and Social
Science, Vol. 3(8) 271-372.
15
through profit sharing, bonuses or other incentive plans and providing opportunities
for wealth and ownership sharing. It also ensures that employees understand how their
performance relates to the organization’s success and their compensation. It is very
important for the organization to carefully set the reward system for employees to
evaluate them correctly. The reward system is gaining importance from the
performance management which aligns needs and goals between organization and
employees. The performance-related reward systems are designed to lead to greater
rewards and motivation for those who contribute the most.

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Human resources are the important for organization and rewarding them timely
helps organization in gaining prosperity and success. Unless and until the institution
does not recognize the efforts and contributions of their employees and reward them
accordingly, it would not be able to conquer the highest level of motivation and job
satisfaction of the employees. Employees contribute up to the mark when they come
to know that their efforts made by them are rewarded by the management.

Rewards serve many purposes in organization, build a better employment

environment which holds on good employees and also reduce turnover. The principle
goal is to increase people willingness to work in one’s company, to enhance their
productivity and even satisfaction from job. People takes “rewards” as salary and
bonuses but this is only one kind of them. The other word related to reward is total
reward strategy which probably help and improves in their psychological contract and
organizational citizenship behaviours of employees along with employees’ work
efficiencies, job satisfaction and job performances. The effectiveness of this strategy
helps management to get acquaint with employees’ work life and other needs; in other
way round, the personnel can keep positive attitude towards the organizations, might
being less stressful or fairly treated or some else. The total reward strategy helps
human resource management practices in varieties of ways to survive in the global
marketing environment through improving the effectiveness of employees to compete.

Types of Rewards

1. Extrinsic rewards:

17
Jiang, Z., Xiao, Q., Xi, X., & Xiao, L. (2009). Total Reward Strategy: A Human Resources
Management Strategy. International Journal of Business and Management, Vol. 4 (11), 177-184.

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Extrinsic rewards are rewards in tangible form which contains financial terms such
raises salary, giving bonuses and other benefits and facilities. These rewards are
external to the job or task performed by the employee. Extrinsic rewards played a
dominant role in earlier eras, when work was generally more routine and bureaucratic,
and when complying with rules and procedures was paramount. These are salary
raises, bonuses, gifts, promotion and other kinds of tangible rewards.

2. Intrinsic rewards:

Intrinsic rewards are intangible or psychological rewards that employees get from
doing meaningful work and performing it well. The intrinsic reward involves
appreciation, meeting the new challenges, positive and caring attitude from employer
and job rotation after attaining the goal. The intrinsic rewards is like giving
opportunities to the employees to use their intelligence and experience to direct their
work activities to accomplish important organizational purposes such as innovation,
problem solving and improvising to meet the conditions they encounter to meet
customers’ needs.

The Modalities of Reward

Wage: A wage is usually a financial compensation, received by a worker in exchange

for their labor.

Salary: A salary is a form of periodic payment from an employer to an employee,

which may be specified in an employment contract. It is contrasted with piece wages,
where each job, hour or other unit is paid separately, rather than on a periodic basis.

Compensation: Compensation is something similar with pay or salary, typically a

monetary payment for services rendered, as in an employment it includes some extra
benefits.

Total compensation: Total compensation includes pay, benefits, flexible schedules,

education assistance, training courses, and workplace opportunities to help you get the
most out of your career and personal life

18
Thomas, K. (2009). The Four Intrinsic Rewards That Drive Employee Engagement. Ivey Business
Journal, 55-59.

17
Total Reward: Total reward covers all the elements that employees value in working
for their employer. It emphasizes the integrity of remuneration and is put forward in
contrast to total compensation. Although at most times it is thought as the same as
total compensation, total reward remains the most new word in the category of
remuneration or reward.

RECOGNITION

Recognition is the appreciation of employee’s performance in formal or an informal

19
way. It is one of the most powerful methods of rewarding people. Recognition can
take the form of acknowledgement, approval or the expression of gratitude and many
other things like giving thank you notes to employees, awarding employees in award
ceremonies, gift vouchers, employee photograph in the company newsletter or on “the
wall of fame”.

Recognition is an activity, a social or interpersonal activity. Workers want respect and

they want that they are trusted to do good job, they want autonomy to decide how best
to do it and they want support, even if they make a mistake. Most important they want
to be appreciated when they do a good job. Recognition can be provided by positive
and immediate feedback and praise where it is well deserved. Recognizing or
honoring employees for his or her effort is meant to encourage repeat actions that are
20
reinforced in form of praise, commendation or appreciation. Recognition can be
given while an employee is striving to achieve a certain goal or behaviour.
Recognition maintains a strong bond between motivation, performance and job
satisfaction and as a result the level of motivation and satisfaction of employees stays
very high almost all the time in employees. Recognition also increases the levels of
job satisfaction among employees and satisfied employees are valuable assets for an
organization. After working for many years in an organization people strive for the
praise even for appreciation because after earning a handsome salary they want more
which make them stand different from other employee that is called recognition and

19
Hafiza, N., Shah, S., Jamsheed, H., & Zaman, K .(2011). Relationship Between Rewards And
Employee’s Motivation In The Non-Profit Organizations Of Pakistan. Business Intelligence Journal,
Vol.4 (2), 327-335.
20
Limaye, A., & Sharma, R. (2012). Rewards and Recognition- great place to work. Edenred (India)
Private Limited.

18
make them more satisfied. It is a work of human resource manager to keep an eye on
these practices which make employees satisfied.

Every organization has different way of recognizing people in different manner. Some
organizations like giving awards in ceremony and some like giving prizes and non
cash awards on occasion or annual function. Non cash awards are generally preferable
by employees.

Employees Recognition is also broken down into following

1. Formal Recognition:

A formal recognition is a structured and planned program for recognizing employees.

This recognition is for desired performance like president’s award, years of service
award, employee of the month. This type of recognition is generally accepted from
employees side because appreciating employees in crowd motivates them. This
recognition is significant and symbolic and presented in public forum.

