Empirical study of job satisfaction and employee loyalty, case of commercial banks in ho chi minh city

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

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business -

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

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 fortheir encouragement, insightful comments, and useful support to help students inresearching and writing theses through proposal defense, feedback on first draft, and finaldefense.

Thirdly, I would like to thank all the participants who took part in doing the survey in orderthat 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 collectdata

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

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 Jobsatisfaction of employees is directly related to their commitment, performances,contribution, turnover, and customers’ satisfaction Thus, this study aims to identify keydeterminants of job satisfaction in commercial banks, find out the relationship between jobsatisfaction and employee loyalty, make a comparative analysis of job satisfaction andemployee loyalty in different genders and bank sectors such as domestic and foreign banks

in Vietnam, as well as suggest some recommendations for managerial implications Bothprimary and secondary data were used in the study and the sample size of the study was 143employees from 29 different banks located in Ho Chi Minh City The study found thatmotivation is the most contributing factor to job satisfaction Other determinants includingpayment and benefits, teamwork, nature of work, working conditions, and training andpersonal development also had significant influence on job satisfaction of employees.Moreover, there was a strong positive relationship between job satisfaction and employeeloyalty In addition, the results indicated that there was no difference in job satisfaction andemployee 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

CHAPTER 1: INTRODUCTION

This chapter presents an overview of the study, including background of the study, problemstatement, research objectives, research questions, and research scope Structures of thestudy 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 employeessatisfy with their jobs tend to have more loyalty towards the organizations, and contributemore than those who dissatisfy Thus, satisfied employees can help to increase retention anddecrease turnover rate as well as save recruiting and training costs Understanding thathuman resource is a valuable capital of an organization, there are many studies about jobsatisfaction all over the world Among them, there are two famous studies from that othersare based on They are study of Locke in 1976 and study of Herzberg, Mausner, andSnyderman in 1959

Locke (1976) defines job satisfaction as a pleasurable or positive emotional state resultingfrom the appraisal of one’s job or job experiences He also points out nine dimensions ofjob, including nature of work, pay, promotion, recognition, benefits, working conditions, co-workers, and company and management In his causal models of job satisfaction, Lockefinds 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 Thisgroup of factors is labeled Motivators While incidents classified as involving supervision,interpersonal relations, working conditions, company policies, and salary are frequentlymentioned 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 onMaslow theory, in which the Hygiene factors operate to fulfill man’s physical needs, whilethe Motivators serve to fulfill man’s psychological needs

Based on these studies, job satisfaction is researched in many different countries and all theresearches get the results that prove the relationships among these factors and jobsatisfaction Lim (2008) examining the job satisfaction of library information technologyworkers in the United States finds that salary, a sense of belonging, job autonomy, andpromotion 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 astrong and positive impact on job satisfaction associated with the use of employeeinvolvement and group incentives Another study about job satisfaction compared betweenCanada and India shows that employees who exhibit job satisfaction and work experiencebehaviors are more likely to heighten their desires to be empowered, regardless of culturalcontext (Gill, Sharma, Mathur, & Bhutani, 2012)

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

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

Studies about job satisfaction are not only popular in many countries but also diversify indifferent 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), andmany other industries.

Objectives of studies about job satisfaction vary according to authors’ purposes There areresearches on determinants of job satisfaction, for instant Kumar and Singh (2011)investigate job satisfaction and its correlates, Seashore and Tabler (1975) research about jobsatisfaction 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 jobdimensions 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 servicequality, including long working hours, workload pressure, unfairness in promotion andsalary, and uncomfortable working environment, etc Job satisfaction directly relates toemployees’ 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 animportant role in improving employee performance, increasing the bank performance, andcustomer satisfaction In Vietnam, there are some studies about job satisfaction ofemployees in banking industry, for instant Nguyen (2012) studies about job satisfaction ofEximbank in Da Nang province, Phan (2011) analyzes factors influence job satisfaction ofcommercial banks in Thua-Thien Hue province, and Mai and Bui (2013) identify factorinfluencing employee loyalty directly and indirectly through job satisfaction in bankingsector in Ho Chi Minh City.

