European Journal of Education and Learning, Vol.

11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X

Sehrish Manzoor Faculty of Administrative Sciences Air University, Islamabad Usman I Kiani Faculty of Administrative Sciences Air University, Islamabad Ghulam Murtaza (Corresponding Author) Faculty of Administrative Sciences Air University, Islamabad Sobai Rashid Faculty of Administrative Sciences Air University, Islamabad ABSTRACT This article mainly emphasizes on the role played by organizational environment in affecting employee’s satisfaction. The present study was conducted to analyze the impact of organizational environment on employee satisfaction in organizations of Pakistan. The research framework includes seven elements (organizational support, organizational politics, career development, workplace flexibility, employee benefits, workplace discrimination and job security) of organizational environment and employee satisfaction. The instrument employed to collect data was questionnaire based. Sample size of this research consisted of 100 employees working in different public and private organizations of Islamabad, Pakistan. Results showed a positive association and non-zero relationship between employee satisfaction and independent variables. Keywords: Seven elements of Organizational Environment, Job satisfaction, Public and Private Sector Organization, Developing Country Pakistan. 1. INTRODUCTION The most important consideration regarding an employee in an organization is his/her satisfaction (Roznowski & Hulin, 1992). Research evidences collected from variety of occupations suggest that satisfaction influences behavior of employees (Churchill, Ford & Walker, 1976). Employees communicate the level of satisfaction through their attitude (Rezaei, et al. 2008). The term organizational environment describes the working condition under which employee works. Organizational environment includes not only physical conditions of that organizations rather it also encompasses other things such as work processes, organizational support, organizational politics and social interactions at the workplace including interactions with peers, subordinates and managers etc. Thus, it would be correct to say that all members of the organization want to attain the maximum level of professional satisfaction at their working place (Cranny et al., 1992). Employees’ satisfaction is a main function of the HR Department in a company. It is a challenge for management as well as a significant factor in order to maintain good employee relations (Fisher & Locke, 1992). Conducive working environment is an important determinant of employees’ satisfaction in a wide variety of settings (Yukl, 1989). Such an environment can be created for the employees on the basis of feedback and surveys within the 1

European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X concerned organization. It is extremely important to examine issue of employees’ satisfaction in developing country such as Pakistan because the level of employees’ satisfaction and organizational environment needs improvement compared with international levels. It was, therefore, decided to study the impact of organizational environment on employees’ satisfaction. The study of the impact of organizational environment on employees’ satisfaction deserves more attention than it has been apportioned by the researchers in the past. Studies on employees’ satisfaction are somewhat available but hardly any one of them explores the impact of organizational environment on employees’ satisfaction. Moreover, no comprehensive research has been conducted in Pakistan measuring the effect of organizational environment on employees’ satisfaction. This study has attempted to make improvements from previous works by shifting its focus from job satisfaction to a more inclusive concept of satisfaction which is purely a subjective state of mind. The results of study will also provide organizations with the opportunity to improve their working environment in order to make it more productive place for their employees where they can fully utilize their abilities. 2. LITERATURE REVIEW 2.1 Organizational Environment Organizational environment means working conditions or the atmosphere of workplace. In the past, organizational environment was not given its due importance but in present situation, due to rapidly changing environment, it is needed to give organizational environment its due importance (Sinha, 1990). Cranny et al. (1992) suggested that satisfaction of employee depends to a great extent on the environment of organization in which they work. The difference in the satisfaction level of employees is mainly due to difference in organizational environment. Since 2009, most prominent research has been done by (Turkyilmaz et al., 2011) who developed a theoretical framework relating to topic. Turkyilmaz et al. (2011) identified empowerment and participation, working conditions, reward and recognition; teamwork; training and development as main factors of employee satisfaction. 2.2 Employee Satisfaction Employees’ satisfaction is an important variable which defines employees’ expectations about their jobs and workplace. It also refers the emotions of employees about the job and their attitudes about the workplace (Togia et al., 2004). Locke (1976) defined employees’ satisfaction as “…a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience”. Rice et al. (1989) proposed that “satisfaction is determined, in part, by the discrepancies resulting from a psychological comparison process involving the appraisal of current job experiences against some personal standards of comparison”. Turkyilmaz et al. (2011) observed that research on determinants of employees’ satisfaction is quite limited. Sinha (1990) believed that organizational environment effect on employees’ satisfaction is least investigated as compared to other relevant factors. Furthermore, lack of theoretical framework has narrowed the examination of environmental characteristics, focusing more on employees’ satisfaction. 2.3 Organizational Environment & Employee Satisfaction This study explores the impact of organizational environment on employees’ satisfaction through seven independent variables i.e. organizational support, organizational politics, workplace discrimination, career development, employee benefits, workplace flexibility and job security.


