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The Relationship between Organizational Commitment and Intention to Quit: The Malaysian Companies Perspectives



W.L. Kuean, S. Kaur and E.S.K.
 
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ABSTRACT

This study examines the relationship between organizational commitment and an employee’s intention to leave the organization in a Malaysian situation and includes the moderating effects of decision-making participation and the employee’s work-effort on the employee-employer relationship, as well as on their job work-effort. This study has two objectives, firstly to determine the relationship between organizational commitment and intentions to leave among working adults in Malaysia. Secondly, is to investigate the moderating effect of decision-making participation and the effort needed to express an intention to leave by these same adults. This is a descriptive study based on a 300-sample size survey conducted among working adults in Malaysia. There were 189 responses received, representing a response rate of 63%. Of these, only 181 responses with no missing values were used for data analysis as the others were rejected as being incomplete. The correlation analysis results from this study confirmed previous researcher’s observations linking higher organizational commitment with lower intentions to leave the organization. The results suggest that among the three components of organizational commitment, the employee’s affective or affection commitment to the organization was the most important predictor of intentions to leave. Employees were less likely to leave when they have an emotional commitment to and identify with, their organization. Cultivating an organizational culture of shared values and involving employees in the goal setting processes would further enhance employee’s acceptance of and alignment with, stated organizational goals. This promotes greater personal organizational commitment and eventually reduces employee’s intentions to leave the organization.

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  How to cite this article:

W.L. Kuean, S. Kaur and E.S.K., 2010. The Relationship between Organizational Commitment and Intention to Quit: The Malaysian Companies Perspectives. Journal of Applied Sciences, 10: 2251-2260.

DOI: 10.3923/jas.2010.2251.2260

URL: https://scialert.net/abstract/?doi=jas.2010.2251.2260
 
Received: April 02, 2010; Accepted: June 19, 2010; Published: July 27, 2010



INTRODUCTION

Organizations worldwide today face many challenges with the growing integration of the world economy into one single, huge marketplace resulting in intense global competition. Besides needing to keep pace with technological advances, it is also crucial for an organization to be able to retain its best employees in the face of globalization and workforce diversity (Chandrashekharan, 2006).

Collectively, an organization’s employees can provide a source of competitive advantage that is difficult for competitors to imitate. Barney (1991) firm resource model of sustained competitive advantage suggests that in order for a firm’s resource to generate sustained competitive advantage, the resource must add value to the firm, is particularly rare, cannot be imitated and is non-substitutable.

Turnover intention is among the strongest predictors of actual turnover and organizational commitment is one of the most important antecedents to turnover intention (Thatcher et al., 2003; Mitchel, 1981). These findings underscored the importance of organizational commitment in retaining employees and the appropriate use of intention to leave as the dependent variable because of the link to actual turnover.

The average employee turnover rate in Malaysia is 18%, this is based on international human resource consulting firm Hewitt Associate’s 2007 Total Compensation Management Survey. Whether, leaving is involuntary, such as termination initiated by the employer, or voluntary, such as resignations, turnover is potentially costly and may have negative organizational implications. Some examples of possible negative impacts of turnover to organizations are the high costs of recruiting, hiring, training and getting new employees up to speed, productivity loss during replacement search and retraining, loss of high performers and disruption of social and communication structures (Mobley, 1982).

Although, the researcher has found many past studies conducted on employee’s turnover intention in Malaysia as well as other countries, the literature search did not provide any studies that were carried out with the combination of these following factors; organizational commitment, participation in decision making and work effort, that is effort at work.

This study seeks to answer the following research questions:

Do employee’s organizational commitment affect their intention to leave the organization?

Are there any influences of the factors of participation in decision making and work effort on employee’s intention to leave?

Employee turnover defined: Employees may leave an organization either voluntarily or involuntarily. Voluntary turnover is an employee’s decision to terminate the employment relationship. Involuntary turnover is an employer’s decision to terminate the employment relationship (Dess and Shaw, 2001). For the purpose of this study, the definition of turnover intention is an employee’s decision to leave the organization voluntarily.

