Literature Review: Organizational Commitment Impact on Satisfaction

This literature review investigates the impact of organizational commitment and employee performance on employee satisfaction, drawing from a study conducted in the banking sector of Pakistan with 110 employees from 10 different banks. The study uses correlation coefficient, regression analysis, and ANOVA to analyze data collected through a self-administered questionnaire, with organizational commitment and employee performance as independent variables and employee satisfaction as the dependent variable. The findings indicate a positive relationship between organizational commitment and employee satisfaction, as well as between employee performance and employee satisfaction. The review also includes an introduction to the research topic, a detailed literature review of each variable, a conclusion summarizing the findings, and a list of references. The study emphasizes the importance of employee satisfaction and commitment for organizational performance, particularly in the context of globalization and rising manufacturing costs, suggesting that organizations should focus on employee retention to maintain a competitive edge.

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International Journal of Learning, Teaching and Educational Research
Vol. 1, No. 1, pp. 84-92, January 2014
Impact of Organizational Commitment and
Employee Performance on the Employee
Satisfaction
Naveed Ahmad
Faculty of Management Sciences,
Indus International Institute, D. G. Khan,
Pakistan
Nadeem Iqbal, Komal Javed
Faculty of Management Sciences,
Baha Uddin Zakariya University Multan,
Pakistan
Naqvi Hamad
PhD Statistics Govt. Postgraduate College, D. G. Khan,
Pakistan
Abstract. The purpose of this study is to investigate the impact of
Organizational Commitment and Employee Performance on Employee
Satisfaction. Author used statistical population of Banking Sector which
covers 110 employees of 10 banks and data was collected through a self
administrative questionnaire. Correlation coefficient, Regression
analysis and “ANOVA were tested for the data analysis. There are two
independentvariables 1) Organizational commitment2) Employee
performancewhereas Employee satisfactionis taken as dependent
variable. Results showed Positive relationship between Organizational
commitment and employee satisfaction and similarly Employee
Performance has Positive relationship with employee satisfaction.
Keywords: employee satisfaction; organizational commitment;
employee performance
Introduction
Modern era of globalization brought many opportunities along with different
challengesfor corporations.In today’s world, organizationsare competing
“globally”. Globalization has shaped many opportunities as well as challenges
for global and local firms. Cost of manufacturing is rising gradually due to many
worldwide factors as economic depression, increase of fuel prices and limitation
of resources. This increase in prices is pushing corporations to adopt those ways
through which cost can be minimized to survive in competitive environment.

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Organizational growth requires more workforce and new hiring but satisfied
and committed workers are true assets of an organization.
The idea of employee satisfaction has been a center of study for two decades
(Greasley,et. al., 2005)and is regardedas a serious issue for managerial
performance. Different academicians and organizational “gurus” strained the
importanceof employeesatisfaction.Theorists have common consent that
employee satisfaction is as essential as customer satisfaction (Chen, et. al., 2006).
Different theorists have defined employ satisfaction differently. Rousseau (1978)
recognized three factors of the employee satisfaction:1) individuality of
organization 2) work task factors 3) personal character. Establishment which
raises high employee’s job satisfaction is also further proficient of retaining and
fascinating the employees through skills which they needed (Mosadegh Rad &
Yarmohammadian, 2006).
A. Objectives
1) To explore the impact of Organizationalcommitmenton employee
satisfaction.
2) To investigatethe impact of employeeperformanceson employee
satisfaction.
B. Research questions
Based on research objectives there are two research questions:
1) What is the relationship between organizationalcommitmentsand
employee satisfaction?
2) What is the relationship between employee performances and employee
satisfaction?
It is also obvious from existing literature that employee satisfaction is very
important for organizationsand similarly the relation between employee
positive attitude and Human Resource practices is also verified by different
researchers (Edgar and Geare, 2005). This research study provides more strength
to existing literature by explaining the importance of employee satisfaction and
commitment for organizational performance.
Literature Review
A. Employee Job Satisfaction
According to Janssen, (2001) job satisfaction means how an employee of an
organization feels about work. These feelings may be positive or negative, more
positive feelings mean employee’s level of job satisfaction is high. In other words
positive emotions of an employee towards workplace also describe job
satisfaction. Locke, (1976) identified that there is a positive relationship between
job characteristics and the need of individuals. There is also common consent
among researchers that Maslow theory of needs also explains this relationship
between job characteristics and individual needs. Luthans (1998) indicated that
job satisfaction has three dimensions 1) job satisfaction relates to emotional
response of an employee to a job situation 2) job satisfaction can be measured by

