The relationship between human resource management practices and organizational commitment in cambodia

MINISTRY OF EDUCATION AND TRANNING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
------------

PON MEAN SOVITH

THE RELATIONSHIP BETWEEN HUMAN
RESOURCE MANAGEMENT PRACTICES
AND ORGANIZATIONAL COMMITMENT
IN CAMBODIA

THESIS OF MASTER OF BUSINESS ADMINISTRATOR

HO CHI MINH CITY – 2012


MINISTRY OF EDUCATION AND TRANNING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
------------

PON MEAN SOVITH

THE RELATIONSHIP BETWEEN HUMAN
RESOURCE MANAGEMENT PRACTICES
AND ORGANIZATIONAL COMMITMENT
IN CAMBODIA
Subject: Master of Business Administrator
Code: 06.34.01.02

THESIS OF MASTER OF BUSINESS ADMINISTRATOR

ADVISOR:

DR. PHẠM QUỐC HÙNG

HO CHI MINH CITY – 2012


i

ACKNOWLEDGEMENT

I would like to take this opportunity to express my gratitude to all those who
have helped and supported me during the time I conducted the study.
First of all, I would like to express my deepest gratitude to my advisor, Dr.
Pham Quoc Hung, for his sincere guidance to my thesis. His advices are crucially
important and valuable for me to finish this thesis. Besides, I would like thank you
Dr. Tran Ha Minh Quan and all professors, lecturers for his/her enthusiastic
support.
Secondly, I would like to show sincere gratitude to University of Economics
Ho Chi Minh City and Vietnamese government for giving me the opportunity to
pursue my mater degree.
Thirdly, I would like to send special thank you to my beloved friends, Mr.
Sokun and Mr. Viet, their guidance had broken the rusty iron door of SPSS
hardship. Mr. Gian Phong, Mr. Tuan and Miss. Chung, their support and materials
play an important role for my accomplishment. Moreover, I would like to express
special thank to all of my class mates (EMBAK19). Without all of their help, today
would not have happened.
Lastly, I wish to thank my parents, Sam Pon and Heng Mean. Their love
provided my inspiration and was my driving force. I owe them everything and wish
I could show them just how much I love and appreciate them. I hope that this work

would make them proud.

Pon Mean Sovith
Ho Chi Minh, December 2012


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COMMITMENT
I hereby would like to commit that the thesis, “The relationship between
human resource management practices and organizational commitment in
Cambodia”, was accomplished based on my independent and serious studies and
researches. The data was collected in reality and it has clear origins. In addition to
that, the data would be trust-worthily handled and it has never been released in any
menu.
Pon Mean Sovith


iii

TABLE OF CONTENT
ACKNOWLEDGEMENT..................................................................................... I
COMMITMENT .................................................................................................. II
TABLE OF CONTENT ..................................................................................... III
LIST OF TABLE .................................................................................................. V
LIST OF FIGURE .............................................................................................. VI
ABSTRACT ........................................................................................................... 1
CHAPTER 1 INTRODUCTION .......................................................................... 2
1.1
1.2

1.3
1.4

SETTING OF THE STUDY ....................................................................... 2
THE PROBLEM AND MOTIVATION FOR THE STUDY..................... 3
THE GOAL OF THE RESEARCH ............................................................ 4
STRUCTURE OF THE STUDY ................................................................. 5

CHAPTER 2 LITERATURE REVIEW............................................................... 8
2.1 INTRODUCTION ....................................................................................... 8
2.2 ORGANISATIONAL COMMITMENT .................................................... 8
2.2.1 Affective Commitment ............................................................................... 8
2.2.2 Continuance Commitment .......................................................................... 9
2.2.3 Relationship between personal variables and organizational commitment 11
2.3 HUMAN RESOURCE MANAGEMENT PRACTICES ......................... 11
2.3.1 The concept of human resource management practices ............................. 11
2.3.2 The association of HRM practices and organization commitment ............. 13
2.3.2.1 Training and development.................................................................. 13
2.3.2.2 Teamwork.......................................................................................... 15
2.3.2.3 Compensation, incentive .................................................................... 17
2.3.2.4 Performance appraisal ........................................................................ 19
2.4
2.5

RESEARCH MODEL ............................................................................... 21
SUMMARY ............................................................................................... 23

