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the job satisfaction on employee turnover intention in manufacturing of malaysia

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Journal of Arts & Social Sciences
Vol 1, Issue 2, 53-63 (2018)
The Influence of Job Satisfaction on Employee Turnover
Intention in the Manufacturing Industry of Malaysia
Collin Lye Chin
Faculty of Business, Raffles University Iskandar
Johor Bahru, Malaysia. Email: [email protected]
Abstract
The main objective of this research is to study the influence of job satisfaction on employee turnover intention
in the manufacturing industry of Malaysia. The research objectives are divided into two which includes to
examine the relationship between the factors of job satisfaction and employee turnover intention, which factor
of job satisfaction contribute most to employee turnover intention. Basically, this research is an inferential
research design, descriptive research design and correlation research design. The respondents are those in the
management level that works in the manufacturing industry in. The collected data was analysed by adopting
mean scores, Pearson’s r correlation coefficient and multiple regression analysis. The findings showed that there
is a negative relationship between career development, supervision and employee turnover intention. The results
also indicated that the overall level of job satisfaction is high and career development is the factor that
contributes most to employee turnover intention.
Key words: job satisfaction; employee turnover intention; nature of work; career development;
supervision; salary
Introduction
According to Willis Towers Watson (2015), a research that done by Global Workforce Study,
Talent Management and Rewards Study from global professional services firm, Towers Watson
shows that the retention rate has declined. Most of the employees are saying they are likely to leave
the company within two years; now 36% compare to 29% in years 2012 (Willis Towers Watson,
2015).
In Malaysia, the employee turnover rate increased from 1.1% to 13.2% in 2014 and increased
to 14.3% in 2015 which manufacturing business group was suffered from a high staff turnover
(Mystarjob, 2015). A high turnover rate can influence the productivity and increase cost of a company
(Butali, Mamuli & Wesang’ula, 2014). According to the Manufacturers Alliance for Productivity and
Innovation (MAPI) Foundation, Malaysia’s manufacturing industrial productivity fell at 1.0% annual
rate in the year of 2015 after 3.5% growth in the year of 2014 (Material Handling & Logistics, 2015).
Encouraging employees to continue stay in the company for a long period can be named as
employee retention and it is a process in which the employees are stimulated to remain with the
company for the maximum period of time or till the end of a particular task (Das & Baruah, 2013).
Hence, job satisfaction is a key driver of employee retention.
According to Parul and Havisha (2015), job satisfaction is the most studied field of
organizational behavior. Most of the companies will measure employee satisfaction annually by using
survey in order to reduce employee turnover rate is most important for companies (Parul & Havisha,
2015). Moreover, to retain an ideal staff requires lots of efforts, time and resources of a company and
if the resources is lost, it will hinders company success (Parul & Havisha, 2015). As a result, each of a
company has to “treat their employees as ends and not means to ends” due to they help the company
to add value (Parul & Havisha, 2015).
Research Objectives
i.
To examine the relationship between job satisfaction (i.e., nature of work, career
development, salary and supervision) and employee turnover intention in the
manufacturing industry of Malaysia.
ii.
To determine which factor of job satisfaction that contribute most to employee turnover
intention in the manufacturing industry of Malaysia.
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Journal of Arts & Social Sciences
Vol 1, Issue 2, 53-63 (2018)
Literature Review
Job Satisfaction: According to Locke (1976), the most used definition of job satisfaction for the
purpose of research is described as a pleasurable or positive emotional state causing from the
evaluation of individual’s work or working experiences. A job is more than writing a report, dealing
with customers and key in the data. A job involves interacting with employees and superiors,
following company policies and rules, assembly performance norms, living with less than ultimate
working environments and others (Robbins & Judge, 2012). From the view of Locke (1976), job
satisfaction involves employee’s opinion and assessment of the job and opinion is affected by the
employee’s exclusive situations such as values, requirements and anticipations. When employees have
high levels of job satisfaction during working, a pleasant emotional state (Bartolo & Furlonger, 1999)
and optimistic response to the company (Feinstein & Vondresek 2002; Oshagbemi, 2000) can be
generated. Fitzenz (1990) acknowledged that there are a lot of factors which will influence whether
the employees will retain in an organization. Those factors include salary, supervision, career
development and nature of work.
