Universalistic Contingency And Configurational Approaches

Published Date: 02 Nov 2017

The 1980’s was seen as a watershed period in human resource management. Scholars such as David Guest made strides in differentiating personnel management and HRM by stressing the latter was concerned with a strategic and coherent approach which viewed employees as its most important asset. This was seen as a departure from the reactive and centralised activities of personnel management.

At the outset it is important to clarify the distinction between personnel management and human resource management (HRM). The origins of the traditional concept of personnel management can be traced to the post World War One 'welfare tradition' of concern for the basic needs of employees. The developing and maturation phases of personnel management between the 1940s to the 1970s saw an increase in the status of the personnel function, particularly in relation to Industrial Relations (IR) matters (Gunnigle et al, 1997).

The concept of HRM, as a new strategic approach to the management of people, evolved in the early 1980s. Its evolution was influenced by a range of factors, including increased competitive pressures caused by deregulation and globalisation, and the influence of notable academics in the US and the UK. Although it has been suggested that HRM may be no more than 'old style personnel management with a new name' Lawton and Rose (1994:.114), Storey (1989) identifies four features of HRM which distinguish it from traditional personnel management:

· It is explicitly linked with corporate strategy.

· It seeks to obtain the commitment of employees rather than their compliance.

· Employee commitment is obtained through an integrated approach to human resource policies (for example, reward, appraisal, selection, training); and· unlike personnel management, which is primarily the domain of specialists,

. HRM is owned by line managers as a means of fostering integration.

A very general definition is that HRM encompasses the philosophies, policies and practices that affect the employees working for the organization (Hellriegel et al., 1999).

Schuler (1992: 18) developed a definition which reflects HRM’s elevated status; it is referred to as strategic human resource management. He states "Strategic human resources management is largely about integration and adaptation. Its concern is to ensure that: (1) human resources (HR) management is fully integrated with the strategy and the strategic needs of the firm; (2) HR policies cohere both across policy areas and across hierarchies; and (3) HR practices are adjusted, accepted, and used by line managers and employees as part of their everyday work."

Guest (1989) offers insight into the different ways of considering HRM. Firstly, at the general level of analysis, HRM can be considered personnel management called by another name. Secondly, after a more detailed analysis, HRM is distinctive which indicates a supporting theory. However he notes that the theory would centre on the practices of firms following HRM, meaning that the theory would be in the form of some idealistic best practice.

Finally, between the two former points of general analysis and precise theory, Strategic Human Resource Management (SHRM) is concerned with a conceptual approach to managing workers in relation to the other factors of production.

What is HRM?

There is a lack of consensus on the nature of HRM and it is very common for the concept to be defined using different indicators. For instance some studies focus on the knowledge and competencies of the workforce and others on the effectiveness of the HR department. Adding to this, studies also take into consideration individual practices or a collection of them which are seen to influence knowledge as well as satisfaction and motivation (Paauwe & Boselie, 2005).

Boselie et al. (2005:81) remark that "A steady body of empirical evidence has been accumulated since the pioneering studies in the mid-1990s, yet it remains the case that no consistent picture exists on what HRM is or even what it is supposed to do."

The researchers remark that there is great diversity in types of practices that fall under the banner of HRM and a fixed list of generally agreed principles is not available. There are, however, four main practices common to the lists analysed in the study, they are: training and development, contingent pay and reward schemes, performance management and recruitment and selection management (Paauwe & Boselie, 2005). It should be noted that even though similar themes are apparent in the literature, some caution must be used in attempting to argue for convergence in HRM theory as the same concepts can be interpreted or used differently.

Storey (1992) says that models of HRM can be used in three ways; prescriptively, descriptively or conceptually. Clark (1993:19) explains that "Prescriptive models suggest what practitioners should be doing, whereas descriptive models comment on what is happening. In contrast, conceptual models contain no suggestion or description but might relate the theoretical inferences behind the definition of HRM to the wider processes of job regulation, organization restructuring and the management of change." Clark (1993) makes the case that HRM theory is partial and whether viewed prescriptively, descriptively or conceptually, its ‘models’ are not always clearly defined or related to theory. This presents some complications for those making the case that HRM leads to increased organisational performance. Another issue is that even if we use the same concepts, the underlying meaning of the practice can be totally different.

Theories of HRM

Soft Vs Hard

Approaches to HRM can be crudely categorised as being either ‘hard’ or ‘soft’. As the names suggest, these two are diametrically opposed concepts and fall under the umbrella of normative models of HRM and are used to categorise ways of managing people. The discussion about these about these opposing views began in the United States but has been the focus of British academia for quite some time.

The hard model stresses HRM's focus on the importance of the alignment of human resource policies, systems and practices with business strategy. Human resources are regarded as largely being a factor of production and play a passive role in the organization in that they are viewed as an operational cost as opposed to being viewed as a creative force. This emphasis on quantitative aspects of managing share some similarities with scientific management as employees are assessed on whether they possess the skills the organization require (Legge, 1995).

