Organizational Commitment

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ORGANIZATIONAL COMMITMENT AND

JOB SATISFACTION: A STUDY OF

EMPLOYEES IN THE INFORMATION

TECHNOLOGY INDUSTRY IN

BANGALORE, INDIA

Submitted in partial fulfilment of the requirement for the degree of

Master of Philosophy

By

Jasmine Sonia

(Roll No.0930008)

Supervisor

T.BHAMA

Lecturer-Department of Management studies

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DECLARATION

I Jasmine Sonia hereby declare that the dissertation, entitled “Organizational commitment

and Job satisfaction: A study of employees in the Information Technology Industry in Bangalore, India” submitted to Christ University, in partial fulfilment of the requirements for

the award of the Degree of Master of Philosophy in Management is a record of original and independent research work done by me during the academic year 2009-2010 under the supervision and guidance of Ms. T. Bhama, Department of Management studies , Christ University ,and it has not formed the basis for the award of any Degree/Diploma/Associate ship/Fellowship or other similar title to any candidate of any University.

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CERTIFICATE

This is to certify that the dissertation, entitled “Organizational commitment and Job

satisfaction: A study of employees in the Information Technology Industry in Bangalore, India” submitted to Christ University, in partial fulfilment of the requirements for the award

of the Degree of Master of Philosophy in Management is a record of original research work done by Ms. Jasmine Sonia During the period 2009-2010 of her study in the Department of Management studies at Christ University, Bangalore, under my supervision and guidance and the dissertation has not formed the basis for the award of any Degree/Diploma/Associate ship/Fellowship or other similar title to any candidate of any University .

Date: Signature of the Guide

T.Bhama (Lecturer)

Department of Management Studies, Christ University

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APPROVAL OF DISSERTATION

The dissertation entitled “Organizational commitment and Job satisfaction: A study of

employees in the Information Technology Industry in Bangalore by Jasmine Sonia is

approved for the degree of Master of Philosophy in Management.

Examiners: 1. _____________________________ _________________________ 2.______________________________ _________________________ 3.______________________________ _________________________ Chairman: ______________________________ (Seal) Date: Place:

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ACKNOWLEDGEMENT

I express my sincere gratitude to the management of Christ University for giving me an opportunity to complete Master of Philosophy in Management. I am greatly indebted to Fr. Thomas T .V. (Director, Institute of Management) for his guidance and who always remained as a source of inspiration.

I remember the efforts taken by the Research centre of the Christ University for establishing a universal research culture and motivating the research scholar to accomplish this study.

I am greatly thankful to my guide Ms. T. Bhama (Lecturer, Department of Management studies) for her constant guidance, support, patience and encouragement to complete this work on time.

I extend my profound gratitude to Prof. Harold Andrew Patrick (Professor and coordinator OB and HRM) for giving me all the necessary guidance and suggestion.

I would like to thank Dr. Mihir Dash for helping me in data analysis and for giving all the necessary suggestion for the interpretation of data.

I remember with gratitude all the IT employees who have shown interest in filling my questionnaire, without which the research work could not have materialized.

I would like to thank my family, colleagues, and friends for all their love and encouragement in all stages of my dissertation work.

Lastly, I thank God for making me who I am and giving me all blessings to complete this journey.

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ABSTRACT

The integral part of any management process is to manage the people at work. A well managed organisation sees worker as the root cause of quality and productivity .An effective organisation will always promote a sense of commitment and satisfaction among its employees. The significance and importance of the concept of organizational commitment in terms of leading to beneficial organizational and desirable outcomes such as increased productivity, reducing absenteeism and turnover, has been documented by many studies such as those of Steers (1977); Porter et al. (1974); Reiches (1985) and Tett and Meyer (1993). One way to address issue of employee turnover is to understand the job satisfaction and commitment level of employees. Organizations often try to foster commitment in their employees to achieve stability and reduce costly turnover. It is commonly believed that committed employees will also work harder and be more likely to “go the extra mile” to achieve organizational objectives. Research has consistently demonstrated that commitment does indeed contribute to a reduction in turnover. Motivated employees are needed in our rapidly changing workplaces. Motivated employees help organizations survive. Motivated employees are more productive. To be effective, managers need to understand what motivates employees within the context of the roles they perform. A lot of studies are conducted separately on commitment, satisfaction and motivation but very few studies are there on IT sector linking these three .So it is crucial to conduct a study on job satisfaction and organizational commitment in information technology industry and also to identify the important motivating factors to retain the highly talented workforce.

The review of related literature on Organizational commitment, Job satisfaction and Motivation has helped the researcher to identify the gap and has provided an insight to the direction of current study. The population for the study was all technical employees in the Information technology Industry in Bangalore city. For the present study data was collected with the help of structured questionnaire from 300 employees working in software industry. The study is concentrated on Bangalore IT industry. The researcher used non probabilistic sampling (purposive sampling) method as sampling design. Samples were selected from 10 top IT multinational companies. Samples were drawn from three levels of management including entry level, middle level and top level employees. The pertinent information for the study is collected from both primary and secondary sources.

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The independent variable in this study is job satisfaction. The overall Job satisfaction was measured using the 15-item questionnaire developed by Prof.Harold Andrew Patrick in 2009, designed to measure 15 aspects of job. The aspects of overall job satisfaction are job security,interest,opportunity for advancement,appreciation,company policy and management practises, intrinsic aspects of a job,salary,supervision,social aspects of job, working conditions,communication,hours,ease, benefits ,and fair treatment. Responses were collected with the help of 7 point likert scale.

The dependant variable, organizational commitment was measured using the revised Organizational Commitment Scales (Meyer, Allen and Smith 1993) that is, the Affective Commitment Scale (ACS), the Continuance Commitment Scale (CCS) and the Normative Commitment Scale (NCS) with 24 questions on 7-point Likert scales. The Kovach ten job-related factors developed by kovach , Kenneth (1999) were used to determine what motivates the employees in software industry. The respondents were asked to indicate the degree of importance of the factors and relative ranking according to motivational importance. The statistical technique used to analyse the data were descriptive statistics, The Pearson’s correlation, ANOVA, Regression and Friedman test. Data was analysed with the help of SPSS.