CHAPTER 3 RESEARCH METHODOLOGY ................................................. 24
3.1 INTRODUCTION ..................................................................................... 24
3.2 RESEARCH DESIGN ............................................................................... 24

3.3 QUESTIONAIRE DEVELOPEMNT ....................................................... 25
3.3.1 Perceived organizational support .............................................................. 25
3.3.2 Control variable ........................................................................................ 25
3.4

TRANSLATION OF THE QUESTIONAIRE ......................................... 27


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3.5 THE PILOT STUDY ................................................................................. 27
3.6 TARGET POPULATION ......................................................................... 27
3.7 SAMPLE SIZE .......................................................................................... 28
3.8 SELECTING THE SAMPLE AND COLLECTING DATA ................... 28
3.9 SAMPLE CHARACTERISTICS ............................................................. 29
3.10 METHOD OF DATA ANALYSIS ............................................................ 29
3.10.1 Data screening....................................................................................... 29
3.10.2 Reliability ............................................................................................. 30
3.10.3 Factor analysis ...................................................................................... 30
3.10.4 Analysis of variance (Anova) ................................................................ 32
3.10.5 Multiple regressions .............................................................................. 33
3.11 SUMMARY ............................................................................................... 33
CHAPTER 4 RESULTS ANALYSIS ................................................................. 35
4.1 INTRODUCTION ..................................................................................... 35
4.2 DATA SCREENING ................................................................................. 35
4.3 SAMPLE DESCRIPTION ........................................................................ 37
4.4 RELIABILITY (Cronbach alpha) ............................................................ 38
4.4.1 Measuring human resource management practices ................................... 39
4.4.2 Measuring Organizational Commitment ................................................... 42
4.5 EXPLORATORY FACTOR ANALYSIS (EFA) ..................................... 43

4.5.1 EFA implementation for independent variable.......................................... 44
4.5.2 EFA implementation for dependent variable ............................................. 48
4.6 CORRELATION ....................................................................................... 51
4.7 MULTIPLE REGRESSION ..................................................................... 54
4.7.1 For affective commitment (AC) as dependent variable ............................. 55
4.7.2 For continuance commitment (CC) as dependent variable ........................ 60
4.8

SUMMARY ............................................................................................... 65

CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS ....................... 67
5.1
5.2
5.3
5.4

INTRODUCTION ..................................................................................... 67
CONCLUSION .......................................................................................... 67
RESEARCH IMPLICATION................................................................... 68
LIMITATION AND FURTHER RESEARCH RECOMMENDATION 68

APPENDIX .......................................................................................................... 81


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LIST OF TABLE
Table 3. 1 : Control variables................................................................................................ 26
Table 4. 1: Normality descriptive statistics ........................................................................... 36
Table 4. 2: Sample description statistic ................................................................................. 38

Table 4. 3: Cronbach’s Apha of scale factor: Training and development ............................... 39
Table 4. 4: Cronbach’s Apha of scale factor: Teamwork....................................................... 40
Table 4. 5: Cronbach’s Apha of scale factor: Compensation / Incentive ................................ 41
Table 4. 6: Cronbach’s Apha of scale factor: Performance appraisal ..................................... 41
Table 4. 7: Cronbach’s Apha of scale factor: Affective commitment .................................... 42
Table 4. 8: Cronbach’s Apha of scale factor: Continuance commitment................................ 43
Table 4. 9: Kmo and Bartlett’s test ....................................................................................... 44
Table 4. 10: Total variance explained ................................................................................... 45
Table 4. 11: EFA analysis result Of HRM Practice’s factors ................................................. 46
Table 4. 12: KMO And Bartlett’s test ................................................................................... 49
Table 4. 13: Total variance explained ................................................................................... 49
Table 4. 14: EFA analysis result of organizational commitment............................................ 50
Table 4. 15: Correlations (independence variable with AC) .................................................. 52
Table 4. 16: Correlations (independence variable with CC) .................................................. 53
Table 4. 17: Regression model summary .............................................................................. 55
Table 4. 18: Anova (B) ......................................................................................................... 56
Table 4. 19: Coefficients(A) ................................................................................................. 56
Table 4. 20: Hypothesis and research results ......................................................................... 60
Table 4. 21: Regression model summary .............................................................................. 61
Table 4. 22: Anova (B) ......................................................................................................... 61
Table 4. 23: Coefficients (A) ................................................................................................ 62
Table 4. 24: Hypothesis and research result .......................................................................... 65
Table 4. 25: Mean of control variable ..................................................................................... 1


