2016

Business research
method Article
Group members:
Sharoz Ajmal BBA02123256
Sheroz Khan BBA02123162
Syed Ijlal Haider BBA02123161
Muhammad Bilal BBA02123234
Muhammad Aqeel BBA02123145
Kamal Mahmood BBA02123241

Section B

Submitted to: 1Mam ASMA RAFIQUE

 A Study of Relationship between the Effects of Income and
job satisfaction

*Sharoz Ajmal
1Sheroz khan, 1Syed ijlal haider, 1Muhammad bilal, 1Kamal mahmod, 1Muhammad Aqeel
1
Bachelor’s Students, University of Lahore (UOL)

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Lahore business school
University of Lahore
Correspondence: Asma Rafique (email: asma.rafique@lbs.uol.edu.pk)
Abstract
This study is an attempt to test the hypothesis that job satisfaction depends on income in
education industry. Using data of 100 employees, it provides result that, worker’s reported
satisfaction levels are shown to be inversely related to their comparison wage rates. The study
tries to help begin the task of constructing a financial side of job satisfaction.
Keywords: Job satisfaction, Pay level.

1. Introduction
Employees were more satisfied, when rewarded fairly for the work. They are sure these rewards
were for real offerings to the organization and consistent with the reward policies (Fatt, Khin,
2008).
Employee job satisfaction is considered to be key variable that impact the performance of
organizations. In highly competitive global education businesses must strive to identify factors
that influence the job satisfaction of employees. One such factor is income; which describes the
individual’s perception of the fairness of treatment received from an organization and their
behavioral reactions to such perceptions (Fernandes and Awamleh, 2006).
In recent years, there is significant importance from economists because employee behavior and
job satisfaction has relationship, Individual job satisfaction play a significant part for civilizing
the nation as contentment of employees in an organization is likely to contribute to the industry

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being healthy, which ultimately affects its contribution to the economy (Benabou, Roland and
Jean Tirole, 2003).
The people are supposed to be more satisfied when they feel happiness in their jobs. Main reason
behind this issue is to satisfy employees less likely to run off from job and have low absenteeism
rate and have more output than others, so it can be argued that a happier workforce can have a
constructive contribution in any organization (M.Osborne, 2001).
Dissatisfaction leads employees toward job turn-over. That’s why taking into account job
satisfaction of employees and its affecting factors have significant value for any institution or
concern to stay alive (Bartel & Anne P, 1981).

2. Problem Statement
This study is conducted to certain key questions about the effect of income on job satisfaction.
Other questions include: The concept of a reference level of income against which an individual
compares themselves. When that individual's earnings fall relative to the comparison level, they
feel relatively unhappy, and are less satisfied.

3. The Objective of the Study

The objectives of this study are as follows:
1. To find out the relationship between employees perceptions towards job satisfaction.

2. How much the job satisfaction depends upon pay by using data and sample method.

4. Research gap:
Researcher elaborated in their studies that how factors influence the customers satisfaction and
income. They used the method of Qualitative research. But this study is based on quantitative
research. This type of study is never conducted by any researcher. No one used this independent
variables as quantitative approach to know about the reason behind employee dissatisfaction.

5. Significance of the Study:

This study is to know about the reason behind the employee dissatisfaction. This study
will help companies and institutions about the employee dissatisfaction. Why they are not
showing more productivity and loyalty towards the organization.

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 6. Literature Review
6.1 Job Satisfaction
Locke (2009) define job satisfaction has been defined as a function of the perceived relationship
between what one wants from one’s job and what one perceives it as offering.
According to Lund (2007) Job satisfaction has been broadly studied over the last four decades of
organizational research. Job satisfaction has been defined and measured both as a worldwide and
as a concept with multiple dimensions or aspect
Cadsby, C. Bram, Fei Song and Francis Tapon, (2007) stated that Job satisfaction is considered
as a vast and profound area of research, many researchers showed that several articles and
dissertations are published or written on job satisfaction. Job satisfaction is a pleasurable or
positive emotional state, resulting from the appraisal of one’s job experiences. It means that
optimistic feeling about work and environment around job lead someone towards satisfaction.
Mosadeghrad (2003) define Job satisfaction as an employee’s affective reaction to a job, based
on a comparison between actual outcomes and desired outcomes.
Misener et al. (1996) defined the Job satisfaction is generally recognized as a multifaceted
construct that includes employee feelings about a variety of both intrinsic and extrinsic job
elements. It encompasses specific aspects of satisfaction related to pay, benefits, promotion,
work conditions, supervision, organizational practices and relationships with co-workers.