The major findings of the study were:

1. The level of organizational commitment was moderate, with relatively higher variability in affective commitment. Mean value was highest for Continuance commitment indicating employees are staying back with the organization because of the cost of leaving the organisation or it’s too much trouble to go somewhere else.

2. IT employees were showing only a moderate level of job satisfaction. Amongst the items comprising the scale for job satisfaction, the items with highest satisfaction levels were related to the social aspects of the job, working conditions (excluding working hours), interest (from intrinsic aspects of the job), job security, communication, and ease of the job (as an intrinsic aspect of the job). On the other hand, employees had lowest satisfaction levels for working hours, supervision, appreciation from management, and salary. It shows that IT employees are dissatisfied with the working hours, supervision, appreciation from management and the salary they are getting.

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3. To increase the Job satisfaction and commitment it is very important to identify the motivational factors. . The most important motivational factors for IT employees were good wages, promotion/growth, job security, interesting work, and appreciation of work.

4. There was significant positive correlation of job satisfaction with affective commitment and normative commitment, and negative correlation with continuance commitment. This indicates that higher the level of job satisfaction greater the level of affective commitment and normative commitment. If employees are staying back with the organization because of the cost of leaving the organisation or it’s too much trouble to go somewhere else then there will be less satisfaction.

5. Amongst the items comprising the scale for job satisfaction, the items with highest correlation with affective commitment were related to the salary, benefits, fair treatment, opportunity for advancement, and supervision. The items with moderate correlation were appreciation (from management),interest (from intrinsic aspects of job),job security and intrinsic aspects of job(excluding ease).The job satisfaction items with lowest correlation were working conditions(excluding hours),social aspects of job, and communication. So it clearly indicates the importance of salary, benefit, fair treatment, opportunity for advancement and a good supervision in increasing the positive emotional attachment to the organisation. 6. Regression analysis revealed that job satisfaction had a significant impact on Organizational commitment. Job satisfaction was found to have a significant positive impact on affective commitment, explaining 67.0% of the variation in affective commitment. Thus, when job satisfaction increases, affective commitment would tend to increase with it. Job satisfaction was not found to have a significant impact on continuance commitment, explaining only 1.2% of the variation in continuance commitment. Thus, when job satisfaction increases, continuance commitment would be expected to slightly decrease with it. Job satisfaction was found to have a significant positive impact on normative commitment, explaining 35.1% of the variation in normative commitment. Thus, when job satisfaction increases, normative commitment would tend to increase with it, but less so than affective commitment.

It is the interest of all organization to secure commitment and reduce employee turnover. So this topic has attracted the interest of many researchers. This study confirms the relationship between job satisfaction and organizational commitment. So managers need to make effort to

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develop human resource policies that are in alignment to the needs and motivation of the employees. The findings of this study have pointed out some salient issues in the IT field. It is imperative for IT company management to meet the demands of their personnel to strengthen their motivation, satisfaction, and commitment to minimize turnover.

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CHAPTER 1 INTRODUCTION

In today’s competitive world, the biggest challenge which the organizations are facing is to retain talented employees. Job satisfaction is necessary to promote functional employee

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behaviours in the organization. For the organization, job satisfaction of its workers means a work force that is motivated and committed to high quality performance. Job Satisfaction can be an important indicator of how employees feel about their jobs and a predictor of work behaviours such as organizational citizenship, absenteeism, and turnover. Further, job satisfaction can partially mediate the relationship of personality variables and deviant work behaviours. One common research finding is that job satisfaction is correlated with life satisfaction.

Securing Commitment and retaining good employees are very important to achieve stability and reduce costly turn over. Various outcomes are influenced by organizational commitment such as decreased turn over, higher motivation and organizational support. An employee who is affectively committed strongly identifies with the goals of the organization and desires to remain a part of the organization. This employee commits to the organization because he/she "wants to". Organizational commitment is recognized as a key factor in the employment relationship. Similarly, it also is widely accepted that one way to reduce voluntary turnover is by strengthening employee commitment to the firm.

So it is crucial to identify the level of job satisfaction, motivating factors and its influence on organizational commitment to retain talented work force in software industry.

1.1INFORMATION TECHNOLOGY INDUSTRY

The word "software" had been coined as a prank by at least 1953, but did not appear in print until the 1960s. Before this time, computers were programmed either by customers, or the few commercial computer vendors of the time, such as UNIVAC and IBM. The first company founded to provide software products and services was Computer Usage Company in 1955. The software industry began in the late 1950s when the use of computers for business applications expanded rapidly creating a huge demand for people with programming experience. A number of people who had learned their programming skills working for computer manufacturers or for the large companies and government agencies that were the first computer users saw this as an opportunity to start their own companies and sell their services under contract.

The first such company, Computer Usage Corporation (CUC), was founded in 1955 by Elmer Kubie and John W. Sheldon, two former IBM employees. The company was founded with $40,000 in start-up capital which supported a staff of five in addition to the two founders. Its

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first project was a program written for California Research Corporation to simulate the flow of oil. CUC became a public company in 1960 and by 1967 had a staff of over 700 people in 12 offices around the U.S. and revenues over $13 million. Unfortunately, it suffered financial losses in the late 1970s and eventually went bankrupt in 1986.

In 1959, seven Univac programmers founded Applied Data Research (ADR) to market their programming skills to computer manufacturers such as Sperry Rand and Honeywell to develop systems software. ADR went public in 1965 and, in the late 1960s, became one of the first companies to successfully sell software products. It continued to be one of the largest U.S. software product companies until it was acquired by Ameritech for $215 million in 1986. Fletcher Jones and Roy Nutt, who had gained their computer experience in the aerospace industry, founded Computer Sciences Corporation (CSC) in 1959 with $100 and a contract from Honeywell to develop a business-language compiler called FACT. By 1963, CSC was the largest software company with revenues close to $4 million. CSC continues to thrive today as one of the world largest information technology services firms with more than $10.2 billion in revenues.