Salary is one of the major concern to both employers and employees. For employees, salary is
of obvious importance in terms of satisfying their economic needs (Hassan, 2014). It is essential that
they are satisfied with their overall salary as this may influence their attitudes and behaviours.
Scholars note that one of the most important variables determining retention is monetary
compensation (Motshegwa, 2010). Secondly, employee job satisfaction have positively affected by
supervisors’ support and acknowledgement of employees (Yang, Brown & Moon, 2011). The
supervisors are representative for the company, if they are supportive and caring, employees recognise
the company as the same (Yang, Brown & Moon, 2011). Thirdly, according to Pergamit and Veum
(1999), they initiate a positive association among career development and job satisfaction which helps
to retain employees. Internal career development of employees is usually the best forecaster of an
employee's operative commitment (Pergamit & Veum, 1999). When the company wants to retain
professionals, they might need to think through in offering their future employment in the company as
a consequence of their greater mobility (Hassan, 2014). Lastly, nature of work can be defined as the
actual content of the job or work characteristics no matter whether these characteristics or the content
of that work is positive or negative (Benrazavi & Silong, 2013). The effects of a job upon the
employees are also reflected as contents of a job whether these effects are categorised as interesting or
uninteresting, various or consistent, innovative or degrading, easy or tough, challenging or nonchallenging (Benrazavi & Silong, 2013). It was recommended that if the company offers technical
professionals the opportunity to involve in challenging and exciting jobs, they will be more involved
and gratified in their companies, more dedicated to their companies, and finally, less possible to leave
(Igbaria, 1991; Igbaria and Guimaraes, 1992; Igbaria, Meredith & Smith, 1994; Tutuncu and Kozak,
2007).
Employee Turnover Intention: Turnover intention is a person’s behavioural intention to resign.
According to Tett and Meyer (1993), the turnover intention refers to the “conscious and deliberate
mindfulness of the employees to leave the company”. Vandenberg and Nelson (1999) defined
intention to resign as the personal own predictable possibility (subjective) that they are perpetually
leaving their company at some point in the near future. The employee turnover intention is measured
by Likert scale in questionnaire.
Previous Studies on The Relationship between Job Satisfaction and Employee Turnover
Intention
In the research that done by Jhajharia and Gupta (2015), it express employees foster an
environment and communication among co-workers and supervision where diverse individuals can
work together effectively and that they focus on providing excellent customer service. Employees also
come to an agreement to the point that they have received all the training they need to effectively
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Journal of Arts & Social Sciences
Vol 1, Issue 2, 53-63 (2018)
accomplish their job, the most along with that their appraisal helps them to plan future and they are
provided with all the tools and equipment to do their job.
According to Shah and Jumani (2015), there was a strong relationship between job
satisfaction and salary with employee turnover intention. However, it was found that career
development, nature of work and supervision showed moderate relationship with turnover intention
among the teachers. Respondents are more concerned about other factors of job satisfaction with
higher yields gradually, rather than being downgraded.
The results show that job satisfaction has positive relationship with employee turnover
intention which may refers to high levels of job satisfaction often results in enhanced employee
turnover intention (Terera & Ngirande, 2014). The results from this study show that rewards and job
satisfaction are main factors in retentive staffs. As a result, it is very important for management to
develop a retaining policy that addresses employee compensation and job satisfaction as most
important factors.
The statistical results obtained in this study which was done by Mahdi, Zin, Nor, Sakat and
Naim, (2012) showed that both practises of job satisfaction (intrinsic and extrinsic satisfaction) have
inverse relationship on employees turnover intentions. However it is found that in this research, the
intrinsic satisfaction (nature of work) has significantly inverse correlated with employee turnover
intention as related to the extrinsic satisfaction (working condition, supervision and co-worker). Since
extrinsic satisfaction founded to have less effect with negative relationship on employee turnover
intention, which refer the intrinsic value were gratified, the turnover rate among the employees will be
low compare if only extrinsic standards that focused by the management to be satisfied.