Consequences of employee turnover: Turnover can be negative or positive to organizations. One of the main negative consequences of turnover is the personnel costs associated with selection, recruitment, training and development of new employees to replace the employees who voluntarily quit the organization (Staw, 1980; Huselid, 1995).

There are three main components associated with the cost of turnover (O’Connell and Kung, 2007):

Staffing in addition to the cost of recruiting and hiring the person initially, the organization must now spend a similar amount to hire the replacement

Vacancy the period of time where that person isn’t working in the company results in lost productivity and potentially lost business

Employees in training are not 100 percent productive from the moment they begin. So it is necessary to invest time and resources for training, orientation and development

If the turnover rate is high, recruitment and selection will become a major function of the organization, thereby increasing its administrative intensity. The new employee may also need a few months before being able to perform at the level of the departed employee. The loss of key members of the organization may also affect the ability of the remaining employees to produce their work due to interdependence of work roles within the organization (Staw, 1980).

Dess and Shaw (2001) suggest a direct negative relationship between voluntary turnover and productivity levels based on the human capital theory.

Riley (2006) observe that social dynamics and effective communication systems are central to the effective performance levels of work teams. Hence, turnover can have a negative impact on the functioning of the organization through loss of team integration, cohesion, morale and may increase in-group conflicts and breakdown of interactions with customers. Riley also reported the estimated cost of turnover has been on average one to one and a half times the employee’s salary.

Dess and Shaw’s (2001) assessment of the cost-benefit approach, argue that although, the costs of turnover are significant, organizations can also realize benefits in the form of payroll reductions, voluntary separations of poor performers and improvements in innovation.

If poor performers are encouraged to leave, more employees that are productive can be employed in their place and this would increase the human capital of the organization. The new employees may contribute fresh ideas, creative solutions and bring along their knowledge, skills and abilities to the organization (Riley, 2006).

Conflicts may arise at the workplace between workers and their supervisor, or among workers themselves. Turnover can reduce deep-rooted conflicts which are not easily resolved and where one side decides to leave the organization rather than continue the fight. Turnover in middle and high level positions may also be the primary determinant of promotion opportunities, thereby contributing to a positive relationship between turnover and organization morale (Staw, 1980).

Although, moderate levels of turnover are beneficial to the organization in terms of injecting new ideas, improving innovation and reducing workplace conflicts, excessive turnover creates an unstable workforce and increases HR costs and organizational ineffectiveness (Grobler et al., 2005). Excessive turnover often engenders far-reaching consequences and at the extreme, may jeopardize efforts to attain organizational objectives due to an organizational brain drain when a key employee leaves. This may also negatively impact the quality and the rate of innovation of services delivered to customers, which in turn adversely affect customer’s satisfaction with the organization and consequently profitability (Abbasi and Hollman, 2000).

Organizational commitment: The link between organizational commitment and various antecedents to organizational commitment (such as turnover intention) has been well-established (De Coninck and Bachmann, 1994; Tett and Meyer, 1993; Allen and Meyer, 1990; Good et al., 1988; Dougherty et al., 1985). The literature suggests that strongly committed employees are those who are least likely to leave the organization.

The most commonly referred model of organizational commitment is that developed by Allen and Meyer, 1990 which consists of three dimensions:

The affective component refers to employee’s emotional attachment to, identification with and involvement in, the organization
The continuance component refers to commitment based on the costs that employees associate with leaving the organization.
The normative component refers to employees feelings of obligation to remain with the organization

According to Meyer and Allen (1991), employees with strong affective commitment continue employment with the organization because they want to do so. Those with strong continuance commitment remain because they need to do so, whereas employees with a high level of normative commitment feel that they ought to remain with the organization. Employees can experience all three forms of commitment to varying degrees. One employee, for example, might feel both a strong desire and a strong need to remain, but little obligation to do so; another might feel little desire, a moderate need and a strong obligation and so on (Meyer and Allen, 1991).

Based on the above literature, this study seeks to determine the existence of the relationship between organizational commitment and affective commitment with intention to leave respectively, among executives in Malaysia.

