e-ISSN: 2395-0463 Journal for Studies in Management and Planning Available at http://edupediapublications.org/journals/index.php/JSMaP/ Volume 02 Issue 6 June 2016 A Study on the Factors of Job Satisfaction among Entrepreneurs of Small and Medium Enterprises in the Batticaloa District Mr. V.J.Delima ; Mr. K.Pushpakaran Assistant Lecturer in Management, Department of Management, Eastern University, Sri Lanka Email: d_jeniston@hotmail.com Senior Lecturer in Economics, Department of Economics, Eastern University, Sri Lanka Email: pushpakarankugathasan@yahoo.com Abstract The Small and Medium Enterprises (SMEs) in Sri Lanka has suffered drastically in the past in the North and East as a result of the civil war and T-sunami havoc. The studies have shown that SMEs play a vital role on promoting economy and especially, on reducing poverty. Many studies have been carried out on this topic at international, global and national level. Similar study has not been carried out in the Batticaloa District with special reference to the job satisfaction among entrepreneurs of SMEs. This paper is based on a study of different variables for job satisfaction among entrepreneurs of SMEs in the Batticaloa District. Primary data on the factors of job satisfaction of entrepreneurs were collected and analyzed using various statistical and research tools. SPSS was used to analyze to identify level and correlation of the variables of job satisfaction. It was found that all the factors are positively correlated with job satisfaction of entrepreneurs. It was also noted that suitability and business image have been identified as highly correlating factors with job satisfaction of entrepreneurs and financial benefits have been identified as least correlating factor with job satisfaction of entrepreneurs. Keywords—Small and Medium Enterprises (SMEs), Entrepreneurs, Job Satisfaction 1. Introduction Small and medium enterprises (SMEs) sector is one of most considered critical units that support to achieve sustainable economic growth in Sri Lanka. It is the foundation part of Sri Lanka’s economy because, it encompasses all the sectors such as agriculture, industry, and services. SME plays a vital role in economy by forming employment, generating income, reducing poverty, and supporting large scale industries therefore, it promotes inclusive growth. Although SME provides several benefits to the nation, SME sector is yet to be improved due to several drawbacks. Gender bias is one of most severely affecting problem in SME. In most cases, male workers are dominating rather than female worker which shows inequality of employment in SME (Chell, 2001); lack of access to marketing opportunities and financial constraints, high degree of absenteeism, and lack of technological capabilities are the other issues. These drawbacks lead to affect job satisfaction of the entrepreneurs in the Batticaloa District. Job satisfaction is an appropriate measure of entrepreneurs’ satisfaction with their work. Job Satisfaction comprises of entrepreneurs’ feelings of pleasure or disappointment, resulting in their jobs. In order to find out job satisfaction, this study is aimed at identifying level of factors that affects the job satisfaction, relationship between factors of job satisfaction, impacts Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 145 e-ISSN: 2395-0463 Journal for Studies in Management and Planning Available at http://edupediapublications.org/journals/index.php/JSMaP/ Volume 02 Issue 6 June 2016 on the factors of job satisfaction, and provides general recommendations to entrepreneurs of SMEs. Department of census and statistics of Sri Lanka 2. Literature Review 2.1. Definition of Small and Medium Enterprises Small and medium enterprise is a business which has a least market share in market and does not have dominance on other businesses in market. SMEs mainly focuses on niche markets therefore, it needs small amount of capital to initiate the business and needs least number of employees to run the business. Decision making will be made based on their data which they have experienced in the past. In order to identify the SMEs, only a few Sri Lankan organizations have given their measurements. Table 1: Definition of SMEs Organization s Criterion Industrial Developmen t Board Value of machiner y Betwee n4 million to 10 million Ministry of Small and Rural Industries Total investme nt Betwee n 20 to 50 million rupees Ministry of Industry Tourism and Investment Promotion Value of fixed assets other than land and building Up to 16 million rupees Not exceedin g 16 million rupees Capital employed Betwee n2 million to 20 million rupees Not exceedin g2 million rupees Federation of Chambers of Commerce and Industry of Sri Lanka Mediu m Scale Small Scale Not exceedin g4 million rupees Between 1 million to 20 million rupees Sri Lanka Export Development Ceylon National Chamber of Industries The Department of Small Industries Sri Lankan Apparel Industry, Task Force on Five Years Strategy (2002) Sri Lanka Standards Institution Number of employees More than 25 Capital investment excluding lands and building More than 40 million rupees Annual export turnover More than 100 million rupees Value of assets other than building and lands Between 4 million to 20 million rupees Number of employees Between 10-50 Capital investment Number of employees Between 5 to 25 million rupees Between 50 to 100 Export value Between 101 to 250 million rupees Number of employees Between 1 to 100 Number of employees Between 50-249 Not exceeding 25 Not exceeding 20 million rupees Not exceeding 100 million rupees Not exceeding 4 million rupees Not exceeding 10 Not exceeding 5 million rupees Not exceeding 50 Between 0.25 to 100 million rupees Between 101 to 250 Not exceeding 50 (Source: Dassanayaka, 2009) However, it is not easy to define SMEs. Although there are many different definitions about SMEs, it can be divided into two types such as size and characteristics of business, number of employees, capital, fixed assets, yearly turnover, electricity, and production are the factors which are considered in the size of business. Technology, nature of business, nature of market, structure of entity, and Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 146 e-ISSN: 2395-0463 Journal for Studies in Management and Planning Available at http://edupediapublications.org/journals/index.php/JSMaP/ Volume 02 Issue 6 June 2016 management skills are the factors which are considered in characteristics of business. 