Psychological empowerment and job satisfaction: a comparison of manufacturing and services industry in Vietnam

Some findings in this study indicated that the degree of job satisfaction may differ from service to manufacturing but all the factors of psychological empowerment impact on it.. And amo

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

MASTER OF BUSINESS (Honours)

Ho Chi Minh City- Year 2015

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr Tran Phuong Thao

Ho Chi Minh City- Year 2015

ABSTRACT

In this research, we can have a deep insight of overall findings for the relationship between four dimensions of psychological empowerment and the employee’s job satisfaction In particular, that relationship was put into the comparison in two industries service and manufacturing To examine the research model, the survey questionnaires were used to circulate to employees in service companies and manufacturing companies in Ho Chi Minh City through mail survey with the sample size of 200 respondents This study used the SPSS Statistic to analyze the data by using reliability analysis, exploratory factor analysis and multiple linear regression analysis

Some findings in this study indicated that the degree of job satisfaction may differ from service to manufacturing but all the factors of psychological empowerment impact on it And among these factors, the empowerment self-determination impacts

the most and the empowerment competence has less impact than the others, the

impact of four dimensions of psychological empowerment on the employees’ job satisfaction in service industry and manufacturing industry are not the same In service industry, the empowerment meaning affects on employees’ job satisfaction

stronger than in manufacturing industry The empowerment competence and

empowerment impact in this case the stronger one belongs to service industry, and in manufacturing industry they impact slightly to employees’ job satisfaction

This study also points out some implications for management to improve employees’ capability, productivity in their work, which can contribute to development of the company

Keywords: psychological empowerment, empowerment meaning, empowerment

competence, empowerment self- determination, empowerment impact, job satisfaction, service, manufacturing

as good criticism to complete my Master’s thesis

Secondly, I would like to thank all the ISB Research Committee, the lecturers, and the staff at International School of Business during all process of my course

Thirdly, I would like to express my special thanks to my family and friends who provided continuously support, encouragement in my life

Finally, I would like to say thank you to those who participated in this study

Ho Chi Minh City, June 6, 2015

TABLE OF CONTENT

ABSTRACT i

ACKNOWLEDGEMENTS ii

CHAPTER 1: INTRODUCTION 1

1.1 Background of the study 1

1.2 Research problem 3

1.3 Research objective and questions 4

1.4 Scope of the research 4

1.5 Significances of the research 5

1.6 Structure of the research 6

CHAPTER 2: LITERATURE REVIEW, HYPOTHESIS AND RESEARCH MODEL 7

2.1 Theoretical foundations 7

Models of Employee Involvement 7

Models of Empowerment 8

Theory of Motivator – Hygiene 8

2.2 Overview on psychological empowerment and job satisfaction 9

2.2.1Psychological empowerment 9

2.2.2Job satisfaction 11

2.3 Hypothesis development 12

2.3.1Empowerment meaning and job satisfaction 12

2.3.2Empowerment competence and job satisfaction 12

2.3.3Empowerment self-determination and job satisfaction 13

2.3.4Empowerment impact and job satisfaction 14

2.4 Research model 14

2.5 Chapter summary 15

CHAPTER 3: RESEARCH METHODOLOGY 16

3.1 Research process 16

3.2 Research design 17

3.2.1Questionnaire design 17

3.2.2Measurement scale 18

3.3 Pilot test 21

3.4 Main survey 22

3.5 Chapter summary 25

CHAPTER 4: EMPIRICAL RESULTS AND DISCUSSIONS 26

4.1 Preliminaries of data analysis 26

4.2 Reliability analysis 27

4.3 Exploratory Factor Analysis 29

4.4 Correlation analysis 31

4.5 Multiple Linear Regression Analysis 32

4.6 Chapter summary 43

CHAPTER 5: CONCLUSION, IMPLICATIONS AND DIRECTIONS FOR FURTHER STUDIES 44

5.1 Key findings of the thesis 44

5.2 Implications 48

5.3 Limitation and directions for further studies 50

REFERENCES 51

APPENDIX A 58

APPENDIX B 61

APPENDIX C 64

APPENDIX D 66

LIST OF FIGURES

Figure 2 1: Conceptual framework of the study 14

Figure 3.1: Research process 17

Figure C 1: The Histogram 64

Figure C 2: The Normal P-P Plot of Regression Standardized Residual 64

Figure C 3: Scatterplot 65

LIST OF TABLES

Table 4 1 : Summary of employees’ profile 27

Table 4 2: Cronbach’s Alpha 28

Table 4 3: KMO and Barlett’s test 29

Table 4 4: Total Variance Explained 29

Table 4 5: Rotated Component Matrix 30

Table 4 6: Correlations 31

Table 4 7: Model Summary 33

Table 4 8: ANOVA 34

Table 4 9: Coefficients 34

Table 4 10: Model Summary 35

Table 4 11: Model Summary 36

Table 4 12: ANOVA 36

Table 4 13: Coefficients 36

Table 4 14: Model Summary 38

Table 4 15: ANOVA 38

Table 4 16: Coefficients 39

Table 4 17: Model Summary 39

Table 4 18: Coefficients 40

CHAPTER 1: INTRODUCTION

This research studies factors of psychological empowerment which impacts on job satisfaction of employees in two industries, namely service and manufacturing This chapter provides an overview of research including research background, research problem, research objectives, scope of study, and significance of the study In this chapter, an overall structure of the research is also suggested