The initial hypotheses are:

H1: There is a significant relationship between organizational commitment and intention to leave.

H2:

There is a significant relationship between affective commitment and intention to leave.

Participation in decision-making: Participation was defined as joint decision-making or as influence-sharing between supervisors and subordinates Participation in Decision Making (PDM) is interpreted by employees as an act of support of them and trust in them by the employer. Employee’s commitment to the organization follows from their perception of employer commitment to and support of, them. Greater decision making power can substantially increase the feeling of success in the hierarchy even if no promotion is offered (Tremblay and Roger, 2004). Van Yperen et al. (1999) also suggest that PDM promotes employee’s sense of supervisory support of them, which made employees more likely to reciprocate by exhibiting organizational citizenship behavior.

The PDM promotes organizational citizenship behavior through involving employees in goals and task strategies formulation. Communications becomes more open and transparent and decision-making processes are enriched. This in turn promotes teamwork and reduces uncertainty, ambiguity and role conflict. As reported by Scott-Ladd et al. (2006), support in the literature claims that PDM increases employee motivation, job satisfaction and organizational commitment.

One of the benefits of PDM is reduction of negative outcomes associated with the perceptions of organizational politics (Witt et al., 2000). Outcomes of perceptions of organizational politics include-reduced organizational commitment, intention to leave, increased job related stress, job dissatisfaction and lower job performance. Providing employees the opportunities to participate in decision-making processes can reduce these outcomes. The supervisor should engage in PDM with the subordinates to allow the subordinates to have a better understanding of the events at the workplace, feel a greater sense of control through power sharing and thus be less effected by organizational politics.

Magner et al. (1996) research on the interaction between participation and outcome favorability in the performance evaluation context, found that unfavorable outcomes had the least negative relationship with intention to stay and trust in immediate supervisor when participation level was high. Employees who receive unfavorable decision outcomes have less negative attitudes towards their organization and organizational officials if they participated in the decision than if they do not participate. They attribute this phenomenon to employee’s belief that participation afforded them influence in decision-making to ensure they received the best possible outcomes under the circumstances. Another more recent study, Kaur (2009) found trust to be related with participation in decision making among middle and top level managers in the private sector. Managers given the opportunity to participate trusted their superiors more.

The literature review suggests the importance of the role of PDM in organizations. With these theoretical frameworks as background, the following hypothesis is proposed:

H3: Participation in decision-making has a moderating effect on the relationship between organizational commitment and intention to leave

Work effort: Brown and Leigh (1996) defined effort as two-dimensional consisting of a time commitment and work intensity. Together, they constitute the essence of working hard. In their hypothesized model, effort mediates the relationship between job involvement and individual work performance. High level of job involvement increases effort put in by employees and this in turn increases performance level. In Vroom’s expectancy theory of motivation, an employee will be motivated to exert a high level of effort when he or she believes that effort will lead to a good performance appraisal; that a good appraisal will lead to organizational rewards such as a bonus, a salary increase, or a promotion and that the rewards will satisfy the employee’s personal goals (Robbins and Stephen, 2005).

High levels of effort are assumed to be generated in the model of the high-commitment work organization (Green, 2004). Committed employees choose to remain, accept and believe in the organization’s goals and are prepared to exert effort toward achieving these. Affectively committed employees seek to extend themselves because of their positive feelings for the organization, which I n turn increases work effort, with subsequent positive performance outcomes (Scott-Ladd et al., 2006).

McCook (2002) suggests that organizational commitment theoretically should relate positively to effort; because individuals who are more committed to their organization should be by nature of this commitment exert more effort.

This leads to a further hypothesis:

H4: Work Effort has a moderating effect on the relationship between organizational commitment and intention to leave

The theoretical framework of this study consists of organizational commitment as the independent variable and intention to leave as the dependent variable. Participation in decision-making and work effort are moderating variables and influencing factors. Figure 1 shows this framework.


