Factors Influencing Employee Commitment

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

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

Huỳnh Thiên Hải

FACTORS INFLUENCING ORGANIZATIONAL COMMITMENT

AND INTENTION TO STAY OF CORE EMPLOYEES IN

SMALL - MEDIUM SIZED COMPANIES IN HOCHIMINH CITY

MASTER OF BUSINESS (Honours)

Ho Chi Minh City - Year 2012

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

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

Huỳnh Thiên Hải

FACTORS INFLUENCING ORGANIZATIONAL COMMITMENT

AND INTENTION TO STAY OF CORE EMPLOYEES IN

SMALL - MEDIUM SIZED COMPANIES IN HOCHIMINH CITY

ID: 60340102

MASTER OF BUSINESS (Honours)

SUPERVISOR

Dr. NGUYỄN THỊ NGUYỆT QUẾ

Ho Chi Minh City - 2012

INDEX

ACKNOWLEDGEMENTS ...................................................................................................... 5

LIST OF FIGURES ................................................................................................................... 6

LIST OF TABLES ..................................................................................................................... 6

LIST OF APPENDIX ................................................................................................................ 7

ABSTRACT .............................................................................................................................. 9

1.1. Background to the research ........................................................................................... 10

1.1.1 The importance of small and medium sized companies ........................................ 10

1.1.2. The facts of labor force in SMEs and problem statement .................................... 10

1.2. Research objective ........................................................................................................ 12

1.3. Scope of the study ......................................................................................................... 12

1.4. Significances of the study: ............................................................................................ 12

1.5. Structure of the study .................................................................................................... 13

CHAPTER 2: LITERATURE REVIEW ................................................................................. 14

2.1. Chapter introduction ...................................................................................................... 14

2.2. Relative concepts and definition .................................................................................. 14

2.2.1.Small and medium companies ............................................................................... 14

2.2.2. Core employees .................................................................................................... 15

2.2.3. Core employee retention ....................................................................................... 15

2.3. Review of previous study .............................................................................................. 17

2.3.1. Organizational commitment ................................................................................. 18

2.3.2. Training ................................................................................................................. 19

2.3.3. Leadership ............................................................................................................. 19

2.3.4.Working environment ............................................................................................ 20

2.3.5. Remuneration and reward ..................................................................................... 21

2.3.6. Organizational culture and policies ...................................................................... 22

3.3.7. Intention to stay .................................................................................................... 22

2.4. Proposal research hypotheses ........................................................................................ 23

2.5. Chapter conclusion ........................................................................................................ 24

CHAPTER 3: METHODOLOGY ........................................................................................... 25

3.1 Research process ............................................................................................................ 25

3.2. Questionnaire design ..................................................................................................... 26

3.2.1 Measure of variable ............................................................................................... 26

3.2.2. Draft questionnaire ............................................................................................... 30

3.3. Pilot study ...................................................................................................................... 30

3.4 Main survey .................................................................................................................... 31

3.4.1. Sample method ..................................................................................................... 31

3.4.2. Sample size ........................................................................................................... 31

3.5. Data analysis technique ................................................................................................. 32

3.5.1. Recoding data ....................................................................................................... 32

3.5.2. Testing of Reliability ............................................................................................ 32

3.5.3. Exploratory factor analysis (EFA) ........................................................................ 33

3.5. 4. Hypotheses testing: Multiple Regression Analysis ............................................. 33


CHAPTER 4: DATA ANALYSIS .......................................................................................... 35

4.1. Sample description and data clearance ......................................................................... 35

4.2. Demography Sampling .................................................................................................. 35

4.4. Testing of Reliability ..................................................................................................... 36

4. 5. Exploratory factor analysis (EFA) ............................................................................... 37


5.1. Finding and discussion .................................................................................................. 45

5.2. Limitation ...................................................................................................................... 46

5.3. Suggestion for future Research ..................................................................................... 47

APPENDIX ............................................................................................................................. 55

APPENDIX 1.1: QUESTIONAIRE (English version) ........................................................ 55

APPENDIX 1.2: QUESTIONAIRE (Vietnamese version) ................................................. 59

APPENDIX 4.1 CODING ................................................................................................... 62

Appendix 4.2 Demography .................................................................................................. 65

Appendix 4.3: Testing of reliability variables ..................................................................... 65

Appendix 4.4 . EFA for all independent variables ............................................................... 67