The software industry expanded in the early 1960s, almost immediately after computers were first sold in mass-produced quantities. Universities, government, and business customers created a demand for software. Many of these programs were written in-house by full-time staff programmers. Some were distributed freely between users of a particular machine for no charge. Others were done on a commercial basis, and other firms such as Computer Sciences Corporation (founded in 1959) started to grow. The computer-makers started bundling operating systems software and programming environments with their machines. When Digital Equipment Corporation brought a relatively low-priced micro-computer to market, it brought computing within reach of many more companies and universities worldwide, and it spawned great innovation in terms of new, powerful programming languages and methodologies. New software was built for micro-computers, and others, including IBM, followed DECs example quickly, resulting in the IBM AS400 amongst others.

The industry expanded greatly with the rise of the personal computer in the mid-1970s, which brought computing to the desktop of the office worker. In subsequent years, it also created a growing market for games, applications, and utilities. DOS, Microsoft's first product, was the dominant operating system at the time.

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In the early years of the 21st century, another successful business model has arisen for hosted software, called software as a service, or SaaS; this was at least the third time this model had been attempted. SaaS reduces the concerns about software piracy, since it can only be accessed through the Web, and by definition no client software is loaded onto the end user's PC.

The information technology (IT) industry has become of the most robust industries in the world. IT, more than any other industry or economic facet, has an increased productivity, particularly in the developed world, and therefore is a key driver of global economic growth. Economies of scale and insatiable demand from both consumers and enterprises characterize this rapidly growing sector.

1.2INDIAN INFORMATION TECHNOLOGY INDUSTRY

The Indian information technology (IT) industry has played a major role in placing India on the international map. The industry is mainly governed by IT software and facilities for instance System Integration, Software experiments, Custom Application Development and Maintenance (CADM), network services and IT Solutions. According to Nasscom's findings Indian IT-BPO industry expanded by 12% during the Fiscal year 2009 and attained aggregate returns of US$ 71.6 billion. Out of the derived revenue US$ 59.6 billion was solely earned by the software and services division. Moreover, the industry witnessed an increase of around US$ 7 million in FY 2008-09 i.e. US$ 47.3 billion against US$ 40.9 billion accrued in FY 2008-09.

The origin of IT industry in India can be traced to 1974, when the mainframe manufacturer, Burroughs, asked its India sales agent, Tata Consultancy Services (TCS), to export programmers for installing system software for a U.S. client. The IT industry originated under unfavourable conditions. Local markets were absent and government policy toward private enterprise was hostile. The industry was begun by Bombay-based conglomerates which entered the business by supplying programmers to global IT firms located overseas.

During that time Indian economy was state-controlled and the state remained hostile to the software industry through the 1970s. Import tariffs were high (135% on hardware and 100% on software) and software was not considered an "industry", so that exporters were ineligible for bank finance. Government policy towards IT sector changed when Rajiv Gandhi became Prime Minister in 1984. His New Computer Policy (NCP-1984) consisted of a package of

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reduced import tariffs on hardware and software (reduced to 60%), recognition of software exports as a "deli censed industry", i.e., henceforth eligible for bank finance and freed from license-permit raj, permission for foreign firms to set up wholly-owned, export-dedicated units and a project to set up a chain of software parks that would offer infrastructure at below-market costs. These policies laid the foundation for the development of a world-class IT industry in India. Indian IT companies such as Tata Consultancy Services (TCS), Wipro, Infosys, and HCL are renowned in the global market for their IT prowess. The Indian IT & ITES industry continues to grow at a blistering pace. The availability of an abundant, high-quality and cost-effective pool of skilled knowledge workers is India’s main advantage in the global IT and ITES-BPO industry.

1.3 ORGANIZATIONAL COMMITMENT

The job satisfaction attitude has received the most attention over the years. Recently the more global organizational commitment has emerged out of the research literature as being important to understanding and predicting organizational behaviour.

Organizational commitment can be considered to be affective responses or attitudes which link or attach an employee to the organization. As an attitude, organizational commitment is most often defined as a strong desire to remain a member of a particular organization, a willingness to exert high levels of effort on behalf of the organization and a definite belief in and acceptance of the values and goals of the organization.

According to Meyer and Allen's (1991) three-component model of commitment, prior research indicated that there are three "mind sets" which can characterize an employee's commitment to the organization:

1.4 AFFECTIVE COMMITMENT

Affective commitment is defined as the employee's positive emotional attachment to the organization. An employee who is affectively committed strongly identifies with the goals of the organization and desires to remain a part of the organization. This employee commits to the organization because he/she "wants to". In developing this concept, Meyer and Allen drew

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largely on Mow day, Porter, and Steer’s (1982) concept of commitment, which in turn drew on earlier work by Kanter (1968).

1.5 CONTINUANCE COMMITMENT

The individual commits to the organization because he/she perceives high costs of losing organizational membership (cf. Becker's 1960 "side bet theory"), including economic costs (such as pension accruals) and social costs (friendship ties with co-workers) that would be incurred. The employee remains a member of the organization because he/she "has to".

1.6 NORMATIVE COMMITMENT

The individual commits to and remains with an organization because of feelings of obligation. These feelings may derive from many sources. For example, the organization may have invested resources in training an employee who then feels a 'moral' obligation to put forth effort on the job and stay with the organization to 'repay the debt.' It may also reflect an internalized norm, developed before the person joins the organization through family or other socialization processes, that one should be loyal to one's organization. The employee stays with the organization because he/she "ought to". Normative commitment involves the employee’s feelings of obligation to stay with the organization.