European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X 2.3.1 Organizational Support Mathieu & Zajac (1990) considered organizational support as a key promoter of employees’ satisfaction. When employees get support from organization their commitment towards organization increases and they stay with organization for longer period of time (Eisenberger et al., 1986). Shore & Shore (1995) has studied the difference between perceived organizational support and social support. He found that organizational support is empirically and conceptually distinct from social support as former focuses on groups and later focuses on individuals. Organizational support is measured through two predicators i.e. management support and peer support. Management support involves the understanding of employees with top management thus resulting in cordial working relationship of organization (Yukl, 1989). Anthony (1978) reported that employees increases their interest in the organization and become more increasingly committed to their work when their activities are structured, monitored and directed by mangers. Supervision of managers creates good feelings among employees. Thus, it can be said that support of management is a strong determinant of employees’ satisfaction in a wide variety of work setting (Kate, Anne & Lemerle, 2005). The element of peer support has its significance in employees’ satisfaction. Roger (1973) finds peer relationship a helpful relationship which promotes growth, development and maturity of those who work with them. 2.3.2 Organizational Politics Cropanzano et al. (1995) described organizational politics as a constantly changing social setting characterized by conflict. Cropanzano et al. (1995) defined politics as the readiness of people to use power in order to influence others and to secure their own interests or to avoid negative outcomes with in the organization. Kacmar & Baron (1999) defined politics more narrowly as unsanctioned influence attempts that seek to promote self-interest at the expense of organizational goals. Several studies have found that organizational politics is negatively related to job satisfaction and positively related to turnover intentions (Cropanzano et al., 1995). Using cognitive evaluation theory member’s perceptions of the environment influence how they make sense of and label others' behaviors as political or fair. Members who have control over their environment are more likely to view politics as an opportunity rather than a threat (Ferris et al., 1993). 2.3.3 Workplace Discrimination Discrimination at workplace has significant impact on employees’ satisfaction. Researchers suggest that employees’ satisfaction level is affected due to discrimination at workplace. Earlier studies have placed much attention to the issue of justice at workplace (Johnson & Indvick, 1996). Studies showed that discriminatory behavior at workplace deprives employees of equal opportunity to progress (Dekker & Barling, 1998). Greenberg (1980) proposed that inequality between employees on basis of favoritism, gender and personal relationship etc, greatly affects satisfaction of employees. In this study, workplace discrimination is measured through two predicator’s i.e. unfair treatments and gender discrimination. Unfair treatment influences employee negative attitude and behavior decreases satisfaction level, increasing the feelings of anger and frustration (Morrison & Robinson, 1997). Carcione (2000) argued that an employee who does not receive any reward after a good work merely due to organization’s grievance develops deeper thoughts of betrayal and resentment towards the organization. Sims (1991) found that in an environment where favoritism prevails employees in that organization likely to engage in unethical behavior. Unfair treatment develops feeling of deception and hatred in employee for the organization resulting in decreased satisfaction level (Cloward, 1963). Gender inequalities in organizations have affected the satisfaction of employee immensely (Chusmir, 1982). The difference in attitude towards satisfaction is primarily due to difference in gender (Ahlgren, 1983). 3

