1 Petrleum-Gas University f Pliesti BULLETIN Vl. LXII N. 2/ Ecnmic Sciences Series Impact f Human Resurces Practices n Jb Satisfactin: Evidence frm Manufacturing Firms in Bangladesh Mir Mhammed Nurul Absar *, Mhammad Tahlil Azim **, Nimalathasan Balasundaram ***, Sadia Akhter **** * East Delta University, 1267/A Gshaildanga, Agrabad, Chittagng, Bangladesh. ** Schl f Business, Independent University, Baridhara, Bangladesh. *** Department f Cmmerce, University f Jaffna, Thirunelveli, Jaffna, Sri Lanka **** Premier University, 1/A, O.R. Nizam Rad, Prabartak Circle,Panchlaish, Chittagng, Bangladesh Abstract This study aims at explring the impact f HR practices n jb satisfactin in the cntext f Bangladesh. A ttal f 60 respnses frm 20 manufacturing firms were cllected and analyzed bjectively. It was fund that HR practices have significant assciatin with jb satisfactin (JS). In additin, human resurce planning (HRP), and training and develpment (TND) were fund t have psitive impact n jb satisfactin (JS). It was als fund that TND has the greatest impact n JS. Academicians, researchers, plicy-makers, practitiners, students, lcal and freign entrepreneurs f Bangladesh and ther similar cuntries culd benefit frm this paper by explring the assciatin between HR practices and jb satisfactin. Key wrds: HRM, HR Practices, jb satisfactin, manufacturing firms, Bangladesh and develping cuntries JEL Classificatin: M12 Intrductin The impact f human resurce management (HRM) practices ppularly knwn as HR practices n rganizatinal perfrmance and emplyee attitudes has been a leading area f research in the develped wrld fr years (Delaney and Huselid, 1996; Huselid, 1995; Katu and Budhwar, 2007; Petrescu and Simmns, 2008)). But surprisingly, very limited number f studies have been cnducted n HR practices in the cntext f develping cuntries in general (Schuler as cited in Budhwar and Debrah, 2001, Sing, 2004, Yeganeh and Su, 2008) and Bangladesh in particular (Mahmd, 2004). This study has been cnducted t fill the existing research gap and t explre the relatinship between HR practices and jb satisfactin in the cntext f Bangladesh. Academicians, researchers, plicy-makers, practitiners, students, lcal and freign
2 32 Mir Mhammed Nurul Absar, Mhammad Tahlil Azim, Nimalathasan Balasundaram, Sadia Akhter entrepreneurs f Bangladesh and ther develping cuntries culd benefit frm this study by explring the assciatin between HR practices and jb satisfactin. This study wuld augment the cntemprary research and practice f human resurce management. Furthermre, it wuld als be useful fr the develped cuntries as they find develping cuntries (like Bangladesh) as attractive places fr investment due t their large markets, and cheap and skilled wrkfrces (Budhwar and Debrah 2001). Research Questins Specifically, this study was undertaken t explre the answer t the fllwing research questins (RQ): 1. RQ1: Is there any assciatin between HR practices and Jb Satisfactin? 2. RQ2: D HR practices have any impact n Jb Satisfactin? Objectives The main purpse f the study was t identity the impact f HR practices n jb satisfactin. In rder t materialize this bjective, the fllwing specific bjectives were cnsidered: T address the assciatin between HR practices and jb satisfactin; T identify the impact f HR practices n jb satisfactin; T suggest sme measures in rder t enhance the HR practices f the selected industrial enterprises. Literature Review and Hyptheses HR Practices Human resurce management (HRM) refers t the plicies and practices invlved in carrying ut the human resurce(hr) aspects f a management psitin including human resurce planning, jb analysis, recruitment, selectin, rientatin, cmpensatin, perfrmance appraisal, training and develpment, and labur relatins (Dessler, 2007). HRM is cmpsed f the plicies, practices, and systems that influence emplyees behaviur, attitude, and perfrmance (Ne, Hllenbeck, Gerhart, and Wright, 2007). There are fur tp mdels f HRM such as the Fmbrun, Tichy, and Devana Mdel f HRM, the Harvard Mdel f HRM, the Guest Mdel f HRM, and the Warwick Mdel f HRM (Brattn and Gld, 1999). Out f these mdels, Guest Mdel f HRM is cnsidered t be much better than ther mdels (Aswathappa, 2008). The present study selected the HR practices such as HR planning, recruitment and selectin, training and develpment, perfrmance appraisal, cmpensatin, and industrial relatins which were incrprated by the Guest Mdel, and the Sciety f Human Resurce Management, USA (Yeganeh and Su, 2008). Jb Satisfactin The mst referred definitin f jb satisfactin was ffered by Lcke (1976) wh defined jb satisfactin as a pleasing r psitive emtinal state resulting frm the evaluatin f a persn s jb (Haque and Taher, 2008). Jb satisfactin is als defined as an individual s general attitude regarding his r her jb (Rbbins, 1999). Mullins (1993) mentined that mtivatin is clsely related t jb satisfactin. Varius factrs such as an emplyee s needs and desires, scial relatinships, style and quality f management, jb design, cmpensatin, wrking cnditins, perceived lng range pprtunities, and perceived pprtunities elsewhere are cnsidered t be