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LIST OF FIGURE
Figure 1. 1: Structure of the study........................................................................................... 7
Figure 2. 1 Research model .................................................................................................. 22

Figure 3. 1 Research process ................................................................................................ 34
Figure 4. 1: Hypothesis and research results ......................................................................... 65


1

ABSTRACT

This study is to describe and investigate the relationship between human
resource management (HRM) practices and organizational commitment in Cambodia.
The human resource management practice will be discussed here including Training
and development, Compensation/incentive, Teamwork, and Performance appraisal. In
addition, the organizational commitment elements are including affective commitment
and continuance commitment.
Finding of this study should be shared to, especially, HRM department and
managerial level of the organization, so that they can configure and decide the way
how future HRM practices oriented. The study would, on the other hand, allow them to
have better understanding of HRM practices and fully utilize their potentials for the
effectiveness of the organization and, of cause, encourage employee commitment.

Key words: HRM practices, organizational commitments, Cambodia


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CHAPTER 1
INTRODUCTION
1.1

SETTING OF THE STUDY

Nowadays, Organizational changes are increasingly becoming a major

component of everyday organizational functioning. The basic principles of doing
business successfully are fundamentally changing. The historical boundary between
customer, supplier and competitors is increasingly becoming blurred (Allio, 1993).
Many organizations have responded to these competitive pressures by downsizing,
restructuring and transformation, and thus created a less secure organizational climate.
Traditionally, product technology and process, accessible capital sources, and so
on, were essential to win the competition; however, at present, these kinds of
resources, suggested by Pfeffer (1994), fail to fulfil their roles to defeat competitors.
The decreased vitality of those primitive resources has drawn practitioners and
academics’ attentions to explore other types of assets which can capture and retain
competitive advantage and at the same time, are not easily imitated and copied by
competitors (Barney 1991). The question of the kind of asset that can provide
sustainability, competitive advantage, and superior organizational commitment has
been asked and discussed among managers and scholars over the past decades. As a
result, the finding of human resources as a valuable intangible asset of an organization
is the critical answer to clarify all doubts on how organizations could compete in the
market, achieve superior performance, realize competitive advantage, and, on the other
hand, improve organizational commitment over a very long time, or possibly forever.

Of cause, Ulrich (2002) argues that the competitive edge of companies no longer
lies in its product, but in its people. According to Gunnigle, Heraty and Morley (1971),


3

people are the lifeblood of organizations and they represent the most potent and
valuable resources of organizations. No organization can perform at peak levels unless
each employee is committed to the organization’s objectives and works as an effective

team member. Therefore, the commitment of the competent employees plays an
important role in the success of the organization.
1.2

THE PROBLEM AND MOTIVATION FOR THE STUDY
Organizations in Cambodia are no exception to the competition environment.

Although the employees get paid so well, some or most of them, however, are not
satisfied with their work environment. They are less motivated, and have no
commitment for the organization. Therefore, it results in so many employees decided
to change their jobs or leave their organization. This current environment is
accompanied by poor human resource management practices and shortage of skilled,
competent and committed employees.
Moreover, some organizations are currently losing competent employees to their
competitors for the competitive salaries and benefits. Turnover among these competent
employees may, however, result in interruptions in normal operations, loss of
efficiency, increase replacement and recruitment cost, project delays, increase
customer dissatisfaction, scheduling difficulties and the depletion of the organization’s
intellectual capital.
When an organization loses a critical employee, there is negative impact on
innovation, consistency in providing service to customers may be jeopardized, and
major delays in the delivery of services to customers may occur (Abbasi and Hollman,
2000). In addition, Bennett and Durkin (2000) states that the negative effects
associated with a lack of employee commitment include absenteeism and turnover.
They found that employee commitment is positively related to organizational outcomes


