Factors affecting employees organizational commitment at dat xanh group

Advisor’s Assessment

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Advisor’s signature

Page 1 of 69


ACKNOWLEDGEMENTS
I would like to acknowledge the assistance of HCMC University of
Technology (HUTECH) staff associated with the MBA and MBA administrative
and project support staff. In particular, I would like to acknowledge the continued
support and patience of Nguyen The Khai, DBA who has supervised this research
and Do Thi Thanh Truc whose help with data analysis on SPSS Software has been
invaluable.
Those who participated in interviews and those who responded to the survey
made this report possible. I would like to recognise their contribution. I am also
grateful the management of Dat Xanh Group and in particular CEO Luong Tri Thin
for his support and willingness to help.
This report, and indeed the completion of this Masters of Business
Administration, would not have been possible without the love, eternal patience
and support of my wonderful wife and children. They have scarified much during
this journey.
Finally but by no means least, I would like to recognise the continuous
motivating force that has been my classmates, and especially monitor – Nguyen
Dinh Thi whom have shared their knowledge and time to learn together in order to
complete all assignments especially this paper.

Page 2 of 69

TABLE OF CONTENTS

LIST OF FIGURES ......................................................................................................................... 5
LIST OF TABLES ........................................................................................................................... 6
ABBREVIATIONS .......................................................................................................................... 7
ABSTRACT ...................................................................................................................................... 8
Chapter 1: INTRODUCTION ........................................................................................................ 9
1.1 Company Brief Introduction .................................................................................................... 9
1.2 Research Problem Statement ................................................................................................. 14
1.3 Purpose of the research .......................................................................................................... 15
1.4 Scope of research ................................................................................................................... 16
1.5 Question of the research ........................................................................................................ 16
Chapter 2: LITTERATURE REVIEW ....................................................................................... 17
2.1 Organizational Commitment ................................................................................................. 17
2.2 Job Satisfaction ...................................................................................................................... 19
2.3 Perceived Organizational Support ......................................................................................... 21
2.4 Procedural Justice .................................................................................................................. 23
2.5 Perceived Person-Organization Fit ........................................................................................ 25
2.6 The relationship between JS and Organizational Commitment ............................................. 26
2.7 The relationship between POS and Organizational Commitment ......................................... 27
2.8 The relationship between PJ and Organizational Commitment ............................................. 27
2.9 The relationship between POF and Organizational Commitment. ........................................ 28
Chapter 3: RESEARCH MODEL, HYPOTHESES AND METHODS .................................... 29
3.1 Research model...................................................................................................................... 29
3.1.1 Dependent Variables: ..................................................................................................... 29
3.1.2 Independent Variables: .................................................................................................. 29
3.2 Constructs .............................................................................................................................. 30
3.3 Research Hypotheses: ............................................................................................................ 30
3.4 Measure of each construct ..................................................................................................... 31

3.4.1 Organizational Commitment .......................................................................................... 31
3.4.2 Job satisfaction ............................................................................................................... 33
3.4.3 Perceived Organizational Support.................................................................................. 36
3.4.4 Procedural Justice .......................................................................................................... 37

Page 3 of 69


3.4.5 Perceived Person-Organization Fit ................................................................................ 39
3.5 Data Collection Process ......................................................................................................... 40
3.6 Procedure for data analysis .................................................................................................... 41
Chapter 4: RESEARCH FINDINGS AND ANALYSIS ............................................................. 44
4.1 Reliability statistic .................................................................................................................. 44
4.2 Descriptive statistic ................................................................................................................. 45
4.3 Correlation of all variable statistic ........................................................................................... 45
4.4 Hypothesis Testing ................................................................................................................ 47
Chapter 5: DISCUSSION AND RECOMMENDATION........................................................... 49
5.1 Summary and Discussion ...................................................................................................... 49
5.2 Management Implications ..................................................................................................... 51
5.3 Limitations of Study and Further Research Recommendation .............................................. 53
5.4 Conclusion ............................................................................................................................. 54
REFERENCES ............................................................................................................................... 55
APPENDIX A ................................................................................................................................. 59
APPENDIX B ................................................................................................................................. 64

