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Work motivation and job satisfaction in the Nordic countries Jacob K. Eskildsen and Kai Kristensen Center for Corporate Performance, The Aarhus School of Business, Aarhus, Denmark, and Anders H. Westlund The Stockholm School of Economics, Stockholm, Sweden Keywords Job satisfaction, Motivation (psychology), Denmark, Sweden, Norway, Finland Abstract This paper studies differences in job satisfaction and intrinsic work motivation between employees with different characteristics. Based on a study of the literature assumptions regarding these differences are developed and tested on data from a survey in the Nordic countries. In this survey 9,623 employees from randomly selected households in the Nordic countries participated. Among the findings are that Danish workers were found to be the most satisfied and that there is no difference between the genders with respect to job satisfaction in the Nordic countries. Introduction The world market is becoming an increasingly complex place in which to operate for today’s businesses putting up new demands for corporate information systems. Most information systems are based solely on accounting data and thus insufficient with respect to describing the company’s general situation and future financial health (Kaplan and Norton, 1996). The information systems of the future will include measures of intangibles such as customer and employee/job satisfaction since these intangibles are in account for more than half of the book value in most industries in both the USA and Europe (Kaplan and Norton, 1996; Kristensen et al., 2002). These future information systems will require standardised methods for measuring intangibles (Kristensen and Westlund, 2001) and this is already well underway in the field of customer satisfaction through national indices such as ACSI in the USA and EPSI Rating in Europe. Less has happened in the field of job satisfaction with respect to developing standardised measuring methods (Kristensen and Westlund, 2001) and most of the studies done on job satisfaction and intrinsic work motivation are limited to specific countries or even specific organisations. As a consequence these studies report different and sometimes contradictory findings with respect to the effect that employee characteristics such as gender, age and educational level have on intrinsic work motivation and job satisfaction (Finlay et al., 1995; Clark et al., 1996; Miles et al., 1996; Ganzach, 1998; Robie et al., 1998; Gaertner, The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at www.emeraldinsight.com/researchregister www.emeraldinsight.com/0142-5455.htm ER 26,2 122 Received March 2002 Revised June 2003 Accepted July 2003 Employee Relations Vol. 26 No. 2, pp. 122-136 q Emerald Group Publishing Limited 0142-5455 DOI 10.1108/01425450410511043

Transcript of Work Motivation

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Work motivation and jobsatisfaction in the Nordic

countriesJacob K. Eskildsen and Kai Kristensen

Center for Corporate Performance, The Aarhus School of Business,Aarhus, Denmark, andAnders H. Westlund

The Stockholm School of Economics, Stockholm, Sweden

Keywords Job satisfaction, Motivation (psychology), Denmark, Sweden, Norway, Finland

Abstract This paper studies differences in job satisfaction and intrinsic work motivation betweenemployees with different characteristics. Based on a study of the literature assumptions regardingthese differences are developed and tested on data from a survey in the Nordic countries. In thissurvey 9,623 employees from randomly selected households in the Nordic countries participated.Among the findings are that Danish workers were found to be the most satisfied and that there isno difference between the genders with respect to job satisfaction in the Nordic countries.

IntroductionThe world market is becoming an increasingly complex place in which tooperate for today’s businesses putting up new demands for corporateinformation systems. Most information systems are based solely on accountingdata and thus insufficient with respect to describing the company’s generalsituation and future financial health (Kaplan and Norton, 1996). Theinformation systems of the future will include measures of intangibles suchas customer and employee/job satisfaction since these intangibles are inaccount for more than half of the book value in most industries in both the USAand Europe (Kaplan and Norton, 1996; Kristensen et al., 2002). These futureinformation systems will require standardised methods for measuringintangibles (Kristensen and Westlund, 2001) and this is already wellunderway in the field of customer satisfaction through national indices suchas ACSI in the USA and EPSI Rating in Europe.

