Empirical study of job satisfaction and employee loyalty: case of commercial banks in Ho Chi Minh city

Thus, this study aims to identify key determinants of job satisfaction in commercial banks, find out the relationship between job satisfaction and employee loyalty, make a comparative an

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Phan Thi Tram Thy

EMPIRICAL STUDY OF JOB SATISFACTION AND EMPLOYEE LOYALTY:

CASE OF COMMERCIAL BANKS IN HO CHI MINH CITY

ID: 21120005

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr Cao Hao Thi

Ho Chi Minh City, 2015

DECLARATION

I hereby declare that this thesis titled “Empirical study of job satisfaction and employee loyalty: Case of commercial banks in Ho Chi Minh City” is definitely my own work and effort and it has not been submitted anywhere for any award Where other sources of information have been used in this thesis, they have seriously been cited

Signature: Phan Thi Tram Thy

Date: 28/02/2015

Secondly, I would like to express my sincere gratitude to the ISB Research Committee for their encouragement, insightful comments, and useful support to help students in researching and writing theses through proposal defense, feedback on first draft, and final defense

Thirdly, I would like to thank all the participants who took part in doing the survey in order that I could collect qualified data for my analysis I am thankful to my friends who helped

me send the questionnaires to their colleagues and friends in commercial banks to collect data

Finally, I would like to express my special thanks to my family for their great love and continuous support in both spiritually and materially to help me finish my master’s thesis

Abstract

Employees play an important role in providing services in banking industry and the quality

of services provided for customers is a critical factor of a bank’s performance Job satisfaction of employees is directly related to their commitment, performances, contribution, turnover, and customers’ satisfaction Thus, this study aims to identify key determinants of job satisfaction in commercial banks, find out the relationship between job satisfaction and employee loyalty, make a comparative analysis of job satisfaction and employee loyalty in different genders and bank sectors such as domestic and foreign banks

in Vietnam, as well as suggest some recommendations for managerial implications Both primary and secondary data were used in the study and the sample size of the study was 143 employees from 29 different banks located in Ho Chi Minh City The study found that motivation is the most contributing factor to job satisfaction Other determinants including payment and benefits, teamwork, nature of work, working conditions, and training and personal development also had significant influence on job satisfaction of employees Moreover, there was a strong positive relationship between job satisfaction and employee loyalty In addition, the results indicated that there was no difference in job satisfaction and employee loyalty between genders and bank sectors

Key words: Job satisfaction, employee loyalty, motivation, commercial banks, Ho Chi

Minh City

TABLE OF CONTENT

List of tables, figures, and abbreviations vii

CHAPTER 1: INTRODUCTION 1

1.1 Background of the study 1

1.2 Problem statement 4

1.3 Research objectives 5

1.4 Research questions 5

1.5 Research scope 6

1.6 Research structure 7

CHAPTER 2: LITERATURE REVIEW 8

2.1 Job satisfaction definition 8

2.2 Factors impact on job satisfaction 8

2.2.1 Determinants of job satisfaction 9

2.2.2 Demographic variables impact on job satisfaction 10

2.3 Studies about job satisfaction in general and in banking industry 11

2.4 Employee loyalty definition 12

2.5 Relationship between job satisfaction and employee loyalty 13

2.6 Hypotheses and research model 13

2.6.1 Participations and empowerment 13

2.6.2 Working conditions 14

2.6.3 Rewards and recognition 14

2.6.4 Teamwork 15

2.6.5 Training and personal development 15

2.6.6 Payment and benefits 16

2.6.7 Nature of work 16

2.6.8 Impact of job satisfaction on employee loyalty 17

2.6.9 Impact of gender on job satisfaction and employee loyalty 17

2.6.10 Impact of bank sector on job satisfaction and employee loyalty 18

CHAPTER 3: RESEARCH METHODOLOLY 21

3.1 Research process 21

3.2 Data collection methods 22

3.3 Data analysis methods 23

3.4 Measurement of constructs 24

CHAPTER 4: DATA ANLYSIS 28

4.1 Sample description 28

4.2 Reliability test for 9 constructs 29

4.2.1 Participations and empowerment 29

4.2.2 Working conditions 31

4.2.3 Rewards and recognition 31

4.2.4 Teamwork 31

4.2.5 Training and personal development 32

4.2.6 Payment and benefits 32

4.2.7 Nature of work 32

4.2.8 Job satisfaction 32

4.2.9 Employee loyalty 33

4.3 Exploratory factor analysis 33

4.3.1 EFA for independent constructs 33

4.3.2 EFA for dependent constructs 36

4.3.2.1 EFA for dependent construct of job satisfaction 36

4.3.2.2 EFA for dependent construct of employee loyalty 37

4.4 Linear regression 40

4.4.1 Regression model 1 40

4.4.2 Regression model 2 42

4.5 Analysis of variance (ANOVA test) 42

4.5.1 Impact of gender on job satisfaction 43

4.5.2 Impact of gender on employee loyalty 43

4.5.3 Impact of bank sector on job satisfaction 44

4.5.4 Impact of bank sector on employee loyalty 44

4.6 Discussion for data analysis results 45

CHAPTER 5: CONCLUSIONS 50

5.1 Research findings 50

5.2 Managerial implications 50

5.3 Limitation and further researches 53

REFERENCES 54

APPENDIX 66

Appendix 1 66

Appendix 2 68

Appendix 3 71

Appendix 4 74

Appendix 5 77

LIST OF TABLES

Table 2.1: Studies of factors influence job satisfaction in banking industry 15

Table 3.1: Measurement scale of constructs in the study 31

Table 4.1: Descriptive statistics of the study sample 34

Table 4.2: Cronbach’s Alpha reliability test results 34

Table 4.3: Cronbach’s Alpha reliability test results of deleted items 35

Table 4.4: KMO and Bartlett's Test for independent constructs 38

Table 4.5: Factor analysis result of determinants of job satisfaction 39

Table 4.6: Total variance explained by 6 determinants of job satisfaction 40

Table 4.7: KMO and Bartlett's test for dependent construct of job satisfaction 41

Table 4.8: Factor analysis result of dependent construct of job satisfaction 41

Table 4.9: Total variance explained by dependent construct of job satisfaction 41

Table 4.10: KMO and Bartlett's test for dependent construct of employee loyalty 42

Table 4.11: Factor analysis result of dependent construct of employee loyalty 42

Table 4.12: Total variance explained by dependent construct of employee loyalty 41

Table 4.13: Regression analysis result of model 1 44

Table 4.14: Regression analysis result of model 2 45

Table 4.15: Descriptive statistics of gender 46

Table 4.16: ANOVA analysis – Impact of gender on job satisfaction 46

Table 4.17: ANOVA analysis – Impact of gender on employee loyalty 47

Table 4.18: Descriptive statistics of bank sector 47

Table 4.19: ANOVA analysis – Impact of bank sector on job satisfaction 48

Table 4.20: ANOVA analysis – Impact of bank sector on employee loyalty 48

Table 4.21: Testing results of 11 hypotheses in the research model 48

LIST OF FIGURES Figure 2.1: Theoretical framework 23

Figure 3.1: Research process of the study 25

Figure 4.1: Revised research model 43

LIST OF ABBREVIATIONS

ANOVA: Analysis Of Variance

EFA : Exploratory Factor Analysis

KMO : Kaiser – Meyer – Olkin statistics

CHAPTER 1: INTRODUCTION

This chapter presents an overview of the study, including background of the study, problem statement, research objectives, research questions, and research scope Structures of the study is also presented in this chapter