1.7 BENEFIT OF ORGANIZATIONAL COMMITMENT

Organizational Commitment implies an intention to persist in a course of action. Therefore, organizations often try to foster commitment in their employees to achieve stability and reduce costly turnover. It is commonly believed that committed employees will also work harder and be more likely to “go the extra mile” to achieve organizational objectives. Research has consistently demonstrated that commitment does indeed contribute to a reduction in turnover.

Research consistently shows that employees who want to stay (high ACS) tend to perform at a higher level than those who do not (low ACS). Employees who remain out of obligation (high NCS) also tend to out-perform those who feel no such obligation (low NCS), but the effect on performance is not as strong as that observed for desire. Finally, employees who have to stay primarily to avoid losing something of value (e.g., benefits, seniority) often have little incentive to do anything more than is required to retain their positions.

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1.8 JOB SATISFACTION

Job satisfaction is a result of employee’s perception of how well their job provides those things that are viewed as important. There are three important dimensions to job satisfaction. First, job satisfaction is an emotional response to a job situation. Second, job satisfaction is often determined by how well out comes meet or exceed expectations. Third job satisfaction represents several related attitudes.

1.9 THE CAUSES OF JOB SATISFACTION

Five predominant models of job satisfaction focus on different causes.

Need Fulfilment: These models propose that satisfaction is determined by the extent to which

the characteristics of a job allow an individual to fulfil his or her needs. Unmet needs can affect both satisfaction and turnover.

Discrepancies: These models propose that satisfaction is a result of met expectations. Met

expectation represent the difference between what an individual expects to receive from a job and what he or she actually receives. When expectations are greater than what is received a person will be dissatisfied. This model predicts that individual will be satisfied when her or she attains out comes above and beyond expectation.

Value Attainment: Satisfaction result from the perception that a job allows fulfilment of an

individual’s important work values. Managers can thus enhance employee satisfaction by structuring the work environment and its associated rewards and recognition to reinforce employee values.

Equity: In this model, satisfaction is a function of how fairly an individual is treated at work.

Satisfaction result from ones perception that work outcomes, relative to inputs, compare favourably with a significant others outcomes/inputs.

Dispositional/Genetic components: This model is based on the belief that job satisfaction is

partly a function of both personal traits and genetic factors. It implies that stable individual differences are important in explaining job satisfaction.

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The term job satisfaction refers to the general attitude of an individual towards his/her job(Robbins,2003).Job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of one’s job; an affective reaction to one’s job; and an attitude towards one’s job. Weiss (2002) has argued that job satisfaction is an attitude but points out that researchers should clearly distinguish the objects of cognitive evaluation which are affect (emotion), beliefs and behaviours. This definition suggests that we form attitudes towards our jobs by taking into account our feelings, our beliefs, and our behaviours. Job satisfaction can also be defined as either as the overall or general job satisfaction of an employee or as the satisfaction with certain facets of the job such as the work itself ,co-workers,supervision,pay, working conditions, company policies, procedures and opportunities for promotion(Smith et al.,1969).Based upon these two view points of job satisfaction , it may be measures either as the general or overall satisfaction of an employee with the job or it may be measured as the satisfaction of an employee with the various work facets. For the present study the former view of job satisfaction has adopted.

1.11HISTORY AND BACK GROUND OF THE STUDY

One of the biggest preludes to the study of job satisfaction was the Hawthorne studies. These studies (1924-1933), primarily credited to Elton Mayo of the Harvard Business School, sought to find the effects of various conditions (most notably illumination) on workers’ productivity. These studies ultimately showed that novel changes in work conditions temporarily increase productivity (called the Hawthorne Effect). It was later found that this increase resulted, not from the new conditions, but from the knowledge of being observed. This finding provided strong evidence that people work for purposes other than pay, which paved the way for researchers to investigate other factors in job satisfaction.

Scientific management also had a significant impact on the study of job satisfaction. Frederick Winslow Taylor’s 1911 book, Principles of Scientific Management, argued that there was a single best way to perform any given work task. This book contributed to a change in industrial production philosophies, causing a shift from skilled labour and piecework towards the more modern approach of assembly lines and hourly wages. The initial use of scientific management by industries greatly increased productivity because workers were forced to work at a faster pace. However, workers became exhausted and dissatisfied, thus leaving researchers with new questions to answer regarding job satisfaction. It should also be noted

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that the work of W.L. Bryan, Walter Dill Scott, and Hugo Munsterberg set the tone for Taylor’s work.

Some argue that Maslow’s hierarchy of needs theory, a motivation theory, laid the foundation for job satisfaction theory. This theory explains that people seek to satisfy five specific needs in life – physiological needs, safety needs, social needs, esteem needs, and self-actualization. This model served as a good basis from which early researchers could develop job satisfaction theories.

1.12 THEORIES OF JOB SATISFACTION Affect Theory

Edwin A. Locke’s Range of Affect Theory (1976) is arguably the most famous job satisfaction model. The main premise of this theory is that satisfaction is determined by a discrepancy between what one wants in a job and what one has in a job. Further, the theory states that how much one values a given facet of work (e.g. the degree of autonomy in a position) moderates how satisfied/dissatisfied one becomes when expectations are/aren’t met. When a person values a particular facet of a job, his satisfaction is more greatly impacted both positively (when expectations are met) and negatively (when expectations are not met), compared to one who doesn’t value that facet.

Dispositional Theory

Another well known job satisfaction theory is the Dispositional Theory. It is a very general theory that suggests that people have innate dispositions that cause them to have tendencies toward a certain level of satisfaction, regardless of one’s job. This approach became a notable explanation of job satisfaction in light evidence that job satisfaction tends to be stable over time and across careers and jobs. Research also indicates that identical twins have similar levels of job satisfaction.

