Determinants of Employee Job Satisfaction in Malaysia
Nurul Afifah Iskandar Khaira1, Nurul Sima Mohamad Shariff1*
1 Faculty of Science and Technology, Universiti Sains Islam Malaysia (USIM), Nilai, Negeri Sembilan, Malaysia
*Corresponding Author: nurulsima@usim.edu.my
Accepted: 15 March 2021 | Published: 1 April 2021
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Abstract: Job satisfaction has always linked with the performance of an organization, as a higher satisfactory of employees leads to a better reputation of the firm and a lower turnover rate. Every organization’s success indeed depends on employee satisfaction on job as their effort has been paid off. This study aims to determine the determinants of employee job satisfaction such as demographic factors (gender and living areas), education and skills, work environment and compensation. 132 employees are involved in the survey from various sectors in Malaysia. The analysis involved in this study are Pearson’s correlation between variables and the Ordinal Logistic Regression. Based on the findings, the study concludes that among five variables that have been studied, living area, education qualification and skills and compensation are significant and considered important factors to meet their job satisfaction compared to gender and work environment.
Keywords: Job satisfaction, turnover rate, work environment
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1. Introduction
Job satisfaction is somehow related to the decision of labor force participation, especially among young employees. It has reported that Malaysia ranked fourth of seven countries in the same region for employees that at least satisfied at their workplace. The survey stated that most Malaysian employees’ job happiness depends on suitable work location and company reputation. Both reasons are the main factors in the rising number of labor force participation rate, other than education qualification and employability skills. Although satisfaction is subjective to define, this also leads to the perception of an employee that the work fulfills their financial and psychological needs. If an employee is deprived by these needs, then they will have a strong urge to concentrate and satisfy in their work, resulting in a highly motivated employee. A positive contribution on a company’s labor market hereby improved a company’s ability to attract, maintain and motivate excellent employees.
2. Literature Review
There are various definitions of employee job satisfaction have been stated in literatures. It is related to people’s thinking, feeling and observing their jobs or employment status. Lo and Ramayah (2011) outlined job satisfaction as to whether an employee likes their work or not, while Aziri (2011) defined it as the perception of an employee that the work fulfills their financial and psychological needs. Various theories have been attempted to explain job satisfaction, and the most popular theory is the Maslow’s Hierarchy of Needs. According to this theory, there are five categories of human needs introduced which are physiological or basic needs, safety needs, affection and love needs, esteem needs and self-actualization needs.
If an employee is deprived by these needs, then they will have a strong urge to satisfy and concentrate in their work, resulting in a highly motivated employees and a positive job satisfaction.
The participation of employees to labor market was determined by several factors such as education qualification, income level and other factors. Several studies focused on these factors are in Bucheli et al. (2010), Hong et al. (2013), Bakan and Buyukbese (2013), Nor and Said (2014).
Bucheli et al. (2010) used a Probit model in their study and found that gender male was negatively related to job satisfaction. However, they concluded that with positive impact of education years by providing better tools and capabilities, employees tend to be more satisfied with their jobs. Hong et al. (2013) employed Kruskal-Wallis test to determine the factors contributed to job satisfaction and showed that work environment was the highest median score among others such as salary and promotion criteria. Bakan and Buyukbese (2013) investigated the correlation analysis between employee income level and job satisfaction conducted using t-statistics. They found that there exists a relationship between them although there is no direction causality between both variables. A study from Nor and Said (2014) used the Ordered Logit model to analyze the changes of labor force participation on different group of living areas associated with the explained variables such as education, age and marital status. Their results indicated that job satisfaction is well predicted with employees’ compensation or salary since it becomes an important motivator in increasing their level of satisfaction.
An employee’s behavior is affected by their conduct and values. Employee stress can trigger work pressure and employee’s dissatisfaction. Furthermore, a ‘mismatch’ between qualification and job responsibilities can negatively affect the performance and employee’s productivity, and hence resulting to threaten the company’s position in the market. Low job satisfaction can also lead to a higher rate of employee turnover where it is measured by the leave-taking of a company decided by a personal behavior of employees.
Thus, this study aims to analyze the determinants and satisfaction level of young employees towards their job. The differences in demographic factors are identified in influencing job satisfaction such as gender and living areas from rural, urban and suburban areas. Other factors such as qualification, discrimination and income level are also considered. The significance of this study is to provide information to a public especially fresh.
3. Data and Methodology
Data
The data were randomly distributed and collected via survey technique. The survey consists of two sections which are Part 1 and Part 2. Part 1 consists about demographic profile of respondents such as gender, age, employment status, education and income level. Part 2 consists about questions to measure the variable off interest. The respondents are asked on their perspectives towards their job satisfaction with three main variables are included which are compensation, work environment and qualification of employees. A Five-point Likert Scale is used for each of the questions ranged from 1 (Strongly Disagree), 2 (Disagree), 3 (Neutral), 4(Agree) and 5 (Strongly Agree).
A total of 132 respondents are recorded in this survey with a majority of them are from the group of ages 30 and above with 73.48% has participated. Questions are being referred to
previous studies and amended to suit the study objectives. The main reference of the questionnaire are referred to Bakan and Buyukbese (2013), Ibrahim et al. (2014) and Hong et al. (2013).
