EMPLOYEE SATISFACTION AND WORK MOTIVATION

1 Anna Salanova Sanni Kirmanen EMPLOYEE SATISFACTION AND work MOTIVATION Research in Prisma Mikkeli Bachelor s Thesis Business management March 2010 DESCRIPTION Date of the bachelor's thesis 15 March 2010 Author(s) Anna Salanova, Sanni Kirmanen Degree programme and option Business management Name of the bachelor's thesis EMPLOYEE SATISFACTION and work MOTIVATION Research in Prisma Mikkeli Abstract human resource management is getting more important in the business nowadays, because people and their knowledge are the most important aspects affecting the productivity of the company. One of the main aspects of human resource management is the measurement of EMPLOYEE SATISFACTION . Companies have to make sure that EMPLOYEE SATISFACTION is high among the workers, which is a precondition for increasing productivity, responsiveness, quality, and customer service.

2 The aim of this thesis is to analyze the level of EMPLOYEE SATISFACTION and work MOTIVATION in Supermarket Prisma in Mikkeli. It also deals with the effect the culture has on EMPLOYEE SATISFACTION . The theoretical framework of this thesis includes such concepts as leadership, job SATISFACTION , MOTIVATION , rewards and cultural differences. The empirical part of the thesis and the questionnaire were created according to the mentioned concepts. The questionnaire also included parts where the questions about expectations of the EMPLOYEE , work environment and job organization were asked. Based on the research it can be said that the level of EMPLOYEE SATISFACTION in Prisma Mikkeli is high, although there is still a room for improvements. One of the biggest strength of the organization is the relationship and communication between the employees and the managers. The biggest improvement is needed in the field of the financial rewards, because most of the employees are not showing high SATISFACTION with it.

3 The conclusions made regarding the research are only valid for Prisma Mikkeli and can not be generalised for other organizations. Subject headings, (keywords) human resource management , EMPLOYEE SATISFACTION , MOTIVATION , Leadership, Culture Pages Language URN 81 p. + 22 app. English Remarks, notes on appendices Tutor Marja-Liisa Kakkonen Employer of the bachelor's thesis Prisma Mikkeli CONTENTS 1 1 2 LEADERSHIP AND human resource management .. 1 Evolution of human resource management .. 2 human resource management in Leadership .. 3 Theory X and Theory Y .. 4 Hersey and Blanchard Situational Leadership Theory .. 5 Job SATISFACTION .. 7 Job 8 work Environment .. 9 MOTIVATION of EMPLOYEE .. 10 Maslow s Hierarchy of Needs .. 11 Herzberg MOTIVATION /Hygiene theory .. 13 Expectancy 14 Implementing MOTIVATION theories.

4 17 Financial and non-financial rewards .. 19 Financial compensation .. 19 Non-financial compensation .. 20 Cafeteria plan .. 21 3 CULTURAL DIFFERENCES IN human resource management .. 21 Concept of culture .. 21 Understanding of differences in 22 Geert Hofstede Cultural Dimensions .. 22 Cultural differences in motivational needs of 26 Cultural differences in EMPLOYEE 28 4 RESEARCH 29 Target organization .. 30 Objectives and research methods .. 30 Data collection and 33 5 FINDINGS .. 33 Background Information .. 33 Leadership .. 35 MOTIVATION .. 44 57 Expectations .. 64 Job organization .. 68 work environment .. 70 6 DISCUSSION AND CONCLUSION .. 73 Summary .. 73 Reliability and validity of the research .. 76 Suggestions for further 76 7 CONCLUDING REMARKS .. 76 8 BIBLIOGRAPHY .. 78 APPENDICES 1 1 INTRODUCTION The importance of EMPLOYEE SATISFACTION and work MOTIVATION is growing all the time in the companies.