Less has happened in the field of job satisfaction with respect to developingstandardised measuring methods (Kristensen and Westlund, 2001) and most ofthe studies done on job satisfaction and intrinsic work motivation are limited tospecific countries or even specific organisations. As a consequence thesestudies report different and sometimes contradictory findings with respect tothe effect that employee characteristics such as gender, age and educationallevel have on intrinsic work motivation and job satisfaction (Finlay et al., 1995;Clark et al., 1996; Miles et al., 1996; Ganzach, 1998; Robie et al., 1998; Gaertner,

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

www.emeraldinsight.com/researchregister www.emeraldinsight.com/0142-5455.htm

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Received March 2002Revised June 2003Accepted July 2003

Employee RelationsVol. 26 No. 2,pp. 122-136q Emerald Group Publishing Limited0142-5455DOI 10.1108/01425450410511043

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1999; Groot and Maasen van den Brink, 1999; Sousa-Poza and Sousa-Poza,2000).

The aim of this paper is therefore to study the literature and testassumptions regarding the differences in intrinsic work motivation andemployee/job satisfaction among employees with different characteristics. Thisanalysis will focus on the following demographic and other categories:

. country of origin;

. gender;

. age;

. managers vs employees;

. educational level; and

. company size.

The data for this analysis stem from The Nordic Employee Indexe, which is arecent attempt to develop a standardised way to measure job satisfaction. TheNordic Employee Indexe was launched in August 2001 as a joint projectbetween the two independent market research companies MarkedsConsult A/Sand CFI Group and is based on approximately 9,600 responses form Denmark,Norway, Sweden and Finland.

The effect of employee characteristicsAs stated above most of the studies done on intrinsic work motivation and jobsatisfaction are limited to specific countries or even specific organisations. As aconsequence these studies report different and sometimes contradictoryfindings with respect to the effect of employee characteristics on intrinsic workmotivation and job satisfaction. Some studies have tried to include countiesfrom different parts of the world and in one of these studies most of the Nordiccountries were included (Sousa-Poza and Sousa-Poza, 2000). This studycovered a total of 15,324 employees from 21 countries and the results showedthat Denmark was ranked number one in terms of job satisfaction and Swedenand Norway were ranked as number 9 and 10 respectively. Based on this resultthe following assumption A1 will be tested in the following:

A1. Danish workers are more satisfied than workers from the other Nordiccountries.

Apart from cultural differences, age is another employee characteristic oftenthought to affect the level of job satisfaction. Many studies have studied thisphenomenon and it is often observed that age differences in job satisfaction aregreater than those associated with for instance gender or education (Clark et al.,1996). One of the most recent studies was conducted in the UK on a randomsample of more than 5,000 employees (Clark et al., 1996). Here the relationshipbetween age and satisfaction was found to be u-shaped but this relationship

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does not hold true for the US labour market. Here low levels of job satisfactionamong young employees have typically been observed (Clark et al., 1996).

The Nordic labour market is considered more similar to the UK labourmarket than the US labour market. This is due to the fact that EU legislationconcerning labour-related issues is applying in both the UK and the Nordiccountries.

Therefore the relationship between age and job satisfaction is assumed to beu-shaped in the Nordic countries as well. Although the effect of age on jobsatisfaction is accepted this is not necessarily the same for intrinsic workmotivation. One study has reported no effect from age on intrinsic workmotivation (Howard and Frink, 1996), but generally job satisfaction andinternal work motivation are found to be related (Howard and Frink, 1996; Ebyet al., 1999; Lu, 1999; de Jonge et al., 2001), and therefore the relationshipbetween age and internal work motivation is also assumed to be u-shaped. Thefollowing assumptions A2 and A3 will be tested in subsequent chapters:

A2. The relationship between age and job satisfaction is u-shaped.

A3. The relationship between age and intrinsic work motivation isu-shaped.

Gender is another employee characteristic which is often found to causevariations in reported levels of job satisfaction (Clark et al., 1996; Sousa-Pozaand Sousa-Poza, 2000). Many studies have confirmed these differences and inmost of these studies it turned out that women were more satisfied than men(Clark et al., 1996; Sousa-Poza and Sousa-Poza, 2000; Wharton et al., 2000;Kalleberg and Mastekaasa, 2001). There have been many suggestedexplanations to this phenomenon ranging from genetic differences to anoverrepresentation of women with part-time jobs. Based on these studiesemployees in the Nordic countries are expected to report similar differences injob satisfaction with respect to gender and the assumption A4 to be tested onthe data countries is therefore:

A4. Women are more satisfied with their job than men.