Fig. 1: Three-Component model of organizational commitment and turnover intentions (Meyer and Allen, 1991)

MATERIALS AND METHODS

Sampling design and data collection procedure: This research employed a descriptive design to support the study of above presented hypotheses. The survey instrument used involves a combination of questionnaires for each of the areas of organizational commitment, intention to leave, selected moderating variables: PDM and work effort; along with demographic variables.

Self-answering questionnaires were distributed in July, 2009, to a convenience sample of 300 working adults in the Klang Valley, Malaysia as a non-probability sampling method was adopted. One hundred and eighty nine responses were received during September, 2009, representing a response rate of 63%. Of these, only 181 cases with fully completed questionnaires were used for data analysis.

Selection of measurement scales:
Organizational commitment:
Affective commitment, continuance commitment and normative commitment were measured using the three-dimensional scales developed by Allen and Meyer, 1990.

Intention to leave: Intention to leave the organization was measured with a three-item scale from Stallworth (2003) and adapted from Meyer et al. (1993).

Participation in decision making: Participation in decision-making was measured with a five-item Likert scale from Ruh et al. (1975) adapted from Vroom (1960). Respondents choose from a 5 point scale ranging from 1 for little or no influence (representing low participation), to 5 for a very great deal of influence’ (representing high participation).

Work effort: Effort used the scale developed by Brown and Leigh (1996). As conceptualized by Brown and Leigh (1996) the effort scale consists of two dimensions, time commitment and work intensity. The time commitment scale consists of five items assessing the employee’s persistence and tendency to work extended hours. Work intensity scale consists of five items assessing tendency to work hard and expend energy while at work.

Data analysis techniques: The data was analyzed using the Statistical Package for Social Sciences (SPSS) version 16.0 program. A code was developed for each variable prior to input into the program. Four items on the affective commitment scale, two items on the continuance commitment scale and three items on the normative commitment scale required recoding because of negative presentation.

All Likert Scale points for all questions under a particular measure were summed to produce a new variable. For example, the Likert Scale points of the three questions on intention to leave scale were summed up to produce a new variable called Intention To Leave. This new variable represented the respondents’ turnover intention. The higher the sum, the higher is the intention to leave of the respondent.

The following derived measures were from the sum of the Likert Scale points of the respective questions:

Intention to leave

Affective commitment

Continuance commitment

Normative commitment

Time commitment

Work intensity

Participation in decision making

The data analysis consisted of the following parts:

Summaries of the general characteristics of all respondents in terms of demographic variables. Frequency count was used as the statistical tool
Test of normality for each variable. Descriptive numerical method of skewness and kurtosis statistics were used
A test of scale reliability, using Cronbach’s coefficient alpha
Determination of the relationship between each dimension of organizational commitment with intention to leave, using Pearson’s correlation coefficient analysis
Determination of the linear composite relationship between intention to leave, organizational commitment and the selected variables of participation in decision-making and work effort, using multivariate statistical techniques with all variables regression.

RESULTS

Profile of respondents: Table 1, shows the majority of the respondents are male (55.2%). Most of the respondents fall within the age group of 25-35 years (58%), followed by those aged from 36-45 years (29.8%). Singles are 52.5% while the rest are married. The majority of them hold a Bachelor’s degree and most of the respondents are executives (45.9%) followed by those in management position (37%). A fair distribution of them had worked in the organizations for between one to six years and above ten years.


Table 1: Summary of the respondents’ profile

Normality test: The normality testing of all the variables was by assessing the skewness and kurtosis values. When data is normally distributed, the value of skewness and kurtosis are zero, as values outside the range of +2 or -2 demonstrate considerable degrees of non-normality (George and Mallery, 2003).

Table 2, describes the summary of skewness and kurtosis values for all variables. The variables that are outside the normal are all five work intensity scale items and these variables are excluded from further analysis. For the testing of hypothesis H4, only the time commitment dimension of the work effort scale will be included.

Reliability test: The researcher used Cronbach’s coefficient alpha to measure the internal consistency of scale. Its value ranges from 0-1. Tests of reliability were performed on all the measures used. A scale is reliable if the coefficient value is more than 0.600 (Hair et al., 1998).