6.2 Income Level

Pay is vital but the awareness of individual about salary is more vital. People with positive
attention seem to be much satisfied with pay relative to people with negative affectivity.
Organ (1994) claimed that both positive and negative affectivity stand as key factors of job
satisfaction. But the individuals who have extraordinary on negative affectivity are nervous and
worried (emotional state that may designate an anxious personality),
Oshagbemi (2000) stated that Wage, salary or pay is considered a significant reward to motivate
the workers and their behavior towards the goals of employer.
Hamermesh, Daniel (2004) defined the judgment of satisfaction related to job can be made with
the help of wage payment system. Different type of organizations adopts different types of

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payment system of wages. The workers of low paid and high paid with in developing countries
to analyze job satisfaction level and also enlighten different determinants of job satisfaction
among the workers that exist in low and higher wages in across the world.
Hamermesh, Daniel S, (2004) defined the Job satisfaction level is less for employees, who
receive less amount of pay whereas higher amount receiving employees have high level of
satisfaction.
Heywood, John S. and Xiangdong Wei, (2006) stated that Pay is an imperative factor for job
satisfaction, however other related factor are like promotion, recognition, job involvement and
commitment are also taken into account.

7. Research Model:

Income Job satisfaction

Independent Dependent variable

variable

Fig (1): Job Satisfaction and Income

8. Hypothesis:
H1: The independent variable ‘pay’ has influence upon job satisfaction.
H2: Job satisfaction and employees pay are related to each other.

9. Methodology:
To find out the different perspective in detail related to the job satisfaction and income more
precisely using Exploratory Research. Quantitative Method is used for the study to test the
hypothesis related to population. The information gathering from the respondents is for the
current period of time to justify the study that’s why cross-sectional research is helpful.

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 Population and Sample:
The sampling technique is used random sampling and probability method. Targeted area of
interest for the research conducted was consisted of those who worked in the University of
Lahore as an employee. The sample symbolizes the random sample of 100 employees. This data
includes detailed information on job satisfaction and pay. All working respondents were asked to
rate their satisfaction levels with the range of (1-5) five type liker’s scale.

Research Tool:
Questionnaires used as data collection method. Noted that every questionnaire was personally
handed and instructions were given to each employee before completing the questionnaire.
Questionnaire consisted of 15 questions every question has 1-5 options to select the most
appropriate answer.

Analytic procedure (statistical analysis):

Prior to statistical analysis, all questionnaire data were computer coded for use with the
Statistical Package for the Social Sciences (SPSS) for Windows. Frequency analysis was used to
indicate the respondents’ opinions for each questionnaire items. Then, as the main aim of the
study is to find out the relationship between employees’ income level and employee job
satisfaction correlation analysis and the t statistic were used. With t statistic the study compares
the levels of satisfaction as perceived by employees’ with high income and employees’ with low
income level.
HYPOTHESIS TESTING:
Correlations

JS income11

Pearson Correlation 1 .641**

JS Sig. (2-tailed) .000

N 75 75
Pearson Correlation .641** 1

income11 Sig. (2-tailed) .000

N 75 75
**. Correlation is significant at the 0.01 level (2-tailed).

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There is .645 correlations between js and income which is very good.

Regression:

R R Square Adjusted R R Square

Model
Square Change
1 .641a .411
.42564 .411

a Predictors: (Constant), income11

b Dependent Variable: JS `

The r square is .411 which show that 41 percent dependent variable explain the independent
variable.

ANOVAa

Model Sum of Squares df Mean Square F Sig.

Regression 9.212 1 9.212 50.851 .000b

1 Residual 13.225 73 .181

Total 22.437 74
a. Dependent Variable: JS
b. Predictors: (Constant), income11

Coefficientsa

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) 1.337 .273 4.899 .000

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income11 .556 .078 .641 7.131 .000
a. Dependent Variable: JS

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 Conclusion:
This study is an attempt to test the hypothesis that job satisfaction depends on income. It
produces findings. Workers' reported satisfaction levels are shown to be negatively related, to
their comparison earnings levels there is no guarantee that this is the right interpretation.. In an
analogous way, the wages offered by firms may have low variance if there are intra firm
comparison effects, and may rise over time if workers compare their current wage to their own
previous wages .Moreover, because preferences are intrinsically interdependent, the standard
optimality results of the free market may fail to hold.