3 Impact f Human Resurces Practices n Jb Satisfactin: Evidence frm Manufacturing Firms 33 the determinants f jb satisfactin (Byars and Rue, 1997; Mrhead and Griffin, 1999). Jb satisfactin has a significant influence n emplyees rganizatinal cmmitment, turnver, absenteeism, tardiness, accidents, and grievances (Byars and Rue, 1997; Mrhead and Griffin, 1999). Accrding t Rbbins (1999), a satisfied wrkfrce can increase rganizatinal prductivity thrugh less distractin caused by absenteeism r turnver, few incidences f destructive behavir, and lw medical csts. HR Practices and Jb Satisfactin HR practices and jb satisfactin are studied widely in different parts f the wrld. It is assumed that HR practices are clsely assciated with jb satisfactin (Ting, 1997). Because many schlars and practitiners believe that sund HR practices result in better level f jb satisfactin which ultimately imprves rganizatinal perfrmance (Appelbaum, Bailey, Berg and Kalleberg, 2000). Steijn (2004) fund that HRM practices had psitive effect n jb satisfactin f the emplyees f Dutch public sectr whereas individual characteristics such as age, gender, and educatin had insignificant effect n jb satisfactin. Guld-William (2003) shwed that use f specific HR practices in lcal gvernment rganizatins in the United Kingdm (UK) was assciated with a greater degree f jb satisfactin, wrkplace trust, cmmitment, effrt, and perceived rganizatinal perfrmance. Hypthesis 1: H 1 : HR practices have significant assciatin with jb satisfactin. Edgar and Geare (2005) examined the impact f human resurce management practices n emplyee attitudes such as jb satisfactin, rganizatinal cmmitment, and rganizatinal fairness in the cntext f New Zealand. They identified that HRM practices had a significant impact n rganizatinal cmmitment, jb satisfactin, and rganizatinal fairness. In a study n 66 emplyees f three manufacturing firms in India, Agarwala (2008) bserved that training, ne f the majr HR practices, was psitively crrelated with affective cmmitment. Mrever, Ostrff (1992) bserved that jb satisfactin influenced rganizatinal perfrmance enrmusly. Als, Yu and Egri (2005) fund that HR practices had a significant impact n the affective cmmitment f emplyees in Chinese firms. Again, Petrescu and Simmns (2008) studied the relatinship between human resurce management practices and wrkers jb satisfactin in the cntext f UK. They fund that several human resurce management practices raised wrkers verall jb satisfactin and their satisfactin with payment. Hypthesis 2: H 1 : HR practices have significant impact n jb satisfactin. HR planning is defined as the prcedure by which an rganizatin ensures that it has the right number and kinds f human resurces at the right place and at the right time (Decenz and Rbbins, 1999). Ahmad and Khalil (2007) cmpared the HR planning f tw banks f Bangladesh - Dutch Bangla Bank Ltd. and Agrani Bank. They bserved that neither f the banks had any written HR planning. Aswathappa (2008) argued that an rganizatin shuld have better HR plans t mtivate its emplyees. Sund HR planning can enhance jb satisfactin f the emplyees by prviding pprtunities fr the emplyees t participate in planning their wn careers (Weeratunga, 2003). Hypthesis 3: H 1 : HR planning psitively influences jb satisfactin. The recruitment and selectin prcess determines the decisins as t which candidates will get emplyment ffers. The aim f this practice is t imprve the fit between emplyees and the rganizatin, teams, and wrk requirements, and thus, t create a better wrk envirnment (Tzafrir, 2006). Sphisticated recruitment and selectin system can ensure a better fit between the individual s abilities and the rganizatin s requirement (Fernandez, 1992). Hunter and Schmidt (1982) cncluded that emplyment stability culd be achieved thrugh a selectin prcedure based n ability. Katu and Budhwar (2007) in a study n the Greek manufacturing firms fund that recruitment and selectin was psitively related t all rganizatinal perfrmance variables such as effectiveness, efficiency, innvatin, and quality.