Based on those researches, this study focuses on investigating determinants of jobsatisfaction in commercial banks in Ho Chi Minh City in Vietnam to find out the impact ofthese factors on job satisfaction In addition, relationship between job satisfaction andemployee loyalty as well as the difference in job satisfaction and employee loyalty betweengenders 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 internalmanagement problems in banking industry in Vietnam One of these problems is a lot ofchange in human resources of commercial banks According to Minh (2014), manycommercial 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 1,100employees during 2013, Saigon – Hanoi Bank reduced 660 employees within the first 6months of 2014 This reduction leads to a problem that remained employees have moreworkload and become more stressful Moreover, high and middle level managers are stillimportant 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, jobresponsibilities in commercial banks in Vietnam do not have a lot of difference, thusemployees 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 byincreasing their job satisfaction and their loyalty towards organizations.

However, there are few studies about job satisfaction in banking industry in Vietnam at thistime, 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 jobsatisfaction in commercial banks in Ho Chi Minh City to contribute to the understanding ofemployee demands and requirements in order to increase management efficiency, increaseemployee loyalty, and achieve a higher customer satisfaction

1.3 Research objectives

The study aims to identify factors influence job satisfaction of employees working forcommercial banks in Ho Chi Minh City as well as the level impact of these factors on jobsatisfaction In addition, the study identifies the impact of job satisfaction on employeeloyalty and finds out if there is difference in job satisfaction and employee loyalty betweengenders and bank sectors

- What are the impact level of these factors on job satisfaction of employees in

commercial banks in Ho Chi Minh City?

- 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 cityand the second largest one in Vietnam This city is also center of economics, culture, andeducation of the country In the first 6 months of 2014, Ho Chi Minh City contributes22.71% to GDP of the whole country in which services accounts for 59.38% of GDP of thecity (Statistical Office in Ho Chi Minh City, 2014)

There are 378 branches of 61 banks operating in Ho Chi Minh City including 4 bank sectorsclassified based on the bank’s ownership structures at the end of 2013 (Thuy, 2013) Thefirst bank sector is 3 banks of Vietnamese government, including Vietnam Bank for SocialPolicies, 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, includingAustralia And Newzealand Bank, Deutsche Bank, Citibank, HSBC, Standard CharteredBank, Shinhan Bank, Hong Leong Bank, Mizuho, Credit Agricole, Tokyo-Mitsubishi,Sumitomo Mitsui Bank, Commonwealth Bank, and Bank of Investment and DevelopmentCambodia The third bank sector is 5 joint-venture commercial banks, including IndovinaBank, Vietnam - Russia Bank, VID Public Bank, Vinasiam Bank, and Lao – Viet Bank Therest are 40 domestic commercial banks, including Sacombank, Asia Commercial Bank,Techcombank, Eximbank, etc The Vietnamese government banks account for nearly 5% ofbanking 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 commercialbanks 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 respondentsare 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 studyincluding background of the study, problem statement, research objectives as well as theresearch scope and an overview of the study structure Chapter 2, literature review, presentsprevious studies about job satisfaction and employee loyalty It includes studies in manyindustries in different countries and focus on studies in banking industry Based on theliterature review, hypotheses and research model will be suggested for this study Chapter 3,research methodology, includes process of the study, data collection methods, data analysismethods, and measurement of constructs in the study Chapter 4, data analysis, shows anddiscusses research results, including the results of descriptive statistics, reliability tests formeasurement scales, exploratory factor analysis of variables, regression of independents anddependent variables, and analysis of variances for job satisfaction and employee loyaltybased on gender and bank sector Chapter 5, conclusions, summaries findings of the studyand recommends some managerial implications The limitation of this study and suggestionsfor 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 worldincluding definitions, determinants of job satisfaction, and statistics of research papers aboutthis 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 relationshipbetween 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) Thedefinition of job satisfaction is frequently based on Maslow's need hierarchy theory,Herzberg's motivator-hygiene theory, Vroom’s expectancy theory, and Adam's fairnesstheory

