Area of Study: Training & Development
Motivation to Learn Affects the Relationship between Management’s Role in Training Programs and Job Performance
Chapter 1 Introduction
Background of the study (management’s role in training programs based on literature) (discuss training program eg def, traditional, contemporary, significance)
The term "management" is defined as a group of people such as executives and other managers who are primarily responsible for making decisions in the organization. In a non-profit term, "management" might refer to all or any of the activities of the board, executive director and/ or program directors. Another common traditional view of "management" is getting things done through other people. Apart from the traditional view, the role of management is to support the employee’s performance and productivity through training and development.
In the contemporary view, human resource practitioners suggests that management needs to focus more on leadership skills such as establishing vision and goals, communicating the vision and goals, and guiding others to accomplish them. They also assert that leadership must be more facilitative, participative and empower in how visions and goals are established and carried out (McNamara, 2007).
According to the Mintzberg’s Managerial Roles theory, management roles in the organization include interpersonal roles, informational roles and decisional roles. Management role as a leader responsible for the motivation of subordinates and provide training to the employees (Coulter and Robbins, 2005). Traditional autocratic organization with its hierarchical management systems that forces performance out of its employees is outmoded.
The modern management encourages the practice of empowerment by letting workers make decisions and inspiring people to boost productivity (Allen, 1998). Nowadays, employee’s performance and productivity are enhanced through motivation and intensive training program. Effective training is a crucial developmental opportunities in attracting and promoting commitment among talented employees (Noe, 2003, cited in Buyens & Wouters, 2004).
Training programs is defined as a planned learning event in a systematic fashion that focuses on the work environment. From this point of view, the training process can be defined as the systematic acquisition of skills, rules, concepts, or attitudes that result in improved performance in the work environment. There has been a considerable research into the effectiveness of training (Baldwin & Ford, 1988). A study conducted by Guerrero and Barraud-Didier (2004) found a significant link between training and organizational performance. (cited in Tzafrir, 2006). There has been a major revolution in the world of training and development starting in the 1980s. Traditional vocational training is no longer effective and it is replaced by competence-based training. The concept of competence includes the element of observable knowledge, skills and understanding to ensure effective performance (Brookes, 1995).
When it comes to training, managers play a critical role before and after an employee sign up for a training course (Gittlen, 2001). Several researchers (e. g. Tsui, Pearce, Porter, and Tripoli , 1997) found training was associated with higher levels of employee affective commitment. Managers’ level of involvement in reviewing the training coursework could make a huge difference for the company’s return on its training investment and training transfer.
The manager’s role in training includes proactively identifying the strengths and weaknesses of employees, identify suitable training program, design suitable training coursework, develop training benchmarks and evaluate and communicate the outcome of training to the upper management and subordinates (Gittlen, 2001). Managers need to be personally involved in the training of their employees, since the nature and quality of the training directly relates to their effectiveness on the job.
Research has been revealed the importance of environmental factor such as management’s role when predicting individual attitudes and behaviours. Supportive management’s roles in training program may contribute to the positive individual attitudes and boost work performance. Employees are left without support, encouragement and motivation when the management is not involved in the training program.
This is the problem that most of the organization faces today. Without management support, the training often fails to transfer to improve the trainee’s attitudes and performance (Coates, 2007). Although management plays a significant role in training, the effectiveness of training is estimated to be low because there is little application of training results in actual work practices (Broad & Newstrom, 1992; Baldwin & Ford, 1988).
Further understanding of the relationships between managerial communication and employee’s attitudes and behaviours would be extremely valuable for organizations (Wilkins, 1989). Roberts and O’Reilly (1979, p. 42) propose the need for specificity in investigating communication in organizations by stating that “theories relevant to communication in organizations cannot be developed until facets of organizational communication are specified and some of their correlates identified”. (as cited in Goris, 2007).
In Australia many companies are currently addressing the issue of reward and recognition for employees as part of quality and continuous improvement programs, but there remain no general guidelines or descriptions of such programmes which are readily available (London and Higgot, 1997). Informal rewards such as non-monetary recognition is increasing today as an employee’s motivators. Informal rewards are given less research attention in the management literature and practice (Nelson, 2002).
Traditional rewards such as compensation and promotion are becoming less effective to motivate employees to achieve high performance and commitment (Nelson, 2002). As Drucker points out: “Economic incentives are becoming rights rather than rewards”. Merit raises are usually introduced as rewards for good performance and in no time it will become a right rather than rewards. Merit raises are always introduced as rewards for exceptional performance. In no time at all they become a right. To deny a merit raise or to grant only a small one becomes punishment. The increasing demand for material rewards is rapidly destroying their usefulness as incentives and managerial tools”. Thus, this situation might destroy employees’ learning motivation and transfer of training.
Motivation to learn is also one the critical determinant in the training effectiveness (Mathieu et al., 1993; Mathieu and Martineau, 1997; Tannenbaum and Yukl, 1992, as cited in Tsai & Tai, 2003). Some past studies suggested motivation to learn played a more determinant role than other individual factors in regard to training performance (Tai, 2006; Cheng & Ho, 2001). Post training motivation is also linked to the employee’s behavioural change (Noe, 1986, cited in Shoobridge, n. a.). Noe (1986) assumed that motivation affects trainee’s enthusiasm for training (energising), the direction of participants to learn and master training (directing), and the use of knowledge and skills on the job (maintenance) (cited in Nijman et al., 2006).
Goldstein and Ford (2002) propose that trainee factors like readiness and motivation to learn along with work characteristics such as opportunity to practice, organizational climate and supervisor support should be investigated in developing effective training program (as cited in Shoobridge, n. a). Those points emphasize the need for additional research about the role of motivation to learn in the relationship between management’s role and individual attitudes and behaviours.
Further research should be conducted to identify and remove the major impediments that prevent the effectiveness of training program. The importance of this study is to elaborate and integrate some of the key factors that can influence the effectiveness of training transfer. This study is also intended to extend previous researches that linked management’s role and individual attitudes and performance.
Background of management’s role in training programs in the studied organisation
The past 10 years have witnessed the increasing of research literature in the field of training and development. The training literature is characterised by a multidisciplinary (organisational psychology, business and management literatures) approach to training design, practice, research and evaluation (Shoobridge, n.a.). Most of past researches highlight the significant developments in training methodology, evaluation, theory (Salas and Canon-Bowers, 2001) and focused solely on the training instructional methods (Noe, 1986) (cited in Shoobridge, n. a.).
Early empirical research studying the effects of individual’s factors (eg trainee ability, personality, and motivation) and work environment on transfer of training is very few (Baldwin and Ford, 1988). Further, past researches focus in defining training program and what it is designed to achieve (Salas, 2001) instead of focusing on the influences of work environment.
In the past, training is perceived as an independent event (Salas and Canon-Bowers, 2001; Goldstein, 2002, cited in Shoobridge, n. a.). Traditional training focused on the trainer (Berge et al., 2002). Trainers are expected to demonstrate the link between training and organizational outcomes (Church & Waclawski, 2001; Hesketh, 1999), to evaluate training (Warr, Allan & Birdi, 1999), and to justify organizational investment in training programs (Baldwin & Ford, 1988; Salas & Canon-Bowers, 2001; Warr et al, 1999, cited in Shoobridge, n. a.). Gill (1995) analyzed traditional program-driven training and found the role of the training department is to conduct the need analysis and set the goals which are defined as learning outcomes.
Recent studies (direct effects model)
The fall of the Berlin wall and the opening of the communist bloc to Western capitalism increased the pace of globalization (Berge et al., 2002). Training and development reacted to the reality of globalization with an increased use of system approaches (McLagan, 1996). In recent years, training is perceived as having a strategic focus, as an event that occurs within organizational framework, custom designed to overcome employee’s deficiencies and to meet organizational outcomes (Salas, 2001; Goldstein, 2002).
Line managers have the responsibility to conduct needs analysis. The goals of the training programs are defined as business results, are based on performance, and are linked to strategic goals. Organization realized that well-designed training instruction is no longer guarantee performance. Training instruction is just one of many solutions to performance improvement (Berge et al., 2002).
Recently, more research has been done to explain individual, attitudinal, and environmental impacts on the transfer process and outcomes where some of them have shown high value relatively (Cheng & Ho, 2001). Recent studies also have focused to concerns over the “transfer of training problem” (Salas, 2001). Researchers have investigated various factors that might influence transfer of knowledge, skills and attitudes. Several researchers proposed both individual and organizational contextual factors as antecedents of learning and transfer of learning (Baldwin & Ford, 1988; Colquitt et al., 2000; Mathieu & Martineau, 1997).
Empirical studies supported the relationship between management roles (e. g. support, communication, training assignment) and transfer of training (e. g job performance). For example, in two early studies made by Rouiller & Goldstein (1993) and Tracey et al. (1995), they found that management trainees in supportive workplace were more likely to demonstrate trained behaviours compared to trainees in non-supportive workplace.
A thorough review of training prog literature – mediating model
State the nature of the problem that motivates you to further explore
Consistent with Noe’s (1986) observation, previous research on transfer of training has focused primarily on issues concerning training design. Most of the research is done specifically the appropriateness of various instructional methods. The issues of environmental characteristics such as the transfer climate (managerial support, managerial communication, and managerial rewards) have received less research attention. Despite recognition of the importance of environmental factors, empirical research examining the impact of these factors is very limited (Baldwin & Ford, 1988). Thus, the lack of research on work environment motivates the researcher to conduct this line of research.
Furthermore, Ripley stressed “A review of eleven best-selling introductory HRM textbooks from Australia, New Zealand, and the United States indicates that, generally, there is a heavy focus on individual factors and a lack of significant emphasis on the importance of work environment factors in effective training” (Ripley (n. d.), “Introduction” section, para. 1). The work environment characteristic such as the role of management in training is less emphasized. Work environment impacts individual behaviours in training transfer.
Moreover, human resource practitioner and training designer have given less attention to the impact of work environment in training design and implementation. As Ripley (n. d.) states “Impact of work environment factors is generally not taken into account in discussions of how training programs should be designed and implemented” (Ripley (n. d.), “Abstract” section, para. 1). It means the issue of work environment characteristics is neglected. He suggested that work environment issues should be taken into account when designing and implementing training program. Thus, this issue motivates the researcher to conduct a research base on work environment factors.
In addition, most organization suffers from “training transfer problem”. Trainees have high motivation to learn following the training. However, the motivation fades away as they return to the workplace. Knowledge, skills and attitudes that they had learned from a training program could not be reinforce in the job. As Allan (2003) states “My experience with surveys that I have conducted is that the initial enthusiasm quickly wanes once the trainees return to the reality of their workplace” (“Introduction” section, para. 7).
In Australia, companies spend up to five billion dollars in training and development but only 20 percent of expenditure actually giving benefits to the companies (Allan, 2003). While in the United States, it is estimated that organizations spend up to USD 100 billion on training and development annually. However, not more than 10 per cent of the spending results in transfer to the job (Baldwin & Ford, 1988). The findings suggest that training transfer problem is a global issue that should be addressed.
Noe (1986) suggested that motivation to learn and attitudes are malleable individual difference factors that play a critical role in achieving training effectiveness. Although there is an existence of preliminary support for the relationship between contextual factors and learning outcome (Tracey et al., 1995) and between work environment and training motivation (Tracey et al., 2001), researchers suggests further exploration of the role of motivation in the relationship between contextual or environment factors and various training outcomes.
Tracey et al. (2001, pp. 20-21) state: “Future research should examine the impact of training motivation on other types and levels of effectiveness criteria.” Thus, this research is not only replicate previous studies but also responds to the calls from other researchers to further explore the roles of motivation to learn in the relationship between work environment (management’s role) and employee’s attitudes and performance.
Objective of the study
1.4.1 General Objective
The general objective of this research is to examine the effect of motivation to learn in the relationship between management’s roles and individual attitudes and behaviours.