The first two employee characteristics dealt with gender and age but studieshave also shown differences in reported job satisfaction with respect to otherdemographic characteristics. Educational level, especially, has been found toaffect the level of job satisfaction and in many studies job satisfaction has beenfound to decrease with increasing educational level (Clark et al., 1996; Robieet al., 1998; Sousa-Poza and Sousa-Poza, 2000; Wharton et al., 2000). In onestudy the effect of educational level of on intrinsic work motivation was infocus but no significant relationship was found (Howard and Frink, 1996). Thishas led to the following assumptions A5 and A6 regarding the relationshipbetween educational level and job satisfaction as well as intrinsic workmotivation:

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A5. Employees with a high education are less satisfied.

A6. Educational level has no impact on intrinsic work motivation.

The last group of assumptions deal with more organisational characteristics ofthe employees. The previously mentioned study from the UK found thatmanagers reported higher levels of job satisfaction than regular employee andthis phenomenon has also been found in other studies (Clark et al., 1996;Howard and Frink, 1996; Robie et al., 1998; Kalleberg and Mastekaasa, 2001).Furthermore job satisfaction was found to be negatively related to companysize. This has led to the following assumptions A7 and A8 that will be tested inthe following:

A7. Managers are more satisfied than regular workers.

A8. Job satisfaction decreases with company size.

The eight assumptions developed above will be tested in the following but firstthe sampling and the methodology of the study will be described.

The Nordic Employee IndexeThe Nordic Employee Indexe is based on a general model for employeesatisfaction, motivation and loyalty. The model, which is shown in Figure 1,captures employee satisfaction, motivation and loyalty based on thecorporation’s or organisation’s image, senior management, immediatesuperior, co-operation, and work conditions (which includes salary, worktasks and professional and personal development opportunities).

Figure 1.The conceptual model

behind The NordicEmployee Indexe

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The model rests on a solid foundation of academic research in the field (Baker,1995; Allen and Meyer, 1996; Eby et al., 1999; Gaertner, 1999; Clark, 2001; deJonge et al., 2001; Eskildsen et al., 2002) and is thought to provide a genericapproach to employee satisfaction measurements that can be applied in anyorganisational setting. The way in which the seven constructs has beenoperationalised is shown in Table I were the items for each construct areshown.

The focus of the following section is on the data used for testing theconceptual model and the eight assumptions previously developed.

SamplingThe data for The Nordic Employee Index were collected in August 2001through a postal survey. A total of 85,000 questionnaires were sent toemployees in the Nordic countries; 20,000 in Denmark, 25,000 in Sweden; 20,000in Norway and 20,000 in Finland. The questionnaire contains generic questions

Construct Items

Image Overall imageProud to tellPerception of others

Corporate leadership Overall evaluationAbility to make right decisionsAbility to inform employeesCorporate ethics

Immediate manager Overall evaluationProfessional skillsLeadership skills

Cooperation Professional cooperationClimateSocial belonging

Conditions of work Job contentWork environmentPressurePay and benefitsJob securityAttention to professional and personal development

Motivation and satisfaction Overall satisfactionComparison to idealFeel motivatedLook forward to go to work

Loyalty Intend to stayLooking for another jobRecommendation to friendsWillingness to changeWillingness to do extra effortColleagues think I do well

Table I.Construct items

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that can be answered by any employee irrespective of industry, education etc.The survey also contains a number of demographic and other questions suchas age, education, size of company and whether or not the respondent holds amanagerial position. The questionnaires were sent to randomly selectedhouseholds in the Nordic countries. The selection in Denmark and Norway wasbased on the telephone companies’ database of fixed-line customers. In Swedenand Finland the selection was based on the national register. In order to fill inthe questionnaire the respondent had to meet the following criteria:

. be employed, but not self-employed;

. work at least 25 hours a week for the same employer; and

. be at least 18 years old.