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

Robbins (2003) defines job satisfaction as an individual's general attitude towards his or herjob Price (1997) defines job satisfaction as the degree to which employees have a positiveaffective orientation towards employment by the organization In general, job satisfaction isthe 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 Thefirst group is determinants of job satisfaction, which are the causes of job satisfaction,include employee participation, hygiene factors, fair and empathic management, workingenvironment, job characteristics, and job promotion The second group is demographicvariables 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 participateand involve in decision-making process, the higher commitment they have towards theirorganization Vander, Blonk, Schene, & Van (2001) shows that interdependence in-grouptask could increase degree of job satisfaction because it increases the feeling ofbelongingness 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 workingcan 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 moresatisfied than those who experience autocratic leadership; thus, style leadership caninfluence job satisfaction

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

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

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

variety, opportunity for learning, difficulty, amount, chances for success, control over paceand methods, etc Employees tend to be more satisfied with jobs can provide themopportunities to master their skills and competences with a variety of tasks, freedom, andfeedback They seem to feel boring with jobs that do not have a lot of challenge or feelfailed 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 employeesperception 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) claimthat women tend to be more satisfied at work than men; while other researchers such asForgionne and Peeters (1982), Shapiro and Stem (1975) find that men to be more satisfiedthan 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 marriedemployees 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 ofeducation pay more attention to productivity and have fewer negative feeling with their jobsthan others have In addition, Bajpai and Srivastava (2004) indicate that if employees feeltheir qualification cannot match the jobs, they would be dissatisfied Al-Ajmi (2001),Falcone (1991), and Okpara (1996) also find the positive relationship between educationlevel 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 donot 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 anegative 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 theworld 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 asengineering, public services, and hotel industry, etc There are many studies investigatingdeterminants 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 Authors (Year)

banking industry

Factors influencing job Pay and promotion, organization aspects, Sowmya and

satisfaction of banking sector supervisor behavior, job and working Panchanatham (2011) employees in Chennai, India condition, and coworker behaviors

Job satisfaction among bank Pay and job security Khalid and Irshad (2010) employees in Punjab,

Pakistan: A comparative

study

Job satisfaction in - Job relating factors: job security, fair job Mohammed (2006)

commercial banks of design, challenging work, status, authority

Bangladesh with different and responsibility, autonomy, personal

ownership structures: A growth, balance between life and work,

comparative study 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

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 Participate environment, hygiene factors, Santosh and Santoshi job satisfaction in banks in fair and empathic management, service (2014)

India quality, accessibility, age, and education.

A study on job satisfaction - Personal factors: gender, age, time on job, Islam et al (2012)

and morale of commercial religion

banks in Bangladesh - Factors inherent in the job: type of work,

skill required, occupation status, commitment to organization, size of organization, place of work

- Factors controllable by management:

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

Analysis of the factors Salary, bonus policies, incentive Phan (2011)

influencing job satisfaction of mechanisms, work pressure, leadership,

the commercial banks’ staff training, promotion, work behavior, and

in ThuaThien-Hue province relationship.

Study of job satisfaction of Compensation, leadership, training, Nguyen (2012)

