Human Resource Management Practices and Workers’ Job Satisfaction

Introduction

A growing body research shows that progressive Human Resource Management (HRM) practices have a significant effect on corporate bottom-line and middle-line performance. The positive effect on financial performance, productivity, product and service quality, and cost control are documented by researchers. This study attempts to propose a conceptual framework consisting of three human resources management (HRM) practice (supervision, job training, and pay practices), job satisfaction and satisfaction with the pay, and to explain the relationships among these variables.

Job satisfaction played an important role to employee’s turnover because it would lead employee resigned when their job satisfaction is low. The results indicate HRM practice a positively and significantly correlated with job satisfaction. On the other hand HRM practice and job satisfaction are negatively and significantly correlated with turnover. However, the results of HRM practice and job satisfaction are strong predictors of turnover. Satisfaction with the pay will influence of worker’s job satisfaction in HRM practices.

Problem Statement

In the recent year, the literature on Human Resource Management (HRM) emphasis on the high performance working system practice’s on job satisfaction as hence employee performance and contributed the organization performance. Job satisfaction is one of the most widely studies work-related attitudes in the fields of industrial and organizational psychology, and organizational behavior. Job satisfaction is a factor that would induce the employee to work in the long term position. Regardless of job satisfaction the organization or firm would confront with the cost of recruitment caused by turnover. For this reason, the organization should pay attention to employee’s job satisfaction as well. The important part to be focused on is the satisfaction with their pay.

The activities performed by HRM professionals fall under five major domains:

(1) Organizational design,

(2) Staffing,

(3) Performance Management and Appraisal,

(4) Employee and Organizational Development

(5) Reward Systems, Benefits and Compliance

Acquiring human resource capability should begin with organizational design and analysis. Organizational design involves the arrangement of work tasks based on the interaction of people, technology and the tasks to be performed in the context of the objectives, goals and the strategic plan of the organization. HRM activities such as human resources planning, job and work analysis, organizational restructuring, job design, team building, computerization, and worker-machine interfaces fall under this domain.

Recruitment, employee orientation, selection, promotion, and termination are among the activities that fit into the staffing domain. The performance management domain includes assessments of individuals and teams to measure, and to improve work performance.  Employee training and development programs are concerned with establishing, fostering, and maintaining employee skills based on organizational and employee needs.

Reward systems, benefits and compliance have to do with any type of reward or benefit that may be available to employees. Labor law, health and safety issues and unemployment policy fall under compliance component. Regarding the compensation and reward system, the majority of companies rewarded their employees based on the employee’s ability to achieve the company's critical business goals.

Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives. Human Resource Management is moving away from traditional personnel, administration, and transaction roles, which are increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways.

Issues on HRM Practices and Job Satisfaction.

It starts with the human resource inputs whereby HRM practices have the most direct influence on the skill, knowledge and abilities, and employee motivation of the human resources. Firm generally organize human resource practices into systems that are consistent with their culture and business strategy. Individual employee skills may include reading, writing, math, computer and software knowledge problem solving, critical thinking and report writing. Meanwhile employee motivation refers to the inner force that drives individuals to accomplish personal and organizational goals. 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. For example, researcher describes that monetary reward is extrinsic financial motivators for employees to increase their efficiency and effectiveness toward a firm goal.

In human resource practices, the process the affect human resource characteristic includes sets of organization-wide human resource policies and practices. This study examines HRM practices as a system that will create an affect human resource characteristics and firm performance. They are integrated human resource planning, selective recruitment and selection, comprehensive training and development, developmental performance appraisal and competitive and equitable compensation. Job and firm performance are linked positively to competitive advantage in human resource inputs and practices to meaningful organizational outputs and in due course competitive advantage. After analyzing these outputs, HR manager and practitioners can improve their job and firm performance by addressing them productively in their practices.

The relationship between pay practice and job satisfaction is useful to influence motivation of employee’s work then achieved higher productivity. The study examines the overall job satisfaction with respect to their pay. The results show that there is positive effect of the existence of HRM practice which refers to pay practice on the job satisfaction. On this study employ many HRM practices such as work organization, recruitment and pay practice as independent variables and job satisfaction as dependent variable. The results show that the pay practice is positively associated with the job satisfaction. 

Furthermore, on their works clarify satisfaction with pay is high where seniority and individual performance-related schemes are in place. The attractively turn to the relationship between pay practice and turnover. Some researcher study confirms that a higher wage reduces firms' turnover and recruitment costs. In other word, the wage is negatively related to the turnover and recruitment cost. If the employees have the higher wage the firms or organizations should have lower levels of voluntary turnover (quits).

Otherwise, it is possible that the role of unions within the workplace has been replaced by the introduction of HRM practices, which have the potential to increase worker’s job satisfaction and performance and hence offer competing services to those provided by unions. Some groups of workers, such as the young, may not see a role for unions in resolving workplace disputes regarding pay and practices and consequently may not join a union. Therefore, it is appropriate to assess union-non-union member differences in the effect of HRM practices on their job satisfaction.

A highly dispersed wage structure may alienate those workers at the lower end of the job-wage hierarchy because they feel under-valued. The best system of pay is one that is based on a mixture of seniority, productivity and credentials. Unions do not add or reduce the impact of perceived workplace inequality on the probability of being satisfied or better with overall job or pay. The findings with respect to perceived pay inequality are interesting insofar as they suggest that although many HRM practices raise workers’ job satisfaction there may be a downside.

Conclusion

After controlling for personal, job and firm characteristics, it is found that several HRM practices raise worker’s overall job satisfaction and their satisfaction with pay. However, these effects are only significant for non-union members. Satisfaction with pay is higher where performance-related pay and seniority-based reward systems are in place. A pay structure that is perceived to be unequal is associated with a substantial reduction in both non-union member’s overall job satisfaction and their satisfaction with pay. Although HRM practices can raise worker’s job satisfaction, if workplace pay inequality widens as a consequence then non-union members may experience reduced job satisfaction.

Furthermore, giving workers a “voice” through employee involvement schemes has a positive effect on job satisfaction. Managers who hold regular meetings with employees to enable them to express their views about work have the most substantial effect in raising job satisfaction. Satisfaction with pay is higher where seniority and individual performance-related schemes are in place.

Finally, a pay structure that is seen as overly dispersed is associated with low levels of job satisfaction. Although HRM practices have a direct positive effect in raising worker’s job satisfaction, it can be conjectured that there may be an offsetting negative effect on satisfaction and performance if these policies also raise pay inequality in the workplace. This clearly raises implications for the design and implementation of HRM practices, particularly with respect to pay and incentive systems. However, it should be noted that we measure the effect of perceived workplace pay inequality, rather than actual pay inequality, and it may be that the distribution of pay is misperceived. The implication would then be that information flows about pay structure should be improved if managers are concerned with their worker’s job satisfaction.