4

such as job satisfaction, motivation and attendance. Committed employees usually act

in the interests of their organization and/or the customers being served by the
organization (Romzek, 1990). Furthermore, they tend to generate high performance
business outcomes as measured by increased sales, improved productivity, profitability
and enhanced employee retention (Roger, 2001). Consequently, lack of employee
commitment threatens the survival of the organization because a loss of a competent
employee is a loss of competitive advantage for the organization.
Of cause, the results of the study would help human resource management
department of the organizations to utilize HRM practices that will encourage employee
commitment toward the organization. The study will, on the other hand, contribute to
the body of knowledge by providing more proof and information on the relationship
between HRM practices and organizational commitment.
1.3

THE GOAL OF THE RESEARCH
The main purpose of the research is to cover the aspects of human resource

management practices that have an influence on employee commitment and
furthermore to be able to determine the relationship between the two. Besides, in order
to determine the correlation between the control variables and employee commitment
or HRM practices.
The results of the research would participate in the decision on how future HRM
practices will be configured within the organization being researched in order to induce
and maintain organizational commitment from the employees.
Therefore, the relationship between human resource management practices and
organizational commitment of the organizations in Cambodia are the main objective of
the study.


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1.4

STRUCTURE OF THE STUDY
The study is divided into five chapters. Besides this introductory chapter in

which the problem is defined, the research motivated and the aim as well as method of
the study provided, the chapters are organized as follows:
Chapter 2: Literature review
The literature review section is divided into two main sections; a review on the
literature on organizational commitment and HMR practices.
The organizational commitment section has the following topics:
• The concept of organizational commitment and the below elements are selected and
discussed:
- Affective commitment,
- Continuance commitment
• The influence of personal characteristics (age, gender, and organizational tenure) on
organizational commitment.
The HRM practices section has the following major topics:
• The concept of HRM practices
• The association of HRM practices and organization commitment
The literature review incorporates the construct of both HMR practices and
organizational commitment. It offers an operational definition and history of both
HMR practices and organizational commitment adopted by the researchers. Both
reviews conclude with propositions from literature aimed at guiding the investigation


6

of the relationship between HMR practices and organizational commitment undertaken
in this study.

Chapter 3: Research methodology
The research methodology chapter describes the methodology employed in the
investigation of the relationship between HRM practices and the commitment of
employees at the organization in Cambodia.

Chapter 4: Results analysis
This chapter contains the results, descriptions of the results followed by the
analysis of the relationship (interpretation of the results) and explanations on what the
researcher subscribes to the results.

Chapter 5: Conclusions and recommendations
The thesis ends with conclusions and recommendations on further research on
the relationship between HMR practices and organizational commitment. The chapter
also discusses the implications of these results in the light of the literature review.
Research limitations are identified and implications of the research are also discussed
in this chapter. Outline of the study showed in figure 1.1.


7

INTRODUCTION

LITERATURE REVIEW

RESEARCH METHODOLOGY

RESULT ANALYSIS

CONCLUSION AND
RECOMMENDATION

Figure 1. 1: Structure of the study


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CHAPTER 2
LITERATURE REVIEW
2.1 INTRODUCTION
The literature review section is divided into two main sections; a review on the
literature on organizational commitment and HMR practices. For the organizational
commitment section, (1) the affective commitment, (2) continuance commitment and
(3) the influence of personal characteristics (age, gender, education and organizational
tenure) on organizational commitment have been discussed. In addition, for the HRM
practices section, there are two major topics to discuss (1) the concept of HRM
practices and (2) the association of HRM practices and organization commitment.
2.2 ORGANISATIONAL COMMITMENT
This chapter discusses in detail the multi-dimensional approach of Meyer and
Allen’s to organizational commitment. Furthermore, the influence of personal
characteristics on organizational commitment has been extensively studied with the
focus on demographic or personal variables such as age, gender, organizational tenure
(Nijhof, De Jong & Beukhof, 1998).
According to Meyer & Allen (1984) Commitment has been conceptualized in
two general themes, namely, affective commitment and continuance commitment.
2.2.1 Affective Commitment
Allen and Meyer (1990) refer to affective commitment as the employee’s
emotional attachment to, identification with and involvement in the organization. In
addition, Affective commitment involves three aspects: (1) the formation of an
emotional attachment to an organization, (2) identification with (3) and the desire to

