Determinants of workkers job satisfaction and effectiveness of union in garment industry in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
INTERNATIONAL SCHOOL OF BUSINESS
-----------------------

NGUYEN THI TRUONG LE

DETERMINANTS OF WORKER’S JOB
SATISFACTION AND EFFECTIVENESS OF
UNION IN GARMENT INDUSTRY IN VIET NAM

MASTER OF BUSINESS

SUPERVISORS: DR. NGUYEN QUYNH MAI

Ho Chi Minh City – Year 2014


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ACKNOWLEDGE
Firstly, I would like to express my appreciate to my research supervisor, Dr. Nguyen Quynh
Mai for her support, suggesting, guidance during time of my dissertation.
Secondly, I would like to express my gratitude to Prof. Nguyen Dinh Tho for his effort in
thoroughly guidance, encourage and support to every student throughout two-year-course.
Thirdly, this research was contributed by my classmates, my colleagues, and was moral
assisted by my family. I would like to send my deepest thank to them.
Last, ISB staff did helped, supported with their best for convenience of MBUS 2012.
I appreciate very much for their contribution to my present result.


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ABSTRACT

Garment industry in Vietnam has developed impressively and has quite highly demanded in
employing labor force. Human resources management in this field is very important to
maintain the stable producing. It contains many characteristics which may impact to the
workers to feel more satisfaction and perform their job better. Keep the staff satisfy to work
better, more efficient is always one of business goals, especially in this special industry.
This study aims to investigate which factor affecting to worker‟s job satisfaction and how
the effective of union effect to worker‟s job satisfaction through these factors. The result
showed that indirect compensation, working environment and relationship with supervisor
factors effect to worker‟s relationship. Among three effect factors, relationship with the
supervisor has the most important to job satisfaction and following is working environment
and indirect compensation. The additional finding in this research is effectiveness of union
has a moderating affect to the relationship between job satisfaction and independent
variables included indirect compensation and Working Environment. This finding will help
to strengthen the effectiveness of Union to structure and operate effectively to satisfy their
union members


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Contents
ACKNOWLEDGE ........................................................................................................................................................1
ABSTRACT .................................................................................................................................................................2
CHAPTER 1. INTRODUCTION ....................................................................................................................................2
1.1

Research background ...............................................................................................................................2

1.2 Research problem: ........................................................................................................................................3
1.3 Research objective..........................................................................................................................................4
1.4 Scope: ............................................................................................................................................................4
1.5 Significant of study (Research contribution) ..................................................................................................5
1.6 Organization (Structure) ................................................................................................................................5
CHAPTER 2: LITERATURE REVIEW .............................................................................................................................6
2.1 Concept and Definition:..................................................................................................................................6
2.1.1 Job satisfaction .......................................................................................................................................6
2.1.2 Direct financial compensation .................................................................................................................6
2.1.3 Indirect compensation:............................................................................................................................7
2.1.4 Working environment .............................................................................................................................8
2.1.5 Feedback ..................................................................................................................................................9
2.1.6 Relationship with supervisor ...................................................................................................................9
2.1.7 Union .....................................................................................................................................................10
2.2 Model and Theories:.....................................................................................................................................10
2.2.1 Affect theory ..........................................................................................................................................10
2.2.2 Equity theory .........................................................................................................................................11
2.2.3 Two-factor theory (motivator-hygiene theory) .....................................................................................12
2.2.4 Job characteristics model ......................................................................................................................13
2.3. Previous researches about job satisfaction for worker in garment industry .............................................13
2.4. Conceptual model frame work and Hypothesis ..........................................................................................14
2.4.1 Model frame: .........................................................................................................................................14
2.4.2 Hypothesis .............................................................................................................................................15
CHAPTER 3: RESEARCH METHOD ...........................................................................................................................18


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3.1 Research Design: ..........................................................................................................................................18
3.2 Measurement and Questionnaire design: ..................................................................................................18