1.4.2 Specific Objectives
- To determine the effect of motivation to learn in the relationship between managerial support and individual job performance
- To determine the effect of motivation to learn in the relationship between managerial communication and job performance
- To determine the effect of motivation to learn in the relationship between managerial recognition and job performance
- Research framework
Provide theoretical evidence before drawing a conceptual schema
Motivation to Learn/transfer
Provide empirical evidence to support each hypothesis
(at least 1 case study/survey for 1 hypothesis)
H1: Motivation to learn affects the relationship between managerial support and job performance
H2: Motivation to learn affects the relationship between managerial communication and job performance
H3: Motivation to learn affects the relationship between managerial recognition and job performance
- Definitions of term
Conceptual definitions of term – language/organisation/hr perspective
1.7.1 Managerial support
The Oxford Advanced Learner’s Dictionary defines “support” as “help or encouragement given to somebody or something especially in a difficult situation”. In human resource perspective, managerial support is defined as immediate supervisor provides and facilitates the transfer of employee’s knowledge, skills and attitudes. It is the extent to which supervisors behave in a way that is optimises employees’ use on the job of the knowledge, skills and attitudes gained in training (Nijman, 2004). Managerial support can be in a form of verbal and non verbal cues. Verbal and non verbal cues include encouragement to attend, goal-setting activities, reinforcement activities, and modelling of behaviours (Baumgartel, Reynolds & Pathan 1984; Huczynski & Lewis, 1980; Maddox, 1987).
In this study, managerial support is defined as immediate supervisor gives encouragement to the subordinates to attend training program, goal-setting activities prior and after training program, reinforcement activities to encourage trainees apply newly acquired knowledge, skills and attitudes from training to the actual workplace, and modelling of behaviours as a non verbal cues to encourage trainees to apply knowledge, skills and attitudes.
1.7.2 Managerial communication
The Oxford Advanced Learner’s Dictionary defines “communication” as an act “to make one’s ideas, feelings clear to others; to exchange information, news, ideas, etc with somebody”. Communication is both an observable and a changeable supervisory behaviour (Wilkins, 1989). In organization context, Katz and Kahn (1978) provide a comprehensive categorization of the types of communication which take place from supervisor to subordinate. The five types of communication are job instruction, job rationale, procedures and practices, feedback, and indoctrination of goals. The relationship between supervisory communication and subordinate performance and satisfaction among professionals.doc
In this study, managerial communication is defined as immediate supervisor communicate the information about the specific training program to subordinates, discussion of what is expected to be learn in the training program, and provides constructive performance feedback to the trainees.
1.7.3 Managerial Recognition
The Oxford Advanced Learner’s Dictionary defines “informal” as “not official or not following established procedures”. The word “recognition” is defined as the act “to show official appreciation for somebody’s ability or achievements, for example by giving them an award”. Thus, informal recognition means to show appreciation to somebody through unofficial procedures.
In organization, recognition is used to show the company appreciates employees’ efforts, their unique gifts and contributions (Gentry, 2007). Tracey describes recognition as “intangible, non-monetary acknowledgement of outstanding performance in the form of praise, accolades, commendations, appreciations and tributes. It may be formal or informal”. (Gentry, 2007).
In this study, managerial recognition refers to manager provides an informal recognition when the trainees are able to practice the newly acquired knowledge, skills and attitudes to the workplace. Informal recognition program by the manager is communicated to all employees before, during and after the training program to motivate the employees.
Recognition are such as the manager congratulates subordinate who are able to do a good job, manager writes a personal notes for good performance, manager publicly recognizes employees for good performance, and manager hold a morale-building meeting to celebrate successes.
Motivation to Learn
The Oxford Advanced Learner’s Dictionary defines “motivation” as “the interest of somebody” or to cause somebody to want to do something. “Learn” means “to gain knowledge or skill by study, experience or being taught”. Motivation is typically defined as “variability in behaviour not attributable to stable individual differences or strong situational coercion” (Quin˜ones, 1997, pp. 182-3). Therefore, it is likely that trainees cannot obtain the full benefits of training without considering training motivation (Tai, 2006). Motivation to learn also influences the willingness of an employee to attend the training (Maurer and Tarulli, 1994; Noe and Wilk, 1993) and affects a trainee’s decision to exert energy toward the training program (Ryman and Biersner, 1975).
Motivation to learn is defined as a trainee has a desire and willingness to learn the content of the training program. An employee with high motivation to learn is likely to be able to learn the content of the training program and transfer the knowledge, skills, and attitudes to the workplace.
Motivation to Transfer
Motivation to transfer can be seen as the trainee’s desire to use what she or he has learned on returning to work. Short and long term training transfer.pdf
The Oxford Advanced Learner’s Dictionary defines “job” as “a particular piece of work or task”. “Performance” is “an action or achievement, considered in relation to how successful it is”. Therefore, job performance is an achievement in the context of profession. In organizational context, job performance is associated with transfer of training. Trainees’ who are able to apply the content of the training to the workplace is likely to perform well.
Job performance in this study means the training outcome and the ability of the trainee to apply newly acquired knowledge, skills and attitudes upon returning to the workplace.
Significance of the study
Significant to theory/body of knowledge
Another significance of the study is to provide a better understanding of the factors which would affect the transfer of training. This study could enhance our understanding of the problems underlying the transfer of training. A better understanding about the influence of motivation to learn and management’s role on individual behaviours could lead to improvement and enhancement in training program. Thus, it could promote transfer of training that leads to improvement in job performance.
Further, this study could support the relevant theories that support the relationship between management’s role, motivation to learn and individual behaviours. Besides that, the empirical findings of this study could support the previous researches. In fact, most of the theories and researches were developed and made in the context of western countries. More research should be made locally to determine whether or not the theories and findings can be applied in the context of our country.
Significant to research methodology
Additionally, this study has a significant impact to the research methodology. Empirical findings from literature review, survey questionnaires and in-depth interview could increase the validity and reliability of the study. With increased validity and reliability, errors can be minimized in the data collection procedure. This study could serve as a guideline for future researchers that try to extend in this line of research.
Significant to practitioners
This study also could assist organizations in designing the appropriate management’s role to maximizing the effectiveness of training transfer. The outcome of the study may serve as guidelines to human resource practitioners to develop a work environment that could motivate workers to improve their attitudes and performance. This study also aims to provide empirical evidence to all human resource practitioners about the effects of motivation to learn in the relationship between management’s role and employee’s attitudes.
Besides, this study would ensure the human resource practitioner, training designer, as well as co-worker to realize the importance of management’s role in contributing to the effectiveness of training. The trainer and designer of the training program can improve and identify the weaknesses of the present and future training program with the better understanding of management’s role factors that influence the transfer of training.
Research methodology & procedure
1.10 References (APA/Havard Style)
Chapter 2 Literature Review
Chapter 2 covers the literature review about the relevant theories and some of the past empirical researches that have been done on this research line. These theories and past researches will be used to explain about the relationship of the managerial roles, motivation to learn and job performance.
2.1 Conceptual Framework
Support (morale and material)
2.2 Training Program Defined
Early definition of training program is a planned learning experience which is designed to improve an individual’s knowledge, skills and behaviours (Campbell et al., 1970). In later years, training program is defined as a planned effort made by organization to facilitate an employee’s learning of specific knowledge, skills and attitudes to be successful in their job (Goldstein, 1992). Potential factor affect training.pdf
2.3 Role of Training Program
Purpose, approaches, significance & impact on org and employees
A strategic approach to training…..training program measurement.pdf
Purpose of Training Program
The purpose of a training program in organizations is to facilitate employees to learn, grow and cope with the issues that are important to them. Training program also help employees to gain knowledge, skills and attitudes to improve job performance and organization’s effectiveness (Tai, 2006; Treven, 2003; Ibrahim Mamat, 2001).
Training involves the changing of employees’ interaction with their co-workers and supervisors (Treven, 2003). Most of training program in organization is developed and provided by trainers, managers, and in-house training consultants. It can also be outsourced to external training providers (Ibrahim Mamat, 2001).
Green (1999) argue the main purpose of training is to foster the organization’s common culture, enhance employees’ commitment and attract good quality workers instead of just simply improving employees’ skills. Potential factor affect training.pdf. Training system should be in line with ongoing organizational process while training programs should be in in line with organizational strategic goals (Chen et al., 2007). Potential factor affect training.pdf.
Training Delivery Methods
Training is delivered in various methods depending on needs analysis. Managers will choose a method based on training objective (DeSimone, Werner & Harris, 2002; Ibrahim, 1993). It is important to consider employees’ current level of expertise before managers choose a training method (DeSimone, Werner & Harris, 2002). Training methods can be classified into three broad categories such as on-the-job training, classroom training (Robbins & Coulter, 2005; Treven, 2003; Ibrahim Mamat, 2001) and self-paced training (DeSimone et al., 2002).
On-the-job training (OJT) is the most common training conducted in the workplace (DeSimone, Werner & Harris, 2002). Trainees are required to perform the task right after a brief introduction to the task (Robbins & Coulter, 2005). OJT have advantages than classroom training because trainees have the opportunity to practice work task (DeSimone, Werner & Harris, 2002). Moreover, OJT reduces cost because organization doesn’t have to provide training equipment or trainer (DeSimone, Werner & Harris, 2002) and OJT have the ability of integrating job cycle method (Ibrahim Mamat, 2001).
Job rotation is defined as a formal and planned training program which allocates employees to perform various jobs in different departments. Trainees are usually supervised by the department supervisor. Job rotation is usually implemented to train employees about the different functional areas, career objectives and interests, (Treven, 2003) International training:training of managers for asgnment abroad.pdf. and getting exposure to variety of tasks (Coulter & Robbins, 2005). Job rotation requires trainees to learn more by observing and practicing new skills rather than receiving instruction (DeSimone, Werner & Harris, 2002).
Coaching is defined as informal and unplanned training and development activities provided by supervisors and peers (Harris, 1997). International training:training of managers for asgnment abroad.pdf. Trainees are working together with senior and experienced workers who provide information and support (Coulter & Robbins,….). Coaching should be viewed as supplement rather than substitute to formal training program (Treven, 2003) International training:training of managers for asgnment abroad.pdf.
Classroom training method is defined as “those conducted outside of normal work-setting” (DeSimone, Werner & Harris, 2002). Lecture method is the most common classroom training technique. In lecture, an expert in particular subject matter will convey information to the large audience. (DeSimone, Werner & Harris, 2002).
Lecture is aims to provide understanding to trainees rather than to upgrade skills or change attitudes (Ibrahim Mamat, 2001). Burke and Day (1986) suggest lecture training resulted in positive learning either conducted alone or combination with other methods. Earley (1987) found role playing and lecture methods are equally effective to develop skills among trainees. (as cited in DeSimone, Werner & Harris, 2002 )
Experimental methods consist of role play, case studies, and business games and simulations. The most popular experimental training method is role play. A case study is a training method that aims to develop trainees’ analytical and problem-solving skills by giving trainees a particular case that requires them to solve problem and make decision. (DeSimone, Werner & Harris, 2002). Business games and simulations aims to develop and refine problem-solving and decision-making skills.
Significance of Training Program
There are several reasons as to why training program is important to employees and organization. Training is critical to responds to the changes in the workplace and the workforce. Technology usage is increasing rapidly and the increasing of global business as well as continuing shift from manufacturing to service economy force organization to provide training. In term of changing workforce, the increasing of immigrant workers with limited educational background force organizations to provide training (Goldstein, 1989).
International training:training of managers for asgnment abroad.pdf. Training program is important to maintain organization’s competitiveness and improve employees’ productivity (Treven, 2003; Elangovan & Karakowsky, 1999). International training:training of managers for asgnment abroad.pdf. trainee n environment in training transfer.pdf
Employees gain extrinsic and intrinsic rewards such as skill development and performance improvement with proper training (Elangovan & Karakowsky, 1999). trainee n environment in training transfer.pdf. Organizations utilize training program as a tool to increase workers’ adaptability and flexibility which is increasingly important today (Tai, 2006). General self-efficacy and motivation.pdf
Training has become increasingly important as human capital, knowledge, and skills become competitive assets or tools within organizations, with the presence of the globalization of markets, increased diversity of the workforce, and the rapid entry of foreign investment into ThirdWorld countries (Zakaria, 2000; Bhagat and Prien, 1996).
The cost of investment in continuing training is considerable. Based on a survey on 550 enterprises in 42 countries conducted by the American Society for Training and Development in 2000 (Marquardt et al., 2002), training expenditures in Europe were between 2 percent and 2.5 percent of total expenses. American firms spend up to $US60 billion and Canadian companies spend about US$4 billion on training per year, and the average employee receives about 30 hours of training annually (Belcourt and Wright, 1996).