Two-Factor Theory (Motivator-Hygiene Theory)

Frederick Herzberg’s two factor theory (also known as Motivator Hygiene Theory) attempts to explain satisfaction and motivation in the workplace .This theory states that satisfaction and

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dissatisfaction are driven by different factors – motivation and hygiene factors, respectively. An employee’s motivation to work is continually related to job satisfaction of a subordinate. Motivation can be seen as an inner force that drives individuals to attain personal and organization goals . Motivating factors are those aspects of the job that make people want to perform, and provide people with satisfaction, for example achievement in work, recognition, promotion opportunities. These motivating factors are considered to be intrinsic to the job, or the work carried out. Hygiene factors include aspects of the working environment such as pay, company policies, supervisory practices, and other working conditions.

1.13 DETERMINANTS OF JOB SATISFACTION

While analyzing the various determinants of job satisfaction, we have to keep in mind that: all individuals do no derive the same degree of satisfaction though they perform the same job in the same job environment and at the same time. Therefore, it appears that besides the nature of job and job environment, there are individual variables which affect job satisfaction. Thus, all those factors which provide a fit among individual variables, nature of job, and situational variables determine the degree of job satisfaction. Let us see what these factors are

Individual factors:

Individuals have certain expectations from their jobs. If their expectations are met from the jobs, they feel satisfied. These expectations are based on an individual’s level of education, age and other factors.

Level of education:

Level of education of an individual is a factor which determines the degree of job satisfaction. For example, several studies have found negative correlation between the level of education, particularly higher level of education, and job satisfaction. The possible reason for this phenomenon may be that highly educated persons have very high expectations from their jobs which remain unsatisfied. In their case, Peter’s principle which suggests that every individual tries to reach his level of incompetence, applies more quickly.

Age:

Individuals experience different degree of job satisfaction at different stages of their life. Job satisfaction is high at the initial stage, gets gradually reduced, starts rising up to certain stage,

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and finally dips to a low degree. The possible reasons for this phenomenon are like this. When individuals join an organization, they may have some unrealistic assumptions about what they are going to drive from their work. These assumptions make them more satisfied. However, when these assumptions fall short of reality, job satisfaction goes down. It starts rising again as the people start to assess the jobs in right perspective and correct their assumptions. At the last, particularly at the far end of the career, job satisfaction goes down because of fear of retirement and future outcome.

Other factors:

Besides the above two factors, there are other individual factors which affect job satisfaction. If an individual does not have favourable social and family life, he may not feel happy at the workplace. Similarly, other personal problems associated with him may affect his level of job satisfaction. Personal problems associated with him may affect his level of job satisfaction.

Nature of job:

Nature of job determines job satisfaction which is in the form of occupation level and job content. Occupation level: Higher level jobs provide more satisfaction as compared to lower levels. This happens because high level jobs carry prestige and status in the society which and the itself becomes source of satisfaction for the job holders. Job content: Job content refers to the intrinsic value of the job which depends on the requirement of skills for performing it, degree of responsibility and growth it offers. A higher content of these factors provides higher satisfaction. For example, a routine and repetitive lesser satisfaction; the degree of satisfaction progressively increases in job rotation, job enlargement, and job enrichment

Situational variables:

Situational variables related to job satisfaction lie in organizational context – formal and informal. Formal organization emerges out of the interaction of individuals in the organization. Some of the important factors which affect job important factors which affect job satisfaction are given below:

Working conditions: Working conditions, particularly physical work environment, like

conditions of workplace and associated facilities for performing the job determine job satisfaction. These work in two ways. First, these provide means job performance. Second,

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provision of these conditions affects the individual’s perception about the organization. If these factors are favourable, individuals experience higher level of job satisfaction.

Supervision: The type of supervision affects job satisfaction as in each type of supervision;

the degree of importance attached to individuals varies. In employee-oriented supervision, there is more concern for people which is perceived favourably by them and provides them more satisfaction. In job oriented supervision, there is more emphasis on the performance of the job and people become secondary. This situation decreases job satisfaction.

Equitable rewards: The type of linkage that is provided between job performance and rewards determines the degree of job satisfaction. If the reward is perceived to be based on the job performance and equitable, it offers higher satisfaction. If the reward is perceived to be based on considerations other than the job performance, it affects job satisfaction adversely.

Opportunity: It is true that individuals seek satisfaction in their jobs in the context of job

nature and work environment by they also attach importance to opportunities for promotion that these job offer. If the present job offers opportunity of promotion is lacking, it reduces satisfaction.

Work group: Individuals work in group either created formally of they develop on their own

to seek emotional satisfaction at the workplace. To the extent such groups are cohesive; the degree of satisfaction is high. If the group is not cohesive, job satisfaction is low. In a cohesive group, people derive satisfaction out of their interpersonal interaction and workplace becomes satisfying leading to job satisfaction

1.14 OUTCOMES OF JOB SATISFACTION

To society as a whole as well as from an individual employees stand point, job satisfaction in and of itself is a desirable outcome. The most important outcomes of job satisfaction are

Satisfaction and Productivity: There are many variables which can affect productivity. The

most important of which is rewards. If people receive rewards they feel equitable, they will be satisfied and this is likely to result in greater performance effort.

Satisfaction and Turnover: If there is considerable job dissatisfaction there is likely to be

high turnover. There are other factors such as commitment to the organization play a role in the relationship between satisfaction and turnover.

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Satisfaction and Absenteeism: Research has pretty well demonstrated an inverse relationship

between satisfaction and absenteeism. When satisfaction is high, absenteeism tends to be low.

Other effects such as Citizenship Behaviours: Research reports that highly satisfied

employees tend to have a better mental and physical health, learn new job related tasks more quickly, have fewer on-the-job accidents, and file fewer grievances. Also on the positive side, it has recently been found that satisfied employees are more likely to exhibit prosocial citizenship behaviours and activities.

1.15 MOTIVATION

Motivation is a basic psychological process. Motivation is a process that starts with physiological or psychological deficiency or need that activates behaviour or drive that is aimed at a goal or incentive. In a systems sense, motivation consists of these three interacting and interdependent elements:

Needs: Needs are created whenever there is a physiological or psychological imbalance Drives: A physiological drive is defined as a deficiency with direction

Incentives: At the end of the motivation cycle is the incentive, defined as anything that will alleviate a need and reduce a drive.