Informal Recognition:

This type recognition is not well planned and it consist spontaneous gesture of sincere
thanks for desired behaviour like creating a “pass around” trophy to acknowledge
exceptional customer service, bringing donuts or a pizza to celebrate in a department
for achievements. These forms of recognition increase morale of employees in day to
day life.

2. Day to Day Recognition:

Daily feedback about their performance to employees is very important for the
employees as a part of recognition. Employees should be known about their daily
routine work and their performance, what they have achieve today and also come to
know the views of senior regarding their work. Appreciating employees with words
like well done, very good, really appreciating, keep it up are some of the examples
comes under day to day recognition.

19
21
Recognition that works has four basic elements such as praise, thanks, opportunity
and respect. Recognizing employees includes one of these basic elements. These four
are very important if someone is recognized and if these are not include then it is not
recognition it is just giving incentive, prize, gift.

Reward and recognition is advantageous to the employee in a way that it injects self-
confidence. Offering different schemes of rewards etc. is a way of acknowledging the
efforts of employees which helps the employee to ponder on the point that he/she as
well as his/he

r works is being valued by the institution. It also works as stress reliever. When an
institution is offering different sorts of incentives and rewards to the employee, it will
relieve many of his/her fears.

TRAINING AND DEVELOPMENT

Training and Development represents a fundamental investment in the employees

who work for an organization with the overall goal of improving their ability to make
contribution to the firm’s effectiveness. Training and development may be understood
as any attempt to improve current or future employee performance by increasing an
employee’s ability or increasing his or her skills and knowledge. It is the acquisition
of technology which permits employees to perform their present jobs to standards. It
is the one means of improving manpower utilization and thereby potentially raising
job satisfaction. Training provides chances to employees to enhance their knowledge
and skills for effective development because trained workers are more satisfy to their
job as compared to untrained employees.

According to Armstrong’s:

The systematic development of the knowledge, skills and abilities required by an

individual to perform adequately a given task or job.

According to Mathis and Jackson:

21
Javed. M, Rafiq. M., & Ahmed, M & Khan, M. (2012). Impact of Human Resource Practices on
Employee Job Satisfaction in Public Sector Organization of Pakistan. Interdisciplinary Journal of
Contemporary Research in Business, 348-363.

20
A learning process whereby people acquire skills, concepts, attitudes or knowledge to
aid in the achievement of goals.

Development is an ongoing process in an employees life, it is a process that “strives to

build the capacity to achieve and sustain a new desired state that benefits the
organization or community and the world around them”. It refers to long term growth
and learning, directing attention towards what an individual may need to know or do
as some future time.

Training and development term is used in coordinated with organizational activity

that mainly deals in bettering the performance of individuals and group in
22
organization. Training involves designing programs for employees and supporting
learning activities which result in a desired goal. It is also an educational process
where people learn things related to their jobs, relearn and reinforce existing
knowledge and skills and most importantly it give time to employees to think and
consider what new options and opportunities help them to improve their performance
towards the job.

Importance of training and development:

1. Improving skills and knowledge along with enhancing morale, mould attitude
and behaviour- cooperative of employees.
2. It enhances the job satisfaction level of employees and lowers turnover,
absenteeism and grievances.
3. Training helps employees in efficient and economic use of equipment and
material- minimal wastage.
4. Meet organizational and technological changes with confidence.
5. Investment in training and development results in good results or return.

Training and development are commonly used in organization for improving the
performance and self fulfilment of their employees through a variety of educational
methods and programmes. It is ongoing efforts that are made within organization to
improve the level of employees and these two are used together to describe the overall
improvement and education of an organizations employees. These processes are often

22
Mahendru, M., & Kaur, M. (2011). Does Training and Development Really Impact the Bottom Line
Worker? A Case of North India. Social Science Research Network, 97-101.

21
closely connected. Training can be used as proactive means for developing skills and
expertise to prevent problems from arising and can also be an effective tool in
addressing any skills or performance gaps among staff. Training is related with
current performance and progress of an employee while development is related with
future performance and progress.

An organization must manage four resources i.e. money, equipment, information and
people. These four resources are interrelated with each other. Investments in better
equipment may speed up production or reduce waste which requires money.
Information is power, data about any products, prices and customers are essential to
every business. These three are only managed by peoples. Investments in training and
development of employees can make them more productive and more satisfied and
even more effective in performing their jobs which directly contributing to the bottom
line. When organization invests in improving the knowledge and skills of its
employees, the investment is returned in the form of more productive and effective
employees. Training and development programs may be focused on individual
performance or team performance.

Training and development is one of the key elements of employees job satisfaction
because it reduces the discrepancies in jobs tasks and enhances the job skills which in
result motivates the employees and lead towards job satisfaction. Training helps
employees in more specific with their job an organization and as a result increases
employee job satisfaction and makes them work better. Training is believed to nullify
the influence of factors which cause dissatisfaction of employees at work.

CAREER MANAGEMENT

Career management is the combination of structured planning and the active

23
management choice of one’s own professional career. It involves matching an
individual career aspirations with the opportunities available in an organization. It is
also concerned with the provision of opportunities for people to develop their abilities
and their careers in order to ensure that the organization has the flow of talent it needs

23
Armstrong, M. (2006). A Handbook of Human Resource Management Practice. 10th Ed. London:
Kogan Page Publishers.

22
and to satisfy their own aspirations. It is about integrating the needs of the
organization with the needs of the individual.

According to Baron and Greenberg (1995), a typical career management programme,

as part of the larger human resources system, involves efforts to:
1. Help employees to assess their own career strengths and weaknesses.
2. Set priorities and specific career goals.
3. Provide information on various career paths and alternatives within the
organization.
4. Offer employees yearly reviews of their progress towards these goals by
managers who have received training in conducting such assessments.
Career management programmes strive to involve employees in setting their own
goals and recognising their strengths and weaknesses. It assists employees with the
identification and facilitation of training needs and opportunities. This is mainly
achieved by building a process of feedback and discussion into the performance
management systems of institutions. Through career management programmes
employees are informed of career options available within the institution. It assists
employees with the identification of skills and other qualities required for current and
future jobs. Most career management programmes seek to focus employees career
plans upon the institution, thereby enhancing their commitment to the institution. In
doing this, career paths are developed that indicate mobility in different directions in
the institution for employees.

