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Impact of perceived organizational

Paper Type: Free Essay Subject: Organisations
Wordcount: 5159 words Published: 1st Jan 2015

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Abstract

Purpose

– The purpose of this research paper is to study the impact of perceived organizational support and organization commitment on the outcome “intention to quit”. The study also investigates the mediation relationship of organization commitment between Perceived organizational support and intention to quit. Another aim of this study was also to test the moderation effect of gender between the dimensions of perceived organizational support and intention to quit.

Design/methodology/approach

– A questionnaire was administered to employees employed in different organizational settings. The questionnaire comprised of items measuring the three constructs POS, Organizational commitment and lastly intention to quit.

Findings

– The research was able to establish a mediation relationship for Organization between POS and intention to quit. When investigating the moderation effect of gender on POS and intention to quit it was found that females posited a stronger negative relationship between POS and intention to quit as compared to males.

Research limitations

– The study did not focus on a single organizational setting or a particular work sector like BPO or IT sector, therefore across different work sectors there may be multiple other variables which may not have been captured. Future research might need to investigate multiple other areas of human resource practices that may significantly affect the construct intention to quit.

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Practical implications

– The study emphasizes the need by managers to implement strategies to provide greater organizational support to their employees and hence enhance their retention periods. The study also provides a view that male and female workers may require different degree of support. In any organization turnover costs are huge therefore managers by recognizing this need may prevent huge amount of losses to the organization.

Paper type

– Research paper

Introduction

Employee retention has traditionally been of considerable interest to practicing managers. However, as technology has become more complex and tasks have tended towards greater complexity the turnover costs have become even more costly. In addition to the costs of recruiting and retraining, turnover has other negative impacts. It has the effect of reducing the bonding and commitment levels of existing workforce. Employees begin to feel that they should also explore other opportunities or start believing that the organization may handle them badly in the future as the exiting employee was treated (Mobley, 1982).

Studies investigating intention to quit have predominantly researched job satisfaction and have refused to look at multiple other dimensions that affect turnover. There are multiple other attributes apart from job satisfaction alone that affect the employee’s intention to quit (Maertz and Campion, 1998). The present research study aims to study attributes apart from job satisfaction and investigate their impact on turnover.

POS is based on the belief that as organizations perform appraisal for the employees, employees too constantly appraise their organizations and evaluate its commitment towards their welfare (Rhoades and Eisenberger, 2002). Organizational Commitment tries to determine the extent of consistency of behaviour and attitudes of employees towards work related tasks and achieving organizational outcomes (Hulin, 1991, p. 488).

Numerous prior researches have investigated the relationship between POS and organizational commitment. However, we did not come across any research that tried to determine the mediation affect of organization commitment between POS and intention to quit. There exist studies however that establish mediation relationship of affective commitment between POS and intention to quit. The present study endeavours to fill this gap in the existing literature.

Research Background and Construct Description

Perceived Organizational Support

POS refers to the degree to which employees perceive their employer to be concerned with their well-being and to value their contributions to the organization (Eisenberger et al 1986).

The contribution that an employee makes can be in form of the task performed as well as the knowledge shared. The valuation of these contributions comes in form of compensation, promotions, ex-gratia, recognition, both monetary and expressed etc. These act of valuation by supervisors, executives and managers tend to be treated by employees as the actions and intentions of the organization as a system. Apart from this, any support provided by the supervisors, executives and managers is reflection of the support provided by the organization. Rhoades and Eisenberger (2002) though concluded that PSS is an antecedent to POS. Supervisors serve as agents of the organization and this supervision that employees receive from the supervisor is a manifestation of how they are viewed by the organization. POS therefore corresponds to the degree to which employees feel that the organization is willing to help them in case of need and provide them with adequate working conditions. Employees may interpret the support provided by their employer as a demonstration of commitment towards them (Rhoades and Eisenberger 2002), which in turn tend to enhance their commitment to the organization. Apart from the above mentioned POS also signals an employer’s commitment towards their employee. This in-turn is expected to influence the attitudes and behaviors of the employees (Cole et al., 2002; Eisenberger et al., 1986). This perspective also helps us to understand that POS is a variable in the function which employees use evaluate their organization. POS refers to the extent of organization’s benevolent intent which the employees seek to determine via measurement of the efforts expended by them and the commensurate rewards and recognition received by them (Lynch et al., 1999, pp. 469-70). Thus as expected, research has shown that as the levels of POS increases, there are many positive outcomes associated with the same (Eisenberger et al., 1990).

