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									                                  European Journal of Education and Learning, Vol.11, 2011
                                           ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                       www.BellPress.org

 DOES ORGANIZATIONAL ENVIRONMENT INFLUENCE EMPLOYEES’
 SATISFACTION: A CASE OF PUBLIC AND PRIVATE ORGANIZATIONS
                       OF PAKISTAN?

                                     Sehrish Manzoor
                                 Shrh.usman@yahoo.com
                Faculty of Administrative Sciences Air University, Islamabad
                                      Usman I Kiani
                Faculty of Administrative Sciences Air University, Islamabad
                               Usman_kiani81@yahoo.com
                        Ghulam Murtaza (Corresponding Author)
                             murtaza_awaz2000@yahoo.com
                Faculty of Administrative Sciences Air University, Islamabad
                                       Sobai Rashid
                Faculty of Administrative Sciences Air University, Islamabad

ABSTRACT

This article mainly emphasizes on the role played by organizational environment in affecting
employee’s satisfaction. The present study was conducted to analyze the impact of
organizational environment on employee satisfaction in organizations of Pakistan. The
research framework includes seven elements (organizational support, organizational politics,
career development, workplace flexibility, employee benefits, workplace discrimination and
job security) of organizational environment and employee satisfaction. The instrument
employed to collect data was questionnaire based. Sample size of this research consisted of
100 employees working in different public and private organizations of Islamabad, Pakistan.
Results showed a positive association and non-zero relationship between employee
satisfaction and independent variables.

Keywords: Seven elements of Organizational Environment, Job satisfaction, Public and
Private Sector Organization, Developing Country Pakistan.

    1. INTRODUCTION
The most important consideration regarding an employee in an organization is his/her
satisfaction (Roznowski & Hulin, 1992). Research evidences collected from variety of
occupations suggest that satisfaction influences behavior of employees (Churchill, Ford &
Walker, 1976). Employees communicate the level of satisfaction through their attitude
(Rezaei, et al. 2008). The term organizational environment describes the working condition
under which employee works. Organizational environment includes not only physical
conditions of that organizations rather it also encompasses other things such as work
processes, organizational support, organizational politics and social interactions at the
workplace including interactions with peers, subordinates and managers etc. Thus, it would be
correct to say that all members of the organization want to attain the maximum level of
professional satisfaction at their working place (Cranny et al., 1992).
Employees’ satisfaction is a main function of the HR Department in a company. It is a
challenge for management as well as a significant factor in order to maintain good employee
relations (Fisher & Locke, 1992). Conducive working environment is an important
determinant of employees’ satisfaction in a wide variety of settings (Yukl, 1989). Such an
environment can be created for the employees on the basis of feedback and surveys within the


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                                   European Journal of Education and Learning, Vol.11, 2011
                                            ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                        www.BellPress.org

concerned organization. It is extremely important to examine issue of employees’ satisfaction
in developing country such as Pakistan because the level of employees’ satisfaction and
organizational environment needs improvement compared with international levels. It was,
therefore, decided to study the impact of organizational environment on employees’
satisfaction.
The study of the impact of organizational environment on employees’ satisfaction deserves
more attention than it has been apportioned by the researchers in the past. Studies on
employees’ satisfaction are somewhat available but hardly any one of them explores the
impact of organizational environment on employees’ satisfaction. Moreover, no
comprehensive research has been conducted in Pakistan measuring the effect of
organizational environment on employees’ satisfaction. This study has attempted to make
improvements from previous works by shifting its focus from job satisfaction to a more
inclusive concept of satisfaction which is purely a subjective state of mind. The results of
study will also provide organizations with the opportunity to improve their working
environment in order to make it more productive place for their employees where they can
fully utilize their abilities.
2. LITERATURE REVIEW

