Key organizational factors contribuiting to employee satisfaction an examination of small medium sized enterprisse in ho chi minh city

The results form data survey of SMEs in Ho Chi Minh City and using data analysis methods may support finding out key organizational factors impacting on employee satisfaction.. In this s

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

**************************

Vo Thi Ngoc Linh

KEY ORGANIZATIONAL FACTORS CONTRIBUTING TO EMPLOYEE SATISFACTION:

An examination of small-medium sized enterprises

in Ho Chi Minh City

MASTER OF BUSINESS (Honours)

International School of Business

**************************

VoThi Ngoc Linh

KEY ORGANIZATIONAL FACTORS CONTRIBUTING TO EMPLOYEE SATISFACTION:

An examination of small-medium sized enterprises

in Ho Chi Minh City

ID: 22110084

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr NGUYEN DANG LAM

Ho Chi Minh City – Year 2014

ACKNOWLEDGEMENT

Firstly, I would like to express my sincerest gratitude to my supervisor, Dr Nguyen Dang Lam who has supported my thesis with enthusiasm in guidance as well as instruction knowledge in detail

I would like to express appreciations to my ISB’s classmates, colleagues, friends, and relatives They helped me so much for finishing data survey, communicating usefully information for my study

Last but not least, I would like to thank my small family who gave me the best conditions to carry out the thesis

Sincerely

Vo Thi Ngoc Linh

April 2014

ABSTRACT

One of the factors to bring advance competitiveness for enterprises in Vietnam is productive labor There are some forces helping to increase productivity from different activities as training, physical support or morale The best choice for increasing productivity and enthusiasm in job is to create high satisfaction of employee with organization Small Medium Enterprises (SMEs) in Vietnam need to have more attention this aspect for competition with rivals in Vietnam’s market as well as expending to international markets

The purpose of this study, therefore, tries to examine key organizational characteristics contributing to employee satisfaction in Vietnam’s SMEs In detail, it surveys seven organizational factors that influence employee satisfaction in enterprises It includes factors

as purpose, structure, relationships, rewards, helpful mechanism, leadership, and attitude toward change The results form data survey of SMEs in Ho Chi Minh City and using data analysis methods may support finding out key organizational factors impacting on employee satisfaction This thing can support enterprises to identify and apply the best strategies to improve and develop labor productivity

