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European Journal of Human Resource Management Studies
ISSN: 2601 - 1972
ISSN-L: 2601 - 1972
Available on-line at: http://www.oapub.org/soc
Copyright © The Author(s). All Rights Reserved 10
DOI: 10.46827/ejhrms.v6i2.1410
Volume 6 │ Issue 2 │2023
JOB SATISFACTION AND TURNOVER INTENTION OF BPO
WORKERS: THE MEDIATING EFFECT OF SERVICE PERFORMANCE
Princess G. Cole1
i
,
Reynaldo C. Castro2
1Faculty of Business Administration,
University of Mindanao - Digos,
Philippines
2Vice President of External Relations and International Affairs,
University of Mindanao,
Philippines
Abstract:
This study investigated the mediating effect of service performance on the relationship
between job satisfaction and turnover intention of BPO workers in Davao City. In order
to do so, this study employed the quantitative research design using the descriptive and
correlational method via mediation analysis. Using proportionate stratified random
sampling, primary data were gathered through the use of online survey questionnaires
addressed to 373 respondents working in selected BPO companies in Davao City. In
addressing the hypotheses of the study, correlation analysis using Pearson product-
moment correlation and mediation analysis using Sobel z test were used. The level of job
satisfaction and service performance was very high among BPO workers, while the
turnover intention was low. Results also revealed job satisfaction to have significantly
predicted turnover intention and service performance which satisfied the ground for
mediation. However, service performance did not significantly predict turnover
intention. Further analysis through the Sobel z test confirmed that the mediating effect of
service performance on the relationship between job satisfaction and turnover intention
is not significant.
Keywords: business management, job satisfaction, service performance, turnover
intention, mediation, regression, Philippines
1. Introduction
Organizations face stiff competition, and one way to sustain their competitive edge is to
retain their top-caliber employees. Over the years, the turnover rate has become the main
challenge for industries, particularly the BPO sector ranging from 20 – 30 percent based
i
Correspondence: email princessgcole@gmail.com, princess_cole@umindanao.edu.ph
Princess G. Cole, Reynaldo C. Castro
JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
THE MEDIATING EFFECT OF SERVICE PERFORMANCE
European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 11
on the survey conducted by Towers Watson Philippines in 2015. This report is further
substantiated by industry data, showing consistent records of a high turnover rate
compared to other major industries with 60 percent company attrition (The IT and
Business Process Association of the Philippines and TeamAsia, 2014). While it has been
declining for the past few years, from as high as 50 percent in 2007, 20 percent attrition is
still considered high for any industry.
A high employee turnover rate can be detrimental as it directly affects the overall
performance of an organization. Not only does it drive the organization to incur a huge
cost in recruitment and training, but it also hampers the quality and consistency of
services that organizations provide to their customers (Kumar and Pansari, 2016). When
workers have a strong desire to quit the company, they frequently consider quitting,
searching for a new job or better opportunities, and eventually resigning (Milovanovic,
2017). Organizations then run the risk of a fall in results, both quantitative and
qualitative, and the cost of integrating and training new employees (Zito et al., 2018).
Hence, a good understanding of the negative effect of turnover intention is vital to many
organizations.
Several studies have found a correlation between job satisfaction and turnover
intention (Reukauf, 2018; Zito et al., 2018; Milana, 2018). Increased job satisfaction
contributes to increased profitability and tenure for the company (Che Nawi et al., 2016).
In addition, the study of Mbah and Ikemefuna (2012 as cited in Alam and Asim, 2019) in
Total Nigeria revealed that high job satisfaction lessens the probability of turnover
intention. However, a study conducted by Slatten, Svensson, and Svaeri (2009, as cited in
Khan et al., 2020) showed that employees’ impression of their service could also affect
their decision to leave.
Most of the empirical works conducted on service performance are using external
rather than internal perspective (Babić-Hodović, Arslanagić-Kalajdžić, Banda and Sivac,
2019; Baffour-Awuah 2018; Ajmal, Khan and Fatima, 2018). Very few studies have
focused on assessing service performance from the perspective of employees. Also, most
of the studies are conducted in Western organizations and service industries such as
hospitality and banking sectors, but none in BPO (Martini, Suardana and Astawa, 2018;
Ramseook-Munhurrun, Naidoo and Lukea-Bhiwajee, 2010). Hence, this treatise was
proposed to explore the mediating effect of service performance on the relationship
between job satisfaction and turnover intention of BPO workers particularly, call centers
in Davao City.
2. Research Objectives
This study aimed to test if service performance significantly mediated the relationship of
job satisfaction and turnover intention in the context of BPO workers in Davao City. In
more specific terms, the study sought:
1. To assess the level of job satisfaction of BPO workers in terms of:
1.1 job/work;
Princess G. Cole, Reynaldo C. Castro
JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
THE MEDIATING EFFECT OF SERVICE PERFORMANCE
European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 12
1.2 relationship at work;
1.3 communication;
1.4 recognition of performance;
1.5 compensation and benefits; and 1.6corporate culture/environment.
2. To ascertain the level of turnover intention of BPO workers in Davao City.
3. To determine the level of service performance of BPO workers in terms of:
3.1 tangibles;
3.2 reliability;
3.3 responsiveness;
3.4 assurance; and
3.5 empathy.
4. To determine the significance of the relationship between:
4.1 job satisfaction and turnover intention;
4.2 job satisfaction and service performance; and service performance and
turnover intention.
5. To test if service performance significantly mediates the relationship between job
satisfaction and turnover intention.
3. Literature Review
The information of the study was gathered and selected from books, articles available via
the internet, and other academic publications to have a better understanding of the study.
3.1 Job Satisfaction
Job satisfaction is a person's emotional response to their job, which could either be
positive or negative (Bayarcelik and Findikli, 2016). In this premise, job satisfaction varies
from person to person in the organization at multiple levels. Positive evaluation towards
the job indicates job satisfaction, while unfavorable or negative attitude towards the job
indicates job dissatisfaction (Milana, 2018). Contrarily, Alias et al. (2018) cited that job
satisfaction can be described as the difference between what the employee expected to
get from the organization and what the employee actually receives. Furthermore, job
satisfaction also affects employees’ decisions and willingness to stay or leave the current
organization.
Employees leave the organization if job dissatisfaction supersedes job satisfaction
(Jannsen, 2018). A high number of dissatisfied employees can have a domino effect on
the organization as it increases the turnover rate, which could lead to unnecessary costs
for the organization. Similarly, Abuhashesh, Al-Dmour, and Masadeh (2019) stated that
highly satisfied employees are more likely to remain in the organization. The long-term
employee usually has a greater level of accumulated skill and expertise, resulting in
increased performance.
Moreover, job satisfaction is marginally but positively related to general
performance measures (Chicu, Ryan, and Valverde, 2016). Satisfied employees tend to
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exert more effort and provide better service performance. As stated by Milana (2018), job
satisfaction is a pre-requisite to high service performance because satisfied employees are
more open to quality enhancement and continuous improvement. On the other hand,
Squires, Hoben, Carleton, and Graham (2015) contended that though dissatisfied
employees are unlikely to leave their jobs, their feelings of frustration can affect them,
their co-workers, and the quality of their work. They also have a proclivity for showing
aggression toward colleagues.
There seems to be no general agreement as to what factors determine job
satisfaction. Milana (2018) suggests that job satisfaction is determined by several factors,
including pay packages, prospects of promotion, working environment, and workgroup.
However, the indicators used in this study are based on the Employee Satisfaction Survey
of the University of Mindanao, which was taken from Q Insights and Zarca Interactive.
Six indicators are included to measure job satisfaction: job/work, relationship at work,
communication, recognition of performance, compensation, and benefits, and corporate
culture/environment.
Job/work is an important aspect of a person’s life, and it utilizes a lot of personal
and professional time compared to any other activities. It provides financial support to
individuals to sustain their daily needs. Ali (2016) defined a job as the task undertaken in
a particular setting, whereas work is more generally taken to cover the job. Durai and
Shaju (2017) found that the nature of work itself is an important determinant of job
satisfaction. A mentally challenging job that allows individuals to grow and experience
success can be a source of motivation.