Page 4 of 69


LIST OF FIGURES
Figure 0-1: DXG at a glance ................................................................................................ 10

Figure 0-2: DXG management organization ....................................................................... 10
Figure 0-3: List of Subsidiaries and Associates................................................................... 12
Figure 0-4: List of Project Portfolio .................................................................................... 13
Figure 0-5: Proposed Research Model of Organizational Commitment in DXG............... 29

Page 5 of 69


LIST OF TABLES
Table 1: Measurement of Organizational Commitment ...................................................... 32
Table 2: Measurement of Job Satisfaction ........................................................................... 34
Table 3: Measurement of Perceived Organizational Support .............................................. 36
Table 4: Measurement of Procedural Justice ....................................................................... 38
Table 5: Measurement of perceived person-organization fit ............................................... 40
Table 6: Reliability of the measurement scales ................................................................... 41
Table 7: Degree of correlation ............................................................................................. 42
Table 8: Summary of Cronbach’s Alpha of the variables ................................................... 44
Table 9: Descriptive statistics .............................................................................................. 45
Table 10: Summary of Correlations of all variables ............................................................ 46
Table 11: Model Summary of all hypotheses ...................................................................... 47
Table 12: Coefficients of all hypotheses.............................................................................. 47

Page 6 of 69


ABBREVIATIONS

DXG

Dat Xanh Group

HRM

Human Resource Management

SPSS

Statistical Packages for the Social Science

OC

Organizational Commitment

JS

Job Satisfaction

POS

Perceived Organizational Support

PJ

Procedural Justice

POF

Perceived Person–Organization Fit

Page 7 of 69

ABSTRACT
The purpose of this research is to examine factors affecting employee’s Organization
Commitment at Dat Xanh Group. It is expected that the findings of the research will give
an overall view of how internal management items affect the turnover rate at Dat Xanh
Group. Then, Dat Xanh Group management team could find the project’s results as
reference on adjusting and developing couple of solutions that fill in the gap in HRM
system and retaining its talents in today strong competitive context.
This research was conducted to evaluate the relationship of Job Satisfaction,
Perceived Organizational Support, Procedural Justice, Perceived Person-Organization Fit,
and Organizational Commitment. Responses were collected via questionnaires from 287
respondents. Regression used as a statistical tool and the results showed that all four
independent constructs involved in examining with dependent construct were supported.
The findings on direct effects revealed that predictor variables have a positive relationship
with Organizational Commitment. In general, the Job Satisfaction (pay, promotion,
supervision, benefits and rewards) has the largest effect on Organizational Commitment
and followed by Procedural Justice (the justice in procedures shows the degree of
authenticity of the organization) and Perceived Person-Organizational Fit (there were
significant fitness of values, goals and objectives, work-family balance, ethics between
person and organization at DXG) and Perceived Organizational Support has the lowest
effect on Organizational Commitment.
To improve step by step the commitment from employees to DXG, the necessary
thing is that top management should be aware of the importance of developing and
retaining its workforce. And then, focusing on reviewing and revising the human resource
policies and procedures effectively. The management should also take steps to support
their employees and apply rules fairly and consistently to all employees and pay due
attention to the concept of Person – Organization fit as a means to improve the
organization’s performance.

Keywords: Job Satisfaction, Perceived Organizational Support, Procedural Justice,
Perceived Person-Organization Fit, and Organizational Commitment.