Soft HRM which is associated with the human relations school of Herzberg and Mc Gregor (Storey, 1987) places an emphasis on the employee with attention given to the integration of HR policies with business goals. Employees are viewed as a source of competitive advantage through the maximization of commitment, skill and flexibility and are elevated to the level of an asset (Legge, 1995).

While both these models have been very popular there have been criticisms concerning its use. The issue lies with the understanding that these two approaches are in great contrast to each other and yet authors such as Guest (1987) and Storey (1992) have incorporated elements of both into their theories of HRM such as commitment (soft) and strategic integration (hard). This is seen as problematic as each approach rest of different assumptions about human nature (Truss et al, 1997). This can be demonstrated by returning to Mc Gregor (1960). Theory X associated with hard HRM puts forward the view that people do not like work and thus tight managerial control is warranted. Conversely, Theory Y managers are of the view that "man will exercise self direction and self-control in the service of objectives to which he is committed" McGregor (1960:326).

While hard HRM is associated with strategic integration and ‘fit’ of human resource policies with business strategy, the empirical evidence to demonstrate that a high degree of integration or ‘fit’ leads to an increase in organizational performance is lacking. Indeed a high degree of integration may lead to inflexibility and maybe counterproductive (Legnick-Hall, 1988). Concerning soft HRM, there are also issues of ambiguity concerning fostering commitment and flexibility as these concepts are multilayered, often contradictory and have very little empirical evidence supporting it (Legge, 1995 b).

Truss et al (1997) in their study which involved eight case studies of organizations does not encounter ‘pure’ versions of either model and observes a mix of both. This opens up tensions concerning rhetoric vs the reality debate when considering theories of HRM. In this instance the rhetoric used by organizations to communicate with employees had many soft characteristics while the reality experienced by employees was associated more with strategic control, synonymous with hard HRM.

Vaughan (1994: 26) suggests that "HRM rhetoric communicates an attractive image of people trusting each other, sharing risks and rewards, and united by a strong feeling of identity, but it gives little sense of the impersonal economic rationalism that characterises management thinking in the real world". In this way, the value and credibility of HRM as a discipline has the potential to be compromised.

The debate also has implications for normative theories of HRM as a whole which espouse the view that what is good for the organisation is also good for employees. This is problematic as the needs of a business do not always align with the interests of employees (Keenoy, 1990). A common example would be those organisations competing on cost.

Universalistic, Contingency and Configurational Approaches

Two approaches to HRM which has dominated the discourse as two opposing theoretical foundations are differentiated as universalistic and contingency.

The universalistic perspective, according to its scholars and researchers starts with the premise that there exists a relationship between the adoption of particular HRM practices and increased organizational performance (Delery and Doty, 1996). It proposes ‘best practices’ that when adopted and implemented would contribute to contribute positively to financial performance regardless of the strategic goals of the organization (Huselid, 1995). Further, there is the assumption that HRM practices have an effect on employee motivation as well as increased efficiency (Ichniowski et al, 1996).

Delery and Doty (1996:805) identify seven ‘best practices’ which are "internal career opportunities, formal training systems, appraisal measures, profit sharing, employment security, voice mechanisms, and job definition." These are viewed as crucial aspects of the employment system which affect performance. This list is not definitive and different studies have used various configurations of practices as there is little agreement on what the ideal ‘best practice’ system should be. Huselid (1995) uses thirteen HRM practices while Pfeffer (1994) propose the use of sixteen management practices to achieve higher productivity and profits.

Although internal fit is key to universalistic approaches, these models fail to explicitly consider the internal integration of HR practices, and they consider them merely from an additive point of view (Pfeffer 1994; Becker and Gerhart, 1996).

The contingency approach proposes another way to elicit increased performance. It suggests that organisations need to adapt their HRM practices according to the business strategy that is employed. Higher organisational performance is derived from the interaction between the firm strategy and HRM. The approach denotes external fit and proponents are of the view that contingency models are better suited to HRM. HRM practices that are not consistent with business strategies and are in conflict with other HRM practices create confusion or ambiguity which may lead to decreased performance for the individual and the organisation (Schuler and Jackson, 1987; Schuler, 1989). Delery and Doty (1996) make it clear that by using contingency theory the organization can promote employee behaviours that are consistent with the business strategy of the firm because behaviour stems from ability and motivation, therefore the organizations can implement HR practices to recruit the individuals they need while promoting policies which motivate the employee to work in harmony with the said strategy.

Gibb (2001:320) cautions us in this critical statement of best practice and contingency models: "The methodological weaknesses common to both perspectives are partly rooted in the sources and forms of the data gathered. Data sources on the state of HRM are typically surveys of the views of individuals in organizations; either personnel professionals responsible for people management policies or senior managers concerned with the business as a whole. Both these groups will have self constrained and self interested views in providing information about HRM systems and services, and in evaluating their organisations implementation of either best practice or contingent HRM. They will provide subjective rather than objective evidence."

The configurational approach combines internal and external fit which is seen as the basis for maintaining and increasing performance. HRM practices usually described as ‘bundles’ are combinations of various practices which are used in corresponding organisational contexts. Martin-Alcazar et al (2005).