3.3 Data collection method: ...............................................................................................................................21
3. 4 Data Analysis Method:.................................................................................................................................21
3.4.1 Descriptive statistics of sample: ............................................................................................................21
3.4.2 Reliability test: .......................................................................................................................................21
3.4.3 Exploratory Factor Analysis (EFA) ..........................................................................................................22
3.4.4 Regression Analysis ...............................................................................................................................23
3.4.5 Process Analysis .....................................................................................................................................23
CHAPTER 4. DATA ANALYSIS ...................................................................................................................................24
4.1 Descriptive statistics of sample ....................................................................................................................24
4.1.1 Final sample ...........................................................................................................................................24
4.1.2 Demographic Statistics ..........................................................................................................................24
4.2 The construct measurement scale ...............................................................................................................26
4.2.1. Cronbach’s Alpha results of each measurement ..................................................................................26
4.2.2. Exploratory Factor Analysis ..................................................................................................................33
4.3.Adjustment of hypotheses and research model ..........................................................................................36
4.4 Regression Analysis: .....................................................................................................................................37
4.4.1. Pearson Correlation Coefficient ...........................................................................................................37
4.4.2. Regression Analysis ..............................................................................................................................38
4.4.3 Process Analysis in SPSS ........................................................................................................................42
4.5. Discussion about findings ............................................................................................................................47
CHAPTER 5. CONSLUSIONS AND RECOMMENDATIONS .........................................................................................49
5.1. Recommendations.......................................................................................................................................49
5.1.1 Indirect compensation:..........................................................................................................................49
5.1.2 Working Environment: ..........................................................................................................................50
5.1.4 Effectiveness of Union ...........................................................................................................................52
5.2. Limitations and recommendation for future researches ............................................................................53
References ..............................................................................................................................................................54
APPENDIX A: Descriptive Statistics ........................................................................................................................57

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APPENDIX B: PROCESS RESULT ...............................................................................................................................62
APPENDIX C: Questionnaire in English ...................................................................................................................69
APPENDIX D: Questionnaire in Vietnamese ...........................................................................................................73


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List of table
Table 4.1 Descriptive statistics of sample……………………………………………………………………………………………………………24
Table 4.2 Reliability statistics for direct compensation….……………………………………………………………………………………25
Table 4.3 Reliability statistics for Indirect compensation…………………………………………………………………………………….26
Table 4.4 Reliability statistics for indirect compensation (extracted ICS2)………………………………………………………….26
Table 4.5 Reliability statistics for Working Environment…………………………………………………………………………………….27
Table 4.6 Reliability statistics for Relationship with supervisor………………………………………………………………………….28
Table 4.7 Reliability statistics for Feedback………………………………………………………………………………………………………..28
Table 4.8 Reliability statistics for Union……………………………………………………………………………………………………………..30
Table 4.9 Reliability statistics for Job Satisfaction……………………………………………………………………………………………….31
Table 4.10: KMO and Bartlett’s test for independent variables…………………………………………………………………………..33
Table 4.11 : Rotated Component Matrixa…………………………………………………………………………………………………………..33
Table 4.12 Rotated Component Matrixa…………………………………………………………………….....................................33
Table 4.13 Pearson Correlation Coefficient…………………………………………………………………………………………………………36
Table 4.14 Summary output of Regression…………………………………………………………………………………………………………37
Table 4.15 Summary output of Regression…………………………………………………………………………………………………………38
Table 4.16 Regression Union and Job satisfation………………………………………………………………………………………………..39
Table 4.17 Hypothesis testing…………………………………………………………………………………………………………………………….46


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CHAPTER 1. INTRODUCTION
1.1

Research background

Overview the garment industry of Vietnam:
Vietnam‟s textile and garment sector has seen fast and sustainable growth over the past years,
playing an important role in national socio-economic development. Demand for labor in the
sector is huge. Every year, the sector gives employment for 2.2 million people, generating
income for the workers. Export value of textile and garment products in recent years has been
ranking number two in the country‟s total export revenue, earning a major source of foreign
exchange and contributing significantly to Vietnam‟s gross national product and budget.
According to government statistic office Vietnam, Labor of Vietnam Textile industry is not
focused, because over 70% of the textile enterprises are small and medium enterprises, which
number less than 300 employees. Nearly 20% of enterprises employed from 300 workers to
1000 workers, the factories have 1000 workers now come up only 6%. With such dispersion, if
not linked to the training activities will be difficult to implement efficiently.
Textile industry workers increased speedily and concentrated mainly in the non-state
enterprises, then in the enterprise with 100% foreign capital. These two types currently attract
two thirds of the entire sector workers. Often the majority of these businesses today tend to
attract for new labor, but not care deeply in keeping the current ones. Lead to a scramble for
labor among firms in the sector has increased at an alarming rate; the concern was their ability
to leave the company is too big due to dissatisfaction. Due to the labor requirements of the
garment industry increased very fast response to worker satisfaction; this industry is actually in
lack of labor. Besides that, the labor force is still weak not only at professional level but also at
management one. If we do not solve this problem rapidly, it will be hard to compete and win
on the market. So, it is really necessary for the industry to know the characteristic of labor