2.1 Organizational Environment
Organizational environment means working conditions or the atmosphere of workplace. In
the past, organizational environment was not given its due importance but in present situation,
due to rapidly changing environment, it is needed to give organizational environment its due
importance (Sinha, 1990). Cranny et al. (1992) suggested that satisfaction of employee
depends to a great extent on the environment of organization in which they work. The
difference in the satisfaction level of employees is mainly due to difference in organizational
environment. Since 2009, most prominent research has been done by (Turkyilmaz et al.,
2011) who developed a theoretical framework relating to topic. Turkyilmaz et al. (2011)
identified empowerment and participation, working conditions, reward and recognition;
teamwork; training and development as main factors of employee satisfaction.
2.2 Employee Satisfaction
Employees’ satisfaction is an important variable which defines employees’ expectations about
their jobs and workplace. It also refers the emotions of employees about the job and their
attitudes about the workplace (Togia et al., 2004). Locke (1976) defined employees’
satisfaction as “…a pleasurable or positive emotional state resulting from the appraisal of
one’s job or job experience”. Rice et al. (1989) proposed that “satisfaction is determined, in
part, by the discrepancies resulting from a psychological comparison process involving the
appraisal of current job experiences against some personal standards of comparison”.
Turkyilmaz et al. (2011) observed that research on determinants of employees’ satisfaction is
quite limited. Sinha (1990) believed that organizational environment effect on employees’
satisfaction is least investigated as compared to other relevant factors. Furthermore, lack of
theoretical framework has narrowed the examination of environmental characteristics,
focusing more on employees’ satisfaction.

2.3 Organizational Environment & Employee Satisfaction
This study explores the impact of organizational environment on employees’ satisfaction
through seven independent variables i.e. organizational support, organizational politics,
workplace discrimination, career development, employee benefits, workplace flexibility and
job security.



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                                   European Journal of Education and Learning, Vol.11, 2011
                                            ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                        www.BellPress.org

2.3.1 Organizational Support
Mathieu & Zajac (1990) considered organizational support as a key promoter of employees’
satisfaction. When employees get support from organization their commitment towards
organization increases and they stay with organization for longer period of time (Eisenberger
et al., 1986). Shore & Shore (1995) has studied the difference between perceived
organizational support and social support. He found that organizational support is empirically
and conceptually distinct from social support as former focuses on groups and later focuses on
individuals.
Organizational support is measured through two predicators i.e. management support and peer
support. Management support involves the understanding of employees with top management
thus resulting in cordial working relationship of organization (Yukl, 1989). Anthony (1978)
reported that employees increases their interest in the organization and become more
increasingly committed to their work when their activities are structured, monitored and
directed by mangers. Supervision of managers creates good feelings among employees. Thus,
it can be said that support of management is a strong determinant of employees’ satisfaction
in a wide variety of work setting (Kate, Anne & Lemerle, 2005). The element of peer support
has its significance in employees’ satisfaction. Roger (1973) finds peer relationship a helpful
relationship which promotes growth, development and maturity of those who work with them.
2.3.2 Organizational Politics
Cropanzano et al. (1995) described organizational politics as a constantly changing social
setting characterized by conflict. Cropanzano et al. (1995) defined politics as the readiness of
people to use power in order to influence others and to secure their own interests or to avoid
negative outcomes with in the organization. Kacmar & Baron (1999) defined politics more
narrowly as unsanctioned influence attempts that seek to promote self-interest at the expense
of organizational goals. Several studies have found that organizational politics is negatively
related to job satisfaction and positively related to turnover intentions (Cropanzano et al.,
1995). Using cognitive evaluation theory member’s perceptions of the environment influence
how they make sense of and label others' behaviors as political or fair. Members who have
control over their environment are more likely to view politics as an opportunity rather than a
threat (Ferris et al., 1993).
2.3.3 Workplace Discrimination
Discrimination at workplace has significant impact on employees’ satisfaction. Researchers
suggest that employees’ satisfaction level is affected due to discrimination at workplace.
Earlier studies have placed much attention to the issue of justice at workplace (Johnson &
Indvick, 1996). Studies showed that discriminatory behavior at workplace deprives employees
of equal opportunity to progress (Dekker & Barling, 1998). Greenberg (1980) proposed that
inequality between employees on basis of favoritism, gender and personal relationship etc,
greatly affects satisfaction of employees. In this study, workplace discrimination is measured
through two predicator’s i.e. unfair treatments and gender discrimination.
Unfair treatment influences employee negative attitude and behavior decreases satisfaction
level, increasing the feelings of anger and frustration (Morrison & Robinson, 1997). Carcione
(2000) argued that an employee who does not receive any reward after a good work merely
due to organization’s grievance develops deeper thoughts of betrayal and resentment towards
the organization. Sims (1991) found that in an environment where favoritism prevails
employees in that organization likely to engage in unethical behavior. Unfair treatment
develops feeling of deception and hatred in employee for the organization resulting in
decreased satisfaction level (Cloward, 1963). Gender inequalities in organizations have
affected the satisfaction of employee immensely (Chusmir, 1982). The difference in attitude
towards satisfaction is primarily due to difference in gender (Ahlgren, 1983).