In the study conducted by Panchal (2016), work is one of the components of job
satisfaction that receive a high level of satisfaction among employees. Job challenge,
autonomy, variety, and job scope were among the factors used in predicting employees’
job satisfaction. Similarly, Raziq and Maulabakhsh (2015) found that the characteristics
of work and the ownership employees have in their job help them find their worth with
respect to the value given to them by the organization. This statement is parallel to the
study of Janssen (2017), which encouraged to increase in the job satisfaction of employees
by making the job itself as interesting and challenging as possible for the employees.
Job satisfaction is heightened by the level of ownership the employees take in their
job or how much they are intrinsically motivated to do their job (Russel, 2017).
Fundamentally, employees must take a personal interest or establish a personal
connection towards their job. In the study cited by Amarasena, Ajward, and Haque
(2015), results show that jobs that provide opportunities for using skills and abilities,
diversity of tasks, autonomy, and evaluation of their performance tend to be preferred
by the employees.
Relationships at work occur among individuals from all levels of the organizational
structure regardless of rank or position. Employees' working relationships have long
been considered to be critical in assessing their overall performance scores. Research has
long found a positive effect on employees’ working relationships with their managers
and co-workers in organizations (Tran et al., 2018). A good working relationship
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contributes to a positive atmosphere in the workplace. Employees would be less likely to
look forward to working every day if they did not get along with their manager and
colleagues. Hence, one cannot deny that organizational success is inextricably related to
the quality and consistency of working relationships among employees (Ramjee, 2018).
Moreover, organizations or businesses that do not have successful working
relationships appear to have high turnover. It may also impact the employee's mental
state, causing them to perform below the anticipated threshold (Abun et al., 2018).
Employees will be able to do their work if they feel valued by their boss and co-
employees. Job satisfaction is a product of successful working relationships, which
greatly contributes to organizational success (Bakotic, 2016). Interaction with colleagues
can create a sense of belonging, reinforce social identity, and positively contribute to the
workplace.
The significance of work relationships cannot be gainsaid. The need for
belongingness needs to be sustained and nurtured; otherwise, it will deteriorate (Patricia,
2015). The working relationship commences when the employee is hired and signed an
agreement that creates an obligation between the two parties. Organizational success
depends on how well employers and employees work together; thus, both sides must
develop a relationship with each other. Additionally, Tran (2018) stated that workers who
have a good relationship with their manager are likely to achieve superior results and
perform more than their formal duties require.
On the other hand, relationships with colleagues are critical aspects of a fun and
efficient work atmosphere. According to Ariani (2015), co-worker relationship is a major
source of professional and emotional support. They generally have a good understanding
of how the organization works and tidbits about organizational knowledge that people
cannot access outside the organization. Hence, employees must feel free to communicate
with one another to do their work happily. It is also important because quality working
relationships go a long way toward inspiring and improving employee trust and morale
(Abun et al., 2018).
In addition, employees must be able to collaborate with companies to accomplish
their goals and objectives. Despite its pivotal role in the organization, communication does
not seem to have a universal definition. Nabi, Foysol, and Adnan (2017) viewed
communication as exchanging views, ideas, opinions, and suggestions between one or
more people in the same organization. Many researchers assert that communication has
a positive effect on employees’ satisfaction. Musa, Ghazali, and Isha (2017) stated that job
satisfaction is affected by employees' perceptions of the overall organizational
communication. In the study conducted by Abdullah, Widiaty, and Abdullah (2018), the
results show a significant relationship between communication and job satisfaction. This
signifies that the extent to which the employees’ goals are achieved through effective and
appropriate interaction can affect the satisfaction they have towards their job.
Individuals in the organization need to socially interact, collaborate and propose
to be affiliated with a group. As mentioned by Izvercian, Potra, and Ivascu (2016),
communication can be viewed as the intention to share positive or negative experiences
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THE MEDIATING EFFECT OF SERVICE PERFORMANCE
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with others. Markiz (2017) observed that while internal communication provides workers
with important organizational and employment-related information, employees
typically need more information and interact to meet interpersonal needs, making them
feel part of the organization. This stimulates job satisfaction, which then enhances the
competence and effectiveness of organizations.
The study by Sharma, Lampley, and Good (2015) also demonstrates a positive
relationship among employees between communication and job satisfaction. Therefore,
as organizations become more complex in form and function, re-evaluating how
organizational communication takes place to ensure that they work efficiently becomes
important. In parallel to these findings, communication dimensions were explicitly
defined by Borovec and Balgač (2017): quality of the medium, organizational perspective,
and inter-departmental communication as important predictors of job satisfaction.
Therefore, it is fair to state that internal communication is one of the key activities that
maximize organizational performance.
Recognition is a significant key to an organization's success because it lets people
realize how their conduct makes a difference to their interests and the organization’
objectives (Shonubi et al., 2016). It makes staff feel a greater sense of ownership,
accountability, and pride. Amoatemaa and Kyeremeh (2016) added that employee
recognition programs had been recognized to point out employee value and contribution
at the right moment due to its instantaneous nature and the continuing dynamism of the
work environment. It is a highly motivational instrument with a significant effect on
employee job satisfaction.
Workers have different needs, goals, as well as differing viewpoints regarding
appropriate and acceptable rewards and recognition for effective motivation (Akafo and
Boateng, 2015). For this reason, it takes an in-depth understanding of individual
differences and expectations of acceptable rewards and benefits, as well as a combination
of extrinsic and intrinsic rewards, to inspire employees and improve their job satisfaction.
Ahmad et al. (2017) stated that employee recognition programs keep workers in good
spirits, raise their self-esteem, and establish a link between performance and engagement,
which eventually leads to job satisfaction.
Recognition is described as the appreciation, greeting, or positive happenings of
the agreement of an individual or team’s behaviors. Amarasena, Ajward, and Haque
(2015) indicate that appreciation of success is one of the most commonly used elements
cited as a source of employee satisfaction or dissatisfaction at work. Every undertaking
that supports a company’s goal is acknowledged through informal input or formal
organization-wide recognition. Organizations should remain versatile in their
recognition methods since employees are driven by different forms of recognition
(Ndungu, 2017).
In management, the key to understanding the process of creating a satisfied
workforce lies in the significance of the relationship between needs, motivation, and
rewards (Muguongo, Muguna, and Muriithi, 2015). For as long as organizations have
existed, compensation has been regarded as a primary motivator of employees and an
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European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 16
important instrument and cost for organizations. Rewards have become relevant in
recent years due to the economic conditions of both workers and organizations. It is a
significant consideration for employee retention and work satisfaction (Iqbal, Guohao,
and Akhtar, 2017).
Compensation is an essential factor that affects the preferences of future workers to
join and stay in a company afterward. It refers to all forms of financial rewards that
employees earn in return for their job, taking into account the contract, competence, and
skills (Koitalek, 2016). Compensation is a valuable tool for management to contribute to
the organization’s efficiency and effectiveness and can positively impact employees’
actions and productivity. Mabaso and Dlamini (2018) attested that compensation
influences employee attraction and retention to achieve organizational goals. In addition,
Sudiardhita et al. (2018) stated that compensation is important to employees as
individuals because the remuneration itself reflects the value of their work relative to the
overall task performance.
Compensation and benefits include certain fundamental aspects that aim to make
workers satisfied with their jobs, including wages, bonuses, rewards, allowances,
promotion, and recognition (Rahaman, Rahman, and Abdul, 2016). Similarly,
Muhammad and Abdullah (2016) stated that compensation could influence employee
behavior and organizational effectiveness. From an individual standpoint, compensation
can increase the feeling of self-reliance. On the other hand, compensation creates a
domino effect; that is - the design and implementation of compensation schemes
influence employee motivation and a myriad of other outcomes such as improved safety,
increased productivity, creativity, and innovation.
In addition, Expectancy theory posits that employees who perform well at work
and put in more effort expect their employer to reward them with equal remuneration
and benefits. Workers who are not fairly compensated for their contributions do not
perform well at work. Low performance has resulted from the lack of a well-respected
compensation system (Aladwan, Bhanugopan, and D'Netto, 2015). Compensation
reflects the value of the employees among other employees themselves, their relatives,
and communities. Thus, when employees view their compensation as inadequate and
incongruent to the job performed, their job satisfaction and performance could drop
drastically (Rahardjo, 2017). Therefore, it is necessary to design a fair compensation
structure that reflects the value of employees in the organization.
