SELECT COLLEGE

SCHOOL OF POSTGRADUATE STUDIES

MBA PROGRAM.

FACTORS AFFECTING EMPLOYEES JOB SATISFACTION: THE

CASE OF ETHIOPIAN INSURANCE CORPORATION.

A Thesis Submitted To The Department Of Business Administration School Of

Postgraduate Studies, Select College In Partial Fulfillment Of The Requirements
For The Degree Of Masters Of Business Administration

By: -

Netsanet Kentiba

Advisor: -

Emnet Negash (Associate professor)

SEP, 2024
ADDIS ABABA, ETH
Declaration

I, (Netsanet Kentiba), the under signed, declare that this thesis entitled: “Factors affecting
Employees job satisfaction: the case of Ethiopian Insurance Corporation.)” is my original
work. I have undertaken the research work independently with the guidance and support of the
research advisor. This study has not been submitted for any degree or diploma program in this or
any other institutions and that all sources of materials used for the thesis has been duly
acknowledged.

Declared by

Name
Signature:
Department

Date

II
 Certificate of Approval of Thesis

School of Postgraduate Studies

Select Business and Technology College

This is to certify that the thesis prepared by (Netsanet Kentiba), entitled “Factors affecting
Employees job satisfaction: the case of Ethiopian Insurance Corporation.)” and submitted in
partial fulfillment of the requirements for the Degree of Masters of MBA complies with the
regulations of the College and meets the accepted standards with respect to originality and quality.

Name of Candidate: ; Signature: Date: .

Name of Advisor: . Signature: Date: .

Signature of Board of Examiner`s:

External examiner: Signature: Date: .

Internal examiner: Signature: Date: .

Dean, SGS: Signature: Date: .

III
 TABLE OF CONTENTS
SCHOOL OF POSTGRADUATE STUDIES ........................................................................ I

Declaration .................................................................................................................................. II

Certificate of Approval of Thesis .............................................................................................. III

List if acronyms ......................................................................................................................VIII

ACKNOWLEDGEMENT ........................................................................................................ IX

Abstract .......................................................................................................................................X

1 INTRODUCTION ................................................................................................................... 1

1.1 Background of the study ....................................................................................................... 1

1.2 Statement of the problem ...................................................................................................... 2

1.3 Research questions ................................................................................................................ 4

1.4 Objective of the study ........................................................................................................... 5

1.4.1 General objective ............................................................................................................... 5

1.4.2 Specific objectives ............................................................................................................. 5

1.5 Significance of the study....................................................................................................... 5

1.6 Delimitation/Scope of the study............................................................................................ 6

1.7 Organization of the Study ..................................................................................................... 6

1.8 Operational Definitions of terms .......................................................................................... 7

CHAPTER TWO ........................................................................................................................ 8

2 REVIEW OF RELATED LITERATURE ................................................................................ 8

2.1 Introduction ........................................................................................................................... 8

2.2 Theoretical Literature............................................................................................................ 8

2.2.1 Definition of Job Satisfaction ......................................................................................... 8

2.2.2 Importance of job satisfaction ........................................................................................ 9

IV
 2.2.3 Theories of job satisfaction ............................................................................................ 9

2.2.4 Factors that affect job satisfaction ................................................................................ 13

2.3 Empirical Literature Review ............................................................................................... 15

2.4 Conceptual framework ........................................................................................................ 18

CHAPTER THREE................................................................................................................... 20

3 RESEARCH DESIGN AND METHODS ............................................................................. 20

3.1 Introduction ......................................................................................................................... 20

3.1.1 Background of the organization ................................................................................... 20

3.2 Research Design.................................................................................................................. 21

3.3 Research Approach ............................................................................................................. 21

3.4 Target Population, Sampling and Sampling Method .......................................................... 22

3.5 Source and type of data ....................................................................................................... 23

3.5.1 Primary data ................................................................................................................. 23

3.5.2 Secondary Data ............................................................................................................ 23

3.6 Data Collection method ...................................................................................................... 23

3.6.1 Questionnaire ............................................................................................................... 24

3.7 Method of data analysis ...................................................................................................... 24

3.7.1 Descriptive statistics ..................................................................................................... 24

3.8 Reliability and validity Test ................................................................................................ 26

3.9. Ethical Considerations ....................................................................................................... 27

CHAPTER FOUR ..................................................................................................................... 28

4 DATA PRESENTATION, ANALYSIS, AND DISCUSSION ............................................... 28

4.1 Introduction ......................................................................................................................... 28

4.2 Demographic Information ................................................................................................... 28

V
4.3 Factors That Affect Employees’ Job Satisfaction ............................................................... 31

4.4 Job satisfaction .................................................................................................................... 35

4.5 Descriptive statistics of the variables .................................................................................. 36

4.6 Correlation analysis ............................................................................................................ 37

4.7 Regression Analysis ............................................................................................................ 39

4.7.2 Homoscedasticity Test .................................................................................................. 39

4.7.3 Regression Result Analysis and Discussion ................................................................. 43

4.7.4 Discussion of the Regression Result ............................................................................ 46

CHAPTER FIVE....................................................................................................................... 49

5 SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS .......................................... 49

5.1 Introduction ......................................................................................................................... 49

5.2 Summary ............................................................................................................................. 49

5.3 Conclusions ......................................................................................................................... 50

5.4 Policy recommendation ...................................................................................................... 51

6. REFERENCE ....................................................................................................................... 53

APPENDIX ............................................................................................................................... 60

VI
 List of Table
Table 1 Proportional Distribution of sample to each stratum ....................................................... 23
Table 2: Model Specification of Variables .................................................................................... 26
Table 3: Reliability Test of Variable‟s Using Cronbach‟s Alpha ................................................. 27
Table 4: General Background Information of Respondents .......................................................... 28
Table 5: Intrinsic factors................................................................................................................ 32
Table 6: Extrinsic factors .............................................................................................................. 33
Table 7: job satisfaction ................................................................................................................ 35
Table 8: Descriptive statistics........................................................................................................ 37
Table 9: Correlation matrix of dependent and independent variables........................................... 38
Table 10: Autocorrelation Test ...................................................................................................... 41
Table 11: Test of Multi collinearity ............................................................................................... 42
Table 12: Model Summary ............................................................................................................ 44
Table 13: ANOVA table ................................................................................................................ 44
Table 14: Regression output .......................................................................................................... 45

List of Figure
Figure 1: - Based on Herzberg theory (1959) ............................................................................... 19
Figure 2 ......................................................................................................................................... 40
Figure 3: Normality Test ............................................................................................................... 43

VII
 List if acronyms

EIC--------------- Ethiopia Insurance Corporation

MSQ --------------- Minnesota Satisfaction Questionnaire
PCA --------------- Principal Component analysis
SPSS --------------- Statistical package for social science

VIII
 ACKNOWLEDGEMENT

I wish to thank God for the strength and guidance that gives to me throughout my life with
love and sincerity,
I express my sincere gratitude to all those who have supported and contributed to the
completion of this Work.
I am particularly grateful to my advisor, Bemnet(PHD). Their guidance, expertise and
unwavering support have been invaluable throughout this research journey. Their insightful
feedback and constructive criticism have significantly shaped the quality of this Research.

Finally, I am grateful to the staff and Management at Ethiopian Insurance Corporation for
providing the necessary resources and information that supported the smooth execution of this
research.

IX
 Abstract

This paper is intended to determine the factors affecting employee job satisfaction in the case
of Ethiopian Insurance Corporation. In order to identify whether the factors considered are
having an impact on the satisfaction of employees, the researcher used Herzberg’s Two-Factor
Theory to determine the influence of intrinsic and extrinsic job satisfaction factors on
employees of Ethiopian Insurance Corporation The main objective of the study is examining
factors that affect employees’ job satisfaction in Ethiopian Insurance Corporation. The study
has used explanatory research design & data was collected by distributing questionnaires to
174 employees of EIC. Respondents were requested to mark their satisfaction level which is
based on 5-point Likert Scale.

The question related to job satisfaction consists of the factors that are supposed to affect job
satisfaction: a) payment & Benefit b) promotion c) Work Environment as extrinsic factors and
d) Recognition & e) Responsibility as intrinsic factors. This tool is employed to measure the
intrinsic factors of satisfaction, the extrinsic factors of satisfaction as well as the general
satisfaction levels of employees. The average from all the answers on each question was
computed and the higher the score mean the higher the level of job satisfaction in this aspect
of employees work.

The data gathered was entered into SPSS in order to analyze using the statistical tools such as
descriptive statistics & inferential statistics which involves percentage analysis, mean analysis
and correlation of independent and dependent variables. The result of the study indicated that
recognition, responsibility, payment and benefits & promotion have positive and statistically
significant effect on job satisfaction and the intrinsic factors (recognition & responsibility)
have more influence on the job satisfaction of employees of EIC. EIC should formulate a fair
Recognition, Responsibility & promotion system to increase employees’ motivation and their
job satisfaction.

Key words and phrases: Job satisfaction, Responsibility, Recognition, Payments,

Promotion, Work environment.

X
 CHAPTER ONE

1 INTRODUCTION
The purpose of this proposal was to determine the factors that affect employee job satisfaction of EIC.
This chapter provides Background of the study, Statement of the Problem, Research Questions, Objective
of the Study, Significance of the Study, Delimitation/Scope of the Study, Organization of the Study &
Definition of Terms.

1.1 Background of the study

Human capital is perceived as one of the most dynamic assets for the enhancement and development of
any organization. It is crucial in making other assets useful and valuable in any organization in order to
generate the best return for the organization. In view of this, to obtain improved human capital, any
organization needs to execute appropriate actions in time. It is evident that if employees are satisfied and
are happy with the actions of their company, then they will do their best for the best of their company
(Al-Ali, et al., 2019).

The meaning of Job satisfaction is defined by many writers in different ways. For example, it is
considered as the the attitudes and feelings that people have about their jobs (Armstrong, M. & Taylor,
S. 2014). In another study, job satisfaction is considered as the level of gratification and contentment that
any employee has towards his/her job. Since it is important in positively impacting employees, increasing
their productivity as well as the overall organizational success, it is considered in any organization as
being a major driver which directs any organization achieve its goals (Fahed-Sreih, 2020).

According to Locke (1976), job satisfaction is defined as a state of being in a positive emotion which he
considered arises from a person‟s job or the experience of his/her job. Similarly, Locke and Lathan (1990)
define it as the pleasurable or the positive emotional state of being resulting from the appraisal of a
person‟s job or job experience. On the other hand, lack of job satisfaction can be considered as a predictor
of giving up a job (Alexandar et al., 1998). Workers may switch from public to private sector jobs and
vice versa. At other cases, the transition is from one career to another that is thought to be a better fit.

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This is typical in countries dealing with a shrinking economy and its consequences, such as bad working
conditions and late salary payments (Nwagwu., 1997). Job satisfaction significantly influences
organization behavior. Most studies have indicated that job satisfaction positively affects employee
working performance and organizational commitment, and negatively influences employee turnover
(Agarwal and Ferratt, 2001; Fraser, 2001). Companies need to know what factors need to be identified in
order to have the knowledge of what cause both satisfaction and dissatisfaction among employees in the
intention of increasing employees motivation and satisfaction for organizational commitment (Herzberg,
1966; Mc Gregor ,1961). Ethiopian Insurance Corporation also encounters a problem of determining the
factors which can lead to its employees‟ job satisfaction. Due to this, the corporation first need to properly
identify the current factors that affect its employees‟ job satisfaction so that to take appropriate measures
to address the gap.