Limitation and future directions:

The size of sample was very small, due to time and budget constraint if we will take
larger sample than the result will be more significant.

For future directions, use more variables for better result.

References:
1. Organ, D.W (1994). Personality and organizational citizenship behavior. Journal of
Management, 20(2), 465-478.
2. Bellemare, Charles 2006. “Sorting, Incentives and Risk Preferences: Evidence from a
Field Ex-periment.” IZA Discussion Paper No. 2227, Bonn.
3. Oshagbemi, T. (2000). Correlates of pay satisfaction in higher education. International
Journal of Educational Management, 14(1), 31-39.
4. Bowles, S., H. Gintis and M. Osborne. 2001. “The Determinants of Earnings: A
Behavioral Approach,” Journal of Economic Literature 39: 1137 – 76.
5. Benabou, Roland and Jean Tirole. 2003. “Intrinsic and Extrinsic Motivation.” Review of
Economic Studies 70: 489 – 520.

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6. Cadsby, C. Bram, Fei Song and Francis Tapon. 2007. “Sort-ing and Incentive Effects of
Pay for Performance: An Expe-rimental Investigation,” Academy of Management Journal
50: 387–405.
7. Misener, T.R., Haddock, K.S., Gleaton, J.U., and Ajamieh, A.R. (1996). Toward an
international measure of job satisfaction. Nursing Research, 45, 87-91.

8. Locke, Edwin A. (1969). What is Job Satisfaction?. Organization Behavior and Human
Performance, 4, (4), 309-414.
9. Mosadeghrad, A.M. (2003). The role of participative management (suggestion system) in
hospital effectiveness and efficiency. Research in Medical Sciences, 8, (3), 85-9.
10. Clark, Andrew. 2001. "What Really Matters in a Job? He-donic Measurement Using Quit
Data, Labour Economics 8: 22 - 42.
11. Hamermesh, Daniel S. 2004. "Subjective Outcomes in Eco-nomics," Southern Economic
Journal 71: 2 – 11.
12. Hamermesh, Daniel S. 2001. "The Changing Distribution of Job Satisfaction," Journal of
Human Resources 36: 1 – 30.
13. Heywood, John S. and Xiangdong Wei. 2006. "Performance Pay and Job Satisfaction,"
Journal of Industrial Relations 48: 523 – 540.
14. Jirjahn, Uwe. 2006. “A Note on Efficiency Wage Theory and Principal-Agent Theory.”
Bulletin of Economic Research 58: 235 – 52.
15. A study of relationship between organizational justice and job satisfaction. International
Journal of Business and Management, 5(12), 102–109.
16. Job satisfaction and organizational commitment among employees in the sultanate of
Oman. Journal of Psychology. 1:295-299.
17. The relationship between job satisfaction and performance of administrative staff in south
west Nigeria universities. Journal Soc Sci,, 30(3), 313–316.

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Appendix:

UNIVERSITY OF LAHORE

Questionnaire
Dear respondent,
We are candidates of BBA (Hons) in university of Lahore. As a part of our degree we are
conducting a survey on the Study of Relationship between the Effects of Income on Job
Satisfaction.
This survey is conducted for the research article. Your feedback will be used to strengthen and improve
the result of our research. Based on your knowledge, your responses are anonymous and
confidential.

Name: Gender:

Age: Education

Department: Length of services:

Income: 25000-40000 41000-50000 51000 or above

What is your primary discipline (mark one only)?

Administration Teacher

Sr. 1. QUESTIONS Strongly Disagree Neutral Agree Strongly

No. Disagree (2) (3) (4) Agree
(1) (5)

1 My organization is better compared

to others.

2 The salary is competitive to similar

organizations providing similar
services.

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3 Job security and level of satisfaction
are good.

4 Salary matches with the

responsibility and the level of
satisfaction.

5 The organization provides sufficient

benefits and sufficient salaried
leave.

6 The pay and benefits offered by this

organization are reasonable.

7 Working hours and level of

satisfaction are good.

8 Overall I am satisfied as an
employee of university of Lahore.

9 The organizational supports for its

employee’s welfare are satisfactory.

10 My assigned work and

responsibilities are fair and
reasonable.

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11 I have the materials and
equipment’s to do my work.

12 The organization cares about me as

a person as well as an employee.

13 I feel totally secured in my job.

14 Intrinsic rewards increases

employee on job satisfaction.

15 Financial incentives increases

employee work productivity.

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