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force and orient for a new period. (Ministry of Industry, Vietnam Textile and Garment Group,
2013)

This study is to identify the factors make workers feel satisfaction and perform their work
better then can affect to the economic and social development of countries involved.
1.2 Research problem:
Because job satisfaction is serious in organizations, the study of what satisfies workers is
increasingly important. Therefore, the goal of this research project was to answer the
overarching question: How are workers across satisfied at work?
Job satisfaction is important in every worker‟s life. Workers spend more than thirds of our
waking hours at work which means that if we are not happy with their jobs, they are also
unhappy with their personal lives. Workers who find satisfaction in their jobs are more
enthusiastic when it comes to performing their responsibilities. Job satisfaction definitely plays
an important role in determining our efficiency and productivity.
Job satisfaction gives them motivation and helps them become more optimistic no matter what
challenge they may face at work. It encourages workers to always give their best shot in
everything they do. In addition, a person who is truly satisfied with his or her career life helps
create a more positive work environment. Workers who have job satisfaction can help boost
the morale of his or her co-employees and will encourage them to be optimistic about their job.
Many experts believe that job satisfaction trends can affect labor market behavior and
influence work productivity, work effort, employee absenteeism and staff turnover. Moreover,
job satisfaction is considered a strong predictor of overall individual well-being (Diaz-Serrano
and Cabral Vieira, 2005), as well as a good predictor of intentions or decisions of employees to
leave a job (Gazioglu and Tansel, 2002).


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Beyond the research literature and studies, job satisfaction is also important in everyday life.
Organizations have significant effects on the people who work for them and some of those
effects are reflected in how people feel

In addition, measures of job quality seem to be useful predictors of future labor market
behavior. Workers‟ decisions about whether to work or not, what kind of job to accept or stay
in, and how hard to work are all likely to depend in part upon the worker‟s subjective
evaluation of their work, in other words on their job satisfaction.(Clark, 1998)

Second one, this research is to find out the union impact to job satisfaction. The goal was to
investigate the mediating role of compensation, relationship with supervisor, feedback and
working environment versus relationship between union and job satisfaction. For some
country, people concern on the effective operation of union, it is speculated that if clothing
factory workers were free to choose their own union and were socialized with regard to the
functions of a union, it would be doubtful whether they would still be satisfied with the
garment workers union (Chetty, 1983).
1.3 Research objective
-

To determine factors influence worker satisfaction in garment companies

-

To determine the moderating impact of union to the relationship of worker‟s job

satisfaction to

direct and indirect compensation, working environment, relationship with

supervisor and feedback.

1.4 Scope:
-

Garment factories in Vietnam

-

Subject: workers in the garment factories in Vietnam


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1.5 Significant of study (Research contribution)
-

For management of factories to make decision in human resource management, creating
appropriate decisions in managing, in order to increase productivities and employees‟
motivation level

-

For Union to structure and operate effectively to satisfy their union members

-

Theoretical contribution: understand the moderating role of union

1.6 Organization (Structure)
This study includes five chapters below:
Chapter 1 Introduction

Chapter 2 – Literature review: this chapter includes Definition of job satisfaction, theories of
satisfaction, previous researches and identifying significant satisfaction factors in this paper
Chapter 3 – Research method: this chapter consists research process, measurement scale, the
pilot test and the main research which was conducted.
Chapter 4 – Data analysis: this chapter describes how each measurement scale was evaluated
and the result of testing hypothesis. It consists of sample description, measurement scale data
analysis, regression analysis and evaluating the impact of personal characteristic on employee
motivation.
Chapter 5 – Conclusion and Recommendation: this chapter presents brief description about
research findings and some of implications has mentioned. In the end, research limitation and
recommendations for future research have presented as well.