1.16 INTRINSIC AND EXTRINSIC MOTIVATION

Intrinsic motivation has been studied by social and educational psychologists since the early 1970s. Research has found that it is usually associated with high educational achievement and enjoyment by students. Intrinsic motivation has been explained by Fritz Heider's attribution theory, Bandura's work on self-efficacy, and Ryan and Deci's cognitive evaluation theory.

Extrinsic motivation comes from outside of the performer. Money is the most obvious example, but coercion and threat of punishment are also common extrinsic motivations.

While competing, the crowd may cheer on the performer, which may motivate him or her to do well. Trophies are also extrinsic incentives. Competition is in general extrinsic because it encourages the performer to win and beat others, not to enjoy the intrinsic rewards of the activity.

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Why do we need motivated employees? The answer is survival (Smith, 1994). Motivated employees are needed in our rapidly changing workplaces. Motivated employees help organizations survive. Motivated employees are more productive. To be effective, managers need to understand what motivates employees within the context of the roles they perform. Of all the functions a manager performs, motivating employees is arguably the most complex. This is due, in part, to the fact that what motivates employees changes constantly (Bowen & Radhakrishna, 1991). For example, research suggests that as employees' income increases, money becomes less of a motivator (Kovach, 1987). Also, as employees get older, interesting work becomes more of a motivator.

1.18 THEORIES OF MOTIVATION

Jeremy Bentham’s “The Carrot and the Stick Approach”:

Possibly the essence of the traditional view of people at work can be best appreciated by a brief look at the work of this English philosopher, whose ideas were also developed in the early years of the Industrial Revolution, around 1800. Bentham’s view was that all people are self-interested and are motivated by the desire to avoid pain and find pleasure. Any worker will work only if the reward is big enough, or the punishment sufficiently unpleasant. This view - the ‘carrot and stick’ approach - was built into the philosophies of the age and is still to be found, especially in the older, more traditional sectors of industry.

The various leading theories of motivation and motivators seldom make reference to the carrot and the stick. This metaphor relates, of course, to the use of rewards and penalties in order to induce desired behaviour. It comes from the old story that to make a donkey move, one must put a carrot in front of him or dab him with a stick from behind. Despite all the research on the theories of motivation, reward and punishment are still considered strong motivators. For centuries, however, they were too often thought of as the only forces that could motivate people.

At the same time, in all theories of motivation, the inducements of some kind of ‘carrot’ are recognized. Often this is money in the form of pay or bonuses. Even though money is not the only motivating force, it has been and will continue to be an important one. The trouble with the money ‘carrot’ approach is that too often everyone gets a carrot, regardless of performance through such practices as salary increase and promotion by seniority, automatic ‘merit’ increases, and executive bonuses not based on individual manager performance. The ‘stick’,

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in the form of fear–fear of loss of job, loss of income, reduction of bonus, demotion, or some other penalty–has been and continues to be a strong motivator. Yet it is admittedly not the best kind. It often gives rise to defensive or retaliatory behaviour, such as union organization, poor-quality work, executive indifference, failure of a manager to take any risks in decision making or even dishonesty. But fear of penalty cannot be overlooked. Whether managers are first-level supervisors or chief executives, the power of their position to give or with hold rewards or impose penalties of various kinds gives them an ability to control, to a very great extent, the economic and social well-being of their subordinates.

Reinforcement Theory

B.F. Skinner, who propounded the reinforcement theory, holds that by designing the environment properly, individuals can be motivated. Instead of considering internal factors like impressions, feelings, attitudes and other cognitive behaviour, individuals are directed by what happens in the environment external to them. Skinner states that work environment should be made suitable to the individuals and that punishment actually leads to frustration and de-motivation. Hence, the only way to motivate is to keep on making positive changes in the external environment of the organization.

Cognitive Evaluation Theory

As per this theory a shift from external rewards to internal rewards results into motivation. It believes that even after the stoppage of external stimulus, internal stimulus survives. It relates to the pay structure in the organization. Instead of treating external factors like pay, incentives, promotion etc and internal factors like interests, drives, responsibility etc, separately, they should be treated as contemporary to each other. The cognition is to be such that even when external motivators are not there the internal motivation continues. However, practically extrinsic rewards are given much more weight age.

The incentive theory of motivation

A reward, tangible or intangible, is presented after the occurrence of an action (i.e. behaviour) with the intent to cause the behaviour to occur again. This is done by associating positive meaning to the behaviour. Studies show that if the person receives the reward immediately, the effect would be greater, and decreases as duration lengthens. Repetitive action-reward combination can cause the action to become habit. Motivation comes from two sources: oneself, and other people. These two sources are called intrinsic motivation and extrinsic motivation, respectively. Applying proper motivational techniques can be much harder than it

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seems. Steven Kerr notes that when creating a reward system, it can be easy to reward A, while hoping for B, and in the process, reap harmful effects that can jeopardize your goals. A reinforce is different from reward, in that reinforcement is intended to create a measured increase in the rate of a desirable behaviour following the addition of something to the environment.

Vroom’s Valence x Expectancy theory:

The most widely accepted explanations of motivation have been propounded by Victor Vroom. His theory is commonly known as expectancy theory. The theory argues that the strength of a tendency to act in a specific way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual to make this simple, expectancy theory says that an employee can be motivated to perform better when there is a belief that the better performance will lead to good performance appraisal and that this shall result into realization of personal goal in form of some reward.

The theory focuses on three things: Efforts and performance relationship Performance and reward relationship Rewards and personal goal relationship Drive-reduction theories

There are a number of drive theories. The Drive Reduction Theory grows out of the concept that we have certain biological drives, such as hunger. As time passes the strength of the drive increases if it is not satisfied (in this case by eating). Upon satisfying a drive the drive's strength is reduced. The theory is based on diverse ideas from the theories of Freud to the ideas of feedback control systems, such as a thermostat.