2.2.Definition of Job Satisfaction Job satisfaction is basically defined as the feelings of particular employee who has about his or her job. An employee with high level of job satisfaction leads to high level of positive feelings about his or her job. In contrast, an employee with high level of dissatisfaction leads to low level of positive feelings about his or her job. In many field of businesses and researches, job satisfaction is significant attribute that has received more attention nowadays because, a satisfied employee is fundamental element of organizational success. Job satisfaction is people’s feelings about their jobs and different aspects of their jobs (Spector, 1997). According to Ellickson and Logsdon (2002), job satisfaction as the extent to which people like their jobs. Gordon (1999) indicates that job satisfaction occurs when a job meets the anticipation and values of individuals and it impacts the commitment and performance of individual. Job satisfaction is multidimensional concept which gives different understanding to different people (Mullins, 2002). According to Ayranci (2011), job characteristics affect workers’ job satisfaction. Competence is an extremely valuable quality that effectively utilizes the skills of personnel in the given situation and the better competence will rise the worth of personnel (Ismail et. al., 2015). The worth of personnel and entrepreneurs’ feelings about competence affects their job satisfaction (Ayranci, 2011). Job characteristics is a fundamental features of task which is assigned to personnel. These features or characteristics are required to create high level of motivation and performance (Anjum et al., 2014). Empirical evidences say that job characteristics have greater degree of connection with job satisfaction (Hadi and Adil, 2009). In the context of working condition, Robbins (1998) states that working conditions influence job satisfaction with a comfortable physical work environment and this will provide positive level of job satisfaction. Effective communication leads to an organizational success and satisfaction (Eisenberger et.al., 1986). Employee’s communication with co-workers and management or entrepreneurs improve the job satisfaction (Eisenberger et.al., 1986). Business image is the strength that lies among the entrepreneurs because, business image and reputation are associated between them (Bitner, 1990; Gronroos, 1984). According to Ayranci (2011), financial benefits and social benefits, and the freedom of employees in business-related activities positively affect the job satisfaction. 3. Conceptual Framework Competence Job Characteristics Work Conditions Job Satisfaction Communication Business Image Suitability Financial Benefit Figure 1: Conceptual Framework (Source: Ayranci, 2011) 4. Research Methodology The aim of this research is to explore the job satisfaction of the entrepreneurs of SMEs in the Batticaloa district. This study is based on primary data. These data were Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 147 e-ISSN: 2395-0463 Journal for Studies in Management and Planning Available at http://edupediapublications.org/journals/index.php/JSMaP/ Volume 02 Issue 6 June 2016 collected through the administrated questionnaire from the Batticaloa District. Convenience sampling technique was carried out to collect the data from entrepreneurs of SMEs. 200 entrepreneurs were conveniently selected from the Batticaloa District and questionnaires were issued to them. The questionnaire consisted of two sections such as personal information and job satisfaction factors. 46 statements were adapted from Ayranci (2011) to measure job satisfaction of entrepreneurs of SMEs in the Batticaloa District. 4.1.Univariate Analysis In the Univariate analysis, mean and standard deviation are used to evaluate individual characteristics of dimensions and variables. Assessing the level of dimensions and variables is one of the objectives of the study with the following criteria. Table 2: Decision Criteria for Univariate Analysis Decision Criteria Decision Attribute 1.0 ≤ Xi ≤ 2.5 2.5 < Xi ≤ 3.5 3.5 < Xi ≤ 5.0 Low Level Moderate Level High Level 4.2.Bivariate Analysis Bivariate analysis is used to identify the relationship between two variables. The correlation coefficient ranges from -1 to +1 to explore the degree of relationship between the study variables. Table 3: Decision Criteria for Bivariate Analysis Range r=0.5 to 1.0 r=0.3 to 0.49 r=0.1 to 0.29 Decision Attribute Strong positive relationship Moderate positive relationship Weak positive relationship r =-0.1 to -0.29 r=-0.3 to -0.49 Weak negative relationship Moderate negative relationship r=-0.5 to -1.0 Strong negative relationship 5. Analysis and Discussions 5.1.Personal Information Entrepreneurs of A total of 250 questionnaires were distributed among the entrepreneurs of SMEs in the Batticaloa District. Out of 200 respondents, 82.5% of respondents are male and 17.5% of respondents are female. With respect to the age group, 7.5% were in group of below 20 years, 22.5% were in group of 21-30 years, 34.5% were in group of 31-40 years, 17% were in group of 41-50 years, and 18.5% were in group of above 50 years. With respect to educational qualifications, 32.5% were in group of primary, 36.5% were in group of secondary, 25.5% were in group of GCE O/L, and 5.5% were in group of others. With respect to work experience, 25% were in group of below one year, 19.5% were in group of 1-3 years, 12.5% were in group of 4-7 years, 14.5% were in group of 8-10 years, and 28.5% were in group of above 10 years. 