The Connection Between Employee Satisfaction and Employee Retention

Table of contents

List of abbreviations

List of figures

List of tables

1. Introduction and objectives

2. Employee satisfaction
2.1 Definitions of employee satisfaction
2.2 Theories related to employee satisfaction
2.2.1 The two-factor theory according to Herzberg
2.2.2 The concept of motivation potential according to Hackman and Oldham (job characteristics model)
2.2.3 The Bruggemann model
2.3 Factors that can influence employee satisfaction
2.3.1 Working atmosphere
2.3.2 Pay
2.3.3 Attractiveness of work activity
2.3.4 Working time regulations
2.3.5 Employee Management & Operational Communication
2.4 Impact of employee satisfaction on the company
2.4.1 Organizational Citizenship Behavior (OCB) and Employee Satisfaction
2.4.2 Performance
2.4.3 Absenteeism and fluctuation
2.5 Impact of employee satisfaction on the person
2.5.1 Job satisfaction and life satisfaction
2.5.2 Personality development
2.6 Consequences of a lack of employee satisfaction
2.6.1 Internal termination
2.6.2 Consequences for the company

3. Employee retention
3.1 The importance of employee retention for the employee
3.2 The importance of employee retention for the company
3.3 Organizational commitment – a more precise definition
3.4 Examples of measures to promote employee retention
3.4.1 Staff development
3.4.2 Market-driven payment
3.4.3 Work & Life Balance
3.4.4 Company pension scheme

4. The relationship between employee satisfaction and employee retention

5. Conclusion

Appendix

Bibliography

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of figures

Figure 1: The two factors of the two-factor theory according to Herzberg

Figure 2: The Job Characteristics Model according to Hackman/Oldham (1975)

List of tables

Table 1: Examples for content and context factors

1. Introduction and objectives

Research results from the Institute "Work and Qualification" at the University of Duisburg Essen in 2011 came to the conclusion that employee satisfaction in Germany is continuously declining in the longer term. Also seen in a European comparison, we are in fifth last place.¹ This finding could become a serious problem in German companies. because: Which entrepreneur in this day and age does not know the emerging problem of the "War for Talents"? Shouldn't it be assumed that companies do the best they can to ensure that their employees are satisfied and enjoy working in their company? Are these companies not afraid of losing their top talent to the competition? "Only satisfied employees are good employees." This statement is often heard, but is it sufficiently implemented? If you look at the study results of the University of Duisburg Essen, you have to doubt this. The satisfaction of employees has not increased but decreased in recent years and this would have to tempt some companies to rethink – at least one should assume. The topic of employee satisfaction is becoming an increasingly important topic – not only for the companies themselves, but also for the employees. When employees determine how much is being done for satisfaction and well-being in other companies, they come to think about what, in the worst case, could lead to the termination of the current job. That is why, in this context, the retention of employees is also a topic that can no longer be suppressed by companies. For companies, it is becoming increasingly important to retain their "high professionals" who have a broad knowledge and skills in order to be able to keep this knowledge in the company. The current Gallup study on the commitment of German employees came to a frightening conclusion: In 2012, only 15% of the employees surveyed in Germany had a high level of employee retention. 61% feel only slightly and the remaining 24% do not feel emotionally bound to their company at all.² More and more companies are therefore relying on appropriate measures to increase job satisfaction in order to increase the employee retention of their employees accordingly.³

In this context, the present work is intended to provide an overview of the constructs of employee satisfaction and employee retention and to show how these two concepts are related. Within the second chapter, the construct of employee satisfaction is dealt with. Theories of these are described and it is shown which factors can influence employee satisfaction and how employee satisfaction affects the company and the individual. This is followed by a description of the effects of a lack of employee satisfaction. In the third chapter, employee retention is examined in more detail. It describes what this concept means for the company and the employees and what is meant by organizational commitment. Subsequently, measures are listed that can promote employee retention. In the fourth chapter, the connection between the two constructs of employee satisfaction and employee retention is to be examined and made visible.