4 34 Mir Mhammed Nurul Absar, Mhammad Tahlil Azim, Nimalathasan Balasundaram, Sadia Akhter Hypthesis 4: H 1 : Recruitment and selectin psitively influences jb satisfactin. Training and develpment is cnsidered t be the mst cmmn HR practice (Tzafrir, 2006). Training and develpment refers t any effrt t imprve current f future emplyees skills, abilities, and knwledge (Aswathappa, 2008). Training and develpment has a significant psitive impact n emplyees jb satisfactin (Garcia, 2005). Thang and Buyens (2008) stated that training and develpment lead t superir knwledge, skills, abilities, attitudes, and behavir f emplyees that ultimately enhance excellent financial and nnfinancial perfrmance f the rganizatins. Hypthesis 5: H 1 : Training and develpment psitively influences jb satisfactin. Perfrmance appraisal is a systematic prcess t evaluate the perfrmance f an emplyee after a certain perid. Perfrmance appraisal als influences ther HR practices such as recruitment and selectin, training and develpment, cmpensatin, and emplyee relatins. As perfrmance appraisal leads t pay raise, prmtin, and training, it is assumed that better perfrmance appraisal can have an impact n emplyee jb satisfactin. Hypthesis 6: H 1 : Perfrmance appraisal psitively influences jb satisfactin. Cmpensatin refers t all types f pay r rewards ging t emplyees and arising frm their emplyment (Dessler, 2008, p. 390). Cmpensatin is very much imprtant fr emplyees because it is ne f the main reasns fr which peple wrk. Emplyees living status in the sciety, satisfactin, lyalty, and prductivity are als influenced by the cmpensatin (Aswathappa, 2008). Ting (1997) in a study n the emplyees f US gvernment fund that cmpensatin was ne f the mst imprtant determinants f jb satisfactin. Hypthesis 7: H 1 : Cmpensatin psitively influences jb satisfactin. Industrial relatins play an imprtant rle in establishing and maintaining industrial demcracy (Mnappa, 2004, p. 9). Better industrial relatins can create the apprpriate wrking envirnment fr all emplyees that ultimately influences jb satisfactin (Khan and Taher, 2008). Hypthesis 8: H 1 : Industrial Relatins psitively influence jb satisfactin. Myeen and Huq (2001) studied HRM practices f 92 medium and large business enterprises (public and private sectr) lcated in Dhaka, Bangladesh. They fund that nly 62% f surveyed rganizatins had an HR/Industrial Relatins (IR) department. Human resurce management practices f ten lcal private manufacturing enterprises listed under Dhaka Stck Exchange (DSE) were examined by Akhter (2002). She measured crrelatin between emplyees pinins regarding HRM practices in their enterprises and their age, educatin, and experience. Mahmd (2004) bserved that ther than rganizatinal cntingencies, the institutinal cntext such as natinal educatin and training system, natinal industrial relatins system, regulatry framewrks, and verall scietal cntext had significant influence n the develpment f HR practices in Bangladesh. Furthermre, HR practices were fund t have a significant impact n affective cmmitment in cntext t Bangladesh (Haque & Azim, 2008). Hssain (1995) cnducted an in-depth study n the jb satisfactin f the emplyees f cmmercial banks f Bangladesh. Abdullah (2009) fund that jb satisfactin had an impact n the prductivity f garments wrkers f Bangladesh. Hssain and Ullah (2009) in a cmparative study n the jb satisfactin f the emplyees f public and private banks fund that emplyees f the private banks were mre satisfied with their jbs than thse f the public banks. Islam, Saha, and Ahmed (2000) evaluated the jb satisfactin f wmen emplyees in cmmercial banks f Bangladesh. Haque and Taher (2008) examined the ability f different cre jb characteristics t influence the level f jb satisfactin in terms f gender, marital status, and age in the cntext f Bangladesh. Thus, the abve review f literature shws that there have been several studies arund the glbe
