BUS603: Managing People

We conducted an empirical study aimed at identifying and quantifying the relationship between work characteristics, organizational commitment, job satisfaction, job involvement and organizational policies and procedures in the transition economy of Serbia, South Eastern Europe. The study, which included 566 persons, employed by 8 companies, revealed that existing models of work motivation need to be adapted to fit the empirical data, resulting in a revised research model elaborated in the paper. In the proposed model, job involvement partially mediates the effect of job satisfaction on organizational commitment. Job satisfaction in Serbia is affected by work characteristics but, contrary to many studies conducted in developed economies, organizational policies and procedures do not seem to significantly affect employee satisfaction.

In the current climate of turbulent changes, companies have begun to realize that the employees represent their most valuable asset. Satisfied and motivated employees are imperative for contemporary business and a key factor that separates successful companies from the alternative. When considering job satisfaction and work motivation in general, of particular interest are the distinctive traits of these concepts in transition economies.

Serbia is a country that finds itself at the center of the SouthEast region of Europe (SEE), which is still in the state of transition. Here transition refers to the generally accepted concept, which implies economic and political changes introduced by former socialist countries in Europe and beyond (e.g., China) after the years of economic stagnation and recession in the 1980's, in the attempt to move their economy from centralized to market-oriented principles. Serbia exemplifies many of the problems faced by the SEE region as a whole, but also faces a number of problems uniquely related to the legacy of its past. Due to international economic sanctions, the country was isolated for most of the 1990s, and NATO air strikes, related to the Kosovo conflict and carried out in 1999, caused significant damage to the industry and economy. Transitioning to democracy in October 2000, Serbia embarked on a period of economic recovery, helped by the introduction of long overdue reforms, major inflows of foreign investment and substantial assistance from international funding institutions and others in the international community. However, the growth model on which Serbia and other SEE countries relied between 2001 and 2008, being based mainly on rapid capital inflows, a credit-fueled domestic demand boom and high current account deficit (above 20% of GDP in 2008), was not accompanied by the necessary progress in structural and institutional reforms to make this model sustainable. The central issue of the transition process in Serbia and other such countries is privatization of public enterprises, which in Serbia ran slowly and with a number of interruptions, failures and restarts. The process led the Serbian industry into a state of industrial collapse, i.e., deindustrialization. Today there are less than 400,000 employees working in the industry in Serbia and the overall unemployment rate exceeds 26%. The average growth of Serbia's GDP in the last 5 years was very low, at 0.6% per year, but has reached 2.7% in 2016. The structure of the GDP by sector in 2015 was: services 60.5%, industry 31.4%, and agriculture 8.2%.

Taking into account the specific adversities faced by businesses in Serbia, we formulated two main research questions as a starting point for the analysis of the problem of work motivation in Serbia:

1. To what extent are the previously developed models of work motivation applicable to the transition economy and business practices in Serbia?

2. What is the nature of the relationships between different segments of work motivation (job satisfaction, organizational commitment, job involvement and work characteristics)?

The Hawthorn experiment, conducted in the early 1930s, spurred the interest of organizational behavior researchers into the problem of work motivation. Although Hawthorn focused mainly on the problems of increasing productivity and the effects of supervision, incentives and the changing work conditions, his study had significant repercussions on the research of work motivation. All modern theories of work motivation stem from his study.

Building on his work, published his Hierarchy of Needs theory, which remains to this day the most cited and well known of all work motivation theories according to Denhardt et al. Maslow's theory is a content-based theory, belonging to a group of approaches which also includes the ERG Theory by, the Achievement Motivation Theory, Motivation-Hygiene Theory and the Role Motivation Theory.

These theories focus on attempting to uncover what the needs and motives that cause people to act in a certain way, within the organization, are. They do not concern themselves with the process humans use to fulfill their needs, but attempt to identify variables which influence this fulfillment. Thus, these theories are often referred to as individual theories, as they ignore the organizational aspects of work motivation, such as job characteristics or working environment, but concentrate on the individual and the influence of an individual's needs on work motivation.

The approach is contrasted by the process theories of work motivation, which take the view that the concept of needs is not enough to explain the studied phenomenon and include expectations, values, perception, as important aspects needed to explain why people behave in certain ways and why they are willing to invest effort to achieve their goals. The process theories include: Theory of Work and Motivation, Goal Setting Theory, Equity Theory, as well as the The Porter-Lawler Model.

Each of these theories has its limitations and, while they do not contradict each other, they focus on different aspects of the motivation process. This is the reason why lately there have been several attempts to create an integrated theory of work motivation, which would encompass all the relevant elements of different basic theories and explain most processes taking place within the domain of work motivation, the process of motivation, as well as employee expectations. One of the most influential integrated theories is the theory proposed by Locke and Latham, which represents the basis for the study presented in this paper.

The model of Locke and Latham is shown in Figure 1. As the figure shows, it includes individual needs, values and motive, as well as personality. Incorporating the theory of expectations, the goal-setting theory and the social-cognitive theory, it focuses on goal setting, goals themselves and self-efficiency. Performance, by way of achievements and rewards, affects job satisfaction. The model defines relations between different constructs and, in particular, that job satisfaction is affected by the job characteristics and organizational policy and procedures and that it, in turn, affects organizational commitment and job involvement. Locke and Latham suggested that the theory they proposed needs more stringent empirical validation. In the study presented here, we take a closer look at the part of their theory which addresses the relationship between job satisfaction, involvement and organizational commitment. The results of the empirical study conducted in industrial systems suggest that this part of the model needs to be improved to reflect the mediating role of job involvement in the process through which job satisfaction influences organizational commitment.

Figure 1. Diagram of the Latham and Locke model. The frame on the right indicates the part of the model the current study focuses on.

Job satisfaction is one of the most researched phenomena in the domain of human resource management and organizational behavior. It is commonly defined as a "pleasurable or positive emotional state resulting from the appraisal of one's job or job experiences". Job satisfaction is a key element of work motivation, which is a fundamental determinant of one's behavior in an organization.

Organizational commitment, on the other hand, represents the degree to which the employees identify with the organization in which they work, how engaged they are in the organization and whether they are ready to leave it. Several studies have demonstrated that there is a strong connection between organizational commitment, job satisfaction and fluctuation, as well as that people who are more committed to an organization are less likely to leave their job. Organizational commitment can be thought of as an extension of job satisfaction, as it deals with the positive attitude that an employee has, not toward her own job, but toward the organization. The emotions, however, are much stronger in the case of organizational commitment and it is characterized by the attachment of the employee to the organization and readiness to make sacrifices for the organization.

The link between job satisfaction and organizational commitment has been researched relatively frequently. The research consensus is that the link exists, but there is controversy about the direction of the relationship. Some research supports the hypothesis that job satisfaction predicts organizational commitment, as is the case in the study presented in this paper. Other studies suggest that organizational commitment is an antecedent to job satisfaction.

In our study, job involvement represents a type of attitude toward work and is usually defined as the degree to which one identifies psychologically with one's work, i.e., how much importance one places on their work. A distinction should be made between work involvement and job involvement. Work involvement is conditioned by the process of early socialization and relates to the values one has wrt. work and its benefits, while job involvement relates to the current job and is conditioned with the one's current employment situation and to what extent it meets one's needs.

Source: J. Ćulibrk, M. Delić, S. Mitrović, and D. Ćulibrk, https://www.frontiersin.org/articles/10.3389/fpsyg.2018.00132/full
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