5 Many researches have been made to find out the effect the job SATISFACTION and MOTIVATION have in the productivity of the company. This thesis is about the EMPLOYEE SATISFACTION in a supermarket in Mikkeli, Finland. The authors of this thesis are very interested in this subject and wanted to find out in practice what the level of EMPLOYEE SATISFACTION in a company is. After the target organization had been found, the research question was composed: what is the level of EMPLOYEE SATISFACTION in Prisma, Mikkeli. The main subjects will be leadership and MOTIVATION , and the affect they have on EMPLOYEE SATISFACTION . To find out the results for the research, questionnaires were delivered to the employees in the supermarket. The purpose of this kind of research is to find out which factors could be improved in the target company and how to make employees enjoy their work every day.

6 In this research it is explained what kind of factors have an effect on employees SATISFACTION and which perhaps cause job dissatisfaction. For example the power of money as a motivator will be discussed. Also the characteristics of Finnish culture will be analyzed and the effect on EMPLOYEE SATISFACTION will be estimated. In this thesis the concept of culture will be explained. It will also be discussed how important it is to understand different cultures and their effects on job SATISFACTION . Also the general Finnish characteristics and their effect on MOTIVATION will be researched. The research question was: what are the Finnish cultural traits that affect the EMPLOYEE SATISFACTION . The main aim was to find out the level of EMPLOYEE SATISFACTION in Prisma, Mikkeli, and to find out possible aspects for improvements. The analysis of the research results is based on various theories in the field of human resource management .

7 Different MOTIVATION , leadership and cultural theories are used in explaining and analyzing the results. 2 LEADERSHIP AND human resource management human Resources means the people that work in a company and the contribution they make with their skills, knowledge and competence. (Dransfield 2000, 3) Managing people at work is concerned with making plans and deciding on approaches which to use to make people perform the way to help the company to achieve their goals. 2 Today effective human resource management (HRM) is more important than ever because people and their intelligence are the most important factors of knowledge-based economy in which intelligent organizations are the key aspects of economic growth in the global economy. HRM is also important because people tend to change their working places often. People can change their working places to gain more respect and to feel more valued in their jobs.

8 Also management teams have a much better understanding in HR policies and practices than before. HRM typically includes planning and implementing HR policies, recruiting and selecting work force, training and development, workforce planning, ensuring fair treatment of employees and creation of EMPLOYEE contracts. It can include also ensuring equal opportunities, assessing the performance of employees, managing EMPLOYEE welfare, providing a counseling service for employees, managing the payment and rewards systems, supervising health and safety procedures, disciplining individuals, dealing with grievances, dismissal, redundancy, negotiation, ensuring the legality of organizations employees policies and encouraging EMPLOYEE involvement. Evolution of human resource management In the nineteenth century HRM has changed dramatically. In the beginning of the twentieth century people where seen as something that need tight controlling and supervising.

9 EMPLOYEE needs were secondary to the needs of the industrial system. Within hundred years the amount of people management has grown towards the situation where the recognition of EMPLOYEE needs is more and more important. Nowadays human resource management is one of the key responsibilities of the company. To better understand the aspects of HRM it is important to know the steps of development HRM has gone through. It is said that the foundation of HRM lies on nine different steps. Those steps are the rapid technological change which increased the specialization of labor association, the emergence of free collective bargaining, with constrains established for unions and employers, the scientific management movement (Taylorism), early industrial psychology, government personnel specialists growing out of the establishment of the Civil Service Commission, the emergence of personnel specialists and the grouping of these specialists into personnel departments, the human relations movement, the behavioral sciences, and the social legislation and court decisions of the 1960s and 1970s.

10 (Cascio 1995, 34). Beyond these nine factors, HRM developed in four stages. File maintenance stage typified HRM activities 3 through the mid-1960s and emphasis was placed on the EMPLOYEE concerns. Personnel were the responsibility of special departments. These departments were responsible for screening applicants, creating EMPLOYEE data and planning company activities such as picnics. Next stage is considered as government accountability stage. This stage started after Civil Rights Act of 1964 in USA. Laws like antidiscrimination, pension, health and safety laws were created and these accelerated the rise in importance of the efficient HRM. Within HRM, compensation and benefits, training and development, labor relations and affirmative action specialists began to appear. In the 1970s and 1980s when many firms were struggling to survive, a combination of economic and political factors such as high interest rates and international competition led to greater accountability in financial terms of all the functional areas of business.