2. Employee satisfaction

The construct of employee and job satisfaction has been investigated in many different ways to this day. Especially within work and organizational psychology, this concept was examined very intensively. On the subject of "job satisfaction", more than 11,000 articles had been published by the year 2000.⁴ In the next chapters, this multi-layered and complex construct will be discussed in more detail. First, the definitions of employee satisfaction are considered. Below is a brief overview of the theories on the topic. This construct is influenced by various factors and has a corresponding effect on the individual and the human being. In addition, the effects that a corresponding lack of employee satisfaction has resulted in are examined in more detail. The term "job satisfaction" is used within this work synonymously with the term "employee satisfaction".

2.1 Definitions of employee satisfaction

For the construct of employee satisfaction, no universally valid definition has yet been defined. The oldest definition on the subject of job satisfaction goes back to Hoppock: Job satisfaction is "... a combination of psychological, physiological and situational conditions that cause the person to make an honest statement: I am satisfied with my work."⁵ Other authors refer to the fact that employee satisfaction is the result of a target-actual comparison of expected needs and expectations. This statement represents e.g. B. Agnes Bruggemann: "We assume that situation-specific needs and expectations arise when a worker learns to what extent the characteristics of the work situation affect his generally given needs. This results in a more or less conscious target value for concrete satisfaction possibilities from the employment relationship. The actual satisfaction possibilities correspond to the actual value. The balancing comparison between actual and target value leads to a judgment on the scale "satisfactory- unsatisfactory" or "satisfied-dissatisfied."⁶ The most frequently cited definition of job satisfaction in the literature is that of Edwin Locke. This refers to the fact that job satisfaction can be achieved if certain personal values (which are related to one's own needs) are fulfilled.⁷ From the different definitions, it can already be seen that the concept of employee satisfaction is a complicated one. Lorenz Fischer (based on Neuberger & Allerbeck, 1978) therefore subdivides the definitions of job satisfaction as follows: Operational definitions (e.B. Hoppock), job satisfaction as satisfaction of needs, job satisfaction as a (cancelled) target-actual difference, job satisfaction as the achievement of certain values (e.B. locke), satisfaction as a pleasant person-immanent state or affective evaluation reaction, job satisfaction as a state of equilibrium, job satisfaction as a result of complex information processing (e.B. Bruggemann), job satisfaction as the equivalent of a Expectations and job satisfaction as an attitude to work or to aspects of the work situation.⁸

2.2 Theories related to employee satisfaction

There are various theories in the literature that try to explain or describe employee satisfaction. These theories can be distinguished between content and process theories.⁹ Content theories describe "... according to which law man strives for which goals..."¹⁰. In process theories, however, the goal of behavior is unknown or very different, but humans still want to maximize their benefits. They are more concerned with how the goal is to be achieved.¹¹ Both theoretical approaches go back to the general motivation theories. This is due to the fact that there is no independent theoretical concept for employee satisfaction per implies, which is why it has been adapted to the motivation theories. This is explained by the fact that motivation leads to satisfaction and satisfaction in turn to motivation.¹²

In the following subchapters, content theory is aimed specifically at the "two-factor theory" according to Herzberg and at the Concept of motivation potential according to Hackman and Oldham (Job Characteristics Model). In terms of process theory, agnes Bruggemann's job satisfaction model is considered.