This show very clearly the important role training plays in the success of the organization and growth in productivity. Bartel (1994) tried to prove this concept by looking at the link between training and productivity using 150 firms from another survey of the Columbia Business School, and found that there is a positive effect of training on productivity.
We are fully aware that training is a key element for the success and growth in productivity of organizations as well as companies: this is why Noe and Ford (1992) and Schuler and Walker (1990) stated the importance of training as an integral part of the strategic planning process of the firm.
Potential factor affect training.pdf
- Management Role in Training Programs
- Management Support
def., elements, peranan & kesan pd individual attb & org.
Management support can be defined as immediate supervisor provides and facilitates the transfer of employee’s knowledge, skills and attitudes. It is one of the important work environment supports in the workplace (DeSimone et al., 2002) and is an important tool to facilitate employees’ transfer of training (Elangovan & Karakowsky, 1999).
Managerial support can be in a form of verbal and non verbal cues. It is a multidimensional construct, which could include encouragement to attend, goal-setting activities, reinforcement activities, and modelling of behaviours (Baumgartel, Reynolds & Pathan 1984; Huczynski & Lewis, 1980; Maddox, 1987).
Wexley and Baldwin (1986) suggest that managerial support can occur in term encouragement to attend training programs. Encouragement from managers has the greatest impact on employees’ training motivation, which in turn lead to training success (Guerrero & Sire, 2000). Motivation-training outcomes.pdf. Managers could support subordinates to attend particular training program by setting goals prior, during and after the training.
Moreover, reinforcement activities should be developed to ensure the trained behaviours will be retained. Rouiller and Goldstein (1993) identified that social cues such as the influence and behaviour of supervisors may affect the transfer climate. Indeed, supportive managers in training might affect trainee’s motivation to learn and lead to transfer of training.
There are numbers of past researchers that suggest managerial support affects learning motivation. For example, Facteau et al. (1995), Huczynski et al. (1980), Rouiller et al. (1993), Tracey et al. (1995), Warr et al. (1999) and Weiss et al. (1980) found that managers play a significant role in their subordinates’ training motivation.
def., elements, peranan & kesan pd individual attb & org.
Managers have the responsibility to communicate effectively with employees about the training program. Feedback is part of managerial support to enhance employees transfer of training (Elangovan and Karakowsky, 1999). Forza and Salvador (2000) state feedback from managers can provide the information about the type, extent and direction of errors so that they can be corrected by employees.
According to Forza and Salvador (2000), performance feedback provides direct and indirect guidance to employees. That is, direct guidance consists of providing the employees with the information about the consequences of actions, while indirect feedback consists of monitoring employees’ effort in a particular aspect of work (Forza and Salvador, 2000). Feedback is a series of an over time process in which employees receives, absorbs and use the information (London and Smither, 2002).
Managerial communication is found to be associated with motivation and performance improvement (Tai, 2006; Tsai and Tai, 2003; Lim and Johnson, 2002; London and Smither, 2002). Other studies (e. g. Vuuren, de Jong and Seydel, (2007), Boon and Arumugam (2006)) found managerial communication is linked to employees’ affective, normative and continuance organizational commitment. Informal verbal feedback from managers in addition to formal written feedback might motivate employees to improve their performance and behaviours (Daily and Govindarajulu, 2004).
Open and honest discussion about performance between managers and employees is critical in motivating employees to learn and promoting performance improvement (Tsai and Tai, 2003; Lim and Johnson, 2002). Tai (2006) suggests managers that provide realistic information to employees prior to the training will enhance pre-training motivation, which in turn will increase training motivation. Managers who are able to practice open and honest discussion might encourage trainees to feel easy to voice their comments and problems in the training program.
Thus, managers can improve future training program by reviewing the comments and problems raised by the trainees. Open and honest discussion also might demonstrate that managers are truly concern and priorities training. Employees that perceived the importance of training are motivated to learn and transfer the content of training to the workplace (Elangovan & Karakowsky, 1999).
This supposed importance stems both from notions of the effects of social support in general and from the works of industrial and organisational psychologists, who indicated supervisors to be among the most significant sources of feedback for employees on their performance (Van der Klink et al., 2001). Diff effects of sprvsr supp on training transfer pdf.
def., elements, peranan & kesan pd individual attb & org.
Training assignment refers to the employees’ participation to attend training program. “Participation” means the employees’ choice in making pre-training decisions (Quinones, 1997; Tannenbaum and Yukl, 1992; Wagner and Gooding, 1987; Wlodkowski 1985). In organization, management have the role to decide whether employees attend training program mandatory or voluntarily.
Pre-training decisions is whether employees’ have the choice to participate or not participate in training program. Pre-training decisions also means whether or not employees’ have a choice in selecting training program. Therefore, training assignment consists of whether employees’ are force by managers or voluntarily attend training programs (Tsai & Tai, 2003).
Previous research advocated mandatory training assignment lead to high training motivation (Tsai & Tai, 2006; Baldwin & Magjuka, 1991; Wagner & Gooding, 1987). Mathieu and Martineau (1997) suggest employee’s perceived “message” of the training program affects influence the relationship between training assignment and motivation.
For example, Mathieu and Martineau (1997) mentioned that they have developed a “safety climate” training program for a team of diverse employees at a nuclear power plant. At first, employees did not pay serious attention to the training program and considered it to be a waste-of-time exercise. However, employees soon realized that they were forbidden to leave the training site, and that, in fact, executive-level managers were invited to discuss relevant issues with them. Consequently, employees’ training motivation was much enhanced. Because of this finding, Mathieu and Martineau (1997) concluded that the influence of a training assignment (mandatory versus voluntary) on trainees’ motivation would depend on the perceived “message” of the program.
Choice in attending training: employees attend training programs for different reasons: the organization may deem training to be mandatory, the organization may recommend training while the decision to attend is left to the employee, or employees themselves may request training be provided. Employees offered a choice of entering a training program may develop a greater appreciation for this training than those ``forced'' into a program regardless of their personal interests.
Consequently, the motivation to learn will be higher when employees have a choice in attending training (Hicks and Klimoski, 1987). As a result, the motivation to transfer the newly acquired skills and knowledge would also be increased. PA2: Motivation to transfer training is positively related to the degree of freedom in attending the training.
Motivation to Learn Theories
General Definition & its application dlm organisasi & training.
e.g., adam,– definition, elements &
- Direct effects correlation with individual att & b (dlm konteks training).
- Indirect effects = linker/tanpa mtl tidak berlaku kesan individual at b (ref), such as JP (ref), Com (ref)
.g., locke,– definition, elements &
- Direct effects correlation with individual att & b (dlm konteks training).
- Indirect effects = linker/tanpa mtl tidak berlaku kesan individual at b (ref), such as JP (ref), Com (ref)
- Empirical evidence supporting the relationship between management role, motivation to learn and individual attitudes and behaviours
- Empirical evidence supporting the relationship between mgt support, motivation to learn & job performance
Beri direct effect support + motivation
Further research - mediating
2.5.1 Empirical evidence supporting the relationship between mgt communication, motivation to learn & outcome 2
Beri direct effect communication + motivation
Further research - mediating
2.5.1 Empirical evidence supporting the relationship between assignment, motivation to learn & outcome 3
Beri direct effect assignment + motivation
Further research - mediating
2.1.3 Managerial Recognition
Informal rewards and recognition are effective to motivate and encourage employees’ to improve their performance. It is also a powerful tool for managers to encourage employees’ motivation to learn in training program. Many studies show that employees want to be acknowledged and appreciated for a job well done. Informal recognition is less structured and it is very flexible and can be done on-the-spot. For example, a manager praises her subordinates on-the-spot whenever the subordinates perform well in their job. Recognition programs can range from simple thank-you, public recognition, personal congratulations notes and so on (Nelson, 2002)
Keller (1999) advocates employees are motivated to perform well if they receive positive recognition from their managers. Previous research indicated that intrinsic motivators such as recognition and praise from managers could positively impact employee’s attitudes and work behaviours (Ingraham and Barrilleaux, 1983; Romzek, 1985; Hill, 1991). Miller (1991) suggests that employees expect appreciation and recognition from supervisors, colleagues and even their families for their effort.
Motivation to Learn
Motivation is commonly divided into intrinsic and extrinsic motivation. Intrinsic motivation is an internal drive that directs the individual, while extrinsic motivation is an external environmental incentive that directs an individual to perform something. Amabile et al. (1994), Deci (1972) and Wiersma (1992) suggest that an employee can be considered intrinsically motivated if they perform a task for no apparent reward except the activity itself and when they perceived their behaviour is self-directed. Extrinsic motivation is primarily in response to something apart from the work itself. Extrinsic motivation may be in the form of support and communication from managers, rewards and recognition, status, money and so on (Amabile et al., 1994).
Recent researchers have suggested that trainees’ training motivation has impacts on the effectiveness of training outcomes. Elangovan and Karakowsky (1999, pg 273) state: “We believe that an employee's motivation plays a critical role in the ultimate success of a training program with regard to skill transfer.” Moreover, researchers have found that training motivation is strongly affected by managerial actions such as intentional or unintentional cues (Baldwin & Magjuka, 1991). Colquitt et al (2000) suggests that trainees with low motivation might fail to benefit from training even though they possessed ability to learn the training content. This implies that motivation to learn is an important aspect that managers should deal with.
Empirical study also supports the relationship between motivation to learn and transfer of training. For example, Tracey et al. (2001) developed a basic managerial knowledge and skills training program with managers from 40 hotels owned by a private organization. Their studies found that trainees’ motivation to learn positively influenced trainees’ reactions to the training program and their amount of learning. Another study made by Axtell et al. (1997) aimed at improving technical staff’s interpersonal skills at work found that trainees’ motivation to learn was positively influenced immediate and long-term transfer of training.
Job performance is the employees’ observable behaviour and actions in their work. It is also considered as the level of employees’ accomplishment in their work. Job performance is associated with training effectiveness and transfer of training. It is influence by the work environment (managerial support managerial communication, managerial recognition), training design (principles of learning and retention, sequencing, principles of training) and trainee’s characteristics (abilities, personal characteristics, motivation to learn, motivation to transfer) (Baldwin & Ford, 1988).
2.2 Theoretical Evidence supporting the relationship between Managerial Roles, Motivation to Learn and Job Performance (refer to Guerrero and Sire, 2002)
2.2.1 Adams’ Equity Theory
Adams’ (1963, 1965) equity theory can be used to support the relationship between managerial support, managerial recognition, motivation to learn and job performance. Equity theory advocates that employees are more likely to be motivated when they are treated fairly by managers. When employees feel they are treated unfairly, they will be not motivated. Adams’ equity theory extends beyond the individual self by incorporating influence and comparison of other people’s situation in forming a comparative view and awareness of fairness.
Equity, in the sense of fairness which commonly underpins motivation, is dependent on the comparison a person makes between his or her input to output (reward/investment) ratio with the ratio enjoyed (or suffered) by others considered to be in a similar situation. Employees will be likely to feel motivated when they feel their input to output ratio is equal to the ratio of their colleagues (Chapman, 1995)
Employees are motivated to learn the content of the training program if they feel that their inputs (effort, commitment, loyalty) is fairly rewarded by outputs (support, benefits, recognition). Additionally, if the employees feel their ratio of inputs to outputs are equal the ratio of referent others, they are likely to be more motivated. However, they will not be motivated if the ratio is less. Similarly, employees are motivated if they think that they received fair support from their managers to attend training program.
Adams’ equity theory also can be utilized to support the relationship between managerial recognition, motivation to learn and job performance. The employees’ behaviour is further increased if there is a positive relationship between performance and recognition. (Nelson, 2002) Informal rewards to recog performance.pdf. For example, when employees receive recognition for the job well done, they will perceived equity and motivated to learn in the training program.
2.2.2 Vroom’s Expectancy Theory
Vroom’s (1964) expectancy theory suggests that motivation can be measured by how much employees want something. Motivation is a combination of valence, expectancy and instrumentality. Valence is defined as the value of the perceived outcome; expectancy is the belief that one’s effort will result in attainment of desired performance; while instrumentality is the belief that if one does meet performance expectations, he or she will be rewarded. (Vroom, 1964). Vroom suggests that desired behaviour in a work setting will increased if an employee perceives a positive relationship between effort and performance.