5 Impact f Human Resurces Practices n Jb Satisfactin: Evidence frm Manufacturing Firms 35 fcusing n HR practices and jb satisfactin. Hwever, studies prtraying the impact f HR Practices n jb satisfactin in the manufacturing firms have nt yet received prper attentin in Bangladesh and ther develping cuntries. This study has been undertaken t fill the existing research gap. Research Design and Methdlgy This sectin is divided int six sub-sectins. The first sub-sectin presents the research design. In the secnd sub-sectin, the research apprach is discussed. The third sub-sectin illustrates the sampling design. In the furth-sub, data surces are mentined. The fifth sub-sectin declares the selectin f measures and the prperties f instruments. The sixth sub-sectin explains the reliability and validity whereas the last sub-sectin highlights the types f statistical techniques emplyed t test the hyptheses. Research Design This study is basically an explratry study. Explratry studies are a valuable means f finding ut what is happening; t seek new insights; t ask questins and t assess phenmena in a new light (Rbsn, 2002). It can be linked t the activities f the traveller r explrer (Adams and Schvaneveldt, 1991). Its great advantage is that it is flexible and adaptable t change (Naipul, 1989). Research Apprach As this study is a business and management research, it has characteristics f psitivist and interpretive appraches and it invlves the deductive apprach (Hussey and Hussey, 1997; Rbsn, 1993) as well as the inductive apprach (Easterby-Smith, Thrpe and Lwe (2002). Cmbining these tw research appraches in same piece f research is perfectly pssible and advantageus fr a research. Sampling Design A sampling frame f 91 manufacturing firms (Chittagng Stck Exchange, 2007) was prepared n the basis f listed manufacturing firms under Chittagng Stck Exchange, the 2 nd largest stck exchange f Bangladesh. Amng them, 20 manufacturing firms (22% f the ppulatin) were selected randmly and all respndents were selected as per cnvenience. Data Surces and Instrumentatin The study was cmpiled with the help f primary data and secndary data. Primary data was cllected thrugh direct persnal interview by means f the questinnaire. A ttal f 60 emplyees (i,e., three emplyees were selected frm every manufacturing firm) respnded thrugh the questinnaire. Mrever, the desk study cvered varius published and unpublished materials n the subject. The questinnaire was administered t emplyees f manufacturing firms in Chittagng, Bangladesh. A five pints rating scales f questinnaire frm strngly disagree (1) t strngly agree (5) were adpted t measure the variables f HR Practices. Jb satisfactin was measured by a ne-item questinnaire n five-pint Likert scale [where disagree (1) t strngly agree (5)], this is the single glbal rating apprach (Davidsn,1979) as it is believed t be an easier apprach t cllect data (Haque and Taher,2008; Yu and Egri,2005). Reliability and Validity Befre applying statistical tls, testing f the reliability f the scale is very much imprtant as it shws the extent t which a scale prduces cnsistent result if measurements were made repeatedly. This is dne by determining the assciatin in between scres btained frm different administratins f the scales. If the assciatin is high, the scale yields cnsistent
6 36 Mir Mhammed Nurul Absar, Mhammad Tahlil Azim, Nimalathasan Balasundaram, Sadia Akhter results, thus it is reliable. Crnbach s alpha is the mst widely used methd. It may be mentined that its value varies frm 0 t 1 but the satisfactry value is required t be mre than 0.6 fr the scale t be reliable (Malhtra, 2000; Crnbach, 1951). In the present study, we, therefre, used Crnbach s alpha scale as a measure f reliability. Surce: Survey data Table 1. Reliability value f the Scale Scale N. f Items Crnbach s Alpha (α) 1. HR Planning Recruitment & Selectin Training & Develpment Perfrmance Appraisal Cmpensatin Industrial Relatins Jb Satisfactin 1 - Frm the Table-1, it is seen that the reliability