1.2 Statement of the problem

Many organizations in both the general public and indeed the private sector take into account their
workers as an important asset within the organization towards the attainment of the structure goals.
However, the same objectives can only be earned from a satisfied workforce. Thus worker satisfaction is
of significance if organizational goals are to be attained. Worker job satisfaction is related to increased
productivity, organizational commitment, lower absence and turnover, and ultimately with increased
organizational effectiveness (Logsdon & Ellickson,
2001). Job satisfaction is a worker‟s sense of achievement and success on the job. It is generally perceived
to be directly linked to productivity as well as to personal well-being. Job satisfaction implies doing a job
one enjoys, doing it well and being rewarded for one‟s efforts. Job satisfaction further implies enthusiasm
and happiness with one‟s work. Job satisfaction is the key ingredient that leads to recognition, income,
promotion, and the achievement of other goals that lead to a feeling of fulfillment (Kaliski, 2007). Job
satisfaction is an important issue in running of institutions and one of the key signs of how well an
organization is. Thus, organizations attach great importance to the job satisfaction issue. Satisfaction
levels of employees are vital for organizations, since satisfied employees contribute to success and
enduring achievement of the organizations (Ahmed, 2010). The efficiency and performance of an
organization depends on its employees and surely "a happy worker is an effective one”. It is not
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imaginable for advancement of an organization without considering developing of the staff‟s abilities
and refining their working conditions. Organizations which have very satisfied employees are without
doubt more fruitful (Smith, 2017).

There are some academic works related to employees‟ job satisfaction in Ethiopia. However, most of
them focused on education and health sectors, among others. For instance, studies performed by Mengistu
(2012) and Gebremichael and Rao (2013) focused on employees‟ satisfaction in education sector but
studies by Mengistu and Bali (2015) focused on health professionals. As per the studies, low job
satisfaction was commonly observed in different public medical centers in Ethiopian hospitals because
of lack of mentoring support in the work places.
Another study on Ethiopian anesthetists‟ job satisfaction level and factors affecting their level of job
satisfaction implicate a problem of improper supervision to be one of the reasons for employees‟ job
dissatisfaction (Desalegn, 2015).

A study conducted on “Assessment of job satisfaction among pharmacy professionals in south west of
Ethiopia shows that poor salary and poor management might be the major factors for dissatisfaction and
consequently migration of health professionals in Ethiopia” (Ahmed et al., 2013). Job satisfaction study
in public sectors of health workers in Addis Ababa, Oromia, Amhara and Somali also shows high level
of dissatisfaction in relation to financial rewards (Hotchkiss et al, 2015).

There are a lot of indicators showing that EIC has faced problems with regard to employees‟ job
satisfaction. The researcher could observe that in Ethiopian Insurance Corporation, many employees
complained regarding the management practice of the company in satisfying their needs. Employees
within the corporation are heard complaining that Company structures as well as salary structure are not
timely done as compared to other financial organizations; such as, The Commercial Bank of Ethiopia and
The Development Bank of Ethiopia. In fact, the National
Bank of Ethiopia previously had issued a directive requiring all financial institutions, both government
and private, to set aside a minimum of 2% of their recurrent budget for training and development in order
to encourage businesses to invest in human resources development and to report on their efforts. This
directive was issued because the majority of the enterprises under its oversight are unaware that having

3
productive and engaged employees who provide a lasting competitive advantage necessitates a significant
investment. In addition to that, a recent survey by the Corporation shows that customers are also
complaining about getting quality service from employees (Masresha, T. 2018). Due to these reasons,
those dissatisfied but experienced employees had been leaving to the private insurance industry and
became its own competitors. It is clear that if this problem is not solved accordingly, the Corporation‟s
services eventually may decline and makes it lose its market share in the insurance industry.

The purpose of this study work is to identify the characteristics that influence employee job satisfaction
in general, with a focus on those that are more significant in the context of EIC. Employee job satisfaction
is influenced by a variety of factors, according to a large body of literature. Failure to pay attention to
these issues can result in employee dissatisfaction, which can manifest as turnover, absenteeism, lost
productivity, poorer morale, and startling drops in performance. As a result, it's critical to figure out what
elements influence employee job satisfaction.

1.3 Research questions

This study paper is led by the following research questions: -

1) What are the intrinsic factors that affect employee job satisfaction in Ethiopian Insurance
Corporation?

2) What are the extrinsic factors that affect employee job satisfaction in Ethiopian Insurance
Corporation?

3) How to identify the level of job satisfaction in Ethiopian insurance corporation?

4) How to identify the relation between each factor with employ job satisfaction in Ethiopian
insurance corporation?

5) Which factors have more effect on employee job satisfaction in Ethiopian Insurance Corporation?

4
1.4 Objective of the study

This study has general and specific objectives.

1.4.1 General objective

The general objective of the study is examining factors that affect employees‟ job satisfaction in
Ethiopian Insurance Corporation.

1.4.2 Specific objectives

1) Determining the intrinsic factors that affect employee job satisfaction in Ethiopian Insurance
Corporation.

2) Analyze the extrinsic factors that affect employee job satisfaction in Ethiopian Insurance
Corporation.

3) To identify the level of job satisfaction in Ethiopian insurance corporation

4) To identify the relation between each factor with employ job satisfaction in Ethiopian insurance
corporation

5) Analyzing the factors which have more effect on employee job satisfaction in Ethiopian Insurance
Corporation

1.5 Significance of the study

It is believed that the study can identify the factors that affect employee job satisfaction in EIC and that
can help the corporation take appropriate actions to keep employees being satisfied and perform to the
best of their capacity. Moreover, the results of the study can be used as an input for further research
studies and also will enhance the researcher‟s knowledge in the areas of job satisfaction. Investigating
and analyzing the elements that influence employee job satisfaction, particularly in the context of
businesses, helps to explain the idea and its practical implications.

5
The research outcome will be used in a variety of ways. By offering a conceptual framework and
identifying the factors, it benefits businesses to have focus on employee job satisfaction, and develop a
strategy to remedy the job satisfaction problem.

1.6 Delimitation/Scope of the study

This study is delimited to examining the factors that affect employees‟ job satisfaction in Ethiopian
Insurance Corporation. Despite the fact that there has been a rush of research and studies undertaken
since the invention of this construct, having enough research and studies conducted in the Ethiopian
setting in general, and in the Insurance Industry in particular, would be a difficulty. Targeted employees'
willingness to participate in questionnaire responses would also potentially be a problem.

The scope of methodology is limited to conducting a survey through questionnaires that are distributed
to sample participants of professional employees of the corporation. Based on the conceptual framework,
the factors which would be emphasized are: intrinsic factors which are; recognition & responsibility and
extrinsic factors which are; salary, benefit, promotion & work environment. The survey is restricted to
Districts & Branches that are located in Addis Ababa because of the fact that all Districts & Branches
have similar characteristics & working conditions so that it is believed that the research can be
represented well by outlets located in Addis Ababa.

1.7 Organization of the Study

This paper is organized to have five chapters; the introduction part of the paper chapter one includes
background of the study, statement of the problem, research questions, research objectives of the study,
significance of the study and scope/delimitation of the study. Chapter two covers review of theoretical as
well as empirical literature of the subject matter under study. Under chapter three methodologies & the
research design are discussed. Under chapter four, the findings of the study are going to be presented,
analysed and discussed. Finally, t h e summary, conclusions, and recommendations are going to be
forwarded in chapter five based on the research findings.

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1.8 Operational Definitions of terms

Job satisfaction: - is an attitude towards work related condition in organization perspective Supervision:
- is the systematic and willing of supervisors to teach, coaching, and delegation of authority and share of
job knowledge.

Working condition: - Factors that affect employees‟ wellbeing on operation or office: amount of work,
work facilities, tools, ventilation, temperature, and workspaces. Generally, it means that having all
necessary materials to operate employees‟ job activities.

Job security: - the attitude of employees in organization to the permanent status or the position of having
a formal secure appointment until retirement

Salary/reward: - is a payment for employees within organization for achieving the expected task with in
a specific time.

Intrinsic Factors; Intrinsic factors are the non-physical one. They cannot be seen or touched but are
emotionally connected with the employees. In other words, intrinsic factors can be defined as the feeling
of contentment one finds in the completion of any task.

Extrinsic Factors; an extrinsic factor is a tangible and visible reward given to an individual or an
employee for achieving something. They usually have monetary value such as a salary, bonus, award, or
public recognition.

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 CHAPTER TWO

2 REVIEW OF RELATED LITERATURE

2.1 Introduction

In this chapter, a literature review in relation to employees‟ job satisfaction was discussed. The first part
of this chapter is focused on the concept of job satisfaction and review of theoretical literature. The second
part of this paper has covered the empirical literature review in relation to job satisfaction. The final part
of this chapter states the conceptual framework.

2.2 Theoretical Literature

2.2.1 Definition of Job Satisfaction

Job satisfaction has been defined by different authors in numerous ways. In this paper the widely cited
definitions of job satisfaction are going to be analyzed as follows.

Hoppock (1935), in his classic research of job satisfaction defined job satisfaction as the collaboration of
the physical, the psychological and the environmental factors that make any person feel the sense of being
satisfied. His study shows that a person‟s internal sensation plays a greater role in making him/her feel
satisfied.

People may have positive or negative attitudes towards their job. The positive attitude can be considered
as favorable attitude which implicate the person‟s satisfaction but the negative attitude on the other hand
is considered as the negative attitude which implicate dissatisfaction.
Generally speaking, job satisfaction is a person‟s feelings/attitudes regarding his/her job (Armstrong,
2006). Job satisfaction is the attitudes and feelings people have about their work. Positive and favorable
attitudes towards the job indicate job satisfaction. Negative and unfavorable attitudes towards the job
indicate job dissatisfaction (Armstrong, 2006).

8
Employees' level of comfort with their jobs is referred to as work satisfaction. Beyond their regular tasks,
this includes how happy they are with their bosses and team members, how happy they are with the
organization's rules, and how their job affects their life. Employee job satisfaction is the fulfillment,
gratification, and enjoyment that come from work. It is not the money or the fringe benefits, but the
feelings employees receive from the work itself (Asegid, et al., 2014).

2.2.2 Importance of job satisfaction

Many companies have a problem of keeping their experienced & developed employees due to their lack
of a better understanding of the intrinsic and extrinsic satisfaction factors of their employees (Garg, et
al.,2018).

2.2.3 Theories of job satisfaction

When mentioning Job satisfaction theories, it is clear to observe that there are similarities with
motivational theories. The frequently mentioned theories in this area include: Maslow„s needs hierarchy
theory; Herzberg„s motivator hygiene theory; Aldefer-ERG theory; McClelland‟s Need
Theory; Vroom‟s Expectancy Theory, Locke‟s Goal- Setting Theory, Adams‟ Equity Theory; Job
Characteristic Theory and the dispositional approach. These theories are discussed in the following part
of this sub title.

