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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
which does not support to the previous findings. This study had an important impact on
researchers, and in some cases on organizations, with some managers and HR
practitioners concluding that the relationship between job satisfaction and performance
was trivial.
In addition, in a comprehensive review of 301 studies, Judge, Thoresen, Bono, and Patton
(2001) found that when the correlations are appropriately corrected (for sampling and
measurement errors); the average correlation between job satisfaction and job
performance is a higher 0.30. This finding is supportive of current study sampling and
measurement as results of job satisfaction and job performance (0.52) is a higher than
0.30 Thus, contrary to earlier reviews, it does appear that job satisfaction is, in fact,
predictive of job performance and the relationship is stronger.
Previous work of Fried & Ferris (1987); Parisi & Weiner (1999); and Weiner (2000)
envisaged that major job satisfaction areas includes, satisfaction with the nature of the job
itself, including job challenge, autonomy, skill variety and scope, best predicts overall job
satisfaction, as well as other important outcomes like job retention. Correlation between
job satisfaction and job retention in this study is (r = 0.34) which is statistically significant.
Hence these finding support the work of Fried and Ferris (1987); Parisi and Weiner
(1999); and Weiner (2000).
Job satisfaction, which shows organization‘s interest in the compensation and career
growth of the employee, has a direct influence on an employee‘s commitment to the
organization, which in turn affects employee retention and employee productivity and
finally results in increased job performance. This is in conformity with the finding of
Igbaria and Greenhaus (1992). Since most of the professionals in the organizations were
in their mid career, they look for career growth. More than pay, prime value is given to
growth opportunities. If there is scope for career growth in the organization, employees
feel attached to the organization and remain longer and contribute towards organizational
success. The influence of organizational commitment on employee retention and
productivity is very much in consistency with previous studies (Becker, 1960; Allen &
Meyer, 1996; Mowday et al., 1979). Organizations that are interested in a long-term
relationship with employees reap the rewards in financial terms through increased
productivity and long term affinity of the employee with the organization. It is really
inspiring to observe that expenditure on employees is not an overhead, but a long-term
investment for greater long-term returns.
Although salary package is a major cost in the public sector regulatory authorities, good
compensation packages have a direct positive impact on job satisfaction and job retention
for highly qualified and trained manpower to enhance the productivity of the
organization. This is in agreement with the Harvard approach that all HRM practices
should lead to cost effectiveness (Beer et al., 1984). This reveals that a well-designed
compensation system can reduce operating costs. It might be through enhancing the
commitment of employees to contribute more to the organization. Higher pay may not
always increase operating costs if it is used to enhance overall productivity of the
organization. Many previous studies found compensation and rewards to be the major
factor deciding the organizational commitment of employees (Steers, 1977; Mowday et
al., 1982; Angle, 1983; Mottaz, 1988). Compensation might be a major criterion for
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 175
JANUARY 2011
VOL 2, NO 9