In line with this view Miles and Snow’s (1984) proposed a typology that identifies the four ideal planned types of strategies: prospector, analyser, and defender. Picking one or the other has implications for HRM activities in that employment systems can either be categorised as ‘market type system’ meaning that employees are recruited from outside of the organisation. The other, the ‘internal system’ is based on the potential internal pool of perspective employees for to fill positions (Delery and Doty (1996).

The prospector strategy is adopted when strategy is frequently changing. In terms of recruitment it is based on the market type system. The defender on the other hand, focuses on efficiency in current products and in the markets they are competition in, the employment system is internal system is deemed more appropriate. The third type of configurational strategy is the analyser. This is the middle ground between the defender and prospector and is seen as suitable for organisations that have stable product domains as well as new ones. They aren’t regarded as initiators of change but adapt to changes faster than the defender.

The Resource Based View of the Firm (RBV)

Barney’s (1991) seminal article concerning the resource based view (RBV) which incorporates concepts from organizational economics and strategic management makes the case that sustained competitive advantage is derived from capabilities and resources that are not substitutable, valuable, rare and not completely imitable, there has been a rapid diffusion of this theory as well as research into it to strengthen the case for HRM as a strategic concept which has implications for the performance on an organization. Examples of these resources can include things such as information and knowledge, organizational processes and routines as well as management skills.

Becker and Huselid (2006: 900) state that "…integration tends to focus on human capital, or employee-level attributes, and the RBV’s emphasis on recognizing existing strategic resources rather than the development of those strategic assets. However, there is little evidence of the impact of this theoretical work on the empirical SHRM literature. Instead, the most we can say is that we have a set of empirical results that are consistent with the theoretical implications of the strategy literature but do not follow from an SHRM theory that directly integrates that theoretical literature." The authors express concern over the level of ambiguity or abstraction between HR systems and RBV concepts because of a lack of direction concerning implementation; it therefore makes empirical work difficult. They are a bit forgiving however when quoting Barney (2001:54) who says that "the ability to implement strategies is, by itself, a resource that can be a source of competitive advantage." This reflects scholars’ relatively new attitude as implementation was once thought to be something that would automatically follow strategy. Having considered some of the theories and models that have dominated the HR literature, we now turn to a more in depth discussion on how HRM is linked with performance.

HRM and Performance

Theorists have been on a mission to seek validation from empirical evidence concerning the link between HRM and performance. Legge (2001: 23) refers to this as a quest to find "the Holy Grail of establishing a causal link between HRM and performance." As the phrase would suggest, this is no easy task and the quest has been set back by a series of issues.

It is helpful to provide a description of what performance refers to. Pauuwe and Boselie (2005) adapting the work of Dyer and Reeves (1995) say that performance should be understood as a multifaceted concept and performance outcomes of HRM can be considered in the following ways: by financial outcomes (e.g. profits, market share), by organizational outcomes (e.g. using measure of productivity, output and quality) and by HR- related outcomes (e.g. satisfaction, commitment and other attitudinal and behavior factors).

Boselie et al (2005) concluded in their analysis of their literature review that financial measures are represented in fifty percent of all the articles studied at the time with profit being the most common measure.

Profit based financial measures of performance are difficult to tie to HRM as there are many factors , internal and external that may influence them and may totally be out of the realm of employees or human capital as a whole. This could include things such as research and development activities as well as marketing strategies.

Additionally performance based studies have come under scrutiny. Wright and Haggerty (2005:8) identified sixty seven empirical studies in their literature review which analyzed the relationship between HRM practices and performance. The majority drew criticism as the studies were designed with a post-predictive method which"…measures HR practices after the performance period, resulting in those practices actually predicting past performance". The researcher found that only a few studies tackled the effect of HRM practices on performance in a more timely and accurate manner while tying them to subsequent performance, which demonstrates the lack of presenting or describing causal relationships. As financial performance is always at the top of an organisation’s list being its top strategic goal Paul and Anantharaman (2003) separates it from organizational performance with financial performance being measured in terms of sales, net profit and return on investment and operational performance being measured by employee retention and productivity, speed of delivery and quality of product etc. This is sensible as they found that not one HRM practice had a causal connection to financial performance but played an indirect role in influencing it by intervening variables and operational performance dimensions.

Traditionally we have seen the case being made for the ability of individual HR practices to influence performance (Delery and Doty, 1996) but this view is inconsistent with the dominant theory of the resource based view with its emphasis on internal fit and the importance of complimentary resources which mirrors concepts of synergy, contingency factors and a holistic approach as the HR system as a whole is viewed to be a greater source of competitive advantage.

In considering a holistic view, employee attitudes and satisfaction mentioned previously, can be seen as being a measure of performance itself while contributing to financial performance even though it may be indirectly.