Page 8 of 69


Chapter 1: INTRODUCTION

1.1 Company Brief Introduction
Dat Xanh Real Estate Service and Constructions Corporation (“DXG” code)
formerly known as Dat Xanh Services and Real Estate Construction Limited
Company was established in 2003 with initial chartered capital of VND0.8 billion.
The company's chartered capital now is VND1,172 billion. The company's stock
was listed on HOSE in 2009 and operated as corporation since 2011. Over 12 years
developing, Dat Xanh Real Estate Service And Constructions Corporation has
become one of the fast developing companies in investing and trading real estate in
Vietnam, being the leading one in distributing projected land and apartments. The
company currently has large distribution network in Vietnam with 20 branches,
subsidiaries, associated companies, joint venture companies over the country. The
company has many key projects, one of which is "Sunview Town" project, which
was voted as "Top 3 best apartments in Vietnam" (as announced in South East Asia
Property Awards 2014) according to Property Report magazine.
Since its founding date, Dat Xanh Group has invested and develop in
cooperation over 311.56 hectares of project land, provided the market with 5,375
villas, terraced houses and apartments in Ho Chi Minh City, Binh Duong, Long An.
DXG is deploying more than 180 hectares of new land in Ho Chi Minh City, Dong
Nai and Phu Quoc and intend to annually provide the market with about 3,0005,000 villas, terraced houses and apartments over the next few years.
Projects with convenient locations, complete infrastructure, modern design
style, quality construction, fully furnished, and clean environment that offers true
living value for people have been and will always be the targets of Dat Xanh

Group.

Page 9 of 69


DXG at a glance
 Head office

27, Dinh Bo Linh Street, Ward 24, Binh Thanh District,
Ho Chi Minh City

 Founders

Luong Tri Thin; Luong Tri Tu and Tran Van Anh

 Date of establishment

November, 2003

 Scope of Work

Operating in real estate sector, investing in real estate
projects, trading centers, hotels, restaurants, and offices.
Distributing and marketing real estate projects, financial
investments, securities brokerage.

 Market capitalization

2,274 billion VND (as of 16 December 2015)

 Number of employees

1,600 (as of November 2015)

 Stock exchange

HOSE (Ho Chi Minh Stock Exchange, Vietnam)

 Website

www.datxanh.com.vn

Figure 0-1: DXG at a glance
 DXG’s Organizational Chart

Figure 0-2: DXG management organization

Page 10 of 69


 Personnel Policy
With the goal of creating all conditions for relief workers, long-term
attachment, while continuing to maintain the corporate culture of DXG, labor
remuneration policy has always been seriously and continuous improvement.
Therefore, employees at DXG, are eligible for salary, bonuses as explicit policies.
Every year, employees have worked at the Company for 12 months or more will be
considered and adjusted wage increases to match the rate of inflation coefficients.
DXG implement reward regime for employees based on their job
performance. The Company has policies in cash prizes through the evaluation
emulation and commendation quarterly, yearly, based on the review process of

work, high working efficiency, achievement of each HR representative. At the same
time, the Company may also reward extraordinary policy for individual and
collective contributions to prominent or have a distinguished track record in the
implementation of guidelines and policies of the Company, have ideas and
innovative solutions bring efficiency in developing the company
For salary and bonus policies, allowances, DXG has competitive policies on the
market. For examples: purchasing apartment (reduced to 15% and repayment within
5 years without interest); ESOP; seniority allowances; 24/24 HI; celebrating special
occasional events for employees (birthday; family; women;…); travelling for
employees; allowance for traditional days (1/1; 30/4; 2/9; 8/3; 20/10…),..
 Subsidiaries and Associates in Dat Xanh Group
No.

Companies

Control

1.

Ha Thuan Hung

99.9%

2.

Long Kim Phat

100%

3.

Dat Xanh Mien Nam

51%

4.

Dat Xanh Dong Nam Bo

51%

5.

Dat Xanh Mien Bac

51%

Page 11 of 69


No.

Companies

Control

6.

Dat Xanh Mien Trung

55%

7.

Dong Bang Song Cuu Long

75%

8.

ECI Construction

82%

9.

Tam Thong Real Estate

10.

Xuan Dinh Investment

11.

LDG Real Estate

12.