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maintain organizational membership. On the other hand, Allen and Meyer (1990)
argue that individuals will develop emotional attachment to an organization when they
identify with the goals of the organization and are willing to assist the organization in
achieving these goals.
Mowday, Steers and Porter (1979) also describe affective commitment as an
active relationship with the organization such that individuals are willing to give
something of themselves in order to contribute to the organization’s well-being.
Jaros, Jermier, Koehler and Sincich (1993) suggest that affective commitment is
the most widely discussed form of psychological attachment to an employing
organization. This is primarily because of its association with desirable work behaviors
such as increased productivity, personnel stability, lower absenteeism rate, job
satisfaction and organizational citizenship (Mowday, Porter & Steers, 1982).
Meyer and Herscovitch (2001) report that affective commitment has been
found to correlate with a wide range of positive outcomes with respect to turnover,
absenteeism, job performance and organizational citizenship behavior.
2.2.2 Continuance Commitment
The second of Allen and Meyer’s dimensions of organizational commitment is
continuance commitment, which is based on Becker’s (1960) side-bet theory. The
theory states that as individuals remain in the employment of an organization for
longer periods, they accumulate investments, which become costly to lose the longer
an individual stays. These investments include time, job effort, and organization
specific skills that might not be transferable or greater costs of leaving the organization
that discourage them from seeking alternative employment, work friendships and
political deals.


10

Allen and Meyer (1990) describe continuance commitment as a form of
psychological attachment to an employing organization that reflects the employees’
participation as the loss that would otherwise be suffered if they were to leave the
organization. Allen and Meyer (1990) explain that continuance commitment involved
awareness on the employee’s part of the costs associated with leaving the organization.
Kanter (1968) also defines cognitive-continuance commitment as that which occurs
when there is a profit associated with continued participation and a cost associated with
leaving”. Moreover, Romzek (1990) argues that employees calculate their investments
in the organization based on what they have put into the organization and what they
stand to gain if they remain with the organization. Sometimes employees express
continuance commitment because of personal investments in non-transferable
investments. The investments could include time and money tied up in an
organization’s retirement plan, special skills that are unique to a particular
organization, close working relationships with co-workers and other benefits that make
it too costly for one to leave the organization and seek employment elsewhere.
Although there are several conceptualization and measures to organizational
commitment research and there are several different definitions of organizational
commitment, these various definitions and measures share the common theme of
psychological attachment to an organization that means a psychological bond linking
individuals and their organizations (O’Reilly & Chatman, 1986). According to
Mowday et al., (1982), employees who are committed to an organization tend to
strongly believe and accept the organization’s goals and values, exert considerable
effort on behalf of the organization and maintain membership in the organization.
Thus, organizational commitment not only enhances employee intentions to exert
effort on behalf of an organization but also influence employees’ intentions to stay
with the organization.


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2.2.3 Relationship between personal variables and organizational commitment
Some research draw results that male employees are more committed than their
female counterparts (Knoke, 1988), while other studies find no significant link between
the genders (e.g., Igbaria & Wormley, 1992; Van Dyne & Ang, 1998). With regard to
the education level, some research showe a negative relationship with continuance
commitment (e.g. Cohen, 1999; Mayer & Schoorman, 1998), but others show no
obvious relationship (e.g. Knoke, 1988).
Many scholars in the field consider age as an important factor to predict
commitment. Mathieu and Zajac (1990) and Meyer, Allen and Smith (1993) reveal a
significant positive correlation mean, 0.2 and 0.36, between commitment and age.
Kaldenberg, Becker and Zvonkovic (1995) indicat that current job attractiveness
increases as the employee ages due to fewer other employment options. Hawkins
(1998), on the other hand, find an insignificant statistical correlation (r = -.004)
between age and affective commitment for a sample of 396 high school principals.
Meyer and Allen (1997) states that organizational tenure can lead to
contemplative organizational commitment due to the fact that uncommitted workers
leave early while the committed ones stay. In another study by Meyer, Allen and Smith
(1993), it is found that the new and the senior-tenured employees are more committed
than the middle-tenured ones. In addition, Liou and Nyhan (1994) conclud that
affective commitment has a negative relationship with tenured employees and
continuance commitment has no correlation at all.
2.3 HUMAN RESOURCE MANAGEMENT PRACTICES
2.3.1 The concept of human resource management practices


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HRM practices have been defined in many ways. Schuler and Jackson (1987)
defines HRM practices as organizational activities that are directed at managing the

pool of human resources and ensuring that resources are employed towards the
fulfillment of organizational goals.
Delery and Doty (1996) conceptualize HRM practices as a set of internally
consistent policies and practices designed and implemented to ensure that a firm's
human capital contribute to the achievement of its business objectives. Similarly,
Dittmer (2002) view HRM practices as an individual's perceptions of the extent of
implementation of the strategies, plans, and programs used to attract, motivate,
develop, reward and retain the best people to meet organizational goals. Building on
the arguments given by these scholars, HRM practices comprise of specific practices,
formal policies, and philosophies that are designed to attract, develop, motivate and
retain employees who ensure the effective functioning and survival of the organization.
Moreover, the important thing is to define the boundary of HRM practices.
Hornsby and Kuratko (2003) define HRM practices in five major areas: job analysis
and description, recruiting and selection, training, performance appraisal and
compensation. Huselid (1995) define HRM practices as employee recruitment and
selection procedures, compensation and performance management systems, employee
involvement and employee training. Jeffrey and Donald (2003) view HRM practices as
job analysis, recruitment, selection, compensation, benefits, incentive, performance
appraisal and training. Mondy et al. (2002) thought the practices of HRM include five
basic functions, including staffing, human resource development, compensation and
benefits, safety and health, employee and labor relations and so on. Pawan (2000)
identify HRM practices as pay and reward, recruitment and selection, training and
development, health and safety, and work expansion or reduction. Lee and Lee
(2007) define 6 elements HRM practices, namely, training and development,


13

teamwork, compensation/incentive,

HR

planning,

performance appraisal,

and

employee security. Meanwhile, Zaini, Nilufar and Syed (2009), on the other hand,
suggest four dimensions of HRM practices including training and development,
team work, HR planning, and performance appraisal.
From the above discussion, this study suggests four key HRM practices that are
likely to be positively associated with organizational commitment. The four HRM
practices are: training and development, teamwork, compensation/incentives,
performance appraisal.
2.3.2

The association of HRM practices and organization commitment
The following gives a description of how each of the practices which are

including training and development, teamwork, compensation/incentives, and
performance appraisal might be expected to influence the various forms of
organizational commitment.
2.3.2.1 Training and development
A strong training emphasis implies an internal labor market and career
opportunities (Althauser, 1989). Such emphasis is indicated by formal training,
numbers participating, training effectiveness, and firm attempts to match current
training practices. Based on human capital theory, employees should perceive
employer training investments as symbols of continued future employment and higher
wages (e.g., Strober, 1990). Employees should value training for the security,

advancement, and higher earnings implied, and thus be more committed. Prior research
shows organizational climates that emphasize continuous training and updating elicit
high commitment (e.g., Maurer and Tarulli, 1994).


14

Training and development are also closely associated with culture change and
indirectly employee commitment in much of the HRM literature. Guest (1992) alludes
to training and development as one of the key policy areas necessary to achieve a new
culture. This culture can be one in which organizational commitment ranks high.
McElroy (2001) claims that organizations that extensively train their employees
create reputation for valuing and developing employees. He adds that this provides a
vehicle through which they can attract the right kind of employees. Thus, people who
are high achievers would be attracted to organizations known to value their employees.
McElroy (2001) suggests that increased self-worth and importance could be the
mechanism through which training is predicted to increase organizational commitment.
He argues that organizations that invest in training send a clear message to their
employees that the organization is committed to the development of its people.
When the training involves organization specific skills, the training might
induce continuance commitment if the skills acquired are perceived to be untransferable (McElroy, 2001). Generalized skills training can be easily transferable to
other organizations, while specialized training may result in the creation of sunken
costs in terms of time and effort that an employee stands to lose if he/she leaves the
organization.
Previous study by Cherrington (1995) & Bartlett (2001) on the link between
training and development and organizational performance, proves that training and
development plays an important role since it facilitates the updating skills, lead to
increase commitment, well-being and sense of belonging and consequently lead to
the strengthening of organizational competitiveness (Cherrington, 1995; Bartlett,
2001) particularly, organizational commitment.