Bowen and Ostroff (2004) accept that HRM can make a difference concerning performance and identifies a crucial linkage in the relationship between HRM and performance as being organizational climate. This is defined as is ‘a shared perception of what the organization is like in terms of practices, policies and procedures, routines and rewards, what is important and what behaviours are expected and rewarded (Bowen and Ostroff, 2004: 205). The authors state that HR systems comprising of many practices can be effectively designed and administer "….by defining meta features of an overall HRM system that can create strong situations in the form of shared meaning about the content that might ultimately lead to organisational performance’ (Bowen and Ostroff ,2004:206). These meta features such as consistency and consensus play a vital role in fostering perceptions, attitudes and behaviours that are shared. For this to occur individual employees will need to see the organizational climate as relevant to their own goals in order for some positive outcome to be achieved as the potential is there to have a climate that is viewed as being too rigid. Not all employees will perceive practices or policies the same way but it is acknowledged that if there is a strong climate that focuses on flexibility and willingness to change then employees will be far more inclined to share the idea that adaptability is expected (Bowen and Ostroff, 2004).

Referring to the theory of the three ways of understanding performance (Pauuwe and Boselie 2005; Dyer and Reeves 1995) suggest that when HR practices are linked with performance expressed in terms of organizational outcomes and HR related outcomes, it is understood that the behavior and attitudes of the employee can have a real impact on the organization.

Hartog et al (2012) investigated the mediating role that HR practices play between HR systems and HR outcomes in a study of 2,063 employees and 449 managers in 119 branches of a single large firm. This specific study tested how managers’ perceptions of the HR practices implemented in each branch related to individual employee perceptions of the said practices.

Their findings implicated that there was a weak correlation between manager and employee ratings of HRM, this supports the work of Nishii and Wright (2008), which says the organization’s HR plan may not the same with what is implemented and even less with what is perceived by employees. Liao et al (2009) suggests that motivation-related employee attributes may be more directly influenced by employee interpretation of the work system than other attributes. Therefore it is no surprise that the relationship between managers’ views and employee perceptions with regard to performance only existed where there was a high degree of communication. Where there was low communication quality, no direct relationship was found.

This means that HR managers need to take into consideration both content and implementation into consideration. Thus a strong HR system is one which is characterized as one which sees agreement on HR practices amongst managers coupled with effective implementation and high quality communication (Bowen and Ostroff, 2004). We will now move on to a variable that relates to individual behavioural outcomes and unit level performance; job satisfaction.

Job Satisfaction

Job satisfaction has been an important area of research for a number of years among HRM scholars as well as other organizational management disciplines as it can be considered as one of the main factors in the efficiency and effectiveness of organizations (Aziri, 2011). As a widely researched topic it follows that there are many definitions. Michinsky (1993: 290) defines this concept as being the "extent to which a person derives pleasure from a job."

One of the most popular definitions contends that ‘‘job satisfaction is a pleasurable or positive emotional state resulting from an appraisal of one’s job or job experiences’’ (Locke, 1976: 1300). But why should anyone is concerned about whether or not employees are satisfied?

According to Muchinsky (1993) the value of job satisfaction can be understood through considering humanitarian and utilitarian perspectives. The former centers on the premise that all human beings are entitled to / or deserve respect and fair treatment while the latter is concerned with the usefulness of job satisfaction to organizational effectiveness. It has already been mentioned that being profitable is always a key goal of the organization so it understandable that most managers seem to endorse the utilitarian approach due to their focus on productivity, which means that they are in favour of a satisfied workforce as opposed to an unsatisfied one.(Organ, 1990).

Armstrong (2006) says job satisfaction can be understood in terms of attitudes and feelings. Favorable attitudes towards the job indicate job satisfaction while unfavorable attitudes towards the job indicate job dissatisfaction. Mullins (2002) also shares this view as satisfaction is viewed as being concerned with an internal state which is linked to the individual’s feelings of achievement, either quantitative or qualitative.

Job satisfaction is a many-sided concept and individuals can have attitudes concerning their jobs as a whole but also with regard to specific aspects such as the nature of the job, their coworkers, supervisors or subordinates and their salaries (George and Jones., 2008).

Jathanna et al (2011: 1) remark that, "Explaining job satisfaction has been an enduring problem in the study of organization. The major motivation of behavioral scientists for studying job satisfaction has been to create a link between workers’ job satisfaction and job performance. Although investigations to this end have provided varied and contrasting results, job satisfaction, in general, is believed to be related to several important organizational behaviors, such as turnover, absenteeism, and union activity."

Theories of Job Satisfaction

While theories of job satisfaction can be catergorised chronologically due to the exhaustive amount of literature on the topic, their classification into content theories and process theories has achieved some dominance.

Content theory suggests that job satisfaction is achieved when the individual’s need for growth and self-actualisation is facilitated by their occupation. Process theory on the other hand is concerned with explaining job satisfaction along the lines of how well a particular occupation meets one’s expectations and values.