Several researchers have been applied the expectancy theory framework in their studies to explain the process of how managerial support affects an employee’s training motivation. Farr and Middlebrooks (1990) suggest that managerial support positively influence learning motivation because it impacts trainee’s expectancies and instrumentalities. Meaning to say, a manager might cue the importance and implications of training through performance evaluations.
Besides, a manager may provide support such as encouragement to attend training program, goal-setting activities, reinforcement, and modelling of behaviour to motivate employees to attend training program. When managers manage to convey the importance of training to improve performance, employees will be motivated to learn the content of the training program and this will lead to transfer of training and subsequently performance improvement.
2.3 Empirical Evidence supporting the relationship between Managerial Support, Training Motivation, and Job Performance
Managerial support in training program has been identified as an important environmental aspect that affects transfer of training (Ford et al., 1992; Huczynski and Lewis, 1980; Chen et al, 2007). It is likely to be of central importance in creating a “transfer-friendly” climate (Axtell et al. 1997). Most of early researchers focus on the direct relationship between managerial support and transfer of training. Smith-Jentsch, Salas and Brannick (2001) conducted a study to examine variables that influencing transfer of flight training for 80 pilots in Naval Air Warfare Center.
The study indicated trainees who are provided with support from team leaders in the training demonstrated more trained behaviours (better performance) compared to trainees that received less support. Meaning to say, supportive team leaders positively correlated with trainees’ performance. Guerrero and Sire (2000) conducted a study about antecedents of training motivation with the sample size of 335 respondents in three large companies and a training organization. This study found that support from hierarchical manager positively influences employees’ training motivation (in term of instrumentality). Motivation-training outcomes.pdf.
Interestingly, Cromwell and Kolb (2002) suggest manager support directly affects transfer outcomes or indirectly through trainee’s motivation or different factors in the transfer climate. Facteau et al. (1995) studied about training transfer based on a sample size of 967 managers and supervisors. Outcomes of the study show a positive relationship between manager support and transfer outcomes. Manager support positively effects motivation to learn but have indirect effect on transfer outcomes. It is suggested that training motivation mediates the relationship between manager support and transfer outcomes. Support-motivation-outcome (facteau).doc (Nijman et al. 2006).
Chiaburu and Tekleab (2005) carried out a longitudinal study about training effectiveness with the sample of 119 trainees in a large organization located in United States. This study found a strong relationship between manager support and employee’s training motivation. Although the study did not found a direct relationship between training motivation and training transfer, the study revealed that training motivation interacted with performance goal orientation in influencing transfer of training and training generalization. Individual and contextual.pdf.
Nijman, Nijhof, Wognum and Veldkamp (2006) conducted a study about transfer of training with the sample size of 32 supervisors and 179 trainees who attended four different training programs in three organizations. This study found manager support has a positive effect on trainee’s transfer outcomes through motivation. Specifically, managerial support (emotional and instrumental support) indirectly influences transfer of training (knowledge, skills and attitudes) via trainee’s motivation to transfer. Consequently, trainee’s motivation mediates the relationship between managerial support and job performance.
2.4 Empirical Evidence supporting the relationship between Managerial Communication, Training Motivation, and Job Performance
Previous study found effective communication in the workplace between managers and subordinates play an important determinant of employee’s attitudes and behaviours. Increased communication from the manager is found to affects employee’s performance (Burke, 1970; Schuler, 1979; Winkler and Murphy, 1973; Smith and Brown, 1964). There are numerous past studies that confirmed managerial communication can influence motivation to learn and performance improvement.
Pavett (1983) found constructive feedback from the manager to be related to instrumentality, motivation to learn, role perceptions and performance. A study made by Martocchio and Webster (1992) about performance feedback and cognitive playfulness based on the sample size of 68 full-time employees in microcomputer training found positive feedback resulted in higher test performance and affective outcomes. Martocchio n Webster.doc.
Trainees that received positive feedback are more motivated to learn and apply their newly acquired knowledge, skills and attitudes to the workplace. Effective transfer of training might enhance their job performance. Longenecker and Stansfield (2006) carried out a two-month study about goal-setting and timely feedback involving a sample size of 310 workers at a manufacturing plant in Midwestern USA. This study confirmed feedback and goal-setting are associated with performance improvement. Specifically, the study supported timely feedback as well as goal-setting improved work performance, greater efficiency, and the establishment of more challenging goals.
Several researchers posited the significant role of training motivation in the relationship between communication and job performance. Sheela, Azman, Tan and Ong (2007) made a study about the mediating role of training motivation in the relationship between supervisor’s role and job performance with a sample size of 100 technical employees of Kuching Utara City Hall. Result of the study found communication (e.g., provide feedback, encourage discussion and openly deliver information on training) indirectly affects job performance through training motivation.
Lim and Johnson (2002) conducted a qualitative study involving 10 human resource practitioners who participated in training program for performance improvement technologies in Korea. This study revealed the most important work environment factors affecting training motivation and transfer of training are such as discussion between manager and subordinate on the use of new learning, manager involvement and familiarity with the training program and constructive feedback from manager. Lim n Johnson 2002.doc.
Tai (2006) conducted a longitudinal study about training transfer involving the sample size of 126 employees who entered a computer software operation and design training program. The study found managers training framing (e.g. manager communicate the importance of training program to subordinates) affects trainees learning and transfer motivation. That is, managers training framing predicts trainee’s self-efficacy and training motivation, which in turn affects their reactions, learning and transfer motivation. As a result, trainees’ training performance, transfer outcomes (Cheng & Ho 2001) and behaviours (Noe, 1986) will be improved.
2.5 Empirical Evidence supporting the relationship between Managerial Recognition, Training Motivation, and Job Performance
Although they are given little or no attention in management literature and practice, informal recognition is very effective to increase motivation and performance (Nelson, 2002). Some scholars believe that motivation is an intrinsic property of human nature rather than a behaviour to be instilled by management (Scholtes, 1995). Though, recent results of survey from US Council of Communication concluded that recognition for the job well done is the top motivator of employee performance (Sweatman, 1996).
In fact, a survey conducted by the Society of Incentive Travel Executives Foundation in 1992 found 65 per cent of the respondents ranked informal reward like “a pat on the back” by their managers as a meaningful incentive. This implies that motivation is not just influence by intrinsic factors but it is also influence by extrinsic factors.
In another study of 65 potential incentives, Graham and Unruh (1990) found that four out of the top five incentives ranked by employees as most motivating were initiated by their manager and based upon performance are such as the manager personally congratulates employees who done a good job, manager writes personal note for good performance, manager publicly recognizes employees for good performance, and manager holds morale-building meeting to celebrate employees successes.
Front-line managers’ recognition serves as a motivator for the employees to learn and motivate them to transfer their knowledge, skills and attitudes to the workplace. Results of the study by Xiao (1996) show verbal praise and promotion chances can moderately increase transfer outcomes that in turn will increase job performance. Another Chinese study on transfer of training by MBA graduates indicates that rewards and recognition enhance the trainee’s motivation to learn and performance improvement (Cheng, 2000). Those empirical findings suggest that managerial recognition indeed have a relationship with motivation to learn and job performance.
Empirical Evidence supporting the relationship between Management Training Assignment, Training Motivation and Job Performance.
Ayres (2005) conducted a study about training motivation based on a sample size of 156 workers in continuing professional education program. The respondents participated in 11 nursing CPE programs in North Carolina. This study found nurses who attended the training programs voluntarily have higher motivation to learn compared to nurses who are forced by management to attend the training.
A study conducted by Guerrero and Sire (2000) involving 335 samples from three large companies and a training organization found voluntary training assignment plays a minor role in the success of the training program. Specifically, employees’ voluntary action is positively influenced by intrinsic rewards. Instrumentality related to intrinsic rewards might affect employees’ training motivation, which in turn will enhance job performance. motivation-training outcome.pdf
Interestingly, while most research advocates voluntary participant in training positively influence training motivation, Tsai and Tai (2003) found inconsistent results. Tsai and Tai (2003) conducted a study in Northern Taiwan involving 184 trainees belonging from 18 banks who attended training programs offered by Taiwan Academy of Banking and Finance. The training program involved introductory banking and financial laws. Each of the training programs lasted for five to seven days and involves 20 to 40 trainees.
The study found employees have more training motivation when they were assigned to attend a training program by management than they made their choice freely. Management that force their employees to participate in training programs sends a clear message to employees that training is important. That is, mandatory training affects trainees’ training motivation through perceived importance.
Empirical Evidence supporting the relationship between Management Support, Training Motivation and Job Commitment
Cheung (2000) conducted a study of organizational commitment from non-Western societies involving 927 employees in eight high-technology organizations in Taiwan. This study found management support has strong reciprocal and positive relationship with organizational commitment.
Battistelli, Mariani and Bello (2006) conducted a study to examine the relationship between perceived organizational support and organizational commitment involving 687 employees. The study found perceived organizational support have a positive relationship with employees’ affective and normative commitment. Normative commitment to the org.doc.
Robertson, Lo and Tang (2003) studied antecedents of employees’ commitment based on a sample size of 1312 public employees from government bureaus and offices in China. This study revealed commitment among employees is influenced by management support. Robertson-antecedents of commitment in china.pdf
Ahmad and Raida (2003) studied about organization commitment involving local professionals in Malaysia. This study found availability of training, support for training, motivation to learn, training environment and perceived benefits of training have positive relationship with affective commitment, normative commitment, and overall organizational commitment. Conversely, support for training, availability of training and motivation to learn were not significantly correlated with continuance commitment.
Bartlett and Kang (2004) studied about organizational commitment with the sample size of 543 registered nurses in New Zealand and United States. This study found access to training, training frequency, training motivation, job, career, and personal related benefits from training, and supervisory support have a positive and significant relationship with employees’ affective and normative commitment.
Bartlett (2001) studied about attitudes towards learning and organizational commitment involving 337 registered nurses from five hospitals. This study found perceived access to training, supervisory support for training, motivation to learn, and perceived benefits of training have a positive relationship with affective organizational commitment. .doc
Empirical Evidence supporting the relationship between Management Communication, Training Motivation and Job Commitment
Boon and Arumugam (2006) studied the influence of corporate culture dimensions on employees’ organizational commitment involving 377 full-time employees from six semiconductor manufacturing company in Peninsular Malaysia. The study found corporate culture dimensions (e.g. communication, rewards and recognition, teamwork and training) are positively influence employees’ organizational commitment. The results revealed the communication was the most dominant factor that influenced employees’ organizational commitment. Corporate culture in Malaysia-commitment.pdf.
Brunetto and Wharton (2004) conducted a study employee commitment post-managerialism based on a sample size of 367 employees and nurses from five public and private sector organizations in Queensland, Australia. This study found a strong relationship between communication processes and job satisfaction and affective job commitment across cohorts. On the other hand, communication processes have a weak significant relationship with normative and continuance commitment. (does your talk affect your decision to walk(comm.-commitment.pdf)
Hutchison and Garstka (1996) conducted a study to examined antecedents of organizational commitment based on a sample size of 337 employees from three different organizations in southern California. This study proved that goal-setting and feedback influence commitment through employees’ perceived support from organization. (sources of perceived org support-feedback n goal-setting.doc)
Vuuren, de Jong and Seydel (2007) studied communication and commitment involving 456 employees from Dutch telecommunication services provider. This study found employees’ satisfaction with managers’ communication significantly influenced affective organizational commitment. Direct n indirect effects of sprsvr comm. N commitment.pdf
Saks (1995) studied about training program adjustment of newcomers and found post-training self-efficacy to some extent mediated the relationship between training and job satisfaction, organizational and professional commitment, and intention to quit the organization and profession. (self efficacy mediates training and adjustment.doc).
Self-efficacy: self-efficacy represents one's belief in one's ability to perform a task (Bandura, 1986). The level of self-efficacy positively affects task effort, persistence, expressed interest and the level of goal difficulty (Bandura, 1982), and has important implications for the facilitation of effective transfer of training. Trainees who lack sufficient self-efficacy will expend less effort in transferring training. A number of studies have shown that the enhancement of self-efficacy facilitates positive transfer of training (Frayne and Latham, 1987; Latham and Frayne, 1989).
Other studies have found that higher ``selfexpectancies'' lead to higher training performance (Eden and Ravid, 1982; Eden and Shani, 1982). In sum, employees with higher perceived self-efficacy in applying their newly learned skills and knowledge are more likely to transfer training than those with low perceived self-efficacy.
