Factor Analysis: A Dimension Reduction Approach

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Factor Analysis – A Dimension Reduction approach Introduction: The study considers a Data Set that comprises of a random sample (n=1000) of call center representatives’ (CSRs) responses to a survey. Several demographic variables were captured as well as 36 variables measuring the role of ambiguity, role of conflict, work overload, work and family conflict, IT support, organizational commitment, job satisfaction, both extrinsic and intrinsic, and intention to quit. The selected variables for the study includes four from Extrinsic Job satisfaction (JE 1-4), four from Intrinsic Job satisfaction ( JI 1-4), five from Organizational Commitment (OC 1-5) and three from Intention to Quit (IQ1-3). Factor analysis is used mostly for data reduction purposes. That is to get a smaller set that consists variables, mostly uncorrelated, from a bigger set of variables having relatively high correlation among them. It also consists of creating indexes with variables that measure common things, theoretically. There are two types of factor analysis. One is known as Exploratory Factor Analysis and the other Confirmatory Factor Analysis. It is exploratory when we don’t have a pre-defined idea of the structure or how many dimensions are in a set of variables. It is confirmatory factor analysis when we want to test a specific hypothesis about the structure or the number of dimensions underlying a set of variables. Methodology The Factor Analysis is carried out for the 16 variables using SPSS. Steps to be followed in SPSS are as follows:  Click ‘Analyze’ and then select ‘Data Reduction’  Select Factor Analysis  Then incorporate all the variables in the under ‘Variables’ box.  Click ‘Extraction’ and then select ‘Principle Components’  Chec... ... middle of paper ... ...mponent is most highly correlated with the variable ‘I really care about the future of the company’ and it is least related with the remaining two components (Component # 1 and #3). The 3rd component is most highly correlated with the variable ‘I am unlikely to be looking for a new job in the next year’ and it is least related with the remaining two components (Component # 1 and #2) Hence we can shift our focus on the variables  The recognition one gets when doing a good job (Job Satisfaction)  I really care about the future of the company (Organization commitment) and  I am unlikely to be looking for a new job in the next year (Intension on new job) rather than concentrating on the whole 16 variables. That is, we have to mainly focus on job satisfaction, Organization commitment and intension on new job than the other areas of interest. *******END*******