1.1 Background of the study

Nowadays, in an evolving environment, organizations are working under highly competitive context In order to survive in such a tough environment, organizations try to seek out their competitive advantages The most critical challenges they have to face are the need to increase productivity, enhance organizational capabilities, expand into global markets, develop and implement new technologies…, etc (Burke and Cooper, 2005)

Employee is regarded as a back bone of an organization that performs critical tasks for the survival of the organization With the needs of changing for the growing nowadays, organizations have forced not only to develop the quality of product of service but also the organization capabilities, especially their employee through their performance However, the impact of human resources on operational systems has often been overlooked (Boudreau et al 2003) An empowered and committed workforce is generally claimed to be essential for the effective functioning of modern organizations (Bowen et al, 1992; Sparrowe, 1995; Kirkman et al, 1999)

In organizations, empowerment means delegating responsibilities to employees with complete confidence and trust so as to assume a more active and responsible role This strengthens their sense of effectiveness as well as by sharing power, information and the responsibility to manage their own work as much as possible

There is a broad context of empowerment in many dimensions as well as perspectives Some approach by individual to proactive work orientation by increasing employee’s performance and some can be viewed as managerial practices

to improve employee autonomy and responsibility Researchers such as Burke (1986) and Kanter (1977) have also defined empowerment in terms of job structure the transfer of power or authority or job support structures such as the sharing of resources and information (Blau and Alba, 1982; Hardy and Leiba O’Sullivan, 1998) In these studies, empowerment is viewed from the perspective of the leader’s role in empowering employees Many others studies view empowerment as individual task motivation (Conger and Kanungo, 1988; Thomas and Velthouse, 1990) or motivation from person and environment fit relationship (Zimmerman, 1990) while Randolph (1995) asserts that employee empowerment is a transfer of power from the employer to the employees

Most of the literature which reviewed many perspective of empowerment concludes that an empowered workforce will lead their organization to achieve a competitive advantage Employee empowerment increases productivity by increasing employee pride, self- respect and self- worth In recent studies, one of the dominant classifications of employee empowerment accepted by many researchers is given by Spreitzer (1995) The author defines psychological empowerment as “the intrinsic motivation manifested in meaning, competence, self-determination, and impact, in which an employee feels able to shape his role in work and context” The concept is employed in a number of studies such as Avolio et al (2004), Corsun et

al (1999), Carless (2004) and Jha et al (2008)

According to Hofstede and Bond (1984), “power distance is defined as the extent in which less powerful members of organization accept that power is distributed unequally” In Vietnam, power distance is influenced by the Confucianism, in which the ordering relationships are in the hierarchical fashion and the behaviors in society are based on these orders, Gudykunst (2000) Taking more responsibility and authority always goes along with additional benefits in Vietnam Vietnamese are quite indecisive in delegating power Being a social republic state and high power distance, Vietnam is the country in which the power is not distributed equally and regarded as the basic fact in society In organizations, close supervision, fear of disagreement with supervisors, lack of trust among co-workers,

and directed supervision are well manifested more in high power distance cultures than in low power distance cultures

1.2 Research problem

After becoming an official member of the World Trade Organization, Vietnam has opportunities as well as challenges to adapt with globalization trend in the world In order to moving forward successfully, organizations in Vietnam should take the advantages of not only the new technology but also improve their workforce with high competence, empowerment and development

In the literature, many prior studies on psychological empowerment (Tsui et al., 1997; Shaw et al., 1998; Gerhart and Rynes, 2003) indicate that management of the organization must improve employee satisfaction and that can encourage employees to improve the performance of their tasks and boost the level of their work performance, which in turn contribute to the company’s growth Hunjra et al (2011) and Bowen and Lawler (1992) found that there is association between psychological empowerment and job satisfaction So it is essential to take these factors into account

According to Hofstede center (2010), Vietnam with the score of 70 is considered as high power distance country That means Vietnamese people accept hierarchical order The eldest person has the most influence In addition, hierarchy can be classified in terms of age, education level and job positions Power distance exists not only in workplace but also in daily life In a high power distance cultures, powerful individuals strive to maintain or increase influence at the expense of less powerful ones, who accept and present no challenge to the status quo (Hofstede, 2001) As such, understanding psychological empowerment and job satisfaction in the Vietnamese context is crucial for the organizational development

