Introduction
Employee satisfaction is a critical element in organisations’ pursuit for success. Therefore, organisational leaders are obliged to foster a high level of employee satisfaction to attain optimal ordinary performance. One of the most important areas of strategic management that organisational leaders should focus on in order to nurture a high level of employee satisfaction involves human resource.
Different studies on improving organisational performance have been conducted. Some of these studies have focused on integrating effective operational strategies. However, it is imperative for organisational leaders to nurture an environment that motivates its workforce (Bockerman & Ilmakunnas, 2012).
The level of employee productivity is subject to the level of job satisfaction. Naseem, Sheik, and Malik (2011) further opine that the level of employee satisfaction influences the extent to which customers are satisfied, and hence the firms’ financial performance.
Company profile
The Emirates National Oil Company [ENOC] was founded in 1993 in the United Arabs Emirates (UAE). The firm is wholly owned by the Dubai government and it is a critical institution in UAE’s quest for sustainable development and economic diversification. The firm specialises in the development of upstream and downstream operations within the gas and oil sector.
ENOC intends to be the most profitable government-owned entity by integrating social responsible practices into its workforce and the overall society (ENOC, 2014). ENOC is focused at attracting, developing, and retaining a talented workforce, hence positioning itself as the employer of choice. ENOC intends to achieve this goal by integrating ethical business practices and integrity into its operations (ENOC, 2014).
The firm has adopted an extensive Code of Business Conduct, which emphasises a number of core values such as integrity, teamwork, respect, transparency, and customer focus (ENOC, 2014). These aspects show that the firm is committed at nurturing an enabling working environment.
Research objective
This research paper evaluates the impact of employee satisfaction on the ENOC’s profitability. In order to achieve this primary objective, the research focuses on a number of aspects that are related to employee satisfaction. Some of these areas are illustrated by the following secondary objectives.
- To evaluate how employee satisfaction influences the level of motivation amongst ENOC’s employees.
- To examine the ENOC’s reward management practices and their impact on employee productivity
- To assess ENOC employees’ level of satisfaction and their impact on customer satisfaction, and hence the organisations level of profitability.
Literature review
Employee satisfaction and customer satisfaction
Most profit-oriented entities are focused on maximising the level of profits. Daft (2008) defines profitability as “an organisation’s capacity to generate profit within a particular period of time using its resources” (p. 82). Human capital constitutes one of the essential organisational assets.
However, the level of profitability is determined by diverse factors. Some of these aspects relate to the organisation’s technical, structural, and human aspects (Allen & Wilburn, 2002). Tarigan and Widjaja (2011) define employee satisfaction as the employees’ general attitude towards their job.
Employees who are highly satisfied with their job are likely to portray positive attitude as opposed their disgruntled counterparts. Employee satisfaction constitutes a fundamental element in organisations’ long-term existence.
Bockerman and Ilmakunnas (2012) argue that lack of employee satisfaction is one of the main reasons that explain the source of poor job performance, absenteeism, and employee turnover (Mbah & Ikemefuna, 2012). However, some organisational leaders have not understood the impact of employee job satisfaction on the overall organisational financial performance.
Conversely, some organisational leaders do not have sufficient knowledge on the policies that can be integrated into their strategic human resource management practise in order to enhance employee satisfaction. Naseem, Sheikh, and Malik (2011) assert that employee satisfaction is a multi-factorial construct, which means that it is comprised of three main categories of actors.
These factors include the basic factors, performance factors and excitement factors (Lussier, 2012). The basic factors involve the minimum job requirements, which if not addressed can increase the level of dissatisfaction amongst employees. On the other hand, Shahzad et al. (2013) assert that excitement factors “increase employee satisfaction while performance factors result in satisfaction only when performance is high” (p. 167).
Hellermann (2006) corroborates that employee satisfaction is strongly correlated with productivity, and hence a firm’s profitability. Despite this realisation, some studies show that there are situations whereby employee satisfaction is not positively correlated with the level of profitability. For example, some studies have identified a negative relationship between employee satisfaction and the level of gross profit (Bernhardt, Donthu, & Kennett, 2000).
Customer satisfaction
The concept of customer satisfaction has been a major concern amongst scholars and practitioners in different economic sectors. Its significance has arisen from the emphasis by most organisations as one of their core priorities.
Bernhardt, Donthu, and Kennett (2000) assert that the significance of customer satisfaction has emanated from the growing concern on the relationship between customer satisfaction and organisations’ bottom-line performance.
Kuballa (2007) argues that most studies have considered customer satisfaction to be directly linked with an organisation’s performance as opposed to employee satisfaction. Additionally, most studies conducted on customer satisfaction have only focused on service quality areas such as tangibility and empathy.
Only a few studies have established the connection between the level of satisfaction and performance measures (Chi & Gursoy, 2008). Additionally, varied results on the relationship between organisational performance and customer satisfaction have been established.