Queen Land

98.7%
75%
41.5%
36%

Figure 0-3: List of Subsidiaries and Associates

 List of project portfolio
Status

Project

Land fund

Quantity

Type of product

Type of
investment

Deployed

Western Land

320,000.0

129

Villas

Cooperation

Deployed

Rubyland

110,000.0

418

Villas + houses

Cooperation

Deployed

Hung Phuoc

77,000.0

325

Building land

Cooperation

Deployed

Binh An

4,400.0

12

Villas

Cooperation

Deployed

Hoang Gia

658,160.0

1,917

Villas + houses

Cooperation

Deployed

Thung Lung Xanh

450,000.0

458

Building land

Cooperation

Deployed

Five Star

150,680.0

649

Building land

Cooperation

Deployed

Giang Dien

1,180,000.0

582

Building land

Cooperation

Deployed

The Morning Star

1,634.4

203

Apartment

Cooperation

Deployed

Sunview 1-2

160,002.0

448

Apartment

Direct
Investment

Deployed

Phu Gia Hung

3,727.0

234

Apartment

Direct
Investment

Deploying

4S Riverside Linh
Dong

19,994.5

1,116

Apartment

Cooperation

Page 12 of 69


Status

Project

Land fund

Quantity

Type of product

Type of
investment

Deploying

Sunview Town

36,698.8

1,603

Apartment

Direct
Investment

Deploying

Gold Hill

265,700.0

1,264

Building land

Direct
Investment

Deploying

Sunset Sanato

274,000.0

210

Building land

Cooperation

Deploying

Golden West

8,737.0

816

Apartment

Cooperation

Deploying

Viva City

1,170,908.0

3,013

Building land

Cooperation

To be deployed

My Son

5,039.0

350

Apartment

Cooperation

To be deployed

Arisen

6,487

450

Apartment

Direct
Investment

To be deployed

Water Garden

20,097

Apartment

Direct
Investment

To be deployed

Phu Quoc

708,000

Villas

Cooperation

To be deployed

Green City (plan)

74,000

Apartment,
houses

Direct
Investment

Source: DXG’s website at www.datxanh.com.vn
Figure 0-4: List of Project Portfolio

Page 13 of 69


 Some representative awards in 2015
Top ten Developers Famous brand of economic Capacity
2015 Viet Nam

integration in Asia - Pacific

assessment

of

business operations in 2014

 Vision, Mission and Business Philosophy
Vision: Becoming a leading real estate developer in Vietnam
Mission: Dat Xanh provide quality products and excellent services which enhance
the life value for Vietnamese people
Business Philosophy: Trust we build begins from constructing your home

1.2 Research Problem Statement
An organization cannot build a good team of working professionals without

good Human Resources. Human Resource Management deals with issues related to
compensation, performance management, organization development, safety,
wellness, benefits, employee motivation, training and others.
Human Resources are valuable assets of Dat Xanh Group. Therefore,
developing and retaining talents are crucial for the organization because this is one
of the factors that will have great impact on the success of the business of the
company.

Page 14 of 69


Up to 30 November 2015, Dat Xanh Group has approximately 1,600
employees. During 2015, DXG’s employee turnover rate (divide resignations by
number of employees) has been increasing from 5% in 2014 to 10% in 2015. In
addition, it has been also informed that these employees moved to competitive
firms in Real Estate Industry. As discussed with some employees in DXG, there are
some reasons as follow:
-

They were not satisfied with chances for promotion and salary increases

-

The organization did not take care complaint from them and solve problems
at work

-

The procedures used to evaluate their performance have not been fair and
objective

-

There was not fitness between their values and organizational values
With the high employee turnover, the company not only losing its skilled and

experience employees but also have to incur more cost to recruit and train new
staff. It is therefore essential for the human resources department to identify factors
affecting organizational commitment among employees at Dat Xanh Group.
1.3 Purpose of the research
The purpose of this research is to examine and approach whether items in
terms of Job Satisfaction, Perceived Organizational Support, Procedural Justice and
Perceived Person-Organization Fit, which will have any influence on the
organizational commitment of DXG employees.
It is expected that the findings of the research will give an overall view of how
internal management items affect the turnover rate of DXG. With the research
result, the Management and Human Resources Department of DXG could have
valuable implication to develop couple of solutions. This may fill in the gap in
current HRM system to develop and retain its talents to fulfill its vision of