value was estimated t be α= between the scale. If we cmpare ur reliability value with the standard value alpha f 0.6 advcated by Crnbach (1951), Nunnally & Bernstein (1994); and Bagzzi & Yi s (1988) we find that the scales used by us are highly reliable fr data analysis. Validatin prcedures invlved initial cnsultatin f the questinnaires. The experts als judged the face and cntent validity f the questinnaires as adequate. Hence, researchers satisfied the cntent and cnstruct validity. Data Analysis and Findings In the present study, we analysed ur data by enter wise methd in a multiple regressin analysis. In this cntext, a multiple regressin was perfrmed, by making use f all the discrete variables (i.e., dependent and independent variables) available in the dataset. The estimatin prcess was based n Ordinary Least Squares (OLS) [i.e.,y= a + bx]. Fr this purpse, we cnsider the fllwing mdel specificatins, by taking as dependent variable i.e., jb satisfactin (JS) by making HR practices as independent variables: JS = ß O +ß 1 (HRP) +ß 2 (RNS) +ß 3 (TND) +ß 4 (PA) +ß 5 (COM) +ß 6 (IR)+e... Mdel (1) where: ß 0, ß 1, ß 2, ß 3, ß 4, ß 5 and ß 6 are the regressin c-efficient; JS: JbSatisfactin; HRP: HumanResurcePlanning; RNS: RecruitmentandSelectin; TND: TrainingandDevelpment; PA: PerfrmanceAppraisal; COM: Cmpensatin; OIR: IndustrialRelatins; e: errrterm. T test hw well the mde-1 fit the data and findings, crrelatin (r), R, R 2 (Cefficient f determinatin), variance, analysis f variance (ANOVA) and the t statistic were used.
7 Impact f Human Resurces Practices n Jb Satisfactin: Evidence frm Manufacturing Firms 37 Crrelatin analysis was perfrmed t find ut the pair wise relatinship between variables: HRP, RNS, TND, PA, COM, IR and JS. Hence, the results are summarised in Table-2. Table 2. Crrelatins Matrix fr HR Practices and JS Variables HRP RNS TND PA COM IR JS HRP 1 RNS 0.585** 1 TND 0.627** 0.422** 1 PA 0.772** 0.811** 0.637** 1 COM 0.728** 0.542** 0.699** 0.715** 1 IR 0.356** 0.598** 0.331** 0.644** 0.533** 1 JS 0.626** 0.493** 0.623** 0.615** 0.594** 0.439** 1 Surce: Survey data; **Crrelatin is significant at the 0.01 level (2-tailed) Table-2 shws that the factrs HRP, RNS, TND, PA, COM, and OIR are independently psitively crrelated with JS and als highly significant at 1% levels. Therefre, Hypthesis 1 f the present study was accepted. Here it is bvius that the maximum crrelatin (r =0.626) is existed between HRP and JS, fllwed by the assciatin (r =0.623) between TND and JS; PA and JS(r= 0.615); and COM and JS (r =0.594). It shuld be necessary t give the highest emphasis n HRP fr superb jb satisfactin f emplyees. Training and develpment is als crucial fr wnderful jb satisfactin f emplyees. Althugh there has n s influential link (r =0.493) between RNS and JS; and IR and JS (r=0.439). These were als essential fr jb satisfactin. HR practices are pair-wise psitively crrelated with ne t anther and als statistically significant at P-value Amng the six HR practices, the relatinship (r =0.811) between RNS and PA is the highest, fllwed by the link (r =0.772) between HRP and PA. Further, a multiple regressin analysis was perfrmed t identify the predictrs f JS as cnceptualized in the mdel. An enter-wise variable selectin was used in the regressin analysis and table-3 and table-4 shw the summary measure and ANOVA f the mdel. Table 3. Predictrs f JS - mdel summary Mdel R R 2 Adjusted R (a) Predictrs: (Cnstant), HRP; RNS; TND; PA; COM, and IR