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CHAPTER 2: LITERATURE REVIEW
2.1 Concept and Definition:
2.1.1 Job satisfaction
Job satisfaction is described as the feelings of employees resulting from the assessment of their
job. It can be negative, positive, or moderate. Edwards, et al. (2008, p 442) refers to job
satisfaction as “an evaluative judgment about the degree of pleasure an employee derives from
his or her job that consists of both the affective and cognitive components”. Aamodt, (2009)
defines job satisfaction as “the attitude an employee has toward his job.” Moser and Galais
(2007) highlighted that employee‟s ability and opportunities aid to improve their satisfaction of
the job level. Herzberg, et al. (1959) formulated the two-factor theory of job satisfaction and
postulated that satisfaction and dissatisfaction are two separate, and sometimes even unrelated
phenomena. Intrinsic factors named „motivators‟(that is, factors intrinsic to the nature and
experience of doing work) are found to be job „satisfiers‟ and included achievement,
recognition, work itself and responsibility. Extrinsic factors which they named hygiene‟ factors
are found to be job „dissatisfies‟ and included company policy, administration, supervision,

salary, interpersonal relations and working conditions. Herzberg and Mausner‟s MotivationHygiene theory has dominated the study of the nature of job satisfaction, and formed a basis
for the development of job satisfaction assessment. There are different models developed in the
job satisfaction field. Job satisfaction generally implies a positive evaluation of work and a
positive effect deriving from it; that is, a “positive emotional state resulting from the appraisal
of one‟s job or job experiences” (Locke 1976, p. 1300). Job satisfaction is defined as the extent
to which people like (satisfaction) or dislike (dissatisfaction) their jobs" (Spector, 1994, p. 2)
2.1.2 Direct financial compensation


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Direct financial compensation refers to the act of providing a person with money or other
things of economic value in exchange for their goods, labor, or to provide for the costs of
injuries that they have incurred.
Kinds of financial compensation include:
-

Damages, legal term for the financial compensation recoverable by reason of another's
breach of duty

-

Nationalization compensation, compensation paid in the event of nationalization of
property

-

Payment

-

Remuneration: Deferred compensation, Executive compensation, Royalties, Salary,
Wage

-

Workers' compensation, to protect employees who have incurred work-related injuries
Essays, UK. (November 2013). Direct And Indirect Compensation Managing Human
Capital Business Essay.

2.1.3 Indirect compensation:
Dessler (2011) refers to Indirect Compensation as the indirect financial and non-financial
payments employees receive for continuing their employment with the company which are an
important part of every employee‟s compensation. Other terms such as fringe benefits,
employee services, supplementary compensation and supplementary pay are used.
Armstrong (2009) says Indirect Compensation or Employee benefits are elements of
remuneration given in addition to the various forms of cash pay. They also include items that
are not strictly remuneration such as annual holidays. Management uses it ostensibly to
facilitate its recruitment effort or influence the potential of employees coming to work for a
company, influence their stay or create greater commitment, raise morale, reduce absenteeism


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in general and improve the strength of the organization by instituting a comprehensive
programme in this area (Noe et al, 1996).
According to Chhabra (2001), Indirect or Supplementary Compensation involves 'fringe
benefits' offered through several employee services and benefits such as housing, subsidized
food, medical aid, crèche and so on. It involves rewards provided by organizations to
employees for their membership, attendance or participation in the organization. Because of

the increasing costs of fringe benefits, some people also label them as 'hidden payroll.' Benefits
currently account for almost 40 per cent of the total compensation costs for each employee.
The basic purpose of fringe benefits or supplementary compensation is to attract and maintain
efficient human resources within the organization and to motivate them.
Some popular indirect compensation offered by today‟s organizations (Byars and Rue 2008):
Social Security, Workers‟ Compensation, Retirement Plans, Paid Holidays, Paid Vacations,
Other Benefits.
2.1.4 Working environment
Business dictionary defined work environment as location where a task is completed. When
pertaining to a place of employment, the work environment involves the physical geographical
location as well as the immediate surroundings of the workplace, such as a construction site or
office building. Typically involves other factors relating to the place of employment, such as
the quality of the air, noise level, and additional perks and benefits of employment such as free
child care or unlimited coffee, or adequate parking. When look at working environment should
consider about its culture aspect as whether it is a creative or conventional environment which
is very important to productivity of its staff.
Heath (2006) states, the biggest goal of all the business organization is to increase their
productivity, thus decreasing their cost of production and making high profits. Although, there
is very less amount of effort, which these organizations make in order to increase their
productivity. Many employers have a very wrong view that productivity can be increased by