2.2.2.1 Maslow „s needs hierarchy theory

Maslow „s needs hierarchy theory is one of the basic motivation theories. These needs are classified as
deficiency needs meaning physiological and safety needs and growth needs meaning belonging, self-
esteem and self- actualization needs. As per his explanation if the deficiency needs are not satisfied then
the individual will feel the gap and that in turn will affect his/her development (A, Lemma. 2020).

2.2.2.2 Herzberg „s motivator hygiene theory

Herzberg (1959) has discussed motivation from two angels of job satisfaction namely; motivators and
job dissatisfaction as hygiene factors. It is clearly stated that job satisfaction can increase employees‟
satisfaction while job dissatisfaction can decrease employees‟ satisfaction which leads to poor working

9
performance. Since job satisfaction is a process that an individual‟s feeling of good concerning his/her
work, it can hold for instance, job security, high salary, recognition and interest in one‟s work, (Shaikh,
S. H. et al.,2019). As per Herzberg, job dissatisfaction is one part of the two-factor theory. It can however
be improved by creating satisfaction in the organization. But according to him, this is only possible when
managers exert motivating factors (Yuosef, 2000). In the Herzberg‟s two-factor theory, individuals are
motivated by lower-level needs (extrinsic or hygiene factors) due to elimination of dissatisfaction in order
to do better performance. Robbins (2009) stated that intrinsic or motivation factors (i.e. recognition,
responsibility) should be there to motivate and enhance employee‟s performance. Examples of hygiene
factors include the company, organizational policies, administration, salary, status, job security, working
conditions, personal life, and interpersonal relations (A, Lemma. 2020).

On the other hand, Herzberg‟s motivation-hygiene theory is also criticized on some points. Theory does
not clarify the differences between the satisfaction and dissatisfaction. These two factors, called
“motivators” and “hygiene”, conclude differently from population to population. Any factor that causes
dissatisfaction may contribute to satisfaction in any other condition or any other country. In addition, this
difference is hard to put into effect, since people have different needs and expectations. According to
researcher having opposite view, level of satisfaction cannot be predicted with the only motivator or
hygiene (Stello, 2011).

There are however, some criticisms regarding Herzberg‟s motivation-hygiene theory. These are because
the theory doesn‟t clearly separate satisfaction and dissatisfaction. These factors may be accepted in a
different way from one group of people to another. This is explained as being factors that bring
dissatisfaction in one group of people may bring satisfaction in another group (Unutmaz, S. 2014).

2.2.2.1 Aldefer-ERG theory

As per Alderfer, C. P. (1989), the ERG theory states that the order of need is different for different
individuals. He further developed the A. Maslow's Hierarchy of Needs into a three factor motivation
models which are called the ERG model namely; existence, relatedness and growth. In another study,
ERG Theory needs the understanding of the factors that affect the individual behavior. It is considered to
be one of the other approaches that focus on the intrinsic factors of an individual which are responsible

10
in making him take specific actions (Ivancevich, J.M.,et al., 1990). As per the study of Caulton, J. R.
(2012) ERG Theory can be used to study needs and family relationships and also performance and human
right needs.
2.2.2.2 McClelland‟s Need Theory
As per David McClelland there are three central motivational paradigms namely: achievement, affiliation
and power. The Theory states how the needs for authority, achievement and affiliation affect people's
actions in the context of management. David McClelland theory was based on Henry Murray's (1938)
list of motives and manifest needs study (Osemeke, M., & Adegboyega, S. 2017)

McClelland‟s research has identified the six characteristics of high need achievers as:

 They have a strong desire to assume personal responsibilities in order to perform a task;
 They try to set moderately difficult goals and take calculated risks;  They also have a strong
desire to get performance feedback?
 They have the need for achievement regarding attaining personal accomplishment.
 They are interested in challenging tasks.
 They don‟t pass their responsibilities to others. Sinha,D. K, (2015)

2.2.2.3 Vroom‟s Expectancy Theory

As Parijat, P., & Bagga, S. (2014) described, Vroom‟s Expectancy Theory focuses on the relationship
between personal goals and organizational rewards. Employees‟ personal goals can be fulfilled by
organizational rewards. It concludes that outcomes (organizational rewards) are highly dependent on
employees‟ performance. In addition, employee‟s perception of their effort to contribute high
performance of the company is considered very important. On the other hand, the theory is criticized as
being very complicated and with so many variables that makes it difficult to implement. Robbins, S. P.
(2010) indicated that the theory is more of idealistic since there are few individuals who can clearly
perceive the relationship of effort with performance and performance with company reward.

2.2.2.4 Locke‟s Goal- Setting Theory

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As per this theory goal setting is a very important part of job satisfaction. The theory is developed by
Locke and Latham. In goal setting process, if people want to be satisfied on emotions and desires they
need to get their goals. The theory further states that, for a goal setting to be effective, consistent feedback
must be there. Here, supervisors or managers need to evaluate the cause of undesirable performance of
employees rather than applying punishment (Luthans, 1995).
2.2.2.5 Equity Theory of Adams
As Adams (1963, 1965) stated, in Equity Theory satisfaction is determined by the input & outcome
balance. He states that, employees aim to reach a balance between their inputs and their outcomes. He
considered inputs as factors such as, experience, educational level, ability & skill responsibility, age and
effort, and outcomes as such as performance, salary, good working conditions, work insurance,
promotion, recognition, status, and opportunity. Outcomes are also explained as being rewards that a
company gives to its employees; such as salary and inputs are those contributions rendered by the
employees of the company (Huseman & Hatfield, 1990).
2.2.2.6 Job Characteristic Theory
The Job Characteristics Model (JCM) is developed by Hackman and Oldham (1980) is understood to be
the most powerful model in researching job design (Thomas-Shaw, S. A. 2004). The authors had first
proposed then tested the theory of work redesign which targeted the characteristics of jobs. The model
elaborates how the characteristics of people and the characteristics of jobs interact to determine when an
enhanced job will lead to favorable outcomes. The model also shows the time of failure expectation of
such efforts (Thomas-Shaw,
S. A. 2004). According to Atasoy (2004). The theory has the most widely accepted job characteristic
approach with the following job attributes namely: task identity, feedback, variety, dealing with others
friendship opportunities and autonomy.

2.2.2.7 The dispositional approach

This Theory which is also known as the Trait Theory is the study of human personality and human
behavior. Some employees can be consistently more satisfied with their jobs than others. Employees who
love their jobs may keep doing it even if they have another job (Borghini, A., & Williams, N. E. ,2008).
The theory focus on the measurement of traits, that directs to the higher understanding of human

12
personalities. Through the passage of time, these traits become relatively stable based on the individual‟s
surrounding environment that can influence his/her behavior.

2.2.4 Factors that affect job satisfaction

As Aziri (2011) explained, job satisfaction is affected by many factors such as: salary, nature of work,
development opportunities, the management itself, work conditions and work groups. In another study
factors of job satisfaction are stated as: Manager‟s concern for people, the job design, employee
compensation, work conditions, social relationships, long-range opportunities which are perceived by
employees, elsewhere perceived opportunities and levels of aspiration & need achievement which all lead
to either job satisfaction or dissatisfaction. Job satisfaction or dissatisfaction also leads to the commitment
to the organization or absenteeism, tardiness, strike, etc. (Rue and Byars, 2003).There is a distinction
between intrinsic factors (i.e. recognition, responsibility) and extrinsic hygiene (i.e. job security, wage,
and working environment) variables, according to the Two- Factor Theory of Job Satisfaction. Higher
satisfaction and performance are facilitated by intrinsic factors, whilst the absence of extrinsic factors
helps to decrease dissatisfaction. (Goetz and Champbell.2012)

2.2.4.1 Salary

Pay is the leading and most important feature of satisfaction for almost each type of employee in public,
private, small, medium and large institutions and that reasonable pay system is related with job
satisfaction (Bajpai and Srivastava, 2004). When a worker is paid well for the services presented to the
employer, it displays the worker that their presence in the organization matters (Chiu et al., 2002). For
Saeed et al., (2013), the significance of money in employee job satisfaction should not be misjudged
subsequently everyone wants money and all employees work so that they can make money. The core
drive after all of this is nothing but money. So, money and compensation play a significant role in the job
satisfaction of the employees.

2.2.4.2 Work environment

According to Kawada & Otsuka (2011) an environment is anything that aids and supports employees to
be or to implement in a definite way. It is one of the significant guides of determining their working

13
comfort and their satisfaction. Subsequently it is a fact that employees expend most of their time in an
organization, it is very essential for organizations to familiarize and keep suitable working conditions.
Saeed et al., (2013), working conditions have recognized to be a strong effect on the job satisfaction of
employees. Additionally, the physical design too, to some extent affects the job satisfaction of employees
and that work greatly depends on the relationship between employees and the environment; hence they
consider a part of the working conditions that affect job satisfaction.

2.2.4.3 Staff relation

Several studies conducted among healthcare professionals reveals the importance of interpersonal
relationships in job satisfaction, and show that they lead to increased patient safety, improved quality of
care and greater patient satisfaction. Highly functioning teams have also been shown to offer great support
to inexperienced staff. Specifically, within healthcare, there has been arising need to improve teamwork.
Introducing team-building activities has resulted in stronger interpersonal; relationships, improved staff
communication, understanding and clarity of roles as well as greater job satisfaction.

2.2.4.4 Job security

Employee‟s personal feelings about future security of engagement condition define job security. The
feelings however vary from person to person. The aftermath of real practices in the employment
marketplace are those job security feelings (Emberland & Rundmo, 2010). If employees are satisfied and
gratified with the job security they will spontaneously be dedicated to and faithful to their organizations
(Lane et al., 2010). An employee who is satisfied with his/her job security has a tendency to achieve well
than the one who is not (Ruvio, 1996).

2.2.4.5 Reward and recognition

Recognition is a process of giving an employee a definite position within an institution (Danish et al.,
2010). Milne (2007) emphasizes that although “recognition” is still an important management too, it is
somewhat diverse. Usually it is a non-financial prize given to employees selectively, in gratitude of high
level of conduct or accomplishment that is not dependent on achievement of a given target. Recognition
can be as simple as giving someone response on what they have done right, or just saying “thank-you”.

14
2.2.4.6 Promotion

Promotion refers to advancing in career or career development. There is an agreement among the
researchers that job satisfaction is strongly associated to opportunities for promotion (Pergamit & Veum,
1999). The positive relationship between job satisfaction and promotion is dependent on perceived
fairness by employees (Kreitner & Kinicki, 2001).

2.3 Empirical Literature Review

As Tremblay and others discovered, a positively influencing work environment is characterized by setting
clear expectations of employees‟ roles and a consistent support from supervisors. These are believed to
positively affect the intrinsic as well as extrinsic motivation of employees to get organizational objectives.
On the other hand, if the work environment allows insecurity of jobs, employees may act just to get their
salaries without the self-motivating factor (Tremblay. et al., 2009).