PA4: Motivation to transfer training is positively related to the level of selfefficacy of the trainee.
Trainee n environwmnt in training transfer.pdf
Empirical Evidence supporting the relationship between Training Assignment, Training Motivation and Job Commitment
Chapter 3 Research Methodology
The research methodology chapter explains about the research design, population and sample of the study, data collection procedure and data analysis procedure.
This study takes the form of quantitative survey. The primary research instrument is questionnaire form. The questionnaire form will be distributed to the respondents. The questionnaire form will be used to determine the relationship that exist between the independent variables (Organizational and work group support) and dependent variable (Training transfer). It is also used to determine the most dominant factor that influences training transfer. Secondary data in this study will be retrieved from indirect sources such as books, journals and related articles.
Population and Sampling
The minimum sample for this study is 500 respondents. This study will be conducted at various government organizations located at Kuching.
- Data Collection Procedure
An interview will be conducted before the questionnaire forms are distributed. An interview is done to design the suitable questionnaires for the respondents. All the questionnaires in the survey must be suitable to the respondents’ preferences. After the interview, pilot test will be conducted.
- Questionnaire Form
The questionnaire consisted of closed-ended questions both in English and Bahasa Malaysia. All measurements will be assessed using a five-point Likert-type scale (1 = Strongly disagree, 2 = Disagree, 3 = Neither agree nor disagree, 4 = Agree; and 5 = Strongly agree). The questionnaires will be design based on the conducted interview and literature review.
3.4 Data Analysis Procedure
Statistical Package for Social Sciences (SPSS) software will be utilized to analyze the collected data. Descriptive and inferential statistics will be used to describe and interpret the data.
3.4.1 Descriptive Statistics
Descriptive statistics will be used to summarize the demographic data in the form of frequency, mean, median and percentage. The demographic data in this study are such as the respondent’s gender, age and educational level.
3.4.2 Inferential Statistics
Inferential statistics consists of methods of drawing and measuring the reliability of conclusions about a population base on information obtained from the population. Pearson correlation and multiple regression analysis will be utilized in this study.
184.108.40.206 Pearson Correlation
Pearson correlation will be used to measure the relationship that exists between two variables. In this study, Pearson correlation will be used to test the relationship between organizational support, work group support and training transfer. The correlation can range from –1.00 to +1.00. A correlation of +1.00 represents a perfect positive relationship between the two variables.
In other words, as one of the variable increase, the other variable will also increase. On the contrary, a correlation of –1.00 represents a perfect negative relationship, indicating that as a score of one variable increase, the other decreases by a predicable amount. A correlation of zero indicates no relationship exists between the variables involved.
220.127.116.11 Multiple Regression Analysis
“Regression analysis is used when independent variables are correlated with one another and with the dependent variable” (Coakes & Steed, 2002). In this study, multiple regression analysis will be used to determine the most dominant factor affecting training transfer. Organizational and work group support will be tested by using multiple regression analysis.
This chapter discusses about the research design, data collection and data analysis procedure. This study is base on quantitative survey. Interview will be conducted before the questionnaire forms are distributed to the respondents. Data analysis procedure in this study consists of descriptive statistics and inferential statistics.
Allan, L. (2003). The myth of the silver bullet-and how to improve the effectiveness of training. Retrieved August 20, 2007, from Training Management Articles 2003 at the BusinessPerformanceWebSite: http://www.businessperform.com/articles/training_effectiveness.html
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Chapter 2 Literature Review
The preceding chapter highlighted the fact that pay administration issues are equally as important as pay design issues in affecting individual attitudes and behaviours via their impact on perceptions of justice. In compensation research literature, pay design issues are the main focus whereas pay administration issues are less emphasised. In effect, the importance of pay administration issues has been largely ignored and is in need of more investigation.
This chapter aims to define compensation, identify the role of the compensation system in achieving organisational and individual goals, review the impact of compensation decisions on individual attitudes and behaviours and examine major theories underlying the relationship between pay administration system features and individual attitudes and behaviours.
2.1 Compensation Defined
The meaning of “compensation” is varied and is dependent upon a number of factors including the culture, the organisation and the individual. In business and management dictionaries, the word “compensation” is defined as “payment for any services or items” (Rosenberg, 1983: 110), and “salaries, wages, employee benefits, and other financial advantages granted to employees for service rendered” (Cross, 1995: 68).
In Western countries compensation is mostly defined as salary and/or wage (Rajkumar, 1996), remuneration (Langsner & Zollitisch, 1970), reward (Anthony et al., 1993; Armstrong & Murlis, 1980 & 1994), and pay (Henderson, 2000; Milkovich & Newman, 1999; Wallace & Fay, 1988). On the other hand, Eastern countries such as China perceive that compensation is not wages and benefits, but “dai yu” (how you are treated or taken care of) (Milkovich & Newman, 1999).
The Japanese have a traditional belief that compensation is “kyuyo” (giving something) meaning that something is given by one’s superior (a feudal lord, an emperor, or a samurai leader). At present, Japanese business consultants substitute the traditional definition with “hou-syu” (rewards) which means that the concept of compensation has no associations with notions of superiors (Milkovich & Newman, 1999). Czechs understand compensation as “platit” (to pay, be worth) (Milkovich & Newman, 1999). These definitions highlight that each culture has different terminologies to describe compensation, but its basic meaning is “an exchange for something of worth”.
From an organisational perspective, compensation definitions also vary among organisations within the same and/or different countries (Henderson, 2000; Milkovich & Newman, 1999). Compensation is viewed as a segment of human resource management that emphasises planning, organising, and controlling the various types of payment systems for rewarding employees who perform their work or service. The kinds of rewards bestowed by employers are often based on the value of the job, the level of personal contributions, and/or the level of performance (Belcher, 1974; Maurer et al., 1995; Milkovich & Newman, 1999; Warner, 1997).
An organisational payment system consists of a variety of rewards and can be provided in various forms: monetary and non-monetary rewards, extrinsic and intrinsic rewards (Anthony et al., 1996; Armstrong & Murlis, 1980 & 1994; Cherrington, 1989; Hewitt Associates, 1991), direct and indirect payments (Deluca, 1993; Dessler, 1996; Mondy, Noe, & Premeaux, 1993; Rajkumar, 1996), or cash, non-cash and relational forms (Cascio, 1995; Milkovich & Newman, 1999).
Within organisations, individual employees have different interpretations of compensation (Adams, 1963 & 1965; Herzberg, 1959 & 1968; Maslow, 1943 & 1954; Rousseau, 1989 & 1995). Some perspectives emphasise that reward entitlements and obligations are determined according to the employment contract. A discrepancy between what is received and what is promised can be perceived as unfair and that can affect individual attitudes and behaviours (Levinson, Price, Munden, Mandl, & Solley, 1962; Morrison & Robinson, 1997; Robinson, Kraatz, & Rousseau, 1994; Rousseau, 1989 & 1995).
In this study compensation is defined as pay, remuneration or reward management where financial and non-financial payments are designed and administered by employers to reward the employees who perform work or service.
2.2 Role of Compensation System
A compensation system is an important human resource management function that may motivate employees to achieve organisational and individual goals. At an individual level, pay (such as financial and non-financial rewards) is strongly related to fulfilling an individual’s expectations and aspirations (Adam, 1963 & 1965; Cascio, 1995; Herzberg, 1959 & 1968; Maslow, 1943 & 1954).
For example, monetary and non-monetary rewards can be a powerful tool to capture the minds and hearts of workers. They can may strongly increase employee satisfaction and thus lead to increased productivity, bridging the gap between organisational and individual goals in an employment relationship (Cascio, 1995; Folger & Greenberg, 1985; Young, 1999).
At an organisational level, the role of pay systems is strongly influenced by traditional and contemporary approaches (Henderson, 2000; Kanter, 1989; Milkovich & Newman, 1999; Wallace & Fay, 1988). Traditional pay systems are typically developed based on a job approach where they are designed around cost control, internal equity, attraction, retention and motivating individual performance (Gomez-Mejia & Balkin, 1992a; Lawler, 1990; Ledford & Hawk, 2000; Schuster & Zingheim, 1992). This type of approach is viewed as a product of Taylorism (Henderson, 2000; Mahoney, 1989, 1991 & 1992).
Kanter (1989: 231) explains: "People's pay has been largely a function of the social and organisational positions they occupy. In traditional compensation plans, each job came with an assigned pay level, relatively fixed regardless of how well the job was performed or the real value of the performance produced for the organisation."
In this example, many scholars state that traditional pay systems only focus on pay distribution issues and their design process does not take an organisation’s strategic mission (such as innovation and cost leadership) into account. Such pay systems may be limited in attracting, retaining and motivating employees to meet organisational goals (Gomez-Mejia & Balkin, 1992a & 1992b; Lawler, 1995b; Lawler, Mohrman, & Ledford, 1998; Schuster & Zingheim, 1992).
Contemporary pay systems take these strategic business goals into account (Gomez-Mejia & Balkin, 1992a & 1992b; Kanter, 1989; Lawler, 1990 & 1992b; Schuster & Zingheim, 1992). As Lawler (1995b: 14) states, "The new pay argues in favour of a pay-design process that starts with business strategy and organisational design. It argues against an assumption that certain best practices must be incorporated into a company's approach to pay".
In this context, many contemporary scholars advocate that a fit between pay policy and an organisation’s strategy may motivate individuals to achieve organisational goals (Anthony et al., 1996; Henderson, 2000; Milkovich & Newman, 1999; Gomez-Mejia & Balkin, 1992a & 1999b). Pay systems may play effective roles if they meet three major requirements: (1) providing a sufficient level of rewards to fulfil basic needs. (2) maintaining equity with the external labour market, and (3) maintaining equity within the organisation (Adams, 1963 & 1965; Maslow, 1943 & 1954; Lawler, 1971, 1989 & 1977; Milkovich & Newman, 1999; Maurer et al., 1995).
Specifically, pay structures that are designed based on internal equity variables (such as corporate strategy, management philosophy, type of job, and level of productivity) (Arnault, Gordon, Joines, & Phillips, 2001; Cooke, 1994; Gomez-Mejia, 1988, 1992, & 1994; Singh & Agarwal, 2002) may motivate employees’ feelings of equitable treatment and thus lead to an increase in positive behavioural outcomes such as willingness to share new ideas for improving work or product, and decrease intention to seek other jobs, file grievances, form unions, go out on strike, or refuse to take on additional job responsibilities (Milkovich & Newman, 1999; Olalla & Castilo, 2002; Schwab, 1980 & 1985).
The way the pay system is administered also plays an important role in ensuring that the pay design features may strongly fulfil employees’ needs and that motivation is sustained (Adam, 1963 & 1965; Herzberg, 1959 &1968; Locke & Latham, 1990a & 1990b; Maslow, 1943 & 1954).
Recent studies have shown that employees’ perceptions of justice about pay procedures and distributions may not only increase satisfaction with pay but may motivate employees to achieve the objectives of the organisational pay system: efficiency (i.e., improving performance, quality, customers, and labour costs), equity (i.e., fair pay treatment for employees through recognition of employee contributions and employees’ needs) and compliance with laws and regulations (Gomez-Mejia & Balkin, 1992a & 1992b; Milkovich & Newman, 1999; Maurer et al., 1995; Schuler, Dowling, & DeCieri, 1993). Thus, it may help human resource managers to attract, retain and motivate good workers to increase and sustain organisational competitiveness in a global economy (Gomez-Mejia & Balkin, 1992a & 1992b; Henderson, 2000; Lawler, 1995b; Schuster & Zingheim, 1992).
Therefore, it appears that for the pay system to function effectively it is of paramount importance to concentrate on how perceptions of equity or fairness can be influenced.
2.3 Justice Theories
Although there are a number of theories which influence compensation decision-making, including Maslow’s Need Hierarchy (Maslow, 1943 & 1950); Herzberg’s Two Factor Theory (Herzberg, 1959 & 1968); Expectancy Theory (Porter & Lawler, 1968; Vroom & Yetton, 1973; Vroom, 1964 & 1973); and Reinforcement Theory (Skinner, 1963, 1969 & 1974), this thesis will focus on the role of justice theories in explaining the fairness perceptions in compensation management.
