Application of Herzberg's Two-Factor Theory of job satisfaction to a Department of Defense Demonstration Project

The purpose of this dissertation was to study the relationship between job satisfaction and the compensation system for technical employees at two research and development centers. This study focused on Herzberg's Two-Factor Theory of Job Satisfaction of managers and non-managers of two high technology organizations: a control group operating under the standard General Schedule pay system, and an experimental group operating under a Department of Defense Demonstration Project pay system.; Research was conducted using the results of a Department of Defense survey administrated by United States Office of Personnel Management. Data from the survey was used to determine the effects of the demonstration compensation system on civilian employees.; Results of the study indicate that the compensation system had a significant effect on several of the factors associated with employee job satisfaction but little effect on managers' job satisfaction and job dissatisfaction. The satisfiers analyzed included recognition, advancement and growth opportunities, and the work itself. The dissatisfiers analyzed were company policies and supervision. The results did reveal that managers had higher levels of job satisfaction than non-managers, and non-managers were more dissatisfied. Results revealed that managers were more satisfied with both the satisfier and dissatisfier factors than non-managers. The findings suggest the demonstration project's experimental compensation system had the most effect on the non-managers' perception of their work. This is believed to be due to the increased flexibility given to demonstration project managers to adjust their personnel as they deem necessary to meet organizational and individual desires. Recognition and advancement opportunities were not perceived to have improved in the experimental group. The reduction in grade levels associated with the experimental compensation system resulted in a lower perception of recognition and advancement opportunities for the non-managers. The results of this study are expected to help administrators understand motivation, so that policies might be implemented to create an environment that promotes employee job satisfaction. The implications are that employers will have the information necessary to develop policies, programs, and initiatives aimed at more effectively matching employee interest and skill level to job assignments. The results of this study will also provide information that can be used for improving recognition for superior performance and rewarding appropriately, and providing increased opportunity for advancement. Organizations should then continuously monitor employee perceptions of these policies and effectiveness and strive for continuous improvement.