Kanwal and Majid (2013) investigated the factors which are the major contributors towards employee‟s
job satisfaction. It was found that low pay, long working hours, bonuses and rewards and effective
communication were the contributors towards job satisfaction or dissatisfaction and have impact to the
employee‟s intention to leave or stay in the organization. Nyamekye (2012) argued that non-monetary
benefits had a direct bearing on employees‟ job satisfaction. The employees were dissatisfied with
supervision and non-participation in the decision making process, these may influence their intention to
leave the job. Girmachew (2019) investigated a study on to make comparison of job satisfaction level in
between public and private bank employees. Job satisfaction is attitude of employees towards their work.
The study used MSQ standardized questionnaire. The questionnaire has 20 items with 5 likert scale. The
validity of the questionnaire was checked by the designers of these questionnaires. In this study SPSS
version 21 used. The researcher used means to make comparison and used t-test to check whether their
difference is significant or not. In addition the researcher used levan‟s test to check the homogeneity of
variance. The result of study is public bank employee satisfied more in overall satisfaction supervision,
and promotion.

15
In the Woldia district, Haile and Premanandam (2017) investigated the predictive capacity of job
satisfaction characteristics for private and governmental employees, as well as job satisfaction
discrepancies between the two organizations.

Workers from 135 publics and 189 private organizations participated in the survey. were participated. As
the findings of the study indicated, statistically significant mean difference observed between private and
public workers job satisfaction of communication and relationship, job security, pay and promotion and
fairness. The job satisfaction factors correctly classified the private and public organizations. The
likelihood ratio of the study indicated, privately employed workers are 1.8 times more likely satisfied in
pay and promotion of their respective organization than the public worker's job motivation of pay and
promotion. In the same vein, public employed workers are 1.3 times more likely satisfied in job security
of their organization than the privately employed workers.

Ijaz et al. (2015) investigated a study the impact of different non-monetary rewards in the eyes of the
employees at banking sector of Pakistan. Quantitative data is collected through questionnaires from a
sample of 249 respondents. Analysis is done using SPSS 17.0 and the results suggest that there exists a
positive correlation among the non-financial rewards and job satisfaction. Different non-financial
rewards like learning & promotions, trainings, work autonomy, work life balance, working environment
etc play an important role in employee‟s satisfaction towards their jobs. It is concluded from the study
that if the organizations want to get a quality output from their employees.

Hossain (2014) investigated a study on the relative importance of job satisfaction factors and their impacts
on the overall job satisfaction of employees. In this study the targeted population is employees of Bank.
The Banks include private and public Bank. The data was collected and administered by means of a
structured questionnaire. The study showed that organizational factors such as work conditions, pay,
fairness, and promotion significantly influenced employee job satisfaction in Bank. However, individual
factors such as age and gender did not significantly influence employee job satisfaction in Banks. The
overall job satisfaction of the bank officers is at the positive level appeal to their customers. In such
situation, job satisfaction of bank officers becomes an important issue that has to be taken care of in order
to achieve ultimate goals of the banking sector in Bangladesh.

16
Timkete (2018) studied on to identify the top most determinants of job satisfaction among employees of
Abay bank using a sample of 150 employees working in Addis Ababa. A combination of principal
component analysis (PCA) and OLR models were used. Out of the 13 variables initially identified, 5
principal factors were drawn using PCA. Based on the earlier findings of PCA, OLR analysis was
conducted on the five prime factors. The findings demonstrate that 4 factors are statistically significant
with evidence that remuneration and fringe benefits and effective leadership are positively linked with
job satisfaction wherein unmet job expectation and workload are negatively correlated with job
satisfaction. However, evaluation and promotion appeared statistically insignificant. The findings
highlight the need for establishing conducive working environment and recommend the bank to stay
attuned in weighting workers economic status.

There has been a lot of research on job satisfaction for over a century from various angles (Judge et al.,
2017). Referring the study performed by Gedif, G & others; salary, marital status, leadership style and
supportive supervision were observed as being the determinant factors of job satisfaction. Employees
who were paid high salary were found to be more satisfied with their job as compared to the others who
didn‟t get such payment (Gedif, et al., 2018).

As per the study of Walkowiak and Staszewski (2019), salary, company policies and working conditions
were the factors that highly affected employee‟s job satisfaction. It was also evident that employment
security, rendering service to other individuals and being active on one‟s job can positively influence the
level of job satisfaction. Strong correlation was exhibited between job seniority and the feeling of
accomplishment from the job. However, there was no correlation observed between satisfaction with pay
and level of education, age and seniority.

Koorella and Perumal (2019) investigated a study on the impact of job satisfaction of an employee. This
study also finds out various factors underlying employee satisfaction. To achieve the aim of the study
questionnaire survey was used. The results show that there is direct impact of all the factors in the
organization. Job satisfaction is related to different Socioeconomic and personal factors, such as: Age,
Sex, Incentives, Working Environment, Education, duration of work etc. The paper highlighted different
factors affecting job satisfaction in pharmaceutical company in Hyderabad, India.

17
Kaur et al. (2020) conducted a study on the factors influencing job satisfaction in banking Industry.
Factors which mostly influenced the job satisfaction are Job security, job rotation ,job enrichment, salary,
promotion, working condition, nature of work, benefits, relationship with co- workers, supervision
support, demographic factors, working experiences, quality of management, attitude of employee, career
opportunities, communication, higher education level, motivation, long term employment. Some other
factors are style, Culture, Job Environment, Employee Improvement, age, gender.

Biniyam (2021) conducted a study to examine the determinants of police employee‟s job satisfaction in
Dire Dawa Administration Police Commission. Cross - sectional survey quantitative designs adopted to
collect the relevant data and information regarding the determinants of police employee‟s job
satisfaction. Descriptive statistics such as means and standard deviation and inferential statistics such as
Ordinal Logistic Regression (O logit) model analysis was used to establish the determinants factors that
affect employee‟s job satisfaction by the predictor variables. Among the major findings of the study,
Working Condition and Job Enrichment practice were not statistically significant variables on
determinants of police employee‟s job satisfaction.

2.4 Conceptual framework

In order to get the research objectives, the researcher has applied the twenty item short form of Minnesota
Satisfaction Questionnaire (MSQ) to measure and determine employee‟s job satisfaction at Ethiopian
Insurance Corporation (EIC). The researcher used the Minnesota Satisfaction Questionnaire (MSQ) in
order to use the advantage of effective measurement of the Intrinsic as well as the extrinsic job satisfaction
components. As per Spector, (1997) and Herzberg et al (1959)., Intrinsic job satisfaction refers to how
people feel about the nature of the job tasks themselves, whereas extrinsic job satisfaction refers to how
people feel about the task outside the work itself. In this study employee job satisfaction is going to be
taken as dependent variable while, intrinsic and extrinsic factors of job satisfaction are to be taken as
independent variables.

18
 Independent Variables Dependent Variable

Intrinsic Factors
Recognition
Responsibility

JOB SATISFACTION

EXTRINSIC FACTORS

Payment

Benefit

Promotion

Work environment

Figure 1: - Based on Herzberg theory (1959)

The relationship between extrinsic and intrinsic factors of employees and job satisfaction.

19
 CHAPTER THREE

3 RESEARCH DESIGN AND METHODS

3.1 Introduction

In this chapter the methodological elements of the study that include the background of the organization,
research design, the research approach, target population, sampling and sampling method, the source and
type of data, the method of data collection, the method of data analysis and reliability and validity test
and ethical considerations followed are discussed

3.1.1 Background of the organization

The Ethiopia Insurance Corporation (EIC) was established in 1976 by proclamation No 68/1975 and
governed as per the public enterprise proclamation No.25/1992. The corporation was established to
engage in business objectives of provision of insurance services and any other related activities which
makes it attain its purpose. The Corporation has been providing insurance services for its customers for
the last 46 years being the only insurance service provider (for 19 years, from 1976-1994) before
becoming a competitive insurance service provider among the other private insurance providing
companies in the country (from 1994 to present day). The Ethiopian insurance industry has been opened-
up for private insurance companies following the liberalization of the financial sector in 1994.

EIC provides life, property and liability insurance policies. Known for its strong and reliable financial
position, long standing and well-built affiliation with many international insurance organizations and
associations. EIC has maintained a comprehensive range of out ward reinsurance contract, and accepting
inward reinsurance (including Co-insurance) business.

Moreover, the Corporation has been involved in different investment area. Previously, the corporation
had executed a business process re-engineering in its core and support process to bring about institutional
transformation, which in turn would enable to boost the level of customer satisfaction be competitive in
both the domestic as well as international insurance markets to achieve its vision (i.e. To be World Class

20
Insurer in 2025; EIC Annual Report of the year 2013/2014). Above all reasons it needs to boost its
employees‟ level of job satisfaction to achieve its goals.

3.2 Research Design

A research design is a plan or a blueprint of how to design conducting the research (Bobbie and Mouton,
2001). The function of research design is to provide the collection of relevant evidence with minimal
expenditure of effort, time, and money (Kothari, 2004). In order to answer the research questions and
achieve the stated objectives, the study has used a combination of descriptive and explanatory research
designs. Therefore, in order to analyze the existing situation under consideration, descriptive research
and explanatory design was employed. On the other hand, the researcher also used explanatory research
designed to collect raw data and create data structures and information that allow the decision maker or
researcher to model cause-and effect relationships between two or more decision variables (Hair et al.,
1998). Descriptive survey design helped the study to gather varieties of data to achieve the objectives of
the study by describing the situation as it is. It helped in assessing the practices by addressing the size of
population and describes the situation. In terms of data collection type and source, the researcher
employed survey research technique using structured; enumerators administered questionnaire to obtain
first hand qualitative and quantitative data from target population.

The aim of this research is to determine which factors are important for employee job satisfaction in
Ethiopian Insurance Corporation.

3.3 Research Approach

In this research paper, quantitative research approach is used and survey was conducted through
questionnaires. The Minnesota Satisfaction Questionnaire (MSQ) with the short version of 20 questions
was also developed in order to collect relevant information from the respondents to get the general job
satisfaction of employees. The questionnaire was constructed based on the 5-point Likert s c a l e. The
twenty questions were ranked on a five-point scale (very dissatisfied, dissatisfied, neither, satisfied, and
very satisfied). This tool is employed to measure the intrinsic factors of satisfaction, the extrinsic factors
of satisfaction as well as the general satisfaction levels of employees. The average from all the answers
21
on each question was computed and the higher the score mean the higher the level of job satisfaction in
this aspect of employees work. The MSQ is equipped with short information regarding respondents,
containing questions about their gender, age and professional experience (Walkowiak, D., & Staszewski,
R., 2019).

3.4 Target Population, Sampling and Sampling Method

As of January 31, 2023 Ethiopian Insurance Corporation has a total of 1,802 employees. In this study,
employees of the corporation have participated. The target population included the top management
members at all level and professional employees working in Addis Ababa It exclude non-clerical
employees like cleaners, drivers, and security guards since these job positions are usually filled by
outsourcing. Because of this reason the target population has been lowered to 1,180 people. As per
literature review, probability sampling will have assumed to be suitable to survey research methods since
it is possible to make inferences from the samples regarding the population (Saunders, et al., 2009). The
total number of professional permanent employees working in EIC is 1180 individuals. Regarding the
employee respondents, the researcher used Yemane‟s formula (1967), in order to determine the sample
size of the population. This formula is reliable to 93% and has only 7% margin error.

n= N/
1 + N(e2) 1 + 1180(0.072) 6.782

Where:

n = the sample size N = size of population e = the level of accuracy (e = 0.07) accordingly, the number

of sample items from the target population of 1,180 employees was 174. Since employee perception

towards job satisfaction and its factor is presumed to vary across employee types of an organization, the

researcher has used proportional samples from different departments or work units. Thus, in order to

determine the number of sample items from each stratum; the researcher has used the following

formula. Furthermore, a probability random sampling technique was adopted because it gives equal

chance to everyone in the sample

22
 Sample size = Number of staff in each stratum X 174 (total sample size) Total Population
Table 1 Proportional Distribution of sample to each stratum
No Name of the department Total number of Proportion sample
Employees size
1 Top Management 8 2

2 Middle Level Management 64 9

3 First Line Managers And Officers 978 144

4 Clerical And Non-Clerical 130 19

Employees
Total 1180 174

3.5 Source and type of data

The research has used the combination of primary and secondary data sources.