Page 15 of 69


becoming a leading group in distributing real estate products and services in
Vietnam.
1.4 Scope of research
This research was conducted on all 350 employees of Dat Xanh Group in 7
departments include Investment, Construction, Sales & Marketing, Human
Resource, Compliance, Finance and Accounting and IT.
A series of formed questionnaire was distributed to each employee with clear

instructions and guidelines for fulfillment.
1.5 Question of the research
This research addresses some points follow:
-

How are the effects of Job Satisfaction on employee’s Organizational
Commitment at DXG?

-

How are the effects of Perceived Organizational Support on employee’s
Organizational Commitment at DXG?

-

How are the effects of Procedural Justice on employee’s Organizational
Commitment at DXG?

-

How are the effects of Perceived Person-Organization Fit on employee’s
Organizational Commitment at DXG?

Page 16 of 69


Chapter 2: LITTERATURE REVIEW

This chapter presents the body of organizational literature containing the base
theory and relevant other theories used in this research. This chapter includes the

following:
-

(1) Organizational Commitment (OC)

-

(2) Job Satisfaction (JS)

-

(3) Perceived Organizational Support (POS)

-

(4) Procedural Justice (PJ)

-

(5) Perceived Person-Organization Fit (POF)

-

(6) The relationship between JS and Organizational Commitment

-

(7) The relationship between POS and Organizational Commitment

-

(8) The relationship between PJ and Organizational Commitment

-

(9) The relationship between POF and Organizational Commitment.

2.1 Organizational Commitment
Employee commitment to an organization has been defined in a variety of ways
including an attitude or an orientation that links the identity of the person to the
organization, a process by which the goals of the organization and those of the
individual become congruent, an involvement with a particular organization, the
perceived rewards associated with continued participation in an organization, the
costs associated with leaving, and normative pressures to act in a way that meets
organizational goals (Meyer & Allen, 1997). Mowday, Porter, and Steers (1982), who
did much of the original research about organizational commitment, characterized it
as a strong belief in and acceptance of the organization's goals and values, a
willingness to exert considerable effort on behalf of the organization, and a strong
desire to maintain membership in an organization. The various definitions reflect
three broad themes: commitment reflecting an affective orientation toward the

Page 17 of 69


organization, recognition of costs associated with leaving the organization, and moral
obligation to remain with an organization (Meyer & Allen, 1997).
An employee's liking for an organization is termed affective commitment and
includes identification with and involvement in the organization Employees with a
strong affective commitment continue employment with the organization because
they want to do so (Cohen, 1993). Continuance commitment refers to an awareness of

the costs associated with leaving the organization. Employees whose primary link to
the organization is based on continuance commitment remain with their employer
because they need to do so. Finally, normative commitment reflects a feeling of
obligation to continue employment. Employees with a high level of normative
commitment feel that they ought to remain with the organization (Meyer & Allen,
1997).
Others have argued that commitment reflects the psychological bond that ties
the employee to the organization but that the nature of the bond can take three forms,
labeled compliance, identification, and internalization (O'Reilly & Chatman, 1986).
Compliance occurs when attitudes and behaviors are adopted not because of shared
beliefs but simply to gain specific rewards. In this case, public and private attitudes
may differ. Identification occurs when an individual accepts influence to establish
and maintain a relationship; that is, an individual may respect a group's values
without adopting them. On the other hand, internalization occurs when influence is
accepted because the induced attitudes and beliefs are congruent with one's own
values (Caldwell, Chatman, & O'Reilly, 1990; Meyer & Allen, 1997; O'Reilly &
Chatman, 1986; O'Reilly, Chatman, & Caldwell, 1991). Clearly, not all of these
views are in agreement. For example, some researchers have questioned whether
compliance should be viewed as a component of commitment because it is distinct
from other common definitions and can be viewed as the antithesis of commitment.
That is, compliance has been found to correlate positively with employee turnover
(O'Reilly & Chatman, 1986), whereas commitment generally reduces turnover