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estimating how well outcomes meet expectations 3) job satisfaction can be
determined through several job related attitudes.
Choo & Bowley (2007) indicated that satisfaction and employee performance are
interconnectedwith each other and satisfactionis the resultant of job
performance.Khan, Nawaz, Aleem, & Hamed, (2012) investigated job
satisfaction of employees and performance and established the fact that job
satisfaction provides input for better performancce to employeess. The sttructure
of performancemangamentalso emphasizeson employeejob satisfaction
(Tinofirei, 2011). Job satisfaction is to create positive emotion among employees
about their occupation Robbin and Judge (2008). Greater job satisfaction creates
more positive emotions in the mind of employees about their job. Luthans (2006)
indicated that job satisfaction creates positive emotional feelings that results
from work evaluation. Nasaradin (2001) specified that the job satisfaction might
be an enjoyable or the positive emotional state which is resultant from review of
one’s job or his or her job experience.
B. Employee Job Performance
Performance is described as the attained result of skilled workers in some
specific situations (Prasetya & Kato, 2011). Dharma (1991) thought that the
performance is somewhat that is prepared, or products shaped and offered by a
cluster of people. Robbins (2001), indicated that when employee feels happy
about work related tasks then his performance is increased and he/she performs
tasks in better way. Brandt, Krawczyk & Kalinowski (2008) said that there is a
disagreement between employee personal life and performance. Prawirosentoso
(2000) Explored that performance is outcome of work in an efficient way with
cosiderableobligation for organization without interupting any law and
organizational goals Mangkunegara (2005) says that performance of employee is
the work consequence in excellence and the quantity that accomplished by
somebody in directing his/her job obligations.
C. Organizational Commitment
Employee’s affiliation with organization is regarded as organizational
commitment. Generally there are three dimensions of organizational
commitment 1) continuance commitment 2) normative commitment 3) affective
commitment (Allen and Meyer, 1996; Karrasch, 2003; Turner and Chelladurai,
2005; Greenberg, 2005; Boehman, 2006; Canipe, 2006). Meyer & Allen (1997)
indicated that these types are independent and are demonstrated by different
individuals at different levels of management in organizations. Similarly, porter
(1974) explained that organizationalcommitmentis the extent to which
employees accept the goals and values of organization and are desirous to
remain in the organization. Committed personnel of an organization
demonstrate positive intentions to serve their organization and they think very
less about quitting the organization. (Hunt and Morgan, 1994; Robbins and
Coulter, 2003; Mowday, Steers, & Porter, 1982). According to Buchanan (1974)
organizational commitment is defined as the emotional commitment to achieve
the organizationalobjectives.Organizationalcommitmentis “the aggregate

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internalized normative demands to perform in a manner which meets
organizational objectives and interests” (Wiener, 1982).
Kitchard and Strawser (2001) proposed that satisfied employees develop high
affective commitmentfor their firm. Marthis and Jackson (2000)defined
employee commitment as the extent to which employees stay with organizations
and considers about organizational objectives seriously. Luthans (2006),
explored organizationalcommitmentas the desire to be a memberof an
organizationand not to complain about their organization.Organizational
commitment is clear as the measure of authority of employee empathy by the
objectives and morale of organization and remains involved in it, organization
commitment as well be an improved indicator for employees who wish to stay
at work or want to change (Mc Neese-Smith, 1996).
D. Hypothesis
H1: There is significant positive relationship between Organizational
commitment and employee satisfaction.
H2: There is significant positive relationship between Employee performance
and employee satisfaction.
Methodology
Author used simple random sampling process in different banks of Pakistan to
show the impact of Organizational commitment and employee performance on
employee satisfaction which is also supportive for other countries to inspect the
impact of Organizational commitment and their employee’s performance in
their regions. In this research study 110 respondents are selected randomly from
the employees of 10 different banks of Pakistan as sample population. To
examine the numerical propositions SPSS is used for evaluation. The provisions
of validity of the is accepted beyond the beliefs. The reliability of the paper is
accomplished over the 110 employees of 10 different banks of Pakistan as
sample.
Findings
The findings of this research are explained according to the SPSS results:
Hypotheses1:
Results of correlation analysissupported that a positiverelationship exists
between organizational and employee job satisfaction. The value of r= .403** that
is positive and indicates positive relationshipamong these two variables.
Similarly, regression analysis showed that significant relationship exists between
dependentvariable andindependent. Aswe may observefrom regression
analysis table that the value of beta= 0.939 that is positive and t value is =
7.681that is above average level 2 and is sufficient to show relative importance.
Similarly, P value is=0.000 that is less than 0.05 and is significant. So it is evident
from the results that null hypothesis is rejected and alternate hypotheses is
accepted. So H1 is found to be true.