The results of analysis using a structural equation model showed that job satisfaction with
supervisors significantly affected employee turnover intention (Yamazakia & Petchdee, 2015). Based
on these findings, the study determined that the specific job satisfaction aspect of supervision inclines
to be a direct determining factor of employee turnover intention, the outcomes section, satisfactions
with supervision negatively affected intention to quit in company, while the two satisfaction aspects
of personal development and human resource policy were insignificantly related to employee turnover
intention (Yamazakia & Petchdee, 2015).
There is a significant negative relationship between overall job satisfaction and employee
turnover intention (Ali, 2000). Besides this, all aspects of job satisfaction were found to be
significantly related with employee turnover intention. The highest correlation with employee
turnover intention were of salary, career development, benefits and rewards. The moderate correlation
with employee turnover intention were working conditions, co-workers, nature of work and
communication.
Hypotheses
Based on the above discussion on the previous studies, four research hypotheses are developed. The
hypotheses are as below:
H1a: There is a relationship between nature of work and employee turnover intention in the
manufacturing industry of Malaysia.
H2a: There is a relationship between career development and employee turnover intention in the
manufacturing industry of Malaysia.
H3a: There is a relationship between supervision and employee turnover intention in the
manufacturing industry of Malaysia.
H4a: There is a relationship between salary and employee turnover intention in the manufacturing
industry of Malaysia
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Vol 1, Issue 2, 53-63 (2018)
Research Framework
Dependent variables
Independent variables
Intrinsic Job Satisfaction
•
•
Nature of work
Career development
Employee Turnover Intention
Extrinsic Job Satisfaction
•
•
Supervision
Salary
Figure 2.1: Conceptual framework
Figure 2.1 shows the conceptual framework of this research. The conceptual framework
consists of two sections which are independent and dependent variable. Independent variable includes
job satisfaction which divide into intrinsic and extrinsic job satisfaction. The factors of intrinsic job
satisfaction are nature of work and career development, while factors of extrinsic job satisfaction are
supervision and salary. Moreover, dependent variable is employee turnover intention that used to
measure employees’ behavioural intention to resign.
Research Methodology
Research Design
This research adopt inferential statistics to determine whether an expected pattern entitled by
the theory and hypotheses is actually found in the observations (Felix, 2015). To decide which
hypothesis is adopt, this research might survey the white collars in manufacturing industry in
Malaysia. Then, this research also adopt descriptive statistics. Descriptive statistics help to simplify
large amounts of data in a sensible way (Jaggi, 2003). Each descriptive statistic reduces lots of data
into a simpler summary (Jaggi, 2003). There are two basic methods which are numerical and
graphical. Graphical methods are better suited than numerical methods for identifying patterns in the
data because numerical approaches are more precise and objective (Jaggi, 2003). In the correlational
research technique, the study inspects the relationship between the two variables which are job
satisfaction and employee turnover intention of the study group.
Quantitative research is generally use to explain the phenomena by collecting numerical data
and analysing the data by using statistics and mathematically methods (Aliaga & Gunderson, 2000).
This study aim is to examine the relationship between independent variable (job satisfaction) and
dependent variables (employee retention), hence correlation research design is the most suitable for
this research. Questionnaire design is a key component in quantitative research design and survey
questionnaires should be concise and unambiguous (Hair, Money, Samouel & Page, 2007).
Research Respondents
The sampling technique for this research is decide by the nature and aim of this research
which were assess. As this research targets at manufacturing industry among white collars in Malaysia,
the non-probability sampling technique was use to gather the data for the research. Convenience
samples are occasionally considered as “accidental samples” due to components may be selected in
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Vol 1, Issue 2, 53-63 (2018)
the sample simply as they just happen to be situated, spatially or administratively, near to where the
researcher is conducting the data collection (Saumure & Given, 2008). Williams (2007) recommended
that a sample of 50 is sufficient to run the regression analysis. Therefore, the sample size for this
research is decide at around 100 samples.