Organization Commitment

Organization Commitment refers to willingness of an employee to strive for the fulfillment of the organization’s goals and accept the norms and values that the organization propounds (Ingersoll et al., 2000). Allen and Myer (1990) define a three dimensional construct for organizational commitment

  1. Affective component refers to the employee’s degree of involvement with the organization
  2. Continuance component refers to costs that the employee perceives he might have to bear in the event of leaving the organization.
  3. Normative component is the employee’s obligation feeling to remain as a part of the organization.

The study however relies on stating organizational commitment as a one-dimensional concept which accepts that the three dimensions are non-distinguishable from one another (Stallworth, 2003). This permits the use of a smaller item scale to measure organizational commitment.

Research Studies have hinted that there may not exist always a positive relation between commitment and identification (Bullis and Bach, 1989). For example, a person may identify himself as loyal to the organization and approve of its activities however may not be committed to the organization as in he skips meetings and misses the deadlines

Studies have indicated that committed employees contribute more to the organization than the non committed employee (Myer and Allen 1997). Prior research studies have also indicated that organizational commitment leads to reduction in the turnover, increased motivation, organization support and organization citizenship (Kwon and banks, 2004). Organization Commitment therefore is an important predictor of study for managers as they can design interventions to facilitate a more committed manpower.

Some researchers (Angle and Perry, 1981) have discerned from their research that women are more committed. Angle and Perry explain further that this could be due to difficulty faced by women in movement across between organizations. On the other hand, however other researchers (Brunning and Snyder, 1983) have not found women as more committed than male employees. Owing to these prevailing differences in the literature the group sought not to include gender as a moderating variable for organizational commitment and turnover intention.

Some literature does support the argument that the research theories propounded and verified in western cultures and settings are equally valid in non western settings (Yousef, 2000), however there have been research studies that have stated otherwise (Vanderberghe,1996). The present study being undertaken therefore is significant in the context that it tests the constructs in a non-western culture where the attitudes and values of employees could be different to that of previously examined samples.

Intention to quit

Mobley (1977) defines turnover intention is defined as the intention to leave a job on a voluntary basis. In a broader definition of the term Falkenburg and Schyns (2007) refer to turnover intention as the intention to voluntarily change companies or to leave the labor market altogether. The reasons put forth by Falkenburg and Schyns (2007) for making a distinction between intention to leave and actual turnover is that, firstly their research focuses on the present employees rather than those who had already left the organization and secondly because actual turnover is influenced (as posited by Carsten and Spector, 1987; Dipboye et al., 1994) by other factors such as the economic climate and by circumstances on the labor market.

Extant research posits a number of variables as antecedents of employee intention to leave. Several studies point to a negative relationship between job satisfaction and turnover intentions (Netemeyer et al., 1990; Ladik et al., 2002), Futrell and Parasuraman (1984) examined the multiple dimensions of job satisfaction and found that satisfaction with promotion; work and supervision were significantly related to propensity to leave. Johnston et al. (1988) on the other hand, found only a significant relationship only between satisfactions with work and turnover intentions. Boles et al (2009) posit that the dimensions of satisfaction with overall job and satisfaction with promotion and advancement are the ones significantly and negatively related to propensity to leave. Howver, Ladik et al. (2002), in a study involving different groups of salespeople found significant differences in all dimensions of job satisfaction in relation to propensity to leave. Other research involving job satisfaction and organizational commitment has also reported a negative relationship existing between the stated variables and turnover intention (Mathieu and Zajac, 1990; Mobley et al., 1978; Williams and Hazer, 1986, Boles et al., 1997; Jaramillo et al., 2006). Other research found that and gender (Ladik et al 2002), industrial experience (Purani and Sehdev, 2008) play a moderating role in the relationship between job satisfaction and turnover intention.

Other antecedents of intention to quit could include organizational climate, select human resources practices and a human resource orientation. A study by Jansen and Chandler (1994) reports a negative relationship between climates that are innovative and turnover intention. According to DeGeorge (1990) individuals who do not believe they ‘‘fit” with the organization do not tend to stay long with the organization. Research (Sims and Keon, 1997; Apasu, 1986; Schwepker 2001) suggests a relationship between perceptions of an ethical climate and turnover intentions. Tham (2007) found that a key determinant for an employee to quit the organization are a lack of human resource orientation inside the organization, this could refer to the extent to which employees are adequately rewarded , well managed and supported . Chew and Chan (2008) report that the intention to stay was significantly related to person-organization fit, remuneration, recognition, training and career development.

Research indicates that the intention to leave is a significant predictor of actual turnover (Mobley et al., 1978; Steel and Ovalle, 1984). Bluedorn (1982) refer to 23 studies which report a significant positive relationship between intention to leave and actual leaving behavior. As pointed out by Schwepker (2001) this is line with Fishbein’s (1967) model of attitudes, intentions, and behavior.

Hypothesis Development

While Organization commitment refers to commitment of employees towards the organization POS may be regarded as the employer’s commitment towards his employees (Cole et al., 2002). POS derives its basis from a principal of reciprocity in which favorable treatment by the organization towards the employee creates an obligation on the part of the employee to repay by caring and working well for the organization and help the organization achieve its goals (Eisenberger et al., 1990). Increased POS strengthens an employee’s effective attachment to the organization, resulting in greater efforts to fulfill the organization’s goals (Eisenberger et al., 1986). Estell and Caroline through their research study have concluded that POS is significantly related to affective and normative commitment in a positive manner. The results also supported a moderating effect of Locus of control between POS and organization commitment. The sample of the study included 249 prison employees in a similar organization setting (Estell et al., 2007). The sample of the current research study undertaken does not confine to a single organization setting but however includes employees working in different organizations.

In an analysis done by Rhoades et al., they show that POS is related to affective commitment in a positively strong manner (Rhoades and Eisenberger, 2002). If the level of POS is low, the organization refuses to acknowledge employee contributions and cannot be expected to provide the necessary emotional support and assistance in terms of equipment and challenging job (Eisenberger et al., 1986). With low level of support an organization fails to induce affective or any other form of commitment among employees.

Organizational commitment has been studied from multiple perspectives and most commonly as a predictor of consequent variables such as turnover, intention to quit, job satisfaction (Weiner and Vardi, 1980). However, not many studies have probed organization commitment as an outcome variable. The current study investigates the impact of POS, a predictor with organization commitment as the outcome.

There exists literature which has revealed that among the factors that shape commitment is the extent of organization support provided , their freedom in the decision making process and the feedback provided by their immediate manager (Matheiu and Zajac 1990). These arguments lead us in framing our first hypothesis stated below

H1: Perceived Organizational Support is positively related to Organizational Commitment.

The perception of employee about the extent of support that the organization is willing to provide influences his decision making capabilities regarding the intention to quit. The degree to which the employee perceives his valuation by the organization affects his turnover intention. Intention to quit has an influence on the cost as well as on the efficiency of the organization. According to DeConinck et al. 2009, understanding the rationale for sales force turnover is important to organizations if the organization wants to mitigate the costs associated with voluntary attrition. Though the direct costs associated with salesperson turnover are relevant, but the indirect costs may be considerably higher. For example, the role the salespersons play in fabricating quality relationships (Boles, Johnson, and Barksdale 2000) and customer retention (Johnson, Barksdale, and Boles 2001) is imperative. An employee seeking support from the organization will have greater inducements (March and Simon, 1958) and hence, this potentially increases their instances of positive well being at work, which in-turn could cause positive emotional associations with the organization itself. This increase in affective commitment (Eisenberger et al., 2001) reduces turnover intention (Mathieu & Zajac, 1990). POS, PSS, and organizational justice, which have been the focus of extensive research in the various management literatures, have been linked to various behaviours, including intention to quit (Rhoades and Eisenberger 2002). Maertz(2007) studied the effect of Perceived Superior Support on turnover cognitions. Rhoades and Eisenberger (2002) though concluded that PSS is an antecedent to POS. Supervisors serve as agents of the organization and this supervision that employees receive from the supervisor is a manifestation of how they are viewed by the organization. The reciprocity norm also applies between employee-employer, employees being obliged to recompense advantageous treatment they receive from their work supervisor who act as on behalf of the organization (Mowday, Porter, & Steers, 1982; Rousseau, 1989, 1990; Wayne, Shore, & Liden, 1997). Thus, an employee’s decision to quit the organization can be affected by his perception of whether his organization is supportive or not. Here, we state our second research hypothesis.