1.1 Background of the study

Human resources play an important role in establishment and development of organizations Fletcher and Williams (1996), Al-Aameri (2000), and Fang (2001) indicate that employees satisfy with their jobs tend to have more loyalty towards the organizations, and contribute more than those who dissatisfy Thus, satisfied employees can help to increase retention and decrease turnover rate as well as save recruiting and training costs Understanding that human resource is a valuable capital of an organization, there are many studies about job satisfaction all over the world Among them, there are two famous studies from that others are based on They are study of Locke in 1976 and study of Herzberg, Mausner, and Snyderman in 1959

Locke (1976) defines job satisfaction as a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences He also points out nine dimensions of job, including nature of work, pay, promotion, recognition, benefits, working conditions, co-workers, and company and management In his causal models of job satisfaction, Locke finds strong positive relationships among these job dimensions with job satisfaction

Another famous study of job satisfaction is Herzberg’s motivator – hygiene theory in 1959 Herzberg et al (1959) classify incidents involving the work itself, achievements, promotion, recognition, and responsibility are frequently mentioned as sources of satisfaction This group of factors is labeled Motivators While incidents classified as involving supervision, interpersonal relations, working conditions, company policies, and salary are frequently mentioned as causes of job dissatisfaction This group of categories is labeled Hygienes The two-factor theory of job satisfaction parallels the theory of man’s needs based on Maslow theory, in which the Hygiene factors operate to fulfill man’s physical needs, while the Motivators serve to fulfill man’s psychological needs

Based on these studies, job satisfaction is researched in many different countries and all the researches get the results that prove the relationships among these factors and job satisfaction Lim (2008) examining the job satisfaction of library information technology workers in the United States finds that salary, a sense of belonging, job autonomy, and promotion opportunities are related to job satisfaction The conclusion drawn from the study

of Sesil (1999) in High Technology Establishments of United Kingdom is that there is a strong and positive impact on job satisfaction associated with the use of employee involvement and group incentives Another study about job satisfaction compared between Canada and India shows that employees who exhibit job satisfaction and work experience behaviors are more likely to heighten their desires to be empowered, regardless of cultural context (Gill, Sharma, Mathur, & Bhutani, 2012)

Besides American and Europe, Asia, Africa, and Middle East also have many studies about job satisfaction Koh, Ma, and Kuek (2012) studying about the relationships among job satisfaction, job performance, and job stress in the context of higher learning institutions in Malaysia find that job stress has negative impact on job satisfaction and then, job satisfaction affects job performance in a positive relationship According to Ashok and Lekh (2013), pay, promotion, work itself, supervision, and co-workers can contribute to increase the job satisfaction of managers in pharmaceutical industry in Himachal Pradesh of India Sadegh and Azadeh (2012) also indicate supervision, relationship with co-workers, nature of work, opportunities for promotion, and present pay all have important influence job satisfaction when they do an empirical study at airline industry in Iran

In Nigeria, Oyebamiji, Kareem, and Ayeni (2013) show that job satisfaction dimensions including pay, supervision, promotion, work itself, and work conditions have significant effect on job performance, which account for 33% variance of job performances The study conclude that small and medium enterprises managers should use these job satisfaction dimensions as policy instruments for retention to reduce employee turnover and enhance job performance

Studies about job satisfaction are not only popular in many countries but also diversify in different fields and research objectives Job satisfaction are researched in technology (Sesil, 1999; Lim, 2008), banking industry (Islam, Mohajan & Datta, 2012; Mansor, Noor & Hassan, 2012; Muhammad and Kamal, 2009), governments (Krzysztof & Bartomicj, 2013; Turkyilmaz, Akman, Ozkan, & Pastuszak 2011), hotel industry (Hussain, 2012; Abdullah, Musa, Zahari, Rahman, & Khalid 2011), textile industry (Ami, Shiji, & Shamira, 2012), health care (Harmon et al., 2003), pharmaceutical industry (Ashok & Lekh, 2013), and many other industries

Objectives of studies about job satisfaction vary according to authors’ purposes There are researches on determinants of job satisfaction, for instant Kumar and Singh (2011) investigate job satisfaction and its correlates, Seashore and Tabler (1975) research about job satisfaction indicators and their correlates There are many studies compare the differences

in job satisfaction between genders and bank sectors, such as Sadegh and Azadeh (2012) do

an evaluation of employees’ job satisfaction and role of gender difference at airline industry

in Iran, or comparative study about job satisfaction of public sector and private sector banks

of Devi and Suneja (2013)

Other authors research about the demographic attributes and job satisfaction, such as Santosh and Santoshi (2014) Some authors investigate the relationship between some of job dimensions and job satisfaction, for instant study about the impact of employee participation

on job satisfaction, employee commitment, and employee productivity (Komal and Tahir, 2007), impact of salary differential on managerial job satisfaction (Okpara, 2004), relationship between job satisfaction and job commitment (Luqman, Bolaji, & Abubakar, 2012), job satisfaction and job performance relationship (Timothy, Carl, Joyce, & Gregory, 2001), work values and job satisfaction (Ju, Mohd, Datin, & Kong, 2006), etc

In banking industry, low level of job satisfaction makes difficulties in increasing service quality, including long working hours, workload pressure, unfairness in promotion and salary, and uncomfortable working environment, etc Job satisfaction directly relates to employees’ performance, absenteeism, commitment, turnover, and citizenship behaviors

that has a direct influence on the bank's performance (Koh and Boo, 2001) Moreover, empirical study shows that job satisfaction of employee has a direct influence on customers' satisfaction (Yee, Yeung, & Cheng, 2008) Therefore, studying job satisfaction plays an important role in improving employee performance, increasing the bank performance, and customer satisfaction In Vietnam, there are some studies about job satisfaction of employees in banking industry, for instant Nguyen (2012) studies about job satisfaction of Eximbank in Da Nang province, Phan (2011) analyzes factors influence job satisfaction of commercial banks in Thua-Thien Hue province, and Mai and Bui (2013) identify factor influencing employee loyalty directly and indirectly through job satisfaction in banking sector in Ho Chi Minh City

