Organizational commitment of employees in enterprises in Dong Nai Province

ABSTRACT:

This study examines the factors influencing organizational commitment of employees working for enterprises in Dong Nai Province. By analyzing primary data sets which were collected from 203 employees, the study finds out that the organizational commitment is significantly affected by the perceived job satisfaction, the perceived leadership styles and the perceived emotional of employees. It is important for the human resource management system of each enterprise to be aware of predictors affecting the organizational commitment of their employees in order to have appropriate management policies.

Keywords: job satisfaction, leadership style, emotion, organizational commitment.

1. INTRODUCTION

For all professional and nonprofessional organizations, organizational commitment is an important research topic of human resource management, having both practical and theoretical implications. Organizational commitment behavior plays an important role in supporting and promoting employment outcomes of human resources in the organizations. The Industrial Revolution 4.0 is associated with technological breakthroughs, internet, digital, virtual reality will completely change in the field of human resource management, and studies in organizational behavior contributed to the understanding of the subjective dimension of work and its impact in performance and commitment. Therefore, the identification and assessment of factors affecting the degree of attachment of employees in enterprises are very important to ensure the stability of human resources.

Organizational commitment has been the subject of several studies, have received a great attention from administrators, researchers, and many conceptualizations and measures have been proposed and tested in the prediction of employees’ commitment in organizations (Becker, 1960; Mowday, Steers & Porter, 1979; O'Reilly & Chatman, 1986; Meyer & Allen, 1991). The current reality shows that organizations in industry are facing the departure of good employees who are not committed to the organization and empirical research on the commitment of employees in organizations has not been focused. Therefore, factors that influence organizational commitment behavior of employees in enterprises need to have empirical research to identify.

This study aims to analyze the factors that influence organizational commitment behavior of employees in enterprises in Vietnam based on the structural equation model approach. The structure of the article consists of five parts: (i) introduction, (ii) review of literature, (iii) research methodology, (iv) results and discussion, and (v) conclusions.

2. REVIEW OF LITERATURE 2.1. Organizational commitment

Organizational commitment reflected in efforts to complete the task, is proud to be a member of the organization and loyalty to the organization. When the persons’ extraneous interest exists in consistency line, it becomes a commitment (Becker, 1960). Organizational commitment is a degree of attachment to the organization is called commitment (O'Reilly & Chatman, 1986). It has three major components: (i) a strong belief in the organization and acceptance of the organizations’ goals, (ii) a willingness to expert considerable effort on behalf of the organization, and (iii) a definite desire to maintain organizational membership (Mowday, Steers & Porter, 1979).

Major three dimensions of commitments are complaining, identification and moral (O'Reilly & Chatman, 1986). Organizational commitment is a psychological contract that describes the employees’ relationship to the organization and is meaningful for decisions to continue or stop being a membership of the organization, which focused on the three psychological states of commitment: (i) Affective commitment means that the employee wants to stay in the organization from their sincere feelings, (ii) Continuance commitment refers to the perception of the involved costs when leaving the organization, they realize that it has no chance of finding a better job, and (iii) Normative commitment of personal responsibility or the ethical standards they pursue to work in the organization (Meyer & Allen, 1991). Defining it as a positive evaluation of organization and purpose of work is toward the goal of the organization (Sheldon, 1971). Describing it as supporting, giving affection for the organizational goals and values, the role of the employee is to work for the pure goals and values related to the organization (Buchanan, 1974).

There have been many efforts from research to identify factors that explain the organizational commitment behavior of employees in the organizations. Various research has been done to understand factors that trigger employees to stay in the organization (Maslow, 1943; Herzberg & Mausner, 1959; Becker, 1960; Mowday, Steers, & Porter, 1979; O'Reilly & Chatman, 1986; Meyer & Allen, 1991).