Appendix 4.4 .1. EFA for all independent variables (The first time in 4 times) ............ 67

Appendix 4.4.2: EFA with all independent variable (the second time in 4 times) ........ 68

Appendix 4.4 .3. EFA for all independent variables (The third time in 4 times) ........... 70

Appendix 4.4 .4. EFA for all independent variables (The fourth time in 4 times) ......... 71

Appendix 4.5. Regression, model 1. Independent variables: Training, leadership,

remuneration and company policies; dependent variable: Commitment ............................. 73

Appendix 4.6. Regression, model 2. Independent variables: Organizational Commitment;

dependent variable: intention to stay .................................................................................... 76

5

ACKNOWLEDGEMENTS

First at all, I would like to express my sincere gratitude to my supervisors, Dr.

Nguyen Thi Nguyet Que for her continuous support of my thesis.

I would like to take this opportunity to thank leaders, teachers and staffs in ISB who

help me usefully all the subjects of my master course.

My sincere thanks also goes to the friends and colleagues who participated in the

initial trial survey stages that led to the development of the final survey questionnaire and

their support over the time when I am busy to study.

I would like to thank my Mummy, my sisters, brothers and my special friend who is

my moral support in all my studying period.

Last at all, I would like to present the achievement to my Dad's soul who spent all the

life for my family

Ho Chi Minh City, December 28, 2012

Huynh Thien Hai

6

LIST OF FIGURES

Name of configure Page

Figure 2.1 proposal research hypothesis 24 Figure 3.1 Research Design Process 26

Figure 4.1 Final model 44

LIST OF TABLES

Table name Page

Table 2.1. Classification of SMEs in Vietnam 16

Table 3.1. Measurement of training and career development 27

Table 3.2. Measurement of leadership 27

Table 3.3. Measurement of working environment 28

Table 3.4. Measurement of remuneration and rewards 29

Table 3.5. Measurement of company policies 29

Table 3.6. Measurement of organizational commitment 30

Table 3.7. Measurement of intention to stay 30

Table 3.8: Cronbach’s alpha reliability coefficient 33

Table 4.1 Sample Demography 37 Table 4.2: Cronbach’s alpha reliability coefficient

of variable 37 Table 4.3: Pattern matrix in the last time (the fourth time) of regression analysis 37 Table 4.4 Correlations model 1 40 Table 4.5 Model Summaryb model 1 40 Table 4.6 ANOVA of model 1 41 Table 4.7. Coefficientsa of medel 1 41 Table 4.8 Model Summaryb model 2 43 Table 4.9. Coefficientsa of model 2 43 Table 5.1. Questionnaire for organizational polices 46

7

LIST OF APPENDIX

Appendix name Page

APPENDIX 1.1: ENGLISH QUESTIONAIRE 55

APPENDIX 1.2: VIETNAMESE QUESTIONAIRE 50

APPENDIX 4.1 CODING 62

Appendix 4.2 Demography 65

Appendix 4.3: Testing of reliability of variables 65

Appendix 4.4. EFA for all independent variables 67 Appendix 4.4 .1. EFA for all independent variables (The first time in 4 times)

67

Appendix 4.4.2: EFA with all independent variable (the second time in 4 times)

68

Appendix 4.4 .3. EFA for all independent variables (The third time in 4 times)

70

Appendix 4.4 .4. EFA for all independent variables (The fourth time in 4 times)

71

Appendix 4.5.Correlation bivariable model 1 73 Appendix 4.5.Correlation bivariable model 2 76

8

LIST OF ABBREVIATION

SME ................................................................................. Small and medium sized company

SMEs ............................................................................ Small and medium sized companies

HCMC ........................................................................................................... Hochiminh City

VCCI ............................................................... Vietnam Chamber of Commerce and Industry

HR ................................................................................................................... Human resource

VND .................................................................................................................. Vietnam Dong

WTO ........................................................................................ the World Trade Organization

WB ........................................................................................................................ World Bank

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ABSTRACT

Employee retention especially core employees is one of the most important ongoing

practices of human resource management. Employee’s turnover is a major HR organizational

threat. The problem is being faced by different organizations of almost all the countries.

Organizations are trying different plans to get maximum output from employees. Core

employee retention is one of the main factors that could help in achieving the required

results.

There are many theories for retention employees but there is not any closed research for

SME employees in HCMC.