Organizational culture reflects the organizational members' common interests,
beliefs, and values. It is a function of history, product, industry, technology and strategy,
employee type, management style, and national culture. On the other hand, corporate
culture refers to those cultures purposely developed by management to accomplish
particular strategic goals (Ahamed and Mahmood, 2015). Studies have affirmed a
positive connection between corporate culture and job satisfaction. Osei-Owusu (2016)
posits that employees’ job satisfaction is influenced by culture; thus, corporations should
establish systems that may increase the degree of collaboration, mutual trust,
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European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 17
appreciation for colleagues’ views and feelings, and open-mindedness to obtain and
accept input from their employees.
Academic and managerial professionals have reached the consensus that the
central competence of an organization is organizational culture. It will affect the
individuals, groups, and the whole organization (Qazi and Kaur, 2017). Organizational
culture is often viewed as the precondition for organizational coordination. Belias et al.
(2015) found that organizational culture can partially predict the job satisfaction levels of
employees. Employees generally prefer to work in a cordial environment, where mutual
trust and casual relationships among colleagues are dominant, personal interests are
taken into account, and teamwork is rewarded.
The work environment directly affects employee’s job satisfaction. Shravasti and
Bhola (2015) pronounced that organizations with favorable working conditions
contribute to employee job satisfaction and ultimately leads to high organizational
efficiency. This pronouncement is parallel with the study of Sree and Satyavathi (2017),
which concluded that the working environment positively influences employees’ job
satisfaction. Poor working conditions restrict employees from displaying their talents and
reaching their potential, so it is important that organizations must recognize the value of
a good working atmosphere.
The importance of the work environment in job satisfaction cannot be gainsaid.
According to Agbozo et al. (2017), employees’ productivity is mainly dictated by the
environment in which they work. The greatest empirical evidence that suggests working
conditions become progressively worse has to do with the declining job satisfaction rate.
Similarly, Bhanu and Babu (2018) pointed out that a good working environment
enhanced employee output. It allows the employees to work easily and smoothly without
problems that may prevent them from performing up to their maximum potential.
3.2 Turnover Intention
The turnover intention of employees pertains to the possibility of employees leaving their
current position (Belete, 2018). Simply put, it is a precondition for actual turnover.
Similarly, the turnover intention was expounded by Çinar (2015) as an employee’s
inclination to leave an organization in search of greater opportunities relative to their job.
Although various studies attached different meanings to turnover intention, most
researchers such as McInerney et al. (2015) correlated it with an employee’s willingness
or intent to leave the current organization.
The turnover intention was a cognitive process that involved a series of mental
decisions before the employees ended their employment with an organization (Dwivedi,
2015). The employee first evaluates their present position and then assesses their degree
of satisfaction with the organization and the job. They then weigh the possible outcome
and the cost they might incur once they are out of the organization. Lastly, they evaluate
the advantages and disadvantages of the alternative jobs available (Saridakis and Cooper,
2016). Contrarily, Bonds (2018) argues that the driving force behind an employee's
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JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
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European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 18
decision to remain or leave a company is not a sequence of steps but rather the employee's
action or conduct against the organization.
Employees who consider leaving their current organization have no interest in
investing in their current job (Wong, YT, Wong, YW, and Wong CS, 2015). Hence,
organizations need to consider why workers want to remain or leave organizations and
how employees explain it, which can be done by using a method explicitly developed to
assess turnover intentions (Rothausen, Henderson, Arnold, and Malshe, 2015). This study
adapted Roodt’s (2004) turnover intention scale to measure the turnover intention of BPO
workers, which was also used by Taboli (2015) in his quantitative research.
3.3 Service Performance
Service performance is defined as a customer’s assessment of the quality, and excellence
of an organization’s services in relative terms (Hosseini, Zainal, and Sumarjan, 2015). It
creates direct experiences that make it possible for the customers to become accustomed
to brand recognition and brand meanings, thereby creating brand loyalty. As internal
customers, employees are often the first to get in touch with customers and they can
either create or destroy the organization’s credibility; thus, knowing their perception of
service performance is crucial because their assessment of the whole process or service
transaction determines the type of service performance the organization can deliver to
the organization (Promkaew and Tembo, 2017).
Service industries are seen as challenging sectors that serve a variety of customers.
These services are delivered by the companies’ employees (Palaniswamy et al., 2017).
Therefore, there is a direct relation and interaction when delivering services between
employees and their clients, which gives employees a strong hand in satisfying these
clients. In fact, among other factors, employees' performance is the greatest factor
influencing client satisfaction. Owing to the perceived importance of service employees
in service delivery, many studies have stressed the need for service managers to monitor
their job satisfaction (Gupta, 2016). Apparently, employees who are pleased and
contented with their jobs are likely to be attentive, accommodating, polite, and mindful
of both co-workers and customers.
There are two levels of service performance that have been taken into account: the
organizational level and the individual level (Hanafi and Ibrahim, 2018). However, this
study will focus on the individual level of performance and its mediating effect between
job satisfaction and turnover intention. Schepers and van der Heijden (2016) mentioned
two core elements of service performance: efficiency performance and quality
performance. Efficiency performance considers the time for a given job to be done, while
quality performance is considered a durable solution to customer issues and concerns.
Several authors mentioned different dimensions of service performance in their
works. García-Buades et al. (2016) commend the use of service quality perceptions,
customer satisfaction, and loyalty as relevant indicators to measure service performance.
On the other hand, Aryee, Walumbwa, Gachunga, and Hartnell (2016) consider service
performance a form of task excellence in a service context. However, this study adapted
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the “SERVPERF” scale of Cronin and Taylor (1992) to measure the service performance
from the employees’ perspective. This model consists of five indicators: tangibles,
reliability, responsiveness, assurance, and empathy.
Tangibles have been described as features of a service that can be experienced
without actually purchasing the service. It is the noticeable aspect of the service that
organizations used to improve customers’ satisfaction (Rasyida, Ulkhaq, Setiowati, and
Setyorini 2015). This may range from the cleanliness of washrooms, orderly car parking
facilities, and waiting-lounge comfort to employees’ appearance. Hanaysha (2016)
stressed that companies need to make their physical facilities appealing to create a
positive impact and quality service to their customers. As stated by Awan and Tahir
(2015), an attractive work environment motivates employees to combine their superior
skills and competencies to perform their job effectively.
The working environment is described as a tangible workstation that can be seen
and touched by employees (Morgan, 2015). Employees’ welfare is closely associated with
productivity and efficiency, which can be accomplished by using any kind of equipment
and facilities that employees need to execute their job (BizFilings, 2017). These
pronouncements are congruent with the study of Promkaew and Tembo (2017), which
cited that office design and layout influence employees’ productivity and work quality
in the organization. They added that a lack of comfort in the workplace has a negative
effect on workers.
To further elaborate, this dimension impacts the interaction between co-workers
and customers (Agbozo et al., 2017). It is worth noting that tangibles create impressions
and reflect the kind of services being offered by the company. Employees tend to have
quicker and better service when they have adequate and modern equipment. On the
other hand, the lack of better facilities and equipment impedes the smooth flow of
operations, resulting in service delays (Eberendu, Akpan, Ubani, and Ahaiwe, 2018). As
supported by Hafeez, Yingjun, Hafeez, Mansoor, and Rehman (2019), employees who are
satisfied with their physical environment manifest a more positive work outcome and
maintain the organization’s value.
Another factor affecting service performance is reliability. As cited by Promkaew
and Tembo (2017), reliability is the ability to perform services in a dependable and
accurate manner. Customers expect services to be rendered accurately, and if the services
do not meet customers’ expectations, it is viewed as inaccurate and therefore not reliable
(Egeland, 2017). This dimension can be attained by observing the company’s standard
operating procedure, which is also an integral part of service performance. Having high
reliability shows that organizations strive to fulfill their promises and pay attention to
the results (Pakurár et al., 2019).
Two key traits involved in reliability are consistency and dependability.
Consistency is marked by the regularity or evenness of service performance (Iberahim,
Taufik, Adzmir, and Saharuddin, 2019). This means that the quality of service is
invariably the same, always executed in the same manner, and has the same standards.
On the other hand, dependability is associated with trustworthiness, that is – meeting the
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European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 20
customers’ requirements without fail and maintaining the customers’ trust and
confidence which enables a good customer relationship (Promkaew and Tembo, 2017).