Content Theories

Maslow’s Hierarchy of Needs

When exploring the landscape of content theories one doesn’t have to venture far before encountering the work of Maslow (1954) on his hierarchy of needs theory. It is explained through the use of a five tier pyramid model. The lowest tier is characterized by basic needs that we all require to live much less work. They include needs such as water, food, and shelter. When the individual has satisfied those needs they move on to the other tier which describes physical security. In satisfying this need the individual seeks to live in a safe, predictable and lawful world where financial security is also achieved. Having achieved a sense of safety, the individual progresses up the pyramid to satisfy the need of belonging by developing close associations with others. With this, one feels appreciated and has meaningful friendships. The fourth tier incorporates recognition and self-esteem needs from one’s peers. The final need of self actualization, once gratified continues to grow autonomy and self-direction. This framework describes a specific order to the way human beings are motivated and satisfied. Once one need is fulfilled, the individual cannot rely on it to act as a motivator. The scholar does mention however that it is possible for one need to be partially fulfilled before moving on to another need

In applying this theory to work situations management should ensure that they foster an environment where the first four needs are met through core HR activities such as performance appraisal, outlining job description and type of employment, health and safety as well as proper wages. This is seen as a positive step in fostering satisfaction amongst employees and creating a platform for the employee to move to self actualization.

Wicker et al (1993) criticises this approach because people who report that higher needs are important may do so for other than they being deprived or having attained it. The less favourable possibility is that the individual may attach importance to the need just because they value it. The scholars maintain that if individuals report that a higher-order need is important because they have attained it, it would be positively related to satisfaction.

Herzberg’s Two Factor Theory

Frederick Herzberg’s two factor theory also known as motivation-hygiene factor theory, based on a study of engineers and accountants introduced in 1959 is held in high esteem for explaining motivation and job satisfaction in ways other theories do not. The theory recognizes that job satisfaction and dissatisfaction manifests different work characteristics and thus cannot be measured along the same continuum. Schulz et al (2003) reflecting on the theory, describes that employees who are satisfied at work attribute their satisfaction to internal factors, while dissatisfied employees ascribe their behaviour to external factors. The factors that contribute to the satisfaction of employees are called motivators, while hygiene factors are those which contribute to job dissatisfaction. The motivators are intrinsic and influence satisfaction based on fulfillment of higher level needs such as recognition, achievement, and opportunity for growth. The hygiene factors are extrinsic variables such as work, pay, conditions and interpersonal relationships that must be addressed in order to prevent dissatisfaction. It should be noted that the author makes clear that the factors leading to job satisfaction are not related to those that lead to job dissatisfaction. It is therefore possible to mitigate factors that lead to job dissatisfaction but it may not translate into increased motivation or satisfaction.

Smith et al (1992) are of the view that this theory has a few shortcomings. Most notably is the simplistic relationship between motivation and dissatisfaction and the relationship between sources of job satisfaction and dissatisfaction. In addition to this it assumes that all employees will react to changes in motivating/hygiene factors, disregarding individual differences.

McClelland’s Theory of Needs

McCelelland’s (1961) theory of needs is one of the most widely used theories in research and practice. It is also known as McClelland’s trichotomy of needs. The theory proposes that individuals are motivated by achievement, affiliation, or power.

Fritz et al (2000:41) explain that "Achievement is described as working toward something only to achieve a goal or dream. Achievement is trying to accomplish something with great effort, skill or perseverance. Affiliation is described as establishing, maintaining, or restoring a positive affective relationship with another person. This relationship is described mostly by the word ‘friendship’. Other statements associated with affiliation are ‘liking’, or ‘the desire to be liked’ or ‘accepted by someone.’ Approval-seeking is a high priority of a person motivated by a need for affiliation. The need for power is described as the control or the influence of the thoughts of a person or a group of individuals. This need for achievement compliments Maslow’s (1954) hierarchy of needs theory. Kast and Rosenzweig, (1970:295) remark that "Although not stated specifically in Maslow's need hierarchy, the need for achievement underlies self actualization." McClelland (1961) proposes that when a need is strong in an individual, its effect is to motivate the person to use behavior which leads to satisfaction of the need.

The concept of achievement motivation also relates to Herzberg's motivation-hygiene theory. Individuals who possess high achievement motivation tend to be interested in the motivators while those with low achievement motivation are more concerned about the environment (Hersey and Blanchard, 1982).

Process Theories

Whereas content theories focus on factors that contribute toward job satisfaction and dissatisfaction, the aim of process theories is "to describe the interaction between variables in their relationship to job satisfaction" (Gruneberg, 1979:19). While process theorists acknowledge that job satisfaction is influenced by the relationship between the individual and the environment, it is also determined by the values and expectations that individuals have in relation to their job (Gruneberg, 1979). This school of thought suggests that workers’ select their behaviors in order to meet their needs. As far as process theories go, Adams’ (1963) equity theory and Vroom’s (1982) expectancy theories have been the most prominent.

Adams’ (1963) Equity Theory

Adams (1963) proposed that the individual perceives their job as a series of inputs and outcomes. Examples of inputs are experience, ability, and effort, while outcomes include factors such as salary, recognition, and opportunity. Perception plays a major role in determining job satisfaction as satisfaction is determined by how fairly individuals perceive they are being treated in comparison to others. Furthermore it proposes that people seek social equity in the rewards they expect for performance and feel satisfied at work when the input to a job and outcome corresponds to that of their fellow coworkers. It also suggests that a psychological contract exists between the employer and employee where it is understood that for a certain amount of effort there should be a corresponding amount of reward.

