Factors Influencing Employee Statisfaction

A Seminar paper
By
Sabin Dhamala
Bachelor of Business Administration (BBA)
Third semester
MGT 232: Leadership and Organizational Behavior

Submitted to
Faculty of Management
Sraswati Multiple Campus
Tribhuvan University

August 2023
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DECLARATION

I hereby declare that seminar paper entitled FACTOR INFLUENCING EMPLOYEE

STATISFACTION submitted to the BBA program, Saraswati Multiple Campus,
Kathmandu is an original place of work under the supervision Of Mr.Narayan Prasad
Dhakal faculty member, sarsaswati multiple campus, Kathmandu, and is submitted in
partial fulfillment of the requirement for degree of BBA Third semester. This seminar
paper has not been submitted to any other college for the award of any degree.

Signature:
Name: Sabin Dhamala
Date: August 2023
 3

SUPERVISOR’S RECOMMENDATION

The seminar paper entitled FACTOR INFLUENCING EMPLOYEE STATISFACTION

submitted by Sabin Dhamala of BBA Third semester, section B, is prepared under my
supervision as the procedure and format requirement laid by Faculty of Management,
Office of the Dean, Tribhuvan University, as partial fulfillment of the requirement of the
degree of BBA Third Semester, Leadership and organizational Behaviour. I, therefore,
recommend the seminar paper for finalevaluation.

Signature:
Name of supervisor: Narayan Prasad Aryal
Date: August 2023
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Contents
DECLARATION ....................................................................................................................................... 2
SUPERVISOR’S RECOMMENDATION ..................................................................................................... 3
INTRODUCTION .................................................................................................................................... 5
1.1 Background of the study............................................................................................................. 5
1.2 Statement of the problem .......................................................................................................... 6
1.3Objective of study ........................................................................................................................ 6
1.4Significance of study .................................................................................................................... 6
1.5Limitations of the study ............................................................................................................... 6
LITERATURE REVIEW............................................................................................................................. 8
METHODOLOGY .................................................................................................................................. 13
2.1Methodology of the study ......................................................................................................... 13
DESCRIPTION AND ANALYSIS .............................................................................................................. 14
CONCLUSION ...................................................................................................................................... 18
REFERENCE ......................................................................................................................................... 19
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INTRODUCTION
1.1 Background of the study
In the present business scenario where the business organizations are facing intense
competition and challenges, the role of employees and their dedication towards the work
has been one of the critical factors of concern for the business organizations. Their success
ultimately depends upon how satisfied the employees are. So, job satisfaction has become
one of the essential issues to investigate. Job satisfaction, in general, is the feeling and
belief that people have about their current job. It is a critical issue in human resource, which
can affect the future of a firm. Job satisfaction is one of the most importantcharacteristics
to be investigated. An organization will not run smoothly without the contribution of the
employees as the employees could lead the organization to a successful position in a highly
competitive market. So, it is essential for all organizations how the satisfaction of the
employees can affect their work performance, which has a direct link to the overall
organization performance.
The employee is an essential element in the process of implementing the enterprise's mission
and vision, especially in the production sphere. Employees should meet the performance
criteria set by the organization to ensure the quantity and quality of their work. To meet
organizational standards, employees need a work environment that allows them to work
freely without problems that can stop them from reaching their fullpotential. They also need
appropriate superior that will provide them with this environment, but above all, he will
motivate them to work in the right way, make them feel satisfied with their work.
Each person has different criteria for measuring own job satisfaction. The factor that
influences it, is the style of management, but also payments, working hours, schedule,benefits,
stress level and flexibility. Job satisfaction is related to productivity, motiva- tion, work
performance and life satisfaction which means that this also applies to the private lives of
employees. It should be remembered that job satisfaction affects the employee's feeling of
securi- ty in the enterprise. A satisfied employee feels better in the company, perform better.
Employee satisfaction helps in effective utilization of resources, higher productivity, loyalty
of employees, better customer service, lower number of accidents, etc. (Adhikari & Shrestha,
2079).