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

ABSTRACT ii

TABLE OF CONTENTS iii

LIST OF TABLES vii

LIST OF ABBREVIATIONS viii

CHAPTER 1 INTRODUCTION 1

1.1 Research background 1

1.2 Research objectives and questions 2

1.3 Research contribution 3

1.4 Research scope 4

1.5 Overview of research 4

CHAPTER 2 LITERATURE REVIEW 5

2.1 Definition of small-medium sized enterprise in Vietnam 5

2.2 Employee Job satisfaction 6

2.3 Key organizational factors contributing to employee satisfaction 8

2.3.1 Purposes 9

2.3.2 Structure 9

2.3.3 Leadership 10

2.3.4 Relationships 10

2.3.5 Rewards 10

2.3.6 Helpful mechanisms 11

2.3.7 Attitude toward change 11

2.4 Research model 12

2.5 Conclusion 15

CHAPTER 3 RESEARCH METHODOLOGY 16

3.2 Measurement scale 18

3.3 Sampling design 22

3.4 Data collection method 22

3.5 Data analysis technical 22

3.5.1 Reliability analysis of measurement scales with Cronbach’s alpha 23

3.5.2 Exploratory factor analysis 23

3.5.3 Multiple regression analysis to test the impact of independent variables to dependent variable 24

CHAPTER 4 DATA ANALYSIS and RESULTS 26

4.1 Introduction 26

4.2 Descriptive Analysis 26

4.2.1 Gender 26

4.2.2 Age 26

4.2.3 The mean and standard deviation of independent and dependent variables 27 4.3 Reliability analysis 27

4.3.1 Reliability of Purpose 28

4.3.2 Reliability of Structure 28

4.3.3 Reliability of Leadership 29

4.3.4 Reliability of Relationship 29

4.3.5 Reliability of Reward 30

4.3.6 Reliability of Helpful Mechanisms 30

4.3.7 Reliability of Attitude toward Change 31

4.3.8 Reliability of Overall Satisfaction 31

4.4 Exploratory Factor Analysis (EFA) 32

4.4.1 Assessing the scale measurement of independent variables 32

4.4.2 Assessing the scale measurement of dependent variable 35

4.5 Correlation Analysis 36

4.6 Multi-Linear Regression Analysis for testing hypotheses 37

4.7 Hypotheses testing 38

CHAPTER 5 RECOMMENDATION AND CONCLUSION 42

5.1 Introduction 42

5.2 Summary of the study results 42

5.3 Managerial Implications 43

5.4 Conclusion and future research recommendation 45

References 46

APPENDICES 49

LIST OF FIGURES

Figure 1- Weisbord’s (1976) Organizational Diagnosis Model 12 Figure 2- Research Model: Adapted from Weisbord’s (1976) and Preziosi’s (1980) Organizational Diagnosis Model 13 Figure 3- The proposal research method 15

LIST OF TABLES

Table 1- SMEs Definition according to Decree 56/2009/ND-CP 6

Table 2- Measurement scale of factors contributing to employee satisfaction 18

Table 3- Gender 26

Table 4- Age 27

Table 5- Descriptive Statistics of Variables 27

Table 6- Cronbach’s alpha of Purpose 28

Table 7- Cronbach’s alpha of Structure 28

Table 8- Cronbach’s alpha of Leadership 29

Table 9- Cronbach’s alpha of Relationship 29

Table 10- Cronbach’s alpha of Reward 30

Table 11- Cronbach’s alpha of Helpful Mechanisms 30

Table 12- Cronbach’s alpha of Attitude toward Change 31

Table 13- Cronbach’s alpha of Employee Overall Satisfaction 31

Table 15- Rotated Component Matrix 34

Table 16- KMO and Bartlett's Test of dependent variable 35

Table 17- Total Variance Explained of dependent variable 35

Table 18- Component Matrix of dependent variable 36

Table 19- Correlations 36

Table 20- Model Summary 38

Table 21- Anova Result 38

Table 22- Coefficients Result 39

Table 23- Research results 41

LIST OF ABBREVIATIONS

SMEs: Small-medium Enterprises

EFA: Exploratory Factor Analysis

CHA: Attitude toward Change

CHAPTER 1 INTRODUCTION

1.1 Research background

Along with the fast development of science and technology, human resource is becoming a leading competitive factor in business organizations Businesses focus on increasing their employee satisfaction because satisfied employees will become more enthusiastic, fervent in job and loyal to company’s goals Thus, identifying factors that can impact on employee satisfaction is of the utmost importance to today’s managers

When employees satisfy with their job and organization, they are easy to accept change conditions and are quite willing to contribute to organizational initiatives to bring profits for enterprise In addition, labor cost can be decreased The costs of recruiting and training are significantly reduced because employees are willing to stay with job For example, in HP Corporation, managers have allowed employees to arrange their working hours With flexible time work plan, workers have had reasonable period of time for job and enjoyed the holidays with relatives This helped HP reduce 36% overtime cost and costs of recruiting and training were also noticeably decreased (Weekly Saigon Entrepreneur, 2013)

According to VTV News, SMEs in Vietnam face many challenges in international competition since Vietnam opened its economy to the world SMEs are lack of strategic competitiveness because of poor management and labor capacity, small scale, limited capital, and backward technology that forces price to increase while making product quality decreasing (Da Thao, 2013; PhanThanh Hai, 2013) Facing tough competition from both domestic and international competitors, SMEs in Vietnam need to redefine their resources, capabilities, and core competences and have strategic plans to be able to win the market Furthermore, as SMEs contribute greatly to the economy, it is strategically crucial to develop this sector to achieve the country’s sustainable growth

Among the top strategic directions to help SMEs gain competitive advantage and achieve strategic competitiveness, building a high performance work system that produces superior employee performance is perhaps the most important initiative One of the ways to accomplish this mission is to increase employee satisfaction and their commitment to the organization

In previous research, many authors studied the impact of organizational characteristics on employee satisfaction Because most people spend almost a lifetime for work, understanding

of the factors that help increase satisfaction is important to improve the well-being of individuals (Grunneberg, 1997) Recent research results have shown that the level of satisfaction of employees in local companies in Vietnam was low (Duong &Swierczek, 2008;

Yu & Lyons, 2012)

This research, therefore, focuses on understanding key organizational factors contributing to employee satisfaction in SMEs It helps confirm necessary factors that enterprises need to focus on in order to improve their employee satisfaction Generally, understanding employee satisfaction help SMEs gain some important advantages such as maintaining employee commitment, increasing employee performance, and increasing competitive advantage It also attempts to examine some key organizational factors that have studied in western cultures and see if they can apply on SMEs in Vietnam