The literature, there are many researches for psychological empowerment in Western countries, but little empirical studies for Eastern ones especially in Vietnam, except from Thang et al (2007) who considerate the employee empowerment in

Vietnam’s firms In addition, difference from the previous studies, this research focuses on the comparison in the two industries service and manufacturing, which plays decisive roles in developing the national economy According to Looney (2014), the rapid growth of manufacturing output keeps the high share of manufacturing in Vietnam’s GDP, while service keeps growing Hence, more than a third of Vietnam’s growth is attributed to structural change caused by the movements

of labor from low productivity agriculture toward more productive manufacturing and services (McCaig and Pavcnik 2013) As such, due to continuous changes of the economic context in Vietnam, a study on the relationship between psychological empowerment and job satisfaction is needed to investigate

1.3 Research objective and questions

The objective of this thesis is to investigate the relationship between psychological empowerment and job satisfaction Four factors of psychological empowerment as given by Spreitzer (1995), Thomas and Velthouse (1990) are taken

into consideration in this thesis, namely empowerment meaning, empowerment

competence, empowerment self- determination, empowerment impact

More specifically, two research questions are given as follows:

Question 1: Do the empowerment meaning, empowerment competence,

empowerment self- determination and empowerment impact affect the job satisfaction in Vietnam? If yes, to what extent do these above factors affect the job satisfaction in Vietnam?

Question 2: Is there any difference on the impacts of psychological empowerment on the job satisfaction between the service industry and manufacture industry in Vietnam?

1.4 Scope of the research

In the literature, empowerment can be classified into two main streams namely structural empowerment and psychological empowerment (Laschinger, 2004 and Thomas and Velthouse, 1990) This research only investigates the influence of four

factors of psychological empowerment, namely empowerment meaning, empowerment competence, empowerment self- determination, empowerment impact

towards job satisfaction instead of structural empowerment

In addition, the research only focuses on employees in organizations in the Vietnamese context More specifically, this study collects data only from Ho Chi Minh City Ho Chi Minh City is selected because this is the most dynamic city in Vietnam, where attracts many companies or enterprises from many kind of industries

To investigate the impact of four dimensions of psychological empowerment

on job satisfaction of employee in many companies in Ho Chi Minh City, the manufacturing and service industries are selected These industries are selected because: services and manufacturing are increasingly important facilitators and sources of economic growth, in the next future Vietnam is expected to implement far-reaching regulatory, administrative and economic reforms that will provide an increasingly favorable environment for foreign providers in Vietnam and open new markets for Vietnamese service and manufacturing firms So the workforce has the drastic move of employment away from agriculture toward services and manufacturing and play more important in total labor force of Vietnam

1.5 Significances of the research

This research differs from previous studies in the following ways First, prior studies have mainly focused on the Vietnam context Then, there have been little of studies which investigates the impact of employee empowerment on employee satisfaction and their productivities in two industries service and manufacturing in Vietnam, in the scope of this study it is essential to have deep insight into the four dimensions of employee empowerment so as to identify the impact on the employee job satisfaction as well as the company overall performance because the job satisfaction will increase productivity, creativity, innovative, service quality and reduce turnover rate

1.6 Structure of the research

This thesis is organized into five chapters The contents of the chapters are as follows:

Chapter 1 presents the overview of research background, research problem, research objectives, scope of study, significance of the study and research structure

Chapter 2 focuses on the literature review, including the definition of each concept, rationale for hypotheses as well as proposed the conceptual model for the research

Chapter 3 illustrates the detailed research methodology: research process, research design, measurement of the constructs, question design and data collection procedure

Chapter 4 describes empirical results and discussions based on the data collected: characteristics of the sample, analyzing the reliability and validity, testing the assumption of regression and testing hypotheses

Chapter 5 summarizes the discussions on the research results, theoretical contributions, suggest for practical implications, limitations of the study are recognized for the future researches

CHAPTER 2: LITERATURE REVIEW, HYPOTHESIS AND

RESEARCH MODEL

This chapter reviews the literature and gives an overview of what research already has been done, regarding the main variables mentioned in the introduction First, theoretical foundations are discussed to gain a better understanding of this unknown concept Second, an overview of on psychological empowerment and job satisfaction is outlined Third, the dependent variable and independent variable performance are described in hypothesis development Finally, the conceptual model will be presented together with the hypotheses

2.1 Theoretical foundations

Models of Employee Involvement

The concept of employee empowerment came from the concept of “Employee evolvement” which was defined by Lawler and Mohrman (1989) In this concept, information, influence and incentives are required to access for employees A Model

of Employee Involvement was developed by Lowin (1968), Saskin (1976), Locke (1979) and Leana (1987) etc Lowin (1968) present a model that the effectiveness of involvement depends on the personalities and attitudes of those who involved, the extent, importance, the quality of the participation process, and visibility of the issues Saskin (1976) defined a model that focuses on the psychological target of the Employee Involvement with four types as: goal setting, decision making, problem solving and change Locke and Schweiger (1979) presented a model of the participation process which differentiated between cognitive effects and motivational effects Leana (1987) differentiated between employee participation and delegation, which emphasized giving employees more involvement, autonomy and participation

in decision making

Models of Empowerment

The concept of empowerment began with a five stage model of empowerment by Conger and Kanungo (1988) In this model, the experience of empowerment comes from the self sufficiency and confidence by using of participative management, job enrichment There are some other previous models by Lowin (1968) who focused on attitudes about the process, Saskin (1976) who studied on commitment to change From those concepts and models, empowerment was developed as a concept, philosophy, an organizational program, and set of organizational behavioral practices

by Ripley and Ripley (1992) Ripley and Ripley (1992) focused on granting authorization and drawing company vision As a concept: Empowerment is providing with power and authority to make decision As a philosophy and behavioral practices: team can manage itself and individuals can follow their assignment with personal orient, while company and personal goals toward the shared company vision As an organizational program: giving the workforce permission basing on the provided framework in order to pursue, develop their skills and broaden their knowledge to contribute to the organization as well as themselves Different aspects of the employee or organization interaction, the nature of the environment, market, product, the technology involved in organization were focused

in different models above So organization can approach to empowerment by using a suitable definition and can take the advantage of its own market, challenges and opportunities

A unifying model is emerging which allows for such different approaches The empowerment model starts with the need to change driven by external forces such as competitiveness, globalization and the introduction of the advanced technology The empowered organization in which high performance employees are born will increase in its efficiency and productivity

Theory of Motivator – Hygiene

This theory is developed by Herzberg et al (1959) According to them there are many factors at any workplace that are related to the job satisfaction or job

dissatisfaction The factors that are related to the job satisfaction are regarded as

"motivators" and the factors which results in job dissatisfaction are known as

"hygiene" Herzberg et al (1959) indicated these factors are regards as Motivators: work itself, recognition, achievement, responsibility, advancement The Hygiene factors are including: salary, supervision, policy and administration, working conditions, interpersonal relations Herzberg et al (1959) identified these factors but their description in the scenario of education is provided by the Padilla-Veles (1993) Theory of Motivator – Hygiene by Herzberg et al (1959) is one of the theories to study job satisfaction There are two other theories: Discrepancy theory was presented by the Locke (1969) and Equity theory was developed by Mowday (1992)

A review of these above theories of job satisfaction could be found in the studies

by Siddiqui and Saba (2013)

2.2 Overview on psychological empowerment and job satisfaction

In the literature, there are several definitions on the empowerment Specifically, Newstrom and Davies (1998) define empowerment as process that provides greater autonomy by sharing of relevant information and control over factors affecting job performance while Zimmerman (1990) viewed empowerment with reference to behavior or performance related outcomes Empowerment has also been described as dependent on management or leadership actions (Bennis and Nanus, 1985; Block, 1987) and human resource practices (Conger and Kanungo, 1988; Lawler, 1986)

It could be seen that there are two types of empowerment: structural empowerment and psychological empowerment (Laschinger, 2004, Spreitzer, 1995; Thomas and Velthouse, 1990) Specifically, structural empowerment is limited to the workplace conditions; it depends on the perceived actual conditions of empowerment within the workplace It is mainly about the empowering of management/work

practices, delegation of decision rights from high level employee to their subordinates and giving employees access to needed information or diverse resources to accomplish tasks autonomously Another type of empowerment, psychological empowerment, is focused on employee mainly It is the reaction of employees to structural empowering conditions Therefore, this type of empowerment is referred to as increased intrinsic task motivation, with four dimensions which reflects the individual’s orientation to his or her work role

Spreitzer (1995) defines psychological empowerment as “the intrinsic motivation manifested in meaning, competence, self-determination, and impact, in which an employee feels able to shape his role in work and context” Recent studies shows that psychological empowerment is becoming a concern of many researchers such as Avolio et al (2004), Corsun et al (1999), Carless (2004), Jha et al (2008) etc So in this study applies the definition of Spreitzer (1995) including four types of empowerment as follows:

- Meaning: involves a fit between requirements of a work role and beliefs

values, and behaviour

- Competence: is an individual’s belief in his or her capability to perform a job well

- Self- determination: the feeling of having choice in initiating and regulating behaviour