3.5.1 Primary data

Primary data was collected by using survey questionnaire which was distributed to management members
and professional employees in the Head Office, Districts and Branches

3.5.2 Secondary Data

The secondary data collection was from review of literature of journals, articles, and other relevant
documents, EIC‟s corporate strategy and annual reports of the corporation.

3.6 Data Collection method

The main data gathering instruments were questionnaire and document analysis. The researcher has used
questionnaire to get quantified result. To maintain the data collection instrument to be valid and reliable,
the researcher has employed different techniques prior to collection and before analysis.

23
3.6.1 Questionnaire

Structured Questionnaire was used in order to reach wide range of respondents in order to acquire
information to examine and explain the relationships between variables. The survey questionnaire has
two parts; the first part contains demographic variables which indicate profile of participants of the
survey; such as gender, age category, marital status, highest qualification and lengths of service in the
company. The second part comprises close-ended question statements, so as to measure the variables of
the study. The questions were framed using Likert‟s scale of measurement ranging from strongly agree
to strongly disagree (Strongly agree 5, Agree 4, Neutral 3, Disagree 2 and Strongly Disagree 1) & the
MSQ general satisfaction questions were ranked on a five-point scale (very dissatisfied 1, dissatisfied 2,
neither 3, satisfied 4, and very satisfied 5).

3.7 Method of data analysis

Data analysis is the computation of certain measures along with searching for patterns of relationship that
exist among the data group (Kothari, 2004). In this research data was analyzed using descriptive statistics,
comparing means, and regression analysis to provide summaries of tables and figures. The collected data
was analyzed using Statistical Package for the Social
Sciences (SPSS) for windows because it is broadly used computer software which is employed to analyze
quantitative data. SPSS can electronically store collected data; generate descriptive statistical data for the
responses, create graphical figures of questionnaire data for the reporting and presentations; and analyze
relationships between responses to different questions.

3.7.1 Descriptive statistics

The final report of the relevant demographic variables was produced through central tendency
measurements (frequency and frequency distribution, valid & cumulative percentage, and comparison of
mean). In addition, tabular explanations were used to present the result with the help of SPSS.

24
3.7.1.1 Inferential statistical Analysis

In inferential statistical analysis, correlation and multiple linear regression methods are utilized using
statistical package for social sciences (SPSS) software. The use of these statistical tools and methods of
presentation are described below.

3.7.1.2. Correlation

Correlation (r) is used to describe the strength and direction of the relationship between two variables.
Since all variables are measured as an interval level, Pearson product-moment correlation was used.
Correlation “r” output always lies between -1.0 and +1.0 and if “r” is positive, there exists a positive
relationship between the variables. If it's negative, the relationship between the variables is negative.
While computing a correlation, the significance level shall be set at 95% with an alpha value of 0.05 or
a chance of occurrence of odd correlation is 5 out of 100 observations.

3.7.1.3 Multiple Regression Analysis

Based on the developed conceptual of the expressed study, figure no 2.1 mathematically the relationship
between selected independent variable and dependent variable is expressed in the multiple regression
equation. Multiple regression analysis is a major statistical tool for predicting the unknown value of a
variable from the known value of variables. And it is about finding a relationship between variables and
forming a model. The Model for this study was developed using five factors or predictors which have
influences on employee job satisfaction.

Yi = {30 + {31X1i + {32X2i + {33X3i + {34X4i + {35X5i + Ei

Where Y is the dependent variable and the independent variables are those which explain the response
ranges from X1 to X5.

Where: Y= employee job satisfaction X1= payment and benefit

X2= promotion

X3 = work environment

X4 = Recognition
25
 X5 = Responsibility

{30 to {35 are the coefficients and Ei the error term

Table 2: Model Specification of Variables

No Independent variable Beta Coefficients (β) Independent variable

assigned by X

1 payment and benefit

{31 X1
2 Promotion
{32 X2
3 work environment X3
{33
4 Recognition X4
{34
5 Responsibility X5
{35
Variable assigned by Y
Dependent variable
1 Employee job satisfaction Y

3.8 Reliability and validity Test

In order to ensure the quality of the research design, content and construct validity of the study was
checked. The content validity will verify by the advisor of this research, who look into the appropriateness
of questions and the scales of measurement. The questionnaire involves the six dimensions to measure
employee job satisfaction based on the selected independent variables. The questionnaire with five points
rating scale was used. Cronbach's alpha is one of the most commonly accepted measures of reliability. It
indicates that the extent to which the items in a questionnaire are related to each other Fubara and Mguni,
(2005). The normal range of
Cronbach‟s coefficient alpha value ranges between 0-1 and the higher values reflects a higher degree of
internal consistency.

Reliability is calculated in such a way that it represents the reliability of the mean of the items, not the
reliability of any single item for instance as shown in the below factor loading table, all the latent variables
and their corresponding indicator variables consisted of multi-item questions. As reported by Gliem and

26
Gliem (2003), a single item question is not reliable to conclude as compared to summated multi-item
questions.

Table 3: Reliability Test of Variable‟s Using Cronbach‟s Alpha

Reliability Statistics
Cronbach's Cronbach's Alpha based on
Variable Name Alpha Value standardized items No of items
No
Independent variables
1 Payments and Benefit 0.788 0.787 7
2 Promotion 0.828 0.828 3
3 Working Environment 0.756 0.759 4
4 Responsibility 0.684 0.686 3
5 Recognition 0.852 0.852 3
Dependent variable
1 Job Satisfaction 0.878 0.908 20
Overall 0.945 0.946 40
Source: Own computation using SPSS of the survey, 2024

3.9. Ethical Considerations

The researcher has used all the information given by employees in a manner of confidentially and full
anonymity of the respondents‟ identity. According to the Social Research Association's (2003) Ethical
criteria, the research shall be carried out in accordance with ethical principles and standards. To encourage
ethical reflection, 14 check lists are offered. Informed permission, data protection, confidentiality, and
anonymity are among the usual protocols that must be followed. Participants must also be made aware
of any risks or potential advantages associated with the research endeavour.

27
 CHAPTER FOUR

4 DATA PRESENTATION, ANALYSIS, AND DISCUSSION

4.1 Introduction

More Ethiopian Insurance Corporation professional employees are located in Addis Ababa, especially in
the Insurance Service Core process. The sample size for this study involved 174 staff working under
different departments both at the managerial level and non-managerial level. The data was analyzed using
computer based software SPSS 20.0 and the results have been presented in tables and figures. The
findings are provided in the context of descriptive and as per the study objectives. So that this study is
about determining the factors which influence employee‟s job satisfaction at work places, using
Ethiopian Insurance Corporation as a case study.

The data collection procedure for the research followed the following pattern: first, respondents were
contacted and asked for their consent to participate in the study; then, they were informed about how
confidentiality and ethical principles would be protected during the research process. After that, total of
174 questionnaires were distributed to the respondents and from that 160 (91.95%) questionnaires were
collected through a self-administered survey and 151 (86.78%) questionnaires were properly filled and
ready for analysis. After that, the data were entered into SPSS and the dataset was rechecked to ensure
the accuracy of the data entry. The minimum and maximum data values on each variable related to each
case were checked to detect any irregular or unusual data values. The chapter is structured along the
objectives of the study.

4.2 Demographic Information

The findings are presented in the context of Age, Sex, Education level, Working Experience, and Work
unit and also according to the findings gathered from the respondents on the subject matter.

Table 4: General Background Information of Respondents

28
 Cumulative
No. Item Frequency Percent
Percent

1 Gender Male 95 62.9 62.9

Female 56 37.1 100.0
Total 151 100.0
2 Age 18- 25 years 4 2.6 2.6
26-35 years 86 57.0 59.6
36-45 years 46 30.5 90.1
46 & above 15 9.9 100.0
Total 151 100.0
3 Education Diploma 3 2.0 2.0
First Degree 106 70.2 72.2
Master‟s (MA/MSc) 42 27.8 100.0
Total 151 100.0
4 Experience Below 5 years 34 22.5 22.5
6-10 years 57 37.7 60.3
11-20 years 36 23.8 84.1
Above 20 years 24 15.9 100.0
Total 151 100.0
5 Work unit General Insurance 35 23.2 23.2
Long Term Insurance 27 17.9 41.1
Finance & Investment 20 13.2 54.3
Information T (ITSM) 18 11.9 66.2
Human Resource 15 9.9 76.2
Legal 11 7.3 83.4
Business Dev. & Risk 10 6.6 90.1
Internal Audit 5 3.3 93.4
Others 10 6.6 100.0
Total 151 100.0
Source: Own computation using SPSS of the survey, 2024 Sex Distribution

29
The most important demographic variable that receives huge attention in job satisfaction research is sex.
A number of empirical studies on job satisfaction have suggested that female workers have lower level
of job satisfaction than their male counterparts because male officials dominate most of the public
organizations. The findings show that 95 (62.9 percent) were male and 56 (37.1 percent) were female
respondents as Table 4.1 demonstrates: The results presented in Table 4.1 show that the majority of the
respondents were male. This also indicates that there are more male professional employees than female
ones in the Corporation. On the whole, there is gender imbalance among professional employees in the
organization.

Age Distribution

Another important identified variable in the research on demographic characteristics is age.

Worker „s age has been found to have a negative impact on worker „s job satisfaction (Buzawa, 1984).
This means that younger workers are more satisfied with their jobs than their senior counterparts. In this
study, respondents were asked to indicate their age in the appropriate space provided. The result shows
that the age group between 26 and 35 years were 86 (57 percent) respondents. This was followed by 46
(30.5 percent) respondents in the age group of 36 and 45 years, while the age group between 18- 25 were
only 4 (2.6 percent) respondents. The age group between 46 and above years had 15 (9.9 percent)
respondents.

Educational Level Distribution

Another common demographic variable studied was educational level. Most of the researches on the
relationship between education level and job satisfaction yield consistent findings. Especially Griffin,
Dunbar & McGill (1978) found that workers with higher educational level are tend to be more satisfied
with their job than workers with lower educational level. The study also set out to establish respondents‟
level of education and found that the majority of the respondents have a bachelor „s degree as evidenced
by 106 (70.2 percent), while 42 (27.8 percent) of the respondents have master‟s degree and 3 (2 percent)
of the respondents have the

30
Diploma level. This is an indication that about 70.2 percent of the professional staff of the Corporation
have the university education level of at least first degree.

Year of Service Distribution

The respondents were also asked to provide information on their work experience in the Corporation. The
selection of respondents for the purpose of this study was done with regard to their duration of service.
The findings show that the largest number of respondents had stayed between 6-10 years of services
within the Corporation constitute 57(37.7 percent). This is followed by those respondents with 11-20
years of services who were 36 (23.8 percent), 34 (22.5 percent) of the respondents had spent below 5
years and 24 (15.9 percent) respondents had spent over 20 years in the Corporation.