Coldwell and Perumal (2007: 199) offer a framework of employee perception and behavioural outcomes as it relates to equity theory:

"Employees first assess how they perceive themselves to be treated by the firm. Second they form a view of how another or others with whom they measure themselves are treated by the firm. Third they compare their particular circumstances with a referent that might be a specific individual or some persons or a generalized group which leads to specific perceptions of equity or inequity. Finally, feelings of inequity or equity may lead (depending on their type and intensity) to specific behavioural outcomes."

Cosier and Dalton (1983) crticise this approach because it does not take account how inputs change over time and it fails to explain how employees define inputs and outcomes

Vroom’s (1964) Expectancy Theory

Vroom’s (1964) theory of job satisfaction shares similarity with Adams (1963) as it investigates the interaction between individual and workplace variables. It differs in that elements of worker expectations are included in the theory. If employees receive less than they expect or perceive some form of unfair treatment then dissatisfaction is likely to occur. As an example dissatisfaction can occur because there is a discrepancy between expected compensation which can be monetary or otherwise and the actual outcome. Conversely, overcompensation can also lead to dissatisfaction with the individual experiencing feelings of guilt. In essence, the employee’s decision to complete or not complete job tasks is dependent on their perceived aptitude to be able to complete the task and earn fair compensation (Vroom, 1982). As this theory incorporates measures that are intuitive in nature there has been criticism of this approach as in the case of Adams (1963). Van Eerde and Thierry (1996) noted the difficulty in dealing with the ambiguity surrounding the measurement of the major constructs in the expectancy theory.

Determinants of Job Satisfaction

There have been numerous variables that are associated with job satisfaction. The literature tends to categorize them in three ways; Demographic data (includes age, race, gender, education etc), intrinsic variables (e.g. responsibility, recognition and advancement) and extrinsic variables (e.g. salary, working conditions and supervision).

Demographic Variables

The literature indicates that there is a relationship between the demographic variables of gender, age, race/ethnicity and other factors influencing job satisfaction (Corbin, 2001; Feldman & Turnley, 2001).

Age

Age has often been focus of research with some showing a gradual increase of job satisfaction while age increases (Weaver, 1980; Sutter 1994). A link between age and job satisfaction is generally accepted and is often attributed to the idea that individual job expectations tend to be more realistic as employees mature. Drafke and Kossen (2002) support this view, explaining that job satisfaction typically increases with age as older workers have more work experience. Younger employees are viewed as being idealistic in terms of what work should be like. Quinn et al (1974) reported that promotions and acquisition of more desirable positions by older staff were the reasons for satisfaction. Zeitz (1990) demonstrated major differences in the satisfaction levels of government employees based on their positions being classified as elite, professionals, non-elite professionals, and non-professionals. Researchers like Brown, Hohenshil & Brown (1998) as well as Levinson, Fetchkan and Hohenshil (1988) have not found a significant relationship between age and job satisfaction.

Gender

Chiu (1998) reported contradictory results with regard to studies on the relationship between gender and job satisfaction. Murray and Atkinson (1981) found that the sexes attach importance to different factors, stating that females attach more importance to social factors, while males place greater value on pay, advancement and other extrinsic aspects. Robbins’ et al (2003) survey of issues affecting the women of the South African workforce suggested that the factors that contributed the most to their job satisfaction were the company of co-workers, the opportunity to learn new things and factors inherent in the job itself.

Donohue and Heywood (2004) however could not prove gender satisfaction differences in their study and Robbins et al. (2003) concluded that while gender differences can have an effect on the relationship between job dimensions and job satisfaction; it does not have a direct impact on job satisfaction.

Tenure

Saal and Knight (1988) include tenure as a demographic variable and suggest that tenure is likely to influence job satisfaction. The prevailing notion is that employees with longer job experience are more satisfied compared to those with fewer years of experience. It suggests that there is an acclimatization process where employees settle into their jobs over time, and this leads to organizational commitment and job satisfaction (Okpara, 2004).

Another interesting point on tenure is its relationship with absenteeism. Hoque and Rahman (1999) maintain that employees with higher work experience as opposed to those with lower work experience reported higher levels of absenteeism because of the belief that they were entitled to sickness absence due to their loyalty to the organization.

Research concerning tenure is also contradictory as can be seen in the work of Lau et al. (2003) who found there is no association between tenure and absenteeism.

Intrinsic Variables

Intrinsic variables are described as the employee’s emotional reaction to the job and includes factors the opportunity for advancement, the freedom to choose their own way of working and the recognition that they receive.

Opportunity for Advancement

Vroom (1982) suggests that promotional opportunities are important to a worker's job satisfaction with the job; especially in the situation where a worker believes that the achievement of company goals will lead to such personal rewards as promotion.