Table 3, summarizes the Cronbach’s coefficient alpha for each measure. All the measures found in this study were reliable with the intention to leave scale having the highest coefficient alpha value of 0.884.

All the measures in this study were reliable with the intention to leave scale having the highest coefficient alpha value of 0.884.


Table 2: Summary of Skewness and Kurtosis values for the entire variables; normality test

Table 3: Summary of Cronbach’s coefficient alpha for each measure, showing reliability of measures

The measure having reliability coefficients lower than 0.700 was normative commitment.

DISCUSSION

H1: There is a significant relationship between organizational commitment and intention to leave
H2: There is a significant relationship between affective commitment and intention to leave

Table 4: Pearson correlation between dimensions of organizational commitment and intention to leave
**p<0.01

The Pearson correlation coefficient analysis was used to determine the relationship between organizational commitment with intention to leave. The Pearson Correlation coefficient, which indicates the strength of relationship between the variables, concerns three areas. A correlation coefficient between 0.10 and 0.29 indicate a small correlation, while a coefficient between 0.30 and 0.49 indicate a medium correlation and a coefficient between 0.50 and 1.0 indicate a large correlation (Sidin and Zawawi, 2002).

Table 4 shows the Pearson correlation coefficient (r) between dimensions of organizational commitment with intention to leave. The overall organizational commitment Pearson correlation, r = -0.574 indicated a strong and negative correlation with intention to leave.

The correlation analysis results show that all three dimensions of organizational commitment have a significant inverse relationship with an employee’s intention to leave. Affective commitment showed large correlation with intention to leave with r = -0.576 (p<0.01) while both continuance and normative commitment demonstrated a medium correlation with r = -0.303 (p<0.01) and r = -0.357 (p<0.01) respectively. Therefore, there is statistical support of hypotheses H1 and H2. For the testing of the moderating effect of participation in decision-making and work effort upon the relationship between organizational commitment and intention to leave (hypotheses H3 and H4), multiple regression tests were conducted. Regression analysis were in two stages. In the first stage, all three dimensions of organizational commitment (the control variables) were entered as the independent variables. In the second stage, the moderating variable was included as the predictor variable. In each step of hierarchical regression analysis, the predictors and control variables were regressed on the ‘intention to leave’ variable. The dependent variable were the scores for intention to leave:

H3: Participation in decision-making has a negative moderating effect on the relationship between organizational commitment and intention to leave

From Model 1 of Table 5, the value of R2 for the control variables is 0.341, which means that the three dimensions of organizational commitment contributed 34.1% of the total variation associated with intention to leave.


Table 5: Regression results of dimensions of organizational commitment and participation in decision making on intention to leave

Table 6: Regression results of dimensions of organizational commitment and work effort on intention to leave

The negative Beta values explained that employees with higher affective, continuance and normative commitment would be less inclined to leave the organization. Affective commitment is the most important dimension that influenced an employee’s intention to leave. The least important was the continuance commitment.

In Model 2 of Table 5, when participation in decision-making was entered into the equation together with the three control variables, the value of R2 increased to 0.354, which means the model was able to explain 35.4% of the factors that affect employees’ intention to leave. This regression result indicated that participation in decision-making was a significant predictor for intention to leave as well:

H4:

Work effort has a moderating effect on the relationship between organizational commitment and intention to leave

The multiple regression results in Table 6 revealed that the time commitment dimension of work effort had a positive effect on intention to leave (Beta = 0.081). However, it is not significant in predicting an employee’s intention to leave.

CONCLUSIONS

Implications: The primary objective of this study was to determine the relationship between organizational commitment and intention to leave among working adults in Malaysia. The second objective was to investigate the moderating effect of participation in decision-making and work effort on intention to leave of these same adults.

The correlation analysis results from this study confirmed previous researcher’s observations that higher organizational commitment is linked with lower intention to leave the organization. The results suggest that among the three components of organizational commitment, the employee’s affective commitment to the organization is the most important predictor of intention to leave. Employees are less likely to leave when they are emotionally attached to and identify with their organization. This is consistent with the findings of Iverson and Buttigieg (1999) whereby in their examination of the multi-dimensionality of organizational commitment, affective commitment was also found to be most influential in enhancing organizational effectiveness, i.e., employees are less likely to leave, or be absent from work and are more accepting of change.