Page 18 of 69


(Mowday et al., 1982). The studies I reviewed from the 1990s suggest there is a
growing consensus that commitment is a multidimensional construct that certainly
includes an affective dimension and may include components that reflect normative
pressures as well as practical considerations such as the costs of leaving an

organization and locating another job with similar pay and benefits.
2.2 Job Satisfaction
Job satisfaction is commonly known as how pleased a person is with his or her
work, and can be defined as “how people feel about their jobs and different aspects of
their jobs” (Spector, 1997, p. 2). The subject has been a popular research area since
the 1930s when the industrial companies realized that job satisfaction was to some
degree positively correlated with productivity (Vroom, 1967). As a result, today one
can observe many different approaches and definitions on the subject.
One should be concerned with job satisfaction for several reasons (Spector,
1997). Firstly, job satisfaction can to some extent reflect how employees are treated
with regards to respect and fairness. Secondly, job satisfaction can be an indicator of
an employee’s psychological and emotional health. Thirdly, it can affect the behavior
of the employee, and thus the organizational functions and productivity. Moreover,
job satisfaction can be a reflection of the organizational performance, where
differences between groups can lead to future problems within the company.
There is an argument on whether job satisfaction is a product of the
determinants that lie in the job itself, if they reside in the worker’s cognitive mind, or
if satisfaction is a result of an interaction between the employee’s psychological mind
and the work environments (Locke, 1969; Spector, 1997). It is difficult to find the
correct description of job satisfaction due to its complex nature, however, most
theories include both environmental and personal factors. Organizational
commitment is shown as a correlating variable to job satisfaction, a term that is
discussed above.

Page 19 of 69


Needs and process theories are the two most commonly used concepts to
describe job satisfaction, even though they are traditionally applied to describe
motivation. Oldham and Hackman (1980) indicated that job satisfaction was a result

of inner motivation, as it could be an indicator of an employee’s psychological health.
Thus job satisfaction is connected to motivational theory. Due to the similarity of
motivation and job satisfaction, it is not uncommon to use the definitions
synonymously even though they are different terminologies.
The earliest theories on job satisfaction were based on determinants of a
person’s needs. To become fully satisfied, Maslow (1954) pointed out five crucial
needs: physiological, safety, belongingness and love, esteem, self-actualization and
self-transcendence needs. Another job satisfaction theory based on human needs,
developed by Herzberg, was called the two-factor (Herzberg, 1968). He identified six
satisfaction factors and seven dissatisfaction factors that were independent of each
other in his primary research in the late 1950s.
There is contrast to needs theory, a process theory is where one emphasizes the
individual’s cognitive processes (Haukedal, 2007). The most acknowledged process
theories are Adams’ equity theory and Vroom’s expectancy theory. Adams (1963)
believed that people were concerned about how fair their performance was rewarded
in comparison with similar groups or individuals with the same job. If the other
individual or group received a better salary but did not increase the input in the job,
the person would experience a disparity in regards to effort. The person would then
act in accordance with the imbalance, for example reduce the work effort and
productivity due to job dissatisfaction.
Victor H. Vroom (1967) suggested that job satisfaction is an individual’s
affective orientation towards work roles that he or she is presently occupying. The
level of valence, or a person’s expected utility, drives the job satisfaction of an
employee. If the person has positive attitudes towards the job, the person will feel
satisfied, however, if the person has negative attitudes towards the job, the person