Career management programmes also seeks to improve the matching of jobs with the
right employees according to their aim. An assessment of the skills and competencies
of employees could assist in accommodating them in positions which suit them better.
Many practices such as transfers and rotation are effective and improved the
operational effectiveness. Career management programmes are also helpful for
management in a reduction of recruiting people externally as employees with the
required capabilities are revealed through their career planning activities.
Management needs to focus on the effective career management system so the
efficiency of organization improves. Career management practice is also related with
satisfaction of employees. The role played by career management practice in the life
of employee is very important. Career management improves the job satisfaction of
the employees. Employees maintain a long-term relationship with the organization if

23
organization provides the opportunity to develop their career. Employees aspiration
from their job is to grow and learn things which makes them perfect and fulfil the
needs and aspirations of organization as well as in the achievements of the personal
goals through proper career management.

PAY PRACTICE

Pay refers to the amount of financial compensation that an individual receives as well
as the extent to which such compensation is perceived to be equitable. It is one of
human resources management practice which normally refers to pay, wage, salary and
benefit etc. 24Pay is instrument in fulfilling many needs of an individual. Pay serve as
a symbol of achievement as well as sources of recognition, it is also seen as a
reflection of an organization towards their employees. Pay is a form of episodic
compensation from a firm to its worker, which is completely stated in an employment
contract. Pay is an important instrument in fulfilling one’s needs; and employees who
often see pay as a reflection of management’s concern. Pay system should be simple,
fair and in line with the expectations of employees. The emphasis is on the fairness of
the amount paid to employees but not on the absolute amount.

The pay has an important role in implementation strategies, the high level of pay
and/or benefits relative to that of competitors can ensure that the company attract and
retains high-quality employee, but this might have a negative impact on the
company’s overall labor costs. 25Pay plays a significant role to reward to motivate the
workers and their behaviour towards the goals of employer. It is a cost of hiring
employees in an organization for running the firm and its operations. Employees have
some needs which are fulfiled through this salary received from organization. Pay is
one of the motivating factors for employees and encourages employees to work.
There exist a strong link between happiness of the employees and handsome salary.

The relationship between pay practice and job satisfaction is useful to influence
motivation of employees’ work then achieved higher productivity. Pay has been

24
Chaudhry, M. S., Sabir, H. M., Rafi, N. and Kalyar, M. N. (2011). Exploring The Relationship
Between Salary Satisfaction And Job Satisfaction: A Comparison Of Public And Private Sector
Organizations. The Journal of Commerce, Vol. 3 (4), 1-14.
25
Mudor, H., & Tooksoon, P. (2011). Conceptual framework on the Relationship Between Human
Resource Management Practices, job satisfaction, and turnover. Journal of Economics and Behavioral
Studies, Vol. 2 (2), 41-49.

24
considered as the major factors for job satisfaction and however other related factors
like promotion, work efforts, supervision, and relationship with co-workers, reward
out of which pay is important factor. The pleasure from pay satisfaction is also an
important thing that is linked to some administrative outcomes and success. When pay
is seen as fair, based on job demands, individual skill level, and community pay
standards, satisfaction is likely to result.

Pay is associated with global satisfaction and even more closely with the facet of pay
satisfaction. The dissatisfaction with pay can lead employee to decreased job
satisfaction, decreased interest of working, and decreased the learning level of
employees, motivation and performance, increased absenteeism and turnover, and
more pay-related grievances.

The relationship between pay practices and job satisfaction is ambiguous in the
efficiency wage theories. Low performance of employee is the result of low level of
satisfaction from salary. Organization need to develop strategy for the pay related
system because it encourages the employee towards the works. A pay-for-
performance is one of the common strategy used for employees and found effective
technique to encourage salary level satisfaction.

JOB SECURITY

Job security is the probability that an individual will keep his or her job. A person
with a high level of job security has a small chance of becoming unemployed. It is the
assurance from the firm to employee for the employment. Job security is also an
employee’s assurance or confidence that they will keep their current job. Employees
with a high level of job satisfaction have a low probability of losing their job in the
future and that also builds a confidence level in employees and they works without
any fear. Certain profession or employment opportunities inherently have better job
security than others.

Job security affects the workers performance, success of the business and the current
26
economic environment. Employee’s commitment towards organization depends on

26
Cuyper, N., & Witte, H. (2003). Contractual Flexibility and Job Insecurity: Main and Interaction
Effects on Attitudinal and Behavioural (Intentional) Variables. European Congress on Work and
Organizational Psychology, 54-67.

25
the job security provided from the organization which results in the higher
performance. Employees work without stress and fear which is beneficial for the firm
for the long term business.

There is a strong relationship between employees job satisfaction and job security
which leads to higher commitment of employees. Job satisfaction arising from job
security is a major factor affecting the quality of the employer-employee relationship.
Job security reflects the individual’s overall sense of satisfaction in the work situation.
The employees with permanent job are much secure as compare to the temporary job.
The importance of job security comes in the knowledge of employees when there are
ups and down in the business. It is closely related to the current climate and rapidly
changing organizational environment. Employees with high job security are closely
attached with the organization. Employees stand with the organization in the ups and
downs of the business.

26
 1.4 JOB SATISFACTION

Job satisfaction is one of the common and important term used in the organization for
the employees. Job satisfaction is major factor in the human resource management
programmes. It is mainly related to employees feeling towards their job. Job
satisfaction has been studied both as a consequence of many individual and work
environment characteristics and as an antecedent to many outcomes. Human resource
management focus on the job satisfaction of employees for the sake of organization
development.