Place mof Work Distribution

Regarding the work unit in the Corporation, the majority of the respondents were working in
General Insurance Service 35 (23.2 percent) and followed by Long Term Insurance Service 27 (17.9
percent), Finance & Investment 20 (13.2 percent), Information Technology & Service Management
Directorate (ITSM) 18(11.9 percent), Human Resource Management Directorate 15(9.9 percent), Legal
Service Directorate 11(7.3 percent), Business Development & Risk Management Office 10 (6.6 percent),
Internal Audit 5 (3.3 percent) and others 10 (6.6 percent).

4.3 Factors That Affect Employees’ Job Satisfaction

In this section, the study sought to examine factors that affect employees‟ job satisfaction in Ethiopian
Insurance Corporation. Job satisfaction factors were viewed in terms of payment and benefits,
promotions, work environment, responsibility and recognition as the independent variables and job
satisfaction as the dependent variable.

31
 Table 5: Intrinsic factors

Responsibility Mean Std. Dev.

3.01 1.055
1 Employees have clear job responsibilities in our organization

2 2.69 .967
Employees participate in decisions making that has a positive
effect on their job satisfaction
3 I perform my duty with full autonomy and freedom 3.22 .999

Recognition
1 I get credit for what I do 2.72 1.021

2 2.81 1.016
I receive constructive criticism (positive feedback) about my
work
3 2.82 .994
The existence of recognition for good work, has given me an
opportunity to Perform well
Source: Own computation using SPSS of the survey, 2024

The study finding shows that in achieving responsibility under intrinsic factors, I perform my duty with
full autonomy and freedom (Mean = 3.22, SD = 0.999), employees have clear job responsibilities in our
Corporation (Mean = 3.01, SD = 1.055) and employees participate in decisions making that has a positive
effect on their job satisfaction (Mean = 2.69, SD = 0.967) are more important components of responsibility.

Regarding to recognition under intrinsic factors, the existence of recognition for good work, has given me
an opportunity to perform well (Mean = 2.82, SD = 1.016), I receive constructive criticism (positive
feedback) about my work (Mean = 2.81, SD = 0.944) and I get credit for what they do (Mean = 2.72, SD =
1.021) are considered to be less important components in the Corporation.

32
 Table 6: Extrinsic factors

A. Payments and Benefit Mean Std. Dev.

My salary is equitable when compared with other Insurance Companies 3.25 .995

My salary payment is satisfactory in relation to what I do 2.95 1.106

I am satisfiehd by the Corporation‟s pay grade 2.80 1.096

Salary adjustment or increment is made on reasonable time period 2.36 1.152

The Corporation pay Competent benefit in the Market 2.95 .900

3.20 .945
Benefit and Bonus payment of the Corporation are matched ( Bonus based
on Profitability of the Corporation is Matched)
The benefit system of the Corporation has effect on my satisfaction 3.50 1.015
B. Promotion

Everyone has an equal chance to be promoted 2.66 1.119

The Corporation‟s promotion policy is clearly communicated to all 2.50 1.064

Employees
2.50 1.051
The existing Promotion motivate employees for high level of job
satisfaction
C. Working Environment

3.02 1.086
I am providedmn with adequate facilities and resources to do my job
effectively
2.78 1.171
The working condition like space, seating arrangement, ventilation,
lighting etc helped me to do my duties in better way
2.98 1.104
The Corporation provides flexible work hours to accommodate my
personal needs
All in all I am satisfied with the working condition of the Corporation 2.97 1.016

Source: Own computation using SPSS of the survey, 2024

33
The study finding under extrinsic factors shows that in achieving payment and benefits, the benefit system
of the Corporation has effect on my satisfaction has mean value of 3.5 & SD
1.015, My salary is equitable when compared with other Insurance Companies has mean value of 3.25 &
SD 0.995, Benefit and Bonus payment the Corporation are matched (Bonus based on Profitability of the
Corporation is Matched) has mean value of 3.2 & SD 0.945 and The Corporation pay Competent benefit
in the Market has mean value of 2.95 & SD 0.9 are considered by the respondents to be the most important
payment and benefit practices in the Corporation. The findings of the study indicate that my salary
payment is satisfactory in relation to what I do (Mean = 2.95, SD = 1.106), I am satisfied by the
Corporation‟s pay grade (Mean =
2.8, SD = 1.096) and Salary adjustment or increment is made on reasonable time period (Mean = 2.36,
SD = 1.152) are also important components of payment and benefit practices in the Corporation.

With regard to achieving promotion in the organization, everyone has an equal chance to be promoted
(Mean = 2.66, SD = 1.119), the Corporation‟s promotion policy is clearly communicated to all
Employees (Mean = 2.5, SD = 1.106) and the existing promotion motivate employees for high level of
job satisfaction (Mean = 2.8, SD = 1.051) show that they were not well applied in the organization.

As per the table 4.2 the study finding shows that in achieving working environment, I am provided with
adequate facilities and resources to do my job effectively (Mean = 3.02, SD =
1.06), the Corporation provides flexible work hours to accommodate my personal needs (Mean = 2.97,
SD = 1.104), all in all I am satisfied with the working condition of the Corporation (Mean = 2.97, SD =
1.06), the working condition like space, seating arrangement, ventilation, lighting etc helped me to do
my duties in better way (Mean = 2.78, SD = 1.118) are important components of working environment
in the organization.

34
4.4 Job satisfaction

Table 7: job satisfaction

Std. Deviation
No Items Mean
1 Being able to keep busy all the time 3.21 .961

3.24 .892
2 The chance to work alone on the job
3.15 .943
3 The chance to do different things from time to time
4 The chance to be "somebody" in the community 3.11 .888
5 The way my boss handles his/her workers 3.25 1.021
6 The competence of my supervisor in making decisions 3.24 .950

7 Being able to do things that don‟t go against me conscience 3.16 .924

8 The way my job provides for steady employment 3.23 .844

9 The chance to do things for other people 3.40 .857

10 The chance to tell people what to do 3.40 .841

11 The chance to do something that makes use of my abilities 3.37 .984
12 The way company policies are put into practice 2.92 .949

13 My pay and the amount of work I do 2.89 1.036

14 The chances for advancement on this job 2.84 .987

15 The freedom to use my own judgment 3.12 .993

16 The chance to try my own methods of doing the job 3.32 2.554
17 The working conditions 3.19 .991
18 The way my co-workers get along with each other 3.47 .908
19 The praise I get for doing a good job 3.05 .982
20 The feeling of accomplishment I get from the job 3.15 .943
Source: Own computation using SPSS of the survey, 2022

As per the above table the study finding that shows job satisfaction in the Corporation: The way my co-
workers get along with each other (Mean = 3.47, SD = 0.908), The chance to do things for other people
35
(Mean = 3.4, SD = 0.841), The chance to tell people what to do (Mean = 3.4, SD = 0.841), The chance
to try my own methods of doing the job (Mean = 3.32, SD = 0.254), the chance to do something that
makes use of my abilities (Mean = 3.4, SD = 0.841), the chance to work alone on the job (Mean = 3.24,
SD = 0.892), the competence of my supervisor in making decisions (Mean = 3.24, SD = 0.950), the way
my job provides for steady employment (Mean = 3.23, SD = 0.844), and being able to keep bus y all
the time (Mean = 3.21, SD = 0.961) are observed to be more important components of job satisfaction in
the Corporation. The findings of the study also indicate that, the chances for advancement on this job
(Mean = 2.84, SD = 0.987), pay and the amount o f work the y do (Mean = 2.89, SD = 1.036) and the
way company policies are put into practice (Mean = 2.92, SD = 0.949) are less important components of
job satisfaction in the Corporation.

4.5 Descriptive statistics of the variables

As presented in the table below, the descriptive statistics of payment and benefits, promotions, work
environment, responsibility and recognition presented as the independent variables and job satisfaction
as the dependent variable. The results in the table show that payments and benefits has the highest mean
score of 3.00 followed by responsibility with an overall mean score of 2.97 and the relatively low overall
mean score was recorded by promotion which is 2.55. Regarding to the dependent variable the summery
statistics shows that job satisfaction had relatively highest mean score value which is 3.18.

36
Table 8: Descriptive statistics

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation

Payment & Benefit 150 1.14 4.57 3.0067 .68609

Promotion 151 1.00 4.67 2.5541 .93006

Working Environment 151 1.00 5.00 2.9371 .83278

Responsibility 151 1.00 5.00 2.9713 .78875

Recognition 151 1.00 5.00 2.7859 .88723

Job Satisfaction 151 1.30 4.65 3.1848 .59394

Valid N (listwise) 150

Source: Own computation using SPSS of the survey, 2024

4.6 Correlation analysis

It is a statistical measure that shows the strength of association between different variables within a study
and relative movement of variables as well. The value of correlation coefficient is needed to be within -
1 to +1. The table below shows that correlation coefficients of this research.
The Pearson‟s correlation coefficient analysis helped the researcher to better understand whether there
was a positive relationship, negative relationship, or no correlation between dependent variables and
independent variable. Thus, the strength and direction of relationship between variables was analyzed by
the researcher using Pearson‟s correlation coefficient analysis. In addition, the researcher used it to
measure whether there was a significant relationship between independent variables and dependent
variable.

37
Table 9: Correlation matrix of dependent and independent variables

Correlations
Paymen Working
Satisfac t& prom Environm Responsibili Recognit
tion Benefit otion ent ty ion

Satisfaction R 1 .515** .564** .539** .599** .621**

Sig. .000 .000 .000 .000 .000
Payment & R .515** 1 .500** .390** .418** .493**
Benefit Sig. .000 .000 .000 .000 .000
Promotion R .564** .500** 1 .522** .565** .481**
Sig. .000 .000 .000 .000 .000
Working R .539** .390** .522** 1 .676** .491**
Environment Sig. .000 .000 .000 .000 .000
Responsibility R .599** .418** .565** .676** 1 .542**
Sig. .000 .000 .000 .000 .000
Recognition R .621** .493** .481** .491** .542** 1
Sig. .000 .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Own computation using SPSS of the survey, 2024

The first tested relationship was among variables provided on recognition and satisfaction gained through
the job. The p-value is less than 0.01, which shows that correlation between the said two variables is
statistically significant. Out of the relationships, on the basis of 151 responses, among the five selected
variables, the strongest relationship of job satisfaction in this study is with recognition which has a value
of 0.621. This is a direct or positive relationship that means if recognition will be improved by 100%
there will be 62.1% increase in job satisfaction. As per the collected data from 151 responses from the
employees, among the five selected variables in this study the second strongest relationship of job
satisfaction is with responsibility which has a value of 0.599. This is a direct or positive relationship that
means if responsibility will be improved by 100% there will be 59.9% increase in job satisfaction in work
place. As per the collected five selected variables in this study the third strongest relationship of

38
satisfaction level is with promotion because the value is 0.564. This is a direct or positive relationship
that means if workplace environment will be improved by 100% there will be 56.4 % increase satisfaction
of the personnel from their jobs.