In the BPO sector, reliability involves handling customer service issues at the indicated
time, maintaining accurate records, and error-free measures (Raza, Burney, and
Ahsanullah, 2019). Specifically, this dimension is shown through employee’s ability to
perform services such as solving customers’ problems or answering customers’ queries
regarding a product in a timely and accurate manner.
Reliability, therefore, depends primarily on the expertise, experience, and abilities
of employees. As stated by Perić et al. (2015), employees who are dissatisfied and
professionally inadequate can have an adverse impact on the quality of services rendered.
A full understanding of an organization’s operation is crucial; however, it cannot be
achieved overnight but through constant and continuous immersion in the working
conditions (Esmaeilpour and Ranjbar, 2017). Therefore, it is necessary to attain high
retention as the longer the employees stay in the organization, the higher the opportunity
to gain mastery over their working area. An organization must also take into account
employee job satisfaction as satisfied employees are equally vital in delivering high
service performance. As stated by Milana (2018), satisfied employees tend to be more
committed to continuous improvement.
Responsiveness is associated with the employees’ ability and willingness to support
customers in a timely manner (Liu, Yan, Phau, Perez, and Teah, 2016). Readiness to assist
involves employees’ availability to help the customers, but they also need to be
intrinsically motivated. Simply put, it is the employees’ willingness to exert more effort
or go the extra mile in helping customers (Liu et al. 2016). Responsiveness of employees
involves informing customers of the exact waiting time, concentrating on their needs,
promoting services, and responding to their customers’ demands (Pakurár et al., 2019).
“Promptness” is one of the main attributes affecting responsiveness which pertains to
employees’ preparedness to deliver services in a timely manner (Wang, 2015). In a call
center setting, the responsiveness of employees is measured through various metrics,
including the service level or the percentage of calls that were answered in a specified
period, the average time elapsed before answering, the percentage of callers being helped
compared to the number of callers waiting in a queue, the number of inbound callers who
encountered a busy signal, the percentage of callers who hung up without speaking to
the employee, the longest waiting-time, and self-service accessibility (Chicu, Ryan, and
Valverde, 2016). Hence, employees need to master the use of technology to deliver high
service performance.
Waiting time affects customer satisfaction significantly. Just as delayed services
cause negative feelings such as frustration and dissatisfaction on the customer’s part,
long waiting time leads to customer’s poor experience (Wang, 2015). On the contrary,
waiting time that is shorter than expected leads to higher customer satisfaction.
Understanding customers’ needs enable organizations to render appropriate services,
thereby increasing customer satisfaction (Vasella, 2015). In the BPO sector, employees’
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ability to swiftly detect errors and track down their causes is vital to maintain minimal
interruption during the service transaction, thus increasing customer satisfaction.
Satisfied employees express greater initiative in dealing with customers’ concerns
(Perić et al., 2018). Employees’ willingness to take on their roles in the organization
improve both individual and organizational level (Abdulkhaliq and Mohammadali,
2019). However, in the call center context, the excessively demanding environment can
cause stress among employees, making compliance more difficult. This stress can be
positive if employees can control the conflicting demands between pressure to improve
operational efficiency. However, loss of control leads to emotional exhaustion and
burnout which eventually leads to turnover or absenteeism (Chicu, Ryan, and Valverde,
2016).
Assurance represents employees’ expertise and deference as well as their ability to
stimulate trust and credibility towards their customers (Promkaew and Tembo, 2017).
This dimension is associated with the extent to how much customers put their trust and
confidence in the organization’s services. Assurance can be achieved even during the first
customer interaction by providing services in a secure and competent manner and
showing good behavior such as honesty, courtesy, and friendliness (Steenkamp, 2015).
Nevertheless, loss of customers goodwill may also happen during the first encounter by
giving inadequate or wrong information (Timney, 2017). In line with this argument, it is
therefore essential that employees especially in customer service, be well-trained in their
services to satisfy their customers.
In telephonic interactions, the assurance dimension can be easily determined
through the language and tone used by call center employees. Quality assurance in call
centers guarantees that customers receive the correct services from the organization
(Promkaew and Tembo, 2017). Through various quality assurance metrics, call centers
can monitor employees’ service performance and customer satisfaction rates. It is found
that highly satisfied employees are more enthusiastic and positive in dealing with
customers, leading to superior services (Osman, 2017). This is parallel to the study of
Godarzvand et al. (2016), which reveals that job satisfaction leads to employees’ effective
participation, which in turn significantly affects their service performance.
Assurance establishes a relationship between employees, customers, and the
organization (Promkaew and Tembo, 2017). To enthusiastically and courteously deal
with all customers is an integral component of this dimension. Employees need to remain
composed and set aside their emotions, especially when interacting with irate customers.
It is also imperative to attend the next call with equal enthusiasm and a positive tone,
even when the previous caller verbally abused the employee (Gorde, 2018). The
relationship between employees and customers is bidirectional by default which
indicates that a negative predisposition from one end is likely to generate a negative
interaction between both parties (Chicu, Ryan, and Valverde, 2016). An interaction with
problematic customers results in emotional dissonance on the part of employees, leading
to lower task performance. In this case, the organizations need to design policies and
practices for employees to cope and thrive in the highly demanding environment.
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Empathy represents sensitivity towards customer’s situation (Promkaew and
Tembo, 2017). This dimension mirrors the organization’s propensity to extend
individualized attention and give customers a greatly satisfying experience (Fluss, 2016).
In the call center context, empathy relies primarily on the employees’ interpersonal skills.
For instance, clarifying and confirming the customers’ requests or queries and the use of
probing questions to ascertain all relevant facts of the query relates to this dimension.
When employees express these, customers’ satisfaction with service performance is
guaranteed.
Being able to convey the feeling and understand the effect of the problem on the
customer is the core of empathy. Empathy is reflected in the employee’s efforts to do
everything they can to resolve the customer’s issue (Pakurár et al., 2019). The focus of this
dimension is on personalized services that satisfy the different needs of customers. Thus,
service providers need to understand the various and unique customers’ needs and
preferences to equip employees with adequate information beforehand (Ramya,
Kowsalya, and Dharanipriya, 2019).
Altogether, this study strives on discovering the factors affecting job satisfaction
that may influence turnover intention and the dimensions comprising the service
performance of the BPO companies under study, may they be confirming or deviate from
the measures in the studies previously conducted. These studies have seen the
applicability of the three variables in multifarious organizations like banks, hotels,
grocery and retail, manufacturing, and even higher education. These concepts avowed
definitions of job satisfaction, turnover intention, and service quality that may give a
clearer understanding as to how they may apply to business process outsourcing
companies.
3.4 Correlation between Measures
An organization’s sustainability relies heavily on employees’ job satisfaction. Quite a few
studies reveal that job satisfaction has a significant negative impact on employees’ intent
to leave the organization, which means higher job satisfaction is associated with lower
turnover intention (Reukauf 2018; Zito et al. 2018; Milana 2018; Gebregziabher et al. 2020).
The study of O’Connor (2018) similarly yielded a moderate negative relationship
between job satisfaction and turnover intention, implying that increased job satisfaction
of employees can lengthen tenure. Still, the opposite, that is - job dissatisfaction
manifested in extended periods could also turn into the intent to leaving the organization.
Moreover, the study of Tarigan and Ariani (2015, as cited in Reukauf 2018) of
employees in a particular Indonesian manufacturing company also revealed a negative
relationship between work satisfaction and turnover intention. Their findings are
substantiated by Batura et al. (2016), who also found a significant relationship between
the variables mentioned above in the healthcare industry. The multi-level perspective of
job satisfaction conducted by Liu and colleagues (Liu et al., 2012, as cited in Kaiser,
Hennecke, and Luhmann, 2020) further demonstrated that the employees’ trajectory in
job satisfaction predicts their turnover intention.
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Job satisfaction is described as a behavioral cycle manifested towards different
dimensions of a job or the extent to which employees like their jobs (Falkerburg and
Schyns, 2007 as cited in Rahman and Syahrizal, 2018). Lack of satisfaction towards these
dimensions leads to turnover intention, which eventually changes to a more serious
response such as job turnover. One dimension of job satisfaction that strongly influences
turnover intention is compensation. Higher compensation reportedly leads to lower
turnover intention, and inversely, lower compensation results in higher turnover
intention (Silaban and Rahmat, 2018).