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Table 1: Descriptive Statistics
Mean Std.
Deviation
N
Commitme
nt
4.6078 .35123 110
Satisfaction 4.5636 .55475 110
Performanc
e
4.6260 .71047 110
Table 2: Results of Correlations
Commitme
nt
Satisfactio
n
Performanc
e
Commitme
nt
Pearson
Correlation
1 .594** .403**
Sig. (2-tailed) .000 .000
N 110 110 110
Satisfaction Pearson
Correlation
.594** 1 .340**
Sig. (2-tailed) .000 .000
N 110 110 110
Performanc
e
Pearson
Correlation
.403** .340** 1
Sig. (2-tailed) .000 .000
N 110 110 110
**. Correlation is significant at the 0.01 level (2-tailed).
Table 3: Model Summary
Mod
el
R R
Square
Adjusted R
Square
Std. Error of
the Estimate
1 .594a .353 .347 .44819
a. Predictors: (Constant), Commitment

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Table 4: Results of Regression Coefficientsa
Model Unstandardized
Coefficients
Standardize
d
Coefficients
t Sig.
B Std. Error Beta
1 (Constant) .238 .565 .421 .674
Commitme
nt
.939 .122 .594 7.681 .000
a. Dependent Variable: Satisfaction
Hypotheses2:
Correlation between employee performance and employee satisfaction is also
positive as the result of r=.340** that is positive and shows positive relation.
Similarly unstanderdized regression weight is also positive and explores that a
positive relation is caused by independent variable in dependent variable. The
value of beta =0.266 and t value is = 3.761 that is significant. The value of
p=0.000 that is significant. So these results are providing sufficient ground to
accept hypothesis 2. So the null hypotheses is rejected and alternate hypotheses
is accepted.
Table 5: Model Summary
Mo
del
R R
Square
Adjusted R
Square
Std. Error
of the
Estimate
1 .340a .116 .108 .52406
a. Predictors: (Constant), Performance
Table 6: Results of ANOVA
Model Sum of
Squares
Df Mean
Square
F Sig.
1 Regressio
n
3.884 1 3.884 14.142 .000a
Residual 29.660 108 .275
Total 33.544 109
a. Predictors: (Constant), Performance
b. Dependent Variable: Satisfaction

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Table 7: Results of Regression analysis
Model Unstandardized
Coefficients
Standardiz
ed
Coefficient
s
t Sig.
B Std. Error Beta
1 (Constant) 3.335 .331 10.086 .000
Performan
ce
.266 .071 .340 3.761 .000
a. Dependent Variable: Satisfaction
Conclusions
There is no second opinion about the fact that organizational commitment and
employee performance play a pivotal role for employee satisfaction. At present
era of globalization the cost of manufacturing is rising due to many factors so
organizationsshould try to recover that cost through employeeretention.
Because hiring new employee requires cost of hiring and training so if employee
of some organization stays for longer period of time then organization may
compete in better way. The tradition of Pakistan is relationship-oriented as well
as collectivistic relatively than an achievement-oriented individualistic culture.
Managers of organizations should consider these factors of employee
satisfaction in policy making and as tool of competition. Because if the level of
satisfaction of employee is high than the organizational performance would be
better. The findings of this research study are important for service sector
because in service sector, staff of organization is very important for growth of
organization. Although study focused banking sector but its finding may be
generalized to other service sectors and in manufacturing sector.
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