If several members of the household fulfilled the criteria, the person whosebirthday passed most recently was asked to complete the questionnaire. About9,600 responses were collected, of which there were about 2,650 in Denmark,2,050 in Norway, 1,900 in Sweden and 3,000 in Finland. The response rate is11.3 per cent but since a substantial amount of the Nordic households do nothave people that fulfil the criteria above, the response rate is considerablyhigher in reality. All in all, the response rate is perceived as satisfactory.

MethodologyThere are quite a number of statistical techniques that can be applied fortesting causal relationships but the method used to estimates the model behindThe Nordic Employee Index is partial least squares (PLS). The reason for thischoice is that the focus of the study is on predicting employee loyalty and PLSis a technique well suited for this purpose (Joreskog and Wold, 1982) since it isnot sensitive to skewed distributions, multicollinearity and misspecifications inthe model as other structural equation modelling techniques (Cassel et al.,1999). The PLS model consists of three parts: inner relation, outer relations, andweight relations (Wold, 1980; Fornell and Cha, 1994). The inner relations depictthe relations between the latent variables as shown in equation (1):

h ¼ Bhþ Gjþ z: ð1Þ

Here h is a vector of the latent endogenous variables and B the correspondingcoefficient matrix (Fornell and Cha, 1994). j is a vector of the latent exogenousvariables, G the corresponding coefficient matrix and finally an error term, z, isincluded. The second part of the model is the outer relations (Fornell and Cha,1994). Here the relationship between the latent variables and the manifestvariables are defined and in contrast to LISREL these can both be reflective andformative by nature (Joreskog and Wold, 1982). In a reflective relationship themanifest variables are determined by the latent variable whereas the latentvariable is determined by the manifest variables in formative relationships(Joreskog and Wold, 1982).

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Since the analysis performed here is based on reflective outer relations onlythis situation is mentioned in the following. The general formula for reflectiveouter relations is shown in equation (2):

y ¼ Lyhþ 1y

x ¼ Lxjþ 1x :ð2Þ

Here y is a vector of the observed indicators of h and x is a vector of theobserved indicators of j. Ly and Lx are matrices that contain the li coefficientswhich link the latent and the manifest variables together and d and 1 are theerror of measurement for x and y, respectively (Fornell and Cha, 1994). Theweight relations are the final part of the PLS model. In PLS each case value ofthe latent variables can be estimated through the weight relations shown inequation (3) as linear aggregates of their empirical indicators:

h ¼ vhy

j ¼ vjx:ð3Þ

The ability to calculate case values for the latent variables is another reasonwhy PLS has preferred over LISREL. In LISREL case values cannot becalculated without factor indeterminancy, which means that they should beused with caution (Bollen, 1989). This is not a problem in PLS estimation.

Empirical resultsThe Nordic Employee Indexe is estimated using the statistical technique PLSand the outcome is shown below in Figure 2. In the estimation procedure therespondents have been weighted with respect to country, region, sex, age aswell as education in order to make the results more representative.

There is a range of measures that can be used to assess the fit of a PLSmodel. Three of the most commonly applied are composite reliability, averagevariance extracted, and R 2 (Fornell and Cha, 1994; Chin et al., 1996; Hulland,1999). The three fit measures for the empirical model are shown in Table II. Thefirst measure in Table II is the composite reliability given by equation (4). Hereli is the factor loadings and Qi are the unique/error variances (Chin et al., 1996).

rc ¼

Xki¼1

li

!2

Xki¼1

li

!2

þXki¼1

ui

: ð4Þ

The composite reliability is used to assess the reliability of the latentvariables. Cronbach’s a could have been used instead but this measure is

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calculated under the assumption of tau equivalence among the measures andtherefore composite reliability will provide a better estimate of the truereliability (Chin et al., 1996). In this case the composite reliability of thelatent variables are above 0.90 except for “Conditions of Work” which is justbelow 0.85. This is satisfactory and the latent variables are therefore thoughtto be reliable.