1.2 Research objectives and questions

To become an industrialized country, Vietnam has faced the challenge of deficiency in qualified work force (Truong et al., 2010) According to a Gallup survey conducted in 2011, Vietnamese employees were least happy among Asian workers (Yu & Lyon, 2012)

Research on job satisfaction has paid quite a lot of attention to organizational factors (Lorianne, 2011; Yiicel, 2012) Job satisfaction relates to various organizational

characteristics and behaviors in the workplace (Boles et al., 2007; Ejere, 2010; Kantabura & Avery, 2007; Nguyen, 2011; Valentine et al., 2011)

The objective of this study is to determine key organizational factors impact on employee satisfaction It includes three main contents as follow:

- To examine level of employee satisfactionin SMEs in Ho Chi Minh City

- To identify the key organizational factors contributing to employee satisfactionin SMEs in

Ho Chi Minh City

- To find out the strength of each factor on level of employee satisfaction in SMEs in Ho Chi Minh City

In this study, seven organizational characteristics of SMEs in Ho Chi Minh City including purposes, structure, relationships, rewards, helpful mechanism, leadership, and attitude toward change is tested The study reports influence of these seven factors on employee satisfaction For the purpose of the research, research questions to survey key organizational factors contributing employee satisfaction are as follows:

- Is there a relationship between each of the seven factors of organizational characteristics and employee satisfaction?

- How strong is the relationship between each of the seven factors of organizational characteristics and employee satisfaction?

1.3 Research contribution

As stated earlier in this study, the level of employee satisfaction in local companies in Vietnam was low (Duong & Swierczek, 2008; Yu & Lyons, 2012) This may be because of the lack of skilled workers at these companies (Henderson & Tullock, 2008) In reality, there are many different reasons and factors contributing to employee satisfaction At the theoretical level, this research contributes to previous studies in the literature of

characteristics can impact on employee satisfaction At the practical level, this research can help managers of SMEs in Ho Chi Minh City have an overview on key organizational factors that impact on employee overall satisfaction It also helps them recognize how each key factor can strengthen the level of employee satisfaction The research has implications for not only Vietnamese managers but also for organization development practitioners, as to how to increase the employee satisfaction in SMEs in Ho Chi Minh City

1.4 Research scope

This study is limited to the investigation of SMEs in Ho Chi Minh City only It focuses on a few referential enterprises in Ho Chi Minh City Thus, it is not necessarily representative other enterprises from different areas in Vietnam The population of this study is staff and supervisor level

1.5 Overview of research

This research includes five chapters that indicate the context as follows:

 Chapter 1: Introduce the background of the research, research objective and questions,

as well as research contribution and scope

 Chapter 2: Indicate literature review context that concerned factors belong to organizational characteristics, and employee satisfaction

 Chapter 3: Indicate contents concerning research methodology, such as research design, sampling design and data collection

 Chapter 4: Indicate data analysis, hypotheses testing and report result of the research

 Chapter 5: Conclusion of the research as well as recommendation

CHAPTER 2 LITERATURE REVIEW

Purpose of this chapter is to review concepts of employee satisfaction and organizational characteristics (purposes, structure, relationships, rewards, helpful mechanism, leadership, and attitude toward change) It focuses on previous research concerning the seven factors of organizational characteristics, employee satisfaction and the impact of organizational characteristics to employee satisfaction

2.1 Definition of small-medium sized enterprise in Vietnam

Based on regulations of Vietnam government, a small-medium sized enterprise is a business that it registered in accordance with law statements SMEs are regularly divided into three groups of micro, small and medium enterprise’s size according to size of total fund or the average labor Besides sizes, they can be categorized by locations, technological development

or types of organization Table 1 below presents the classification of Vietnamese SMEs (Nguyen, H.L 2011)

Table 1- SMEs Definition according to Decree 56/2009/ND-CP

Size

Field

Micro enterprise Small enterprise Medium enterprise

Employees Capital

(VND) Employees

Capital (VND) Employees

100 billion

From 200

to 300

II Industry and

construction Less than 10

Less than 20 million

From 10 to

200

From 20 million to

100 billion

From 200

to 300

III Trade and

services Less than 10

Less than 10 million

From 10 to

50

From 20 million to 50 billion

From 50 to

100

According to assessment of Cao Si Kiem, he is The President of Business Association of SMEs in Vietnam SMEs has capital less than one million VND take a rate of 40 percent; capital from one to five million VND take a rate of 37 percent; from five to ten million VND take a rate of 8 percent and remaining are more than 10 million VND (Pham Thanh Hai, 2013) With small capital, most SMEs have loans from various sources This is one of reason making severe competition for SMEs