Cognitive dissonance theory

Suggested by Leon Festinger, this occurs when an individual experiences some degree of discomfort resulting from an incompatibility between two cognitions. For example, a consumer may seek to reassure himself regarding a purchase, feeling, in retrospect, that

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another decision may have been preferable. Another example of cognitive dissonance is when a belief and behaviour are in conflict.

Key Experiences and Motivation

Prof. Gad Yair from The Hebrew University has developed a line of research on Key Experiences, especially relating to educational events. His approach to motivation follows his longstanding interest in outstanding motivating events - either short term and contextual or long-term. He first published a series of papers using the Experience Sampling Method (all three in 2000). This has led to his major study of key experiences, motivation and long-term outcomes. His papers on Key experiences in higher education and on the role of those experiences in educational turning points are readily available over the net. The concept of key educational experiences refers to singular, short and intense educational encounters that proved to have strong and long-lasting effects on adults.

Need theories

Need hierarchy theory

Abraham Maslow's theory is one of the most widely discussed theories of motivation.

The theory can be summarized as follows:

• Human beings have wants and desires which influence their behaviour. Only unsatisfied needs influence behaviour, satisfied needs do not.

• Since needs are many, they are arranged in order of importance, from the basic to the complex.

• The person advances to the next level of needs only after the lower level need is at least minimally satisfied.

• The further the progress up the hierarchy, the more individuality, humanness and psychological health a person will show.

The needs, listed from basic (lowest-earliest) to most complex (highest-latest) are as follows:

• Physiology (hunger, thirst, sleep, etc.) • Safety/Security/Shelter/Health

• Belongingness/Love/Friendship

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• Self actualization

(I) Physiological needs:

These are important needs for sustaining the human life. Food, water, warmth, shelter, sleep, medicine and education are the basic physiological needs which fall in the primary list of need satisfaction. Maslow was of an opinion that until these needs were satisfied to a degree to maintain life, no other motivating factors can work.

(ii) Security or Safety needs:

These are the needs to be free of physical danger and of the fear of losing a job, property, food or shelter. It also includes protection against any emotional harm.

(iii) Social needs:

Since people are social beings, they need to belong and be accepted by others. People try to satisfy their need for affection, acceptance and friendship.

(iv) Esteem needs:

According to Maslow, once people begin to satisfy their need to belong, they tend to want to be held in esteem both by themselves and by others. This kind of need produces such satisfaction as power, prestige status and self-confidence. It includes both internal esteem factors like self-respect, autonomy and achievements and external esteem factors such as states, recognition and attention.

(v) Need for self-actualization:

Maslow regards this as the highest need in his hierarchy. It is the drive to become what one is capable of becoming; it includes growth, achieving one’s potential and self-fulfilment. It is to maximize one’s potential and to accomplish something.

As each of these needs are substantially satisfied, the next need becomes dominant. From the standpoint of motivation, the theory would say that although no need is ever fully gratified, a substantially satisfied need no longer motivates. So if you want to motivate someone, you need to understand what level of the hierarchy that person is on and focus on satisfying those needs or needs above that level.

Maslow’s need theory has received wide recognition, particularly among practicing managers. This can be attributed to the theory’s intuitive logic and ease of understanding.

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Theory X and Theory Y” of Douglas McGregor:

McGregor, in his book “The Human side of Enterprise” states that people inside the organization can be managed in two ways. The first is basically negative, which falls under the category X and the other is basically positive, which falls under the category Y. After viewing the way in which the manager dealt with employees, McGregor concluded that a manager’s view of the nature of human beings is based on a certain grouping of assumptions and that he or she tends to mould his or her behaviour towards subordinates according to these assumptions.

Under the assumptions of theory X:

• Employees inherently do not like work and whenever possible, will attempt to avoid it.

• Because employees dislike work, they have to be forced, coerced or threatened with punishment to achieve goals.

• Employees avoid responsibilities and do not work fill formal directions are issued.

• Most workers place a greater importance on security over all other factors and display little ambition.

In contrast under the assumptions of theory Y:

• Physical and mental effort at work is as natural as rest or play. • People do exercise self-control and self-direction and if they are

committed to those goals.

• Average human beings are willing to take responsibility and exercise imagination, ingenuity and creativity in solving the problems of the organization.

• That the way the things are organized, the average human being’s brainpower is only partly used.

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On analysis of the assumptions it can be detected that theory X assumes that lower-order needs dominate individuals and theory Y assumes that higher-order needs dominate individuals. An organization that is run on Theory X lines tends to be authoritarian in nature, the word “authoritarian” suggests such ideas as the “power to enforce obedience” and the “right to command.” In contrast Theory Y organizations can be described as “participative”, where the aims of the organization and of the individuals in it are integrated; individuals can achieve their own goals best by directing their efforts towards the success of the organization.

Herzberg’s two-factor theory

Frederick Herzberg's two-factor theory, intrinsic/extrinsic motivation, concludes that certain factors in the workplace result in job satisfaction, but if absent, they don't lead to dissatisfaction but no satisfaction.

The factors that motivate people can change over their lifetime, but "respect for me as a person" is one of the top motivating factors at any stage of life.

He distinguished between:

Motivators; (e.g. challenging work, recognition, responsibility) which give positive

satisfaction, and

Hygiene factors; (e.g. status, job security, salary and fringe benefits) that do not motivate if

present, but, if absent, result in demotivation.

The name Hygiene factors is used because, like hygiene, the presence will not make you healthier, but absence can cause health deterioration.

The theory is sometimes called the "Motivator-Hygiene Theory" and/or "The Dual Structure Theory."

Herzberg's theory has found application in such occupational fields as information systems and in studies of user satisfaction.