The second measure shown in Table II is average variance extracted (AVE)given by equation (5). This measure calculates the amount of variance capturedby the latent variables in relation to the amount due to measurement error(Fornell and Cha, 1994):

Composite reliability AVE R 2

Image 0.9383 0.8353Senior management 0.9421 0.8028Immediate superior 0.9475 0.8577Cooperation 0.9182 0.7895Conditions of work 0.8484 0.4876Motivation and satisfaction 0.9450 0.8113 0.7131Loyalty 0.8681 0.5299 0.6930Total for model 0.6900

Table II.Fit-measures for the

empirical model

Figure 2.Empirical results for The

Nordic EmployeeIndexe

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AVE ¼

Xki¼1

l2i

Xki¼1

l2i þ ui

� � : ð5Þ

In this case the AVEs are all above 0.5 except for “Conditions of work”. Ananalysis of the individual items showed that the item dealing with job securityis the main reason for this. This might be due to specific structure of the labourmarkets in the Nordic countries. In these countries the labour market is highlyregulated and employees are therefore guaranteed some degree of job security.Therefore job security might not be as important for them as for employeesfrom other cultural settings.

This problem could be solved simply by omitting this item from thequestionnaire but. However, since the purpose of The Nordic Employee Indexeis to develop a generic model applicable across cultural differences the item hasremained apart of the “Conditions of work” construct.

The third and last fit-measure in Table II is the R 2s of the latent endogenousvariables. This measure express the proportion of variance in the latentendogenous variables explained by the structural relationships (Fornell andCha, 1994) just as in simple regression. The two R 2s stemming from thisanalysis are both quite high so the fit of the model is also satisfactory on thisaccount.

The level of satisfactionBased on the overall model indices for intrinsic work motivation and jobsatisfaction have been calculated on a 0-100 scale. It is these two indices thatwill be used to test the eight assumptions in the following. When calculatingindices the respondents have been weighted with respect to region, sex, age aswell as education in order to make the results more representative.

The first assumption, A1, to be tested is whether or not Danish workersreport a higher level of job satisfaction than workers from the other Nordiccountries. Results on both job satisfaction and intrinsic work motivation for allfour Nordic countries are shown in Figure 3. The overall Nordic result iscalculated as a weighted average of the four countries so that the result isrepresentative for the Nordic countries as a whole.

From Figure 3 it is evident that A1 can be confirmed. Danish workers reporta significantly higher level of job satisfaction ( p , 0.001). The differences injob satisfaction can almost be replicated in internal work motivation althoughthere is no significant difference between the reported levels from Danish andFinnish workers in this instance ( p = 0.929). This indicates that job satisfaction

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and internal work motivation is highly related and at the overall Nordic levelthe correlation between the two concepts is 0.795.

With respect to both job satisfaction and internal work motivation Swedishworkers report significant lower levels ( p , 0.001) than workers from otherNordic countries and this is surprising since previous research showed thatreported job satisfaction in Sweden was at the same level as Norway(Sousa-Poza and Sousa-Poza, 2000).

The reasons for these conflicting results can be twofold. First the samplesizes in the previous research were a lot lower (Sousa-Poza and Sousa-Poza,2000) than in The Nordic Employee Indexe study. Second, the results reportedin the previous research do not appear to have been weighted with respect toregion, sex, age as well as education in order to make the results morerepresentative.

Nevertheless if the trend from the sited study holds true one would actuallyexpect that employees from a large number of countries would evaluate theirjob situation worse than the Swedish employees do if The Nordic EmployeeIndexe was expanded to other countries (Sousa-Poza and Sousa-Poza, 2000).

The age effectThe next assumptions to be tested are the distribution of job satisfaction andintrinsic work motivation in age. The actual relationship between age and jobsatisfaction as well as intrinsic work motivation is shown in Figure 4.

It is obvious that the relationship between age and job satisfaction and ageand internal work motivation is far from u-shaped in the Nordic countries. In

Figure 3.Job satisfaction and

intrinsic workmotivation in the Nordic

countries

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fact the relationship is close to being perfectly linear. A simple linear regressionmodel is significant ( p = 0.01) for both satisfaction and motivation with R 2s of0.929 and 0.807 respectively. A2 and A3 have therefore not been confirmed inthis Nordic study.