Moorman (1991: 845) states that “the belief of researchers who support the value of organisational justice is that if employees believe that they are treated fairly, they will be more likely to hold positive attitudes about their work, work outcomes, and their supervisors.” A number of theoretical frameworks assert that perceptions of and feelings related to justice can influence attitudes and behaviours in organisations (Cohen-Charash & Spector, 2001; Summers & Miller, 2000; Tang & Sarsfield-Baldwin, 1996).
For instance, equity theory (Adams, 1963 & 1965) explains how perceptions of fairness are developed in the context of the distribution and exchange of resources. Equity theory is based upon the notion that when inputs are not proportional to outcomes, an imbalance will be felt. Inputs can be skills, effort, time, experience and the like.
Outcomes are things received in from the organisation in exchange for the inputs and generally include pay, recognition, promotion and the like. Inequity creates a tension until it is corrected. Both inputs and outcomes are weighted by their importance to the individual, and therefore the level of inequity felt will be dependent upon the value of the outcomes (Adams, 1963 & 1965; Allen & White, 2002; Mowday, 1991; Young, 1999).
Equity evaluations are formed by comparing our own personal situation to another’s. Pay satisfaction may exist in the equitable pay condition where net differences between actual and expected pay are relatively minimised by a comparison standard (Adams, 1963 & 1965), or they believe that the amount employees received and the amount they think others received are equal (Lawler, 1981). If net differences show overpayment (overcompensated) or underpayment (under compensated) conditions, this may directly create inequity and thus lead to lower satisfaction with pay level (Adams, 1963 & 1965; Lawler, 1981).
When individuals feel inequity in the workplace a number of negative outcomes can result including reduced effort or performance. Many researchers have advocated that employees’ dissatisfaction with pay level may induce negative behavioural outcomes such as anger or guilt, and try to regain equity by altering inputs or outputs using a different comparison other, or psychological justifications (Adams, 1965; Dittrich & Carrell, 1979; Mowday, 1991; Werner & Mero, 1999). As a result, they will have decreased job satisfaction, productivity, production quality and performance, and increased turnover (Cowherd & Levine, 1992; Glass & Wood, 1996; Janssen, 2001; Pfeffer & Davis-Blake, 1992; Pfeffer & Langton, 1993).
Allen and White (2002) examined the equity sensitivity theory based on a sample of 240 business students at an urban public university and found that the Entitled group and the Benevolent group were not satisfied if they were paid less for doing the same amount of work as their referent. Specifically, if the Entitled group was assigned to work in an under-reward situation, they would decrease their effort or intent to transfer.
If the Benevolent group was assigned to work under the same situation they would reduce their effort, try to make their referent work harder, attempt to reduce their referent's pay, attempt to transfer or quit. However, this theory only tested individuals’ attitude to being paid less for working. Its findings supported Adam’s (1963) equity theory where feelings of inequity and dissatisfaction to pay level distribution can decrease employees’ effort and commitment to an organisation.
Distributive Justice. Equity theory falls into the category of distributive justice theories. Distributive justice refers to fairness as it relates to the outcomes of a process (deCarufel, 1986; Greenberg, 1996; Sweeney & McFarlin, 1993). In terms of the compensation system this relates to fairness in the actual distribution of rewards.
Traditionally, pay distribution research has advocated that feelings of distributive justice may induce positive behavioural outcomes (Cowherd & Levine, 1992; Davis & Ward, 1995; Martin & Bennett, 1996; Tremblay, Sire, & Balkin, 2000; Williams, 1995). Specifically, deCarufel (1986:181) wrote that ‘The allocation of rewards to organisational members is one of the most powerful forces affecting their behaviour.”
A study by Martin (1982) made a comparison between actual wages and experimental pay plans that were administered to a blue-collar (experimental) sample (n=100), a middle management sample, and a heterogeneous sample recruited by newspaper advertisement. The study indicated that employees’ feelings of injustice about the allocation of wage levels could increase feelings of deprivation.
The relative deprivation research literature demonstrates that feelings of dissatisfaction and perceptions of injustice about inequality in the type and amount of pay is based on a comparison of one’s outcomes (usually financial) rather than the outcomes of another individual or group. This may strongly influence the severity and type of relative deprivation experienced (Crosby, 1976, 1982 & 1984; Pettigrew, 1967). Deprivation may strongly influence employees’ satisfaction and/or perceptions of inequity (Martin, 1982; Mowday, 1991; Robert, Coulson, & Chonko, 1999; Runciman, 1966; Stouffer, Lumsdaine, Lumsdaine, William, Smith, Janis, Starr, & Cottrell, 1949) and thus lead to negative behaviours (Crosby, 1976, 1982 & 1984; Crosby & Gonzales-Intal., 1984; Martin, 1980; Martin, 1981 & 1986; Martin & Lee, 1992).
Positive feelings of distributive justice about pay allocations may increase employees' satisfaction and that may increase the satisfaction in performing a job. For example, social exchange theory (Blau, 1964) states that employees may respond more innovatively to higher levels of job demands when they perceive that their efforts are fairly rewarded by the organisation.
If they feel that rewards are not fairly paid, the higher levels of job demands may not motivate them to increase innovative work behaviour. If employees perceive fairness of the effort-reward interaction, that may positively influence his/her self-regulatory functions, sense of mastery, efficacy and esteem, and acts as a beneficial condition for affective job responses such as job satisfaction (Siegrist, 1996).
Positive feelings of distributive justice about pay systems may also increase commitment to the organisation. Summers and Miller (2000) examined the reciprocal relationships between justice and turnover intentions in a textile product company in the South-eastern United States. Data were collected at two times: Time 1 (310 employees) and Time 2 (180 employees) with a separation interval of 10 months. This study found that distributive justice (such as pay entitlement) strongly affected organisational commitment. Specifically, when employees perceived their contribution as fairly rewarded, it decreased their intention to leave (Alexander & Ruderman, 1987; Giacobbe-Miller et al., 1998; Konovsky & Cropanzano, 1991; Robinson et al., 1994).
However, perceptions of fairness are not only influenced by the distribution and exchange of resources, which is commonly liked to the design of the pay systems. Fairness can also be influenced by procedures used in the allocation of the process. This type of fairness is termed procedural justice.
Procedural Justice. Procedural justice is fairness as it relates to decision-making (Cropanzano, Byrne, Bobocel, & Rupp, 2001; Cropanzano & Greenberg, 1997, Greenberg, 1987a & 1987b).
Philosophers of justice such as Dworkin (1978) and Rawls (1971) argue that at the individual level, ethical issues such as respect and concern are critical elements of procedural justice as they address social/psychological needs for self-esteem, self-identity and affiliation (Folger & Cropanzano, 1998 & 2001). Procedural justice has instrumental value because it entails that long-term outcomes are protected due to the existence of a “level playing field” (Lind & Tyler, 1988; Thibaut & Walker, 1978).
The relational perspective of procedural justice holds that individuals will accept authority legitimacy and comply with the rules of the collective because people are valued by their authority figures and the collectives to which they belong (Colquitt, Noe, & Jackson, 2002; Lind & Tyler, 1988; Tyler & Lind, 1992).
Valued organisational outcomes associated with procedural justice are trust, job satisfaction, organisational commitment, intention to stay, absenteeism, turnover and organisational citizenship behaviours (Colquitt, Conlon, Wesson, Porter & Ng, 2001; Folger & Konovsky, 1989; Konovsky & Pugh, 1994; Sweeney & McFarlin, 1993; Tyler, Degoey & Smith, 1996).
Compensation research has mainly focused on outcome fairness and its relationship to desired employee attitudes and behaviours (Gerhart & Milkovich, 1990). In particular, compensation decision-makers acknowledge that the fairness of pay administration practices, (imbedded in pay policies) directly influences evaluations of pay outcomes (Bergman & Scarpello, 2002), however little has been done to explain the nature of this relationship.
Procedural justice is concerned with providing employees with input into decision making by ensuring fair treatment, communicating information accurately, and consistently, suppressing bias, and providing correctability opportunities (Leventhal, 1976; Thibaut & Walker, 1978). This suggests that within a compensation framework, opportunities provided to employees for participating in decisions about the design and administration of the pay system and openly communicating information about the system should have a positive impact on procedural justice perceptions and therefore have a positive effect on employee attitudes and behaviours. It appears that participation and communication are two key ingredients in ensuring positive perceptions of procedural justice about the compensation system within the organisation.
2.4 Factors Which Influence Procedural Justice
Agency theory (Eisenhardt, 1985 & 1989; Jensen & Meckling, 1976) tells us why justice should matter in compensation theory; justice theory explains how individuals react to perceptions of justice. A pay administration system consists of two major features that may have a great impact upon procedural justice perceptions: the level of participation in decision-making and the level of open communication about the pay system (Appelbaum et al, 2000; Delaney & Huselid, 1996; Colvin, Batt, & Katz, 2001; Olalla & Castillo, 2002).
The Role of Participation
Participation is traditionally perceived as a medium of communication (Grant & Wilkinson, 1993; Schuler & Van De Ven, 1995; Sproull & Keisler, 1991). Participation as a creative management technique is viewed as an interrelated, independent, and distinct construct of communication (Heery & Noon, 2001; Rosenberg, 1983; Schuler & Van De Ven, 1995; Tracey, 1991 & 1998).
In human resource management contexts participation techniques are of many types and may occur at different levels and categories of decision-making (Heery & Noon, 2001). This may encourage individual workers at different hierarchical levels to share information-processing, decision-making, or problem-solving activities to attain organisational goals (Appelbaum et al., 2000; Becker & Gerhart, 1996; Delery & Doty, 1996; Ichniowski, Kochan, Levine, Olson, & Strauss, 1996; Roberson et al., 1999; Wagner, 1994).
Participation in pay design and administration refers to the degree of employee participation in determining the goals of its system and the major policies and procedures that will meet those goals, and asking for input into pay policy (Lawler, 1984a, 1986, 1988, 1989 & 1995a; Wallace & Fay, 1988). In particular participation acts as a “checks and balances” system in which management “creates over its own decisions in the conviction that checks and balances are needed over their (the organisation’s) natural tendency to take primarily the shareholder perspective or to emphasise business outcomes at the expense of human outcomes” (Beer et al., 1984: 1).
In a study of compensation strategy, Ledford and Hawk (2000) found that the involvement of top managers and compensation professionals in developing and operating compensation plans align an organisation’s business needs with compensation system goals, types of rewards that employees value and key choices that managers need to make in managing the rewards. The plans are designed to enhance the effectiveness of the system.
These findings are consistent with studies of Fortune 1000 firms (Lawler et al., 1989 & 1995) which reveal that employee involvement (such as co-operation between top managers and compensation professionals) in the design and administration of a variety of compensation innovations (such as base pay, incentives, benefits and pay for corporate performance) may strongly increase the organisational competitiveness.
Participation in compensation design may range from consultation to full participation which can affect final decisions (Tannenbaum & Schmidt, 1973; Vroom, 1964 & 1973; Vroom & Yetton, 1973). In Japanese industries, for example, pay systems are designed through labour-management joint consultation committees that permit sharing and exchanging information about pay systems. These consultation committees do not negotiate labour contracts, but the information shared is used to gain consensus about pay settlements (Hart & Kawasaki, 1999; Hashimoto, 1990a & 1990b; Morishima, 1991a & 1991b).
Sheehan (1981) has indicated that participation in pay administration can be of two specific forms: participation in input and output. Participation in input means employees give their input in determining the enterprise’s goals, resources, and methods. Participation in output means employees are permitted to share the organisation’s rewards of profitability and/or the achievement of productivity objectives. This thesis is focused on the first type of participation form.
The significance of participation in pay plans is to help workers understand their expectations more clearly and encourage them to work towards rewards that they value. Employee participation in pay plans may provide employees with greater intrinsic rewards (i.e., feelings of control, responsibility, accomplishment, and trust) and thus reinforce their support of the pay plans (Ebert & Mitchell, 1975; Goodman & Dean, 1995; Lawler, 1975; Miller & Monge, 1986; Miller & Schuster, 1987).
Greater participation in a pay system can produce fairer decisions (Appelbaum et al., 2000; Delaney & Huselid, 1996; Lawler et al., 1992 & 1995; Roberson et al., 1999) which can increase feelings of procedural justice about those decisions. This may lead to greater job satisfaction, motivation to perform, and commitment to an organisation (Fay & Thompson, 2001; Janssen, 2000; Coyle-Shapiro et al., 2002). The use of an employee’s information, knowledge, creativity, and skills in administrating how rewards are to be distributed may motivate these employees to commit to pay plans.