European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X 2.3.4 Career Development Sequence of positions occupied by a person during the course of lifetime is a career (Holton et al., 2000) where as Dessler (2008) defined career development “a lifelong series of activities that contributes to a person’s career exploration, establishment, success and fulfillment”. Researchers believe that aiding career development by providing training and coaching opportunities are vital in gaining satisfaction from organization workforce (Goldstein, 1986). Gutteridge (1986) suggest that when employees get opportunities of career advancement they identify themselves with the organization and work harder to make the organization successful. According to Ford et al. (1992) lower opportunity of progress at workplace leads to lower interest in employees’ satisfaction. Gregory et al. (2008) are of the view that promising careers prospects increases employees’ satisfaction thereby reciprocating the life long employment offer for employees with total commitment for the company. 2.3.5 Employee Benefits Previous studies by (Scarpello, Huber & Venderberg, 1988) confirmed that benefits are closely related to the satisfaction and their commitment towards the organization. Similarly, Dreher, Ash & Bretz (1988) found that employee benefits significantly effects employees’ satisfaction level. Eby (1997) is of the view that the importance of employee benefits cannot be ignored as it often means of attracting and retaining the best employees in the area and losing them to the competition. The reward system is the key driving force behind employees’ satisfaction (Centers & Bugental, 1966). Many businesses use pay, promotion, bonuses or other types of rewards to increase employees’ satisfaction and to encourage high levels of performance (Cameron & Pierce, 1994). 2.3.6. Workplace Flexibility Galinsky, Friedman & Hernandez (1991) defined work place flexibility as a way to get work done and to organize careers. Organizations have introduced number of policies and benefits to increase flexibility in workplace in recent years (Rainy & Wolf, 1982). The purpose of offering flexibility at workplace is to maintain a balance between employee work and family life so that they remain satisfied to their work settings. Organization policy makers have started realizing that by offering flexible timings and flexible leaves employees take more interest in their work which is a result of their satisfaction (Rousseau, 1995). Perception of workplace flexibility increases employee loyalty and satisfaction due to positive feelings associated with working for the organizations which visibly cares about the well being of its employees (Kush & Stroh, 1994). Hence the perception of employees that organization supports them in their needs to manage both their career and family may increase their feelings of satisfaction and morale (Lee, 1991). Moreover, employees’ satisfaction is positively related to workplace flexibility (Pierce & Newstrom, 1983). 2.3.7. Job Security Job security is very important factor which significantly impacts employees’ satisfaction. Organizations are facing threat of unemployment and downsizing which is a big hazard in employees’ satisfaction (Mishra & Spreitzer, 1998). Greenhalgh & Rosenblatt (1984) conceptualized job insecurity as a source of stress involving ‘powerless to maintain desired continuity in a threatened job situation’. Hartley et al. (1991) defined job insecurity as a discrepancy between the level of security people experience and the level they like to prefer. Literature suggests that perception of job insecurity might have detrimental consequences on employees’ satisfaction which leads to increase in job dissatisfaction, deterioration of psychological well being and higher risk of psychological distress (Ashfold, Lee & Boko, 1989). In the light of above cited studies following hypotheses have been made: 4

European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X H1: There is a relationship between organizational environment and employees’ satisfaction. H2: There is a relationship between organizational support and employees’ satisfaction. H3: There is a relationship between organizational politics and employees’ satisfaction. H4: There is a relationship between workplace discrimination and employees’ satisfaction. H5: There is a relationship between career development and employees’ satisfaction. H6: There is a relationship between workplace flexibility and employees’ satisfaction. H7: There is a relationship between employee benefits and employees’ satisfaction. H8: There is a relationship between job security and employees’ satisfaction. 3. THEORATICAL FRAMEWORK
Organizational Support Organizational Politics Career Development Employee Benefits Workplace Discrimination Workplace Flexibility Job Security Employees’ Satisfaction

4. METHODOLOGY 4.1 Population The study covered three Banks and a cellular company in Rawalpindi and Islamabad respectively. Population included employees working in the category of officers from grade 17th equivalent to grade 21st equivalent. 4.2 Sample The sample included 100 employees, 50 from banks and 50 from cellular company. Sample selection was done on the basis of quota sampling. 150 questionnaires were distributed in the organizations (75 in banks & 75 in cellular company) using quota sampling. Out of 150 questionnaires 114 were received back, 14 were incomplete 100 were of use so the response rate was 66.67. 4.3. Measures The questionnaire included questions on organizational environment and on employees’ satisfaction. Organizational environment is measured through different components i.e. organizational support, organizational politics, career development, workplace discrimination, employee benefits, workplace flexibility and job security.