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giving their employees good pay package and timely increments for their work. What these
employers are not aware of is that there are many other factors, which affects the performance
of the employees in an organization. One of the major factors, which have an impact on the
motivation level of the employees and their performance, is the workplace environment.
2.1.5 Feedback
As noted by Herold and Parsons (1985), and Becker and Klimoski (1989), more information is

typically available to employees in organizations than these isolated performance feedback
interventions. The feedback environment is believed to play a vital role in determining how
employees seek, receive process, accept, and use feed-back messages. Therefore, a better
understanding of the feedback environment is crucial to gain more insight into the feedback
process and to improve feedback interventions in organizations (Frederik Anseel, Filip
Lievens, 2007, p. 3)
2.1.6 Relationship with supervisor
Buckingham and Coffman (1999) pointed manager‟s role in employee‟s commitment, that is
they must have good communicate skills, providing positive feedback in order to develop their
staff‟s strengths and overcome weaknesses. There are many reasons for employee resigning
cited in studies of Buckingham and Coffman (1999); Kaye and Jordan-Evans (1999); Kreisman
(2002); Herman (1999), and the most popular reason was given is bad relationship between
manager and employee. Hence, managers and their management ways play a signification and
important role in motivation employee and builds organization commitment.
According to Adam‟s equity theory, Hellriegel and Slocum (2007) and Coetsee (2003) provide
some managerial approaches: first, managers should treat their staff fairly; second, encourage
honest and transparent communicate about employee‟s inputs and outputs in order to avoid
dissatisfaction. Manager‟s role in Adam‟s equity theory plays an important role because of its


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moderator position from individual effort to individual goals through recognition. If
employee‟s effort is not recognized by manager, their new goal may be to decrease effort or
quit the job.
2.1.7 Union
Business dictionary defined Union as an organized association of workers in a trade, group of
trades, or profession, formed to protect and further their rights and interests. According to
Bryson and Freeman (2006), workers may benefit from union membership. A trade union is an
organization of employees formed on a continuous basis for the purpose of securing diverse

range of benefits. It is a continuous association of wage earners for the purpose of maintaining
and improving the conditions of their working lives. Dale Yoder has defined trade union as a
continuing long – term association of employees formed and maintained for the specific
purpose of advancing and protecting the interests of members in their working relationships.
He quotes: “A trade union is a continuous association of workers which is formed with the
purpose of protecting the interests of workers.”
According to Flippo “A labour union or trade union is an organisation of workers formed to
promote, protect, and improve, through collective action, the social, economic, and political
interests of its members”.
Essays, UK. (November 2013). Features Of Trade Unions Management Essay
2.2 Model and Theories:
Three predominant theories of job satisfaction include affect theory (Edwin a. Locke‟s),
Herzberg, Mausner, & Snyderman, 1959) motivation-hygiene theory
2.2.1 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


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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 or are not met. When a person
values a particular facet of a job, his satisfaction was 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. To illustrate, if Employee A valued autonomy in the workplace
and Employee B was indifferent about autonomy, then Employee A would be more satisfied in
a position that offers a high degree of autonomy and less satisfied in a position with little or no
autonomy compared to Employee B. This theory also states that too much of a particular facet
will produce stronger feelings of dissatisfaction the more a worker values that facet.

2.2.2 Equity theory
John Stacey Adams (1963) Equity Theory shows how a person views fairness in regard to
social relationships such as with an employer. A person identifies the amount of input (things
gained) from a relationship compared to the output (things given) to produce an input/output
ratio. They then compare this ratio to the ratio of other people in deciding whether or not they
have an equitable relationship. Equity Theory suggests that if an individual thinks there is an
inequality between two social groups or individuals, the person is likely to be distressed
because the ratio between the input and the output are not equal.
For example, consider two employees who work the same job and receive the same pay and
benefits. If one individual gets a pay raise for doing the same work than the other, then the less
benefited individual will become distressed in his workplace. If, on the other hand, one
individual gets a pay raise and new responsibilities, then the feeling of equity will be
maintained.