In this respect the labour markets in the Nordic countries are more similar tothe US labour market than the UK labour market, since a linear relationshipbetween age and job satisfaction has previously been found in US studies(Clark et al., 1996).

Other characteristicsIn Figure 5 difference in job satisfaction and intrinsic work motivation aregiven for the rest of the employee characteristics in focus in this study. Basedon Figure 5 the rest of the assumptions, A4-A8, can be tested.

A4 stated that women would be more satisfied with their job than men. Thisassumption is not supported by the Nordic data since women and men appearto be equally satisfied with their job ( p = 0.906). With regard to intrinsic workmotivation women appear to be more motivated but the difference between thegenders is not significant ( p = 0.172).

The reason for the difference between this study and previous studiesreporting a gender effect might be that the Nordic labour market is ratherhomogenous with regard to gender. It might actually be a lack of homogeneitythat is the real reason for the reported differences in job satisfaction betweenthe genders in previous studies.

With regard to educational level A5 stated that highly educated employeesare less satisfied than other employees. From Figure 5 it is evident that this isthat case in the Nordic countries ( p, 0.001) so A5 is confirmed. In this context

Figure 4.The distribution of jobsatisfaction and internalwork motivation by age

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the group of highly educated employees consists of those with a universitydegree.

An interesting aspect is that although the employees with a high educationare less satisfied they are more motivated ( p = 0.03). A6 stated that educationallevel should have no impact on intrinsic work motivation and therefore thisassumption has been disconfirmed by this study. The reason for this paradox

Figure 5.Difference in job

satisfaction and intrinsicwork motivation

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might be that the highly educated have more diversified and challenging tasksthat can motivate them despite their lower level of satisfaction.

From Figure 5 it is evident that A7 is also confirmed by this study.Employees in managerial positions are significantly more satisfied ( p , 0.001)than regular employees and the same is true for their intrinsic work motivation( p , 0.001). The reason for this higher level of job satisfaction amongemployees in managerial positions might be that they to a larger extent are ableto change elements of their vocational situation that they find unsatisfactory.

As was the case for the highly educated the employees that holdsmanagerial positions have more diversified and challenging tasks and thismight be the reason for the relative high level of intrinsic work motivationamong managers.

The last assumption to be tested is A8. This assumption stated that jobsatisfaction should decrease with company size and results from the Nordiccountries are shown in Figure 5. From these data it is clear that there is nosignificant difference in the reported levels of job satisfaction among employeesfrom companies with less than 50 employees and from companies with 50 to499 employees ( p= 1.000).

The expected decrease in job satisfaction with company size occurs forcompanies with 500 or more employees. Employees from the largest companiesreport significant lower levels for both job satisfaction and intrinsic workmotivation ( p , 0001). Assumption A8 that job satisfaction decreases withcompany size is therefore partially confirmed by this study in the Nordiccountries.

Concluding remarksThe aim of this paper was study the literature and test assumptions regardingthe differences in intrinsic work motivation and employee/job satisfactionamong employees with different characteristics. These assumptions wherethen tested on data from 9,623 employees in the Nordic countries.

Previous research has shown that Danish workers are more satisfied thanworkers from the other Nordic countries and this was confirmed by this study.Other previous findings that were confirmed by this study includes thatemployees with a high education are less satisfied, that managers are moresatisfied than regular workers and that job satisfaction decreases withcompany size.

Job satisfaction between the genders has also been analysed in this studyand men and women in the Nordic countries were found to be equally satisfiedwith their job. This contradicts previous findings where women were found tobe significantly more satisfied than men.

Furthermore this study on employees from the Nordic countries found thatjob satisfaction and intrinsic work motivation are linear in age and that

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employees with a high education report higher levels of intrinsic workmotivation. These findings are also in conflict with previous findings.

It is clear from this study that job satisfaction and intrinsic work motivationare not globally uniform concepts and there is a need for further researchwithin this area especially on the differences between different culturalsettings. Therefore this study is now being expanded in an attempt to establisha European Employee Index as a European standard for measuring employeeassets.

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