Organizational Environment


European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X Five items scale which measured Organizational Support was developed by (Kacmar & Ferris, 1991) having cronbach α reliability for present study as 0.74. Workplace Discrimination was measured with the help of gender discrimination and unfair treatment having 6 items with cronbach α reliability value 0.722. The scale was developed by (Sameer, 2006). EOP Survey questionnaire was used for measuring the Career Development with a cronbach α reliability value 0.86. Employee Benefits was measured with the help of reward, and recognition questions developed by Nunnally (1978) with cronbach α reliability value 0.70. Job Security was measured with the help of four item scale developed by (Ashford et al., 1989) having cronbach α reliability value 0.58 & 0.73. Workplace flexibility was measured with the help of two item scale developed by (Nunnally, 1978) with cronbach α reliability value 0.70. Employee Satisfaction scale was developed by (Brayfield & Roth, 1951) having five items with cronbach α reliability value 0.95. 5. RESULTS 5.1 Descriptive Analysis The demographic profile of respondents i.e., their gender, marital status, education, type of organization, income group, total working experience, and the pay scale. The demographics profile of respondents showed that 62% of the employees were males whereas 38% were females out of which 49% were single and 51% were married. The youngest employee was 21 years old and the oldest was 64 years old. Based on the age, the respondents were divided in six groups: 19-27, 28-36, 37-45, 45-54, 55-63 and 6372. The largest group was between 19-27 years (54%), followed by 28-36 years (42%) and finally 64-72 years age group formed the smallest group (1%) whereas none of the respondents fall within the age group 37-45 years and between and 55-63 years. Most of the employees in both the organizations hold a master degree. None of the employee was below graduate level. 5.2 Correlation Analysis The data was also tested on Pearson Coefficient of correlation to estimate strength of linear relationship between each element of OE and ES.

Table 5.1 Correlation Results


0.98** 0.97** 0.99** 0.98** 0.99** 0.98** 0.96** 0.97** 0.97** 0.95** 0.96** 0.95** 0.97** 0.98** 0.96**


European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X
JOB SEC ORG SPT 0.96** 0.97** 0.94** 0.96** 0.97** 0.99** 0.96** 0.95** 0.95** 0.96** 0.98** 0.98** 0.95* 1**

** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

Table 5.2 Bivariate Correlation between Overall Organizational Environment (OE) and Employees’ satisfaction OE ES
OE ES 1 .988** 0.988**

Seemingly there is a strong correlation between individual elements of OE and ES. 5.3 Regression Analysis 5.3.1 Multiple Regression Standard multiple regression was conducted to asses the relationship between independent variable Organizational Environment (OE) and six predicator variables, i.e., Organizational Support, Organizational Politics, Workplace Discrimination, Workplace Flexibility, Career Development, Employee Benefit and Job Security and dependent variable Employee Satisfaction (ES). Table 5.4 Multiple Regressions
Model Un standardized Coefficients B 1.061 0.214 -0.073 -0.135 0.068 0.661 0.872 0.754 Std. Error 0.146 0.1681 0.1347 0.106 0.154 0.092 0.094 0.183 t-Statistics P-Value

(Constant) Organizational Support Organizational Politics Workplace Discrimination Workplace Flexibility Career Development Employee Benefits Job Security

3.032 5.040 -6.993 -4.713 2.244 3.763 4.191 3.219

0.000 0.000 0.001 0.000 0.003 0.001 0.002 0.002

Dependent Variable: Employees’ satisfaction, n=100 * R2= 0.978,**Adjusted R2= 0.977.