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                                   European Journal of Education and Learning, Vol.11, 2011
                                            ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                        www.BellPress.org

2.3.4 Career Development
Sequence of positions occupied by a person during the course of lifetime is a career (Holton et
al., 2000) where as Dessler (2008) defined career development “a lifelong series of activities
that contributes to a person’s career exploration, establishment, success and fulfillment”.
Researchers believe that aiding career development by providing training and coaching
opportunities are vital in gaining satisfaction from organization workforce (Goldstein, 1986).
Gutteridge (1986) suggest that when employees get opportunities of career advancement they
identify themselves with the organization and work harder to make the organization
successful. According to Ford et al. (1992) lower opportunity of progress at workplace leads
to lower interest in employees’ satisfaction. Gregory et al. (2008) are of the view that
promising careers prospects increases employees’ satisfaction thereby reciprocating the life
long employment offer for employees with total commitment for the company.
2.3.5 Employee Benefits
Previous studies by (Scarpello, Huber & Venderberg, 1988) confirmed that benefits are
closely related to the satisfaction and their commitment towards the organization. Similarly,
Dreher, Ash & Bretz (1988) found that employee benefits significantly effects employees’
satisfaction level. Eby (1997) is of the view that the importance of employee benefits cannot
be ignored as it often means of attracting and retaining the best employees in the area and
losing them to the competition. The reward system is the key driving force behind employees’
satisfaction (Centers & Bugental, 1966). Many businesses use pay, promotion, bonuses or
other types of rewards to increase employees’ satisfaction and to encourage high levels of
performance (Cameron & Pierce, 1994).
2.3.6. Workplace Flexibility
Galinsky, Friedman & Hernandez (1991) defined work place flexibility as a way to get work
done and to organize careers. Organizations have introduced number of policies and benefits
to increase flexibility in workplace in recent years (Rainy & Wolf, 1982). The purpose of
offering flexibility at workplace is to maintain a balance between employee work and family
life so that they remain satisfied to their work settings. Organization policy makers have
started realizing that by offering flexible timings and flexible leaves employees take more
interest in their work which is a result of their satisfaction (Rousseau, 1995). Perception of
workplace flexibility increases employee loyalty and satisfaction due to positive feelings
associated with working for the organizations which visibly cares about the well being of its
employees (Kush & Stroh, 1994). Hence the perception of employees that organization
supports them in their needs to manage both their career and family may increase their
feelings of satisfaction and morale (Lee, 1991). Moreover, employees’ satisfaction is
positively related to workplace flexibility (Pierce & Newstrom, 1983).