staff in Eximbank – Da Nang promotion, work itself, co-workers, and

2.4 Employee loyalty definition

According to Allen and Grisaffe (2001), loyalty is a psychological state and it characterizesthe relationship of an employee with the organization they work for and that hasimplications for their decision to remain with the organization According to Becker andBillings (1993), loyalty could be defined as a strong desire to maintain a member of anorganization; 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 inpublic sectors in Turkey, in which job satisfaction can explain almost 50% variance ofemployee loyalty Abdullah et al (2009) investigating the linkage of job satisfaction andemployee loyalty in hotel industry in Malaysia find out that employee loyalty is a result ofjob satisfaction that stems from determinants of satisfaction, such as recognition andrewards, working conditions, teamwork and cooperation, and relationship with supervisors.These four determinants of job satisfaction correlate with all three aspect of employeeloyalty in this study, namely, employment tenure, planning career with company, andrecommending employment Hussain (2012) also finds out a linkage of job satisfaction andemployee loyalty in hotel industries of Pakistan through the strong correlation betweenemployee loyalty variables with variables of job satisfaction, including relation with boss,performance appraisal, situation and place of work, group work, and coordination Inbanking industry in Vietnam, Mai and Bui (2013) indicate that the higher levels of jobsatisfaction, supervisor support, fringe benefits, teamwork, working environment, andtraining 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 thisstudy, providing factors of job satisfaction are determined based on characteristics of thecommercial 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 makingrelated 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 positivelyand significantly related to job satisfaction.

Empowerment involves creating values for employees to do their job independently withoutconstant intervention of management to develop individual and organizational performanceand help employees achieve their goals According to Snipes, Oswald, Tourc, andArmenakis (2005), employees' feeling of empowerment has a positive impact on jobsatisfaction

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 thesefeatures are preferred to extreme degrees since too little light or too much heat can causephysical 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 companyprovides 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) isproposed 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 organizationalsuccess 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 recognitiondecreases job satisfaction of employees.

Locke (1976) also finds that recognition is one of the most mentioned factors causing jobsatisfaction and dissatisfaction, especially among blue-collar workers Moreover,recognition provides feedback concerning the competences of employee performances inorder that they can correct past errors and set future goals for performance to become moreefficacious Promotion considered as a type of rewards and recognition also affect jobsatisfaction 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 andrecognition 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 ofemployee autonomy, significance, bonding with team members and satisfaction (Griffin,Patterson, and West, 2011) Volkwein, Malik, and Napierski (1998) also find that teamworkhas a positive relationship with job satisfaction and work stress caused by interpersonalrelationships is negatively associated with job satisfaction According to research result ofVolkwein 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 abilitiesfor 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) findout that the development of individual competencies through various training programs has

a positive influence on job satisfaction When employees attend to training programs, theygain self-confidence of making their jobs, they perceive career development opportunitiesand they think that their companies make investment in them (Jun et al., 2006) As result ofthis positive situations, job satisfaction increases Based on the impact of training andpersonal 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 ofpayment, etc., whereas pension, medical, annual leave, paid vacations, etc are included inbenefits Lai (2011) argues that an efficient compensation system result in organizationalgrowth 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 theintrinsic factors of motivation, including recognition, work, career opportunities,professional growth, responsibility, good feeling about the organization that has asignificant 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 ofemployee’s conceptual faculty that is called mental challenge In the absence of an adequatemental challenge, employee experiences boredom that is the result of unused mentalcapacity 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 personallyinteresting and meaningful.

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

Based on the relationship between nature of work and job satisfaction, Hypothesis 7 (H7) isproposed 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 onemployee loyalty, such as Fletcher and Williams (1996), Al-Aameri (2000), and Fang(2001) In contradiction, low job satisfaction could cause employees to recede from theirjobs or change their current jobs and careers Soler (1998) indicates that low job satisfactionleads 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 andjob satisfaction is tested in many studies; however, the results are inconsistent Many studiesfind that there is a significant relationship between gender and job satisfaction, in whichSloan and Williams (1996), Clark (1997), and Kim (2005) indicate that women are moresatisfied with their jobs than men; while Sharpio and Stern (1975) and Weaver (1974) findthat 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 jobsatisfaction, 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 aspredicted in Hypothesis 8, this study examines the impact of gender on employee loyalty aspresented 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 sectorsand job satisfaction Sahgal (2012) finds that there is not much difference in the level of jobsatisfaction between public banks and private banks; however, regarding some factors likejob security, salary, and benefits given to employees, the job satisfaction level differs inboth bank sectors Islam and Saha (2001) indicate that private bank officers have higherlevels of job satisfaction than those from public sector as they enjoy better facilities andsupportive work environment Devi and Sunja (2013) also find out significant differenceexists between employees of public and private banks regarding various aspects of jobsatisfaction According to Mohammed (2006), public banks lead in terms of job security,autonomy, balance between work and life, authority and responsibility, whereas foreignbanks lead in terms of salary, status, and timely feedback