Job satisfaction is considered as one of the main factors of the effectiveness and effi- ciency
of business organizations. In fact, the new managerial paradigm, which insists that
employees should be treated primarily as someone who has their own needs and personal
desires, is a very good indicator of the importance of job satisfaction in modern enterprises.
Analyzing job satisfaction, it can be concluded that a satisfied employee is a happy
employee.
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1.2 Statement of the problem

Problem refers to a situation or issue that requires attention and resolution. It can be termed as
issues. The contemporary issue that this study focuses on is employee satisfaction and the factor
that influences job statisfaction. In today’s modern world, employee satisfaction has become a
challenge which when deal precisely results into opportunities, or a blessing whereas when ignored
may result into a curse for the organization.
1.3Objective of study
The objectives of this study are:
i. To describe the factor that influences employee satisfaction and its importance.
1.4Significance of study
This report talks about the importance of employee satisfaction, factors influencing employee
satisfaction and its impact on organizations. This study establishes that employee satisfaction plays
a pivotal role in driving high productivity, reducing absenteeism, minimizing employee turnover,
and decreasing the occurrence of accidents. These factors collectively contribute to enhancing the
organization's brand image and overall profitability. Even though managers and people in charge
of organizations might know how important it is for employees to be happy, they might not have
all the details about the things that make employees happy. This can make it hard to create the
right plans and rules to make employees happier at work. Organizations need to make sure that
their employees are happy at work. This is really important because it helps them work better, be
more responsive, do better work, and provide good service to customers. So, this study looks at
the things that make employees happy and how this makes the organization better.
1.5Limitations of the study
The limitations of this study are listed below:
i. The information used in this paper is limited because there were only a few articles available as
source.
ii.This paper is influenced by the idea of various reviewed articles previously published, in which
studies are carried out with different methodologies and data sources, which makes it difficult to
 7

draw clear conclusion about the actual variables of employee satisfaction in every type of
organization.
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LITERATURE REVIEW
The literature review is a written overview of other sources on a selected topic. As the topic of our
study is factors influencing Employee satisfaction , this section of study includes review of various
published articles, journals, books related to the topic.

Employees feel good about their contribution to the success of the organization. We know pay and
benefits are strong indicators of employee satisfaction but they are not usually satisfied with their
salary or pay given by the organization. Pay and benefits here are taken as only a factor among
others and the study shows that absence of this factor brings discontent but only for short term as
the study focuses on job-enrichment factors for long term satisfaction. Their satisfaction improve
to an extent when they are made involved in decision making, receive adequate trainings to
enhance their capacities, better communication within organization, and are recognized for their
contribution. Empowerment is recognized as an important tool for improving employee morale,
performance and of course satisfaction (Spinelli & Canavos, 2000).
Employee satisfaction is essential to the success of any business. Keeping employees satisfied with
their careers should be a major priority for every employer. There are numerous reasons why
employees can become discouraged with their jobs and resign, including high stress, lack of
communication within the company, lack of recognition, or limited opportunity for growth. Lack
of communication in the workforce is a major contributor to dissatisfaction. This is usually the
result of managerial staff that is isolated and does not know how to relate to their employees on a
personal or professional level. Employees want to know that their employers recognize their
achievements in the workplace. They need to feel appreciated, as workers and as people.
Management should actively seek to improve these factors if they hope to lower their turnover
rate. Even in an economic downturn, turnover is an expense best avoided. Often companies
become more focused on production and revenues, rather than with their own employees, or even
their customers. In the case of employees, the employees may rarely be praised for the quality of
their performance; employees may feel uncomfortable in the workplace, rather than encouraged to
achieve more. Failure to provide employees with opportunities to grow within the company results
in employee frustration .
Barriers within the company may prevent some employees from reaching their full potential, such
barriers may include favoritism of certain employees. Organizations that do not provide sufficient
 9