Research Instrument
The questionnaire consists of three section, section A is personal information, section B
evaluates the employees’ level of satisfaction in their current position within their own company,
while section C contains questions on the respondents’ desire to remain the relationship with their
own companies. In terms of the measurement items, all the items adopted from the previous study.
The job satisfaction items divide into four which are nature of work, career development, supervision
and salary.
Likert-type scales is use in this research which consists of five response alternatives: 1 = Not
at all or Strongly agree, 2 = Little extent or Agree, 3 = Moderate extent or Not sure, 4 = Great extent
or Disagree, and 5 = Very great extent or Strongly disagree.
Table 1: Classification of questionnaire’s questions
Questions
Variables
Source
Intrinsic job satisfaction
Q5-Q8
Nature of work
Watson, Thopmson & Meade (2007)
Q9-Q12
Career development
Watson, Thopmson & Meade (2007)
Extrinsic job satisfaction
Q13-Q16
Supervision
Ellickson & Logsdon (2001)
Q17-Q20
Salary
Watson, Thopmson & Meade (2007)
Q21-Q24
Employee
turnover Alnaqbi (2011)
intention
Results
As a mean to perform reliability test to the job satisfaction and employee turnover intention,
Cronbach’s Alpha was the chosen method by referring to a study conducted previously by (Cronbach
& Shavelson, 2004). It was designed to be used with regard to the reliability among items in a test, as
well as with regard to the constancy of performance of scores on multiple trials of the same procedure,
with a level of trust that was generally defensible (Cronbach & Shavelson, 2004). Table 2 presents
the Cronbach’s Alpha reliability test for this research. Based on the results, all of the variables were
exceed than 0.7, this indicate high reliability. However, the variable’s value of more than 0.8 will be
preferable.
Table 2: Cronbach’s Alpha reliability test
Variables
Cronbach’s Alpha
Nature of work
0.714
Career development
0.751
Supervision
0.881
Salary
0.742
Employee turnover intention
0.882
Number of items
4
4
4
4
4
Table 3 shows the demographic information of respondents which consist of gender, age,
number of years in company and education level. A total 100 of questionnaire were distributed, the
return rate was 70 (i.e. 70%), while 30 (i.e. 30%) of the respondents did not respond to the
questionnaire or return.
Table 3: Demographic profile of respondents
Demographic
Categories
57
Frequency
Percentage
Journal of Arts & Social Sciences
Vol 1, Issue 2, 53-63 (2018)
variables
Gender
Age
Number of years
in company
Education level
Female
Male
Under 26
26 to 35
35 to 45
45 to 55
More than 55
Less than 3
3 to 5
5 to 9
More than 10
Did not complete high school
SPM level
Diploma
Associate/2-years degree
Bachelor’s Degree
Master’s Degree
PhD
(%)
34.3
65.7
60.0
20.0
5.71
8.58
5.71
65.71
18.57
4.29
11.43
4.29
25.71
18.57
10.0
40.0
1.43
0
24
46
42
14
4
6
4
46
13
3
8
3
18
13
7
28
1
0
The Relationship between the Factors of Job Satisfaction and Employee Turnover Intention
Table 4: Relationship between job satisfaction and employee turnover intention
Variables
Employee Turnover Intention
r
Sig.
Nature of work
-.171
.157
Career development
-.309**
.009
Supervision
-.269*
.024
Salary
.023
.849
Notes: ** Correlation is significant at the 0.01 level (2-tailed), * Correlation is significant at the 0.05
level (2-tailed)
Based on table 4, it found that the relationship between nature of work with employee
turnover intention (r = -0.171) is not significantly which the hypothesis H1a was rejected. This means,
there relationship is no significant between the factor of nature of work for job satisfaction and
employee turnover intention due to the correlation coefficient is not significant at either the level of
0.01 or 0.05. The second variable is career development, the result was found to be significant
relationship with employee turnover intention (r = -0.309) which the hypothesis H2a was accepted.