According to the notions of goal setting (Locke & Latham, 1984, 1990a & 1990b) and leadership theory (Fiedler, 1984; Tannenbaum & Schmidt, 1973; Vroom-Yetton, 1973), allowing employees to participate in pay decisions (such as setting performance standards) may increase employee satisfaction and that may motivate employee performance and improve commitment (Fiedler, 1984; Lepak & Snell, 1999; Liu, Lepak, Takeuchi, & Sim, 2003; Vroom-Yetton, 1973).
Encouraging employees are encouraged to participate in compensation decisions can create positive beliefs that their entitlements are allocated to fulfil their aspirations and expectations (Paul, Niehoff, & Turnley, 2000) which may better balance-out estimations of others’ contributions. This could in turn increase co-operation and attachment to the organisations (Robinson et al., 1994; Rousseau, 1995).
Crawford (1975) recognised that a high degree of consultation between employees and management in incentive plans (such as productivity and profit sharing systems) provided an important framework and procedure to harness employee contributions for improving productivity and profitability performance. For example, some pay for performance plans allowed peer groups to participate in planning and determining their pay rates and this resulted in a positive climate of trust, joint problem solving and acceptance of the decisions (Lawler, 1981).
Janssen (2001) examined the pay distribution system using a sample of 99 low-level and mid-level management employees in a Dutch organisation. The study showed that management employees who were empowered and involved in decisions about distributing reward levels, had more positive perceptions about the pay system. These positive perceptions influenced job satisfaction.
Coyle-Shapiro, Morrow, Richardson, and Dunn (2002) conducted a study of profit sharing plans based on a sample of 141 engineering employees in a UK multinational supplier of aerospace components to the aerospace industry. This study indicated that employee participation in the distribution of profit sharing rewards positively affected employees’ perception that rewards are paid fairly based on management goals. This situation also increased the sense of commitment to the organisation.
The HayGroup examined the impact of broad based incentives plan using a sample of 300 United States and Canadian employees. The study found that a lack of employee participation in the development of measures and targets for determining incentive plan actually decreased the level of successful initiatives (Fay & Thompson, 2001).
Ruh, Wallace, and Frost (1973) tested Lowin’s (1968) participative decision making model in 18 firms that had experience with Scanlon plans. Overall, the results showed that the managers that had retained the plans were satisfied and were more committed to the plans than the ones that had been fully engaged to participate in the development and administration of the plans.
Furthermore, White (1979) investigated the use of participative process in designing the Scanlon Plan in twenty-three organisations and found that a high degree of employee participation was strongly related to the plan success, and the success of the plan was highly correlated to positive attitudes of top management toward such participation programs.
The degree to which employees are involved in compensation decisions is heavily influenced by the management philosophy and culture and ownership structure of an organisation.
Organisations that promote a participative style in pay administration often believe that their employees can make intelligent and honest estimations in the development of pay plans, which may reinforce individuals to behave responsibly and work consistently (Lawler, 1975, 1981, 1986, 1989 & 1995a; Lawler & Ledford, 1984 & 1985; Lawler et al., 1992 & 1995; Ledford, 1991a & 1991b). On the other hand, organisations that have not practiced participative management in the development of pay plans often do not believe that their workers can make pay decisions in a responsible manner (Jenkins, 1994; Jenkins & Lawler 1981; Lawler, 1975 & 1981).
Much research evidence supports the notion that a high commitment management culture has become a major determinant of success for standard and custom gainsharing programs (such as Scanlon, Modified Scanlon, Rucker, and Improshare programs) (Lawler, 1988 & 1992a; Kim, 1999; Staw & Ross, 1978). Under this management culture, managers encourage participation of internal (e.g., accounting and operating systems) and external experts (e.g., outside consultants that have specialised knowledge and credibility) in the design, start-up, and operation stages of the pay programs. Thus participation can affect employee commitment to and survival of gainsharing systems in organisations (Juravich, Harris, & Books, 1993; Kim, 1996 & 1999; Nadler, Hanlon, & Lawler, 1980).
Ownership structure also influences participation levels. In owner-controlled firms, for example, participation in the design of pay and incentives is not prevalent. Alternatively, in management-controlled firms, employee participation in the design of variable payments and the payment of larger bonuses (such as those that make up a larger proportion of base and bonus salaries) is greater than in owner-controlled and owner-managed firms (Tosi & Gomez-Mejia, 1994). Yates (2002) discovered that employee ownership as a democratisation of ownership structure in a capitalistic economy can empower employees to collaborate in workplace activities and share their mutual benefits by aligning the interests and actions of employees to shareholders. This can reduce labor-management conflicts.
However, in general, participation in pay administration is viewed as an extremely radical step and is rarely practiced by most organisations (Lawler, 1981 & 1984a; Wallace & Fay, 1988). It is even more rarely empirically examined given the above review. Specifically, although the empirical evidence presented does highlight that participation is of significant consequence in affecting perceptions of procedural justice, which in turn can influence attitudinal and behavioural outcomes, the research does not test the actual role that procedural justice plays in effecting this outcome. This is an area for further consideration.
The Role of Communication
Communication is generally defined as exchanging information, forming understandings, co-ordinating activities, exercising influence, socialising and generating and maintaining systems of beliefs, symbol and values. Barnard (1938: 8) claimed that “In an exhaustive theory of organisation, communication would occupy a central place, because the structure, extensiveness and scope of the organisation are almost entirely determined by communication techniques.”
In a broad communication process participation is traditionally perceived as a medium to deliver information to other people in an organisation (O’Connell, 1997; Nilcholson, 1995). In a compensation management context participation and communication may work independently to deliver pay messages from one person or group (the sender) to another (the receiver) through verbal, non-verbal and written communication.
Specifically, a communication process may increase employees’ understanding and appreciation of compensation practices in organisations (Henderson, 2000; McClurg, 2001; Milkovich & Newman, 1999; Tremblay et al, 1998; Tremblay et al., 2000; Wallace & Fay, 1988).
The purpose, nature and style of pay communication has been recognised to increase the credibility of pay administration (Fitzgerald, 2000; Hunter & Lafkas, 1988; Hurley, 1998; Hewitt Associates, 1991; Nelson, 1998; Wallace & Fay, 1988). For example, communication about pay policies can work effectively if used to inform employees, to guide management in administering the programme, to educate employees about why it is happening or to correct employees’ misunderstanding about the compensation program.
These communication policies are considered to have a significant impact upon the success of any pay program, although a great degree of this success depends on the compensation design (Hewitt Associates, 1991; Marshall, 1978; Nielson, 2002).
There are two common types of pay communication strategies practised by most organisations: communicating pay from employees to the organisation and communicating pay from the organisation to employees (Henderson, 2000; Lawler, 1982; Milkovich & Newman, 1999; Wallace & Fay, 1988).
Communicating pay information from employees to an organisation involves compensation analysts and other human resource/pay specialists to actively seek information from employees (Lawler, 1981, 1982, 1990 & 1995b; Wallace & Fay, 1988). Under this pay communication system, most employers prefer to seek broad and specific information from at least some of their employees.
For example, an employer often seeks broad information from its employees about job information, labour market information, performance information, organisational economic capabilities, and legal requirements. On the other hand, specific information from employees relates to compensation expectations, benefits preferences, administrative preferences and employee equity perceptions.
Compensation managers view this type of information as useful as they seek to design pay systems to satisfy employees’ needs and to increase employee understanding of the system, thereby influencing procedural justice (Lawler, 1982; Wallace & Fay, 1988).
Second, communicating pay information from the organisation to the employees relates to how information is disseminated. This communication exchange emphasises the degree of openness and disclosure about the compensation system (Hewitt Associates, 1991; Wallace & Fay, 1988). An open communication system may clearly expose the value of the compensation package quantitatively and qualitatively, deliver accurate information about pay and performance relationships, permit a voice in the system and increase the ability to understand and perceive equity and fair treatment within the system (Henderson, 2000; Hewitt Associates, 1991; Lawler, 1981, 1984a & 1984b; Wallace & Fay, 1988).
According to an examination of the Hewitt company, a majority of respondents (79 percent) perceived that organisations that have variable pay plans and communicate information to employees could improve business results. They also believed that communication could be an effective tool for increasing understanding about the basic structure of the plan, the link between the plan and organisational business strategy, as well as leading employees to align with the mission and vision of the corporations (Nelson, 1998).
These findings are consistent with the profit sharing studies which reveal that communication is a key feature used to enhance employees’ understanding of the operation of pay systems and thus positively affect their motivation and productivity in organisations (Kruse, 1993; Lawler, 1988 & 1992a; Long, 2000; Tyson 1996).
Hurley (1998) performed a thorough study on sales staff and found that communicating information about the changes of compensation levels of salespeople and sales executives may increase understanding of earnings and thus lead to greater motivation and commitment.
The notion that pay communication is more important than actual pay in influencing employees’ perception of a compensation program has high credibility (Fitzgerald, 2000; Hewitt Associates, 1991; Marshall, 1978). Fitzgerald noted that “a compensation plan, no matter how brilliantly designed, will not accomplish its objectives without a communication strategy that is just as brilliantly designed as the plan itself” (2000: 532). A pay knowledge survey that used more than 6,000 managers and employees in 26 North America organisations reported that even if organisations had good incentive systems, they could not succeed in the implementation of incentive based on pay rises and bonuses if communication between employers and employees did not improve (Anonymous, 2003).
Pay openness is therefore viewed as an effective managerial tool. Although more readily practiced in organisations which encourage high-involvement practices (Lawler, 1986 & 1992b; Lawler et al., 1992, 1995 & 1998; Osterman, 1994; Pfeffer, 1994) and progressive human resource management practices (Delaney & Huselid, 1996; Huselid, 1995), communication openness is important to co-ordinate and control information flow in all directions (Bavelas & Barrett, 1951; Peters & Waterman, 1982).
Fitzgerald (2000) advocates that pay openness is more effective than a closed pay system in achieving organisational strategy. Using pay openness may demonstrate clearly the link between the compensation plan and the company’s overall business strategy. By applying the programme consistently and fairly in the day-to-day operations of the company, an open communication system can influence perceptions of justice (Chang & Chen, 2002; Lawler, 1981 &1989; Miceli & Lane, 1991; Pettijohn et al., 2001).
Furthermore, pay openness is found to be a good mechanism for improving managerial decisions in organisations. Through pay openness, managers can be forced to defend decisions and practices publicly, reduce the cost of visible mistakes in pay decisions, decrease differences in pay among subordinates that promote conflict and increase explanations about such differences to disappointed employees (Gomez-Mejia & Balkin, 1992a & 1992b).
Communicating pay messages and values openly, honestly and in a straightforward manner to employees can increase employees’ understanding of the complex terms of the system and eliminate rumours and feelings of fear about the pay system. Employees will be motivated to improve their productivity, advance customer service, generate improvements in work processes. It will also foster employee involvement in organisations (Flannery, Hofrichter, & Platten, 1996). For example, Mercer surveyed 100 top hospitals and found that organisations that openly communicate information about compensation levels and pay practices increase their employees’ understanding and appreciation of their total reward package (Sinclair, 2000).
Communication openness about a pay system may clearly deliver pay messages to employees and that may increase their perception of procedural justice within the system. It can lead to increased job satisfaction, motivation to perform, and commitment to the organisation (Chang & Chen, 2002; Guthrie, 2000; Tata, 2000; Williams, 1995).
These notions are consistent with expectancy theory which states that understanding the link between pay and effort (performance), and appreciating the value of rewards may increase employees’ feelings of procedural justice and that may induce their performance and commitment in organisations (Kreitner & Kinicki, 1998; Murray & Gerhart, 1998; Porter & Lawler, 1968; Vroom, 1964 & 1973).
The affection exchange theory (2001) states that affectionate communication that can help to deliver pay information and may invoke feelings of satisfaction (Floyd & Burgoon, 1999; Morman & Floyd, 1999; Rotter, Chance, & Phares, 1972; Schutz, 1958 & 1966), thus leading to increased work quality (Floyd & Morman, 1997, 1998, & 2000), and performance (Steward & Lupfer, 1987).