2.2. Job satisfaction

A Theory of Human Motivation of Maslow (1943), Alderfer's Conception of Existence, Relatedness, and Growth (ERG) needs Theory (1972), Equity theory of Adam (1963) and Herzberg, Mausner and Snyderman (1959) emphasized the important work to meet the different needs of employees such as pay, career advancements, work, environment, recognition, empowerment which influence their behavior in the organization, satisfaction and commitment. Job satisfaction is a good feeling an individual perceives toward their job (Stajkovic & Luthans, 1998). Numerous studies have been done to see the positive link between job satisfaction and the level of organizational commitment (Weiss, 1967; Smith, Kendall, & Hulin, 1969; Mowday et al., 1982; Schjoedt, 2005; Moser, 1997; Irving, Coleman & Cooper, 1997; Currivan, 1999; Firth, Mellor, Moore & Loquet, 2004; Tella, Ayeni, & Popoola, 2007 ; Zhang, Lee & Zou, 2010; Enache, Sallán, Simo, & Fernandez, 2013; Saha, 2016). Job satisfaction and commitment finally leads to lower the employee turnover (Lee, 1999).

Hypothesis H1a: Perceived income and equity positively influence organizational commitment of employees in enterprises in Dong Nai province, Viet Nam.

Hypothesis H1b: Perceived career advancement positively influences organizational commitment of employees in enterprises in Dong Nai province, Viet Nam.

Hypothesis H1c: Perceived recognition positively influences organizational commitment of employees in enterprises in Dong Nai province, Viet Nam.

Hypothesis H1d: Perceived empowerment positively influences organizational commitment of employees in enterprises in Dong Nai province, Viet Nam.

Hypothesis H1e: Perceived working environment positively influences organizational commitment of employees in enterprises in Dong Nai province, Viet Nam.

2.3. Leadership styles

Bethel (1995) argued that leadership has a strong ability to affect employee. Leadership is divided into two types transactional and transformational leadership (Bass, 1997). Hellriegel and Slocum (2006) explained that transactional leadership based on three primary components; contingent reward, active management by exception and passive management by exception. Tichy and Devanna (1986) presented characteristics regarding the estimation of transformational leadership, including qualities, courage, openness, values, learning and ability of visionary. Leadership style is also reflected in the level of interest of an employee in a higher position for an employee in a lower position in an organization (Currivan, 1999). Leadership styles include the attitude, interest, words, gestures, actions that superiors or administrators are for their employees. When employees feel well treated, they receive the attention, support, sympathy and appreciation from their superiors, they will strive for the work and desire to contribute more to the organization (Currivan, 1999; Scheweizer & Petzelt, 2012). Purvanova, Bono, and Dzieweczynski (2006) explained that transformational leadership played a very important role in creating job commitment. Akinboye (2005), and Lo, Ramayah and Min (2009) explained that positive behavior of leaders helps in creating motivation and employee commitment. Swanepoel, Eramus, Van Wyk and Scheck (2000) describe the organizational commitment is encouraged with the leadership style for the successful implementation of business strategies to achieve the organizational goal.

Hypothesis H2: Perceived leadership styles positively influence organizational commitment of employees in enterprises in Dong Nai Province, Viet Nam.

2.4. Emotion of employees

Morris and Feldman (1997) provided direct empirical evidence that emotional dissonance is associated with higher emotional exhaustion and lower job satisfaction. Wharton’s (1993) examination of the emotional employees offered results that often directly contradict earlier studies, emotional employees are positively related to job satisfaction. Ashforth and Humphrey (1993) suggested that emotional employees actually might make interactions more predictable and help employees avoid embarrassing interpersonal problems. This should, in turn, help reduce stress and enhance satisfaction of employees in organization.

Hypothesis H3: Perceived emotion positively influences organizational commitment of employees in enterprises in Dong Nai Province, Viet Nam.