2.2.1 The two-factor theory according to Herzberg

The two-factor theory according to Herzberg applies "... as a very important paradigm of job satisfaction, which still has an effect on science today..."¹³ as Lorenz Fischer puts it. This theory belongs to the content theories of work motivation.¹⁴

There are two variants: The two-factor theory in the narrower sense and in the broader sense. The two-factor theory in the broader sense refers to work motivation in general.¹⁵

For employee satisfaction, according to Agnes Bruggemann, the two-factor theory in the narrower sense must be considered in more detail. In contrast to the two-factor theory in the broader sense, this refers to the two different modes of action of the factors for job satisfaction.¹⁶ This is about measured job satisfaction and job dissatisfaction. Within this model, job satisfaction is measured by satisfaction in certain situations of work, and job dissatisfaction is measured by the frustration or non-satisfaction of the workers.¹⁷ Herzberg examined the perceived satisfaction of the workers in certain situations. He asked the workers in which situations they felt particularly comfortable at work and in which, on the other hand, they felt rather uncomfortable.¹⁸

Based on the survey results obtained in this way, Herzberg assumes that only certain and not all factors of the work contribute to the satisfaction of the employees.¹⁹ In contrast to the one-dimensional model, Herzberg distinguishes in his two-dimensional model between the satisfaction dimension and the dissatisfaction dimension (see also Fig. 1).²⁰ The factors that generate satisfaction are classified within the framework of "neutral (no satisfaction) – satisfied". These factors are called "satisfiers".²¹ The "satisfiers" have to do with the work or.dem work content itself and are therefore referred to as "account factors" (content = content) or as "motivators".²² Motivators motivate employees to perform at a higher level. They express higher-value needs such as the pursuit of growth (for more examples, see Table 1). Only they can guarantee job satisfaction in the long term, as they are aimed at the intrinsic motivation of the employees and thus their own motivation without external influence is in the foreground. The absence of these factors does not lead directly to dissatisfaction, but only to a lower level of satisfaction.²³

On the other hand, there are factors that promote employee dissatisfaction. These factors are in the range of "neutral (no dissatisfaction) – dissatisfied". They are called "dissatisfiers" or "context factors".²⁴ The contextual factors are also referred to as "hygiene factors". This refers to factors that are desired by every person and should definitely be fulfilled so that dissatisfaction does not occur. This includes, for example, the relationship with colleagues (for further examples see Table 1). "They prevent the emergence of negative states (dissatisfaction), but do not lead to positive (satisfaction)".²⁵ The hygiene factors are caused by external influences of the work (extrinsic mode of action). If the hygiene factors are not met, this leads to dissatisfaction.²⁶

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: The two factors of the two-factor theory according to Herzberg

Abbildung in dieser Leseprobe nicht enthalten

Table 1: Examples for content and context factors

Source: Own representation based on: Fischer, L. (1989) p. 34

2.2.2 The concept of motivation potential according to Hackman and Oldham (job characteristics model)

This model provides information on how the work tasks should be designed in order to increase intrinsic motivation, performance and job satisfaction and still offer workers personal opportunities for development.²⁷ The model assumes that the work is done not only on the basis of extrinsic incentives, but also on the basis of incentives arising from carrying out the work activity itself.²⁸

Hackman and Oldham assume that intrinsic motivation is also decisive for the development of job satisfaction, among other things. According to this model, the emergence of intrinsic motivation depends on the personal characteristics (psychological states of experience) of the individual person. These are influenced by the core dimensions of the work situation. Depending on the perception of the core dimensions (positive or negative), these have a corresponding influence on the psychological experience states of a person.²⁹ So it must be tried that the core dimensions are all fulfilled, so that a positive change in the psychological experience states can occur and thus the intrinsic motivation is promoted.

The job characteristics model of Hackman/Oldham is described in more detail below (see also Fig. 2). It is based on three mutually influencing variables. These variables are denoted as follows:³⁰

- Core dimensions of the work situation (task and activity characteristics)
- Critical psychological states of the person and
- Personal and work-related results

The "core dimensions of the work situation" are again divided into five different dimensions:

Variety of requirements: ³¹ This dimension describes how diverse a work situation is for the individual worker and how much it demands the individual skills and knowledge of the worker.

Holistic approach of the task: ³² The issue here is how much the worker is involved in the development process of his task, or whether he can follow his work from beginning to end and thus identify as part of this work.