4.7 Regression Analysis

Regression analysis is a statistical measurement used to estimate the relationships among the dependent
and independent variables. It enables to determine the strength of the relationship between variables and
the predictive power of the independent variables on the dependent variable. In short, regression helps a
researcher understand to what extent the change of the value of the dependent variable causes the change
in the value of the independent variables, while other independent variables are held unchanged.
Regression analysis is a way of statistically sorting out the variables that have indeed an impact. While
there are many types of regression analysis, at their core they all examine the influence of one or more
independent variables on a dependent variable.

4.7.1 Diagnostic Tests of Assumptions of Classical Linear Regression Model (CLRM)

The Classical linear regression model such as homoscedasticity, autocorrelation, Multi collinearity, and
normality were conducted and are discussed below.

4.7.2 Homoscedasticity Test

This assumption of homoscedasticity is central to the linear regression model. It describes a situation in
which the error term (that is, random disturbance in the relationship between the independent variables
and the dependent variables) is the same across all values of the independent variables. Assumptions can
be checked by a scatter plot diagram. The result plots the values the model would predict, against the
residuals obtained. As the predicted values increase, the variation in the residuals should be roughly
similar. The graph looks like a random array of dots. So, the model is homoscedasticity.

39
 Figure 2

: Homoscedasticity Test

Source: Own computation using SPSS of the survey, 2024

4.7.2.1 Autocorrelation Test

Durbin-Watson statistic is used to test for the presence of serial correlation among the residuals. The
residuals are not correlated if the Durbin-Watson statistic is approximately 2, and an acceptable range is
1.50 - 2.50. As it can be shown from the table below the Durbin- Watson statistic value is 1.793 and this
value almost approaches 2 therefore, there is no autocorrelation problem in this model.

40
Table 10: Autocorrelation Test

Model Summary
Mode l R R Square Adjusted R Square Std. Error of the Estimate Durbin- Watson
1 .738a .545 .530 .40616 1.793
a. Predictors: (Constant), Recognition, promotion, payments, Working Environment,
Responsibility
b. Dependent Variable: Job Satisfaction
Source: Own computation using SPSS of the survey, 2024

4.7.2.2 Multi collinearity Test

Multi collinearity is the situation in which the independent variables are highly correlated each other.
When independent variables are correlated, there is an “overlap” or sharing of predictive power. This
may lead to the paradoxical effect, whereby the regression model fits the data well, but none of the
predictor variables has a significant impact in predicting the dependent variable. This is because when
the predictor variables are highly correlated, they share essentially the same information. Thus, together,
they may explain a great deal of the dependent variable, but may not individually contribute significantly
to the model. The existence of multi collinearity can be checked using “Tolerance” and “VIF” values for
each predictor variable. Tolerance values less than 0.10 and VIF (variance inflation factor) greater than
10 indicates the existence of multi collinearity (Robert, 2006). The VIF is a measure of the reciprocal of
the complement of the inter-correlation among the predictors. The decision rule is a variable whose VIF
value is greater than 10 indicates the possible existence of a multi collinearity problem. Tolerance (TOL)
defined as 1/VIF, it also used by many researchers to check on the degree of collinearity. The decision
rule for tolerance is a variable whose TOL value is less than 0.1 shows the possible existence of a multi
collinearity problem (Gujarati, 2004).

Based on the test result below all the variance inflated factor (VIF) values are less than 10 and also all
the tolerance value greater than 0.1 therefore, in this model there is no high multi collinearity problem.
Multi collinearity problem it is not a matter of existence rather it is a matter of degree.

41
Table 11: Test of Multi collinearity

Model Collinearity Statistics

Tolerance VIF
1 (Constant)
Payments .662 1.510
Promotion .567 1.765
Working .498 2.008
Environment
Responsibility .450 2.222
Recognition .594 1.683
Source: Own computation using SPSS of the survey, 2024

4.7.2.3 Normality test

Multiple regressions require the residuals to be normally distributed. Skewness and kurtosis are statistical
tools that can enable to check if the data is normally distributed or not. According to Smith and Wells
(2006), kurtosis is defined as “property of a distribution that describes the thickness of the tails. The
thickness of the tail comes from the amount of scores falling at the extremes relative to the
Gaussian/normal distribution”. Skewness is a measure of symmetry. A distribution or data set is
symmetric if it looks the same to the left and right of the center point. The skewness and kurtosis test
results of the data is within the acceptable range (-1.0 to +1.0) and it can be concluded that the data is
normally distributed.

42
 Figure 3: Normality Test

4.7.3 Regression Result Analysis and Discussion

Overall, the entire model passed the four diagnostic tests in accordance with Classical Linear Regression
Assumptions (CLRM). The next part will present the results of the regression output to analyze the factors
that affecting job satisfaction. With the help of multiple linear regression analysis, model summary,
ANOVA, and Beta coefficient were determined, and the regression model was developed.

Model Summary: The table below shows that there are five predictor variables in the study including
payment and benefits, promotions, work environment, responsibility and recognition. Regression model
was applied to test how far job satisfaction factors had impact on employee‟s satisfaction. Coefficient of
determination-R2 is the measure of proportion of the variance of dependent variable about its mean that
is explained by the independent or predictor variables (Hair et.al, 1998). Higher value of R2 represents
greater explanatory power of the regression equation. The table below shows the R2 value of 0.545. This
result shows that the independent variables (payment and benefits, promotions, work environment,
responsibility and recognition) accounted for 54.5 percent of the variance in employee‟s job satisfaction.
This means 54.5 percent of the variation in job satisfaction of employee‟s is explained by the independent

43
variables whereas the remaining 45.5 percent of the variation is explained by other factors which are not
included in this study.

Table 12: Model Summary

Model Summary
Model R Adjusted Std. Error of the Durbin-
R Square
RSquare Estimate Watson
1 .738a .545 .530 .40616 1.793

a. Predictors: (Constant), Recognition, promotion, payments, Working Environment, Responsibility

b. Dependent Variable: Job Satisfaction
Source: Own computation using SPSS of the survey, 2023

The below table i.e. ANOVA test shows if the predictors of this research actually predict job satisfaction
or not. This can be answered through overall significance of the model, which is typically and
traditionally shown through a p-value that is less than 0.05. The table shows that the p-value is
appropriately and shows a perfectly significant of all collective independent variables on one dependent
variable.

Table 13: ANOVA table

ANOVA
Model Sum of Squares Df Mean Square F Sig.
1 Regression 28.491 5 5.698 34.542 .000b
Residual 23.755 144 .165
Total 52.246 149
a. Dependent Variable: Job Satisfaction
b. Predictors: (Constant), Recognition, promotion, payments, Working Environment,
Responsibility
Source: Own computation using SPSS of the survey, 2024

44
Table 14: Regression output

Coefficientsa

Model Unstandardized Standardized t Sig.

Coefficients Coefficient
B Std. Error Beta
1 (Constant) 1.262 .169 7.479 .000

Payments(ext.) .133 .060 .154 2.226 .028

Promotion(ext.) .110 .047 .173 2.321 .022
.084 .057 .118 1.487 .139
Working
Environment (ext.)
Responsibility(int.) .151 .063 .201 2.405 .017
Recognition (int.) .195 .049 .293 4.014 .000
a. Dependent Variable: Satisfaction
Source: Own computation using SPSS of the survey, 2024

Standardized Beta Coefficient: It is the coefficients that can explain the relative importance of
explanatory variables. These coefficients are obtained from regression analysis after all the explanatory
variables are standardized. As can be seen from table 4.11 above the standardized coefficient of
recognition is the largest value followed by responsibility, promotion, payments and work environment
two to five respectively. The larger the standardized coefficient, the higher is the relative effect of the
factors to the job satisfaction.

Unstandardized Beta Coefficient (/J): As it is defined in chapter three, the unstandardized coefficients
(/J1 up to /J5) are the coefficients of the estimated

Regression model. Hence, by including the error term (ε), the model for job satisfaction can be written
as; k Yi = p0 + p1X1i + p2X2i + p3X3i + p4X4i + p5X5i + Ei

Y i = 1. 262 + 0. 133X1i + 0. 110X2i + 0. 084X3i + 0. 151X4i + 0. 195X5i

45
The intercept (/J0) is the point on the vertical axis where the regression line crosses the Y axis. The value
of /J0 is 1.262 which means the expected value of job satisfaction is 1.262 when all the five explanatory
variables.

Among the five factors, four of them are found to be a statistically significant effect on employee
performance. The significant variables are Payment and benefits, promotions, responsibility and
recognition.

4.7.4 Discussion of the Regression Result

Payment and benefits

Pay is the leading and most important feature of satisfaction for almost each type of employee in public,
private, small, medium and large institutions and that reasonable pay system is related with job
satisfaction (Bajpai and Srivastava, 2004). Pay is a payment system that employee view as being fair and
proportionate with their skills and expectation is called pay. The provision of benefits will create an
optimistic, motivating work environment and increases output and sales. The motivated workforce will
lead to organizational excellence, prosperity, excellent quality and cost control. As per the regression
output of model one table

4.11 Above, the coefficient of payments and benefits is positive and statistically significant at 5 percent
level of significance. This implies that a one-unit increase in payments and benefits leads to 0.133 unit
increase in job satisfaction being other variables are constant. The findings of this study is in line with
the findings of Chiu et al. (2002), Saeed et al., (2013), Kanwal and Majid (2013), Haile and Premanandam
(2017), Hossain (2014), Judge et al., 2017) and Walkowiak and Staszewski (2019).

Promotion
Promotion at regular interval of time has an optimistic approach behind and they are generally given to
satisfy the psychological requirements of employees in the organization. Koch and Nafziger, (2012)
specified that promotions are desirable for most employees, only because they work harder to compensate
for their „„incompetence.‟‟ Promotion refers to advancing in career or career development. The
coefficient of promotion is positive and statistically significant at 5 percent level of significance. This

46
implies that a one-unit increase in promotion leads to 0.110 unit increase in job satisfaction being other
variables are constant. Therefore, the study failed to reject the null hypothesis that promotion has a
negative effect on job satisfaction. This means, there is enough evidence to support the positive
relationship between job satisfaction and promotion. The relationship is positive as expected. The
findings of this study is in line with the findings of Kanwal and Majid (2013), Girmachew (2019), Haile
and Premanandam (2017), Hossain (2014), Judge et al., 2017), Walkowiak and Staszewski (2019), Kaur
et al. (2020) and Biniyam (2021).

Responsibility
According to Hertzberg (1950) the relationship of people to their work is a basic one and that their attitude
towards their work can very well determine the job satisfaction. He states that intrinsic factor such as
achievement, recognition, responsibility. As per the regression output of model table 4.11 above, the
coefficient of responsibility is 0.151. The coefficient is positive and has statistically significant effect job
satisfaction at one percent level of significance. The coefficient of responsibility interpreted as holding
constant other explanatory variables when responsibility increased by one percent, the level of job
satisfaction is increased by 0.151 units. Therefore, the study failed to accept the null hypothesis that
responsibility has a negative effect job satisfaction. This means, there is enough evidence to support the
positive relationship between job satisfaction and responsibility. The relationship is positive as expected.
The findings of this study is consistent with the findings of Kanwal and Majid (2013), Girmachew (2019),
Hossain (2014), Timkete (2018), Judge et al., 2017), Walkowiak and Staszewski (2019) and Koorella and
Perumal (2019).