The regression results of the selected moderating variables implied that an employee’s turnover intention tends to decrease if they experience high level of participation opportunities in the job. Employees ought to have a chance to have a say or influence on decisions that affect their jobs or workgroups, performance, company policies and strategies (Scott-Ladd et al., 2006). However, an employee’s ability to participate effectively also depends on their having sufficient knowledge of the subject matter, otherwise the result will be increased ambiguity. Participation also creates a stronger sense of ownership or identity with the job, provided the employee has appropriate and sufficient level of skill and job knowledge (Scott-Ladd et al., 2006). Training and support should be provided to employees to assist them in making decisions (Lok and Crawford, 2001).

The regression analysis also showed that increased work effort leads to higher intention to leave, practitioners should be mindful to ensure a balance between increase in work effort due to increased responsibilities and subsequent work stress that may result from this. In this aspect, the organization could pursue a reward strategy that link effort or productivity with pay and incentives. By offering appropriate performance and effort-related incentives, employers could induce employees to input higher level of effort.

This study has provided greater understanding on the relationship between the tested variables with turnover intention. Findings of the study would assist practitioners, managers and policy makers of organizations to formulate appropriate strategies particularly in the areas identified to be having an effect on turnover intention. The organization could pursue a commitment strategy to obtain a committed workforce through application of suitable human resource policies, e.g., training, career planning and advancement opportunities, employee participation and compensation plan to reduce employee turnover intention.

Cultivating an organization culture of shared values and involving employees in the goal setting process will further enhance employee’s acceptance of and alignment with organizational goals that will promote greater organizational commitment and eventually reduce employee’s intention t o leave the organization (Wright and Mc Mahan, 1992).

Limitations: This study has several limitations. First, the small sample size raises concern about sample bias. The participant’s responses may be biased by a number of factors. They may misrepresent their actual attitudes, preferences or intentions in order to give what appears to be socially acceptable responses. This can reduce the reliability and validity of the data. Secondly, the study uses convenience sampling that might lead one to question the ability to generalize these findings. A larger and more diverse sample from different geographical areas could produce more generalized results in the Malaysian context. A third limitation is related to the current worldwide economic situation. Although, employees might have intention to leave the organization, but due to economic reasons, job security is more important to them at this moment. If this study were to be conducted during economic boom times, the results might be different. Another limitation is that due to time constraints, the study did not collect data on actual employee turnover that may require a period from 6-12 months.

Suggestions for future research: Beyond the limitations discussed, there are many other factors of interests not included in the current study due to practical and time constraints. Future research efforts should explore the impact of other moderating variables on intention to leave. The analysis of the data could be along other dimensions such as organizational level and gender. For example, affective commitment may be the most important predictor of turnover intention at lower organizational levels, while the opportunity to participate in decision making become increasingly important when one moves up the career ladder (Akinyele and Taiwo, 2007). We can also investigate whether there are significant differences between male and female employees in the predictors for turnover intention although they did not differ significantly in the level of education or work experience (Rong-Chang et al., 2009).

In Mitchel (1981), a turnover study on a sample of managerial personnel, tenure was also found to be correlated with turnover intention. The cost of replacing a manager can be quite substantial especially for a long-tenured manager. Hence, future studies could also include this factor into the analysis model.

Other factors for future investigations include employee’s personality or perceptions of equity and organizational justice. The results of research done by Hassan (2002) confirmed that perceptions of equity and justice are meaningful predictors of organizational commitment and intention to leave. Personality includes the dispositional traits of positive and negative affectivity that can predict attitude and behavior (Chiu and Francesco, 2003). Individuals with high positive affectivity have an overall sense of well being and are more likely to experience positive affective states over time and across situations. The findings from the current study, should be repeated with different participants for generalization. Different measurement instruments for the same variables could be tested to identify the set of instruments that best represent the Malaysian community.

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