Significance of the task: ³³ This dimension indicates how important the task the worker performs is for the future users of the product and how his work is related to the work of other departments.

These three dimensions contribute to the psychological state of experience "Experienced significance of one's own work activity".³⁴ When you see what you do, how future users of the product benefit from it and what is required of you, you realize the importance of your work for others and also for yourself. Thus, the work gets a corresponding importance and the work task is experienced as meaningful. If these dimensions are fulfilled, the intrinsic motivation is increased.³⁵

Autonomy: ³⁶ This characteristic exists when the employees can work independently and they are given a certain amount of leeway.

The core dimension "autonomy" influences the psychological state of experience "Experienced responsibility for the results of one's own work activity". Depending on the degree of autonomy, the worker feels responsible for his task and pursues it with more vigour and joy.³⁷ In addition, he can thus also put his skills and knowledge to better use than would be the case if all work steps were prescribed.

Feedback from task fulfillment (job feedback):³⁸

The dimension "feedback of the fulfillment of tasks" influences the psychological state of experience "knowledge about the current results, especially the quality of one's own work". This is not about the feedback from colleagues or superiors, but about the feedback from the task itself. This cannot be influenced from the outside like employee feedback, but is either fulfilled by the individual worker or not. In production, for example, displays are conceivable that display the produced parts of the individual worker so that he has feedback on the number of parts produced by him.³⁹

The already described "psychological states of experience" lead to the "effects of work". Only when the "psychological states of experience" are experienced and evaluated by the workers in a positive way can the following "effects of work" occur.⁴⁰

- High intrinsic motivation
- High quality of work performance
- Reduction of the fluctuation and absenteeism rate
- High job satisfaction and
- Low absence and fluctuation

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: The Job Characteristics Model according to Hackman/Oldham (1975)

Source: Own representation based on: Fischer, L. (1989), p. 41

All three variables (task characteristics, psychological experience states and effects of work) are subject to the need for personal development. This is considered the central intervening variable.⁴¹ People with a strong need for growth react particularly positively to challenging activities. They are more closely linked to the core dimensions and the impact of work.⁴² They need a high degree of autonomy and an interesting and varied work activity so that they can be satisfied.⁴³ Accordingly, people with lower expectations react less positively to an expansion of tasks, as they could quickly feel overwhelmed. Consequently, there are people who have a greater need for personal development than others. The Job-Charactericstics model thus takes into account that not all people react equally to the same task.⁴⁴

[...]

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¹ cf. Bohulskyy, Jan et. al.: Arbeitszufriedenheit in Deutschland sinkt langfristig. Auch geringe Arbeitszufriedenheit im europäischen Vergleich, IAQ‐Report. Aktuelle Forschungsergebnisse aus dem Institut Arbeit und Qualifikation, Nr. 3/2011, Duisburg, p. 2

² cf. Pfeifer, Anke: Pressemitteilung. Innere Kündigung bedroht Innovationsfähigkeit deutscher Unter‐ nehmen. Beratungsunternehmen Gallup veröffentlicht Engagement Index 2012, Berlin: 06.03.2013, p. 1

³ cf. Baszenski, Norbert: ifaa‐Trendbarometer Auswertung Dezember 2012, Institut für angewandte Arbeitswissenschaft e. V., Düsseldorf: 2012, p. 1

⁴ cf. Nerdinger, Friedemann W. et al..: Arbeitsmotivation und Arbeitszufriedenheit, in: Arbeits‐ und Or‐ ganisationspsychologie, 2. Auflage, Springer‐Verlag, Heidelberg: 2011, p. 395

⁵ Fischer, Lorenz: Strukturen der Arbeitszufriedenheit. Zur Analyse individuelle Bezugssysteme, Verlag für Psychologie – Dr. C. J. Hogrefe, Göttingen: 1989, p. 23, quoted from: Hoppock, R., Job Satisfaction, Harper & Row, New York: 1935