2.2 Employee Job satisfaction

There are many definitions of employee satisfaction in organizational behavior study Cranny

et al (1992) defined employee satisfaction as “an employee’s affective reactions to a job based on comparing actual outcomes with desired outcomes.” According to Hodson (1991), employee satisfaction is a broad concept, relating to an individual’s attitude towards his job

or several aspects of the jobs Ellickson and Logsdon (2002) defined employee satisfaction as

“the extent employees like their work.” Jyoti and Sharma (2012) defined employee

satisfaction as “the extent to which the employees of a firm feel that their interests are being looked after by the management.” Spector (1997) claimed that employee satisfaction simply was when people felt like their job and other aspects of work When employees satisfy with job, they will focus more attention into working and easy have commitment toward organization’s target Employee satisfaction is often considered as an important outcome of organizational activity and is used to measure attitude and motivation (James & Jones, 1976; Meadow, 1980)

According to Naseem et al (2011), employee satisfaction is a complex, multi-faceted construct which can be impacted by many factors such as wages, work environment, supervisors and co-worker relationships (Lane at al., 2010) Parvin and Kabir (2011) indicated a link between how employees regard their jobs and their resulting feelings When supervisors show support, it can positively influence employee satisfaction

Many researchers theorize that the employee satisfaction leads to commitment to the organizations (DeCotiis & Summers, 1987; Mathieu, 1988; Mathieu & Hamel, 1989) Luddy (2005) defined employee satisfaction as the emotional reaction and feelings towards different aspects at work of the staff The author emphasized the causes of employee satisfaction including job title, level of supervision, relationships with colleagues, job content, compensation, and rewards consisting of promotion, physical conditions of working environment, as well as the structure of the organization

Employee satisfaction and productivity are the two criteria of organizational effectiveness (Meltzer & Salter, 1962) Employee satisfaction is an important outcome of organizational activity and is among the measures of attitude and motivation that are related to organizational study (James & Jones, 1976; Meadow, 1980)

In general, when people satisfied with their work, they tend to have positive feeling and

employees think that the present job may be better than other jobs because they love their job Furthermore, in order to retain their existing satisfied jobs, employees try to perform work more effectively This helps to increase benefit for the enterprise Therefore, to increase working effect, enterprises should try to enhance employee satisfaction inside their

organization (Karim & Rehman, 2012)

Base on the review of the literature of job satisfaction as well as its influence on the company bottom line, this research studies impact of organizational characteristics to employee satisfaction There are total of seven factors will be examined characteristics of an organization including purposes, structure, relationships, rewards, helpful mechanism, leadership, and attitude toward change By the result of survey will show different impact of every factor to employee satisfaction

2.3 Key organizational factors contributing to employee satisfaction

Ostroff and Schmitt (1993) believed that the effectiveness of an organization depends on many factors such as work culture, employee satisfaction, and many other organizational components There have been many studies examining the relationship between organizational characteristics and employee satisfaction (Nguyen, 2011) For example, Blum

et al (1995) found that employees who worked in bureaucratic organizations had lower satisfaction than those who worked in other types of organizations They also found that decentralized organizations might benefit both employee satisfaction and organizational Ghiselli & Johnson (1970) believed that the structural shape (tall or flat) of the organizations had an impact on the relationship between managerial need satisfaction and organizational success Luddy (2005) emphasized the causes of employee satisfaction including job title, level of supervision, relationships with colleagues, job content, compensation, and rewards consisting of promotion, physical conditions of the working environment, as well as the structure of the organization

2.3.1 Purposes

According to Moynihan and Pandey (2006), purpose is defined as a sort of psychological negotiation between “what we have to do” (for survival) and “what we want to do” (for growth, self-expression, idealism, and so on) Goal should meet the two requirements: clarity and agreement Goal clarity indicates how well articulated the goals in the formal system are and to what extent the organization members are clear about the organization’s purposes and mission Goal agreement illustrates the extent to which people understand and support the organization’s purposes (Preziosi, 1980) When employee can understand organization goals, they will associate with organization more easily So purpose influences level of employee satisfaction, this study developed the following hypothesis:

H1: There is a positive impact of organizational purpose on employee satisfaction

2.3.2 Structure

Drucker (1998) concludes that there are two universal principles of organization First, the organization needs to be transparent so that people can understand clearly how their work is structured and what expect from them Second, the organization needs to be as flat as possible The more layers there are, the more opportunity for miscommunication and poor management

According to James and Jones (1976), they define organizational structure as the enduring characteristics of an organization reflected by the distribution of units and positions within the organization and their systematic relationships to each other Priziosi (1980) defines organizational structure as the division of labor and as the manner in which work tasks are divided From this statement, this study developed the following hypothesis:

H2: There is positive impact of organization structure on employee satisfaction

2.3.3 Leadership

Leadership plays important role in influence employee satisfaction From the Hawthorn experiment and the behavior research that followed, focused and placed on dynamic leaders and the meaning, nature and origins of leadership Liker suggested that leadership people was the central and the most significant aspect of all the tasks of management that encouraged a sense of participative or consultative management (James Carlopio & Graham Andrewartha, 2008)

According to Priziosi (1980), the definition of leadership includes both immediate supervisors and organizational leaders It involves in the leadership norms Leadership requires an understanding of the environment in addition to behavior skills The leaders should not know and do everything, but they should know where the trouble spots are and how these affect the whole organization Leaders should systematically monitor and initiate efforts to help Besides, leadership has affects on employees In that way, this study developed the following hypothesis:

H3: There is a positive impact of leadership on employee satisfaction

2.3.4 Relationships

Priziosi (1980) defines relationships as the interdependence between people-peers or subordinate, between units doing different tasks, and between people and their technologies Quality of the relationship impacts organization’s performance and effectiveness Relationships also indicate the capability of managing conflict in an organization With that

boss-in mboss-ind, this study developed the followboss-ing hypothesis:

H4: There is a positive impact of organization relationship on employee satisfaction

2.3.5 Rewards

Knowledge of need theory helps managers to understand whether organizational rewards are significant reinforces for special individuals If a reward satisfies an activated personal need,

it can use to reinforce desired individual behaviors The difficulty many managers have in predicting what rewards will be most attractive to their employees (James Carlopio & Graham Andrewartha, 2008)

Priziosi (1980) defines rewards as opportunity to grow as a person, the pay scale and benefits, the opportunity for promotion, salary, and incentives associated with tasks A good reward system is the one that not only pays off in fringe benefits and salary but also shows people the value of their work It should guarantee the equity and fairness among employees Based on this literature, this study developed the following hypothesis:

H5: There is a positive impact of organizational rewards on employee satisfaction

2.3.6 Helpful mechanisms

Helpful mechanisms are defined as the procedures, policies, meetings, systems, committees, office facility, information, work units, planning and control systems, and so on, that facilitate the organizational efforts (Priziosi,1980) They are coordinating factors that bind the organization together to make it more than a sum of individuals with separate needs Thus, this study developed the following hypothesis:

H6: There is a positive impact of organization helpful mechanisms on employee satisfaction

2.3.7 Attitude toward change

Change in today’s information is a constant and will increase Access to more information in increasing amounts leads to increased turbulence and complexity for managers Attitude toward change is an individual psychological tendency that is expressed by recognizing, evaluating the change and behavior toward it with some degree of favor or disfavor (Eagly & Chaiken, 1998; Elizur & Guttman, 1976) It indicates how changeable the organization is It

is the ability to change of the organization (Preziosi, 1980) It includes both organization and

individual attitude toward change With above literature, this study developed the following hypothesis:

H7: There is a positive impact of attitude toward change on employee satisfaction

2.4 Research model

This study uses Preziosi’s (1980) Organizational Diagnosis Questionnaire (ODQ), an extension Six-Box Organizational Model of Weisbord’s (1976) It used the same items appearing in Weisbord model, together an additional factor “attitude to change” Weisbord’s model establishes a systematic approach for analyzing relationship among variables that influence how an organization is managed

This model provides for assessment in six areas of organizational activity: purpose, structure, relationship, rewards, leadership and helpful mechanisms The outer circle determines an organizational boundary that it clarifies the functioning of the internal environment is to be

in balance?

Structure:

How do we divide up the work?

Rewards:

Do all needed tasks have incentives?

Helpful Mechanisms:

Have we adequate coordinating technologies?