training opportunities for employees are also doing themselves a disservice. These organizations
are missing out on employees that are dedicated to their companies and knowledgeable in their
fields, and with sufficient training, have the potential to do well in higher positions. Employees
will notice that he or she is not being compensated fairly for the amount of work they are doing,
and will begin searching for another company that will appreciate his or her labor. The effects of
dissatisfaction that results in an employee’s withdrawal from job and company can range from
mild to severe. Happiness and satisfaction in the workplace leads to much higher levels of
productivity. It increases employee morale; therefore employees are more willing to work harder
to improve the company and its goals. Companies need good, knowledgeable employees. If these
employees are not treated fairly, they are going to take advantage of other job offers that will
provide more stability, more benefits, and more compensation. Many reasons for employee
dissatisfaction are well within the control of the firm and good management practices will enable
a company to diminish, or remove, those reasons. Management should have a positive effect on,
and seek to support the happiness of the organization’s employees. Reasons for this are not solely
to benefit the employees as companies also stand to gain from employee satisfaction. Satisfied
employees will work harder for the company and plan to stay at the company, ultimately reducing
that company’s labor costs (Gregory, 2011).
Employee satisfaction is identified as the degree to which a person feels satisfied by his/her job.
Employee satisfaction is positively correlated with motivation, job involvement, organizational
citizenship behavior, organizational commitment, life satisfaction, mental health, and job
performance and negatively related to absenteeism, turnover, and perceived stress. In contrast,
there are three components of employee satisfaction: they are characteristics of the organization,
job task factors, and personal characteristics. Organizational productivity and efficiency is
achieved through employee satisfaction and attention to employees physical as well as socio
emotional needs. Employee satisfaction sentiments are best achieved through maintaining a
positive social organizational environment, such as by providing autonomy, participation, and
mutual trust. According to this research, organizations should try their best to evaluate why
employees leave or what kindles their dissatisfaction. Examine the root causes – where does the
problem lie? Is it earnings or benefits? Does it have something to do with job quality or workplace
support? Or is lack of appreciation or growth to blame. The responsibility is on the management
 10

to keep employees engaged and happy, so as to persuade them to stay. In fact, this is critical to
organizational success (Sageer et al., 2012).
In a study conducted by three researchers, based on 7,939 business units in 36 organizations, the
researchers found positive and substantive correlations between employee satisfaction-
engagement and the business unit outcomes of productivity, profit, employee turnover, employee
accidents, and customer satisfaction. According to the study changes in management practices that
increase employee satisfaction may increase business-unit outcomes, including profit. They
conclude from their study that employee satisfaction and engagement are related to meaningful
business outcomes at a magnitude that is important to many organizations (Harter et al., 2002).
Employee engagement and employee satisfaction are important variables that helps to determine
the depth of involvement of an employee with the organization and his roles and responsibilities.
Earmarked as important indicators of organizational well-being, growth, profit and function,
engagement and satisfaction are studied by human relations team across the world to increase
retention and participation of employees. A positive and direct relationship exists within
engagement of an employee and his level of contentment with job as well as existence of indirect
relationship between the two. It is found that “internal and external factors” play vital roles in
determining “job satisfaction of employees.” Some of the internal factors that affect fulfillment
among employees are temperature, lights, airing, sanitation, noise, working hours, resources,
compatibility between one’s ethics and value system of the organization, healthy work
relationships, rising up the hierarchical ladder, salary, future opportunities, accomplishments,
appreciation, accountability, facilities, mid work breaks, on job benefits, wages, remuneration,
working environment, independence, and organizational devotion. External factors as listed out
are job opportunities and financial responsibilities, one’s hometown, liking the school in which
their children study, financial, family requirements, dearth of job opportunities, age, ability to learn
and relearn, job security, perks and low convenience costs. Researchers have found positive
relationship between engagement of the employee to his work and financial growth of the
organizations. Engagement at work among employees also varies according to their years of work
experience in the case of senior and young workforce. Some of the motivating factors that are at
play in organizations in motivating employees to work are pay package, authority, sovereignty,
stimulus, right to use information, capital and future prospects, monetary benefits, long term
processes, autonomy, competence and mental attachment (Yadav & Srivastava, 2020).
 11