The result implied that there is a negative relationship between the factor of career development for
job satisfaction and employee turnover intention. It is because the correlation coefficient is significant
at the level of 0.01. The next variable is supervision, which was found significantly with employee
turnover intention (r = -0.269) which the hypothesis H3a was accepted. The result illustrates that there
is a negative relationship between the factors of supervision for job satisfaction and employee
turnover intention is because of the correlation coefficient is significant at the level of 0.05. The last
variable is salary. The result was found not significantly relationship with employee turnover
intention (r = 0.023) which the hypothesis H4a was rejected. The result shows that the relationship is
no significant between the factor of salary for job satisfaction and employee turnover intention due to
the correlation coefficient is not significant at either the level of 0.01 or 0.05.
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The Most Contribution Factor of Job Satisfaction to Employee Turnover Intention
Table 5: Regression Stepwise Analysis
Model
R
R Square
1
Model
.309a
.095
Adjusted R
Square
.082
Coefficientsa
Unstandardized
Standardized
Coefficients
Coefficients
B
Std. Error
Beta
4.725
.601
-.506
.189
-.309
1
(Constant)
Career
development
a. Dependent variable: Employee turnover intention
b. Predictors: (Constant), Career development
Std. Error of the
Estimate
1.02227
t
Sig.
7.862
-2.6777
.000
.009
In order to found out which factor contributes most to employee turnover intention, this study
adapt another method which is Regression Stepwise Analysis. Regression Stepwise regression is a
modification of the forward selection with the purpose of after each step in which a variable was
added, all candidate variables in the model are checked to see if their significance has been reduced
below the specified tolerance level (Smith, 2014).
Table 5 shows that the significant number for the overall model which is career development
was 0.009. The results implies that the factor that contributes most to employee turnover intention is
career development (β = -.309).
Discussion
The Relationship between the Factors of Job Satisfaction and Employee Turnover Intention
The results showed that there is no significant relationship between nature of work and
employee turnover intention. This finding did not support the Herzberg’s motivation-hygiene theory
which Herzberg argued that when job satisfaction factors increased, employee job satisfaction
increased as well. Hofaidhllaoui and Chhinzer (2014) study support the research findings which
believe that satisfaction with work itself did not influence the employee turnover intentions. In
contrary, Ryan, Ghazali and Mohsin (2011) supported the finding results, emphasizing that high
satisfaction with work itself could provide a better employee-customer relationship and increase
business relationship.
The results showed that there is a negative relationship between career development and
employee turnover intention. It is found that the study of Boudreau (1998) that decision of employee
to resign or stay is influenced by the human resource activity like career development. A study that
done by Weng and Xi (2010) also showed that employee turnover intention was negatively related
with career development. In the same way, as suggested by Ballout (2009) in his research on bank
employees in Lebanon, highly committed and experienced employees seek for the opportunities of
career development if these can be achieved successfully. Employers can gain the benefits of highly
committed employees if they provide the long-term career development which contributes to career
success (Ballout, 2009).
The findings indicated that there is a negative relationship between supervision and employee
turnover intention. This finding was also supported by Hatton and Emerson (1998) in Valias and
Young (2000) that job satisfaction level was lower for employees who are dissatisfied with their
supervisors. Correspondingly, Hatton and Emerson (1998) found that low levels of supervisor support
were related with increased turnover. Strong (or weak) supervisor support has been shown to affect
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employees in numerous ways, because supervisors act as an mediator of the company in guiding,
appraising and supporting their subordinates for having a company of employees with high job
satisfaction means better collaboration, low absenteeism, high retention, better employee exertion and
less inter-personal conflict, less injustice and extra.
The findings indicated that there is no significant relationship between salary and employee
turnover intention. However, this finding does not support the Maslow’s Hierarchy of Need Theory
that the basic physiological need which salary must be fulfilled first before moving to other needs.