Recognition
Recognition can be as simple as giving someone response on what they have done right, or just saying
“thank-you”. Recognition enhances the level of productivity and performance at job whether it is a first
time performance or a repeated action at the job in a progressive way and ultimately reinforces the
behavior of employee. As per the regression output of model table 4.11 above, the coefficient of
recognition is 0.195. The coefficient is positive and has statistically significant effect job satisfaction at
one percent level of significance. The coefficient of recognition interpreted as holding constant other
explanatory variables when recognition increased by one percent, the level of job satisfaction is increased

47
by 0.195 units. Therefore, the study failed to accept the null hypothesis that responsibility has a negative
effect job satisfaction. This means, there is enough evidence to support the positive relationship between
job satisfaction and recognition. The relationship is positive as expected. The relationship is positive as
expected. The findings of this study is consistent with the findings of Danish et al. (2010), Milne (2007),
Girmachew (2019), Hossain (2014), Timkete (2018), Kaur et al. (2020) and
Biniyam (2021)

Work environment
Jung and Kim, (2012) stated that good work environment and good work conditions can increase
employee job satisfaction and an employee organizational commitment. So the employees will try to give
their best which can increase the employee work performance. The coefficient of work environment is
positive but statistically insignificant. This implies that a one-unit increase in work environment leads to
0.084 unit increase in job satisfaction being other variables are constant. Therefore, the study failed to
reject the null hypothesis that work environment has a significant effect on job satisfaction. This means,
there is enough evidence to support the positive relationship between job satisfaction and work
environment. The relationship is positive as expected. The findings of this study is inconsistent with the
findings of Kawada & Otsuka
(2011), Saeed et al., (2013), Emberland & Rundmo ( 2010), Tremblay. et al., 2009), Girmachew
(2019), Haile and Premanandam (2017), Hossain (2014), Timkete (2018), Koorella and Perumal (2019),
Kaur et al. (2020) and Biniyam (2021).

48
 CHAPTER FIVE

5 SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

5.1 Introduction

This chapter states the summary of the study findings and results. Based on the key findings and results,
conclusions are drawn and recommendations are made. The recommendations include interventions to
improve job satisfaction in Ethiopian Insurance Corporation and give implication for further studies

5.2 Summary

The main purpose of this study is to examine factors that affect employees‟ job satisfaction in Ethiopian
Insurance Corporation based on the questionnaire which was distributed to 174 professional employees
of EIC. Based on the literature review discussed in chapter two, five independent variables have been
established. These variables are payment and benefits, promotions, work environment as extrinsic factors
and responsibility and recognition as intrinsic factors.

In the descriptive part of the analysis, the result indicated that majority of the total respondents are male,
the majority of the respondents are in the age range of 26–35 years and the majority of the respondents
are master‟s degree holders.

Prior to the main analysis of the study, a reliability test was administered to check whether the
questionnaire was reliable or not. With this regard, all the quaternaries were reliable and acceptable.

The result from Pearson coefficients implies that the five factors were all positively related to employee
job satisfaction.

Findings from the multiple regression analysis depict, the variation in job satisfaction is explained by
employed explanatory variables. Furthermore, the significance value of F statistics shows a value 0.000,
which is less than p<0.05, implies the model is significant.

49
The standardized coefficient of the intrinsic factor recognition is the largest value followed by
responsibility which is also intrinsic and payments, promotion and work environment which are extrinsic
factors three to five respectively. The larger the standardized coefficient, the higher is the relative effect
of the factors to the job satisfaction.

5.3 Conclusions

To realize the objectives of the study, three research questions were generated, and correlation and
multiple regression method were employed to answer the research objective: To address the problem the
study aim to find answers to the following basic research questions.

1. What are the intrinsic factors that affect employee job satisfaction in Ethiopian
Insurance Corporation?

2. What are the extrinsic factors that affect employee job satisfaction in Ethiopian
Insurance Corporation?

3. Which factors have more effect on employee job satisfaction in Ethiopian

Insurance Corporation?

Thus, on the base of research questions and specific objectives the following conclusions which are:
Determining the intrinsic factors that affect employee job satisfaction in Ethiopian Insurance Corporation,
Analysing the extrinsic factors that affect employee job satisfaction in Ethiopian Insurance Corporation
and Analysing the factors which have more effect on employee job satisfaction in Ethiopian Insurance
Corporation. Based on the findings, job satisfaction is a critical factor in every organization to be
successful. This research work could justify that job satisfaction has positive relationship with all the
intrinsic & extrinsic factors i.e., payment and benefits, promotions, work environment, responsibility and
recognition.

The multiple regression assumptions like multicollinarity, autocorrelation, normality and

heteroscedasticity tests were meet accordingly in model. The ANOVA test result in model also showed
that, the value of R and R2 obtained under the model summary part was statistically significant and
overall significant. The multiple linear regression analysis of the independent variables and dependent

50
variables shows that in the model out of five independent variables four variables are positively and
statistically significant effect on job satisfaction i.e payment and benefits (extrinsic), promotion
(extrinsic), responsibility and recognition (Intrinsic) factors while the other extrinsic variable has positive
but insignificant effect on job satisfaction i.e work environment.

From the above result, the researcher concludes that both of the intrinsic variables; responsibility and
recognition and out of the three extrinsic variables; payments and promotion, are the key factors that
affect job satisfaction in EIC.

5.4 Policy recommendation

From the conclusion made based on the major findings of the research the following recommendations
are suggested. These are:

 The management of EIC should recognize excellent performance. Employees are motivated when
their above-average efforts are recognized and rewarded. This helps to build a sense of employee
attachment to the organization thus increase job satisfaction.

 Recognition, which is one of the intrinsic variables has the most influential factor on the
satisfaction of employees of EIC. Therefore, it is strongly recommended for the top management
to give a due attention towards this variable. Managers should establish criteria for identifying
employees who are eligible for recognition, then recognize anyone who meets the criteria by
being consistently fair.

 EIC should also formulate a fair promotion system, an extrinsic factor to increase employees‟
motivation and their job satisfaction.

 Since responsibility (intrinsic variable) is a significant variable supervision of employees

in any insurance companies, it should be conducted based on their job requirements. When
people's responsibilities are meaningful and involve their strengths and values, they become
driven. Supervision of employees must be free from bias and the results of supervision are
supposed to be communicated with employees in a transparent manner.

51
 EIC employees needs to promptly update pay and benefits. Because this factor has main role to
increase employee‟s motivation and their job satisfaction 

52
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APPENDIX

Masters of Business Administration in Financial Studies Questionnaire intended to Ethiopian

Insurance Corporation Employees

Dear Colleagues: -

I am a student of Masters of Business Administration in Select business and Technology

college. I would like to express my sincere appreciation for your generous time, honest and
prompt responses.

This questionnaire is designed to get information only for academic purpose and is the major
requirement to complete the research on the topic: “Factors Affecting Employees‟ Job
Satisfaction: the case of Ethiopian Insurance Corporation”
The purpose of this questionnaire is also to know how you feel about your present job, which
things you are satisfied with and those things you are not satisfied with. On the basis of your
answers and those of like you, it is expected to get a better understanding of the things
individuals like and dislike about their jobs. This survey is primarily essential for companies
to have satisfied, competent and committed staff for better chance of meeting the overall
objectives and goals.

This study will also suggest possible solution that will be used as an input for management in
amending policies and practices concerning employee job satisfaction. Your support in
responding to this questionnaire is highly appreciated and it is of paramount importance to the
success of this study. The questionnaire may take a few minutes of your precious time & you
are not required to write your name and all information you provide will be handled with great
confidentiality

If you have any questions about this survey, please do not hesitate to contact me at my email
address: [email protected]

Thank you very much for your time, participation & and prompt response.

Please rate the following Statements by ticking “√” only one box on the right side in the space
provided based on the description:
Part I. General demographic information

1 Gender 1.Male 2. Female

2 Age 1. Below 25 years 2. 26-35 years

3. 36-45 years 4. 46 & above

3 Highest level of achievement (education) 1. Diploma 2. First

Degree your

4. Master‟s (MA/MSc)

4. How long have you been working for EIC? 1. Below 5 years 2. 6-10 years

3. 11-20 years 4. Above 20 years

5. In which of the following working unit are you working?

1. General Insurance 2. Long Term Insurance Finance & Investment 4.

Information T (ITSM) 5 Human Resource 6. Legal

7 Business Dev. & Risk 8. Internal Audit

SECTION II: FACTORS THAT AFFECT JOB SATISFACTION
Kindly indicate the degree to which you agree with the following statements concerning factors
that affecting job satisfaction in your Corporation.
Please give them a rank based on a five point Likert Scale. Select if
1 = strongly disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = strongly agree Extrinsic
factors

No D. Payments and Benefit 1 2 3 4 5

1 My salary is equitable when compared with other insurance

companies
2 My salary payment is satisfactory in relation to what I do

3 I am satisfied by the Corporation‟s pay grade

4 Salary adjustment or increment is made on reasonable time

period
5 The Corporation pay Competent benefit in the Market

6 Benefit and Bonus payment of the Corporation are matched (

Bonus based on Profitability of the Corporation is
Matched)
7 The benefit system of the Corporation has effect on my
satisfaction
E. Promotion

1 Everyone has an equal chance to be promoted

2 The Corporation‟s promotion policy is clearly communicated

to all Employees
3 The existing Promotion motivate employees for high level of
job satisfaction
F. Working Environment
1 I am provided with adequate facilities and resources to do my
job effectively
2 The working condition like space, seating arrangement,
ventilation, refrigerator, lighting etc helped me to do my

duties in better way

3 The Corporation provides flexible work hours to

accommodate my personal needs
4 All in all I am satisfied with the working condition of the
Corporation
Intrinsic factors

G. Responsibility 1 2 3 4 5
1 Employees have clear job responsibilities
in our Corporation
2 Employees participate in decisions making that has a
positive effect on their job satisfaction
3 I perform my duty with full autonomy and freedom
H. Recognition
1 I get credit for what I do
2 I receive constructive criticism(positive feedback)about my
work
3 The existence of recognition for good work, has given me
an opportunity to Perform well

PART III: QUESTIONS RELATED TO JOB SATISFACTION

Here are items that help to measure Job satisfaction. Please give them a rank based
on a five point Likert Scale. Select 1 = very dissatisfied 2 = dissatisfied 3 =
Neutral 4 = satisfied 5 = very satisfied
No Items 1 2 3 4 5

1 Being able to keep busy all the time

2 The chance to work alone on the job
3 The chance to do different things from time to time
4 The chance to be "somebody" in the community
5 The way my boss handles his/her workers
6 The competence of my supervisor in
making decisions
7 Being able to do things that don't go against my
conscience

8 The way my job provides for steady employment

9 The chance to do things for other people
10 The chance to tell people what to do
11 The chance to do something that use of my
makes abilities

12 The way the Corporation‟s policies put into

are practice

13 My pay and the amount of work I do

14 The chances for advancement on this job
15 The freedom to use my own judgment
16 The chance to try my own methods of doing the job
17 The working conditions
18 The way my co-workers get along with each other
19 The praise I get for doing a good job
20 The feeling of accomplishment I get from the job
THANK YOU FOR YOUR GENUINE RESPONSE