EFFECT OF JOB SATISFACTION ON EMPLOYEE PERFROMANCE (A CASE STUDY OF AGIP OIL)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Attainment of a high level performance through productivity and efficiency has always been an organizational goal of high priority. In order to do that highly satisfied work force is an absolutely necessity for achieving a high level of performance advancement of an organization. Satisfied worker leads to extend more effort to job performance, then works harder and better. Thus every organization tries to create a satisfied work force to operate the well- being of the organization.

However, the total organizational performance depends on efficient and effective performance of individual employees of the organization. Therefore, every organization places a considerable reliance on their individual employee performance to gain high productivity in the organization.

Employee effort is an important factor that determines an individual performance will be. When an employee feels a satisfaction about the job, he/she is motivated to put greater effort to the performance. Then it tends to increase the overall performance of the organization. In other words, a satisfied individual employee and his effort and commitment are crucial for the successfulness of the organization.

Nigerian Agip Oil Company Limited (NAOC) with headquarters in Lagos Nigeria is a joint venture operated by Agip and owned by NNPC (60 percent), Agip (20 percent) and Phillips Petroleum (20 percent) produces 150,000 bpd mostly from small onshore fields.

Job satisfaction is a complex and multifaceted concept, which can mean different things to different people. It is more of an attitude, in internal state. It could be associated with a personal feeling of achievement, either quantitative or qualitative (Mullins, 1999). He examines job satisfaction (1) in terms of the fit between what the organization requires and what the employee is seeking and (2) in terms of the fit between what employees is seeking and what he/she is actually receiving. He emphasized that the level of job satisfaction is affected by a wide range of variables relating to

(1) Individual (i.e. personality, education, intelligence and abilities, age, marital status and orientation to work);

(2) Social factors (i.e. relationship with co-workers, group working and norms and opportunity for interaction);

(3) Cultural factors (i.e. attitudes, beliefs and values);

(4) Organizational factors (i.e. nature and size, formal structure, personnel policies and procedures, employee relations, nature of the work, supervision and styles of leadership, management systems and working conditions); and

(5) Environmental factors (i.e. economic, social, technical and governmental influences).

Sweeny and Mcfarln (2002) defined job satisfaction as the result of a psychological comparison process of the extent to which various aspects of their job (e.g. pay, autonomy, work load) measure up to what they desire. Thus, the larger the gap between what employees have and what they want from their jobs, the less satisfied they are; (employees tend to be most satisfied with their jobs when what they have matches what they want.

An employee‘ overall job satisfaction is the cumulative result of comparisons that she makes between what her job provides and what she desires in various areas. The fact that perceived importance makes such a big difference in how employees feel also has implications for management. Obisi, (2003), listed factors that contribute to job satisfaction as; adequate salary, good working conditions, parental management, job security, opportunity for growth, positive and supportive environment, friendly nature of co-workers and colleagues responsibility and cordial relationship between the superior and the subordinates. Therefore, we can conclude that job satisfaction is a person‘s evaluation of his or her job and work context.

This research is beaming searchlight into the influence of job satisfaction on employee’s performance in Agip Oil Company in Nigeria.

1.2 STATEMENT OF THE PROBLEM

The evolving competition in the oil and gas industry today in Nigeria is evident from the increasing foreign investors and many multinational companies and local investors (independent marketers) has called for good organizational framework that would allow these companies to retain their best hands.

Gunter and Furnham (1996) state that job satisfaction can directly cause work outcomes that are positive. Positive work incentives are incentives that make work interesting, e.g.; attractive work environment, good personnel policies, provision of benefits, job structure and compensation. Enabling work environment leads to motivation, good personnel policies, favourable work environment, and provision of benefits, job satisfaction and compensation. However, negative work incentives include those incentives that make work boring, unchallenging and dissatisfying. They lead to increased absenteeism, turnover and accidents. Thus to prevent these negative work outcomes, there is a need to find out which factors within the organizational context can lead to satisfaction among employees of Agip Oil Company so as to continually have productive, satisfied and contented employees. However, it is important to point out that the researcher is not unaware of the fact that factors like clear lines of communication, adequate reward system and promotional opportunities could also encourage or discourage both positive and negative work outcomes which if not adequately put in place could result in turnover of these employees. Comparative studies of this nature would afford the researcher the opportunity to identify variations in job satisfaction of employee and their impact on employee performance. A number of factors had been identified in literature as responsible for the extent to which dissatisfaction is associated with employee performance and compensation. The impact of these factors varied and are quite associated with beliefs, management of factors and tolerance levels (Delery and Doty, 2006; Doty, Glick and Huber, 2003). These factors which could enhance or impede academics work performance include top management emphasis on administrative style, work load, feedback about performance and support from superiors.