Customer satisfaction is positively correlated with organisational profitability. Conversely, other studies assert that the level of customer satisfaction is not always indicated by an organisation’s level of profitability (Lumley, Coetzee, Tladinyane & Ferreira, 2011).
The literature review illustrates the existence of mixed results amongst employee satisfaction, customer satisfaction, and an organisation’s level of profitability. According to the findings of previous studies reviewed, the relationship amongst these variables can be correlated positively or negatively depending on the prevailing situation.
Despite these findings, an organisation cannot be considered successful if it ignores the element of employee satisfaction (Solanki, 2013). The employees’ contribution to an organisation is determined by their interest or organisational identification.
Subsequently, the significance of improving the quality of the employees’ relationship with organisations, for example, through employee engagement should not be underestimated (Soni, 2013).
Organisational leaders can improve employee satisfaction via different strategies. Some of these methods include the fulfilment of the employees’ needs, improving interaction amongst the various levels of management, and adaptability. Furthermore, employee empowerment constitutes a critical aspect in employee satisfaction (Solanki, 2013).
Methodology
Research design
This research paper evaluates the impact of employee satisfaction on the ENOC’s profitability. In a bid to achieve this goal, the study has adopted mixed research approach by integrating qualitative and quantitative research approaches. The choice of mixed research design will enable the researcher to improve the validity and credibility of the study, and hence its relevance to target stakeholders.
Moreover, mixed research design will improve the research findings by providing the researcher an opportunity to gather sufficient data from the field. Jha (2008) argues that qualitative research design “involves detailed description of situations, events, observed behaviours, and attitudes from different sources such as case studies and correspondence” (p. 45).
The quantitative design will enable the researcher to explain the relationship between the research variables numerically and analyse the data collected statistically (Brooks, 2006).
Population and sampling
The research data was collected from ENOC’s employees who were selected from different levels of management within the organisation. The research respondents were selected using random sampling approach.
This approach would provide employees in the top and lower levels of management with an opportunity of being selected (Easterby-Smith, Thorpe & Jackson, 2008). A sample of 100 respondents will be selected.
Data collection
The research data was collected from primary sources in order to improve their relevance to the case. Data was collected using interviews and questionnaires. A focus group interview was conducted in order to gather data from respondents within the top levels of management.
Additionally, a set of questionnaires was developed and distributed to the selected respondents through emails in order to minimise the cost of the study. However, the questionnaires were critically reviewed before sending them to the respondents in a bid to eliminate errors and ambiguity, hence increasing the rate of response.
Data analysis and presentation
The data collected using the questionnaires and interviews was analysed using Microsoft Excel. Some of the data presentation and analysis tools that were incorporated include charts, tables, frequencies, and graphs. These tools played a fundamental role in condensing the data collected from the field, and hence the ease of interpretation.
Research findings
Different findings were obtained depending on the research objectives. First, the researcher assessed the extent to which the respondents are engaged in the organisation’s operation. The responses obtained varied. Fifty five percent (55%) of the respondents argued that they were committed towards the organisation due to its commitment in delegating tasks to lower level employees.
Thus, the employees have an opportunity to learn new issues. Conversely, 45% of the respondents argued that they had developed a strong identification towards the firm due to its strong organisational culture, which involves a collaborative decision making process.
The respondents emphasised that ENOC had integrated a collaborative working environment between the top and lower levels of management. Subsequently, the firm provides them with an opportunity to participate in the decision making process by raising their views and opinions on the decision issues under consideration. The graph below illustrates the respondents’ opinion on their engagement.
Table 1.
Graph 1.
Sixty three percent [63%] of the respondents asserted that they were satisfied in their jobs due to the reward package that the firm has integrated, while 17% of the respondents said that they are not satisfied with the firm’s reward system.
Table 1.
Graph 2.
When asked how the reward system was effective, 47% of the respondents argued that the firm has integrated effective monetary gains such as bonuses, ensuring fair and equitable remuneration, gifts and awards.
On the other hand, 36% of the respondents cited non-monetary gains such as employee recognition, provision of training opportunities, independence and autonomy in executing tasks and incorporation of life and health insurance programs.
Table 3.
Graph 3.
Discussion and implication
The study shows that ENOC focused on improving its performance by focusing on satisfaction amongst its workforce. From the study, ENOC has mainly focused on the two-factor-theory of employee satisfaction. The theory postulates that the level of satisfaction is determined by two main group of factors, which include the motivator and the hygiene factors.
The hygiene factors are comprised of the working environment and the job tasks (Saiyadain, 2003). According to the theory, it is imperative for organisational leaders to ensure that the various job tasks are designed effectivley.
On the other hand, the motivator factors relate to the job content. Examples of motivator factors entail rewarding employees through non-monetary benefits such as recognising superior performance and providing them with an opportunity to progress through their desired career path.