3. RESEARCH METHODOLOGY

Structural equation modeling (SEM) was used to estimate parameters. There are 32 items in measure the variables of the research model (see Table 2). All items are measured by 5-point Likert scales, which were 5 – strongly agree, 4 – agree, 3 – not sure, 2 – disagree and 1 – strongly disagree.

Hair, Black, Babin &Anderson (2010) indicated that the sample size must be at least 100 in order to use the Exploratory Factor Analysis (EFA). In addition, for Confirmatory Factor Analysis (CFA) and Structural Equotion Model (SEM), Anderson and Gerbing (1988) suggested a sample size at least 150 to obtain parameter estimates of practical use. Bentler & Chou (1987) proposed that the ratio of a sample size to the number of free parameters may be able 5:1 under normal theory, especially when there are many indicators of latent variables. In this study, the authors use a sample of 203 employees were selected by non-probability sampling methods (convenience sampling technique) at some large enterprises in Dong Nai province. Table 1 show the diversity of the sample.

Table 1. Differences in demographics

Source: Authors’ Calculation

4. RESULTS AND DISCUSSION 4.1. Reliability and Validity

Maximum Likelihood Estimation (MLE) is used for determining goodness of fit of the model. The estimation results confirmed that the model is sufficiently compatible with the data refer to relative indicators: Chi-square = 492.935, df = 377, p = 0.000 (<0.05) was still acceptable due to the large sample size, Chi-square/df = 1.308 (Segars & Grover, 1993); GFI = 0.868, TLI = 0.949, CFI = 0.956 (Bentler & Chou, 1987; Segars & Grover, 1993; Chin & Todd, 1995), and RMSEA = 0.039 (Taylor, Sharland, Cronin, & Bullard, 1993; MacCallum, Browne, & Sugawara, 1996); Segars & Grover, 1993).

The reliability and validity of indicators in the model are tested by system of criteria. As can be seen from Table 2, the lowest Cronbach’s Alpha value is 0.775, exceeding the cut value of 0.70 recommended (Nunnally & Burnstein, 1994; Hair, Black, Babin & Anderson, 2010). The composite factor reliability coefficients of the constructs ranged from 0.775 to 0.857, which met the standard of 0.70 as suggested by Fornell and Larcker (1981).

Convergent validity was estimated by factor loading. The value of Kaiser-Mayer-Olkin (KMO) was 0.865 (between 0.5 and 1.0) which means that data is significant for conducting a factor analysis. All loadings of variables are higher than the 0.50 (see Table 2). According to Hair, Black, Babin, and Anderson (2010), loadings ± 0.50 or greater are considered practically significant.

Table 2. Results of factor analysis and reliability tests

Source: Authors’ Calculation

The average variance extracted for each construct is at 0.572 or higher, exceeding the 0.5 benchmark, which refer to the discriminate validity is adequate (Fornell & Larcker, 1981). In addition, discriminate validity is confirmed if the diagonal elements are significantly higher than the off-diagonal values in the corresponding rows and columns. The diagonal elements are the square root of the AVE score for each construct.

Table 3. Correlation

Source: Authors’ Calculation

4.2. Hypothesis Testing

The estimation results show that theoretical models are quite consistent with market data, appropriate theoretical models: Chi-square = 382.142; df = 278; Chi-square/df = 1.375 (Kettinger, Lee, & Lee, 1995); GFI = 0.881, TLI = 0.947, CFI = 0.955 (Chin & Todd, 1995; Segars & Grover, 1993) and RMSEA = 0.043 (Taylor, Sharland, Cronin, & Bullard, 1993) and can be used to test the relationship has raised expectation and assumptions in the model.

Figure 1. Structural equation modeling of organizational commitment in enterprises in Dong Nai province, Viet Nam.

Critical ration (C.R.) and P value were used to test the significance of hypotheses. C.R should be greater than 1.960 based on the significance level of 0.05. Table 4 shows the path coefficients along with their bootstrap values, and C.R.