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2.2.3 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
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
organizational goals (Hoskinson, Porter, & Wrench, p. 133). 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.
While Herzberg's model has stimulated much research, researchers have been unable to

reliably empirically prove the model, with Hackman & Oldham suggesting that Herzberg's
original formulation of the model may have been a methodological artifact. Furthermore, the
theory does not consider individual differences, conversely predicting all employees will react
in an identical manner to changes in motivating/hygiene factors. Finally, the model has been
criticised in that it does not specify how motivating/hygiene factors are to be measured.
According to Herzberg, the factors leading to Job Satisfaction are separate and distinct from
those that lead to Job Dissatisfaction. Conditions surrounding the job such as quality of
supervision, pay, company policies, physical working conditions relations with other and job
security are characterized by Herzberg as hygiene factors, when adapted, people will not be
dissatisfied; neither will they be satisfied. If organization wants to motivate people on their
jobs, Herzberg suggested emphasizing factors associated with work itself or to outcomes
directly derived from it, such as promotional opportunities, personal growth, recognition,


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responsibility and achievement. These are the characteristics that people find intrinsically
rewarding.
2.2.4 Job characteristics model
Hackman & Oldham proposed the job characteristics model, which is widely used as a
framework to study how particular job characteristics impact on job outcomes, including job
satisfaction. The model states that there are five core job characteristics (skill variety, task
identity, task significance, autonomy, and feedback) which impact three critical psychological
states (experienced meaningfulness, experienced responsibility for outcomes, and knowledge
of the actual results), in turn influencing work outcomes (job satisfaction, absenteeism, work
motivation, and performance). The five core job characteristics can be combined to form a
motivating potential score (MPS) for a job, which can be used as an index of how likely a job
is to affect an employee's attitudes and behaviors. Not everyone is equally affected by the MPS
of a job. People who are high in growth need strength (the desire for autonomy, challenge and
development of new sills on the job) are particularly affected by job characteristics. A metaanalysis of studies that assess the framework of the model provides some support for the

validity of the JCM.
2.3. Previous researches about job satisfaction for worker in garment industry
The above satisfaction theories are studied, applied in afterwards researches, in order to
determine which factor affecting to employee‟s satisfaction in each specific circumstance.
According to studies, papers conducted in general and garment sector, which are reviewed in
this research, there are four motivational factors which are repeated many times. Based on
these factors, hypotheses will be built in order to verify and evaluate their affecting to worker
satisfaction in South of VN context. According to Chetty (1983), there were two hypotheses
are formulated with an assump spillover affect servings as a link: India married women
employed in the clothing industry experience job dissatisfaction and jod dissatisfaction among


14

India married women varies directly with dissatisfaction about their interpersonal relationship
in the family group. And Chetty (1983) also mentioned some terminants of job satisfaction
such as the work group, job content, supervision, compensation, influence of decision making,
working conditions, the trade union, bureaucracy and personal variables.
As Bhagya (2011), Job satisfaction related to the job under condition with such specific factors
such as wages. Supervisors of employment, conditions of work, social relation on the job,
prompt settlement of grievances and fair treatment by employer. Such factors as employee‟s
age, health temperature, desire and level of aspiration should be considered. Further his family
relationship, Social status, recreational outlets, activity in the organizations etc. Contribute
ultimately to job satisfaction
High-work load, poor behavior of line managers, low skills and low wage rates are the notable
reasons for high job turnover and social unrest. Poor relationship between workers and
supervisors is the main source of conflict. This study finds that there is growing demand for
work life balance among the workers Chowdhury Golam Hossan (2012). This author also show
the roles of trade union and labor rights, conflicting relationship with first
line supervisors, demand for work-life balance, self-respect and participation, job turnover and

absenteeism, efficiency and productivity of workers, workers motivational issues, and key
reasons for recent unrest in this sector

2.4. Conceptual model frame work and Hypothesis
2.4.1 Model frame:


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2.4.2 Hypothesis
H1: There is a positive affecting between Direct Compensation and Job Satisfaction
Nowadays, compensation is one of the fastest changing fields in Human Resources, as many
company are continue to investigate various ways of rewarding employees for increase their
job satisfaction and their performance. Here, compensation refers to all forms of financial
return and tangible services and benefits employees receive as part of an employment
relationship, which includes topics in regard to wages or salary programs; for example, salary
ranges for job descriptions, merit based programs, bonus based programs, commission based
programs, long term or short terms incentives programs, and etc. According to the Society for
Human Resources Management report, job dissatisfaction can contribute to multiple
organizational problems and has been associated with increased levels of turnover and
absenteeism, which ultimately cost the organization in terms of low performance and


16

decreased productivity. Thus, employer must ensure that the compensation and benefits system
is fair and equitable to all the staffs and understanding the system. By doing so, employer can
create a real job satisfaction and motivate their employees.