⁶ Bruggemann, Agnes et. al.: Arbeitszufriedenheit, Hans Huber, Bern: 1975, p. 132

⁷ cf. Fischer, L.: (FN 5), p. 23

⁸ cf. Fischer, L.: (FN 5), p. 23

⁹ cf. von Rosenstiel, Lutz: Grundlagen der Organisationspsychologie, 6. Auflage, Schäffer‐Poeschel Verlag, Stuttgart: 2007, p. 241

¹⁰ von Rosenstiel, L.: (FN 9), p. 242

¹¹ cf. von Rosenstiel, L.: (FN 9), p. 242

¹² cf. Fischer, L.: (FN 5), p. 28

¹³ Fischer, L.: (FN 5), p. 33

¹⁴ cf. von Rosenstiel, L.: (FN 9), p. 88

¹⁵ cf. Bruggemann, A. et al.: (FN 6), p. 33

¹⁶ cf. Bruggemann, A. et al.: (FN 6), p. 33

¹⁷ cf. Bruggemann, A. et al.: (FN 6), p. 33

¹⁸ cf. Fischer, L.: (FN 5), p. 34

¹⁹ cf. Fischer, L.: (FN 5), p. 34

²⁰ cf. Lieber, Bernd: Personalführung…leicht verständlich!, 2. Auflage, UTB, München: 2007, p. 32

²¹ cf. Bruggemann, A. et. al.: (FN 6), p. 34

²² cf. von Rosenstiel, L.: (FN 9), p. 89f.

²³ cf. von Rosenstiel, L.: (FN 9), p. 90

²⁴ cf. Bruggemann, A. et. al.: (FN 6), p. 33

²⁵ cf. von Rosenstiel, L.: (FN 9) p. 89

²⁶ cf. Nerdinger, Friedemann W. et al.: Arbeits‐ und Organisationspsychologie, Springer Verlag, Heidel‐ berg: 2008, p. 430

²⁷ cf. Schmidt, Klaus ‐ H. et. al.: Job Diagnostic Survey (JDS‐deutsche Fassung), in: Handbuch psychologischer Arbeitsanalyseverfahren, Hrsg.: Dunckel, Heiner, vdf Hochschulverlag AG, Zürich: 1999, p. 206

²⁸ cf. Schmidt, K. et al.: (FN 27), p. 206

²⁹ cf. Fischer, L.: (FN 5), p. 41

³⁰ cf. Fischer, L.: (FN 5), p. 41

³¹ cf. Weibler, Jürgen: Personalführung, 2. Auflage, Vahlen, München: 2012, p. 204

³² cf. Weibler, J.: (FN 31), p. 204

³³ cf. Weibler, J.: (FN 31), p. 204

³⁴ cf. Fischer, L.: (FN 5), p. 41

³⁵ cf. Ridder, Hans-Gerd: Personalwirtschaftslehre, 3. Auflage, W. Kohlhammer GmbH, Stuttgart: 1999, p. 226

³⁶ cf. Weibler, J.: (FN 31), p. 204

³⁷ cf. Ridder, H.: (FN 35), p. 226

³⁸ cf. Weibler, J.: (FN 31), p. 204

³⁹ cf. Nerdinger, Friedemann W.: Grundlagen des Verhaltens in Organisationen, Hrsg.: von der Oelsnitz, Dietrich u. a., 2. Auflage, W. Kohlhammer GmbH, Stuttgart: 2008, p. 192.

⁴⁰ cf. Fischer, L.: (FN 5), p. 42

⁴¹ cf. Fischer, L.: (FN 5), p. 41

⁴² cf. von Rosenstiel, L.: (FN 9), p. 100

⁴³ cf. Fischer, L.: (FN 5), p. 41

⁴⁴ cf. Nerdinger, F.: (FN 39), p. 193