Due to the contradictory in research results of relationships between bank sectors and jobsatisfaction, 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 aspredicted in Hypothesis 8, this study examines the impact of bank sector on employeeloyalty 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 Figure2.1

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, andemployee loyalty definition This chapter also statistics studies about job satisfaction inbanking industry in many different countries and proposes 12 hypotheses in the theoreticalframework 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 relationshipbetween job satisfaction and employee loyalty and there is difference in job satisfaction andemployee 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 collectionmethods, and data analysis methods Measurement scale of constructs are also presented inthis chapter

3.1 Research process

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

Figure 3.1: Research process of the study

In the first stage, background of the study was presented including importance of jobsatisfaction in organizations, studies about job satisfaction in many countries in differentfields with various research purposes From the background of the study, the researchproblem was identified based on the practical situations of Vietnamese economy and thelimitation of previous studies about job satisfaction Based on the research problem,research objectives and research questions were established to identify determinantsinfluence job satisfaction, identify relationship between job satisfaction and employeeloyalty, 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 werebanking employees Then the literature review of studies in job satisfaction was presentedfollowed by 12 hypotheses and research model proposed in the next step At the end of thefirst stage, a draft questionnaire was formed based on the measurement scale of constructsresulted from the literature review.

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

In the third stage, official survey was conducted with 143 respondents from 29 commercialbanks in Ho Chi Minh City with simple random sampling method Then Cronbach’s Alphavalue 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 bymultiple linear regression analysis of relationship between job satisfaction and itsdeterminants and simple linear regression analysis of relationship between job satisfactionand employee loyalty Analysis of variance to test the difference in job satisfaction andemployee 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 ofthis stage

3.2 Data collection methods

The instrument used for data collection was questionnaire on 5-point Likert Scale fromstrongly disagree to strongly agree, where point 1 indicated “strongly disagree”, point 2indicated “disagree”, point 3 indicated “neutral”, point 4 indicated “agree”, and point 5indicated “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 tocollect 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 factoranalysis (EFA) That means 1 measured item needs minimum of 5 observations This studyhad 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 factoranalysis

The first pilot survey including 10 respondents was used to check the meaning, spelling, andgrammar errors of the questionnaire The second pilot survey including 54 respondents wasused 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 toemployees of 29 commercial banks among 58 ones in Ho Chi Minh City There were 07foreign banks, including ANZ, Citibank, HSBC, Indovina Bank, Shinhan Bank, StandardChartered 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 werepersonally 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 descriptivestatistics, reliability test, exploratory factor analysis, linear regression, and analysis ofvariance (ANOVA)

To analyze the data, this study used both qualitative and quantitative methods Qualitativemethod included establishing draft measurement scales, modifying variables andcomponents to obtain official scales In the next step, quantitative method was used,including reliability test with Cronbach’s Alpha, exploratory factor analysis (EFA), andlinear 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 employeeloyalty between genders and bank sectors.

In the section of quantitative analysis, the study used the value of Cronbach’s Alphacoefficient to test the reliability of the measurement scale of 9 constructs in the theoreticalframework, including participation and empowerment, working conditions, rewards andrecognition, teamwork, training and personal development, payment and benefits, nature ofwork, job satisfaction, and employee loyalty Then exploratory factor analysis (EFA) wasused 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 findout the relationships between dependent variables and independent variables The firstmodel of regression analysis was multiple linear regression in which the independentvariables were participation and empowerment, working conditions, rewards andrecognition, teamwork, training and personal development, payment and benefits, nature ofwork, and the dependent variable was job satisfaction The second model of regressionanalysis was simple linear regression in which independent variable was job satisfaction anddependent 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 Themeasurement scale of constructs in this study is clear and have Cronbach’s Alpha and EFAloading coefficients are from 0.7 to above Moreover, many other authors use the similarmeasurement 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 ofconstructs from Turkyilmaz et al (2011) but modified the measurement scale of workingconditions and added two more constructs including payment and benefits, and nature ofwork