H2: There is a positive affecting between indirect compensation and Job Satisfaction

Beside direct compensation, indirect compensation plays an important role in effecting to job
satisfaction. In direct compensation refers to all forms of financial return and intangible
services and benefits employees receive as part of an employment relationship, which includes
topics in regard to insurance, retirement plan, annual paid leave…

H3: There is a positive affecting between Working environment and Job Satisfaction
Heath (2006) states, the biggest goal of all the business organization is to increase their
productivity, thus decreasing their cost of production and making high profits. Although, there
is very less amount of effort, which these organizations make in order to increase their
productivity. Many employers have a very wrong view that productivity can be increased by
giving their employees good pay package and timely increments for their work. What these
employers are not aware of is that there are many other factors, which affects the performance
of the employees in an organization. One of the major factors, which have an impact on the
motivation level of the employees and their performance, is the workplace environment.

H4: There is a positive affecting between Relationship with Supervisor and Job
Satisfaction
The relationship between supervisor and employee and job satisfaction is a subject of debate in
organizations and this leads to studies being done to measure the exact influence of the
relationship and how it affects the organizations (Petersitzke 2008, p33). In organizational
settings, employees work under supervision. The kind of relationship between the two
inevitably affects the employee‟s performance. The way an employee feels about his job


17

determines how he does it (Hosie et al 2006, p44). Dissatisfied employees find no enjoyment
in their work (Callaway). There are a lot of interaction between supervisors and workers

H5: There is a positive affecting between Feedback and Job Satisfaction

The feedback environment is believed to play a vital role in determining how employees seek,
receive process, accept, and use feed-back messages. Therefore, a better understanding of the
feedback environment is crucial to gain more insight into the feedback process and to improve
feedback interventions in organizations (Frederik Anseel, Filip Lievens, 2007, p. 3)
H6: There is a moderator effect on effectiveness of union to job satisfaction

Union can be a control factor to affect the relationship between direct compensation, indirect
compensation, working environment, feedback, relationship with supervisor and job
satisfaction. Effectiveness of union can bring the satisfaction to workers


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CHAPTER 3: RESEARCH METHOD

3.1 Research Design:
In this research, quantitative approach was used.

Quantitative methods emphasize on

objective measurements and numerical analysis of data collected through polls,
questionnaires or surveys. Quantitative research focuses on gathering numerical data and
generalizing it across groups of people. The data was usually gathered using more structured
research instruments. The results are based on larger sample sizes that are representative of
the population. The research study can usually be replicated or repeated, given its high
reliability. Researcher had a clearly defined research question to which objective answers
were sought. All aspects of the study were carefully designed before data is collected. Data
are in the form of numbers and statistics. Project can be used to generalize concepts more
widely, predict future results, or investigate causal relationships. Researcher uses tools, such
as questionnaires or equipment to collect numerical data.

3.2 Measurement and Questionnaire design:
Questionnaire was designed and modify from previous studies. These question were borrowed
from some previous research and some of them are developed by myself

There were four questions for direct compensation which was adopted from Cheety (1983)
except CPS1 was developed by myself:
DCS1: Presence of salary that makes me feel reasonable
DCS2: Current income presence of attractive and competitive compensation system
DCS3: My company has transparent and equitable policy of salary
DCS4: Presence of salary that enough for expense


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There were five questions for indirect compensation which was adopted from Mensah (2012)
and ICS2, ICS5 was developed by myself
ICS1: I am satisfied with other compensation such insurance and annual leave at my company
IDC2: I am satisfied with other compensation such annual traveling or present of my company
ICS3: I believe company pay for social and health insurance for workers
ICS4: I can get the paid absences when I take leave
ICS5: My company well complies the other benefit for insurance, annual leave…

There were five questions for working environment which was adopted from Nguyen (2011)
and WKE2 was developed by myself:
WKE1: In my workplace, staff is equipped and provided enough equipment for doing their
work
WKE2: The physical working condition in this factory (lightning, toilet, safety measure..) are
good
WKE3: My workplace is safety and convenience
WKE4: I receive support from colleagues so much

WKE5: Relationships between colleagues at my workplace are friendly and relaxed

There were four questions for Relationship with supervisors which was adopted from Smith, et
al (1996).
RWS1: My supervisor welcome suggestion
RWS2: I am received enough instructions to do job well
RWS3: Supervisor treats everyone equitably
RWS4: Supervisor willing and able to help out.

There were four questions for Feedback was adopted from Norris-Watts & Levy (2004), Smith
(1996) and FEB5 was developed by myself: