How Can HRM Practices Influence Employee Commitment and Overcome High Employee Turnover
Chapter 1: Introduction
This study is focused on advising and guiding a newly operating manufacturing firm which has just been established to choose and implement a valid commitment and motivational based strategy, which will help it to overcome the problem associated with high employee turnover within the organisation. This will also enable the organisation to understand what types of HRM practices are vital in improving employee satisfaction and performance, which in turn leads to the organisation’s success.
The way in which organisations manage their employees’ is seen as a crucial factor in facilitating success or failure for an organisation in today’s competitive environment.
or any similar topic only for you
The fundamental key to a firm’s effectiveness and prosperity lies in how its people are managed. Thus enabling it to have a competitive advantage over others.
Guest (1995) cited in Marchington & Wilkinson,1996 in a survey called Employment in Britain mentioned that over 70% of people mentioned that four types of factors where important to them in regards to employment.
Type of work
To have friendly & supportive people around them
Good pay and working conditions
Due to the current recession some of the major HRM policies and practices are not being implemented by many organisations in an attempt to make short term cost savings at the expense of long term staff development. For example training and development activities are being cut due to cash flow problems as it is causing dissatisfaction amongst staff, reducing motivation, performance and increasing the loss of key employees. It can be seen from many perspectives that HRM professionals play a vital part in this complex ever-changing environment. Therefore it is important to understand which HRM practices are important in the day to day running of a firm and how these specific practices influence employee commitment as it is all about developing the skills and knowledge, retaining and boosting staff morale by effectively promoting job satisfaction in the workplace (Pfeffer, 1994).
For this reason it is essential to understand the impact of HRM on employees and labour turnover in regard to employee commitment within a firm. As low performing employees tend to leave an organisation due to the lack of job satisfaction. (Steers and Modway 1981 cited in Hurley and Estelami 2007)
This topic has been chosen because it is of personal interest to me and from past experience, I can understand why some people are more likely to stay committed to a job than others. In this paper I shall investigate the effectiveness of such HR practices and moreover how they can influence employee commitment as well as overcoming high employee turnover which is a major issue in today’s volatile job market. It can be seen that high turnover exists in certain markets and environments where employees feel and consider themselves to be under valued by their employers, unrecognised for their work or feel that they are being taken advantage of.
As you can see the first chapter provides an introduction to the dissertation and outlines the purpose of this study. The second chapter provides the background information and gathers academic literature which is needed for this dissertation. The third chapter emphasises on methodology and looks at the reliability and validity of data and the methods chosen. Chapter four looks at the findings and analysis which took place through primary research and the final chapter will ultimately
draw the conclusion for this study.
1.1. Aims & Objectives
The aim of this study is to undertake both primary and secondary research and investigate how HRM practices can influence employee commitment and overcome employee turnover within the manufacturing sector.
This study will focus on the following key objectives:
To identify ways in which HRM Practices can influence employee commitment
To identify the effects of high turnover within a firm
To determine the factors associated with employee commitment and the relationship with high turnover
Identify which HRM practices are important in enhancing employee commitment
Identify which reward systems are being used within the manufacturing firms and the affect they are having on employee motivation.
H1: We hypothesise that Perceived Organisational Support (POS) will show a strong link between Affective Commitment (AC), and ones intention to leave.
H2: We hypothesise that those manufacturing firms who provide company benefits and bonuses to their employees will benefit from a motivated and effective workforce because those organisations which display a keen interest in their employees and promote commitment based strategies through various HRM practices will benefit the most as they will see lower levels of employee turnover.
Chapter 2: Literature Review
2.1. HRM & SHRM
The HR function has undergone tremendous change over the last 25 years. HRM is the strategic and coherent approach to the management of an organisation’s most valued assets. The people working there individually and collectively contribute to the achievement of the objectives of the business. The terms “human resource management” and “human resources” (HR) have largely replaced the term “personnel management” as a description of the processes involved in managing people in organisations. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce.
The main purpose of the HR department is to establish and maximise the resources of an organisation and to put them to the best use by ensuring that they have the right people in the right place at the right time. However changes in the global environment and issues such as globalisation and workforce management have led HR practitioners to focus solely in managing HR in the most effective way possible.
This is where Strategic Human Resource Management (SHRM) comes in as it is a complex process which emphasises that strategic planning is the key to organisational success. Wright & McMahan, 1992.
Best defined as ‘the process of linking the human resource function with the strategic objectives of the organization in order to improve performance’. (Bratton, 2002)
This term has received much attention and interest in recent years and has been studied and looked upon by various academics.
The main goal of SHRM is to provide a sense of direction for HR managers and enable them to see the bigger picture of the environment in which they are operating so they can seek out ways on how best to enhance their own effectiveness. SHRM can also become a source of competitive advantage for a firm (Pfeffer, 1994, cited in Wright et el, 2003) by means of formulating and implementing such managerial strategies which will help to provide future direction and increase overall performance by achieving strategic objectives.
2.2. HR Influence on Commitment
Commitment is just one of the many factors of the HR policy which seems to influence people. Previous studies show that a number of HR policies and practices (Appendix A) seem to positively influence Employee Commitment (MacDuffe, 1995, Huselid, 1995, Arthur, 1994), and foster growth as it allows management to retain talented employees by making the right management decisions. Certain HRM practices act as a mediator in enhancing organisational performance as it encourages employees to perform better within the workplace. Furthermore certain HR activities strongly influence ones behaviour and performance right from the recruitment and selection stage down to employee development.
Sociology also plays a vital part in helping us to understand the employee commitment philosophy. As it is all about the relationship between an employer and the employee (Psychological contract). (Eisenberger et al, 1990 cited in Baptiste 2008) defines this as a social exchange process.
Furthermore, it is clear that this helps us to understand human behaviour regarding how much effort you put into your work and what you expect to get in return. (Homans, 1958). The social norm of the reciprocity theory suggests that there are several mechanisms of behaviour as employees will give positive kind rewards for actions and responses to each other because it is all about how they are being treated and moreover how they can benefit the organisation. For example an employer can improve commitment through a variety of HRM practices which can influence an individual’s performance as they will be able to perform better and be more motivated by gaining a sense of value and recognition within a firm thus reducing the labour turnover. Thus employee commitment is a fundamental key to overcoming high employee turnover which is visible through the influence of HR.
To summarise, we can say that previous hypothesis verifies that the relationship between the employer and employee as it enhances commitment and determines to build a stronger relationship between the two. This is also backed up with the study of Guest, 1995 as he mentions that ‘where the psychological contract is positive, increased employee commitment and satisfaction will have a positive impact on business performance’. (CIPD, 2010)
2.3. Organisational Commitment Conceptualization
Commitment has been looked upon by various scholars who have established their own theories and frameworks towards commitment and for this reason it has become a very popular area for research. There are over 25 different scales and definitions of commitment within academic literature and tremendous light has been shed on this theme which has attracted a lot of attention in recent years because it is all about understanding what makes employees leave or stay within an organisation. Scholars such as Allen and Meyer, 1990, Meyer and Allen 1984 are highly recognised within this field as they have developed a three component model, which illustrates and summarises commitment in three dimensions which include affective, continuance and normative.
The concept of affective commitment relates to ‘positive feelings of identification with, attachment to, and involvement in, the work organisation’ Meyer and Allen, 1984, p 375. Whilst on the other hand the attitudinal theory also links into the concept of affective commitment, moreover is backed by the study of Mowday et al 1979. Similarly MacDaffie 1995 viewed commitment as a stable affective response towards an organisation. Affective commitment relates to an emotional attachment which employees build towards their organisation. It is a key variable which creates a sense of trust between an employer and the employee, which predicts behavioural intentions.
Continuance commitment also termed as ‘calculative commitment’ Mathieu and Zajac, 1990, cited in Jain et al, 2009 is defined as ‘the costs the employees associate with leaving the organisation’. Allen and Meyer, 1990 cited in Rashid et al 2003, p…). This concept also ties in with the side bet theory of Becker’s 1960, which in return a validated by Meyer and Allen 1984. It emphasises on the contract of exchange behaviour and outlines that employees who are committed tend to place side bets on an organisation as they believe by remaining in an organisation they will heap up the rewards and benefits such as a pension plan which in return an employee will show a willingness to remain within that organisation.
It seems that those employees who develop a strong continuance or affective commitment will remain within their organisation because their job might offer them professional development opportunities. McGee and Ford, 1987
Normative commitment is referred to an ‘employee’s feelings of obligation to remain with the organisation’. Allen and Meyer, 1990 cited in Jain et al 2009. This might be because an employee feels that its the right thing to do because of the moral obligation that they might have towards the company or any positive experience that they might have had during their employment at that organisation, moreover if the employee feels and values the training which they might have received from the organisation they would be more likely to stay within that organisation as a token of appreciation. Thus it is clear that those employees who hold normative commitment demonstrate a moderate level of feelings of loyalty.
2.4. Employee Commitment
It can be seen from the past 25 years that employers and practitioners alike have shown a keen interest in the concept of commitment. Employee commitment is also known as Organisational Commitment (OC). Best defined as ‘the desire of employees to remain in the organisation, exerting work effort while accepting organizational goals’ Putterrill & Rohrer, 1995 pp 2. Noticeably many scholars have highlighted the importance of commitment in academic literature as it can be seen as a multi dimensional construct which portrays both independent and dependant variables. Generally, many theorists believe that there is a strong relationship between employee commitment and employee turnover as those employees who are more committed tend to perform better than those who are less committed.
Although the concept of commitment has been one of interest and debate within the academic community, it was in actual fact the Harvard framework (Beer et al 1984) which created the foundation for this term. It illustrated that the concept is more along the lines of a soft HRM approach (Storey, 2001). Furthermore it is known to be one of the most influential models of HRM. It seems that the main emphasis is on people as they are potential assets which cannot be treated or managed like other business resources. The key aspect of this point is that firms should consider employee welfare, because staff are likely to be your most valuable assets. Commitment is just one part of four HR policies which must be achieved by an organisation also known as the 4 C’s.
In contrast the Michigan model also known as the Matching model has received some criticism within the literature because it displays a hard approach towards HRM, and it stresses that employees are resources just like other business resources and that people need to be managed in the same way. Nevertheless a study conducted by Arnold and Feldman, cited in ‘found that commitment accounted for almost 50 percent of the variance of intension to search for alternative jobs’.
It can be seen that everyone has different needs and goals therefore they are likely to be motivated in different ways. Every organisation is concerned about how to effectively develop and improve their organisations workforce and performance moreover how to maintain a successful work environment. This can only be done through motivation because this process helps managers to further understand their own employees’ behaviour, actions, attitudes and understand why some people behave differently to others and why they take the decisions which they do.
This enables management to further develop their employees so they can become a driving force which can achieve competitive advantage. Motivation also ties in with job satisfaction because its sole aim is to add value through people. Many people are motivated because they believe that by working towards a goal or task they are more likely to achieve and satisfy a need.
Herzberg 1957 two factor model, Intrinsic and Extrinsic also known as the motivation and hygiene theory, was based upon capturing and analysing data from over 200 engineers and accountants and asking them about the times when they felt positive and good about their job and times when they felt dissatisfied. The research found that there were a number of factors which caused job satisfaction and dissatisfaction at work.
(The table above illustrate when people feel most satisfied and dissatisfied).
As you can see the first section is mainly concerned with ones personal growth whilst the second section is more on the lines of fair treatment which one expects from an organisation. Herzberg’s theory has been subjected to criticism by fundamental research that shows he fails to make any attempt ‘to measure the relationship between satisfaction and performance’ (Armstrong. 2006 p.263) Although on the other hand despite it’s validly and weakness his theory still remains highly recognised and valued by many readers as it links in with the views of McGregor and Maslow.
Based on the theory of human motivation, Abraham Maslow, 1943 established a pyramid which he named the “hierarchy of needs”. It has become one of the most dynamic and popular theories within the field of motivation. Maslow claimed that individuals are motivated in different ways because they have different needs and once a certain need is met individuals will tend to move up the hierarchy to fulfil another need. He prescribed that there are five basic levels of needs which include: Physiological, Safety, Social, Esteem and Self-Actualization.
Once the lower level needs such as food and water have been fulfilled only then can an individual pursue higher level needs such as achievement and personal growth.
This theory is relevant in today’s economic environment as it helps managers to understand the philosophy of human behaviour so that they can effectively manage their employees by understanding what motivates them and why. Therefore in order for employees to perform well they must be satisfied accordingly by their needs. There are several empirical studies which support Maslow’s view see Alderfer, 1972, Davis and Filley, 1963, Greenberg & Baron, 2000. Certain elements of motivational factors will be discussed later on in this dissertation.
2.6. Demographic Characteristics and Commitment
The relationship between personal characteristics and employee commitment (organisational commitment) have been looked upon in many studies (Tsui & Cheng, 1999, English et al, 2010, Metcalfe and Dick,2002) which have reported and highlighted that there is a link between factors such as gender, material status, age as well as length of service within an organisation and commitment.
One of the most studied characteristics of employee commitment is gender and tenure because it has been found to be valuable in predicting ones commitment to their organisation as it acts as a moderator in establishing affective commitment.
Although on one hand mixed results have been established within a number of studies which demonstrates that the link between commitment and gender / tenure is unclear. Powell, 1999 states that both men and women tend to experience and show similar levels of commitment. Whilst on the other hand Singh et al, 2004 argues men are more committed then women similarly Mowday et al, 1982, Ward and Sloane, 1998 claim that women are more committed then men.
Furthermore Anderson et al, 2010 found that women tend to leave an organisation more frequently then men, although there is no evidence to support this view.
Besides this, a well known Meta analysis which was conducted by Mathieu and Zajac’s, 1990, found that there was a similarity and a relationship between commitment and gender, but unfortunately these results lacked consistency andtherefore were not considered valid. Furthermore Gallie et al, 2001 indicated that an employee’s commitment to their organisation increases with age as employees develop a high level of commitment. Nevertheless tenure also seems to draw mixed messages because some critics assume that an employee’s affective commitment increases by the growing number of years they have been with an organisation Gaertner and Nollen, 1989, whilst others Lok and Crawford, 2001 believe that the two constructs are negatively related.
2.7. Perceived Organisational support (POS)
Perceived Organisational support is a key mediator in an organisation as it is about how employees feel and their perception of how much an organisation values them. As defined by Eisenberger (1986) ‘employees perception concerning the extent to which the organization values their contribution and cares about their well being’. The POS theory also links into the social exchange theory as well as the norm of reciprocity theory as it describes that certain employees are motivated in various ways as a result they tend to portray and display positive attitudes and behaviours towards their organisation when treated fairly.
Gouldner, 1960 investigated and found that those employees who have a high level of POS are most likely to create a sense of obligation and are more likely to reciprocate to an organisation in a positive way thus reducing the level of employee turnover because if an employee feels that the company has acted positively towards them and does show a interest in them then they are more likely to remain and stay committed to that organisation by helping it to achieve its goals and objectives. Meyer and Smith 2001 claim that POS is a factor which measures the relationship between Organisational commitment and HRM practices.
Furthermore, a meta analysis was carried out by Rhoades and Eisenberger’s 2002 which was based upon over 70 logical studies. In conclusion the study found that fairness, supervisors support, job conditions and rewards were among the top constructive treatments received by employees, which in other words are also known to be the HR practices which actually increase POS. Similar research was conducted by Fasolo 1995 and Wayne et al 2002 cited in…. who mention that procedural justice contributes more strongly to POS.
2.8. Individual & Bundle of HR Practices
Past studies have mainly emphasised and focussed on individual HRM practices in improving employee commitment and many scholars have extensively examined and noted that certain HRM practices do demonstrate a strong link between employee commitment (organisational commitment) such as reward systems, Hackman, 1990, training and development, McLagan, 1989, performance appraisals, Churchill et al, 1985, although it has been found that a substantial amount of research has been on single HRM practices as being important variables which positively contribute to organisational success. A study conducted by Hatch and Dyer’s 2004 based on 25 semiconductor manufacturing firms established that by providing employees with the appropriate training and development opportunities resulted in fewer defects in the products which were being produced, similarly, Harel and Tzafrir, 1999 identified training to be one of many single HR practices which influenced organisational performance and commitment.
On the other hand those in favour of MacDuffie 1995, Huselid 1995, Pfeffer 1994 and, Guest, 1998 claim that many organisations have weakened as they simply focus on one management practice and fail to take up a bundle of HR practices therefore single HRM practices are not seen to be as efficient by these scholars because such academics believe that a multiple systematic constituency approach is needed which interrelates various HRM practices together. This, in turn, can influence organisational performance much more strongly. This is backed by Wood and Albanese 1995 cited in Baptiste 2008 who ‘argue that a variation in organisation policy or bundles of HRM policies is likely to be most effective in enhancing commitment’ . Although there are a number of HR practices embedded within the literature (Pfeffer’s, 1998 cited in Bach, 2005) seven practices have been prominently outlined to be high performance work practices which are adapted and used by many successful businesses.
Whilst on the other hand the universalism perspective also known as “best practice” outlines that some HR practices are better then others therefore organisations must adapt certain practices Miles and Snow, 1984. This view is backed by Delery and Doty, 1996 who outline that there is a ‘direct relationship between several HRMP and organisational performance. Which in turn leads to the contingency theory Joan Woodward,1985. This mentions that there is no single best way in organising and leading an organisation and that certain strategies should be tailored to meet certain circumstances. As pointed out by Fiedler 1964 management styles which are effective in some environments might not be successful in others.
2.9. Employee turnover research
Many scholars have researched into the field of employee turnover also known as labour turnover. Past studies have gained much interest due to the effect it has on organisational success or failure. It still remains a widely debated issue as it explores what makes employees leave or remain in an organisation. According to a survey conducted by CIPD found that the UK labour turnover rate is 13.5%. Turnover seems to be a two way process because it can have dual effects on an organisation, positive as well as negative. In order to drive an organisation towards success in the manufacturing industry turnover must be managed appropriately or else it will de-function the whole organisation. (Glebbeek & Bax, 2004). It can be said that a number of HRM practices can help to reduce the rate of turnover and reduce the level of cost, for instance providing employees with appropriate training and offering rewards. This is supported by the view of Cheng and Brown, 1998 who point out that if employees are provided with better career opportunities an organisation will benefit from lower level of employee turnover. This also links in with the views Wiggins 2001 who mentions that if firms were to provide employees with better advancement opportunities, employees would feel more satisfied from their job. On the other hand Salamin & Hom, 2005 argue that by giving employees a bonus will help to reduce the rate of turnover. However Akerlof and Yellen 1986 claim that firms can effectively reduce turnover costs by increasing pay. Although as far as Martin, 2008 is concerned there is no evidence which supports this view.
Turnover can be either classed as voluntary or involuntary. Certain pull and push factors tend to aid voluntary turnover. For example, staff might leave an organisation due to lack of satisfaction and interest from a certain role or they might be attracted towards another job which might offer them more benefits such as a company car. Whilst on the other hand Morrell et al 2004 cited in Booth and Hamer, 2007 claims that the best performers are most likely to leave an organisation voluntarily. This is also backed up by the view of Jackofsky et al 1986. Involuntary turnover is associated with such factors which are beyond control for instance death or long term sickness. As a result the employer has no alternative but to terminate the employment relationship.
2.10. Effects of High turnover and Intensions to quit
Despite the growing number of studies focussed solely on the relationship between commitment and employee turnover, the effects of such withdrawal intensions are poorly understood. Therefore a number of contributions towards labour turnover can be traced directly from various management practices. Controversially it can be seen that the effects of high labour turnover are immense within the manufacturing sector as it incurs both direct and indirect costs to the organisation. High turnover can effect an organisations productivity, quality, financial performance as well as its customers because if a firm does not have a large workforce or manpower to complete a task on time they won’t be able to meet their goals resulting in inadequate use of resources and poor performance which will eventually effect many of its stakeholders.
Therefore it is essential for managers to manage voluntary turnover or else it will drive costs out of the roof, because high labour turnover results in shortage of skills, loss of social capital, inefficiency and additional costs being incurred in order to recruit new employees for a business Dess and Shaw, 2001. Turnover costs tend to be high in terms of advertising, recruitment and selection, training, overtime and increased management time as these are some of the factors which contribute to the cost element of recruiting a new employee. Therefore in order to avoid such costs it is essential that retention strategies should be put in place to minimise turnover so that employers can avoid going through the whole recruitment process all over again.
2.11. Unfolding Model
The unfolding model of Lee et al 1999 is based on the decision making process and outlines why employees decide to quit. The model outlines that employees leave an organisation based on different reasons and on average an employee will go through five stages before they actually quit. Lee and Mitchell 1994 outline that when employees respond to a single event “shock” it triggers the decision making process and an employee starts to think about quitting a job. Allen and Griffeth 1999 point out that this mainly occurs when managers provide negative feedback during performance appraisals. Porter et al 1974 highlight that a greater understanding should be made in terms of understanding the employee turnover process.
Chapter 3: Methodology
Methodology is best defined as ‘the theory of how research should be undertaken, including the theoretical and philosophical assumptions upon which research is based and the implications of these for the method or methods adopted’. (Saunders et al, 2007, p.602).
This section will include the investigative techniques on how information will be researched for this dissertation. Moreover it shall also highlight the validity of the methods chosen and the constraints. The majority of this research will be based on the gathering of primary data and analysis which will be in the form of a questionnaire. The first three objectives of this dissertation were achieved within the literature review. Whilst the remaining two will be achieved through primary analysis.
The survey consisted of five parts, the first section helped to identify the employees’ demographic characteristics as well as their length of service within the organisation. This enabled the researcher to understand the diversity of employees by fragmenting employee data accordingly which was necessary for this research. The second section focussed on commitment and it outlined the type of commitment the employees’ held (affective, continuance or normative), towards their organisation, by completing 15 statements. In contrast five statements where chosen for each type of commitment which was based on a five point Likert rating scale. The third section emphasized on the theory of POS, which was analysed through a 15 statement instrument which helped to establish the POS view of employees towards their organisation. The forth section highlighted the types of HR practices which should be adapted within the firm in order to improve the relationship between both the employer and the employee, which in return will enhance employee commitment, thus reduce the level of absenteeism. The fifth section will establish what types of rewards systems are being used within the organisation. The final section was based on a scale which was introduced by Mobley et al 1978, which highlighted and examined the level of employee withdrawal intension within all four manufacturing firms.
3.2. Secondary Research
Secondary research on the other hand is commonly known as desk research. Secondary research is vital because it sheds light so that researchers can get a more in depth understanding on a particular topic or area of interest. It helps researchers to gather and summarise data which already exists such as previous reports, statistics. Once secondary research has been conducted researchers can then establish whether there is a need for primary research. Therefore it is important that any secondary research which is being conducted is gathered in an appropriate manner because you need to take into account the overall reliability and validity of the data. By investigating from this perspective I will need to make sure that the information I use is both accurate and from a reputable source. I will be checking elements such as:
Who produced the certain reports/data:
Is the research relevant to my question:
How old are the articles and statistical data:
Throughout this dissertation my secondary research has been conducted using various methods such as books, internet websites and journals. This provided background research which was needed to establish the relationship between commitment and employee turnover intensions. Although on the other hand primary research was also conducted which established how much employees perceived that their organisation values and cares for them moreover it highlighted the type of commitment employees held towards their organisation.
3.3 Quantitative Data/ Questionnaires
A questionnaire was considered to be suitable and an appropriate method for this study (Appendix B). Questionnaires would be given to four manufacturing firms and it would be completed by their employees so that the researcher can establish why some employees decide to leave an organisation whilst other don’t. The survey was created in such a way which enabled respondents to clearly understand the questions thus accurate answers were collected. In order to avoid bias answers being given by the respondents’ survey techniques such as a Likert rating scale was implemented e.g. “I strongly agree, I disagree”
3.4. Distribution of Questionnaires
Data was collected based on four manufacturing firms within the city of Birmingham. It was necessary to obtain permission from the company managers prior to carrying out this survey. Thus a letter of intent was posted to the company managers which outlined the purpose of this study and which was later granted consent, furthermore consent from various participants was also obtained which allowed this research to be undertaken. (See appendix C)
The questionnaire was delivered personally by the researcher to the four businesses, which allowed a face to face interaction with the management, moreover this enabled the participating firms to discuss and resolve any queries that they might have. A time scale of one week was agreed by the researcher and the four organisations in which the survey must be completed. This allowed plenty of time for the firms to convince their employees to take part in this study. After the duration of one week the questionnaires were collected and analysed.
Self – selection sampling was used by the researcher as this was a quick and convenient method because it allowed managers to hand the questionnaire to those employees who were willing to participate. As there is a combined total of over 130 employees working within all four manufacturing firms (Appendix D). The author decided that a sample would be more appropriate rather than collecting data from the entire workforce as this method would enable to gather the results more quickly thus reduce the time limit.
A total of 100 employees will take part in this survey, Approximately 25 respondents from each firm. The manufacturing sector is known to have high labour turnover rate and because there is a mixed population within the manufacturing industry the research will cover several elements based on employees, age, gender, material status and length of service. Within this research the author intends investigate the cause of this my questioning employees from these firms in regard to HRM practices and employee commitment within the organisation and the author shall evaluate these influences and advise the management on what they need to do in order to improve efficiency and how to positively overcome employee commitment and the factors affecting it..
The types of people who will take part in this study will be both employers and employees of the firm, ranging from senior managers to night production operatives and all that is in between.
3.6. The limitations, Reliability & Validity of Research
One of the main limitations for this study is the time scale in which the survey must be completed, as it was agreed that managers will allow duration of one week for their employees to complete this survey. Another limitation is finding participants who are willing to take part in this research.
Validity is defined as ‘the extent to which research findings are really about what they profess to be about’. (Saunders et al, 2007, p. 614). As this study is mainly focussed on commitment it will be measured via a 15 statement questionnaire, likewise validity was generalised by implementing the scale which was developed by Allen and Meyer 1990.
To ensure the reliability of this questionnaire a pilot study was necessary to assess the reliability and the effectiveness of the questionnaire. In order to establish the suitability of the questions two lecturers took part in this pilot test and suggested several improvements which could be made and this resulted in further changes being made to the questionnaire which made it more reliable so that data could be recorded more accurately because only those questions should be answered which relate to the original question, resulting in fewer vague answers being assessed, moreover it enabled the researcher to focus on the layout, length and clarity of the questionnaire.
3.7. Ethical Issues
The author took certain elements into account such as Data Protection Act 1998 and the code of conduct which is associated with the Market Research Society (MRS). This allowed the researcher to maintain professional standards at all times whilst conducting market research within an ethical manner. The author had to make sure that the research which was being conducted was kept confidential thus it had to be properly stored so that it didn’t get into the wrong hands. Moreover it was assured that this data would not passed onto third parties and it is only intended for this research. Moreover for the interest of the research careful planning was put into the questions so that those who were participating in the survey where not offended in any way, shape or form. For this reason the researcher had to make sure that the questions being asked were first approved by his supervisor and that the questions were the consistent and same for all participants.
The aim of this section was to show and discuss the effective methods which are chosen for this study. It outlined that both primary and secondary research are essential part of this research, moreover it showed how data was collected and analysed appropriately by the researcher.
Although it can be seen that academics and researchers use a variety of methods and techniques to construct their research and this mainly depends on the type of research being conducted because every method has its own advantages and disadvantages. Thus a researcher must choose a method which enables them to accurately collect data which relates to a specific research topic in a structured way.
The researcher considered that an appropriate method for gathering data would be a questionnaire because it would allow information to be collected in a standardised way, information can also be analysed much quickly. This method is less invasive compared to a telephone or even a one to one survey.
Finally ethical issues were also taken into consideration by the researcher which emphasised the importance of data protection and the confidentiality of personal information.
Chapter 4: Findings & Analysis
Within this section of the dissertation the primary data and information which was gathered will now be affectively analysed. Which will show the key findings of this study and highlight some of the major theory and practices mentioned previously within the literature review chapter.
Around 100 surveys were initially sent out to four manufacturing organisations within the city of Birmingham. Out of the 100 surveys sent, 8 were unusable as they contained missing data in parts of the survey. This was because some parts of the questionnaires were left blank by the respondents therefore data could have not been used in conjunction with the rest of the findings. Therefore only the 92 remaining completed surveys were analysed. Overall the response rate was 92%.
4.1. Profile of Candidates
As you can see from the table below all 92 respondents reported their sex out of the 92 participants 64 (70%) were found to be male and 28 (30%) were female. This promptly shows that most of the employees within the organisation were male. On the other hand 54% of participants were married whilst the remaining 46% were not. The age of the respondents was also taken into consideration, which showed that most employees were middle aged as the mode appeared to be between 31-40 years of age reflecting a healthy percentage of 38% followed by the age group 20-30 with a percentage of 29%. Regarding the length of service within the organisation over 51% of respondents reported that they had been in active service with their organisation for less then one year. This is quite a high figure which demonstrates the high rate of employees joining the organisation, which also ties in with the level of employee turnover which one expects to see within manufacturing organisations. This was followed by 28.3% of employees who stated that they had been with their employer between 1-2 years, followed by 16.3 % who had worked for 2-4 years, whilst only a tiny fraction of 4.3% of employees had been in service for over 4 years.
Length of Service:Less then 1 year47
Less then 1 year
Between 1 – 2 years26
2 – 4 years15
Over 4 years4
4.2. Gender, Material Status, Age & Length of service
Upon capturing and analysing the commitment data of employees and the relationship it has with demographic variables it was prominent that there was a clear gender difference in commitment as females were found to be more committed then men. This was supported by the study of Mowday et al, 1982 and Ward & Sloane, 1998 as 26 females strongly agreed with the following statement “I feel a strong sense of belonging to my organisation”.
Although age seems to have a slight effect on ones commitment towards their organisation as only 7% strongly believe that one should stay loyal to their organisation which backs up the study of Gallie et al, 2001 who mentioned that ones commitment towards their organisation increases with age. Although their is no hard evidence which backs the view Gallie et al, 2001 as the sample gathered within this study is not large enough therefore by looking at ones length of service within an organisation it is visible that their is a clear relationship as it confirms that most employees will build up affective commitment when working within an organisation for more than one year and this should increase as they stay longer within the firm by being motivated by their employer thus they tend to portray a high level of job satisfaction.
By looking at the diagram above we can see that firm 2 and 4 seem to display a high level of employee turnover as they have a high number of new employees joining the organisation and they have been working for the organisation for less then one year, whilst firm 1 and 3 seem to show the opposite by displaying fewer number of new employees who have worked for less then one year.
4.3. Organisational Commitment Conceptualisation
Based on three component model developed by Allen and Mayer the study revealed that Continuance commitment was highly evident in the majority of employees as it accounted for 46 (50%) of the participants followed by Affective commitment which was shown in 40 (43%) of employees, whilst the remaining 6 (7%) of employees showed Normative commitment.
4.4. Perceived organisational support
Upon further investigation it was noted that employees from firm 1 and 3 reported high levels of organisational support as they build a kind of trust and a reciprocal relationship between their employer because majority of employees strongly agreed with the following statement “My organisation values my contribution and effort”. Whilst on the other hand firm 2 and 4 seem to portray lower levels of organisational support as the majority of employees said that they were not satisfied with their organisation. This also goes to show that employees from firm 2 and 4 are less motivated compared to firm 1 and 3. These findings also seen to validate the study of Meyer and Smith, 2001 as more HRM practices are being used within firm 1 and 3 whilst the other remaining firms don’t seem to understand the importance of the POS theory because the are mainly concerned with making as much profit as they can. These findings also seem to show positive and encouraging results by illustrating that there is a strong relationship between both affective commitment and intention to leave as this is mainly influenced by POS which in turn predicts turnover. This ties in with previous studies Eisenberger et al, 1990 Falkenburg and Schyns, 2007 cited in Jordan et al, 2010, which successfully verifies our first hypothesis.
This primarily concludes that out of the 92 subjects, 40 held affective commitment whilst 48% of the initial 92 respondents either disagree or strongly disagree with the following statement. “I think a lot about leaving my organisation” whilst the remaining agree thus it shows that the lower level of POS which one holds initially decreases Affective commitment which in turn should increase higher lever of intension to quit.
4.5. HR Practices
Looking at the graph above it can be noted that employees feel strongly passionate about a number of HR practices which they believe if they are adapted by their organisation they would be able to take advantage from them, thus as a result this will increase their overall commitment towards their employer.
These findings also showed that employees who held continuance commitment held a high desire for such HR practices then compared to those who held affective commitment. This was evident as most employees who held affective commitment mainly ticked’ Neutral’. This also showed why employees from firm 1 and 3 were more committed to their organisation then compared to firm 2 and 4.
This was mainly because HRM practices were already in place and are being used within firm 1 and 3.
It is evident that the most popular HR practice which employees would like to see implemented are rewards & benefits since 60 employees highlighted that their relationship with their employer could improve if they were given bonuses and rewards more often. Whilst working conditions and training & development also seem to be important factors in enhancing the relationship between both the employee and the organisation. These findings also support the views of Pfeffer, 1998 by illustrating that a bundle of HRM practices working together are much more effective then such single practices working in isolation.
4.6. Reward Systems
The chart illustrated above clearly shows the reward systems which are being used at all four manufacturing firms. Its can be clearly noticed that out of the 92 respondents only 44 (48%) employees have received some kind of reward from their organisation whilst the remaining 52% have not. The most popular rewards to be used are bonuses, followed by pay increase and then performance pay.
These findings also show that firm 1 and 3 have a greater number of employees who are satisfied with their organisation as they show affective commitment because 40 out of 92 respondents strongly agree with the following statement, “I don’t think that I could be easily attached to another organisation”.
This supports the study done by Salamin & Hom, 2005 and Akerlof & Yellen, 1986 who mention that firms can reduce the level of labor turnover if they provide employees with such bonuses and by increasing their pay. These results also seem to demonstrate the reason why employees from firm 2 and 4 don’t seem to display a keen interest within their organisation as they have a lower level of POS towards their employer. This verifies our second hypothesis because those firms who don’t offer such rewards and benefits to their employees will tend to have a de-motivated workforce as a result these employees will be more likely to leave an organisation.
4.7. Withdrawal Intentions
The diagram above was based on a scale introduced by Mobley et al 1978, which was used to assess the level of an employees withdrawal intention. The findings were based on ones intention to quit, ones intention to search for an alternative job and one’s desire to stay within the organisation because they see themselves having a long term future with their current employer. These findings revealed a correlation between employees who held Normative commitment 7%, as most of them stated that they strongly agreed to the following statement “I see myself having a long-term future with my current employer. The findings also revealed that those employees who held continuance commitment were more likely to leave their organisation primarily as they reported high levels of intention to quit.
4.8. Leavers by length of service
The variance of employees who left the organisation last year was also assessed as this data provided more proof into the factors which are likely to affect ones motivation and commitment. It was evident from the table that firm 2 and 4 had the highest labour turnover rate compared with firm 1 and 3 which only accounted for 12%.
This verifies the relationship between tenure and commitment because less committed employees are most likely to leave an organisation within one year of joining. In times of the current economic environment and due to the effects of the severe recession businesses are more likely to experience a lower rate of employee turnover. As job alternatives will be scarce and people will not move or leave an organisation that easily. However, when the economies improve and return to growth a business that has “dissatisfied staff” is in danger of loosing key employees at the very time they need them the most.
Therefore in order to avoid this trend firms 2 and 4 need to implement commitment enhancing strategies which will enable it to reduce the level of employee turnover within the company.
Less then 1 year
Over 4 years
Total number leaving
Average number employed
Index of labour turnover %
Birmingham Safety Wear
Chapter 5: Conclusion
The aim of this study was to identify ways in which HRM Practices could be used in order to influence employee commitment, thus minimise employee turnover within the manufacturing sector. Four manufacturing organisations were selected by the author to take part in this study. Therefore 5 objectives had to be put forward in order to establish if HRM Practices had any influence on commitment.
From the research it was evident that a number of HRM practices had a major influence upon the employer and employee relationship, which in turn affected ones motivation and commitment towards their organisation. The findings also supported the POS theory as it had an immediate affect on ones ability to think and act positively towards their employer. Similar to other studies the findings illustrated less committed employees would like to see a number of HR practices being implemented within their organisation.
The results also indicated positive outcomes which verified both hypotheses. This indicated that two out of the four manufacturing firms were successful in maintaining an effective working environment because employees from these firms portrayed affective commitment as they received rewards and benefits from their organisation which showed that their employer was keen in investing in them whilst the remaining two organisations demonstrated a high level of intention to quit because employers from the remaining two firms don’t pay much attention towards keeping their employees motivated. From the findings above it is visible that a number of improvements can be made in firm 2 and 4.
5.1. Implications of study
This study had a number of implications firstly it investigated four different manufacturing firms which produced various products therefore analysing manufacturing firms which produced similar products would have been a more sensible idea as it would have given more concrete results. Secondly the sample (92) was small as it did not represent the manufacturing sector, thus the sample frame could have been bigger. Nevertheless factors such as job role and education level could also be considered for future research as it would allow a more in depth analysis to be undertaken which should cover more ground
Part 6 A
Please state your level of agreement with the following statements by using the 5 point Likert rating scale as indicated below.
Please tick your answer1
I think a lot about leaving my organisation
I am actually searching for another job elsewhere
I see myself having a long term future with my current employer
Thank you for your time and co-operation
Part 6 B
(To be filled in by the Employer only)
Please can you state the number of employees’ who left the organisation last year by length of service?
Less then 1 year
Over 4 years
Total number leaving
Average number employed
Index of labour turnover %
Birmingham Safety Wear
Akerlof, G. Yellen, J. (1986) Efficiency Wage Models of the Labor Market. Cambridge: Cambridge University Press.
Alderfer, C.P. (1972) Existence, Relatedness, and Growth. New York: Free Press
Allen, N., Meyer, J. (1990), “The measurement and antecedents of affective, normative and continuance commitment to the organisation”, Journal of Occupational Psychology, Vol. 63 pp.1-18. Cited in M.Z.A Rashid
Anderson, D. Vinnicombe, S. Singh, V. (2010) ‘Women partners leaving the firm: choice, what choice?’, An International Journal, Vol. 25, pp.170-183.
Armstrong, M. (2006) A Handbook of Human Resource Management Practice. 10th Edition. London: Kogan Page.
Arthur, J. (1994), ‘Effects of human resource systems on manufacturing performance and turnover’, Academy of Management Journal, Vol. 37, No.3, pp. 670-687.
Bratton, J. (2002) Strategic human resource management [Online]. Bratton J. Retrieved from: http://www.palgrave.com/business/brattonandgold/docs/bgcha02.pdf [Accessed 10 November 2010]
Cheng, A. Brown, A. (1998), ‘HRM strategies and labour turnover in the hotel industry: a comparative study of Australia and Singapore’, International Journal of Human Resource Management, Vol. 9, No.1, pp.136-154.
CIPD (2010) The psychological contract [Online].CIPD. Retrieved from: http://www.cipd.co.uk/subjects/empreltns/psycntrct/psycontr.htm?IsSrchRes=1 [Accessed 26 October 2010]
Churchill, G.A. Ford, N.M. Hartley, S.W. Walker, O.C (1985) ‘The determinants of salesperson performance: a meta-analysis’, Journal of Marketing Research, Vol. pp.103-18.
Davis, R.C. Filley, A.C. (1963) ‘Principles of Management’, New York: Alexander Hamilton Institute.
Delery, J.E. Doty, D.H. (1996) ‘Modes of theorizing in strategic human resource management: tests of universalistic, contingency and configurational performance predictions’, Academy of Management Journal, Vol. 39, No.4, pp.802-835.
Eisenberger, R. Fasolo, P. Davis-Lamastro, V. (1990) Perceived organisational support and employee diligence, commitment and innovation. (s.I.): (s.n). Cited in N.C Baptiste (2008) Tightening the link between employee wellbeing at work and performance. Manchester: Emerald Group Publishing Limited.
Eisenberger, R., Huntington, R., Hutchison, S., & Sowa, D. (1986). Perceived organizational support. [Online]. Retrieved from: http://eisenberger.psych.udel.edu/POS.html [Accessed 4 November 2010].
English, B. Morrison, D. Chalon, C. (2010) ‘Moderator effects of organizational tenure on the relationship between psychological climate and affective commitment’, Journal of Management Development, Vol. 29, No. 4, pp.394-408.
Fiedler, F. E. (1964) ‘A Contingency Model of Leadership Effectiveness’, Advances in Experimental Social Psychology, Vol..1, pp. 149-190.
Gaertner, K.N. Nollen, S.D. (1989) ‘Career experiences, perceptions of employment practice, and psychological commitment to the organization’, Human Relations, Vol. 42, pp. 975-91.
Gallie, D. Felstead, A. Green, F. (2001) ‘Employer policies and organizational commitment in Britain 1992-1997’, Journal of Management Studies. Vol. 38, No.8, pp.1082-101.
Glebbeek, A.C. Bax, E.H. (2004) ‘Is high employee turnover really harmfulAn empirical test using company records’, Academy of Management Journal, Vol. 47, No.2, pp. 277-86.
Gouldner, A.W. (1960), ‘The norm of reciprocity: a preliminary statement’, American Sociological Review, Vol. 25, No.2, pp.161-79.
Greenberg, J. Baron, R.A. (2000) Behaviour in Organisations: Understanding and Managing the Human Side of Work. 7th edition. (s.I.): Prentice-Hall
Guest, D (1995) Why do people work (s.I.): (s.n.). Cited in M. Marchington A. Wilkinson (1996) Core Personnel and Development. London: Institute Of Personnel And Development
Hatch, N.W. Dyer, J.H. (2004), ‘Human capital and learning as a source of sustainable competitive advantage’, Strategic Management Journal, Vol. 25, pp.1155-78.
Hackman, J.R. (1990) Groups That Work (and Those That Don’t): Creating Conditions for Effective Team Work. San Francisco: Jossey-Bass.
Harel, H.G., Tzafrir, S.S. (1999) ‘The effect of human resource management practices on the perceptions of organizational and market performance of the firm’, Human Resource Management, Vol. 38, No.3, pp.185-99.
Homans, G.C. (1958) ‘Social behavior as exchange’, American Journal of Sociology, Vol. 63, No.6, pp.31-41.
Huselid, M.A. (1995), “The impact of human resource management practices on turnover, productivity, and corporate financial performance”, Academy of Management Journal, Vol. 38 pp.635-70.
Lok, P. Crawford, J. (2001) ‘Antecedents of organizational commitment and the mediating role of job satisfaction’, Journal of Managerial Psychology, Vol. 16, pp.594-613.
Pfeffer, J. (1994). Competitive Advantage Through People: Unleashing the Power of the Workforce. Boston: Harvard Business School Press. Cited in P.M Wright T.M. Gardner L.M. Moynihan (2003) The impact of HR practices on the performance of business units. (s.l.): (s.n.) Retrieved from: http://www.blackwellpublishing.com/pdf/wrightetal.pdf [Accessed 29 October 2010].
Pfeffer, J. (1994) Competitive advantage through people. Boston: Harvard Business School Press. Cited in T. Redman A. Wilkinson (2001) Contemporary Human Resource Management. Essex: Pearson Education Limited.
Pfeffer,J. (1998) The Human Equation: Building Profits by Putting People First. Boston: Harvard University Press. Cited in S. Bach (2005) Managing Human Resources. Oxford: Blackwell Publishing
Porter, L.W. Steers, R.M. Mowday, R.T. Boulian, P.V. (1974) ‘Organizational Commitment, Job Satisfaction, and Turnover among Psychiatric Technicians’, Journal of Applied Psychology, Vol. 59, No.5, pp.603-09.
Powell, G. (1999) Handbook of Gender and Work., CA: Thousand Oaks.
Price, J.L. Muller, C.W. (1986) Absenteeism and Turnover of Hospitality Employees., Greenwich: JAI Press
Putterill, M.S. Rohrer, T.C. (1995) ‘A causal model of employee commitment in a manufacturing setting’, International Journal of Manpower, Vol. 16, No. 5, pp. 56-69.
MacDuffie, J.P. (1995) ‘Human resource bundles and manufacturing performance: organizational logic and flexible production systems in the world auto industry’, Industrial and Labor Relations Review, Vol. 48, pp.197-221.
Martin, S M. (2008) ‘Worker churning and firm’s wage policies’, International Journal of Manpower, Vol. 29, No. 1, pp. 48-63.
Mathieu, J.E. Zajac, D.M. (1990) A review and meta-analysis of antecedents, correlates, and consequences of organizational commitment. (s.I.): (s.n).Cited in A.K. Jain S.I. Giga C.L. Cooper (2009) Employee wellbeing, control and organizational commitment. (s.I.): Emerald Group Publishing Limited
McLagan, P.A (1989) ‘HRD competencies’, Training and Development Journal, Vol. 43, No.9, pp.56-7.
Metcalfe, B. Dick, G. (2002) ‘Is the force still with herGender and commitment in the police’, Vol. 17, No. 8, pp. 392-403.
Meyer, J.P. Allen, N.J. (1984) ‘Testing the ‘side-bet theory’ of organisational commitment: some methodological considerations’, Organisational Behavior and Human Performance, Vol. 17, pp.289-98.
Mowday, R.T. Porter, L.M. Steers, R. (1982) ‘Organisational Linkages: The Psychology of Commitment, Absenteeism and Turnover. San Diego: Academic Press.
Rhoades, L. & Eisenberger, R. ( 2002) ‘Perceived organizational support: A review of the literature’, Journal of Applied Psychology, Vol. 87, No.4, pp. 698-714.
Salamin, A. Hom, P.W. (2005) ‘In search of the elusive U shaped performance-turnover relationship: are high performing Swiss bankers more liable to quit?’, Journal of Applied Psychology, Vol. 90, No.6, pp.1204-16.
Saunders, M. Lewis, P. Thornhill, A. (2007) Research Methods for Business Students. 4th Edition. Essex: Pearson Education Limited
Singh, P. Finn, D. Goulet, L. (2004) ‘Gender and job attitudes: a re-examination and extension’, Women in Management Review, Vol. 19, No.7, pp.345-55.
Steers, R.M. Modway, R.T. (1981) Employee turnover and the post decision accommodation process. Greenwich: JAI Press. Cited in Hurley, R.F Estelami, H. (2007) An exploratory study of employee turnover indicators as predictors of customer satisfaction. New York: Emerald Group Publishing Limited.
Storey, J. (2001) Human Resource Management A Critical Text. 2nd Edition. London: Thompson learning.
Tsui, K.T. Cheng, Y.C. (1999) ‘School organizational health and teacher commitment: a contingency study with multi-level analysis’, Educational Research and Evaluation, Vol. 5, No.3, pp.249-68.
Ward, M, Sloane, P (1998) Job satisfaction: the case of the Scottish academic profession. (s.I.): University of Aberdeen.
Wright, P.M., McMahan, G.C. (1992), “Theoretical perspectives for strategic human resource management”, Journal of Management, Vol. 18 No.2, pp.295-320.
Wood, S. Albanese, M.T. (1995) Can we speak of a high commitment management on the shop floor. (s.I.): (s.n). Cited in N.R. Baptiste (2008) Tightening the link between employee wellbeing at work and performance. Manchester: Emerald Group Publishing Limited.
Wiggins, D. (2001), “Driver hiring and retention: winning at finders and keepers”, Commercial Career Journal, Vol. 147 pp.53-60.
Zeffane, R.M. (1994) ‘Understanding Employee Turnover: The Need for a Contingency Approach’, International Journal of Manpower, Vol.15, No.9, pp. 22-37.