Turkyilmaz et al (2011) use 3 observable variables to measure participation andempowerment, 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 conditionsand work measurement Work measurement is the application of techniques designed toestablish the time for an average employee to carry out a specific job Work measurement isappropriate to measure performance of some positions in banks, such as tellers,disbursement officers, verification officers, and international payment officers, but it is notappropriate to measure performance of sales representatives because their performances arebased on sales target, not time constraint Therefore, this study clarified the term “physicalworking conditions” and used total time for a typical working day instead of time for aspecific job Then, working condition was measured by (4) infrastructure, (5) workingenvironment, and (6) working hours Nguyen (2012) also uses this measurement scale forworking 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 oftraining and (15) importance of personal development

According to Locke (1976), one of foundation study of job satisfaction, determinants of jobsatisfaction are work, pay, promotion, recognition, working conditions, the self (individualemployee), supervisors, co-workers, subordinates, and company and management.Compared between Locke (1976) and Turkyilmaz et al (2011), Turkyilmaz et al (2011) arelack 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 factorsaffecting job satisfaction This study used the measurement scale of construct from theresearch 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 hashigh reliability and validity in both theory and practice

According to Nguyen (2012), payment includes 5 observable variables that are (i) salary issuitable with job characteristics, (ii) feel safe with current salary, (iii) salary is suitable withcontribution 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 suitablewith 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 3dimensions to measure payment due to its simplification.

Nguyen (2012) uses 3 dimensions to measure benefits, including (i) benefits policy is clearand completely accomplishment, (ii) provide care to employees, and (iii) useful andattractive To simplify, Hossain (2014) shortens in one dimension is that (19) employeesatisfies 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 socialstatus, (ii) allow to use personal abilities well, (iii) suitable to level of education andspecialty, (iv) provide opportunities to improve knowledge and skills, and (v) work stress.Because (i) express social status and (iv) provide opportunities to improve knowledge andskills were measured in job satisfaction, these 2 dimensions were eliminated from themeasurement 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 andpotential growth, and (26) feeling important Employee loyalty consisted of (27) desire tocontinue 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 measurementscale of 7 independent constructs and 2 dependent constructs Detail of studies using thesemeasurement scales is presented in Appendix 4

In summary, Chapter 3 provides 3 stages of the research process, including generation ofitems, 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 arealso presented in this chapter.

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

Independent constructs

(1) participation in decisions

1 Participation and empowerment (2) participation in meetings

(3) employee empowerment – initiative (4) infrastructure

2 Working conditions (5) working environment

(6) work hours (7) recognition

3 Reward and recognition (8) rewards

(9) just and fair corporate policy (10) fair promotion

(11) efficient teamwork

(13) sharing problems

5 Training and personal development (14) importance of training

(15) importance of personal development (16) suitable salary

6 Payment and benefits (17) just and fair salary policy

(18) affordable salary (19) satisfy with benefit policy (20) suitable work

(22) work stress

Dependent constructs

(23) to be content with the type of work

8 Job satisfaction (24) enjoying the job

(25) learning and growth potential (26) feeling important

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 theoreticalframework in Chapter 3, including descriptive statistics, reliability tests for 9 constructs,exploratory factor analysis, linear regression, and analysis of variance for job satisfactionand employee loyalty After identifying the relationships between determinants with jobsatisfaction and the impact of job satisfaction on employee loyalty, there are someexplanations 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 MinhCity 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 femaleaccounted for 58.7% In addition, 82.5% of the banking employees in the survey graduatedfrom university, 21% had master degrees and only 4% from technical schools and colleges.This meant banking employees had high education to satisfy high requirements forrecruitment

The work force in commercial banks of the study was young that included 86.7% of therespondents 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 theircurrent banks from 1 year to less than 3 years, and 32.9% of them worked from 3 year toless than 5 year, 17.5% of them had the time of working below 1 year, and 18% of themworked from 5 years to above

Nearly 50% of the banking employees in this study had salary from 6 million VND to lessthan 9 million VND, whereas 25.2% of them had higher salary from 9 million VND to lessthan 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 themwere supervisors or managers Descriptive statistics of the sample was shown in Table 4.1.