- Impact: the belief that individual can influence over strategic, administrative

or operational outcomes at work

The theory supported for the empowerment is developed by several researchers Specifically, the theory came from the concept of “Employee evolvement” which was defined by Lawler and Mohrman (1989) In this concept, information, influence and incentives are the combination of employees A Model of Employee Involvement was developed by Lowin (1968), Saskin (1976), Locke (1979) and Leana (1987) etc which emphasized giving employees more involvement, autonomy and participation in decision making Coming after that

model, some researchers who address some concepts of empowerment in Model of Empowerment such as Conger and Kanungo (1988), Ripley and Ripley (1992) etc

There is an increasing attention for job satisfaction theme in the literature.Job satisfaction is defined as the feelings an employee has about the job in general (Smith et al 1975) or as an individual’s positive or negative attitude towards their job (Wollack et al 1971) Robbins and Judge (2007) defined job satisfaction as a positive feeling about one’s job based on evaluation of the characteristics George and Jones (2008) define job satisfaction as “the feelings a worker has about his job Thus, it could be concluded that job satisfaction is the pleasure of employees when he/she have positive feeling about the jobs

There are a number of specific facets of satisfaction related to pay, work, supervision, professional opportunities, benefits, organizational practices and relationships with coworkers (Misener et al 1996) A review of prior study showed a strong correlation between turnover and negative feelings about the job Herzberget al (1957) Research has shown that attitudes about one's job influence the way the job is done (Herzberg 1959) Conversely, studies have reported a positive correlation between negative feelings about the job and turnover (Robbins 1979) and a strong positive correlation among initial lateness, then absence and subsequent turnover (Rosse 1988) Employee satisfaction (and customer satisfaction) was also found to impact changes in sales by Keiningham et al (2006) Job dissatisfaction leads to absenteeism, problems of grievances, low morale and high turnover (Gangadhraiah et al 1990, Martin 1990)

Many studies have found that employee satisfaction is a strong determinant

of organizational commitment and loyalty (MatzlerSRenzl 2006; Mak Sockel 2001; Martensen and Gronholdt 2001), negatively related to turnover (Tekleab et

al 2005; Ward 1988) and absenteeism (Muchinsky 1977)

There are numerous of theories related to job satisfaction which can help to understand more about it such as Theory of Discrepancy by Locke (1969), Theory

of Equity by Mowday (1992), Theory of Motivator - Hygiene by Herzberg et al (1959) A review of the theories could be found in the studies by Siddiqui and Saba (2013)

2.3 Hypothesis development

2.3.1 Empowerment meaning and job satisfaction

In the research of Thomas and Velthouse (1990), empowerment meaning concerns the value of the task or purpose which has the relationship to the employees’ ideas, their beliefs or their standards Spreitzer et al (1997) indicated the fit relationship between the employees’ needs in the job and their own values, their beliefs and their behaviors Empowerment meaning has been linked to work satisfaction by previous research (Hackman and Oldham 1980; Spreitzer et al., 1997) And from these researches empowerment meaning among the other dimension can directly present the relation between the person and the job, that is, the fit between the job role requirements and the employee’s beliefs and values An employee does not feel enthusiastic about the job if he/she does not get energized about work, an employee will not feel empowered (Thomas and Velthouse, 1990)

Literature shows that a positive relationship is found between meaning and job satisfaction (Spreitzer, Kizilos and Nason, 1997; Hackman and Oldham, 1980; Bennis and Nanus, 1985) If work is more meaningful for a person it will lead to more satisfaction with his or her work which will result in an increase in employee satisfaction Whereas low levels of meaningful work will lead to lower levels of work satisfaction We can formulate the following hypothesis

Hypothesis 1 (H1): Empowerment meaning is positively related to job

satisfaction

2.3.2 Empowerment competence and job satisfaction

According to Thomas and Velthouse (1990), empowerment competence, or sometimes understood as self-efficacy, is the degree a person beliefs he or she can

skillfully perform a set of task or activities when he or she tries A person will feel more satisfied with his work when he feels more competent about their work

Although limited research is done on the relationship between empowerment competence and performance, Spreitzer et al (1997) found a positive relationship between competence and productivity Locke (1991) indicated that self-efficacy has

a powerful impact on task performance Multiple empirical studies reviewed by Gist and Mitchell (1992), report a positive relationship between self-efficacy and a variety of work-related performance measures, such as sales and research productivity and adaptability Thus it is expect that empowerment competence is positively related to employee satisfaction