Alderfer’s ERG theory

Alderfer, expanding on Maslow's hierarchy of needs, created the ERG theory (existence, relatedness and growth). Physiological and safety, the lower order needs, are placed in the existence category, while love and self esteem needs are placed in the relatedness category. The growth category contains our self-actualization and self-esteem needs.

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Self-determination theory

Self-determination theory, developed by Edward Deci and Richard Ryan, focuses on the importance of intrinsic motivation in driving human behaviour. Like Maslow's hierarchical theory and others that built on it, SDT posits a natural tendency toward growth and development. Unlike these other theories, however, SDT does not include any sort of "autopilot" for achievement, but instead requires active encouragement from the environment. The primary factors that encourage motivation and development are autonomy, competence feedback, and relatedness.

McClelland’s Theory of Needs:

David McClelland has developed a theory on three types of motivating needs: Need for Power

Need for Affiliation Need for Achievement

Basically people for high need for power are inclined towards influence and control. They like to be at the centre and are good orators. They are demanding in nature, forceful in manners and ambitious in life. They can be motivated to perform if they are given key positions or power positions.

In the second category are the people who are social in nature. They try to affiliate themselves with individuals and groups. They are driven by love and faith. They like to build a friendly environment around themselves. Social recognition and affiliation with others provides them motivation.

People in the third area are driven by the challenge of success and the fear of failure. Their need for achievement is moderate and they set for themselves moderately difficult tasks. They are analytical in nature and take calculated risks. Such people are motivated to perform when they see at least some chances of success.

McClelland observed that with the advancement in hierarchy the need for power and achievement increased rather than Affiliation. He also observed that people who were at the top, later ceased to be motivated by this drives.

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As per the equity theory of J. Stacey Adams, people are motivated by their beliefs about the reward structure as being fair or unfair, relative to the inputs. People have a tendency to use subjective judgment to balance the outcomes and inputs in the relationship for comparisons between different individuals. Accordingly, this observation is illustrated in a diagram in the subsequent page:

If people feel that they are not equally rewarded they either reduce the quantity or quality of work or migrate to some other organization. However, if people perceive that they are rewarded higher, they may be motivated to work harder.

Broad theories

The latest approach in Achievement Motivation is an integrative perspective as lined out in the "Onion-Ring-Model of Achievement Motivation" by Heinz Schuler, George C. Thornton III, Andreas Frintrup and Rose Mueller-Hanson. It is based on the premise that performance motivation results from the way broad components of personality are directed towards

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performance. As a result, it includes a range of dimensions that are relevant to success at work but which are not conventionally regarded as being part of performance motivation. Especially it integrates formerly separated approaches as Need for Achievement with e.g. social motives like Dominance.

Goal-setting theory

Goal-setting theory is based on the notion that individuals sometimes have a drive to reach a clearly defined end state. Often, this end state is a reward in itself. A goal's efficiency is affected by three features: proximity, difficulty and specificity. An ideal goal should present a situation where the time between the initiation of behaviour and the end state is close. This explains why some children are more motivated to learn how to ride a bike than mastering algebra. A goal should be moderate, not too hard or too easy to complete. In both cases, most people are not optimally motivated, as many want a challenge (which assumes some kind of insecurity of success). At the same time people want to feel that there is a substantial probability that they will succeed. Specificity concerns the description of the goal in their class. The goal should be objectively defined and intelligible for the individual.

1.19 SCOPE AND AREA OF STUDY

Specific employee attitude relating to Job satisfaction and Organizational commitment are of major interest to the field of Organizational behaviour and the practise of human resource management.

Job satisfaction is a significant determinant of organizational commitment. So the current study concentrates on identifying the link between job satisfaction and organizational commitment.

The study shall serve the following purpose

• Will help in identifying the factors which motivates employees in soft ware industry.

• Improves knowledge about the factors which can create commitment

• Helps to develop commitment-oriented organization policies.

• Helps to bring out new and motivating ideas in Human resources planning

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• It can improve the quality of HR practises

1.20 RESUME OF SUCCEEDING CHAPTERS

The current chapter deals with introduction into the Information technology industry and the topic under study. The second chapter will be covering review of relevant literature and third chapter deals research methodology. The fourth chapter will be having the statistical analysis and interpretation of the data collected. Fifth chapter covers summary and conclusion.

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CHAPTER 11

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CHAPTER 11 REVIEW OF LITERATURE

2.1 INTRODUCTION

The loss of skilled IT professionals is very expensive. Annual rates of turnover in IT departments have been estimated up to 20% or more. In addition to the cost of replacing the experienced staff turnover takes its toll on productivity and morale through disruption of projects, heavier workloads and negative impact on team cohesion. Some sources view high turnover as inevitable consequence of tremendous demand for technology skills .The only remedy for this trend is research and development to increase commitment among IT professionals.

The literature review of this thesis is divided into three parts. The first part begins with literature review on job satisfaction. Second part covers organizational commitment and the last part on motivation. Finally from the review of literature gap is identified for the current study.

2.2 STUDIES ON JOB SATISFACTION, ORGANIZATIONAL COMMITMENT AND MOTIVATION

The present study is based on the rationale that turnover intentions among software professionals are largely in agreement with theoretical models of job satisfaction, organizational commitment, and turnover. Research on turnover and retention in IT does not much support the claim that IT turnover can be independent of job satisfaction, but rather suggest that IT employees seem to be quicker to change jobs than other employees when they are dissatisfied with their current employer (Hacker, 2003)

Adnan, Riaz . and Muhammad, Ramay. (2010) conducted a study to find out the antecedents of Job satisfaction in telecom sector. The research was conducted to identify the factors that lead to job satisfaction and commitment of employees working for telecom sector in Pakistan. Through questionnaire survey responses from 221 employees working at managerial and non-managerial positions were collected, which showed the significant association of supervision and collegiality and open communication on job satisfaction. The correlation results show the high association of performance appraisal system with career development and management,

Organizational Commitment