Table 4.1: Descriptive statistics of the study sample

Salary per month From 3 mil VND to less than 6 mil VND 14 9.8

From 6 mil VND to less than 9 mil VND 65 45.5 From 9 mil VND to less than 12 mil VND 36 25.2

4.2 Reliability test for 9 constructs

The reliability analysis using SPSS software was done to test the reliability of theinstrument used for data collection The value of Cronbach’s Alpha is good fit if it isbetween 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, includingparticipation in decisions, participation in meetings, and employee empowerment –initiative The Cronbach’s Alpha of this measurement scale was 0.686 indicated that thescale was acceptable

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

Table 4.2: Cronbach’s Alpha reliability test results

Scale Mean if Scale Variance if Correlated Item- Cronbach’s Alpha Item Deleted Item Deleted Total Correlation if Item Deleted Participation and empowerment (3 items) Cronbach’s Alpha = 0.686

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

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

of work

growth

for the current bank

.a

bank to others

4.2.2 Working conditions

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

If the item “working hour” was deleted from the scale, the value of Cronbach’s Alphaincreased to 0.835 which is greater than 0.710 Therefore, “working hour” was notappropriate 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, includinginfrastructure and working environment with Cronbach’s Alpha was 0.835 The result ofreliability 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 Scale Variance if Correlated Item- Cronbach’s Alpha Item Deleted Item Deleted Total Correlation if Item Deleted Working conditions Cronbach’s Alpha = 0.710

4.2.3 Rewards and recognition

There were four items used to measure rewards and recognition determinant They wererecognition, rewards, just and fair corporate policy, and fair promotion The value ofCronbach’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 offour items were reliable to measure the rewards and recognition determinant with details inTable 4.2

4.2.4 Teamwork

Efficient teamwork, conflict solution, and sharing problems were 3 items used to measureteamwork determinant This scale had Cronbach’s Alpha value was 0.748 that indicated itwas 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 formeasuring 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 oftraining and importance of personal development The reliability statistics and item statisticsshowed that these items were acceptable to measure training and personal developmentdeterminant with Cronbach’s Alpha was 0.630 Reliability test for this measurement scalewas presented in Table 4.2

4.2.6 Payment and benefits

There were four items used to measure payment and benefits determinant They weresuitable 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 theconcept 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, andwork stress The value of Cronbach’s Alpha was 0.666 that was acceptable measurementscale 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 workdeterminant The measurement scale of nature of work was presented in Table 4.2 The itemdeleted 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, andfeeling important were used to measure job satisfaction The value of Cronbach’s Alpha was0.886 indicating that it was a good measurement scale

If learning and potential growth was deleted from the scale, Cronbach’s Alpha increased to0.892 that is greater than 0.886 However, learning and potential growth were an importantitem 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 thecurrent bank and recommending the current bank to others The Cronbach’s Alpha was0.790 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 quantitativemethods reversed for the strong scales The use of factor analysis made it possible totransform the particular mutually correlated set of variables into a new set system ofvariables (so-called common factors) mutually uncorrelated, but comparable to the initialsystem Prior to extracting constructs by exploratory factor analysis, validity of its use istested by the significance of these relations In this purpose, Barlett’s test of sphericity andKMO (Kaiser – Meyer – Olkin) statistics are applied Barlett’s test of sphericity relates toverification of the hypotheses of no significant correlations between variables Thus,rejection of the null hypothesis proves the validity of analysis In addition, the value ofKMO is greater than 0.5 shows that exploratory factor analysis is appropriate to apply forthe 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 totalvariance In addition, the variables are accepted if their loading factor coefficients aregreater than 0.5

4.3.1 EFA for independent constructs

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