H2: Perceived organizational support is negatively related to employee’s intention to quit.

In a manner, POS for women is very specific which examines the perceptions of women employees to how much their organization helps them in the way of opportunities and policies to help them advance up the corporate ladder, the same theory which explains the relationship between perceived organized support and an employee’s intention to quit could be put to use in examining the relationship between POS for women and their turnover intentions. Female Employees who identify their company to be as one that doesn’t support your values and effort are less likely to stay loyal to and are likely to leave the organization.(Jawahar and Hemmasi,2006). Research has also pointed out that there is a more negative correlation between POS and turnover intentions in the case of women than in the case of males (Edmund H. Bradley, J. Stuart Wabe, 1988). The investigation of impact of gender leads us to our below hypothesis.

H2a: In case of female employees there is a stronger negative relation between POS and intention to quit than in case of male employees.

Research indicates a negative relationship between organizational commitment and intention to leave (Naumann et al., 2000; Schwepker, 2001). Studies examining the relationship between job satisfaction, organizational commitment and turnover intention also posit that the higher the organizational committement of employees the lower is their turnover intention (Hanisch and Hulin, 1991; Mathieu and Zajac, 1990; Mobley et al., 1978; Williams and Hazer, 1986, Babakus et al. (1999). In the studies byLabatmediene et al (2007) and by Aryee et al. (1991) organizational commitment explained slightly more than 30 per cent of variance in intention to leave the organization. In fact, the more committed an employee is towards the organization, the less likely is he expected to intend to quit the organization, even if he does not like the job (Endriulaitienė et al, 2007). An employee’s intention to quit the organization can be negatively related to all the three components of commitment – affective, continuance, and normative (Allen and Meyer, 1990, Labatmediene˙ et al (2007), with the affective commitment predicting the intention to leave the organization and continuance commitment indicating the number that actually quit (Randall et al 1997). However, this relation between organizational commitment and intention of the employee to quit is not always apparent (Kalbers and Fogarty, 1995). Research by Russ and Mcneilly (1995) suggests that gender and experience act as moderators in the relationship between organizational commitment and intention to leave. Falkenburg and Schyns (2007), in examining the moderating effects of work satisfaction and organizational commitment on turnover intentions, concluded that the relationship between these variables is highly complex and needs further investigation. Here we posit our third hypothesis, stated below.

H3: Organizational commitment is negatively related to an employee’s intention to quit.

In research, many models have given out the relationship of organizational commitment being a mediator in the relationships pertaining to turnover (Hom & Griffeth, 1995). The type of commitment an employee displays plays a very important part in POS and turnover studies (Allen et al. (2003)). Since POS and commitment are connected and supported by research studies as is the relationship between commitment and turnover (e.g., Tett &Meyer, 1993), we expect perceived organizational support to be connected to turnover through its effect on commitment(e.g., Wayne et al., 1997).. The group could not find any research study that tried to investigate the mediation effect of organization commitment between POS and intention to quit.

H4: Organizational Commitment will mediate the relationship between POS and intention to quit.

Methods

Sample

The questionnaire designed was sent out via e-mail to 250 working professionals in a variety of Indian Organizations, of which 149 chose to reply.

Operationalization of variables

Perceived Organizational support: For the purpose of this study, POS is defined the extent to which an employee perceives his organization to care for him and is supportive of his actions.

Organizational Commitment: This variable is defined as the degree of loyalty that the employee feels towards the organization and the amount of effort he is willing to put in for the betterment of the same.

Intention to quit: Intention to quit is defined, w.r.t. this study, as the intention of an employee to leave his present organization so as to join another.

Measures

The above constructs were measured using 5-point Likert Scales where the responses ranged from “Strongly Disagree” (1) to “Strongly Agree”.

Perceived Organizational support: Perceived organizational support shall be measured using Rhoades et al. (2001) developed eight-item scale. The items on the scale include “Help is available from my organization when I have a problem” and “If given the opportunity, my organization would take advantage of me”.