8 38 Mir Mhammed Nurul Absar, Mhammad Tahlil Azim, Nimalathasan Balasundaram, Sadia Akhter Table 4. ANOVA Mdel Sum f Squares df Mean Square F Sig. 1 Regressin (a) Residual Ttal Predictrs: (Cnstant), HRP; RNS; TND; PA; COM, and IR Dependent Variable: JS The HR practices (HRP; RNS; TND; PA; COM and IR) in the abve mdel revealed the ability t predict JS (R 2 = 0.518). In this mdel value f R 2 dentes that 51.8 percent f the bserved variability in JS can be explained by the HR practices namely HRP; RNS; TND; PA; COM and IR. The remaining 48.2 percent is nt explained which means that the rest 48.2 percent f the variatin f JS is related t ther variables which are nt depicted in the mdel. This variance is highly significant as indicated by the F value (F=9.497 and P = 0.000) [Fr details please see table-4]. An examinatin f the mdel summary presented by the table-3 in cnjunctin with ANOVA, presented by the table-3, indicates that the mdel explains the mst pssible cmbinatin f predictr variables that culd cntribute t the relatinship with the dependent variable. Table 5. Cefficients fr Predictrs f JS Mdels Surce: Survey data Unstandardized Cefficients Standardized Cefficients ß Std.Effr Beta 1 Cnstant HRP RNS TND PA COM IR The table-5 shws that HRP and TND are psitively influencing n JS. Fr HRP, the value f t is 1.892(p=0.064, df=53), fr TND, the value f t is (p= 0.017, df=53). Thus, we accept Hypthesis 3 and 5. But fr RNS, PA, COM and IR which fall in the area f rejectin. Thus, we d nt accept the Hypthesis 4, 6, 7 and 8. Hence, it can be cncluded that HRP and TND have significant impact n JS. Therefre, hypthesis-2 is als partially accepted. t Sig Cnclusins Frm the crrelatin matrix, the highest psitive value f crrelatin between HRP and JS clarifies that the authrities f selected industrial enterprises are required t fcus n HRP fr getting fabulus emplyees jb satisfactin fllwed by TND; PA; and COM. It is als fund that HRP and TND have significant impact n JS. The present study nly cllected perceptual
9 Impact f Human Resurces Practices n Jb Satisfactin: Evidence frm Manufacturing Firms 39 data. The study did nt cllect data regarding size f the firms, the vlume f the prductin, and the turnvers. Plicy Implicatins Althugh the present study was cnfined t identify the impact f HR practises n jb satisfactin, it may be apprpriate t state briefly the plicy implicatins fr the study. In this cntext, the fllwing plicy actins may be cnsidered wrthwhile. Organizatins shuld ffer extensive training and develpment prgrams fr the emplyees Organizatins shuld g fr thrugh HR planning. Organizatins shuld carefully cnduct recruitment and selectin prcess. Organizatins shuld intrduce prper perfrmance appraisal systems. Organizatins shuld ffer at least reasnable cmpensatin t the emplyees. Organizatins shuld maintain healthy industrial relatins based n mutual trust and cnfidence f the emplyers and emplyees. Organizatins shuld develp gd wrking cnditin. This facilitates emplyees t d their wrk effectively. Organizatins shuld induce emplyees t perfrm well. This can be achieved by prviding reward, mtivatins, and ther benefits etc. Emplyees shuld be trained t adpt new technlgy and r develp their career. Organizatins shuld prvide unbiased prmtin. That is prmtin shuld be prvided based n the qualificatin f emplyees and /r experience. Organizatins shuld implement equal emplyment pprtunities. That is emplyees shuld nt discriminate against female, and minrity r ld wrker. Organizatin shuld design wrking prcedure including hurs wrk, ver time payment and hur s payment. Prper wrking envirnment shuld be designed. In that the rganizatin shuld prvide adequate facilities emplyees t d their wrks such as apprpriate equipment, wrk breaks, and wrk sharing. Organizatin shuld design gd grievance prcedure, disciplinary prcedure and separatin prcedure etc. Limitatins Small sample size was ne f the majr limitatins f the present study. The study did nt cver all the HR practices f the surveyed manufacturing firms. Directins fr Future Researches Several suggestins that fruitful fr future research emerged frm this present study. In rder t validate the findings f this study, case study is anther interesting apprach that can be dne by future research. Additinally, the research mdel f this study can be retested in business rganizatins, s that the research mdel can be generalized t ther ecnmic sectrs.
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