Hypothesis 2 (H2): Empowerment competence is positively related to job

satisfaction

2.3.3 Empowerment self-determination and job satisfaction

Hackman (1987), and Susman (1976) defined empowerment determination is the degree to which employees experience freedom, independence, and discretion within the organization while (Deci, Connell, and Ryan, 1989) defined self-determination as the ability that an individual has a choice to perform works by themselves It enables an employee, not only delegate tasks to the employee By enabling, which can heighten intrinsic motivation through development of personal efficiency, an employee will feel motivated (Conger and Kanungo, 1988) In addition, according to (Spreitzer et al 1997; Wagner 1995), empowerment self-determination refers to the belief that one has autonomy or control over how one does his or her tasks at work So self-determination consists of the sense of personal control and causal responsibility for ones actions (Thomas en Velthouse 1990) Individuals who experience more autonomy in their work are likely to get more intrinsic rewards from their work (Thomas en Velthouse 1990) and thus be more satisfied employees This leads to the following hypothesis:

self-Hypothesis 3 (H3): Empowerment self-determination is positively related to

job satisfaction

2.3.4 Empowerment impact and job satisfaction

According to Spreitzer et al (1997), empowerment impact is the perception that one, as an individual, can influence strategic, administrative or operating outcomes at work This dimension of empowerment is positively related to

effectiveness While Ashfort (1989) considers empowerment impact as the degree to

which one is able to influence administrative, operating, or strategic outcomes at work to make a difference This leads to the following hypothesis

Hypothesis 4 (H4): Empowerment impact is positively related to job

satisfaction

2.4 Research model

Based on the above discussion, the research model presenting the relationship between the psychological empowerment factors on job satisfaction in service and manufacturing industry is suggested as follow:

Figure 2 1: Conceptual framework of the study

H1 (+)

H2 (+)

H3 (+)

H4 (+)

Accordingly, four hypotheses are suggested, including

Hypothesis 1: Empowerment meaning is positively related to job satisfaction Hypothesis 2: Empowerment competence is positively related to job satisfaction

Hypothesis 3: Empowerment self-determination is positively related to job satisfaction

Hypothesis 4: Empowerment impact is positively related to job satisfaction

CHAPTER 3: RESEARCH METHODOLOGY

This chapter describes the detailed research methodology applied for the conduction of this study The chapter examines from the objectives of the study, the techniques used to conduct the research, as well as the design of the questions, sample, the data collection procedure and the data analysis method Moreover, justification of each choice of method made regarding the mentioned objectives are included, in order for the research design to be supported In the following sections, this research describes our research method containing pilot study and main survey

to approach to a better understanding of four dimensions of psychological empowerment affecting on job satisfaction

3.1 Research process

The thesis investigates the relationship between the four dimensions of psychological empowerment and the job satisfaction of employees in Vietnam and in particular how the differences on the effect of psychological empowerment on the job satisfaction between the service industry and manufacture industry in Vietnam are To achieve this objective, the thesis process covers several stages including literature review, research design, pilot test, main survey and data analysis which are illustrated in the below process After formulating research problem, and basing on the literature review on this theme, identifies the models after developing of hypothesis and research question Then we have research design by indicating questionnaire design and measurement scales After that the pilot test is conducted Finally the quantitative research in the main survey to collect data for testing the model

Figure 3.1: Research process

3.2 Research design

3.2.1 Questionnaire design

The questionnaire is divided into seven parts: personal information, empowerment meaning, empowerment competence, empowerment self- determination, empowerment impact, employee satisfaction and productivity The 5-point Likert scales, which are rating scales widely used for asking respondents’

Formulating Research problem

Literature Review

Questionnaire design Measurement scale Research design

Pilot test Main survey Development of hypothesis, Research questions

Descriptive Statistics Reliability analysis Exploratory Factor Analysis Correlation analysis Testing of Hypotheses (Multiple Linear

Regression Analysis

Data analysis

Conclusions & Implications

attitudes, are utilized to ask the employee to evaluate the degrees of their agreement with the impacts of four dimensions of employee empowerment on their satisfaction

as well as productivities The 5 points in the scale are respectively from 1 to 5 scoring: strongly disagree, disagree, neutral, agree, and strongly agree The questionnaire is initially prepared in English and then translated into Vietnamese by

an academic fluent in both languages This procedure is undertaken because English

is not well understood by all employees in Vietnam Translation is undertaken to ensure the respondents can understand the meanings

No Construct Coding of

EM1 The work I do is very important to me

me personally

Empowerment competence

The competence items were adapted from Jones's (1986) self-efficacy scale

To measure the empowerment competence, the study adapt the measurement given

by Dimitriades (2005), Cyboran (2005), Menon (1999) who suggest three questions based on the Likert - type scale from 1 = "strongly disagree" to 5 = "strongly agree" scale The questions are as follows:

Empowerment Self- determination

The self-determination items were adapted from Hackman and Oldham's (1980) autonomy scale To measure the empowerment self- determination, the study adapt the measurement given by Dimitriades (2005), Cyboran (2005), Menon (1999) who suggest three questions based on the Likert - type scale from 1 = "strongly disagree" to 5 = "strongly agree" scale The questions are as follows:

2 EC2 I am self- assured about my capabilities to

perform my work activities

job

Empowerment impact

The impact items were adapted from Ashforth's (1989) helplessness scale To measure the empowerment impact, the study adapt the measurement given by Dimitriades (2005), Cyboran (2005), Menon (1999) who suggest three questions based on the Likert - type scale from 1 = "strongly disagree" to 5 = "strongly agree" scale The questions are as follows:

No Construct Coding of

independence and freedom in how I do my job

No Construct Coding of

Variables

Item

1

Job satisfaction

JS1 I would recommend this company to a

friend if he/she were looking for a job

2 JS2 I feel personal satisfaction when I do my

- Interviewing some experts from two kinds of industries: twelve experts from service companies and eight experts in manufacturing companies to find out any mistakes in questionnaires

- Revising questionnaire: after interviewing we have to revise three questions in three variables into negative questions to avoid bias The questions were revised

ESD1 I do not have enough autonomy in

determining how I do my job

The results of the pilot test show that the reliability and the result are good, all the variables are acceptable So there is not any more change in research model More details could be seen in Appendix D

3.4 Main survey

3.4.1 Sampling

We formulate our research framework base on the review of the existing literature We design questionnaires consisting of a number of question items to collect data on relationship between dimensions of empowerment and employee satisfaction, between employee satisfaction and productivities Minimum sample size used in statistics analysis should be equal to or greater than five times of the number

of independent variables, but not less than 100 to generate reliable results: n ≥ 100 and n ≥ 5k (where k is the number of items) This research has 16 items, as a result, the minimum sample size required is: n = 5 x 16 = 80 The minimum sample size in case of multiple regressions should be: n = 50+8m (where m is the number of independent variables) Apply this research with this formula for 4 independent variables, we have the minimum sample size for multiple regression: n = 50 + 8 x 4

= 82 This research needs 82 samples at least With quantitative approach, in order to increase the reliability and validity, the initial target sample size for this research was about two hundreds of employees in two industries service and manufacturing A total of 200 questionnaire forms will be circulated to employees who are working in service companies and manufacturing companies in Ho Chi Minh City through mail survey method To control the potential for varied interpretation of question wording and the study was intended, a pilot study was undertaken to ensure maximum clarity The mail survey and online survey are the methods of choice because they are relatively inexpensive to administer; they allow for large numbers of respondents to

be surveyed in a relatively short period; respondents can take their time in answering, and privacy is easier to maintain (Mangione, 1995) There are 185 participants answered the questionnaires through email and 165 questionnaires are used to analyze

3.4.2 Data analysis method

After finishing the data collection, the process of data analysis is conducted All accepted questionnaires will be reviewed for validity and completion Reverse-scoring negatively-keyed items must be implemented before computing individuals’ total scores and before conducting data analyses We do this so that high scores on the questionnaire reflect relatively high levels of the attribute being measured by the questionnaire This study used the IBM SPSS Statistic version 20 to analyze the data Data processing procedures used in this study are summarized as followings:

Test for reliability

The Cronbach’s Alpha is the most widely used objective measure of reliability of the scale Cronbach’s Alpha is a statistical test if the correlation of the items in the scale is relative to each other Consequently, this method of analysis can remove inappropriate variables and limit junk variables in the study process and evaluate the reliability of the scale through the Cronbach’s Alpha coefficient (Hair et al., 1998) According to Pallant (2001), the scales are reliable when Cronbach’s Alpha coefficient of each scale is equal to or higher than 0.7 A low value of alpha could be due to a low number of questions, poor interrelatedness between items or heterogeneous constructs

Test for validity

Exploratory Factor Analysis (EFA) was conducted to test the number of factors extracted to explore the relationship between independent variables Factor analysis is a multivariate statistical technique which defines the underlying structure among a large number of variables (Hair et al., 1998) The two fundamental purposes

of factor analysis are to summarize the information contained in a large number of variables and condense the data into smaller number of factors (Hair et al., 1998) In the study, there were four factors that were assumed to have influence on employee’s job satisfaction Factor analysis was used to create factors for each of the four measuring scale related In addition, factor analysis assisted the researcher to

determine which factors were highly correlated to employee’s job satisfaction According to Pallant (2001), Factor analysis is appropriate for data if it satisfies the followings:

The Kaiser-Meyer-Olkin value (KMO) is 0.6 or greater

The Bartlett’s test of inadequate is statistically significant: p < 0.05

The transmission coefficient variables (factors loading) is less than 0.5 or the difference between the two factors less than 0.3 will be disqualified

Stops Eigenvalue (representing the variance explained by each factor) greater than 1 and the total variance extracted (Cumulative% Extraction Sum of Squared loadings) greater than 50%

Test for the relationship of variables

Pearson’s correlation coefficient was used to examine the relationships between two or more research variables If the value of correlation coefficient is 1.0, then there is a perfect positive correlation between two variables In contrast, if the value of correlation coefficient is -1.0, it can be concluded that there is a perfect negative correlation between two variables In addition, there is no relationship between two variables if the value of correlation coefficient is zero