Environment

Figure 1- Weisbord’s (1976) Organizational Diagnosis Model

analyzed to the exclusion of the external environment

Preziosi argues that in attempting any planned change effort in an organization, it is necessary to know how changeable an organization is (Lok& Crawford, 2000) Putting together the additional component suggested by Preziosi’s (1980), the author studied organizational components that impact to employee satisfaction It has seven key organizational factors including purposes, structure, leadership, relationships rewards, helpful mechanisms, and attitude toward change as figure 2 follows

Purposes

Organizational Characteristic

External Environment

Figure 2- Research Model: Adapted from Weisbord’s (1976) and Preziosi’s (1980)Organizational Diagnosis Model

Attitude toward Change

Organizational Effectiveness

Overall Job Satisfaction

Robert C Preziosi assumed that a meaningful diagnostic effort must be based on a theory or model of organizational functioning This makes action research possible as it facilitates problem identification, which is essential to organization development

This study examines the influence of organizational components to employee satisfaction in SMEs It surveys seven key organizational factors including purposes, structure, leadership, relationships rewards, helpful mechanisms, and attitude toward change Beside of key organizational factors, the study is also survey demographic factor It helps to examine the difference in level of employee satisfaction based on age, gender and experience of employees The research hypotheses for this study, therefore, are as follows:

 Hypothesis 1: Purposes have a positive impact on employee overall satisfaction

 Hypothesis 2: Structure has a positive impact on employee overall satisfaction

 Hypothesis3: Leadership has a positive impact on employee overall satisfaction

 Hypothesis 4: Relationships have a positive impact on employee overall satisfaction

 Hypothesis 5: Rewards have a positive impact on employee overall satisfaction

 Hypothesis 6: Helpful mechanisms have a positive impact on employee overall satisfaction

 Hypothesis 7: Attitude toward change has a positive impact on employee overall satisfaction

Figure 3- The proposal research method

The research model is presented in the figure 3 and consisted of the 7 hypotheses listed above Seven key organizational factors from hypothesis 1 to hypothesis 7 are independent and quantitative variables Employee satisfaction is the dependent variable All of them have

positive impact on dependent variable, employee satisfaction

2.5 Conclusion

There were so many researches on employee satisfaction, organizational characteristics from different factors as well as other organizations This chapter indicates more detail relationship between seven variables of organizational characteristics and employee satisfaction Literature is presented possible relationship of variables that help study more clearly

Attitude toward

Change

Employee Overall Satisfaction

H1

H2 H3

H4

H5

H6

H7

CHAPTER 3 RESEARCH METHODOLOGY

To determine the level of employee satisfaction based on each factor that indicated above, this chapter’s purpose was to present methodology applied in the research They include research process, measurement scale, data collection, sampling, and final was technical to analyze data

3.1 Research process:

Depending on research purpose, this research used survey research method to examine impact seven factors on employee satisfaction Study used a qualitative and quantitative method (questionnaire survey) to examine key organizational factors to the contributing satisfaction of SMEs’ employee in Ho Chi Minh City

Based on the measurement scales found from previous study, initial questionnaire was established to measure key organizational characteristics and employee satisfaction It indicated three parts: Part-1 was participants’ demographic information, Part-2 was organizational diagnosis, and Part-3 was overall job satisfaction The original English questionnaire was translated into Vietnamese, back translated for validity check purposes The survey also was reviewed the data to obtain a sense of the information, research problem more clearly It was central to answering research questions and hypotheses Before data collecting process for analysis impact independent variables on dependent variable, the qualitative research was conducted byinterview face to face Survey interviewed ten persons

in different time and position This step helped to evaluate questionnaire for readability, understandability or finding out measurement scales had similar meaning or not Information from results of interview used to adjust measurement scales Ten volunteers were asked to evaluate questionnaire for some factors such as logic, clarity and suitable time to finish questionnaire The final questionnaire was used to survey and collect the data for next analysis process The detail results of interviewwere showed in Appendix C

After collection data, quantitative researchwasused to test the hypotheses throught out data collected from questionnaire survey In the next analysis process, main survey indicated three steps such as reliability analysis (Cronbach’s alpha), validity analysis (Exploratory Factor Analysis _ EFA), and Hypothesis testing (Multiple Regression Analysis) From results of data analysis, recommendation and conclusions were indicated in last chapter of thesis.The figure 4 showed the whole steps in research process