Based on those researches, this study focuses on investigating determinants of job satisfaction in commercial banks in Ho Chi Minh City in Vietnam to find out the impact of these factors on job satisfaction In addition, relationship between job satisfaction and employee loyalty as well as the difference in job satisfaction and employee loyalty between

genders and bank sectors are also investigated in this study

1.2 Problem statement

In the period of the economic crisis from 2008 to 2014, there have been many internal management problems in banking industry in Vietnam One of these problems is a lot of change in human resources of commercial banks According to Minh (2014), many commercial banks have fired hundreds of employees to cut cost in recent years, for instant, Maritime Bank fired more than 1,300 employees and Asia Commercial Bank reduced 1,100 employees during 2013, Saigon – Hanoi Bank reduced 660 employees within the first 6 months of 2014 This reduction leads to a problem that remained employees have more workload and become more stressful Moreover, high and middle level managers are still important to the development of the banks, especially in this crisis period (Quoc, 2013) Therefore, skillful employees and managers are valuable assets to the banks In addition, job responsibilities in commercial banks in Vietnam do not have a lot of difference, thus employees can easily move from one bank to another one that have more attractive benefits

That is the reason why banks need to have strategies to remain their brilliant employees by increasing their job satisfaction and their loyalty towards organizations

However, there are few studies about job satisfaction in banking industry in Vietnam at this time, including Nguyen (2012), Phan (2011), and Mai and Bui (2013) In Ho Chi Minh City, there is only study of Mai and Bui (2013) finding out determinants of job satisfaction, including supervisor support, fringe benefits, teamwork, working environment, and training Thus, besides those determinants, this study aims to find out more factors affect job satisfaction in commercial banks in Ho Chi Minh City to contribute to the understanding of employee demands and requirements in order to increase management efficiency, increase employee loyalty, and achieve a higher customer satisfaction

1.3 Research objectives

The study aims to identify factors influence job satisfaction of employees working for

commercial banks in Ho Chi Minh City as well as the level impact of these factors on job satisfaction In addition, the study identifies the impact of job satisfaction on employee loyalty and finds out if there is difference in job satisfaction and employee loyalty between genders and bank sectors

- What is the influence of job satisfaction on employee loyalty in commercial banks in

Ho Chi Minh City?

- Is there any difference in job satisfaction and employee loyalty between genders and bank sectors?

1.5 Research scope

The limitation of location in this study is in Ho Chi Minh City that is the most populous city and the second largest one in Vietnam This city is also center of economics, culture, and education of the country In the first 6 months of 2014, Ho Chi Minh City contributes 22.71% to GDP of the whole country in which services accounts for 59.38% of GDP of the city (Statistical Office in Ho Chi Minh City, 2014)

There are 378 branches of 61 banks operating in Ho Chi Minh City including 4 bank sectors classified based on the bank’s ownership structures at the end of 2013 (Thuy, 2013) The first bank sector is 3 banks of Vietnamese government, including Vietnam Bank for Social Policies, Vietnam Development Bank, and State Bank of Vietnam The second bank sector

is 13 foreign commercial banks that have 100% of capital from foreign countries, including Australia And Newzealand Bank, Deutsche Bank, Citibank, HSBC, Standard Chartered Bank, Shinhan Bank, Hong Leong Bank, Mizuho, Credit Agricole, Tokyo-Mitsubishi, Sumitomo Mitsui Bank, Commonwealth Bank, and Bank of Investment and Development Cambodia The third bank sector is 5 joint-venture commercial banks, including Indovina Bank, Vietnam - Russia Bank, VID Public Bank, Vinasiam Bank, and Lao – Viet Bank The rest are 40 domestic commercial banks, including Sacombank, Asia Commercial Bank, Techcombank, Eximbank, etc The Vietnamese government banks account for nearly 5% of banking industry in Ho Chi Minh City, while commercial banks account for more than 95%; thus this study focus on commercial banks in Ho Chi Minh City for data collection

Therefore, the limitation of location in this study is employees working for commercial banks in Ho Chi Minh City, such as Vietcombank, Vietinbank, Eximbank, Agribank, Military Bank, Asia Commercial Bank (ACB), Western Bank, Sacombank, HSBC, ANZ, Standard Chartered, etc

The data will be collected through questionnaires in September 2014 with the respondents are banking employees and the research objects are job satisfaction and employee loyalty

1.6 Research structure

This study includes 5 chapters Chapter 1, introduction, presents the necessity of the study including background of the study, problem statement, research objectives as well as the research scope and an overview of the study structure Chapter 2, literature review, presents previous studies about job satisfaction and employee loyalty It includes studies in many industries in different countries and focus on studies in banking industry Based on the literature review, hypotheses and research model will be suggested for this study Chapter 3, research methodology, includes process of the study, data collection methods, data analysis methods, and measurement of constructs in the study Chapter 4, data analysis, shows and discusses research results, including the results of descriptive statistics, reliability tests for measurement scales, exploratory factor analysis of variables, regression of independents and dependent variables, and analysis of variances for job satisfaction and employee loyalty based on gender and bank sector Chapter 5, conclusions, summaries findings of the study and recommends some managerial implications The limitation of this study and suggestions

for further research in the future will be discussed in this chapter

CHAPTER 2: LITERATURE REVIEW

This chapter presents the literature review studies about job satisfaction in the world including definitions, determinants of job satisfaction, and statistics of research papers about this field Based on the result of literature review, hypotheses and research model are built

to test the relationships among determinants and job satisfaction as well as the relationship between job satisfaction and employee loyalty in commercial banks in Ho Chi Minh City

2.1 Job satisfaction definition

There are plenty of researches investigating on job satisfaction, such as Kuo and Chen (2004), Ellickson (2002), Groot and Brink (1999), and Rogers, Clow, and Kash (1994) The definition of job satisfaction is frequently based on Maslow's need hierarchy theory, Herzberg's motivator-hygiene theory, Vroom’s expectancy theory, and Adam's fairness theory

According to Locke (1976), job satisfaction is a pleasure or positive emotional state resulting from the perception by the individual of his or her job as implementing or giving the opportunity to realize significant values available in the work, if these values are consistent with his or her needs

Robbins (2003) defines job satisfaction as an individual's general attitude towards his or her job Price (1997) defines job satisfaction as the degree to which employees have a positive affective orientation towards employment by the organization In general, job satisfaction is the degree to which people enjoy in doing their job

2.2 Factors impact on job satisfaction

There are many factors impact on job satisfaction of employees classified into 2 groups The first group is determinants of job satisfaction, which are the causes of job satisfaction, include employee participation, hygiene factors, fair and empathic management, working environment, job characteristics, and job promotion The second group is demographic variables that have relationship with job satisfaction, including gender, marital status, education, income, and age

2.2.1 Determinants of job satisfaction

Employee participation: Wagner (1994) and Linda (1998) indicate that employee

participation has a positive impact on their performance The more employees participate and involve in decision-making process, the higher commitment they have towards their organization Vander, Blonk, Schene, & Van (2001) shows that interdependence in-group task could increase degree of job satisfaction because it increases the feeling of belongingness and coordination among employees

Hygiene factors: According to Zohir (2007), non-financial benefits such as canteen

facilities, transport facilities, and other company policies have impact on employees’ quality

of life, thus hygiene factors can increase employees’ satisfaction and their performance Moreover, Rahman (2005) and Yussuf (2008) identify technological innovation in working can bring higher level of service quality as well as volume productions

Fair and empathic management: Locke (1976) indicates that equal reward and

recognition have important effect on job satisfaction In addition, Foel, Driskell, Mullen, and Salas (2000) prove that employees experience democratic leadership tend to be more satisfied than those who experience autocratic leadership; thus, style leadership can influence job satisfaction

Working environment: According to Locke (1976) and Bajpai and Srivastava (2004),

good working environment with friendly and coordinative colleagues can increase job satisfaction Dunham-Taylor (2000) also argues that organization investment in employees such as motivating to learn and regular training can result in higher satisfaction of employees

Job characteristics: Locke (1976) indicates that work of itself including intrinsic interest,

variety, opportunity for learning, difficulty, amount, chances for success, control over pace and methods, etc Employees tend to be more satisfied with jobs can provide them opportunities to master their skills and competences with a variety of tasks, freedom, and feedback They seem to feel boring with jobs that do not have a lot of challenge or feel failed with too much challenged jobs

Job promotion: Fair promotion policies in the organization become the foundation of

growth Kalleberg and Mastekaasa (2001) find that promotion increase employees perception of their job quality as well as their satisfaction and commitment Witt and Nye (1992) also indicate the similar study result

2.2.2 Demographic variables impact on job satisfaction

Gender: There are many arguments in studying relationship between gender and job

satisfaction Clark (1997), Sloane and Williams (1996), and Ward and Sloane (1998) claim that women tend to be more satisfied at work than men; while other researchers such as Forgionne and Peeters (1982), Shapiro and Stem (1975) find that men to be more satisfied than women

Marital status: There are some arguments in studying the relationship between marital

status and job satisfaction Fetsch and Kennington (1997) find that divorced and married employees tend to be more satisfied with their jobs than single employees are, while Scott, Swortzel, and Taylor (2005) find no relationship between marital status and job satisfaction

Education: Churchill, Ford, and Walker (1979) indicate that level of education has a

positive impact on job satisfaction because an individual expectation increases when level

of education increases Bilgic (1998) also finds that employees with higher level of education pay more attention to productivity and have fewer negative feeling with their jobs than others have In addition, Bajpai and Srivastava (2004) indicate that if employees feel their qualification cannot match the jobs, they would be dissatisfied Al-Ajmi (2001), Falcone (1991), and Okpara (1996) also find the positive relationship between education level and job satisfaction

Income: According to Bilgic (1998), Sokoya (2000), Sweeney, McFrarin, and Inderrieden

(1990), Howard and Frink (1996), there is a significant difference in job satisfaction levels

of employees based on their income Employees with low income tend to report lower level

of job satisfaction than others do Highly paid employees may still be dissatisfied if they do not like the nature of their jobs (Luddy, 2005)

Age: Many research papers show a positive relationship between job satisfaction and age,

including Rhodes (1983), Lee and Wilbur (1985), Weaver (1978); while others find a negative or insignificant correlation between age and job satisfaction (Herzberg, Mausner, Peterson, & Capwell, 1957; Singh and Singh, 1980)

2.3 Studies about job satisfaction in general and in banking industry

There are many studies about job satisfaction of employees in different countries in the world confirm the literature review These studies are shown in Appendix 1 Job satisfaction

is not only studied in many different countries but also in many different industries, such as engineering, public services, and hotel industry, etc There are many studies investigating determinants of job satisfaction in banking industry as well Table 2.1 presents the summary

of these studies

Table 2.1: Studies of factors influence job satisfaction in banking industry

Title of study Determinants of job satisfaction in

banking industry Authors (Year)

Factors influencing job

satisfaction of banking sector

employees in Chennai, India

Pay and promotion, organization aspects, supervisor behavior, job and working condition, and coworker behaviors

Sowmya and Panchanatham (2011)

Job satisfaction among bank

- Job relating factors: job security, fair job

design, challenging work, status, authority and responsibility, autonomy, personal growth, balance between life and work, opportunities to use skills, quality of supervision

- Benefits: Salary, medical facilities, training and development, housing and others

- Relationship: Relationship with supervisor, teamwork, relationship with coworkers

- Working environment: Working conditions, safety and security, culture of the bank, rules and regulations, availability

Mohammed (2006)

of resources, working hours, and working conditions

- Management behaviors: Fairness in promotions, fairness in performance evaluation, timely feedback on performance, recognition of performance, commitment to professional development, concerns towards employees' well-being, freedom to express opinions,

communication

Demographic attributes and

job satisfaction in banks in

India

Participate environment, hygiene factors, fair and empathic management, service quality, accessibility, age, and education

Santosh and Santoshi (2014)

A study on job satisfaction

and morale of commercial

- Factors controllable by management:

security, pay, opportunity for advancement/promotional opportunity, working conditions, supervision

Islam et al (2012)

Analysis of the factors

influencing job satisfaction of

the commercial banks’ staff

in ThuaThien-Hue province

Salary, bonus policies, incentive mechanisms, work pressure, leadership, training, promotion, work behavior, and relationship

Phan (2011)

Study of job satisfaction of

staff in Eximbank – Da Nang

branch

Compensation, leadership, training, promotion, work itself, co-workers, and working conditions

Nguyen (2012)

2.4 Employee loyalty definition

According to Allen and Grisaffe (2001), loyalty is a psychological state and it characterizes the relationship of an employee with the organization they work for and that has implications for their decision to remain with the organization According to Becker and Billings (1993), loyalty could be defined as a strong desire to maintain a member of an organization; a willingness to slug on high levels of efforts for the sake of the organization; and a definite belief in and admissibility of the values and goals of the organization

2.5 Relationship between job satisfaction and employee loyalty

There are many studies about the relationship between job satisfaction and employee loyalty

in different industries and countries Turkyilmaz, Akman, Ozkan, and Pastuszak (2011) indicate that there is a strong positive impact of job satisfaction on employee loyalty in public sectors in Turkey, in which job satisfaction can explain almost 50% variance of employee loyalty Abdullah et al (2009) investigating the linkage of job satisfaction and employee loyalty in hotel industry in Malaysia find out that employee loyalty is a result of job satisfaction that stems from determinants of satisfaction, such as recognition and rewards, working conditions, teamwork and cooperation, and relationship with supervisors These four determinants of job satisfaction correlate with all three aspect of employee loyalty in this study, namely, employment tenure, planning career with company, and recommending employment Hussain (2012) also finds out a linkage of job satisfaction and employee loyalty in hotel industries of Pakistan through the strong correlation between employee loyalty variables with variables of job satisfaction, including relation with boss, performance appraisal, situation and place of work, group work, and coordination In banking industry in Vietnam, Mai and Bui (2013) indicate that the higher levels of job satisfaction, supervisor support, fringe benefits, teamwork, working environment, and training are positively associated with the higher level of employee loyalty

2.6 Hypotheses and research model

Based on the literature review, there are many factors influence on job satisfaction In this study, providing factors of job satisfaction are determined based on characteristics of the commercial banks in Ho Chi Minh City surveyed in this study and the literature review They are participation and empowerment, working conditions, reward and recognition, teamwork, payment and benefits, nature of work, and training and personal development

2.6.1 Participation and empowerment

Participation consists of involvement of employees in management and decision making related to strategies, goals, and policies of the companies Chao et al (1994) indicate that

employees' understanding of goals, values, and politics of their companies are positively and

significantly related to job satisfaction

Empowerment involves creating values for employees to do their job independently without constant intervention of management to develop individual and organizational performance and help employees achieve their goals According to Snipes, Oswald, Tourc, and Armenakis (2005), employees' feeling of empowerment has a positive impact on job satisfaction

Based on the influence of participation and empowerment on job satisfaction, Hypothesis 1 (H1) is proposed as following

H1: There is a positive relationship between participation and empowerment and job

satisfaction

2.6.2 Working conditions

According to Locke (1976), physical working condition consists of comfortable workplace, temperature, humidity, ventilation, lighting, and noise The moderate degrees of these features are preferred to extreme degrees since too little light or too much heat can cause physical discomfort and reduce employee’s ability to work Barnowe, Mangione, and Quinn (1972) also find that most employees value a location close to home, new buildings, cleanliness, and adequate tools and equipment Job satisfaction increases when the company provides more physically comfortable working conditions According to De Troyer (2000), low job satisfaction levels can be mainly imputed to the physical working conditions Based

on the relationship between working conditions and job satisfaction, Hypothesis 2 (H2) is proposed as following

H2: There is a positive relationship between working conditions and job satisfaction

2.6.3 Rewards and recognition

Maurer (2001) suggests that rewards and recognition should be linked to organizational success as a result of employee job satisfaction and they are frequently considered as one of

the key factors influencing job satisfaction The lack of proper reward and recognition decreases job satisfaction of employees

Locke (1976) also finds that recognition is one of the most mentioned factors causing job satisfaction and dissatisfaction, especially among blue-collar workers Moreover, recognition provides feedback concerning the competences of employee performances in order that they can correct past errors and set future goals for performance to become more efficacious Promotion considered as a type of rewards and recognition also affect job satisfaction because it satisfies the desire for psychological growth, justice, higher earnings, and social status as indicated in Locke (1976) Based on the impact of rewards and recognition on job satisfaction, Hypothesis 3 (H3) is proposed

H3: There is a positive relationship between rewards and recognition and job satisfaction 2.6.4 Teamwork

Effective teamwork can motivate employees and improve employee performance and efficacy This increases motivation and self-efficacy through teamwork can be a source of employee autonomy, significance, bonding with team members and satisfaction (Griffin, Patterson, and West, 2011) Volkwein, Malik, and Napierski (1998) also find that teamwork has a positive relationship with job satisfaction and work stress caused by interpersonal relationships is negatively associated with job satisfaction According to research result of Volkwein and Zhou (2003), teamwork and interpersonal relationships are more influential

self-on job satisfactiself-on than organizatiself-onal, envirself-onmental, and persself-onal characteristics Based

on the relationship between teamwork and job satisfaction, Hypothesis 4 (H4) is proposed

as following

H4: There is a positive relationship between teamwork and job satisfaction

2.6.5 Training and personal development

Employee training provides opportunities to employees widen their knowledge and abilities for more efficient teamwork and achieve individual development (Jun, Cai, & Shin, 2006) When workers receive self-development training, the level of their job satisfaction is higher

than those without training (Saks, 1996) In addition, Martensen and Gronholdt (2001) find out that the development of individual competencies through various training programs has

a positive influence on job satisfaction When employees attend to training programs, they gain self-confidence of making their jobs, they perceive career development opportunities and they think that their companies make investment in them (Jun et al., 2006) As result of this positive situations, job satisfaction increases Based on the impact of training and personal development on job satisfaction, Hypothesis 5 (H5) is proposed as following

H5: There is a positive relationship between training and personal development and job

satisfaction

2.6.6 Payment and benefits

According to Locke (1976), payment includes amount, fairness or equity, method of payment, etc., whereas pension, medical, annual leave, paid vacations, etc are included in benefits Lai (2011) argues that an efficient compensation system result in organizational growth and expansion and exhibit a positive relationship between job satisfaction and job-based wages, skill-based pay, and performance-based pay The study concludes that the intrinsic factors of motivation, including recognition, work, career opportunities, professional growth, responsibility, good feeling about the organization that has a significant correlation with job satisfaction Based on the influence of payment and benefits

on job satisfaction, Hypothesis 6 (H6) is proposed as following

H6: There is a positive relationship between payment and benefits and job satisfaction

2.6.7 Nature of work

According to Locke (1976), nature of work includes new learning, creativity, autonomy, coping with difficulties, and being responsible for decisions all involve the use of employee’s conceptual faculty that is called mental challenge In the absence of an adequate mental challenge, employee experiences boredom that is the result of unused mental capacity If the challenge of the work is sufficiently great and is accepted by the employee,

he or she should become both interested and involved in the job (Ford, 1969; Patchen, 1970) Herzberge et al (1959) and Strong (1943) also indicate that an important

precondition of work satisfaction is that the individual finds the work itself personally interesting and meaningful

In addition, Hansia (2009) concludes that the majority of people or employees agree that personality type suits the work they do, and have the opportunity to do what they do best and they are optimistic about their personal and professional life Hansia (2009) demonstrates that the procedures for recruitment and selection are an important predictor of job satisfaction of employees, and fair policy of recruitment and selection leads to job satisfaction at work

Based on the relationship between nature of work and job satisfaction, Hypothesis 7 (H7) is proposed as following

H7: There is a positive relationship between nature of work and job satisfaction

2.6.8 Impact of job satisfaction on employee loyalty

Empirical evidences suggest that employee job satisfaction has a positive impact on employee loyalty, such as Fletcher and Williams (1996), Al-Aameri (2000), and Fang (2001) In contradiction, low job satisfaction could cause employees to recede from their jobs or change their current jobs and careers Soler (1998) indicates that low job satisfaction leads to low loyalty to organization, low employee morale, and increases job turnover Based on the relationship between job satisfaction and employee loyalty, Hypothesis 8 (H8)

is proposed as following

H8: There is a positive relationship between job satisfaction and employee loyalty

2.6.9 Impact of gender on job satisfaction and employee loyalty

As one of the most important demographic variables, the relationship between gender and job satisfaction is tested in many studies; however, the results are inconsistent Many studies find that there is a significant relationship between gender and job satisfaction, in which Sloan and Williams (1996), Clark (1997), and Kim (2005) indicate that women are more satisfied with their jobs than men; while Sharpio and Stern (1975) and Weaver (1974) find that men are more satisfied with their job than women Conversely, other studies show that

there is no significant relationship between genders of employees and their job satisfaction, such as Hossain (2014), Kuo and Chen (2004), and Oshagbemi (2000)

Due to the contradictory in research results of relationships between genders and job satisfaction, Hypothesis 9a (H9a) is proposed as following

H9a: There is difference in job satisfaction between genders

Based on the strong positive relationship between job satisfaction and employee loyalty as predicted in Hypothesis 8, this study examines the impact of gender on employee loyalty as presented in Hypothesis 9b (H9b)

H9b: There is difference in employee loyalty between genders

2.6.10 Impact of bank sector on job satisfaction and employee loyalty

There are similar contradiction in research results about relationship between bank sectors and job satisfaction Sahgal (2012) finds that there is not much difference in the level of job satisfaction between public banks and private banks; however, regarding some factors like job security, salary, and benefits given to employees, the job satisfaction level differs in both bank sectors Islam and Saha (2001) indicate that private bank officers have higher levels of job satisfaction than those from public sector as they enjoy better facilities and supportive work environment Devi and Sunja (2013) also find out significant difference exists between employees of public and private banks regarding various aspects of job satisfaction According to Mohammed (2006), public banks lead in terms of job security, autonomy, balance between work and life, authority and responsibility, whereas foreign banks lead in terms of salary, status, and timely feedback

Due to the contradictory in research results of relationships between bank sectors and job satisfaction, Hypothesis 10a (H10a) is proposed as following

H10a: There is difference in job satisfaction between bank sectors

Based on the strong positive relationship between job satisfaction and employee loyalty as predicted in Hypothesis 8, this study examines the impact of bank sector on employee loyalty as presented in Hypothesis 10b (H10b)

H10b: There is difference in employee loyalty between bank sectors

According to the 12 hypotheses, the research model used in this study is presented in Figure 2.1

Figure 2.1: Theoretical framework

In summary, Chapter 2 provides the literature review of studies about job satisfaction, including job satisfaction definition, determinants of job satisfaction and their impacts, and employee loyalty definition This chapter also statistics studies about job satisfaction in banking industry in many different countries and proposes 12 hypotheses in the theoretical framework It is predicted that participation and empowerment, rewards and recognition, working conditions, teamwork, training and personal development, payment and benefits,

nature of work have positive relationships with job satisfaction A positive relationship between job satisfaction and employee loyalty and there is difference in job satisfaction and employee loyalty between genders as well as bank sectors are proposed in the hypotheses

CHAPTER 3: RESEARCH METHODOLOLY

This chapter provides an explanation of research process taken in this study, data collection methods, and data analysis methods Measurement scale of constructs are also presented in this chapter

3.1 Research process

The research process of this study included 3 stages presented in Figure 3.1 The first stage was generation of items, the second stage was pilot survey, and the third stage was survey and data analysis

Figure 3.1: Research process of the study

In the first stage, background of the study was presented including importance of job satisfaction in organizations, studies about job satisfaction in many countries in different fields with various research purposes From the background of the study, the research problem was identified based on the practical situations of Vietnamese economy and the limitation of previous studies about job satisfaction Based on the research problem, research objectives and research questions were established to identify determinants influence job satisfaction, identify relationship between job satisfaction and employee loyalty, and find out if there was any difference in job satisfaction and employee loyalty due

to gender and bank sector The scope of this study was limited in commercial banks in Ho

Chi Minh City and the data was collected in September 2014 with respondents were banking employees Then the literature review of studies in job satisfaction was presented followed by 12 hypotheses and research model proposed in the next step At the end of the first stage, a draft questionnaire was formed based on the measurement scale of constructs resulted from the literature review

In the second stage, 2 pilot surveys were used to test the qualification of the draft questionnaire before doing official survey The first pilot survey included 10 respondents to test the meaning, spelling, and grammar errors of the draft questionnaire After that, the second pilot survey with 54 respondents was used to test the reliability and validity of the constructs measured in the study Based on the good results of reliability and validity test of the second pilot survey, an official questionnaire was proposed to be sent to employees working for commercial banks in Ho Chi Minh City to collect data

In the third stage, official survey was conducted with 143 respondents from 29 commercial banks in Ho Chi Minh City with simple random sampling method Then Cronbach’s Alpha value was used to test the reliability of measurement scale of 9 constructs in the study Next, exploratory factor analysis (EFA) was used to test the validity of the data followed by multiple linear regression analysis of relationship between job satisfaction and its determinants and simple linear regression analysis of relationship between job satisfaction and employee loyalty Analysis of variance to test the difference in job satisfaction and employee loyalty between genders and bank sectors was also included in this stage Based

on the data analysis results, conclusions and recommendations were presented at the end of this stage

3.2 Data collection methods

The instrument used for data collection was questionnaire on 5-point Likert Scale from strongly disagree to strongly agree, where point 1 indicated “strongly disagree”, point 2 indicated “disagree”, point 3 indicated “neutral”, point 4 indicated “agree”, and point 5 indicated “strongly agree” The questionnaire included 35 questions in total, in which 28

questions were used to measure 28 observable variables, and 7 questions were used to collect demographic information

According to Hair et al (2006), a good sample contains number of observations based on

the ratio between observations and measured item is 5:1 in order to use exploratory factor analysis (EFA) That means 1 measured item needs minimum of 5 observations This study had 28 items to measure 9 constructs; thus, the minimum number of observations was 140 The official survey collected 143 responses that was acceptable for using exploratory factor analysis

The first pilot survey including 10 respondents was used to check the meaning, spelling, and grammar errors of the questionnaire The second pilot survey including 54 respondents was used to test reliability and validity of the measurement scales before starting official survey Based on the good results of the second pilot survey, official questionnaires were sent to employees of 29 commercial banks among 58 ones in Ho Chi Minh City There were 07 foreign banks, including ANZ, Citibank, HSBC, Indovina Bank, Shinhan Bank, Standard Chartered Bank, and VRB There were 22 domestic banks, including ACB, Agribank, BIDV, Eximbank, HD Bank, Maritime Bank, MB, MHB, OCB, Ocean Bank, Sacombank, SCB, Techcombank, Tien Phong, VIB, Viet Capital Bank, VietBank, Vietcombank, Vietinbank, and VPBank Finally, the official survey collected 143 questionnaires that were personally completed and 100% of them were qualified for data analysis

3.3 Data analysis methods

SPSS software was used for analyzing data with many techniques, including descriptive statistics, reliability test, exploratory factor analysis, linear regression, and analysis of variance (ANOVA)

To analyze the data, this study used both qualitative and quantitative methods Qualitative method included establishing draft measurement scales, modifying variables and components to obtain official scales In the next step, quantitative method was used, including reliability test with Cronbach’s Alpha, exploratory factor analysis (EFA), and linear regression to define determinants of job satisfaction In addition, the study also used

analysis of variance (ANOVA) to test the difference in job satisfaction and employee loyalty between genders and bank sectors

In the section of quantitative analysis, the study used the value of Cronbach’s Alpha coefficient to test the reliability of the measurement scale of 9 constructs in the theoretical framework, including participation and empowerment, working conditions, rewards and recognition, teamwork, training and personal development, payment and benefits, nature of work, job satisfaction, and employee loyalty Then exploratory factor analysis (EFA) was used to find out the number of factors among 28 observable variables