Employees’ intention to leave their current organization can also be triggered by
other aspects of job satisfaction such as corporate culture or environment and employee
recognition. For instance, the study by Yeun and Han (2015) reported that organizations
that have innovative and social cultures tend to shape the employees’ feelings and
perceptions towards their job, which influence their perception towards the organization
as a whole. This means that the more the employees perceived their organizational
culture as positive and the more satisfied they are with their work environment, the less
likely they intend to leave (Haggalla, 2017).
Recognition, on the other hand, is used to reduce the rate of turnover. Many
organizations use employee recognition program which includes factors such as the
employees’ length of service and service performance (Mendis, 2017). To be recognized
in their respective industries, modern companies often adopt recognition programs as
part of their strategies. It goes on to say that by introducing a good recognition program
that aligns with the organizational value and culture aids in retaining employees and
lowers the intent of searching for alternative jobs (Mosley, 2016).
Another aspect of job satisfaction that is closely linked with turnover intention is
the working relationship. During frequent interaction, employees may develop a sense
of attachment toward their managers and co-workers (Hai and Park, 2021). Employees’
closeness in the workplace translates to how much trust, support, encouragement, and
empathy employees perceive from their colleagues. The manifestation of mutual trust,
concern, and other positive organizational behavior engender familial bonds between
employees in the organization (Ariani, 2015). The emotional attachment of employees to
their colleagues is usually indicative of organizational attachment. This attachment
grows when individuals engage in more extensive, consistent, and quality work
relationships, which eventually leads to deeper organizational embeddedness and a
lower desire to quit (Lu, Liu, and Zhao, 2017).
Customer satisfaction is contingent on employee’s service performance as they are
the ones who always have constant and direct interaction (Paul, 2016). Hence,
understanding what influences individual service performance has been the object of
many studies. Out of many factors associated with service performance, job satisfaction
is found to be one of the most vastly- examined subjects in previous and existing
literature (Darma and Supriyanto, 2017; Okeke, 2018; Shmailan, 2016). Job satisfaction
and employee performance were studied in two directions, and each variable has an
impact on the other (Alromaihi, Alshomaly, and George, 2017).
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The positive link between job satisfaction and service performance is supported
by a number of previous studies. For instance, the study conducted by Inuwa (2016),
Kampkötter (2017), Platis et al. (2015), Torlak and Kuzey (2019), and Yuen et al. (2018)
showed that job satisfaction significantly influenced the levels of employee performance.
Researchers of these studies propounded that organizations should concentrate on
keeping their employees satisfied to increase productivity. Existing literature also
confirmed that satisfied employees performed better and contributed well to the overall
goals and success of an organization (Shmailan, 2016). By contrast, studies also surmised
that dissatisfied employees would not perform effectively, which may become one of the
major constraints to organizational success (Al-Ali et al., 2019).
Employees’ role in the service industry could not be downplayed as every
transaction involves direct interaction with the customers. As stated by Gupta (2016),
employees themselves are the “service” and the “face of the organization”. They also act
as the unofficial “marketers” for the organization as their services mainly become the
basis of customers’ perception of the organization’s overall service. Transactions that
result in customer delight are often associated with the employees’ excellent service
performance (Milana, 2018). Most of the factors considered by customers in assessing the
perceived service performance, such as reliability, assurance, tangibility, empathy, and
responsiveness, are all affiliated with the employees’ extra behavioral effort. The idea that
highly satisfied employees deliver better and quality service performance has almost
become an adage in the existing literature of service industries (Al-Ababneh, Masadeh,
Al-Shakhsheer, and Ma’moun, 2018).
As the human interface is inherent in the service industry, the quality of the service
being provided cannot be set apart from the quality of the service provider (Palaniswamy
et al., 2017). During the service transaction, the management cannot guide or control the
behavioral efforts of service employees. Thus, it can be inferred that service employees
largely determine the quality of the service performance they would deliver to satisfy
customers (Gupta, 2016). Many scholars believed that service organizations must first
improve their internal service performance in order to deliver quality services to their
external customers (Almohaimmeed, 2019). To achieve this, it is imperative that
organizations provide their internal customers with the necessary knowledge, tools,
equipment, training, recognition, and other factors that further increase employees’
satisfaction (Al-Ababneh et al., 2018; Bizfilings, 2017).
The performance of its frontline employees often determines the success of service
organizations. Hence, employee retention is a critical issue that is prevalent in the service
industry. Several factors associated with turnover intention include work environment,
performance evaluation, career development, and economic factors (Hossain, 2018). Job
satisfaction, working conditions, and individual characteristics have also been examined
in relation to turnover intention, as mentioned in the study by Wen, Zhang, Wang, and
Tang (2018). Interestingly, it appears that service performance has also been associated
with employee turnover intention. While the effect of job satisfaction on turnover
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intention has been widely investigated, studies examining the consequences of
employees’ perceived service performance are largely lacking.
However, the limited number of empirical evidence on the effect of perceived
service performance on turnover intention indicates that employees’ perceived service
performance significantly influences turnover intention (Slatten, Svensson, and Svaeri,
2009). Previous research suggests that there is a psychological connection between
employees’ assessment of the service provided and the customer’s judgment of the
service being experienced (Chung and Schneider, 2002, as cited in Slatten and Lien, 2020).
Such an occurrence may provide the employees a clue as to whether or not they are cut
out for the job. In other words, the transaction between employee and customer itself
enables the employee to assess their level of service performance, which might be used
as the basis for making turnover decisions.
Many studies have suggested that frontline workers are often overwhelmed and
exhausted by the demands of communicating with customers, and high job stress reduces
their intrinsic motivation and creativity, which adversely affect their service performance
(Li, Zhu, Cai, Long, and Park, 2019; Harris and Fleming, 2017; Elmadag and Ellinger,
2018). Outbound call centers engaged in telemarketing often require employees to
achieve a fixed sales quota which can be stressful and demanding. Still, when internal
service performance is good such as the ease of use and functionality of working facilities
and equipment, employee inputs are higher which increases their output (Sharma, Kong,
and Kingshott, 2016). The lower their sales efficiency and overall performance, the more
stressed and emotionally exhausted they are, which increases the likelihood of leaving
(Li, Zhu, and Park, 2018).
4. Material and Methods
4.1 Research Design
This study used the non-experimental quantitative research design using the
correlational technique. The non-experimental quantitative design was used to determine
the relationship between variables and to figure out which of the variables are connected
while the correlational technique describes the statistical association between two or
more variables (Field, 2016). Mediation analysis using the technique of Baron and Kenny
(1986) was used to determine if service performance significantly mediated the
relationship between job satisfaction and turnover intention. These designs are
appropriate since the study’s goal is to examine the significance of the relationship among
the three variables of the study and to establish the significance of the mediation effect of
service performance on the relationship between job satisfaction and turnover intention.
4.2 Population and Sample
The total estimated number of respondents in this study was 11,905 BPO employees, 373
of which were taken as the sample size of the study with a 5% margin of error a and
confidence level of 95%. The sample size calculator Raosoft
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(http://www.raosoft.com/samplesize.html) was used to determine the sample size of the
respondents in order to conduct a reliability test of the instrument for the final survey.
This study used the stratified, random via snowball technique which covered selected
BPO companies catering to both inbound and outbound operations. Stratified random
sampling divides the population into mutually exclusive groups in which random
samples are taken. This was used to assure equal proportionate representation per BPO
company that constitutes the total sample size (Rahi, 2017).
Respondents consist of individuals who are currently employed in the selected
BPO companies located within Davao City. However, this study did not include home-
based and freelance BPO workers who are not employed in any BPO companies within
and outside the location of the study. Moreover, respondents who opted not to
participate in the study for any reason were allowed to withdraw at any time and
discontinue participation without penalty.
4.3 Research Instrument
The survey questionnaire consisted of four parts. The first part was intended for the
profile of the respondents as well as the direction on how to rate the questions given. The
second part includes specific questions about job satisfaction which consisted six (6)
indicators with an acceptable reliability score as follows: job/work (α=.849), relationship
at work (α=.786), communication (α=.821), recognition of performance (α =.844),
compensation and benefits (α= .922), and corporate culture/environment (α=.868). The
job satisfaction instrument was taken from the Employee Satisfaction Survey of
University of Mindanao with approved consent from the Quality Management Office
(QMO). Moreover, the scale used a 5-point Likert-type with options ranging from very
high to very low.