MEANING AND DEFINITION

Job satisfaction is the degree to which individual feels positively or negatively about
their jobs. An individual have different attitudes, perception toward various aspects of
the job. It is also an attitude or emotional response to one’s works as well as to the
physical and social condition of the work place. It is derived from many interrelated
factors, such involvement, commitment, character and personality of individuals’ that
impacts on job satisfaction of employees. People with positive thinking are more
likely satisfied with their jobs.

27
There are three important dimensions to job satisfaction.

1. Job satisfaction being an emotional response to a job cannot be seen. As such, it can
only infer.
2. Job satisfaction is often determined by how well outcomes meet or exceed
expectations. Satisfaction in ones job means increased commitment in the fulfilment
of formal requirements. There is greater willingness to invest personal energy and
time in job performance.
3. Job satisfaction represents an employee’s attitudes towards five specific dimensions
of the job; pay, work itself, promotion, opportunities and supervision with co-
workers. Effective Human resource management practices must ensure job
satisfaction to the employees.

27
Jegan, P., & Gnanadhas, M. E. (2011). Job Satisfaction of Bank Employees working with E-
Channel. Asian Journal of Business and Economics, Vol.1, 190-199.

27
Job satisfaction is a worker’s sense of achievement and success on the job. It is an
regard to one's feelings or state-of-mind regarding the nature of their work. Job
satisfaction can be influenced by a variety of factors like the relationship with their
supervisor and co-workers, the physical environment in which they are working,
degree of fulfilment in their work, etc. 28It is generally perceived to be directly linked
to productivity development of the organization as well as to personal well-being. Job
satisfaction implies doing a job one enjoys, doing it well and being rewarded for one’s
efforts. Job satisfaction further implies enthusiasm and happiness with one’s work.
Job satisfaction is the key ingredient that leads to recognition, reward, income,
promotion, appraisal, career growth and the achievement of other goals that lead to a
feeling of fulfilment.

Job satisfaction is the collection of feeling and beliefs that people have about their
current job. People’s levels of degrees of job satisfaction can range from extreme
satisfaction to extreme dissatisfaction. In addition to having attitudes about their jobs
as a whole, people also have attitudes about various aspects of their jobs such as the
kind of work they do, kind of people etc. It can be influenced by a multitude of
factors. The term relates to the total relationship between an individual and the
employer for which they are paid. Satisfaction does not mean the simple feeling of
state accompanying the attainment of any goal, but the end feeling of accompanying
the attainment by an impulse of its objective. The term job satisfaction was brought to
limelight by 29Hoppock (1935) who reviewed 32 studies on job satisfaction conducted
prior to 1933 and observed that job satisfaction is a combination of psychological,
physiological and environmental circumstances that cause a person to say, "I am
satisfied with my job". Such a description indicates the variety of variables that
influence job satisfaction but tell us nothing about its nature.

Definition:

According to P. Robbins: “Job satisfaction is a general attitude towards one’s job: the
difference between the amount of reward workers receive and the amount they believe
they should receive.”

28
Prakashbhai, D.K. (2014). A Study of Job Satisfaction of Industrial Workers Relation To Sex And
Their Types Of Family. Philica.Com Article number 401.
29
Hoppock, R. (1935). Job Satisfaction. New York: Harper & Brothers Publishers.

28
According to Hugh J.Arnold and Daniel C. Feldman: “The amount of over all positive
affect (or feeling) that individuals have toward their jobs.”

According to Andrew J DuBrins: “Job satisfaction is the amount of pleasure or

contentment associated with a job. If you like your job intensely, you will experience
high job satisfaction. If you dislike your job intensely, you will experience job
dissatisfaction.”

According to 30E.A. Locke: “Job satisfaction is as a pleasurable or positive emotional

state resulting from the appraisal of one.s job or job experience.”

According to Davis and Newstrom: “Job satisfaction is a set of favorable or

unfavorable feelings with which employees view their work.”

Job satisfaction is always a centre of attention of theoreticians, researchers and

practitioners for many decades. Past researches confirm that job satisfaction is related
to employee’s job performance, organisational commitment, organisational
citizenship behaviour, life satisfaction, and health. These job–related outcomes are
also the main goals of HR function. It is also the result of employee perception of how
well the job provides those things that are viewed important. Commonly noted facets
are satisfaction with the work itself, wages, and recognition, rapport with supervisors
and co-workers, and chance for advancement. Each dimension contributes to an
individual overall feeling of satisfaction with the job itself, but different people define
the “job” differently.

The employees who are satisfied are the biggest assets to an organization whereas the
dissatisfied employees are the biggest liabilities. Dissatisfaction leads to frustration
and frustration leads to aggression. Dissatisfaction is infectious and quickly spreads to
other employees and is likely to affect the morale and working of other employees
and image of organization. A dissatisfied worker may seriously cause damage to the
reputation and property of the organization and harm its business interest. Job
satisfaction/dissatisfaction is the result of various factors which are related to the
present job situations. These various factors are opportunities for career advancement,
amount of tension at work, work involvement, relations with colleagues and

30
Lock, E. A. (1976). The Nature and Causes of Job Satisfaction. In M. Dunnette, (ed.) Handbook of
Industrial and Organizational Psychology, Chicago: Rand McNally, 1297-347.

29
supervisors, due recognition of merit, sufficient emoluments and good working
conditions, grievances removal, feeling of fatigue and loneliness and prestige of the
organization.

There are two types of job satisfaction based on the level of employees feeling
regarding their jobs or there are two general approaches to measure overall job
satisfaction. The first and most studied is global job satisfaction, which refers to
employees overall feeling about their jobs that they think about their job i.e. ‘I m
happy with my job’. The second is job facet satisfaction which refers to feeling about
specific job aspects such as salary, benefits and quality of relationship with one’s co
workers, where the employee is not actually dissatisfied with job but some of the
practices makes unsatisfied such as ‘my job is good but my co-workers are not
supportive or my working condition are not’. Research shows that in many cases, the
global approach is superior to the facet approach. Researchers have offered little
support that a happy employee is productive; furthermore some research has
suggested that causality may flow in the opposite direction from productivity to
satisfaction.