15

Similarly, there is empirical support for the role of training in producing
beneficial individual outcomes like commitment (Lam, Lo, & Chan, 2002; Saks, 1996;
Tsaur & Lin, 2004).
This drives to the hypothesis (H1 and H5):
H1: Training and development positively influence affective commitment
H5: Training and development positively influence continuance commitment
2.3.2.2 Teamwork
Team work refers to a group of employees created on purpose to carry out a
particular job or to solve problems. Sang (2005) commends that the idea of team work
is people share knowledge, skill, judgment, and ideas among one another to get better
result. Pfeffer (1998)

suggests that teamwork provides many advantages: (1)

teamwork depends on peer-based work rather than hierarchical, which leads to more
effective achievement; (2) teamwork facilitates flows of ideas from team members and
finally, an innovative solution; and (3) teamwork helps save the administrative costs
arising from paying specialists to watch people.
According to the findings of several researchers, teamwork can lead to better
performance for organizations, such as the enhancement of productivity in the
workplace, improvement of service quality, greater satisfaction of employees with
jobs, less absence, reduced turnover rate and lead to increase organizational
commitment.
Fundamentally, employees who work as a team are more likely to feel an
increased commitment to the work unit's efforts and the organization as a
whole (Cohen and Bailey, 1997; Meyer and Allen, 1997). Consequently, employees

tend to remain in organisations due to the strong teamwork relationship they have


16

established at the workplace (Clark, 2001; Marchington, 2000). However, not all
teams are successful because arrangements of the individuals’ cooperation in the
work may not be satisfactory and the members should be allowed to select
teammates (Salas, Bowers, & Cannon-Bowers, 1995).
Meyer and Allen, 1991; Ricardo and Jolly, 1997; Lau and Idris, 2001;
Meyer et al. 2002 has identified various dimensions of corporate culture related to
organizational performance. Within the corporate culture’s dimensions, there are four
important dimensions are teamwork (Morrow, 1997; Osland, 1997; Karia and Ahmad,
2000; Karia and

Ashari,

2006; Ooi and

Arumugam, 2006),

communication

(Nehers, 1997; Myers and Myers, 1982; Ooi and Arumugam, 2006), training and
development (Karia, 1999; Karia and Ahmad, 2000; Acton and Golden, 2002;
Ooi and Arumugam, 2006) and rewards and recognition (Zigon, 1997; Allen and
Helms, 2002; Ooi and Arumugam, 2006). Most of the results examining these
dimensions found significant influence on organizational performance.
There are studies that have examined the link between corporate culture
and organizational commitment (Karia, 1999; Saeed and Hassan, 2000; Karia and

Ahmad, 2000; Lau and Idris, 2001; Ooi and Arumugam, 2006). Karia and Ahmad
(2000) examines that teamwork is one of the important dimensions in influencing
organizational success as well as achieving good relationship between workers
and managers. The results indicate that an organization that practices some levels
of teamwork often experienced an increase in employees’ commitment to the
organization.
In summary, review of the literature finds that teamwork plays an important role
in motivating employees and hence provides high commitment towards an
organization.


17

This drives to the hypothesis (H2 and H6):
H2: Teamwork positively influences affective commitment
H6: Teamwork positively influences continuance commitment
2.3.2.3 Compensation, incentive
One argument for incentive pay systems is that they harmonize employee and
employer interests by aligning incentives. Further, incentive compensation systems
should promote equity feelings because workers are paid for performance
contributions. Accordingly, employees should view incentive pay as a form of support
and show increased commitment in return. Despite well-known problems with
incentive systems, this basic idea suggests that workers will be more committed in
firms where performance is an important earnings influence. Prior research by
Florkowski and Schuster (1992) provides some support for the positive effects of an
incentive compensation system on commitment.
In studies related to HRM practices researchers have shown a link between
rewards and benefits and organizational outcomes. Pfeffer (1994 1995,1998) argues
that reward systems such as a higher salary base, gain-sharing, bonuses and employee
stock options, act as incentives for employees to be committed and motivated to

achieve organizational goals. In a study of 250 employees of a manufacturing
operation, Oliver (1990) finds a positive correlation (r = .56, p < .01) between work
rewards and commitment. Buchko (1993) suggests that benefit practices can be
associated with turnover. He finds that in organizations in which benefits are a higher
percentage of total labor costs and those organizations whose benefits packages were
described to be of higher quality, tends to report lower rates of employee attrition. In
addition, Buchko (1993) suggests that this may be because employees are satisfied
with the benefits they receive or it might be because the rewards and benefits received