A Study of the Relationship Between Job Satisfaction and Financial Performance in Pennsylvania Community Banks

Abstract

This study explored the relationship between job satisfaction and financial performance in Pennsylvania community banks with less than $2 billion in total assets. The research sample included five banks that consistently achieve high earnings and four banks with consistent low earnings results. A calculated four-year average return on equity (ROE) for each participating institution was used to divide participating banks into high and low performance groups. The study determined whether differences existed between overall job satisfaction and specific sub-facets of job satisfaction between the two groups. The research also examined the degree of correlation between earnings performance and job satisfaction among participating banks and assessed the impact of respondent demographic data on overall job satisfaction levels. The Abridged Job Descriptive Index (AJDI) and Abridged Job in General (AJIG) survey scales were used to measure levels of job satisfaction. To determine whether differences in employee satisfaction levels existed between the performance groups, data from the AJIG and AJDI scales were analyzed using independent-samples t-tests. The independent variable was performance group and the dependent variable was the level of satisfaction with the job in general and with job sub-facets. The t-test results indicated a significant difference between the two groups at the .01 level for overall job satisfaction (p = .00) and the sub-facets of Work (p = .00), Promotion (p = .00), and People (p = .00) however practical effect implications of these differences were small. Two-way between-groups ANOVAs were conducted on the survey data with independent variables of performance group and demographic traits and a dependent variable of respondent job satisfaction levels as measured by the AJIG scale. The ANOVAs revealed interactions between performance group and job level (p = .00) and performance group and job tenure (p = .01). Age (p = .00), Job Level (p = .00), and Job Tenure (p = .00) also each had significant main effects but with small practical effect. The Pearson correlation analysis revealed a strong positive correlation (r = .75) between bank profitability (ROE) and employee job satisfaction scores. Both practical and future research implications are discussed.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 1 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.