Employee satisfaction is a measure of how happy workers are with their job and working
environment. In another paper various variables responsible for employee satisfaction had been
discussed such as organization development factors, job security factors, and work task factors,
policies of compensation and benefit factor and opportunities. The study showed the findings done
out of 130 respondents at Kumar’s fabricators and the study inferred that the success of employees
satisfaction relies on the good appraiser-appraisee working relationship all through the process.
Employee motivation, goal achievement and positive employee morale in the work place are
factors of employee satisfaction. Various factors also form a way of improving employee
satisfaction such as organization development factors, job security, work task, compensation and
benefit, opportunities like promotion and career development. According to this study, employees
are positively correlated with the factors such as salary, good relationship with colleagues and
supervisors, motivation, career development, job involvement, productivity, rewards &
recognition, accident ratio, job security, medical & children educational facilities. Employee
motivation, goal achievement & positive employee morale in the work place are factors of
employee satisfaction. Various factors work as a way of improving employee satisfaction such as
organization development factors, job security, work task, compensation and benefit, opportunities
like promotion and career development. Motivations of workers have large impact on the job
satisfaction. The level of motivation has an impact on productivity and performance of business
organizations. Employee satisfaction is measure from happy workers with their satisfied job and
working environment. Organizations should improve for factors like working environment,
training programs, stress management, promotion & increments policies and bonus, and incentives
to improve employee satisfaction (Palaniammal et al., 2015).
Employee satisfaction is a pleasurable or positive emotional state resulting from the appraisal of
one’s job or job experiences. It is the amount of pleasure or contentment associated with a job.
The factors influencing employee satisfaction includes pay, the job itself, promotion of employees,
reward and punishment system, supportive colleagues in the organization, proper supervision, etc.
Employee satisfaction has a inverse relationship with absenteeism, accidents within the
organization, and employee turnover ratio whereas it has positive relationship with organizational
citizenship and productivity of the organization. Employee satisfaction helps in effective
utilization of resources, higher productivity, loyalty of employees, better customer service, lower
number of accidents, etc. (Adhikari & Shrestha, 2079).
 12

A research was conducted by taking 23 variables for the survey. The sample was size of 150
employees based on systematic sampling. Employees were satisfied with the following five major
factors such as empowerment & work environment, working relation, salary & future prospects,
training & work involvement and job rotation. The study also found that a few important factors
that normally contribute to the employee satisfaction didn’t have much influence on employee
satisfaction in KRIBHCO, Surat which was their field of study. The factors such as: welfare
measures, role clarity, freedom of decision making and recognition at work didn’t have much
influence on employee satisfaction according to that study in Surat. The innovativeness and
creativeness of employees also took a back seat as far as satisfaction level was concerned.
Employee satisfaction has positive significant correlation with spiritual leadership and
organizational culture. With respect to experience, the satisfaction level of the employees differed
significantly regarding salary, it could also be concluded that there was no difference of
satisfaction level regarding training opportunities between different age groups. Conclusion could
also be made that between genders groups as there existed no significant difference in satisfaction
level of employees regarding job rotation policy of the company (Sinha, 2013).
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METHODOLOGY
2.1Methodology of the study
Methodology of the study is the specific process used to identify, select, process, and analyze the
information about the stated topic. The methodology may differ according to the research topic
and field of study. The methodology used for preparing this report is documents review and
analysis of it. The approach of the study is qualitative using literature reviews and article
paraphrasing. Reference from a book is taken to understand the topic better and for literature
review, journals and articles which were found with the use of internet are reviewed.
The information used in this study is secondary information collected from various articles and
journals that I do not own. Information that has been collected is presented in literature review.
After collection, the information has been analyzed in my own way. The Finding and Conclusion
is mentioned on the basis of information which was found through the use of internet, journals and
books.
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DESCRIPTION AND ANALYSIS