In its quest to improve the level of satisfaciton amongst its workforce, ENOC has developed a comprehensive employee training program dubbed ENOC National Development Program. The program focuses on five main training areas, which include functional, professional, leadership, managerial, and behavioural skills (ENOC, 2014).The program is aimed at equiping employees with new skills within the oil and gas industry.
The training program is conducted by adopting both on-the-job and off-the-job training program. Furthermore, the firm outsources experts within the oil and gas sector to equip the employees with new skills and techniques.
This aspect improves the employees’ knowledge, and hence their ability to cope with the industry trends. Furthermore, the ENOC’s training program has successfully contributed toward improvement in the firm’s service delivery to its customers. Consequently, the firm has managed to increase the level of satisfaction amongst its workforce, and hence its sales revenues.
ENOC has adopted transformational leadership style in an effort to maximise the employees and organisation’s benefits. First, the firm has adopted task delegation as one of its employee engagement strategies.
This aspect depicts that the firm’s top management team has nurtured a high level of trust and integrity with the lower levels of management. ENOC’s success in delegating tasks has been enhanced by its adoption of the project-based approach in executing diverse gas and oil projects. In this aproach, ENOC develops a project team that is assigned specific tasks and responsibilities.
Furthermore,the project teams are required to meet predetermined milestones within a specific period. This approach provides the firm’s employees with an opportunity to make decisions on the best approach. Subsequently,through task delegation, ENOC has been in a position to improve the effectiveness of its work-design. For example, work design has significantly improved the employees’ job-depth.
Rauner, Maclean, and Boreham (2008) argue that job enrichment “gives employees the freedom to plan, execute and make decisions related to their job” (p. 34).
Furthermore, ENOC has succeeded in nurturing an enabling working environment by establishing a collaborative workplace. Collaboration amongst employees in different departments is a fundamental element in improving the effeciency and effectiveness with which employees execute their duties.
Collboration improves knowledge and information sharing within an organisation’s workforce. Consequently, an organisation attains synergy hence improving the quality of output delivered to the final consumer.
ENOC appreciates that employee satisfaction is directly linked to customer satisfaction. Subsequently, the firm’s top management team associates its strong business results with the high level of employee and customer satisfaction. For example, between 2011 and 2013, ENOC’s sales revenues increased by over 50%, while its profit levels increased by 39% (ENOC, 2014).
According to Saeed Khoory [ENOC’s Chief Executive Officer], the firm considers employee satisfaction as a fundamental driver in its growth path and over the past two years, the firm’s customer satisfaction index increased to 77% in 2013, while the level of customer loyalty increased from 61% in 2012 to 65% in 2013 (ENOC, 2014).
Employee involvement and recognition comprise another fundamental strategy that organisations can adopt in enhancing employee satisfaction, and hence the employees’ productivity. Hellermann (2006) argues that recognition constitutes an essential element in employee motivation. In its reward management practices, ENOC recognises employees who depict exemplary performance in their job by offering them awards.
Lewis (2007) argues that employee satisfaction plays an important role in enhancing commitment within a workforce. Subsequently, all the employees’ activities are focused at achieving the overall organisational goal. Furthermore, employee involvement significantly reduces the rate of employee turnover, hence minimising the cost of retraining new employees.
Furthermore, employee engagement in the decision-making process increases the likelihood of developing a product aligned with the market demand. Therefore, an organisation can be in a position to maximise its sales revenue and hence the level of profitability (ENOC, 2014).
ENOC’s focus on establishing a high degree of employee involvement and engagement has significantly improved the firm’s innovative capability. For example, in 2013, the firm received over 1,000 suggestions from its workforce on how it can improve its competitiveness. The firm’s CEO asserts the suggestions generated have enabled the company to improve its operational efficiency and profitability (ENOC, 2014).
Conclusion
The case study shows that employee satisfaction is strongly correlated with an organisation’s level of profitability. Therefore, organisational managers are compelled to institute effective human resource management policies in order to improve the level of satisfaction. One of the issues that managers should consider relates to work design.
The study shows that jobs should be designed in such a way that they contribute towards the employees’ quest for career progression. Some of the work plan techniques that managers should consider include work enhancement, work alternation, and work extension. Job designing provides employees’ with an opportunity to undertake challenging tasks, hence breaking the boredom associated with specialisation.
Furthermore, the case study underscores the importance of integrating effective leadership style in order to improve the level of employee satisfaction. Considering the changing nature of the labour market, it is imperative for organisational leaders to integrate transformational leadership style. This style will increase the likelihood of attaining optimal competitive advantage.
For example, transformational leadership will improve an organisation’s efforts to establish a collaborative working environment. Consequently, the quality of the final output improves due to of the synergistic working relationship that contributes to information and knowledge sharing. Thus, the probability of increasing and sustaining level of customer loyalty is remarkably improved.
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