2.3.7. Job Security
Job security is very important factor which significantly impacts employees’ satisfaction.
Organizations are facing threat of unemployment and downsizing which is a big hazard in
employees’ satisfaction (Mishra & Spreitzer, 1998). Greenhalgh & Rosenblatt (1984)
conceptualized job insecurity as a source of stress involving ‘powerless to maintain desired
continuity in a threatened job situation’. Hartley et al. (1991) defined job insecurity as a
discrepancy between the level of security people experience and the level they like to prefer.
Literature suggests that perception of job insecurity might have detrimental consequences on
employees’ satisfaction which leads to increase in job dissatisfaction, deterioration of
psychological well being and higher risk of psychological distress (Ashfold, Lee & Boko,
1989).
In the light of above cited studies following hypotheses have been made:


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                                                          European Journal of Education and Learning, Vol.11, 2011
                                                                   ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                                               www.BellPress.org


H1: There is a relationship between organizational environment and employees’ satisfaction.
H2: There is a relationship between organizational support and employees’ satisfaction.
H3: There is a relationship between organizational politics and employees’ satisfaction.
H4: There is a relationship between workplace discrimination and employees’ satisfaction.
H5: There is a relationship between career development and employees’ satisfaction.
H6: There is a relationship between workplace flexibility and employees’ satisfaction.
H7: There is a relationship between employee benefits and employees’ satisfaction.
H8: There is a relationship between job security and employees’ satisfaction.
3. THEORATICAL FRAMEWORK


                                                      Organizational
                                                         Support
                                                      Organizational
                      Organizational Environment




                                                         Politics
                                                   Career Development
                                                                                         Employees’
                                                    Employee Benefits                    Satisfaction

                                                       Workplace
                                                      Discrimination
                                                   Workplace Flexibility


                                                       Job Security




4. METHODOLOGY
4.1 Population
The study covered three Banks and a cellular company in Rawalpindi and Islamabad
respectively. Population included employees working in the category of officers from grade
17th equivalent to grade 21st equivalent.
4.2 Sample
The sample included 100 employees, 50 from banks and 50 from cellular company. Sample
selection was done on the basis of quota sampling. 150 questionnaires were distributed in the
organizations (75 in banks & 75 in cellular company) using quota sampling. Out of 150
questionnaires 114 were received back, 14 were incomplete 100 were of use so the response
rate was 66.67.

4.3. Measures
The questionnaire included questions on organizational environment and on employees’
satisfaction. Organizational environment is measured through different components i.e.
organizational support, organizational politics, career development, workplace discrimination,
employee benefits, workplace flexibility and job security.



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                                  European Journal of Education and Learning, Vol.11, 2011
                                           ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                       www.BellPress.org

Five items scale which measured Organizational Support was developed by (Kacmar &
Ferris, 1991) having cronbach α reliability for present study as 0.74. Workplace
Discrimination was measured with the help of gender discrimination and unfair treatment
having 6 items with cronbach α reliability value 0.722. The scale was developed by
(Sameer, 2006).      EOP Survey questionnaire was used for measuring the Career
Development with a cronbach α reliability value 0.86. Employee Benefits was measured
with the help of reward, and recognition questions developed by Nunnally (1978) with
cronbach α reliability value 0.70. Job Security was measured with the help of four item
scale developed by (Ashford et al., 1989) having cronbach α reliability value 0.58 & 0.73.
Workplace flexibility was measured with the help of two item scale developed by
(Nunnally, 1978) with cronbach α reliability value 0.70. Employee Satisfaction scale was
developed by (Brayfield & Roth, 1951) having five items with cronbach α reliability value
0.95.

5. RESULTS
5.1 Descriptive Analysis
The demographic profile of respondents i.e., their gender, marital status, education, type
of organization, income group, total working experience, and the pay scale.
The demographics profile of respondents showed that 62% of the employees were males
whereas 38% were females out of which 49% were single and 51% were married. The
youngest employee was 21 years old and the oldest was 64 years old. Based on the age,
the respondents were divided in six groups: 19-27, 28-36, 37-45, 45-54, 55-63 and 63-
72. The largest group was between 19-27 years (54%), followed by 28-36 years (42%) and
finally 64-72 years age group formed the smallest group (1%) whereas none of the
respondents fall within the age group 37-45 years and between and 55-63 years. Most of
the employees in both the organizations hold a master degree. None of the employee was
below graduate level.