Test of Hypothesis: Multiple regressions

- Test for the regression assumptions: When choosing to analyze the data using multiple regression, we must checking to make sure that the data for analyzing can actually be analyzed using multiple regression So if the data passes these assumptions that are required for multiple regressions, it can give a valid result, and

we are ready to use multiple regressions

- Show the regression models for entire group and two separate groups: Multiple regression analysis is a statistical technique that is used to analyze the relationship between several independent variables and a single dependent variable (Hair et al

1998) It was used to examine the simultaneous effects of several independent variables on a dependent variable In this study, Multiple Linear Regression method was used to test the research model and hypotheses Two separate groups hierarchical multiple regression analyses were performed to test interaction effects of independent variables and the moderator in two indutries Pallant (2001) explains the conditions to accept the result are:

The sample size is: n > 50 + 8m (where m is the number of independent variables)

We also use R-square value to express how much of the variance in the dependent variable was explained by the model

3.5 Chapter summary

This chapter illustrates the detailed research methodology that used to test the hypothesis given in the chapter 2 They are including: research process, research design, measurement of the constructs, question design and data collection procedure, data analysis methods Questionnaires were distributed to respondents through email or directly The pilot test was also mentioned in this chapter with the result of accept all the items to ensure that they could be used in the main survey All

of the methods in this chapter will be applied by data collected in the main survey and demonstrated the results in chapter 4

CHAPTER 4: EMPIRICAL RESULTS AND

DISCUSSIONS

This chapter describes empirical results and discussions based on the data collected which including: characteristics of the sample, analyzing the reliability and validity, testing the assumption of regression and testing hypotheses Data extracted from the questionnaires were statistically analyzed with the method mentioned in the previous chapter using the SPSS software Detailed analysis of the results derived from this analysis towards the objectives of the research is presented in this chapter

4.1 Preliminaries of data analysis

The main survey was conducted with the total 200 questionnaires were delivered to three service companies and three manufacturing companies in Ho chi Minh City by email There are 185 participants answered and 165 questionnaires are used to analyze

Participants in this survey vary in terms of ages, genders, education level, average years at company, organizational role and from two kinds of company: service and manufacturing In summary employees’ profile, female is 53.9% and male is 46.1% The major group of age is from 18- 25 years (52.1%), following by the group of 26 – 35 years (40.6%) Most of the employees are bachelor (69.7%), followed by the master degree (13.9%) The majority of the group is who works at the company from 3 to 5 years (32.1%), followed by 29.1 % working from 1 - 2 years Most of the employees are staff at company (61.8%), followed by professional employees who are expert in their major and in higher levels than staffs (27.3%) The other organizational role which is consisted of leaders or supervisors or any others role in organization have the minority percentage of the group (4.2%) The majority of the employees are in service (53.9%), and in manufacturing is 46.1%

Table 4 1 : Summary of employees’ profile

No Items Scale Frequency Percent

correlation lower than 0.30 would be deleted Cronbach’s Alpha coefficients of all factors in this research satisfied the requirement because they are greater than 0.7, ranging from 0.796 to 0.841

Table 4 2: Cronbach’s Alpha

Item-Total Statistics Reliability Statistics

Variable

Scale Mean if Item Deleted

Scale Variance

if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

Cronbach's Alpha

N of Items

Empowerment meaning

EM1 7.64 3.682 686 732

.816 3 EM2 7.67 3.453 707 707

EM3 7.53 3.397 619 805

Empowerment competence

EC1 8.03 2.359 621 743

.796 3 EC2 8.05 2.339 640 723

EC3 8.36 2.524 662 703

Empowerment Self- determination

ESD1 7.33 2.687 630 745

.801 3 ESD2 7.25 2.484 728 642

ESD3 7.16 2.646 586 793

Empowerment impact

EI1 6.04 3.370 676 789

.834 3 EI2 6.25 3.118 690 774

EI3 6.30 2.991 720 744

Job satisfaction

JS1 11.10 7.959 647 817

.841 4 JS2 10.44 9.175 620 823

JS3 10.60 8.229 752 767

JS4 11.40 8.339 698 789

4.3 Exploratory Factor Analysis

The conceptual framework of this study has been defined 4 factors with 12 observed variables that influence to employee satisfaction The five components satisfied KMO equivalent to 0.826, significance equivalent to 0, eigenvalues higher than 1, eigenvalues cumulative % equivalence to 74.356% The analysis presented that five components could explain 74.356% of the data variance

Table 4 3: KMO and Barlett’s test

Kaiser-Meyer-Olkin Measure of Sampling

Extraction Method: Principal Component Analysis

Table 4 5: Rotated Component Matrix

Extraction Method: Principal Component Analysis

Rotation Method: Varimax with Kaiser Normalization

Rotation converged in 6 iterations