The third part of the questionnaire consists of six items adapted from Roodt (2004)
TIS-6 scale with Cronbach alpha reliability coefficient of 0.958 which is highly reliable.
The turnover intention scale assesses the BPO worker’s desire to exit an organization by
measuring the six items on a 5-point Likert- type with a range of means, description, and
interpretation. The fourth part of the survey questionnaire consists of explicit questions
with regard to service performance. The scale for service performance was taken from
the SERVPERF model developed by Cronin and Taylor (1992). There are five indicators
under this variable with an acceptable reliability score as follows: tangibles (α=.855),
reliability (α=.776), responsiveness (α=.844), assurance (α=.842), and empathy (α=.935).
Some improvements were made to the items to make them more appropriate for use in a
call center setting. Each item has been rephrased to capture the internal perspective of
service performance.
Refinement of the questionnaires was done through the assistance of the adviser
and four validators who ensured its validity with an overall mean score of 4.17 assessed
to be excellent. Before administering the questionnaire, the researcher conducted a pilot
test to thirty (30) BPO workers in Digos City to assess the suitability and coherence of the
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instrument. The research instruments were subjected to Cronbach Alpha Test for
reliability testing, the results of which are discussed in the subsequent paragraphs.
4.4 Data Collection
Due to COVID-19 pandemic, face-to-face distribution of printed questionnaires to the
prospective respondents was not possible. Hence, data collection was conducted through
an online platform. The questionnaire was encoded using Google Forms as an alternative
to face-to-face surveys. The design and the features of the platform were constructed like
the questionnaires validated by the experts. Prior to the online administration of
questionnaires, the researcher sent letters of permission to conduct the study, signed by
the adviser and favorably endorsed by the Dean of the Professional Schools, to the
approving authorities of selected BPO companies in Davao City. Using a mix of
proportionate stratified random technique and snowball sampling, a pre-filled link was
sent electronically via email and other online channels to the respondents. During the
conduct of the survey, respondents were asked to read and answer the questions honestly
and religiously.
Due to the nature of the survey, respondents’ cyber silence and lack of active social
media presence were some of the challenges encountered by the researcher. Moreover,
data was collected day and night as BPO companies observed shifting schedules. The
online survey was conducted for three weeks commencing the first week until the third
week of October 2020. After retrieval, the responses were tabulated and processed using
appropriate statistical tools. The tabulated data was analyzed and interpreted in
accordance with the problem statements.
4.5 Statistical Tools
Weighted Mean was used to characterize the job satisfaction (IV), turnover intention
(DV), and service performance (MV) of BPO workers in Davao City. Pearson Product
Moment Correlation was used to determine the significance of the relationship between
job satisfaction (IV), turnover intention (DV), and service performance (MV). Mediation
analysis using the technique of Baron and Kenny was used to determine if service
performance significantly (partially or fully) mediated the relationship between job
satisfaction and turnover intention of BPO workers in Davao City.
5. Results and Discussion
5.1 Job Satisfaction of BPO Workers in Davao City
Table 1 presents the list of items in the six indicators of the job satisfaction scale that
include job/work, relationship at work, communication, recognition of performance,
compensation, and benefits, and corporate culture/environment. As seen in Table 1, the
overall mean of job satisfaction is 4.32 (SD=0.628), assessed to be very high. The high level
could be attributed to predominantly very high ratings given by the BPO workers on the
job or work ( =4.41, SD=0. 591), relationship at work ( =4.45, SD=0. 632), communication
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( =4.32, SD=0. 727), recognition of performance ( =4.25, SD=0. 821), corporate culture or
environment ( =4.34, SD=0. 707) with compensation ( =4.12, SD=0. 861) being the only
measure assessed as high.
The overall level of job satisfaction is very high which indicates that BPO workers
in Davao City are highly satisfied with all the indicated factors. Relationships at work
garnered the highest score among the six indicators which indicates that management
and employees in the sector have a good working relationship and that employees
generally get along well with one another. On the other hand, BPO workers were found
to be highly satisfied (yet rated the least) in the aspect of compensation and benefits.
Table 1: Level of Job Satisfaction of BPO Workers
Indicators
Mean
SD
Descriptive Level
The job/work
4.41
.591
Very high
Relationships at work
4.45
.632
Very high
Communication
4.32
.727
Very high
Recognition of performance
4.25
.821
Very high
Compensation and benefits
4.12
.861
High
Corporate culture/ environment
4.34
.707
Very high
Overall
4.32
.628
Very high
These results are comparable with the pronouncement of Tran et al. (2018) that working
relationships are necessary for employees to work happily and comfortably in the
workplace. Moreover, businesses that struggle to develop quality working relationships
are likely to have a high turn-over rate (Abun et al. 2018). On the other hand, the findings
on the aspect of compensation and benefits are in line with the pronouncement of
Koitalek (2016) that this factor significantly influences the decision of employees to
remain in the organization and that if they perceived their compensation to be
incongruent with the job they performed – it is likely that their satisfaction would drop
drastically (Rahardjo, 2017).
5.2 Service Performance of BPO Workers in Davao City
Shown in Table 2 is the descriptive statistics results in measuring the level of service
performance as perceived by BPO workers in Davao City. Overall mean of service
performance is 4.51 (SD=0.480), assessed to be very high. The high level is reflective of
very high levels of its indicators, including tangibles (x =4.46, SD=0. 589), reliability (x
=4.47, SD=0. 571), responsiveness (x =4.63, SD=0. 545), assurance (x =4.66, SD=0. 516), and
empathy (x =4.64, SD=0. 530).
Table 2: Level of Service Performance of BPO Workers
Indicators
Mean
SD
Descriptive Level
Tangibles
4.46
.589
Very high
Reliability
4.47
.571
Very high
Responsiveness
4.63
.545
Very high
Assurance
4.66
.516
Very high
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Empathy
4.64
.530
Very high
Overall
4.51
.480
Very high
The overall level of service performance as perceived by BPO workers is very high. A
closer look at the results shows a very close difference in ratings among the five
dimensions. Assurance, however, garnered the highest ratings which means the
employees are more confident with their ability to instill trust and credibility towards
their customers than any of the other dimensions. On the other hand; tangibles, despite
being rated the least also garnered very high ratings. This means that BPO workers
viewed their physical working environment as visually appealing and is generally
congruent to the services being provided (Eberendu, Akpan, Ubani, and Ahaiwe, 2018).
These findings agree with the study of Osman (2017) that highly satisfied
employees tend to be more enthusiastic to participate with positive and helpful attitudes
that lead to superior services. While Timney (2017) argued that loss of customer goodwill
may also occur during the first transaction by means of giving wrong information, it is
safe to say that BPO workers are quite competent in terms of giving correct services and
handling customers with courtesy and enthusiasm. On the other hand, the idea that
physical facilities contribute to employees’ productivity and service performance is
asserted by Awan and Tahir (2015) who propounded that an attractive work environment
stirs employees to put together their preeminent skills and competencies to execute their
job efficiently.
5.3 Turnover Intention of BPO Workers in Davao City
Shown in Table 3 is the descriptive statistics results in measuring the level of turnover
intention of BPO workers in Davao City which has an overall mean of 2.56 (SD=1.135),
described as low. The low level could be reflective of generally low ratings given by the
respondents to the six-item scale: considering leaving the job; the current job not
satisfying their personal needs; being frustrated because of not being given the
opportunity at work to achieve personal work-related goals; dreaming about getting
another job that better suits their personal needs; thinking of accepting another job at the
same compensation level should it be offered to them, and is no longer looking forward
to another day at work.
Table 3: Level of Turnover Intention of BPO Workers
Indicator
Mean
SD
Descriptive Level
Turnover Intention
2.56
1.135
Low
Results revealed a low level of turnover intention which means the indicated factors of
this variable are less apparent among BPO workers in Davao City. This could be
attributed to their high level of job satisfaction which according to Zito et al. (2018) has a
direct impact on employees’ turnover intention. ‘I dream about getting another job that
will better suit my personal needs’ garnered the highest ratings which means this factor
is sometimes manifested. On the other hand, ‘I no longer look forward to another day at
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work’ was rated the least among the six indicators which indicate that this statement was
only seldom manifested.