Moreover, job satisfaction is relevant to the physical and mental well being of employees, i.e. job satisfaction has relevance for human health (Oshagbemi, 1999). An understanding of the factors involved in job satisfaction is relevant to improve the well being of a significant number of people. While the pursuit of the improvement of satisfaction is of humanitarian value, Smith, Kendall and Hulin (1969) stated that ―trite‖ as it may seem, satisfaction is a legitimate goal in itself‖. Therefore, apart from its humanitarian utility, it appears to make economic sense to consider whether and how job satisfaction can be improved. Hence, the needs to identify variables within the organizational context that can help improve the job satisfaction of employee working in an organization. Most of the previous studies have made attempt to explain a worker‘s job satisfaction as a function of the individual´s personal characteristics and the characteristics of the job itself.

Other factors that appear to affect effective functioning of organizations include management and leadership styles, unclear rules and regulations in the personnel policies, excessive work load, poor communication with supervisor cum unclear lines of communication, boredom and frustration resulting from lack of support from the superior, suitable career ladder, unchallenging jobs and inadequate fringe benefits as expected in the working condition (Marriner- Tomey, 1996). Therefore, this study hopes to establish the relationships that exist between the different variables of employee performance and job satisfaction among the workers of Agip Oil Company.

1.3 OBJECTIVES OF THE STUDY

The main objective of this study is to determine the effect of job satisfaction on employee performance in Agip Oil Company. The specific objectives are therefore listed below;

1. To find out the relationship that exists between job satisfaction and employee performance in Agip Oil Company

2. To identify factors that determines job satisfaction of employees and their consequential effects employee performance.

3. To determine whether there is a difference in the way senior staffs and junior staffs perceive the job satisfaction.

1.4 RESEARCH QUESTIONS

What is the relationship between job satisfaction and employees’ performance in Agip Oil Company?

What are the factors that determine job satisfaction of employees and their consequential effect on employee performance?

Is there a difference in the way senior staff and junior staffs perceives job satisfaction and employee performance?

1.5 HYPOTHESES

H0: There is no significant relationship between job satisfaction and employee performance.

HA: There is significant relationship between job satisfaction and employee performance.

1.6 SIGNIFICANCE OF STUDY

The focus of this study is centered on employee performance of Agip Oil Company due to job satisfaction. The study is important as it will highlight the factors that employees view as enhancing job satisfaction leading to improved employee performance within their organizational context. The management of companies and organizations will find the research helpful in improving staff morale and bringing about job satisfaction of their employees. An employee who achieves success in his or her job and whose needs are met in the work place would be a happy employee that would strive to maintain excellence. In addition, the study will recommend adoptable policies and strategies for mitigating organizational correlates of job dissatisfaction.

1.7 SCOPE AND DELIMITATION OF STUDY

This research focused on employee performance that could arise as a result of job satisfaction. The research was conducted in Agip Oil Company Lagos State, Nigeria. Job satisfaction can have an impact on employees‘performance, which in turn could lead to an increase of productivity among employees. The study concentrated on finding out the causes of job satisfaction and dissatisfaction among employees (senior and lower level) and determines whether there is a difference in the way the senior and the junior workers perceive the job satisfaction and employee performance

LIMITATIONS OF STUDY

Limitations experienced in the course of this study are basically centered on problems relating to:

Difficulty in generating reasonable, adequate and reliable information from respondents- Respondents tend to provide information which they feel the researcher would be pleased to get, which may not be the right information.

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

Busy schedule of the respondents- The workers of Agip Oil Company who will be the respondents of the questionnaires may have busy work schedule thereby making them to provide answers to the questions hurriedly, which can affect their answers negatively.

1.8 DEFINITION OF TERMS

Employee: An individual who works part-time or full-time under a contract of employment, whether oral or written, express or implied, and has recognized rights and duties. Also called worker.

Satisfaction: refer to discharge, extinguishment, or retirement of an obligation to the acceptance of the obligor, or fulfillment of a claim.

Performance: the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract

Salary: Agreed-upon and regular compensation for employment that may be paid in any frequency but, in common practice, is paid on monthly and not on hourly, daily, weekly, or piece-work basis.

Incentives: Inducement or supplemental reward that serves as a motivational device for a desired action or behavior.