In addition, the relational model (formerly known as the group-value model) of procedural justice (Lind, 1995; Lind & Tyler, 1988) suggests that people intend to join a group because they want to obtain the economic resources and psychological rewards associated with group affiliation. If communication is open, employees may clearly understand and perceive the fairness of the process in allocating benefits levels (such as vacation time, the right to take sabbaticals, or retirement plans).
Thus, open communication may strengthen employee interactions within organisations (McCaffery, 1992; Tremblay et al., 2000). If employees judge the procedures used in the model as fair, that may increase their respect for others and their attachment to the organisation (Martin & Bennett, 1996; Tyler & Bies, 1990; Tyler & Lind, 1992; Tyler et al., 1996).
Greenberg (2003) conducted a study of mandated fair pay procedures based on a sample of 276 sales representatives of a large household goods company in the United States. The study found that employees who understood the process and system of determining performance related pay could increase fairness of the salary-only and the salary-plus-commission conditions. On the other hand, employees who believed that their supervisors violated the rules of distributing merit pay (e.g., a salary-plus-commission plan) felt the system was unjust and decreased their performance.
Further empirical evidence also supports that the level of communication openness about a reward system may influence perceptions of procedural justice (Chang & Chen, 2002; Latham et al., 1993). For example, Pettijohn, Pettijohn, and d’Amico (2001) conducted a survey of open performance evaluations based on a sample of 115 sales people. The study found that open discussions and explanations about the use of evaluation methods in determining pay rates increased understanding, positive perceptions, satisfaction and appreciation about the pay rates.
Chang and Chen (2002) conducted a study of pay performance based on a sample of 65 high-tech firms and found that employees who clearly understood the appraisal system processes in determining their incentives had an increased perception of fairness and satisfaction which led to improved job satisfaction.
These findings are also consistent with the Dryer, Schwab, and Theriault (1976) study which argues that openly communicating the policies, rules and operations of pay systems could decrease ambiguity and increase employees’ satisfaction with the pay system (Jones, Kantak, Futrell, & Johnston, 1996), and that could lead to increased job satisfaction (Behrman, Bigoness, & Perreault, 1981; Mowen, Keith, Brown, & Jackson, 1985).
Latham, Skarlicki, Irvine, & Siegel (1993) investigated salespersons pay system and found that open discussion about the pay system helped sales managers better understand and focus on their targets for pay increases.
Tata (2000) studied pay increase procedures based on a sample of 86 employees in various business organisations. The study found that supervisors who were adequately communicating pay rise procedures to their subordinates increased understanding, perceptions of justice and feelings of trust in the organisations.
Additionally, Gopinath (2000) examined the impact of pay decisions using a sample of 144 employees. His study found that managers communicating pay decisions honestly and openly increased employees’ satisfaction and potentially enhanced commitment in the organisation.
Martin and Lee (1992) conducted a prior pay knowledge study based on a sample of 652 employees in the American retail food industry. The study found that knowledge of pay structure was the most important predictor of pay fairness perceptions and pay satisfaction, especially in a tiered-employment setting. These results also indicated that managers who communicate information about pay structures to employees before or after they are hired could enhance those employees’ perceptions of fairness and satisfaction about the pay system. These findings were consistent with previous studies which revealed that employees who have more information and understand clearly the characteristics of the pay structure may increase attachment to the organisation and decrease intention to leave (Martin, 1980; Martin & Bennett, 1996; Sichenze, 1989).
Despite these positive outcomes, most compensation plans have an element of secrecy, which influences this open communication. Secrecy policies normally exist where only pay experts understand the pay strategy and little information about specific pay policies is provided to employees (Flannery et al., 1996). The phenomenon is similar to the notion of ‘scientific management’ (Taylor, 1903 & 1911), which asserts that only management has a right to decide whether to communicate pay messages to employees or not (More, 1994; Vecchio, 1991; Vecchio, Hearn, & Southey, 1992).
According to social comparison theory (Festinger, 1954, 1957 & 1967; Lawler, 1981; Heneman & Judge, 2000), pay secrecy does not allow for openly communicating information about pay allocations within the same or different job groups. This may encourage a worker to misjudge others’ pay based on inaccurate information, innuendo, and hearsay. This can lead to feelings of dissatisfaction and thus lead to decreased performance and commitment towards an organisation.
According to Wallace and Fay (1988), organisations normally practice pay secrecy policies to respect an employee's right to privacy and decrease the need to justify compensation differentials amongst employees. In fact, communicating the specifics of a compensation plan openly might be a risky business if the pay plans are already inherently inequitable. Perceptions of injustice and feelings of unfairness will therefore be exacerbated under these circumstances (Wallace & Fay, 1988). Secrecy may relate to pay levels, determination of individual rises and budget pools for rises as well as how much other groups receive (Heneman, 1985; Wallace & Fay, 1988).
Secrecy about pay rates is a matter of policy in most private sector and in some public sector organisations (Cascio, 1995; Heneman, 1985; Wallace & Fay, 1988). In implementing this policy, most managers prohibit their employees from simply discussing pay rates because some of them have received no salary increase at all (Lawler, 1981). Some organisations inform employees about salaries and the salary range for their pay grade. Other organisations maintain secrecy with respect to outsiders but share information with employees.
In most organisations pay secrecy has been translated into formal guidelines as a mechanism by which to communicate the intentions of the organisation to its staff (Armstrong & Murlis, 1980 & 1994; Marshall, 1978). Under this policy, managers do not publish specific details but provide access to information about the process of fund distributions and the like. This approach goes some way in influencing fairness perceptions (Armstrong & Murlis, 1980 & 1994; Fitzgerald, 2000; Hewitt Associates, 1991; Marshall, 1978).
In a study of pay, Lawler (1981) asked 1,205 managers whether they favour pay secrecy policies. The results of this study show that at least 80 percent of managers were opposed to public pay disclosures. Specifically, most managers felt that secrecy polices allowed pay administrators more freedom in administering pay.
Therefore, it appears that the balance between pay openness and pay secrecy is of importance in influencing procedural justice. This balance achieves the dual benefits of protecting individual rights and enhancing feelings of equity about the pay system (Armstrong & Murlis, 1980 & 1994; Cascio, 1995). Markovich (1994) suggests that selection of proper media by human resource professionals to communicate vital benefits information may inform, educate and impart believable information to employees and meet these dual goals.
For instance, many modern organisations use web technology (such as online and software) as part of a communication strategy to openly communicate information about benefits program (such as, health plan, education plan, welfare plan, and retirement plan) (Hannah, 1999; McCormick, 1999; Meuse, 1999; Nielson, 2002). The use of such technologies may decrease cost, increase participation and improve services (Dorrell, Sanford, & Davis, 2000; Kalbfleisch & Prentice, 1980; Kalbfleisch & White, 1998; White, Davis, & Helik, 1999).
McCormick (1999: 9) states that "Perhaps the most fundamental change in employee service over the past few years has been the dramatic shift toward self-service. Web technologies, in particular, are being used at an ever-increasing rate to give employees direct access to their own HR and payroll information, thereby allowing them to perform transactions electronically that used to be performed by administrative staff on paper forms."
These findings are consistent with the employment-exchange model, which reveals that when employees clearly understand their benefits, they can consider their rewards, recognise their benefits value, and perceive their benefits’ relevance to their needs. This builds positive feelings and acceptance of the system (Fannin & Fannin, 1983).
Although these results point to the possible adverse effect of secrecy on procedural justice perceptions, no empirical research to date examines the role that procedural justice plays in affecting this outcome and the subsequent attitudinal and/or behavioural effects. It appears therefore that this is an area for further consideration.
The Role of Procedural Justice
The review above points to both participation and communication as key features of a pay administration system, which can influence job satisfaction and job commitment. In effect, procedural justice is alluded to as first level outcome of participation and communication practices within the compensation management context. Job satisfaction and job commitment have been identified as second level outcomes of this relationship.
Despite the apparent logic of this conditional connection, no research to date has examined the nature of this relationship. It is the intention of this dissertation to examine the nature of this conditional relationship. Specifically it the intention of this research to reveal whether procedural justice acts as a moderator of the relationship between participation and communication with job satisfaction and job commitment.
The focus on job satisfaction and job commitment in the reviewed studies and in this study is not surprising.
Attitude is strongly influenced by individuals’ perception which is reflected in the forms of individuals’ attitude, that is affective (i.e., emotional or satisfaction state), cognitive (i.e., thought or beliefs), and behavioural (i.e., intention to behave). Two of the most popularly researched attitudinal outcomes are job satisfaction and commitment to the organisation (Nelson & Quick, 1997; Robbins, 1998; Tracey, 1991 & 1998; Wagner & Hollenbeck, 1998).
Job satisfaction refers to an employee’s general attitude toward his or her job. In this context, an employee who has a low level of job satisfaction has a negative attitude about the job. On the other hand, an employee who has a high level of job satisfaction has a positive attitude toward the job (Hodson, 1991; Weiss & Cropanzano, 1996). This definition is broadly described and can be interpreted as a result of employees’ perception or appraisal of their jobs (Luthans, 1989) which may create a pleasurable or emotional state (Locke, 1968, 1983, 1990a & 1990b; Hodgetts, 1991), a positive reaction (Mathis & Jackson, 2000), and action tendencies toward work (Vecchio, 1991; Vecchio et al., 1992).
Job satisfaction is an important job outcome to consider because for most employees it is an end in itself or a means to the end of personal happiness (Locke, 1983). It has been found that job satisfaction is related to a combination of characteristics including environmental factors, job factors and individual personality variables (Agho, Mueller & Price, 1993). Identification of the determinants and factors affecting job satisfaction is still heavily researched in the areas of organisational behaviour and industrial/organisational psychology.
Relationships between job perceptions and satisfaction have been investigated in laboratory experiments, cross-sectional field surveys, longitudinal surveys and field surveys. In almost all cases, job perceptions have been positively and significantly related to job satisfaction (see Griffin, Bateman, Wayne, & Head, 1987). Hence it is expected that both participation and open communication styles will be positively related to job satisfaction. A similar relationship with commitment is also expected.
Many researchers (Allen & Meyer, 1990; Meyer & Allen, 1984; Meyer, 1975; Meyer, Allen, & Gellatly, 1990; Meyer, Allen, Gellatly, Gofin, & Jackson, 1989) have proposed affective, normative, and continuance as important dimensions of attitudinal commitment. Allen and Meyer (1990:1) defined affective commitment as an “employee’s emotional attachment to, identification with, and involvement in the organisation.” They explain that consistency between an organisation’s value and employees’ values may motivate employees to commit to the organisation.
On the other hand, normative commitment may be defined as an “employee’s feelings of obligation to remain with the organisation” (Allen & Meyer (1990: 1). Normative commitment emphasises two major things: the ‘right or moral thing to do’ (Weiner, 1982: 421), and the obligation and/or moral attachment of individuals, that is strongly influenced by the individual’s socialisation to the organisation’s goals and values (Allen & Meyer, 1990; Weiner, 1982).
Continuance commitment (often known as calculative commitment) (Hackett, Bycio, & Hansdorf, 1994; Mathieu & Zajac, 1990) can be defined as “commitment based on the costs that employees associate with leaving the organisation” (Allen & Meyer (1990: 1). These definitions show that employees’ attachment with their organisation are dependent on the benefits related to staying or the personal costs related to leaving (Mellor, Mathieu, Barness-Farrell, & Rogelberg, 2001). These phenomena are derived from two major sources. Firstly, a low perceived alternative is viewed as an employee’s perception that some alternative jobs are available.
Secondly, high personal sacrifice is related to an employee’s perception that leaving an organisation will cause financial difficulty or create another distressing situation (Allen & Meyer, 1990; McGee & Ford, 1987). Further discussion shows that commitment is a multi-dimensional construct that can invoke different motives and thus lead to distinct outcomes in an organisation. For example, strong affective commitment may exert employees’ intention to remain in an organisation because they feel they want to, strong normative commitment may motivate employees’ intention to remain in an organisation because they feel they ought to, and strong continuance commitment may increase employees’ intention to remain in an organisation because they feel they need to (Meyer et al., 1989; Meyer et al., 1990).
2.5 Research Questions
Based on the above review, the following specific research questions are proposed:
- Does procedural justice moderate the relationship between pay administration features (participation and communication) and individual attitudes and behaviours (job satisfaction and job commitment)?
The next chapter discusses the methodology employed to examine this question.