Organizational Commitment: The commitment of an employee to the organization shall be measured using the fifteen-item scale developed by Mowday et al. (1979). “I am willing to put in a great deal of effort beyond that normally expected in order to help this organization be successful”, “I really care about the fate of this organization” and “I would accept almost any type of job assignment in order to keep working for this organization” are some of the items on the scale.

Intention to quit: An employee’s intention to quit shall be measured using a three-item scale developed by Cammann et al. (1979).Sample items are ‘‘I often think of leaving the organization” and “If I may choose again, I will choose to work for the current organization”.

Analysis

Our study uses the four-step method for mediation analysis developed by Barron and Kenny (1986). In the first step, POS is used as the predictor and Intention to Quit as the outcome. In the second step, Organizational Commitment is taken as the criterion variable and POS as the predictor. The third step entails regressing Intention to Quit against Organizational Commitment. In the final step, both POS and Organizational Commitment are taken as predictors to the criterion variable, Intention to Quit. The relationships are then studied with the moderating effect of gender.

Results

The means, standard deviations, correlations and measures of internal consistency (Chronbach’s α) among the variables under study are given in Table I.

TABLE I: Mean, SDs and Correlation

MEAN

SD

POS_TOTALL

OC_TOTAL

IQ_TOTAL

POS_TOT

23.70

4.566

(.732)

OC_TOTAL

46.20

8.299

.775

(.834)

IQ_TOTAL

9.00

2.689

-.697

-.798

(.821)

Correlation is significant at the 0.01 level (2-tailed).

Diagonal values are measures of scale’s internal consistency (α)

Step 1 in Table II shows the results of regression analysis using POS as the predictor and Intention to Quit as the criterion variable. POS is seen to be significantly related to an employee’s Intention to Quit (R2 = 0.485, F =138.703, p< 0.05). H2 is thus supported. Also, it indicates the existence of an effect that can be mediated.

TABLE II: Regression results

Step

Variable

β

Adjusted R2

1

First Regression ( Intention to Quit)

Perceived Organizational Support

-.697

.482

2

Second Regression ( Organizational Commitment)

Perceived Organizational Support

.775

.597

3

Third Regression ( Intention to Quit)

Organizational Commitment

-.798

.635

4

Fourth Regression ( Intention to Quit)

.648

Perceived Organizational Support

-.196

Organizational Commitment

-.647

Significant at the 0.05 level (2-tailed).

Step 2, depicts the regression performed with Organizational Commitment as the criterion variable and POS as the predictor. POS is significantly and strongly related to Organizational Commitment (R2 = 0.600, F = 220.481, p< 0.05), indicating that the antecedent variable is correlated with the mediator. Thus, H1 is supported.

In the third step, Organizational Commitment was used as a predictor for performing regression with an employee’s Intention to Quit as the criterion Variable. It was found that Organization Commitment was also significantly and strongly related to Intention to Quit (R2 = 0.638, F = 258.539, p< 0.05), hence supporting H3.

The final regression was performed with both POS and the mediator, Organizational Commitment as predictors and Intention to Quit as the criterion variable. POS continued to remain significantly related to Intention to Quit, but with reduced intensity. Thus, Organizational Commitment partially mediates the relationship between POS and an employee’s Intention to Quit, with a mediation effect of -0.501, indicating support for H4. On running the Sobel’s test, statistical significance for the same (Z-score = -10.73) was found.

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The same four regressions steps were then run, taking Gender as the moderator. On regressing, POS as predictor and Intention to Quit as criterion variable, it could be seen that the effect of POS on Intention to Quit is greater for females than for males, thus supporting H2a. However, at the same time, effect of POS on Organization Commitment is greater for males than for females. Also, the Intention to Quit the organization is more strongly related to Organizational Commitment for females than males.

On regressing, both POS and Commitment with Intention to Quit as outcome, Organizational Commitment was found to fully mediate the relationship between POS and Intention to Quit for males (Mediation Effect = -0.417, Z- Score = -5.33), while it only partially mediated the relationship for females ( Mediation Effect = -0.515, Z-Score = -9.61).

TABLE III: Regression results

Step

Variable

FEMALE

MALE

β

Adjusted R2

Β

Adjusted R2

1

First Regression ( Intention to Quit)

Perceived Organizational Support

-.817

.658

-.678

.467

2

Second Regression ( Organizational Commitment)

Perceived Organizational Support

.735

.527

.795

.629

3

Third Regression ( Intention to Quit)

 

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