Figure 4 – Research Process

Multiple RegressionAnalysis

Recommendation and Conclusions

3.2 Measurement scale

In this study, measurement scale was developed based on model of Preziosi’s (1980) - Organizational Diagnosis Questionnaire (ODQ), an extension of Weisbord’s (1976) Six-Box Organizational Model It was designed to survey seven organizational component factors including purposes, structure, leadership, relationships rewards, helpful mechanisms, and attitude toward change The questionnaire included 35 items and uses a 5-Likert scale, ranging from 1-agree strongly to 5-disagree strongly Each organizational component factor consists of 5 items

Measurement scale wasdeveloped following model of Taylor and Bowers (1974) to survey overall job satisfaction It surveyed employee satisfaction categories, including the work, co-workers, supervision, promotional opportunities, pay, progress, and the organization It used 5-point Likert scale, ranging from 1= Completely Satisfied to 5= Completely Unsatisfied Employee satisfaction is calculated as the total of these satisfaction categories

Table 2- Measurement scale of factors contributing to employee satisfaction

Factor Coding Variables/Items Source Purpose PUR

1 The goals of this organization are clearly stated

Moynihan and Pandey (2006), Preziosi (1980)

2 I am personally in agreement with the stated

goals of my work unit

3 I understand the purpose of this organization

4 The priorities of this organization are understood

2 The division of labor of this organization is

Factor Coding Variables/Items Source

conducive to reaching its goals

3 The manner in which work tasks are divided is a

logical one

4 The structure of my work unit is well designed

5 The division of labor of this organization helps

its efforts to reach its goals

3 This organization's leadership efforts result in

the organization's fulfillment of its purposes

4 It is clear to me whenever my boss is attempting

to guide my work efforts

5 I understand my boss's efforts to influence me

and the other members of the work unit

3 My relationships with members of my work

group are friendly as well as professional

4 I have established the relationships that I need to

Factor Coding Variables/Items Source

treat each employee equitably

3 The opportunity for promotion exists in this

organization

4 The salary that I receive is commensurate with

the job that I perform

5 All tasks to be accomplished are associated with

incentives

Helpful

Mechanisms

HEL

1 My immediate supervisor has ideas that are

helpful to me and my work group

Preziosi (1980)

2 I have the information that I need to do a good

job

3 This organization has adequate mechanisms for

binding itself together

4 Other work units are helpful to my work unit

whenever assistance is requested

5 This organization's planning and control efforts

are helpful to its growth and development

n (1976), Preziosi (1980)

2 This organization is not introducing enough new

policies and procedures

4 Occasionally I like to change things about my

1 All in all, how satisfied are you with the persons

in your work group?

Taylor and Bowers (1974)

Factor Coding Variables/Items Source

2 All in all, how satisfied are you with your

supervisor?

3 All in all, how satisfied are you with your job?

4 All in all, how satisfied are you with this

organization, compared to most?

5 Considering your skills and the effort you put

into your work, how satisfied are you with your pay?

6 How satisfied do you feel with the progress you

have made in this organization up to now?

7 How satisfied do you feel with your chance for

getting ahead in this organization in the future?

The Organizational Diagnosis Questionnaire (ODQ) contained 35 questions, 5 in each of the seven variables Respondents were requested to indicate their current opinions and thoughts

of their organizations on a scale of 1 to 5 which the score of 1 indicating “Agree Strongly,” the score of 5 indicating “Disagree Strongly,” and the score of 3 representing a neutral point Employee Satisfaction developed by Taylor and Bowers (1974) describes the degree of employee satisfaction with the work, co-workers, supervision, promotional opportunities, pays, progress, and the organization It was measured by a 5-point Likert scale, ranging from

1 (Completely Satisfied) to 5 (Completely Unsatisfied) The score of 3 represents a neutral point To avoid confusion in interpreting the data, all of the scores were recoded so that a higher score indicated a higher level of satisfaction After recoding, scores above 3 indicated satisfaction and scores below 3 indicated dissatisfaction A score of 5 indicated complete satisfaction while a score of 1 indicated complete dissatisfaction The score of 3 remained a neutral point

3.3 Sampling design

Convenient sampling procedure was used for selecting and contacting respondents The target respondents were Vietnamese employees who have been working full-time and working time from one year and over in SMEs at Ho Chi Minh City

Sample size consisted from 250 to 300 questionnaires

To help employees understand easily purpose of survey, this research required employees who have working time from one year and over