He interpreted the opportunity for advancement or promotion as a desired, positive, personal goal. Schneider, Gunnarson, & Wheeler (1992:58) state that "Employees who perceive few opportunities for advancement have negative attitudes toward their work and their organizations."

It is argued that advancement rather than recognition and achievement has a greater impact on job satisfaction because being promoted brings may benefits including positive changes in pay, autonomy and supervision (Arnold and Feldman 1986).

Autonomy

Autonomy is a frequently used intrinsic variable in explaining job satisfaction and is understood as the individual’s freedom to make choices concerning their jobs. Green [2006] concludes that increasing the autonomy of employees is positively related to job satisfaction.

Recognition

Recognition can either be formal or informal and can be described as an appreciation of employee’s performance in relation to organizational goals. Recognition links motivation and performance and is positively associated with job satisfaction (Flynn, 1998).

Fairness

Fairness is a crucial factor in determining an employee’s satisfaction. An employee’s perception of fairness as it relates to how the organization rewards its employees is considered a better predictor of job satisfaction than gender or actual salary (Gunter and Furnham, 1996). Employees usually compare themselves to their colleagues so it is no surprise that consistency concerning fair treatment is valued. Unfair treatment can be seen to threaten the psychological contract between employer and employee.

Extrinsic Variables

Pay

Pay refers to the amount of financial compensation that an individual receives for work done. Luthans (1998) states that salaries are not only essential in assisting people to satisfy their basic physical and security needs but is also instrumental in satisfying higher level needs..

Nel et al (2004) adds that employees view their monetary compensation as an indication of their value to the organization. Boggie (2005) explains that lack of recognition and a relatively low salary can affect employee retention negatively. Oshagbemi’s (2000) study established a statistically significant relationship between pay and rank of employees with job satisfaction.

The outcomes of research into this field are far from consistent however. Firstly pay may not be such a great indicator of job satisfaction as those with higher salaries may still feel dissatisfied with their jobs if they are not happy with the core elements of the job and can find no opportunity for advancement (Bassett, 1994). The author explained that there was a lack of empirical evidence exists to indicate that pay would solely improve worker satisfaction or reduce dissatisfaction. The above indicates that the debate is still alive concerning this variable.

Supervision

Supervision as a function as well its type, plays an important part in job satisfaction. Employees’ superiors provide not only technical guidance but also emotional support to subordinates concerning job related tasks (Robbins et al., 2003).

According to the management style adopted, supervisors can contribute to high or low morale at work (Ramsey, 1997). Democratic management styles are associated with higher levels of satisfaction as opposed to more dictatorial or loose styles (Packard & Kauppi, 1999).

The emphasis on a humanistic approach which focuses on consideration for employees rather than on solely focusing on job design and production generally rewards the organization with more satisfied employees (Brewer and Hensher, 1998).

Working Conditions

Working conditions refer to a combination of physical factors such as lighting and ventilation, as well as privacy and acoustic. Optimization of physical workplace characteristics can help in fostering environmental satisfaction. Newsham et al (2009:137) remark that "the physical work environment, which is provided by management to the employee, can be considered as an expression of management’s attitudes towards the employee; and conversely, it was considered that environmental satisfaction would influence satisfaction with other aspects

of the employment relationship."

Having outlined in general terms the factors that contribute to job satisfaction and those that decrease dissatisfaction in the literature, it should be noted that this list is far from definitive. It is important to understand how these factors are viewed within respective industries and local contexts to obtain a more meaningful perspective. We now look at the importance of job satisfaction in the healthcare industry.

Healthcare and Job Satisfaction

Nikic et al (2008:9) commenting on the importance of employee satisfaction state "Job satisfaction in health care workers has a great impact on quality, effectiveness and work efficiency and at the same time on health-care costs. Besides its importance for patients and health care systems as a whole, professional satisfaction in health care workers is directly connected with absence from work, human relations and organization of work"

The majority of studies concerning job satisfaction in this particular industry have been focused on nurses in the public sector. Managers have often found themselves adopting a more reactive posture within the organization to deal with the combination of increasing turnover, a tight labour market and patients’ needs (Shanahan, 1993). Managers therefore need to pay special attention to enhancing job satisfaction in order to increase the probability of retention and commitment.

In a study examining nurses in Europe, Stordeur et al’s (2001) findings show a positive relationship between leadership quality and affective commitment and between job satisfaction.

A moderate inverse relationship between job stress and job satisfaction among thirty mental child health nurses in the United States was discovered by Williams (2003) when examining intent to leave employment.

The framework of intrinsic and extrinsic variables mentioned previously was seen to impact job satisfaction amongst nurses in a pilot study done by Hegney et al (2001).

Keith (2005) assessed the satisfaction amongst all staff at a private psychiatric hospital and found that there was a high level of pride concerning the organization they work for but low levels of satisfaction concerning their actual jobs. Coomber and Barriball (2006) in examining intent to leave and turnover found that factors such as stress and leadership continued to affect dissatisfaction while level of education and pay were found to be associated with job satisfaction. This UK study highlights the importance of job satisfaction in healthcare.