The salary factor has no significant relationship with employee turnover intention which indicates as
that the managerial level of employees that work at manufacturing industry are more concern on other
job satisfaction factors.
The Most Contribution Factor of Job Satisfaction to Employee Turnover Intention
The analysis showed that there is a significant impact of the factor of career development of
job satisfaction on employee turnover intention. With a high turn-over, inadequate supply of skilled
talent and changing requirements, career development has become an important focus in human
resource planning (Walker, 1980). As employees cultivate, they become more productive and increase
their contribution towards overall organizational effectiveness (Katz, 1982). Careers in companies
have undertaken a revolution to meet the demand of rapid changing business environments. Job
security has become a non-existent in many companies and many businesses give emphasis to
evolving employability of employees as a people management policy (Khan, Rajasekar, & Al-Asfour,
2015). Baruch (2004) found that employers have moved away from providing secure employment for
all to providing opportunities for employees’ development. An effective career development program
is an important interpreter of how well employees acquire and use knowledge and proficiency at the
workplace (Khan, Rajasekar, & Al-Asfour, 2015).
Many researchers have recognized that an effective employee development program helps to
retain employees and build their self-esteem (Ababneh, 2013; DelaCruz, 2004). Conger (2002)
emphasized that the cost benefit analysis of a career development initiative can better control a
program in a company. Sanjeevkumar (2011) recommended that effective career planning for
employees involves their participation in setting their own objectives, which ensures their learning
and growth. Baruch (2004) suggested types of organizational career management practices liable upon
the degree of participation of employees and degree of complexity of these practices. Therefore,
companies must design career development programs based on employees’ requirements as well as
the competencies and aspirations of the employees.
Management Implication
According to the findings, it showed that there is a negative relationship between career
development and employee turnover intention. Therefore, it is important for the company to offer
opportunities for career development and develop fair career development procedures.
Secondly, the finding has also indicated that there is a negative relationship between
supervision and employee turnover intention. This indicated the need for supervisors to provide
encouragement and support to employees are important. In addition, suitable training programs to
develop good supervisory skills may also be a good investment to the company (Salleh, Niar &
Harum, 2012). Such trainings will be supportive in improving the supervisors’ competencies to
provide assistance, communicate, guidance, and advise subordinates on numerous facets. Supervisors
should also be equipped with human oriented problem solving skills and negotiation skills. When
employees are loyal to their supervisors, they will be psychologically attached and thus willing to stay
or remain with the supervisors (Salleh, Niar & Harum, 2012).
Even though the factors that mention above are important, company also need to spend a
minimal amount of time to study more about human behaviour, communication, and the requirements
of employees. Recognizing the crucial factors that may be interrelated to turnover intention allow the
companies to proactively identify the key factors of turnover, and develop policies that build positive
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qualities, reduce voluntary turnover and manage the turnover procedure and its supplementary costs
(Fayyazi & Aslani, 2015).
Limitation of Study
There are some limitations that have been discovered in this study. Firstly, the collection of
questionnaire in this research only covered in Johor. The results may not represent all managerial
levels employees in Malaysia manufacturing industry. Therefore, this may also affect the results
insufficient reflecting on the employee’s perception toward job satisfaction and employee turnover
intention. Secondly, during the questionnaire distribution process, the researcher was ignored by some
respondents that refuse to answer the questionnaire. This is due to employees do not have time to
answer the questionnaire due to their high workload.
Conclusion
The three research objectives of this research are examine the relationship between the factors
of job satisfaction and employee turnover intention, determine which factor of job satisfaction
contribute most to employee turnover intention. The method Pearson’s r correlation coefficient was
also applied to examine the relationship between the factors of job satisfaction and employee turnover
intention. The findings indicated that there is a negative relationship between the factors of career
development, supervision of job satisfaction and employee turnover intention. While another two
factors which are nature of work and salary showed no significant relationship. The last method is
regression analysis which used to determine which factor of job satisfaction contribute most to
employee turnover intention. The results showed that factor of career development of job satisfaction
contribute most to employee turnover intention.
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