A survey of the relationship between job satisfaction and organisational performance of companies listed on the Nairobi stock exchange, Kenya

Abstract

The study sought to establish the relationship between job satisfaction and organizational performance in firms listed on the Nairobi Stock Exchange. The objective of the study therefore was to investigate and document this relationship. The study used structured questionnaire on job satisfaction and secondary data derived from income statements to compute financial ratios which were the basis of the study. The ratios analyzed were Earnings per Share (EPS) and Return on Assets (ROA). On the levels of job satisfaction, the majority of the respondents indicated that employees do their job well and expect to be promoted to a job with more prestige and salary. It was also found that majority of employees prefer to be involved in decision making. On whether or not they were satisfied with their job, it was found that 31% were satisfied while 69 were not. The regression analysis for firm performance and job satisfaction showed that job satisfaction explains 8.7 % of the variance in the performance as measured by both the EPS and ROA. Beta coefficients were not significant at p < 0.05, implying that job satisfaction does not influence performance of listed firms as measured by return on assets and return on equity. Consistent with earlier studies, for example, by Brayfield and Crockett (1955), this study found little evidence of any simple or appreciable relationship between job satisfaction and organizational performance. The study however, has shown that teamwork, employee involvement and pay significantly affect productivity. It is, therefore, prudent that companies listed in the Nairobi Stock Exchange adopt policies that encourage employees' participation, teamwork and equitable pay structure to ensure growth and productivity. The study identified some areas for further research including need to conduct a study on relationship between job satisfaction and performance in different sectors and also need to look into factors which lead to improved financial performance other than job satisfaction. Further there is need to carry out a study on unlisted firms to see if it will yield same results.