Employee satisfaction is the proper match between an employee’s expectation from a job and the
actual output that employee gets from the job. Employee Statisfaction is one of the most important
things in today’s modern era where organization change and development is inevitable. The topic
of employee satisfaction has various importance such as enhancing customer satisfaction, higher
productivity of organization, minimizing organizational accidents and employee turnover ratios,
minimizing the employee costs, etc. It is equally important to reduce the absenteeism of employees
in work. Absenteeism refers to the failure of employees to attend the work.
When employees are dissatisfied with their work, they are demotivated and prefer to neglect their
work, search for better place to enhance their qualities and skills, and the irregular habit of the
employees in the workplace increases leading to increase in absenteeism.
The major factors that influence the employee satisfaction as found by this study are:
1.Organizational Variables.
2.Personal/ Individual Variables.
1.Organizational variables:
The organization determinants of employee satisfaction play a very important role in employee
satisfaction. The employees spend major part of their time in organization so there are number of
organizational variables that determine employee satisfaction of the employees. The employee
satisfaction in the organization can be increased by organizing and managing the organizational
variables or organizational factors. Some of these variables are:
• Organization Development:
Organizational development is an ongoing, systematic process to implement effective change in
an organization. Its objective is to enable the organization in adopting-better to the fast-changing
external environment of new markets, regulations, and technologies. It starts with a careful
organization-wide analysis of the current situation and of the future requirements In other words
we can say that Organization development is the process through which an organization develops
the internal capacity to most efficiently and effectively provide its mission work and to sustain
itself over the long term. Brand and Potential development of organization are some of the the
factors which come under this determinant.
• Compensation and Benefit:
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Compensation can be described as the amount of reward that a worker expects from the job.
Employees should be satisfied with competitive salary packages and they should be satisfied with
it when comparing their pay packets with those of the outsiders who are working in the same
industry. A feeling of satisfaction is felt by attaining fair and equitable rewards. Wage and Salaries,
reward and pentalies are some of the factors that fall under this category.
• Working Environment & Condition:
Working environment can also be understood as the place or surrounding where an employee
performs his/her regular work in the organization. Employees are highly motivated with good
working conditions as they provide a feeling of safety, comfort and motivation whereas poor
working condition brings out a fear and demotivation in employees. The more comfortable the
working environment is more productive and satisfied will be the employees. Feeling safe and
comfort in working environment, tools and equipment used while working, working methods,
security facilities and parking facility, well ventilation with good light fans and air- conditioning
in the working area, neat and clean office place, rest area and washrooms, etc. are some of the
factors that fall under this category.
• Relationship with Supervisor and colleagues:
A good working relationship with supervisor and colleagues is essential since, at every stage,
employees need his or her professional input, constructive criticism, and general understanding.
Relationship with immediate supervisor and colleagues, better communication flow, equal
treatment to employees, etc. fall under this category.
• Job Security
Job security is the feeling of safety in the workplace for every employee. Job security creates a
comfort zone for the workers for which one chooses to continue his entire work-life for the
organization. When the employees do not feel secure, they develop a feeling of loss of the desired
job over their security, which may cause the lack of promotion, no progress in the current project
and also get affected in the long-term career opportunities. Thus, satisfaction with job security
relates to the organ- izational commitment and job performance of an employee. Facility of
transfer, reasonable target ,Facility of Leaves are the factor that fall under this Category.
• Other Factors:
There are some other important variables which affect the level of employee satisfaction in
organization. The following points come under this category:
 16

o Encouragement and Feedbacks.

o Group Outgoing (feel like a part of Family).
o Use of internet and other technology for doing job,

2.Personal Variables:
The personal variables are the individual determinants that also help a lot in maintaining the
motivation and personal factors of the employees to work effectively and efficiently. These factors
are within the individual. Employee satisfaction can be related to psychological factors too. Some
of the personal variables influencing employee satisfaction are:
• Age
In the context of employee satisfaction, age indeed plays a role. Younger employees, who often
possess high energy levels, tend to show more satisfaction at work. This could be attributed to their
enthusiasm and drive. The old employees who have been in the organization for longer period of
time and are habituated to follow old norms and system fear losing their job and resist accepting
new techniques and changes that the organization is trying to make which shows the dissatisfaction
of those employees.
• Personality
The personality of an individual can be determined by observing his individual psychological
condition. The factors that determine the satisfaction of individual and his psychological
conditions is perception, attitude and learning.perception,attitudes amd learning of employee fall
under this category.
• Gender Differences:
The gender and race of the employees is also another important determinant of employee
satisfaction. Women, the fairer sex, are more likely to be satisfied than their counterpart even if
they are employed in same job. Generally women have the quality of being generous and
compromising things, so women are more likely to be satisfied than men.
• Education:
Education is a significant determinant of employee satisfaction as it provides an opportunity for
developing one’s personality. Education develops and improvises individual wisdom and
evaluation process. The highly educated employees can understand the situation and assess it
 17

positively as they possess persistence; rationality and thinking power whereas less education or
illiterate employees have hard time understanding new polices or plans and may be less satisfied.