Next, based on the results of EFA, the study used two models of regression analysis to find out the relationships between dependent variables and independent variables The first model of regression analysis was multiple linear regression in which the independent variables were participation and empowerment, working conditions, rewards and recognition, teamwork, training and personal development, payment and benefits, nature of work, and the dependent variable was job satisfaction The second model of regression analysis was simple linear regression in which independent variable was job satisfaction and dependent variable was employee loyalty

3.4 Measurement scale of constructs

The theoretical framework of the study was based on the study of Turkyilmaz et al (2011) about job satisfaction and employee loyalty of public sector employees in Turkey The measurement scale of constructs in this study is clear and have Cronbach’s Alpha and EFA loading coefficients are from 0.7 to above Moreover, many other authors use the similar measurement scale of constructs with this study, including Devi & Suneja (2013), Phan (2011), Nguyen (2012), Mohammed (2006), Islam and Saha (2001), Sowmya & Panchanatham (2011), and Hossain (2014) This study used the measurement scale of constructs from Turkyilmaz et al (2011) but modified the measurement scale of working conditions and added two more constructs including payment and benefits, and nature of work

Turkyilmaz et al (2011) use 3 observable variables to measure participation and empowerment, including (1) participation in decisions, (2) participation in meetings, and (3) employee empowerment – initiative

To measure working conditions, Turkyilmaz et al (2011) use physical working conditions and work measurement Work measurement is the application of techniques designed to establish the time for an average employee to carry out a specific job Work measurement is appropriate to measure performance of some positions in banks, such as tellers, disbursement officers, verification officers, and international payment officers, but it is not appropriate to measure performance of sales representatives because their performances are based on sales target, not time constraint Therefore, this study clarified the term “physical working conditions” and used total time for a typical working day instead of time for a specific job Then, working condition was measured by (4) infrastructure, (5) working environment, and (6) working hours Nguyen (2012) also uses this measurement scale for working conditions and it has high level of reliability and validity

Rewards and recognition were measured by 4 observable variables They were (7) recognition, (8) rewards, (9) just and fair corporate policy, and (10) fair promotion Teamwork was measured by (11) efficient teamwork, (12) conflict resolution, and (13) sharing problems Training and personal development were measured by (14) importance of training and (15) importance of personal development

According to Locke (1976), one of foundation study of job satisfaction, determinants of job satisfaction are work, pay, promotion, recognition, working conditions, the self (individual employee), supervisors, co-workers, subordinates, and company and management Compared between Locke (1976) and Turkyilmaz et al (2011), Turkyilmaz et al (2011) are lack of two variables They are payment and work itself Therefore, payment and benefits, and nature of work were added to theoretical framework to have a whole picture of factors affecting job satisfaction This study used the measurement scale of construct from the research of Nguyen (2012) to measure payment and benefits as well as nature of work Nguyen (2012) uses the Job Descriptive Index developed by Smith et al (1969) that has high reliability and validity in both theory and practice

According to Nguyen (2012), payment includes 5 observable variables that are (i) salary is suitable with job characteristics, (ii) feel safe with current salary, (iii) salary is suitable with contribution level, (iv) appropriate subsidy, (v) bonus policy is just and fair However, among these 5 dimensions, the most three popular dimensions are (16) salary is suitable with nature of work, (17) salary policy is just and fair, (18) salary is affordable for daily life (Sowmya & Panchanatham, 2011; Devi & Suneja, 2013) Thus, this study used these 3 dimensions to measure payment due to its simplification

Nguyen (2012) uses 3 dimensions to measure benefits, including (i) benefits policy is clear and completely accomplishment, (ii) provide care to employees, and (iii) useful and attractive To simplify, Hossain (2014) shortens in one dimension is that (19) employee satisfies with benefits policy This simplification is much more appropriate with this study.Nguyen (2012) uses 5 dimensions to measure nature of work They are (i) express social status, (ii) allow to use personal abilities well, (iii) suitable to level of education and specialty, (iv) provide opportunities to improve knowledge and skills, and (v) work stress Because (i) express social status and (iv) provide opportunities to improve knowledge and skills were measured in job satisfaction, these 2 dimensions were eliminated from the measurement scale of this construct Therefore, nature of work was measured by (20) suitable to level of education and specialty, (21) allow to use personal abilities well, and (22) work stress

According to Turkyilmaz et al (2011), job satisfaction included 4 observable variables They were (23) to be content with the type of work, (24) enjoying the job, (25) learning and potential growth, and (26) feeling important Employee loyalty consisted of (27) desire to continue working for the current bank and (28) recommend the current bank to others

The measurement scale of 9 constructs is shown in the Table 3.1, including measurement scale of 7 independent constructs and 2 dependent constructs Detail of studies using these measurement scales is presented in Appendix 4

In summary, Chapter 3 provides 3 stages of the research process, including generation of items, pilot survey, and survey and data analysis Data collection methods are mentioned in

this chapter with 2 pilot surveys and 1 official survey by sending questionnaires with point Likert scale to employees working for 29 commercial banks in Ho Chi Minh City Data analysis methods include Cronbach’s Alpha reliability test, exploratory factor analysis (EFA), linear regression, and analysis of variance Measurement scale of 9 constructs are also presented in this chapter

5-Table 3.1: Measurement scale of constructs in the study

Independent constructs

1 Participation and empowerment

(1) participation in decisions (2) participation in meetings (3) employee empowerment – initiative

2 Working conditions

(4) infrastructure (5) working environment (6) work hours

3 Reward and recognition

(7) recognition (8) rewards (9) just and fair corporate policy (10) fair promotion

4 Teamwork

(11) efficient teamwork (12) conflict resolution (13) sharing problems

5 Training and personal development (14) importance of training

(15) importance of personal development

6 Payment and benefits

(16) suitable salary (17) just and fair salary policy (18) affordable salary

(19) satisfy with benefit policy

7 Nature of work

(20) suitable work (21) personal ability (22) work stress

9 Employee loyalty (27) desire to continue working for the current bank

(28) recommending the current bank to others

CHAPTER 4: DATA ANALYSIS

This chapter presents the research results of testing 12 hypotheses in the theoretical framework in Chapter 3, including descriptive statistics, reliability tests for 9 constructs, exploratory factor analysis, linear regression, and analysis of variance for job satisfaction and employee loyalty After identifying the relationships between determinants with job satisfaction and the impact of job satisfaction on employee loyalty, there are some explanations to clarify the meaning of research results

4.1 Sample description

The study collected 143 questionnaires from 29 banks among 58 banks in Ho Chi Minh City There were 07 foreign banks, including ANZ, Citibank, HSBC, Indovina Bank, Shinhan Bank, Standard Chartered Bank, and VRB There were 22 domestic banks, including ACB, Agribank, BIDV, Eximbank, HD Bank, Maritime Bank, MB, MHB, OCB, Ocean Bank, Sacombank, SCB, Techcombank, Tien Phong, VIB, Viet Capital Bank, VietBank, Vietcombank, Vietinbank, and VPBank