The highest-rated indicator agrees with the view of Çinar (2015) who described
turnover intention as an employee’s desire to leave a company in search of better
opportunities. However, that the employees no longer look forward to another day at
work was predominantly low among BPO workers. This signifies a positive regard
towards their job as a whole as the opposite means they would continually seek better
opportunities which increases their turnover intention (Reukauf, 2018).
5.4 Correlation between Job Satisfaction, Service Performance, and Turnover Intention
of BPO Workers
Displayed in Table 4 are the results of the correlation between the independent (job
satisfaction), dependent (turnover intention) and mediator (service performance)
variables. Bivariate correlation analysis using Pearson product moment correlation was
employed to determine the relationship between the variables mentioned.
Table 4: Correlation analysis of the variables
Pair
Variables
Correlation
Coefficient
p-value
Decision
on Ho
IV and DV
Job satisfaction and
turnover intention
-0.457
0.000
Reject
IV and MV
Job satisfaction and
service performance
0.640
0.000
Reject
MV and DV
Service performance and
turnover intention
-0.283
0.000
Reject
The first zero-ordered correlation analysis between job satisfaction and turnover
intention revealed a computed r-value of -0.457 with a probability value of p<0.000 which
is significant at the 0.05 level. This indicates that there is a moderate negative correlation
between the two variables, implying that an increase in job satisfaction results in a
decrease in turnover intention. Hence, the null hypothesis of no significant relationship
between job satisfaction and service performance is rejected. The second bivariate
correlation analysis involving job satisfaction and service performance yielded an r-value
of 0.640 with a probability value of p<0.000, which is significant at 0.05 level. This
indicates that there exists a positive and strong association between the two variables.
Thus, the null hypothesis of no significant relationship is also rejected. The third
correlational analysis between service performance and turnover intention yielded an r-
value of -0.283 with a probability value of p<0.000, which is significant at 0.05 level. This
indicates that there exists a weak negative correlation between the two variables. Thus,
the null hypothesis of no significant relationship is similarly rejected.
The current study found that there is a moderate negative correlation between job
satisfaction and turnover intention, implying that an increase in job satisfaction results in
a decrease in turnover intention. These results are analogous to the findings of Che Nawi
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et al. (2016) that increased job satisfaction ultimately leads to higher profitability and
longer tenure. On the other hand, the second bivariate correlation analysis involving job
satisfaction and service performance also shows that there exists a positive and strong
association between the two variables. This finding is in line with the postulation of
Milana (2018) that satisfied employees are pre-requisite to high service performance
because they have more commitment to continuous improvement. As supported also by
Gupta (2016), employees who are pleased and contented with their jobs are likely to be
attentive, accommodating, polite, and mindful of both coworkers and customers.
Lastly, the correlational analysis between service performance and turnover
intention reveals a weak negative correlation. This was justified by the study of Slatten,
Svensson, and Svaeri (2009, as cited by Khan et al. 2020), that employees’ perceptions of
their own service performance might serve as cues that influence their decision to leave
the organization. Just as customers look for alternatives when they experience bad
service, employees may also decide to quit and look for alternative jobs if they perceive
their service performance as insufficient.
5.5 Mediation Analysis of the Three Variables
Data was analyzed with the linear regression method as input to the medgraph. In Table
5, the results of regression analyses are evidently displayed. Mediation analysis
developed by Baron and Kenny (1986) is the mediating effect of a third variable in the
relationship between two variables.
There are four steps to be met for a third variable to be acting as a mediator. In
Table 5, these are categorized as Steps 1 to 4. In Step 1, job satisfaction as the independent
variable (IV) significantly predicts the turnover intention of BPO workers, which is this
study’s dependent variable (DV). In step 2, job satisfaction significantly predicts service
performance, the mediator (M). However, in step 3, service performance did not
significantly predict the turnover intention of BPO workers.
Table 5: Regression results of the variables in the
four criteria of the presence of mediating effect
Step
Path
Beta (Unstandardized)
Standard Error
Beta (Standardized)
Step 1
c
-0.825
0.084
-0.457
Step 2
a
0.489
0.031
0.640
Step 3
b
0.037
0.142
0.016
Step 4
c’
-0.843
0.109
-0.467
Because not all of the three steps were significant, a further mediation analysis through
medgraph is not essentially warranted. However, to test whether there is a significant
mediating effect, Sobel z test was still carried out. Full mediation can be obtained if the
influence of the independent variable on the dependent variable becomes non-significant
at the final step. It means all of the effects of job satisfaction towards turnover intention
runs through service performance. Moreover, if the regression coefficient is significantly
reduced at the final step but remains significant, partial mediation is obtained, which
Princess G. Cole, Reynaldo C. Castro
JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
THE MEDIATING EFFECT OF SERVICE PERFORMANCE
European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 32
implies that part of job satisfaction (IV) is mediated by service performance (MV) but
other parts are either direct or mediated by other variables that are not included in the
model.
Shown in Figure 3 is the result of the computation of mediating effects. The Sobel
test yielded a z-value of 0.259469 with a p-value of 0.795, which is not significant at the
0.05 level. This means that the mediation accounted for by service performance on the
relationship of job satisfaction and turnover intention is not significant. Hence, the null
hypothesis stating that service performance does not significantly mediate the
relationship between job satisfaction and turnover intention is not rejected.
Figure 3: Medgraph Showing the Variables of the Study
5.6 Mediation Analysis
Sobel z-value 0.259469, p=0.795ns
Percentage of the total effect that is mediated -2.188%
Ratio of the indirect to the direct effect -0.021412
Effect Size Measures
Unstandardized Coefficients
Total: -.825
Direct: -.843
Indirect: .489
Ratio Index: -.593
Job satisfaction was negatively correlated with a turnover intention which
indicates that an increase in job satisfaction leads to a decrease in turnover intention.
Moreover, job satisfaction was also found to have a positive correlation with service
performance implying that an increase in job satisfaction results in an increased or higher
service performance. On the other hand, service performance has a negative correlation
with turnover intention, however, it did not actually translate into a direct effect which
means that service performance did not mediate the relationship between job satisfaction
and turnover intention.
Independent Variable
Job Satisfaction
Mediator Variable
Service Performance
Dependent Variable
Turnover Intention
-0.457** [c]
-0.467** [c’]
0.640*** [a]
0.016ns [b]
Princess G. Cole, Reynaldo C. Castro
JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
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European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 33
Simply put, the effect of job satisfaction on turnover intention does not run
through service performance which is the mediating variable. However, even though
mediation was not fully established, the results of the study revealed that the presence of
service performance in the regression model actually improves the direct effect of job
satisfaction on turnover intention.
The results of the main problem of this study as mentioned in the preceding
paragraph support the theoretical framework anchored on Homan’s Social Exchange
Theory which posits that when organization supports employees in different aspects or
when employees are satisfied, they are likely to reciprocate by exerting more effort in
performing their job and delivering excellent service performance leading to a greater
sense of commitment which then triggers the desire to stay in the organization (Harden,
Boakye and Ryan, 2018). It is also supported by Mobley’s Intermediate Linkage Model
which states that turnover intention starts with an employee’s own assessment of
experienced job satisfaction or dissatisfaction. When employees’ needs are not satisfied,
they are likely to continually seek new opportunities which increase the level of turnover
intention (Reukauf, 2018).
5.7 Recommendations
The Human Resource Department of BPO companies in Davao City may adopt the
findings of this study to improve their current retention programs and policies. Despite
showing very high ratings on the aspects of job satisfaction, compensation and benefits
are found to be less pronounced in this highly competitive sector; hence, it is
recommended that BPO companies increase their financial investment in strategic
compensation and benefits packages to provide employees financial assurance and
further improve job satisfaction. It is also suggested that operation managers constantly
monitor the service performance as perceived by the employees and fill in the deficiencies
that may cause them to feel unsuited for the job through relevant training. It should be
established that enough work is being done to understand their development needs and
that the management is willing to equip them with appropriate competencies to deliver
service performance that falls within a generally acceptable range.