4.2.Research Information 4.2.1. Reliability Test of Data Cronbach’s alpha reliability method was employed to confirm the reliability of data in the context of study problem. These results indicate that these factors are more than 0.6. Therefore, it reveals that variables used in this study were highly reliable. Table 4: Reliability Test of Data Factors Competence Number of Statements 12 Cronbach’s alpha 0.796 7 0.604 Job Characteristics Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 148 e-ISSN: 2395-0463 Journal for Studies in Management and Planning Available at http://edupediapublications.org/journals/index.php/JSMaP/ Volume 02 Issue 6 June 2016 Working Conditions Communication Business Image 5 0.602 8 5 0.727 0.790 Suitability 6 Financial 3 Benefits Job Satisfaction 46 (Source: Survey Data) 0.818 0.616 0.864 4.2.2. Descriptive Analysis The study is aimed at identifying the level of job satisfaction from entrepreneurs of SMEs in the Batticaloa District. The 46 items scale adapted for the study purpose based on Ayranci (2011) was utilized. Respondents are used a 5-point Likert scale (1 = strongly disagree; 5 = strongly agree) to rate the extent to which they were agreed with each of the 33 statements. Descriptive analysis was performed on the responses are shown on below tables. Table 5: Univariate Analysis Factors Mean Standard Deviation 0.472 0.422 Competence 3.799 Job 4.009 Characteristics Working 3.599 0.540 Condition Communication 3.653 0.513 Business Image 3.749 0.687 Suitability 3.579 0.609 Financial 3.155 0.467 Benefits Job Satisfaction 3.650 0.314 (Source: Survey Data) The result shows that competence lies in the range of high level of significant attribute in job satisfaction with the mean value of 3.799. Competence is the key that gives the idea of how to do, think, and work for the situations. Therefore, competency employee will increase quality of work and it leads to job satisfaction of entrepreneurs (Ismail et.al, 2015). Job characteristics lie in the range of high level of significant attribute in the job satisfaction with the mean value of 4.009. Researchers share that highlighting the nature of work and effect on job outcomes of entrepreneurs (Samad, 2004). Working conditions lie in the range of high level of significant attribute in the job satisfaction with the mean value of 3.599. Because, working environment has positive effect on the performance of their employees as well as entrepreneurs (Spector, 1997). Communication lie in the range of high level of significant attribute in the job satisfaction with the mean value of 3.653. Because, communication is a key to improve responsibility and motivate to achieve firm’s goal (Tsai, Chuang & Hsieh, 2009). Business image lie in the range of high level of significant attribute in the job satisfaction with the mean value of 3.749. Because, business image is a must which needs to differentiate from other competitors’ products and leads to job satisfaction of entrepreneurs (Abd-ElSalam, 2013). Suitability lies in the range of high level of significant attribute in the job satisfaction with the mean value of 3.579. Because, suitability is the factor which is related with entrepreneurs’ willingness of business (Ayranci, 2011). Financial benefits lie in the range of high level of significant attribute in the job satisfaction with the mean value of 3.155. Because, entrepreneurs should be satisfied by financial benefits and if it so, it leads to continue the business. Overall results shows that entrepreneurs have high level of job satisfaction in the Batticaloa District.. 5.2.3. Relationship between Factors and Job Satisfaction Table 6: Relationship between Factors and Job Satisfaction Factors Competence Job Characteristics Relationship between job satisfaction 0.490** 0.638** Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 149 e-ISSN: 2395-0463 Journal for Studies in Management and Planning Available at http://edupediapublications.org/journals/index.php/JSMaP/ Volume 02 Issue 6 June 2016 Working 0.549** Condition Communication 0.633** Business Image 0.660** Suitability 0.762** Financial 0.235** Benefits **. Correlation is significant at the 0.01 level (2-tailed) (Source: Survey data) From the correlation table, it is seen that all the factors of job satisfaction are positively correlated with job satisfaction and all are found to be significantly correlated at 0.05 level. Strong positive correlation is found between suitability and job satisfaction (r = 0.762; p <0.000); business image and job satisfaction (r = 0.660; p <0.000); job characteristics and job satisfaction (r = 0.638; p <0.000); communication and job satisfaction (r = 0.633; p <0.000); working conditions and job satisfaction (r = 0.549; p <0.000). Moderate positive correlation is found between competence and job satisfaction (r = 0.490; p <0.000) and weak positive correlation is found between financial benefits and job satisfaction (r = 0.490; p <0.000). 6. Conclusion This study aimed at studying factors of job satisfaction among entrepreneurs of small and medium enterprises in the Batticaloa District. Conceptual model has been adopted from Ayranci (2011). Job characteristics and competence indicate high level of significant factors in job satisfaction among entrepreneurs of SMEs in the Batticaloa District. 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