Individually and collectively all the independent elements have had a strong influence on employees’ satisfaction. The p values of all these were below 0.05 (p<0.05) which proves there is a strong relationship between all IVs and DV. Regression coefficients of Organizational Support (β = 0.254), Organizational Politics (β = 0.174), Workplace Discrimination (β = 0.153), Workplace Flexibility (β =0.179), Career Development (β =0.527), Employee benefit (β = 0.547), Job Security (β =0.367) are significant and positive showing a positive relationship with ES. So it is inferred that H2-H8 are


European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X supported as all are related to employee satisfaction. Workplace discrimination and organization are negatively related to employee satisfaction which means with increase in them employee satisfaction decreases and vice versa. Results show other variables are positively related to employee satisfaction. 5.3.2 Regression Analysis (Composite OE and ES). A regression was also conducted by taking components of OE as independent variable and ES as dependent variable. Results are mentioned in table 5.5. Table 5.5 Regression Analysis: OE (Composite) on ES (Employees’ satisfaction).
Unstandardized Coefficients Model B (Constant) Organizational Environment 5.676 0.324 Std. Error 0.164 0.048 7.919 4.367 .000 .000 t-Statistics P-Value

a. Dependent Variable: Employees’ satisfaction, n=100 b. Predictor (Constant): Organizational Environment
* R2= .330,**Adjusted R2=.333, P- Value =0.00

To measure the influence of Organizational Environment on Employees’ satisfaction simple linear regression was estimated between ES and OE. The Beta coefficient (0.324) was found significant and positive. Unexplained variation in the model was quite low as the coefficient of determination (R Square) is about .330. The results supports H1 i.e. organizational environment is related to employee satisfaction. 6. DISCUSSION The purpose of this research was to identify the impact of organizational environment on employees’ satisfaction in Banks and in cellular companies. Amongst the factors associated with organizational environment, an employee benefit is found to exert strong influence on employees’ satisfaction according to research results. The results of this study also signify that all the selected variables are important for the employees but career development has been found as a second stronger predictor of employee satisfaction. The results of present study identified job security as a third important predictor of employees’ satisfaction. Organizational support is the fourth factor relating to employees’ satisfaction. This study finds relationship between workplace flexibility and employees’ satisfaction. The study also reveals that organizational politics and workplace discrimination negatively affects satisfaction of employees. The findings of the present study are consistent with findings of studies conducted by many researchers including Pierce & Newstrom, (1983), Cropanzano et al. (1995), Durham et al. (19970, & Gregory et al. (2008). Organizational environment variables suggest that improvement in immediate improvements in the organizational environment will produce greatest impact on employee satisfaction and in organizational productivity. Conducive organizational environment and a healthy atmosphere are the ingredients that have strong influence on satisfaction measures. This proves that the organizational environment under which employees perform their duties has a considerable impact on their satisfaction level because nearly all of them are keen to find a healthier workplace that provides them with opportunities of personal development and professional growth. This is further supported by previous research study which identified that individuals enter into organization with certain needs, desires and skills and look forward to find organizational environment that support them to utilize their capabilities optimally and


European Journal of Education and Learning, Vol.11, 2011 ISSN(paper)2668-3318 ISSN(online)2668-361X satisfy many of their basic needs. The desire to fulfill these needs encourage them to accomplish their job tasks with full commitment and devotion. 8. CONCLUSION, RECOMMENDATION AND LIMITATIONS Although, number of factors has been identified to determine satisfaction level of employees but information relating to employees’ satisfaction is still inadequate. Employees’ satisfaction is very important for the success of any organization. It is for this reason this study analyzed employees’ satisfaction and factors affecting it in organizations. This study chooses seven factors of employees’ satisfaction namely organizational support, organizational politics, workplace flexibility, workplace discrimination, career development, employee benefits and job security. Findings show relationship between organizational environment and employees’ satisfaction. As this study is performed in public and private organizations in developing country, the results will help to understand the concept of employees’ satisfaction in that country. In conclusion, it is hoped that this research has helped to both academicians and business practitioners in improving their understanding their understanding of employees’ satisfaction. The banks and cellular companies can initiate their research on any one or more dimensions of OE to study their influence on ES. Secondly, should include banks and cellular companies from other cities of Pakistan as well for more significant results. Thirdly, should study the comparison in different organizations within same industry.

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