5.2 Correlation Analysis
The data was also tested on Pearson Coefficient of correlation to estimate strength of linear
relationship between each element of OE and ES.


                                          Table 5.1

                                      Correlation Results


                     SAT      ORG       WP           CAR       EB      WP    JOB   ORG
                              POL      DSCTN         DEV               FLX   SEC   SPT

      ORG POL       0.98**

      WP DSCTN      0.97**   0.98**
                    0.99**
      CAR DEV                0.96**     0.95**
                    0.98**              0.96**
       EMP BEN               0.97**                  0.97**
                    0.99**              0.95**       0.98**
       WP FLX                0.97**                           0.96**




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                                             European Journal of Education and Learning, Vol.11, 2011
                                                      ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                                  www.BellPress.org

                          0.96**      0.94**      0.97**          0.96**
         JOB SEC                                                            0.95**     0.98**

         ORG SPT          0.97**     0.96**        0.99**         0.95**    0.96**     0.98**     0.95*    1**

** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).



                                                        Table 5.2

     Bivariate Correlation between Overall Organizational Environment (OE) and
                               Employees’ satisfaction
                                    OE                           ES
                 OE                                1
                 ES                             .988**                                          0.988**
Seemingly there is a strong correlation between individual elements of OE and ES.

5.3 Regression Analysis
5.3.1 Multiple Regression
Standard multiple regression was conducted to asses the relationship between independent
variable Organizational Environment (OE) and six predicator variables, i.e.,
Organizational Support, Organizational Politics, Workplace Discrimination, Workplace
Flexibility, Career Development, Employee Benefit and Job Security and dependent
variable Employee Satisfaction (ES).

                                                  Table 5.4
                                             Multiple Regressions
                                                    Un standardized
                                                     Coefficients
 Model                                                                           t-Statistics    P-Value

                                                  B                Std. Error
      (Constant)                               1.061                0.146        3.032           0.000
      Organizational Support                   0.214                0.1681       5.040           0.000
      Organizational Politics                  -0.073               0.1347       -6.993          0.001
      Workplace Discrimination                 -0.135               0.106        -4.713          0.000
      Workplace Flexibility                    0.068                0.154        2.244           0.003
      Career Development                       0.661                0.092        3.763           0.001
      Employee Benefits                        0.872                0.094        4.191           0.002
      Job Security                             0.754                0.183        3.219           0.002

               Dependent Variable: Employees’ satisfaction, n=100
               * R2= 0.978,**Adjusted R2= 0.977.

Individually and collectively all the independent elements have had a strong influence on
employees’ satisfaction. The p values of all these were below 0.05 (p<0.05) which proves
there is a strong relationship between all IVs and DV. Regression coefficients of
Organizational Support (β = 0.254), Organizational Politics (β = 0.174), Workplace
Discrimination (β = 0.153), Workplace Flexibility (β =0.179), Career Development (β
=0.527), Employee benefit (β = 0.547), Job Security (β =0.367) are significant and
positive showing a positive relationship with ES. So it is inferred that H2-H8 are


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                                           European Journal of Education and Learning, Vol.11, 2011
                                                    ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                                www.BellPress.org

supported as all are related to employee satisfaction. Workplace discrimination and
organization are negatively related to employee satisfaction which means with increase in
them employee satisfaction decreases and vice versa. Results show other variables are
positively related to employee satisfaction.
5.3.2 Regression Analysis (Composite OE and ES).
A regression was also conducted by taking components of OE as independent variable
and ES as dependent variable. Results are mentioned in table 5.5.
                                         Table 5.5
        Regression Analysis: OE (Composite) on ES (Employees’ satisfaction).