A study by Martina Price (2002) looked at the factors leading to job satisfaction and dissatisfaction of registered nurses who made up forty percent of the workforce in an acute care hospital. Relationships between co-workers and employment benefits were seem as satisfiers along while low levels of perceived autonomy and advancement opportunities were seen as dissatisfiers. Lack of participation in decision making and low levels of encouragement, recognition and feedback from management were also associated with job dissatisfaction. What’s more interesting about this study is that management had no knowledge of the levels of satisfaction or even what factors influenced them. Had they given their employees a higher strategic priority, it would have been quite possible to address the factors that lead to dissatisfaction at the line and managerial levels.

The quality of leadership and collaboration between nurses and doctors influence job stress and satisfaction. Konstantinos and Christina (2008) study of a psychiatry unit’s mental health nurses revealed the importance of quality clinical leadership from the doctors in addition to inter professional collaboration.

The above literature gives further credibility to Urden (1999), who found that overall job satisfaction was the principal reason that nurses chose to stay in a particular job and that very little has been done to promote job satisfaction in most healthcare facilities. Although the literature has not addressed exactly what nurses need from an organisation to be satisfied unsatisfactory conditions, shortage of supplies and inadequate staffing promote dissatisfaction (Friedrich, 2001). Why is this issue not taken more seriously among HRM managers in healthcare institutions when there is already a shortage of nurses worldwide? An explanation could be that there exists am inevitable need to keep costs contained. Pressure to keep costs down from patients and other institutions such as insurance companies may have benefits such as savings that are passed on to the consumer as lower prices but may hamper HRM activities which promote satisfaction. Bradley (2000) remarks that the drop in quality of the work environment is due to the efforts of the industry as a whole to stay profitable.

This may seem comical as research by Laschinger et al (2001) suggests that a poor working environment may counteract attempts to improve patient satisfaction as higher levels of job satisfaction were associated with improved quality of nursing care. This has implications for linking HRM activities with performance. Customer satisfaction, in this case, patient satisfaction is related to nurses’ job satisfaction. One can hypothesise that if management can use HRM to foster job satisfaction in their employees it would be easier to remain competitive by meeting its customers’ needs. Tzeng and Ketefian (2002) examined the relationship between nurses’ job satisfaction and patients’ satisfaction with respect to the nursing care they received while inpatients in admitted to hospital in Taiwan. The exploratory study focused on patients and nurses in various units including medical-surgical units, a pediatric unit as well as an obstetrics/gynecology unit and tested variables such as indirect and direct working environment, salary and promotion, self-growth, the challenging nature of the work, leadership style, and family support. It is safe to say that this study considered demographic factors, intrinsic and extrinsic variables. The authors found several significant relationships between the nurses’ and patients’ responses. The findings suggest that administration can influence and improve patient satisfaction and in turn intent to return to the facility by catering to nurse satisfaction. Although the study only incorporated one hospital in their study, there are other scholars who propose a similar link between health care workers’ satisfaction (not only nurses’) and patient satisfaction. This research suggests a strong relationship between employee satisfaction, the quality of care, and patient satisfaction. Atkins et al (1996) demonstrated that job dissatisfaction negatively impacted patient loyalty leading to a drop in profitability. Ott and van Dijk (2005) suggest employee satisfaction with the organisation is a better predictor of customer satisfaction than employee’s job satisfaction. The activity which was most relevant to client satisfaction was job related training. This was seen to have no relation to job satisfaction. While making the case for positive relationship between employee and patient satisfaction, the connection is much more complex and can even be a conflicted one. For instance the authors found that regular working schedules for employees fostered job satisfaction but decreased client satisfaction.

Job satisfaction within the healthcare industry is also related to the quality of care and other costs. Satisfied employees are less violent, less stressed out, additionally a drop in leaves of absence and violence claims are all attributed to putting employees first as a competitive strategy (Harmon, et al, 2003; Joiner and Bartram, 2004). Rathert and May (2007) report a decrease in medication errors as well as an increase in general patient safety.

Hospital administrators may find all these benefits associated from positively influencing job satisfaction very appealing but their ability to implement any changes will be dependent on variables such as the skills and abilities of management, the strategy of the organisation, in terms of its main goal and how it chooses to compete. Organisational culture and budgets may prevent long term fixes from being put into action. Externally, legislation and unionisation may provide the push for organisations to take their employees’ wellbeing more seriously as part of their overall strategy. The HR strategy of the firm is paramount to facilitating job satisfaction; adopting models such as the RBV puts labour at the heart of the organisation. This could not be more relevant than in using the example of a health care institution. One should note though that the national context should always be considered when adopting policies and as is often the case with other HR concepts, the decision usually involves choosing between best fit or best practice models but one should use caution as they are far from authoritative. It may be useful to consider a more holistic approach which views employees as customers themselves (internal customers). This outlook allows for a high understanding of workforce and may spawn policies that can mitigate bleaker forecasts of the labour market.

In the following section the research methodology employed in this study will be described.