3.4 Data collection method

After adjusting the measurement scale, the research used final questionnaires to survey information Both of Vietnamese version and English version were shown in Appendix A and Appendix B The data in questionnaires used to survey employees to respond exactly the same set of questions Questionnaire was delivered to employees by email or papersto companies They had turnaround time about 10-14 days to finish their answering This was to provide respondents with ample time and convenience to complete the survey To ensure enough receiving the required data, questionnaires delivery was mentioned to numbers of making up for a loss (about 10% to 20%) With many respondents do not used computer, questionnaires were delivered in papers to them, period to collect questionnaires was shorter than sending by email (about seven days) to limit losing or forgetting Using questionnaire papers were also used in case amount of respondents were not enough to cover the requirements Total time for data collection was 20 days

3.5 Data analysis technical

This research used Statistical Software of Social Science (SPSS) to analysis The data was collected shortest period from seven or ten days, total of maximum time was 30 days The survey data was typed into spreadsheet of SPSS window to use for statistical analysis

methods In this step, data was coded to serve for research purpose Steps of data analysis as follow:

3.5.1 Reliability analysis of measurement scales with Cronbach’s alpha

After collecting and entering the data to SPSS software, the author used Cronbach’s coefficient alpha to measure the reliability of the measurement scales Cronbach’s alpha was measure of internal consistency According to George and Mallery (2003) value of Cronbach’s alpha was applied when Cronbach’s alpha reliability following: over 0.9 were considered as excellent, over 0.8 was good, from 0.6 to 0.7 was acceptable, less than 0.6 was poor and less than 0.5 was considered unacceptable

Next step was considering Inter-Item Correlation Matrix If the Item-total correlation were negative or too low (less than 0.3) variables were deleted for improvement of the reliability level (Leech et al, 2005) The reliability analysis process was tested on all seven independent variables and dependent variable

3.5.2 Exploratory factor analysis

In this section, analysis was considered to reduce data of measurement items in certain group

It was necessary step to prepare for multiple regression analysis part The study examined independence factors, dependence factor, and in each part it was conducted EFA separately Testing also had to test values of The Kaiser-Meyer-OIkin (KMO) and significant from factor analysis table.The KMO tested items that were predicted by each factor The KMO’s value was greater than 0.7 If it was less than 0.5, it showed inadequate

The Bartlett test should be significant Significantly P-value was smaller than 0.05 (Sig = 000) It meaned the variables were high correlated for factor analysis Eigenvalues were a common criterion for a factor to be useful It should be greater than 1.0 If it was less than

testing the result of reliability and factor analysis, analysis applied Multiple Regression Model to test the hypotheses

3.5.3 Multiple regression analysis to test the impact of independent variables to dependent variable

In this analysis, the hypotheses were tested relationship between seven factors (purposes, structure, leadership, relationships rewards, helpful mechanisms, and attitude toward change) and employee satisfaction It tested how the model fits the data based on the value the R square in the model summary table If R square was greater than 0 and smaller than 1 and sig stated in ANOVA table was smaller than 0.05 the model fits Based on Coefficient table, value of Beta and p-value (sig) to test the hypotheses and gave conclusion for each hypothesis

According to Leech et al (2005), before testing the hypotheses need to test six assumptions

of the regression as follow:

Independence or residual: This assumption was accepted if Durbin-Watson value in Model Summary table is greater 1.5 and smaller 2.5

A linear relationship: Analysis relationship of each pair of factors (between independent factor and dependent factor)

Homoscedasticity of residual: Survey standardized residual and unstandardized predicted value in each dependent variable to independent variable to give conclusions

No Multicollinearity: Checking correlations among the variables based on value of Tolerance and VIF from coefficient table If VIF was greater than 10 and Tolerance was smaller 0.1, there was multicollinearity

No significant outliers or influential points

Normality of the residuals

In summary, this chapter outlined the research method, research process, measurement scale,

scale It also presented data collection method, sampling design and the methods using to analysis the data In next chapter, research results in details and discussion of the study were indicated based on statistical analysis of data

CHAPTER 4 DATA ANALYSIS AND RESULTS

4.1 Introduction

From the above research methodology, this chapter mentioned of the result of reliability analysis of data, EFA testing and multiple regression analysis of hypothesis Total of 350 questionnaires were given out companies Of these 296 were returned This resulted in 84.5% response rate

The first part of the questionnaire was the participants’ demographic information which requested the following information about the individual: nationality, type of organizations, years at current job, job type, job category, gender, age, marital status, and education These descriptive and frequency statistics results of the total sample were presented below