1.5 THEORIES OF JOB SATISFACTION

1. Need Fulfilment theory

According to the fulfilment theory, the basic rule of the happiness of workers is to
satisfy their demands and getting their wishes. Workers are satisfied if their demands
31
are totally provided. Fulfilment theorists regard satisfaction in terms of outcomes
(rewards) a person receives or the extent to which a person’s need are satisfied. It
simply explains the reaching of the thing needed. A person is satisfied when he gets
what he wants from his job and gets satisfied when he received it. Job satisfaction will
vary directly with the extent to which those needs of an individual which can satisfied
are actually satisfied. This variable was the strength of the individual’s desire, or his
level of aspiration in a particular area.

31
Schaffer, R.H. (1953). “Job Satisfaction as related to need satisfaction in work,” Psychological
Monographs: General and Applied, Vol. 67(14), 1-29.

30
The difficulty with fulfilment theory is that satisfaction is a function of not only what
a person receives but also what he feels he should receive or wants to receive. What
may satisfy a person may leave another factor for dissatisfaction because of difference
in their expectations, which hardly fills. So the job satisfaction is a function of the
degree to which the employees needs are fulfiled in the job satisfaction.

2. Discrepancy Theory

According to this theory job satisfaction depends upon what a person actually receives
from his job and what he expects to receive. When the rewards actually received are
less than the expected rewards it causes dissatisfaction. 32It is concerned on what the
workers are expecting and what they are getting. Their expectations, evaluations and
hopes of workers about their works are more important than what they are having in
real. The difference in expectation and receiving is actually discrepancy.

According to Locke job satisfaction and dissatisfaction are functions of the perceived
relationship between what one wants from one’s job and what one perceived it is
offering. This theory fails to reveal whether over satisfaction is or is not a dimension
of dissatisfaction and if so, how does it differ from dissatisfaction arising out of the
situation when received outcomes are less than the outcomes one feels he should
receive. This led to the development of equity theory of job satisfaction.

A=B Perceived Satisfaction

Perceived outcomes
received A

A>B Perceived Dissatisfaction

Outcomes one feels

he should receive B
A<B Perceived over Satisfaction

Figure No. 1.1 Discrepancy Theory

32
Gupta, C.B. (2009). Human Resource Management. New Delhi: Sultan Chand & Sons.
31
 3. Equity Theory

33
This theory ponders about employee qualifications, contribution to the work and the
job’s contribution to him. It means creating an attitude of worker against the work he
does. If the worker is paid over his work he will feel guilty but if he is paid under
what he deserves his feeling for justice will rise. According to equity theory, a
person’s satisfaction is determined by his perceived equity. Perceived equity is in turn
determined by his input-output balance as compared to his comparison to others (the
person he compares with) input-output balance. Input-output balance is the perceived
ratio of what a person receives from his job relative to what he puts in the job. People
compare their input-output balance with others. Every individual compares his
rewards with those of a reference group. If he feels his rewards are equitable in
comparison with others doing similar work, he feels satisfied. Job satisfaction is thus
a function of the degree to which job characteristics meet the desires of the reference
group. Equity theory also explains equal balance in rewards, either under reward or
over reward can lead to dissatisfaction, although feeling associated with them are
different. Under reward causes feelings of unfair treatment while over reward leads to
feeling of guilt and discomfort.

4. Expectancy Theory
Expectancy theory is more concerned with the cognitive antecedents that go into
motivation and the way they relate to each other. It is a cognitive theory of motivation
that is based on the idea that people believe there are relationships between the effort
they put forth at work, the performance they achieve from that effort, and the rewards
they receive from their effort and performance.34 It can be explained as people will be
motivated if they believe that strong effort will lead to good performance and good
performance will lead to desired rewards. Rewards are seen as fulfilling or not
fulfilling expectations. Expectancy theory challenges management to demonstrate to
employees that extra effort will reap a commensurate reward. The link between effort
and reward needs to encompass both the pay packet and a variety of other extrinsic or
intrinsic rewards.

33
Agarwal, R.D. (1982). Organization and Management, Tata McGraw Hill Education.
34
Lunenburg, F.C. (2011). Expectancy Theory of Motivation: Motivating by Altering Expectations.
International Journal Of Management, Business, And Administration. Vol. 15, 1-6.

32
The expectancy theory based on these assumptions has three key elements:
expectancy, instrumentality, and valence. A person is motivated to the degree that he
or she believes that (a) effort will lead to acceptable performance (expectancy), (b)
performance will be rewarded (instrumentality), and (c) the value of the rewards is
highly positive (valence).

5. Maslow’s Hierarchy of Needs Theory

Maslow in 1954 first published his book on “Motivation and Personality”, which
introduced the theory regarding people satisfaction i.e. how people satisfy their
various personal needs in the context of their work. Based on his observations as a
humanistic psychologist, he postulates as a general pattern of needs recognition and
satisfaction that people follow in general life. These needs are related to one another
and are arranged in an order of hierarchy of prepotency. He also theorized that a
person could not recognize or pursue the next higher need in the hierarchy until her or
his currently recognized need is completely satisfied. Maslow classified human needs
into five categories that ascend in a definite order as follows:

1) Physiological needs

2) Safety and security needs

3) Belonging and love needs

4) Esteem needs

5) Self- actualization needs.

6. Herzberg’s Motivation/ Hygiene Theory (Two factors theory)

This theory was developed by psychologist Fredrick Herzberg, according to this

theory there are two classes of motives i.e. hygiene or maintenance factor and the
other is motivators factor. Herzberg found that the factors causing job satisfaction
were different from that causing job dissatisfaction. He developed the motivation-
hygiene theory to explain the results of satisfaction and dissatisfaction. The first group
includes factors called hygiene factors which represent that their presence does not
cause motivation though their absence causes dissatisfaction. Therefore they are
called dissatisfiers. The second groups factor are called satisfiers because their

33
presence does not cause motivation or satisfaction though their absence cause
dissatisfaction.