Table 4. Showing path coefficients along with their bootstrap values, C.R

Source: Authors’ Calculation

In this study, 500 times analyzed by the Bootstrap method was conducted in order to test the stability of the estimates for the parameters. The results show that the difference from the initial estimate method does not have a significant difference compared to the estimates by bootstrap methods. All the difference in the estimates is not significant statistically. So the model estimates of reliability are guaranteed for the verification of model assumptions in this research.

As Table 4, Perceived income and equity has a significant effect on Organization Commitment with a path coefficient of 0.098. Perceived Career Advancement has a significant effect on Organizational commitment with a path coefficient of 0.211. Perceived Recognition has a significant effect on Organizational Commitment with a path coefficient of 0.063. Perceived Empowerment has a significant effect on Organizational Commitment with a path coefficient of 0.159. The Perceived Working Environment has a significant effect on Organizational Commitment with a path coefficient of 0.123. The Perceived Leadership Styles has a significant effect on Organizational Commitment with a path coefficient of 0.132. Finally, Perceived emotion of employees has a significant effect on Organizational Commitment with a path coefficient of 0.156. Six hypotheses among seven hypotheses were supported in this study (Except Recognition has P > 0.05).

In addition, the authors perform a multi-group structural analysis, among different organization to find differences between organizations. The results of a multi-group structural analysis shows that, the model of factors affecting organizational commitment of the employees is not significantly different at the 5% level. Consequently, the invariant structural model of the factors that influence the organizational commitment of employees can be shared among all groups.

Results show that Perceived leadership styles, Perceived Emotion, and Perceived job satisfaction have a positive effect organizational commitment of employees in enterprises in Dong Nai province, Viet Nam. The results in this article are appropriate to the previous finding and conform with the theoretical models.

5. CONCLUSION

Organizational commitment is extremely important for any organization. However, experimental studies on organizational commitment of employees in enterprises in Vietnam have not received much attention. Especially in the context of the fourth industrial revolution, studies of organizational commitment of employees in enterprises are necessary. The study was done in the context of the organizational commitment of employees in enterprises in Dong Nai province, Vietnam. The research results show that there are six factors affecting on organizational commitment of employees: Perceived Income and Equity, Perceived career advancement, Perceived empowerment, Perceived working environment, Perceived Leadership Styles, and Perceived emotional of employees in enterprises. Human resource management system of each organization must be aware of predictors that affect organizational commitment of employees in their respective organization and from there, come up with appropriate policies.

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SỰ GẮN KẾT TỔ CHỨC CỦA NGƯỜI LAO ĐỘNG

TRONG CÁC DOANH NGHIỆP TẠI TỈNH ĐỒNG NAI

PHAN ĐẶNG NGỌC YẾN VÂN 1

LƯU NGỌC LIÊM 1

1 Khoa Quản trị - Kinh tế quốc tế, Trường Đại học Lạc Hồng

TÓM TẮT:

Nghiên cứu này nhằm đánh giá các yếu tố ảnh hưởng đến sự gắn kết tổ chức của người lao động trong các doanh nghiệp tại tỉnh Đồng Nai, Việt Nam. Thông qua việc phân tích dữ liệu sơ cấp được thu thập từ 203 người lao động tại các doanh nghiệp, kết quả nghiên cứu cho thấy sự gắn kết tổ chức phụ thuộc phần lớn vào sự hài lòng công việc, phong cách lãnh đạo và cảm xúc của người lao động. Hệ thống quản lý nguồn nhân lực của mỗi doanh nghiệp cần phải nhận thức được các yếu tố dự báo ảnh hưởng đến sự gắn kết tổ chức của người lao động trong tổ chức của mình và từ đó, đưa ra các chính sách quản lý phù hợp.

Từ khóa: hài lòng công việc; phong cách lãnh đạo, cảm xúc, gắn kết tổ chức.

[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ,

Số 11, tháng 5 năm 2021]