Among 143 respondents, 59 male accounted for 41.3% of the sample and 84 female accounted for 58.7% In addition, 82.5% of the banking employees in the survey graduated from university, 21% had master degrees and only 4% from technical schools and colleges This meant banking employees had high education to satisfy high requirements for recruitment

The work force in commercial banks of the study was young that included 86.7% of the respondents were in the age from 21 to 30 years old, 17% in the age from 31 to 40 years old, and only 2% are from 41 to 50 years old Nearly 38% respondents were working for their current banks from 1 year to less than 3 years, and 32.9% of them worked from 3 year to less than 5 year, 17.5% of them had the time of working below 1 year, and 18% of them worked from 5 years to above

Nearly 50% of the banking employees in this study had salary from 6 million VND to less than 9 million VND, whereas 25.2% of them had higher salary from 9 million VND to less than 12 million VND, and nearly 20% of them earned more than 12 million VND per

month In the survey, 84.6% of respondents were employees whereas only 15.4% of them were supervisors or managers Descriptive statistics of the sample was shown in Table 4.1

Table 4.1: Descriptive statistics of the study sample

Characteristics Description Frequency Percentage (%)

4.2 Reliability test for 9 constructs

The reliability analysis using SPSS software was done to test the reliability of the instrument used for data collection The value of Cronbach’s Alpha is good fit if it is between 0.7 and 0.8 If Cronbach’s Alpha is equal or greater than 0.6, it is acceptable

4.2.1 Participations and empowerment

Participation and empowerment was measured by 3 observable variables, including participation in decisions, participation in meetings, and employee empowerment – initiative The Cronbach’s Alpha of this measurement scale was 0.686 indicated that the scale was acceptable

If any item in this scale was deleted, Cronbach’s Alpha was lower than 0.686 Thus, these three items were reliable to measure participation and empowerment determinant Table 4.2 presented the reliability test result for this determinant

Table 4.2: Cronbach’s Alpha reliability test results

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Correlated Total Correlation

Nature of work (2 items) Cronbach’s Alpha = 0.805

Job satisfaction (4 items) Cronbach’s Alpha = 0.886

To be content with the type

of work

Learning and potential

growth

Employee loyalty (2 items) Cronbach’s Alpha = 0.790

Desire to continue working

for the current bank

Recommend the current

bank to others

4.2.2 Working conditions

Working conditions determinant was measured by 3 observable variables They were infrastructure, working environment, and working hour The Cronbach’s Alpha of this scale was 0.710

If the item “working hour” was deleted from the scale, the value of Cronbach’s Alpha increased to 0.835 which is greater than 0.710 Therefore, “working hour” was not appropriate to measure working conditions determinant and should be deleted from the scale

to increase Cronbach’s Alpha Item eliminated from the scale was shown in Table 4.3

Then working conditions determinant was measured by 2 observable variables, including infrastructure and working environment with Cronbach’s Alpha was 0.835 The result of reliability test for working conditions determinant was shown in Table 4.2

Table 4.3: Cronbach’s Alpha reliability test results of deleted items

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Correlated Total Correlation

Item-Cronbach’s Alpha

if Item Deleted Working conditions Cronbach’s Alpha = 0.710

Nature of work Cronbach’s Alpha = 0.666

4.2.3 Rewards and recognition

There were four items used to measure rewards and recognition determinant They were recognition, rewards, just and fair corporate policy, and fair promotion The value of Cronbach’s Alpha for this scale was 0.851 that was good fit to measure the concept

If one of these items was deleted from the scale, Cronbach’s Alpha decreased Thus, all of four items were reliable to measure the rewards and recognition determinant with details in Table 4.2

4.2.4 Teamwork

Efficient teamwork, conflict solution, and sharing problems were 3 items used to measure teamwork determinant This scale had Cronbach’s Alpha value was 0.748 that indicated it was reliable to measure the teamwork concept

Due to Cronbach’s Alpha value would decrease if any items in the scale was deleted; these

3 observable variables were appropriate for the measurement scale The scale used for measuring teamwork was shown in Table 4.2

4.2.5 Training and personal development

Training and personal development were measured by 2 items, including importance of training and importance of personal development The reliability statistics and item statistics showed that these items were acceptable to measure training and personal development determinant with Cronbach’s Alpha was 0.630 Reliability test for this measurement scale was presented in Table 4.2

4.2.6 Payment and benefits

There were four items used to measure payment and benefits determinant They were suitable salary, just and fair salary policy, affordable salary, and satisfy with benefit policy Cronbach’s Alpha of the measurement scale was 0.855 that was good fit to measure the concept Table 4.2 showed the result of reliability test for payment and benefits factor

4.2.7 Nature of work

This determinant was measured by 3 items They were suitable work, personal ability, and work stress The value of Cronbach’s Alpha was 0.666 that was acceptable measurement scale for nature of work

However, if work stress was deleted from the scale, Cronbach’s Alpha increased to 0.805 Thus, the study used suitable work and personal ability to measure the nature of work determinant The measurement scale of nature of work was presented in Table 4.2 The item deleted work stress was shown in Table 4.3

4.2.8 Job satisfaction

To be content with the type of work, enjoying the job, learning and potential growth, and feeling important were used to measure job satisfaction The value of Cronbach’s Alpha was 0.886 indicating that it was a good measurement scale

If learning and potential growth was deleted from the scale, Cronbach’s Alpha increased to 0.892 that is greater than 0.886 However, learning and potential growth were an important item to measure job satisfaction Therefore, the measurement scale included all of four items

as presented in Table 4.2

4.2.9 Employee loyalty

Two items used to measure employee loyalty were desire to continue working for the current bank and recommending the current bank to others The Cronbach’s Alpha was 0.790 shows that the scale was reliable The result was shown in Table 4.2

4.3 Exploratory factor analysis

The assumption of a quasi-quantitative ordinal scale allowed for the use of quantitative methods reversed for the strong scales The use of factor analysis made it possible to transform the particular mutually correlated set of variables into a new set system of variables (so-called common factors) mutually uncorrelated, but comparable to the initial system Prior to extracting constructs by exploratory factor analysis, validity of its use is tested by the significance of these relations In this purpose, Barlett’s test of sphericity and KMO (Kaiser – Meyer – Olkin) statistics are applied Barlett’s test of sphericity relates to verification of the hypotheses of no significant correlations between variables Thus, rejection of the null hypothesis proves the validity of analysis In addition, the value of KMO is greater than 0.5 shows that exploratory factor analysis is appropriate to apply for the constructs

For extraction method, the numbers of factor depend on the value of initial eigenvalue that

is at least equal or greater than 1 and all the factor can explain more than 50% of total variance In addition, the variables are accepted if their loading factor coefficients are greater than 0.5

4.3.1 EFA for independent constructs

According to the results of reliability test, all the observable variables were qualified for exploratory factor analysis for validity test to identify factors among 20 observable