Factors such as achievement, recognition, responsibility, growth, work itself and

advancement are satisfiers, the presence of these factors causes satisfaction but their
absence does not result in dissatisfaction. On the other hand, factors such as
supervision, salary, working conditions, company policy, relationship with boss and
peers are dissatisfiers i.e. absence of these factors causes dissatisfaction. However,
their presence does not result in job satisfaction.

Herzberg stated in the theory that factors causing satisfaction are different from those
causing dissatisfaction among employees, the two feelings cannot simply be always
treated as opposites of one another. The opposite of satisfaction is not actually
dissatisfaction, but it is no satisfaction. Similarly, the opposite of dissatisfaction is no
dissatisfaction. The theory states that job satisfaction and dissatisfaction are affected
by two different sets of factors. Therefore, these two cannot be measured on the same
continuum.

The following table presents the top six factors causing dissatisfaction and the top six
factors causing satisfaction

Table No. 1.1 Herzberg’s Theory Factor

FACTORS LEADING TO DISSATISFACTION LEADING TO

SATISFACTION
1 Company Policy Achievement
2 Supervision Recognition
3 Relationship with boss Work itself
4 Working condition Responsibility
5 Salary Advancement
6 Relationship with peers Growth

The implications of Herzberg’s theory for management and HR practices is that the
motivation-hygiene theory states that management should not only focus on hygiene
factors to avoid employee dissatisfaction, but also provide factors that are intrinsic to
the work itself in order for employees to be satisfied with their jobs. Motivators can
34
only cause employers to exert more effort and thereby attain more productivity, and
this theory suggests that motivators are the only tools for managers to utilize to
enhance employee performance.

7. Job Characteristics

35
Job characteristics theory describes the relationship between job characteristics and
individual responses to work. The theory specifies the task condition in which
individuals are predicted to prosper in their work. The job characteristics model
argues that jobs which contain intrinsically motivating characteristics which lead to
higher levels of job satisfaction as well as other positive work outcomes such as
enhanced job performance and lower withdrawal. The model was introduced by
Hackman and Oldham (1976) according to them, jobs that are enriched to provide
these core characteristics are likely to be more satisfying and than jobs that do not
provide these characteristics. There are five job dimensions prompting three
psychological states.

The five dimensions of job characteristics are:

1. Skill variety- The degree to which a job requires a variety of different

activities in carrying out the work, involving the use of a number of different skills
and talents of the person.

2. Task identity- The degree which requires completion of a whole, identifiable

piece of work; that is, doing a job from beginning to end with the visible outcomes.

3. Task significance- The degree to which a job has substantial impact on lives of
other people, whether those people are in the immediate organization or in the world
at large.

4. Autonomy- The degree to which the job provides substantial freedom,

independence and discretion to the individual in scheduling the work and in
determining the procedure to be used in carrying it out.

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Anderson, N. (2001). Handbook of Industrial Work and Organizational Psychology. London:Sage.

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5. Job feedback- The degree to which carrying out the work activities required by
the job provides the individual with direct and clear information about the
effectiveness of his or her performance.

The combination of these five job characteristics reflects the overall motivating
potential of a job into a single index.

MPS= (Skill variety+ Task identity+ Task significance)/3 *autonomy* feedback.

The three psychological states are:

1. Experienced meaningfulness of the work- it explains that is to feel that the

work, the individual does is generally worthwhile, valuable or important by some
system of values he or she accepts.

2. The experienced personal responsibility- means that he or she feels personally

accountable for the results of the work he or she does.

3. Knowledge of results- the person who has knowledge of the results of one’s
work knows and understands how effectively he or she is performing the job.

Achieving these three psychological states serves as reinforcement to the employee

and as a source of internal motivation to continue doing the job well. If anyone of
these psychological states are not present, several outcome variables such as
motivation and satisfaction will be weakened

1.6 FACTORS INFLUENCING JOB SATISFACTION

A. Work Environment

Work environment can be explained as a place where employees work. It involves

each and every thing related to employees working. Overall life is affected with the
environment in which employee work. If employee is not satisfied with the working
environment, he or she cannot properly focus on the work and which indirectly affect
the organization.

The factor which comes in work environment are:

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 Working Condition: The employees desires for good working condition because they
lead to greater physical comfort. The working conditions are important to employees
because they can influence life of employees outside also. If people work long hours
or do overtime, then they require comfort in their working time.
 Stress: When negative stress is high it reduces job satisfaction. When a job does not
correspond with employee’s personal life, or is the source of anxiety and confusion,
it’s stressful. Stress always makes person unsatisfied with the things happening in the
organization. Stress in employees affects both the employees health and the
production of the organization. Stress arises from the working environment such
workload, relationship with their supervisor, peers etc.

B. Organizational factors

Organization factors are concerned with practices and procedures followed by the
organization. They affect employees if they are not properly formulated and
implemented. Employees expectation from organization impacts on satisfaction level
of employees too. The factors are:

 Promotion: Promotional opportunities have a moderate impact on job satisfaction. A

promotion of an employee to a higher level in an organization typically involves
positive changes in supervision, job content, pay and many other things. Employees
on higher level position usually provide workers with more freedom, more
challenging work assignments and high salary which influence the satisfaction.
 Fair Rewarding: Employees are more satisfied when their works are fairly rewarded.
Fair rewarding to the employees plays a very important for the satisfaction of the
employees. But if this factor is ignored by the organization it will be harmful for
employees in the level of satisfaction. So organization needs to balance this factor
with the work. Employees should be rewarded timely and fairly.
 Opportunities: Job related opportunities increase employee satisfaction. Organization
should provide job opportunities to the employees so employees can make their career
and move further. The opportunities such as to doing projects work, employees
participation in competition, giving decision making authority etc. It motivates the
employees and employees feel like home in the organization when the opportunities
are given to the employees.