                                              Unstandardized Coefficients
 Model                                                                       t-Statistics   P-Value

                                                  B             Std. Error
                                                                                 7.919
     (Constant)                                  5.676            0.164                       .000

         Organizational Environment              0.324            0.048          4.367        .000
    a. Dependent Variable: Employees’ satisfaction, n=100
    b. Predictor (Constant): Organizational Environment
           * R2= .330,**Adjusted R2=.333, P- Value =0.00
To measure the influence of Organizational Environment on Employees’ satisfaction
simple linear regression was estimated between ES and OE. The Beta coefficient (0.324)
was found significant and positive. Unexplained variation in the model was quite low as
the coefficient of determination (R Square) is about .330. The results supports H1 i.e.
organizational environment is related to employee satisfaction.
6. DISCUSSION
The purpose of this research was to identify the impact of organizational environment on
employees’ satisfaction in Banks and in cellular companies. Amongst the factors associated
with organizational environment, an employee benefit is found to exert strong influence on
employees’ satisfaction according to research results. The results of this study also signify
that all the selected variables are important for the employees but career development has
been found as a second stronger predictor of employee satisfaction. The results of present
study identified job security as a third important predictor of employees’ satisfaction.
Organizational support is the fourth factor relating to employees’ satisfaction. This study
finds relationship between workplace flexibility and employees’ satisfaction. The study also
reveals that organizational politics and workplace discrimination negatively affects
satisfaction of employees. The findings of the present study are consistent with findings of
studies conducted by many researchers including Pierce & Newstrom, (1983), Cropanzano et
al. (1995), Durham et al. (19970, & Gregory et al. (2008).
Organizational environment variables suggest that improvement in immediate
improvements in the organizational environment will produce greatest impact on employee
satisfaction and in organizational productivity. Conducive organizational environment and a
healthy atmosphere are the ingredients that have strong influence on satisfaction measures.
This proves that the organizational environment under which employees perform their duties
has a considerable impact on their satisfaction level because nearly all of them are keen to
find a healthier workplace that provides them with opportunities of personal development and
professional growth. This is further supported by previous research study which identified
that individuals enter into organization with certain needs, desires and skills and look forward
to find organizational environment that support them to utilize their capabilities optimally and



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                                   European Journal of Education and Learning, Vol.11, 2011
                                            ISSN(paper)2668-3318 ISSN(online)2668-361X
                                                                        www.BellPress.org

satisfy many of their basic needs. The desire to fulfill these needs encourage them to
accomplish their job tasks with full commitment and devotion.

8. CONCLUSION, RECOMMENDATION AND LIMITATIONS
Although, number of factors has been identified to determine satisfaction level of employees
but information relating to employees’ satisfaction is still inadequate. Employees’ satisfaction
is very important for the success of any organization. It is for this reason this study analyzed
employees’ satisfaction and factors affecting it in organizations. This study chooses seven
factors of employees’ satisfaction namely organizational support, organizational politics,
workplace flexibility, workplace discrimination, career development, employee benefits and
job security. Findings show relationship between organizational environment and employees’
satisfaction. As this study is performed in public and private organizations in developing
country, the results will help to understand the concept of employees’ satisfaction in that
country. In conclusion, it is hoped that this research has helped to both academicians and
business practitioners in improving their understanding their understanding of employees’
satisfaction.

The banks and cellular companies can initiate their research on any one or more dimensions
of OE to study their influence on ES. Secondly, should include banks and cellular companies
from other cities of Pakistan as well for more significant results. Thirdly, should study the
comparison in different organizations within same industry.


     The study is delimited to the following responses.
     (a) Organizational environment was analyzed only in relation to the two organizations
         in Pakistan.
     (b) The coverage of this study was geographically limited to Islamabad and Rawalpindi.
     (c) Too much time was required to fill the long questionnaire.

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                                 European Journal of Education and Learning, Vol.11, 2011
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