Page 20 of 69


will be dissatisfied. Vroom identified several factors that drive job satisfaction, such

as supervision, the work group, job content, wages promotional opportunities and
work hours.
Since the mid 1980s, researches have emphasized dispositional approaches
where personality traits measure job satisfaction. Studies on positive and negative
affectivity and self-evaluations have been used to explain dispositional sources of job
satisfaction (Judge & Larsen, 2001). Staw and Ross’ (1985) study on job satisfaction
concluded that prior job satisfaction is a stronger predictor of current job satisfaction
than changes in pay or status.
There are limited studies on how non-work related factors affect the level of job
satisfaction of the employees. Life satisfaction is strongly correlated with job
satisfaction, which makes sense, as work is a significant part of a person’s life.
Spillover effects between work and life experiences for the employees will always
exist, and it is therefore important that the company takes the external job satisfaction
indicators into account, as these cannot be influenced (Judge & Klinger, 2008). An
example of this is the study of Georgellis et al. (2012) where they discovered that
marriage and children impact the employees’ level of job satisfaction.
To summarize the different theories, job satisfaction is a wide field of study, and
the results vary tremendously due to different viewpoints on the theme. However
most authors agree on the main determinants of job satisfaction, although the theme is
complex and not clearly defined. There will always be a degree of uncertainty
regarding the measurement of job satisfaction, as the level of job satisfaction will
differ between individuals depending on age, country of origin, gender and education
level.
2.3 Perceived Organizational Support
According to organizational support theory, the development of POS is
encouraged by employees’ tendency to assign the organization humanlike

Page 21 of 69

characteristics (Eisenberger et al., 1986). Levinson (1965) noted that actions taken by
agents of the organization are often viewed as indications of the organization’s intent
rather than attributed solely to the agents’ personal motives. This personification of
the organization, suggested Levinson, is abetted by the organization’s legal, moral,
and financial responsibility for the actions of its agents; by organizational policies,
norms, and culture that provide continuity and prescribe role behaviors; and by the
power the organization’s agents exert over individual employees. On the basis of the
organization’s personification, employees view their favorable or unfavorable
treatment as an indication that the organization favors or disfavors them.
Social exchange theorists argue that resources received from others are more
highly valued if they are based on discretionary choice rather than circumstances
beyond the donor’s control. Such voluntary aid is welcomed as an indication that the
donor genuinely values and respects the recipient (e.g., Blau, 1964; Cotterell,
Eisenberger, & Speicher, 1992; Eisenberger, Cotterell, & Marvel, 1987; Gouldner,
1960). Thus, organizational rewards and favorable job conditions such as pay,
promotions, job enrichment, and influence over organizational policies contribute
more to POS if the employee believes that they result from the organization’s
voluntary actions, as opposed to external constraints such as union negotiations or
governmental heath and safety regulations (cf. Eisenberger et al., 1986; Eisenberger,
Cummings, Armeli, & Lynch, 1997; Shore & Shore, 1995). Because supervisors act
as organizational agents, the employee’s receipt of favorable treatment from a
supervisor should contribute to POS. The strength of this relationship depends on the
degree to which employees identify the supervisor with the organization, as opposed
to viewing the supervisor’s actions as idiosyncratic (Eisenberger, Stinglhamber,
Vandenberghe, Sucharski, & Rhoades, in press).
Organizational support theory also addresses the psychological processes
underlying consequences of POS. First, on the basis of the reciprocity norm, POS
should produce a felt obligation to care about the organization’s welfare and to help

Page 22 of 69

the organization reach its objectives. Second, the caring, approval, and respect
connoted by POS should fulfill socioemotional needs, leading workers to incorporate
organizational membership and role status into their social identity. Third, POS
should strengthen employees’ beliefs that the organization recognizes and rewards
increased performance (i.e., performance-reward expectancies). These processes
should have favorable outcomes both for employees (e.g., increased job satisfaction
and heightened positive mood) and for the organization (e.g., increased affective
commitment and performance, reduced turnover).
An appealing feature of organizational support theory is that it provides clear,
readily testable predictions regarding antecedents and outcomes of POS along with
specificity of assumed processes and ease of testing these processes empirically. We
examine studies that consider POS’s hypothesized antecedents and consequences and
more elaborated studies of the mechanisms presumed to underlie these relationships.
2.4 Procedural Justice
Procedural justice reflects a person's judgements about the fairness of the
process of making outcome allocations decisions (Greenberg, 1990). Specifically,
procedural justice reflects the extent to which an individual perceive that outcome
allocation decisions have been fairly made according to the formal procedures of the
organization and from the treatment given by its authorities in enacting those
procedures (Moorman, 1991). Explanations by earlier researchers seem to indicate
that procedural justice judgements play a major role in affecting employee attitudes.
For instance, according to Lind and Tyler's (1988) "group-value" model, perceptions
of procedural fairness which entails fair treatment and use of fair procedures
communicates to members two symbolic messages about group membership.
Firstly, fair treatment receive from decision makers indicates that the individual is a
respected and valued member of the group. Secondly, the use of fair decision-making
procedures in groups also indicates whether members can take pride in their group
membership because fair procedures will reassure members that their interests will