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 C. Behavioural Factors

Behavioural factors involved employee’s nature or employees perception towards the

job. It is the only major factor that influences the employees towards their job that
what employees think about their job. The perception regarding the job is the outcome
of behavioural factor. The perception differs from people to people that means no two
employee have same perception.

 Pay: Wages do play a significant role in determining of satisfaction. Pay is

instrumental in fulfilling so many needs. Pay is the primary need of an employee for
which employee work. The basic needs such as food, shelter, clothing provides the
means to enjoy valued leisure interest outside of work. Moreover, pay can serve as
symbol of achievement and a source of recognition. Employees often see pay as a
reflection of organization. Fringe benefits have not been found to have strong
influence on job satisfaction as direct wages.
 The work itself: The second most important in determining employees satisfaction is
the work itself. The job profile also somewhere affects the satisfaction of employees.
The two most important aspect of the work itself that influence job satisfaction are
variety and control over work methods and work place. Employee with moderate
amount of variety produce the most job satisfaction and employees found their job
challenging. Jobs with too little variety cause workers to feel bored and fatigue. Jobs
with too much variety and stimulation cause workers to feel psychologically stressed
and burnout.
 Supervision: Supervision is one of the main factors which affect job satisfaction.
Managers interested in employees’ work, assisting them in solution of their work
related and personal life problems and also developing informal relations together
with the formal ones are increasing employees’ job satisfaction.

Two dimensions of supervisor style:

1. Employee centered or consideration supervisors who establish a supportive

personal relationship with subordinates and take a personal interest in them.

2. The other dimension of supervisory style influence participation in decision

making, employee who participates in decision that affect their job, display a much
higher level of satisfaction with supervisor an the overall work situation.

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 Work Group: Having friendly and co-operative co-workers is a modest source of job
satisfaction to individual employees. The working groups also serve as a social
support system of employees. People often used their co-workers as sounding board
for their problem of as a source of comfort.
 Adequate Authority: Giving more freedom to employees in their job increases their
satisfaction. When certain teams are organized in the organization and one person was
given the adequate authority to manage the whole team. These things make
employees more responsible towards their job, and in this way they are more engaged
or spend more time in the organization.

Fitting the right man on the right job is the primary and the important function of an
organization for its success. Then only all the resources can be managed effectively
and efficiently. Without human efforts an organization cannot accomplish its
objectives. Renis Likert rightly observes “All the activities of any enterprise initiated
and determined by the persons, who make up that institution, plants, offices,
computers, automated equipment and all else that make a modern firm uses, are
unproductive except for human effort and direction of all the tasks of management,
manager the human component, is the central and the most important task, because all
else depends on how well it is done”.

1.7 CONSEQUENCES OF JOB SATISFACTION

The preponderance of research evidence indicates that there is not only a strong
linkage between satisfaction and productivity but also there are many variables which
are affected by job satisfaction. There are many possible moderating variables, those
effect are seen on job satisfaction. Previous research evidence indicates that
satisfaction may not necessarily lead to individual performance improvement but does
lead to departmental and organizational level improvements.

Job satisfaction has a variety of effects that results in many things related to
employees and also in context to organization. Dissatisfaction from job lead to many
intolerable results which is unbearable for the organization.

 Physical and Mental Health:

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 The degree of job satisfaction affects an individual’s physical and mental health.
Since job satisfaction is a type of mental feeling, its favourableness or
unfavourableness affects the individual psychologically which ultimately affects his
physical health. For example, Lawler has pointed out that drug abuse, alcoholism and
mental and physical health result from psychologically harmful jobs. Further, since a
job is an important part of life, job satisfaction influences general life satisfaction. The
result is that there is spill over effect which occurs in both directions between job and
life satisfaction.

 Productivity:

There are two views about the relationship between job satisfaction and productivity:

1. A happy worker is a productive worker,

2. A happy worker is not necessarily a productive worker.

The first view establishes a direct cause-effect relationship between job satisfaction
and productivity; when job satisfaction increases, productivity increases; when
satisfaction decreases, productivity decreases. The basic logic behind this is that a
happy worker will put more efforts for job performance. However, this may not be
true in all cases. For example, a worker having low expectations from his jobs may
feel satisfied but he may not put his efforts more vigorously because of his low
expectations from the job. Therefore, this view does not explain fully the complex
relationship between job satisfaction and productivity. The another view is that a
satisfied worker is not necessarily a productive worker explains the relationship
between job satisfaction and productivity. Various research studies also support this
view.

This relationship may be explained in terms of the operation of two factors

1. Effect of job performance on satisfaction i.e. Job performance leads to job

satisfaction and not the other way round. The basic factor for this phenomenon is the
rewards (a source of satisfaction) attached with performance. There are two types of
rewards intrinsic and extrinsic. The intrinsic reward stems from the job itself which
may be in the form of growth potential, challenging job, etc. The satisfaction on such
a type of reward may help to increase productivity. The extrinsic reward is subject to

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 control by management such as salary, bonus, etc. Any increase in these factors does
not help to increase productivity though these factors increase job satisfaction.

2. Organizational expectations from individuals for job performance is that a

happy worker does not necessarily contribute to higher productivity because he has to
operate under certain technological constraints and, therefore, he cannot go beyond
certain output. Further, this constraint affects the management expectations from the
individual in the form of lower output. Thus, the work situation is pegged to
minimally acceptable level of performance. However, it does not mean that the job
satisfaction has no impact o productivity. A satisfied worker may not necessarily lead
to increased productivity but a dissatisfied worker leads to lower productivity.

 Absenteeism:

Absenteeism refers to the frequency of absence of job holder from the workplace
either unexcused absence due to some avoidable reasons or long absence due to some
unavoidable reasons. It is the former type of absence which is a matter of concern.
This absence is due to lack of satisfaction from the job which produces a lack of will
to work and alienate a worker form work as for as possible. Thus dissatisfaction from
job also lead to absenteeism which organization suffers.