Additionally, even though a low level of turnover intention was determined in the
area of study, the findings of this research may be used to address the problems of the
turnover rate in the global context. Examining the factors that may prompt employees to
leave their job presents a good opportunity for BPO organizations to review
organizational processes and make necessary adjustments in order to enhance employee
work satisfaction and minimize turnover, resulting in cost savings. Containing the factors
that influence employee turnover intention could significantly improve the company’s
ability to remain competitive and sustainable. Lastly, future researchers may replicate the
study in other geographic and industry-specific areas using different methodologies and
instruments which may provide different results. Other aspects may also be included in
determining employee job satisfaction such as factors relating to customer interaction and
Princess G. Cole, Reynaldo C. Castro
JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
THE MEDIATING EFFECT OF SERVICE PERFORMANCE
European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 34
the processes involved in delivering service performance. A qualitative analysis of the
findings of this study is also recommended to corroborate the findings.
6. Conclusion
This study revealed a very high level of job satisfaction, a low level of turnover intention,
and a very high level of service performance among BPO workers in Davao City. The
relationship between job satisfaction and turnover intention indicates a significant and
negative linear relationship between the two variables while the link between overall job
satisfaction and service performance shows a significant and positive linear relationship
between the two variables. However, the correlational analysis between service
performance and turnover intention reveals a weak negative correlation. Furthermore,
results revealed that service performance does not significantly mediate the relationship
between job satisfaction and turnover intention.
However, albeit mediating effect is not evident, the presence of the mediating
variable which is service performance actually improves the direct effect of job
satisfaction (IV) towards turnover intention (DV). These results support the Social
Exchange Theory in which this study was anchored. It agrees with what the theory posits
that employee satisfaction derived from organizational support creates a greater sense of
commitment and positive attitude towards the organization leading to a higher or
improved service performance which then increases the desire of employees to stay in
the organization.
Conflict of Interest Statement
The authors declare that they have no conflicts of interest regarding the publication of
this paper. The research was conducted independently and without any financial or
personal relationships that could have influenced the results or interpretation of the data.
About the Authors
Princess G. Cole is an Associate Professor in the College of Business Administration at
the University of Mindanao. She is currently pursuing her doctorate degree in Human
Resource Management at Ateneo de Davao University, Philippines. Her research
interests lie in the field of Human Resources Management, with a focus on employee
engagement and retention. orcid.org/0000-0003-2877-7703; ResearchGate:
https://www.researchgate.net/profile/Princess-Cole
Reynaldo C. Castro is the Vice President of External Relations and International Affairs
at the University of Mindanao. He finished his Doctor of Philosophy (PhD) at the
University of Southeastern Philippines. orcid.org/0000-0001-8456-1881
https://scholar.google.com/citations?user=iMCDm0UAAAAJ&hl=en&oi=ao
Princess G. Cole, Reynaldo C. Castro
JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
THE MEDIATING EFFECT OF SERVICE PERFORMANCE
European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 35
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Appendix A: Research Instrument
Survey Questionnaire
Dear Respondent,
I am one of the MBA students of the Professional Schools of the University of Mindanao. I am currently
working on research entitled “Job Satisfaction and Turnover Intention of BPO Workers: The Mediating Effect
of Service Performance”. As a researcher, I am interested on how service performance may intervene the
relationship between job satisfaction and turnover intention in BPO sector. I will use the results as inputs
for employee’s well-being and sustainability program. In connection with this, I choose you to be one of
my respondents. Hence, I would like to ask your cooperation in answering this questionnaire. It would
be best if you do not leave any of the questions unanswered. I assure the full confidentiality of the
information you will give.
I will greatly appreciate your valuable time and response for the success of my research.
Sincerely yours,
The Researchers
I. Profile of the Respondent
Name (Optional): _____________________________________________________
Sex:
o Male
o Female
Age:
o 18-25;
o 31-35;
o 41-45;
o 26-30;
o 36-40;
o 46 and above.
Marital status:
o Single;
o Married;
o Widow/Widower;
o Others (specify):__________________.
Working position:
Please indicate your position: _________________________________
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JOB SATISFACTION AND TURNOVER INTENTION OF BPO WORKERS:
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European Journal of Human Resource Management Studies - Volume 6 │ Issue 2 │ 2023 48
Employment status:
o Regular Trainee;
o Probationary others (specify): ___________.
Directions: Please respond to each item honestly by indicating the degree/rating of your
choice. Check the box of your choice and be guided by the following:
Numerical Scale
Description
Interpretation
5
Very high
The measure described in the item is always evident.
4
High
The measure described in the item is often evident.
3
Moderate
The measure described in the item is sometimes evident.
2
Low
The measure described in the item is seldom evident.
1
Very low
The measure described in the item is never evident.
II. Job Satisfaction
A. The Job/Work
5
4
3
2
1
1. My job makes good use of my skills and abilities.
2. I feel encouraged to come up with new and better ways of doing things.
3. My work gives a feeling of personal growth and accomplishment.
4. I have knowledge, training and resources to do my job well.
5. My job requirements are clear to me.
6. I have job security.
7. The amount of work expected of me is reasonable.
B. Relationships at Work
1. My supervisor/team-leader encourages me to do my best.
2. Management looks to me for suggestions and leadership.
3. I get along/interact well with my colleagues.
C. Communication
1. The management keeps me informed about matters affecting the organization.
2. The management involves me in decisions affecting my work.
3. My company clearly communicates its goals and strategies to me.
4. People in my department/account communicate sufficiently with one another.
D. Recognition of Performance
1. I am valued by my supervisor/team leader.
2. I received the right amount of recognition for my work.
3. I have a clear path for career advancement.
E. Compensation and Benefits
I am happy with my:
1. Pay
2. Bonus
3. Incentives
4. Career progression
5. Vacation time
6. Medical benefits
7. Other benefits
F. Corporate Culture/Environment
1. My senior leaders visibly demonstrate a commitment to quality service.
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2. My company has positive image to the public.
3. I feel safe and secure in my work environment.
4. My company is flexible with respect to my family responsibilities.
5. The morale in my department/account is high.
6. I am motivated to see my organization succeed.
7. I would recommend this company as a good place to work.
III. Turnover Intention
Directions: Please respond to each item honestly by indicating the degree/rating of your
choice. Check the box of your choice and be guided by the following:
Numerical Scale
Description
Interpretation
5
Very high
The measure described in the item is always manifested.
4
High
The measure described in the item is often manifested.
3
Moderate
The measure described in the item is sometimes manifested.
2
Low
The measure described in the item is seldom manifested.
1
Very Low
The measure described in the item is never manifested.
Items
5
4
3
2
1
1. I have considered leaving my job.
2. My current job does not satisfy my personal needs.
3. I am frustrated because I am not given the opportunity at work to achieve my
personal work-related goals.
4. I dream about getting another job that will better suit my personal needs.
5. I think of accepting another job at the same compensation level should it be
offered to me.
6. I no longer look forward to another day at work.
IV. Service Performance
Directions: Please respond to each item honestly by indicating the degree/rating of your
choice. Check the box of your choice and be guided by the following:
Numerical Scale
Description
Interpretation
5
Very high
The measure described in the item is always observed.
4
High
The measure described in the item is often observed.
3
Moderate
The measure described in the item is sometimes observed.
2
Low
The measure described in the item is seldom observed.
1
Very Low
The measure described in the item is never observed.
A. Tangibles
5
4
3
2
1
1. I use up-to-date equipment and software technology.
2. The physical facilities of our company are visually appealing.
3. I dress well and appear neat.
4. The appearance of our call center facilities is in keeping with the type of services I
provided.
B. Reliability
When I promise to do something by a certain time, I do so.
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1. I am sympathetic and reassuring when customers have problems.
2. I am dependable.
3. I provide services at the time required/promised.
4. I provide accurate information to our customers.
C. Responsiveness
1. I tell customers exactly when services will be performed.
2. I provide prompt services to our customers.
3. I am willing to help our customers.
4. I am readily available to respond to customer's needs.
D. Assurance
1. I can be trusted by our customers.
2. I provide the requested service securely and competently to gain the confidence of
our customers.
3. I am polite to our customers.
4. I have the required knowledge to answer our customers’ queries.
E. Empathy
1. I give individual attention to our customers.
2. I give our customers personal attention.
3. I have our customers’ best interest at heart.
4. I understand the specific needs of our customers.
5. Our operating hours are convenient to our customers.
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