Methodology
Some statistical analyses are employed to achieve the objectives of the study. The methodology used are descriptive statistics, Pearson’s Correlation, and ordered logistic Model. The summary of the methods is briefly described as follows:
• Descriptive statistics show the summary statistics of the data used in this study through the average data of every main variable.
• Pearson’s Correlation is to measure the strength of linear correlation between two variables which indicates a positive or negative relationship.
• Ordered logistic model measures the response categories and estimated coefficients of each variables. The model is then estimated by using the maximum likelihood estimator approach.
3. Results and Discussion
Table 1: Respondents’ demographic profile
Variables Categories Frequency Percentage (%)
Gender Male 74 56.06
Female 58 43.94
Age
18-21 3 2.27
22-25 27 20.45
26-30 5 3.79
30 and above 97 73.48
Marital Status
Single 41 31.06
Married 90 68.18
Widow 1 0.76
Living Area
Urban 73 55.30
Suburban 42 31.82
Rural 17 12.88
Employment Status
Government Sector 34 25.76
Private Sector 64 48.48
Self Employed 23 17.42
Student 11 8.33
Education Level
SPM 11 8.33
Diploma 36 27.27
Bachelor’s Degree 69 52.27 Doctorate Degree 15 11.36
Sijil 1 0.76
Race/Ethnicity
Malay 122 92.42
Chinese 6 4.55
Indian 4 3.03
Income Level
RM1,000 and below 22 16.67 RM1,001 – RM3,000 19 14.39 RM3,001 – RM5,000 18 13.64 RM5,001 and above 73 55.30
The results of the survey recorded that majority of the respondents comprises of male which is 56.06% compared to female which is 43.94% from the total of respondents. Next, the majority group of ages were 30 years and above (73.48%) and the other were range from 18-29 years.
In term of marital status, 68.18% of respondents were married while 55.30% of them lives in urban areas. Among four categories of employment status recorded, employees working at private sector (48.48%) contributes the higher percentage and most of the respondents held a Bachelor’s Degree (52.27%) from the total respondents. Among three major races in Malaysia, Malay respondents recorded the highest participants of 92.42%. Lastly, respondents with the highest income of RM5,001 and above made up more than half of total respondents with 55.30%, and the rest are with the income of RM5,000 and below. Table 1 represents the respondents’ demographic profile of the data collection.
Table 2 shows the result of correlation between both Job satisfaction and independent variables (Education qualification and skills, work environment and compensation). All independent variables show there exists a positive relationship with the highest coefficient of r is scored by compensation which indicates that compensation has a strong relationship with job satisfaction.
This was supported by Ganesan et al. (2017) where they stated that compensation is important to determine employee job satisfaction.
Table 2: Pearson’s correlation coefficient Independent Variables Job Satisfaction Education Qualification
and Skills 0.3066
Work Environment 0.3584
Compensation 0.5624
Table 3: Results of the ordered logistics model
Variables Estimated coef. p-value
Gender - Male 0.336 0.346
Areas – Urban 0.770 0.155
Areas - Suburban 1.553 0.008*
Education Qualification & Skills – Response
“Disagree” -1.948 0.071
Education Qualification & Skills – Response
“Neutral” -1.011 0.095
Education Qualification & Skills – Response
“Agree” -1.298 0.005*
Work Environment – Response “Disagree” -1.997 0.100 Work Environment – Response “Neutral” 0.141 0.859 Work Environment – Response “Agree” 0.738 0.356 Compensation – Response “Disagree” -7.113 0.000*
Compensation – Response “Neutral” -4.392 0.001*
Compensation – Response “Agree” -2.944 0.020*
Note: * significant at 5% significance level
The coefficients of the response variable, employee job satisfaction is modelled with the predictors of the model, which is the independent variables (see Table 3). For gender, the coefficient for male is positive by reference to female category. However, it is not an important predictor in the model based on the insignificant p-value. Next, employees who lived at urban and suburban areas are having more satisfactory towards their jobs rather than those in rural.
One of the categories has a significant p-value and therefore living areas influences employee job satisfaction. The negative estimated coefficients of responses on education qualification and skills implies that employees with lower educational attainment and skills are quite unsatisfied with their jobs compared to those with a higher educational attainment and skills.
It is an important factor since there is a significant p-value. Next, work environment has a negative coefficient for the response “Disagree” and positive coefficients for the response
“Neutral” (0.141) and “Agree” (0.738). However, this predictor was not found to be statistically significance at the 5% level. Lastly, compensation contributes as an important factor in the model where it shows a negative estimated coefficient as expected for each response. This interprets that employees with lower compensation have lower job satisfaction than those with higher compensation and vice versa.
4. Conclusion
From the results of the study, respondents who live at urban and suburban areas tend to have a higher job satisfaction is relevant since the economic growth are more obvious especially in developing areas such as the urbans and thus, more job opportunities have been offered.
Education qualification and skills was also found significant in this study due to the importance to meet the needs of employer’s expectation especially in professional sectors. Lastly, as proven from past research, compensation is considered as the strongest determinant as higher compensation and better fringe benefits from company are compatible with employees’ job responsibilities.
In conclusion, Malaysians employers should be more concerned on offering their vacancies towards the employees. The findings of this study indicate that companies need to consider the factors that affect job satisfaction to maximize job satisfaction for their workers and control retention, intention to leave and absenteeism as indicators of dissatisfaction in the long term.
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