 Employee turnover:

Turnover of employees is the rate at which employees leave the organization within a
given period of time. When an individual feels dissatisfaction in the organization, he
tries to overcome this through the various ways of defense mechanism. If he is not
able to do so, he opts to leave the organization. Thus, in general case, employee
turnover is related to job satisfaction. However, job satisfaction is not the only cause
of employee turnover, the other cause being better opportunity elsewhere. For
example, in the present context, the rate of turnover of computer software
professionals is very high in India. However, these professionals leave their
organizations not simply because they are not satisfied but because of the
opportunities offered from other sources particularly from foreign companies located
abroad.

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1.8 IMPORTANCE OF JOB SATISFACTION
36
The term “job satisfaction” is understood to mean everything from “making all
aspects of a job easy for employees” to “making the job meaningful, significant and
challenging.” Job satisfaction can be considered as one of the main factors when it
comes to efficiency and effectiveness of business organizations. In fact the new
managerial paradigm which insists that employees should be treated and considered
primarily as human beans that have their own wants, needs, personal desires is a very
good indicator for the importance of job satisfaction in contemporary companies.
When analysing job satisfaction the logic that a satisfied employee is a happy
employee and a happy employee is a successful employee.

Job satisfaction is also correlated moderately with citizenship behaviour. The

employees who are satisfied are engage in more frequent “extra mile” behaviours to
help their co-workers, supervisors and at last organization. Positive feelings increase
their desire to interact with others and often result in spontaneous acts of helping and
other instances of good citizenship. In addition, dissatisfaction results in negative
feelings towards job, co-workers, supervisor and others also. Satisfied employees
intentionally cannot harm the organization and never result in destructive actions.

The study of job satisfaction enriched the management with a range of information
pertaining to job, employee, environment etc. which facilitated it in decision making
and correcting the path of organizational policies and behaviour. It indicates the
general level of satisfaction in the organization about its programmes, policies etc.
This not only helps in knowing the employee behaviour but also help organization to
plan such a policies which helps organization indirectly. It is an important task for
knowing employees problems, solving them and effecting changes and correcting
with least resistance. The communication system also plays a strong role in the
organization and helps management to discuss the result for shaping the future course
of action. Job satisfaction helps in improving the attitudes of employees towards the
job and facilitates integration of employee with the organization. It inspires sense of
belongingness and sense of participation among, leading to the overall increase in the
productivity and performance of the organization.

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Aziri, B. (2011). Job Satisfaction: A Literature Review. Management Research And Practice, Vol. 3
(4), 77-86.

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It helps unions to know exactly what employees want and what management is doing.
Thus, it facilitates mutual settlement of grievances and other unwanted situations. It
facilitates in determining the training and development needs of the both, employees
and the organization.

Spector (1997) lists three important features of job satisfaction. First is that employees
should be treated fairly and with respect, the priority should be given to the human
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values. In such cases the assessment of job satisfaction may serve as a good
indicator of employee effectiveness. High levels of job satisfaction may be sign of a
good emotional and mental state of employees. Second, the behaviour of workers
depends on their satisfaction and that will directly affect the functioning and activities
of the organization’s business. It is concluded from this, that job satisfaction will
result in positive behaviour and dissatisfaction from the work will result in negative
behaviour of employees. Third, job satisfaction may serve as indicator of
organizational activities. Through job satisfaction evaluation, different levels of
satisfaction in different organizational units can be defined, but in turn can serve as a
good indication regarding in which organizational unit changes that would boost
performance should be made.

To improve the job satisfaction and morale, the management set about to take
advantage of this newly found insight and they should take action on two fronts. First,
they should initiated attempts to measure the state of employee- feeling in order to
know where to concentrate their efforts in improving employee- satisfaction.
Secondly, they should know to train their managers, especially first-level supervisors,
to pay attention to the attitudes and feelings of their subordinates so that performance
could thereby be improved.

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Spector, P. E. (1997). Job Satsifaction: Application, Assessment, Causes and Consequences.
Thousand Oaks: Sage Publications.

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1.9 HUMAN RESOURCE MANAGEMENT PRACTICES AND JOB
SATISFACTION:

Human Resource (HR) practices and job satisfaction of employees have significant
relationship in an organization. To survive in the competition, organization needs to
manage the relationship and challenges arising out of it. It is assumed with the studies
done in this field that HR practices are closely associated with job satisfaction.
Because many scholars and practitioners believe that sound HR practices result in
better level of job satisfaction which ultimately improves organizational performance.
These practices help organizations in improving product quality, achieve higher
flexibility and good performance while remaining cost competitive by inducing
workers to work harder and using the skills and information’s of their employees
more effectively.

Job satisfaction performs many functions and forms the basis and core of most of the
HRM activities. A relationship between HRM practices and organizational
performance including job satisfaction is established and also further improved by the
strategic HRM researches. The job satisfaction is an important part of organizational
research because it is linked with human resource. It determines the impact and
influence of HRM practices such as leadership behaviour, teamwork and job
autonomy on the job satisfaction. The proper management of human resource
practices led to the job satisfaction.

Human resource management practices works for many field in a working firm, but
the most important it works for job satisfaction because until the employees are not
satisfied with the terms and conditions of organization they will not concentrate on
work and it will definitely affects the productivity and performance of a firm.
Somewhere employees are affected by the practices in their working life, they are
dependent on the firm for everything which is directly link with the practices running
over there. So for the organization it is very important to keep their employees
satisfied with the practices. The human resource practices and job satisfaction
increased the mutual understanding between the employer and the employees.

HRM and job satisfaction are considered as communication channel between the
employees and the employer.

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1.10 CONCLUSION

The concept of human resource management and job satisfaction is very crucial and
even important at every walk of life for an organization. The management of people
with help of these practice, improves both the organization as well as individuals.
Overall the organizations are striving to achieve the goal sets, through the committed,
motivated and satisfied workers. Therefore, satisfying employees is utmost
importance for any organization. Continuous efforts should be made by the bank for
sake of employees which results in productivity and achieving competitive advantage.
The above chapter is fully based on explaining these terms in very clear way. This
illustrates that how these two terms are linked with employees in the working firm.

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