• Expectation from the job:

The expectation levels of employees affect their satisfaction level. If one receives more outcome
than expected then s/he will be highly satisfied and vice-versa. If even the minimum expectation
of an employee from her/his job is not fulfilled then s/he will be dissatisfied from the job.
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CONCLUSION
On the basis of above description of this study, it's clear that how employees feel about their job
often reflects how the company is doing as a whole. This is super important, especially when
employees interact with customers or make sales, as they represent the company to the public. So,
it's a good idea for companies to make plans that make their workplace better, boost employee
happiness, and make sure they like their job. When employees are happy, they tend to work better
and get more done.

There are a lot of reasons why employees might not be happy with their jobs, but many of these
reasons can actually be fixed by the company itself. When a company uses good management
practices, they can make these problems go away or become smaller. When employees are happy,
they tend to work harder and want to stay at the company for a long time. This is great for the
company because it means they won't have to spend as much money finding and training new
employees all the time. Happy employees also feel capable and confident in their jobs. They have
the right tools, training, and responsibilities to understand and meet customer needs. They have
a lot of positive energy and are ready to give excellent service. This helps customers see the
company in a good light and makes them happier too. When employees are happy and helpful,
customers become more satisfied with the service or product they receive.

To sum up, the personal and organizational variables such as job security, working environment,
relationship with supervisors and employee, age of employees, gender, expectations, promotions,
job security, etc. play a vital role in maintaining employee satisfaction in an organization. The
managers and supervisors of organization should focus on monitoring and improving these factors
in their respective organizations in order to increase employee satisfaction. So, The level of
Positive work satisfaction levels directly influence employee commitment, performance, and
productivity, contributing to a more engaged and effective workforce.
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REFERENCE
Adhikari, D. D., & Shrestha, D. P. (2079). Leadership & Organizational Behavior (1 ed.).
Kathmandu: Kriti Publication.
Gregory, K. (2011). The Importance of Employee Satisfaction. The Journal of the Division of
Business & Information, 29–37.
Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-Unit-Level Relationship Between
Employee Satisfaction, Employee Engagement, And Business Outcomes: A Meta-
Analysis. Journal of Applied Psychology, 87(2), 268–279. https://doi.org/10.1037/0021-
9010.87.2.268
Sageer, A., Rafat, S., & Agarwal, P. (2012). Identification of Variables Affecting Employee
Satisfaction and Their Impact on the Organization. IOSR Journal of Business and
Management, 5(1), 32–39. https://doi.org/10.9790/487x-0513239
Sinha, E. (2013). A Research Work on Employee Satisfaction Measurement with Special
Reference to KRIBHCO, Surat. International Journal of Modern Engineering Research,
3(1), 523–529. https://ssrn.com/abstract=2329155
Palaniammal, V. S., Saranya, M., & Saravanan, Dr. B. (2015). Employees Satisfaction - An
Empirical Study in Private Organization. International Journal for Research in Applied
Science & Engineering Technology (IJRASET), 3(VII), 189–199.
Spinelli, M. A., & Canavos, G. C. (2000). Investigating the Relationhip between Employee
Satisfaction and Guest Satisfaction. SAGE Social Science Collections, 41(6), 29–33.
https://doi.org/10.1177/001088040004100604.
Yadav, S., & Srivastava, Dr. N. (2020). Determining the Relationship between Employee
Engagement and Employee Satisfaction: A Review of Literature. International Journal of
Psychosocial Rehabilitation, 24(5), 5038–5048. https://doi.org/10.37200/V24I5/20571