Page 23 of 69


protected and advanced through group membership. Feelings of respect, worth, and
pride formed as result of procedural justice may motivate members to adopt a
favorable attitude toward the group that is responsible in mandating the decisionmaking procedures. Tyler (1989) added that when people obtain evidence that they
have attained a favorable social standing within the group, and that over time, they
will receive fair benefits from group membership, these may enhance group harmony
and activate group concerns by stimulating members to adopt positive feelings
toward the group.
Procedural justice (fairness) refers to the perception that fair procedures were
used to derive outcomes (Leventhal, Karuza & Fray, 1980; Thibaut & Walker, 1975;
Cropanzano et al., 2007). Theories of procedural justice emphasize that procedures
are considered fairer if, among other things, the decision maker respectfully treats
those affected by the decision, has no vested interest in a decision that is harmful to
them and has limited choice in making a decision (Charness & Levine, 2000). This is
consistent with Greenberg's (1990) assertion that procedural justice aspects of the
layoff process include the organization providing valid reasons for layoffs, treating
terminated employees decently, having a fair selection procedure for determining
those to be laid off, and having effective communication about the layoffs
(Greenberg, 1990). According to Leventhal et al. (1980), layoff procedures are fair if
they are applied consistently to all, not biased, accurate, correctable, considers the
interest of all parties’ concerned (representativeness) and finally are morally and
ethically right. Instead of examining what constitutes procedural justice, as in most of
the above studies, the current study focuses on the relationship between the perceived
fairness of the procedures used in the layoff and organizational commitment of
surviving employees as well as how personality traits such as locus of control and
self-esteem influences perception of procedural justice.

Page 24 of 69


2.5 Perceived Person-Organization Fit
Consideration of person-organization fit is based on the perspective that aspects
of both an individual employee and a job situation combine to influence the
individual's response to work (O'Reilly, Chatman, & Caldwell, 1991). That is,
attitudes, behaviors, and other individual-level outcomes result not from the person or
environment separately, but rather from the relationship between the two. The
concept of fit is particularly prominent in studies of organizational stress where
measures must recognize individual differences in the way situations are cognitively
appraised (Edwards, 1996).
Person-organization fit refers to the degree of congruence or compatibility
between the attributes of an organization member and those of the organization. For
individuals, these attributes may include personality traits, beliefs, values, and
interests. For the organization, these characteristics traditionally include the culture,
climate, values, goals, and norms (Chan, 1996). Congruence may occur when a
person supplements or matches with other individuals in an environment, when a
person's characteristics add something to the environment that was missing, when an
organization satisfies individual needs, and/or when an individual has the abilities
required to meet organizational demands (Kristof, 1996).
Value congruence is an important form of fit because organizational values are
fundamental components of organizational culture that affect employees' attitudes
and behaviors (Chatman, 1989). Person-organization fit can be operationalized as an
individual's goal congruence with organizational leaders and peers (Vancouver &
Schmitt, 1991). An alternative approach defines fit as the match between individual
preferences or needs and organizational systems and structures. In general, a person
will be more satisfied with work if the environment fulfills his or her needs.
Alternately, person-organization fit can be viewed as the match between the
personality characteristics of an individual employee and organizational climate. For

example, an organization's collectivist climate may be reflected by a team-based

Page 25 of 69