This study elaborates the retention of core employees; its benefits and factors that may help

to retain the best employees of the organization.

Questions with five-point Likert scale are used to the research for investigating needs of core

employees. Base on the result of investigation, the most affective factors among of factors:

training-career path; leadership; working environment ; remuneration-rewards and

organizational culture-policies will be recognized. Intermediary variable is organizational

commitment that is used in the research.

The research findings prove significant relationship of training-career path; leadership;

working environment; remuneration-rewards and organizational culture-policies that

influence the staying decision of core employee. This study will help SMEs in HCMC to find

out various HR policies and to revise their current policies for further improvements.

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CHAPTER I: INTRODUCTION

1.1. Background to the research 1.1.1 The importance of small and medium sized companies

Small and medium sized companies (after here called by SMEs) are important to almost all

economies in the world. SMEs are main element in all economics, in Europe, there are 57

per cent of 1- person enterprises, 34 per cent of micro enterprises (less than 10 employees);

7.7 per cent of small enterprises; 1per cent of medium, totally of SME is 99.7 per cent but

there are only 0.27 per cent of large companies and 0.03 per cent of Stock Exchange (Agnès,

2010). SMEs in Russia (with up to 250 employees) account for about 90 per cent of the total

number of firms, they provide 45 per cent of total employment and they account for 40 per

cent of total sales; SMEs in China account for 99.9 percent of the total number of firms, they

provide 84 per cent of total employment and account for 71 percent of total sales (Qimiao,

2003).

General Statistics Office (2012) reported SMEs are approximately 97 per cent of 448.393

companies in Vietnam and they represent the main drivers in obtaining employment and

VCCI (2012) reported SMEs contribute 60 per cent GDP in Vietnam with the capital of 6

million billion VND

1.1.2. The facts of labor force in SMEs and problem statement

Although there are many important SME's distribution, they still face many problems in HR,

the demands for the human resource is increasing and the lack of the right personnel,

especially in the management personnel, prevent the SMEs development.

One of the specifications of HR in SMEs is not clearly function between administration and

human resource such as administration usually is responsibility recruitment function in

SMEs, but that are 2 different functions of HR in the organization (Torben., 2003)

SMEs is very hard to completive with other organization type to attract qualified employee

because there is not clearly policies to intent them. According to a recent poll of

undergraduates and recent graduates of the three local universities, Singapore Management

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University (SMU), National University of Singapore (NUS) and Nanyang Technological

University (NTU), MNCs, as a category, still outstrip SMEs as employers of choice.

Recruitment firm Jobs Factory, which polled over 4,500 students, revealed that in this year’s

survey, the top five employers of choice in the private sector are Apple, Singapore Airlines,

Google, 3M and DBS Bank – all large companies with operations across the world. It is not

difficult to see why job seekers flock to MNCs. Besides the easily-recognizable brand

names, they are also seen as organizations that are more transparent, offer higher

remuneration, superior benefits and strong organizational structure – all of which point to

better career prospects. Recent surveys have highlighted that �� culture and

work-life balance are important to the younger generation, and bigger firms are perceived to

be more flexible – or at least, more open to suggestion – in these areas. Conversely, SMEs

are often seen to be non-transparent, authoritarian and less professional (than MNCs). More

often than not, the founder/boss’ inner circle is made up of family and relatives, with

competence a secondary consideration. (Developing an Argument, 2010)

Employee working life in SMEs is short, most of employee think SMEs is temporary place,

so they do not have any long term plan for the SME. The other specification of employees in

SMEs is they are not confident working, always waiting direction for leader.

The studies indicated that the work relationship between the employer and the employee in

SME’s is not generally governed by a contract. Only (15%) of the workers had a contract (El

Mahdi, Nov.1999). The lack of contract may just be a reflection of the traditional and

informal environment in which SME’s is conducting its affairs. So, the most important issue

of SME’s is the insecurity of the workers regarding their future, due to the lack of social

security coverage and due to the fact that employers are not bound by any contract towards

their employees.

The previous studies indicated that although the provision of technical and other aspects of

running the small firms are highly needed, the training assistance that is offered to small

enterprises through the different programs of support and finance is almost negligible.

According to the study of Soliman et al., (1998) only 66.9% of the studied projects indicated

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that they did not get any kind of assistance, especially training, from the finance providers.

Despite the fact that a few studies tackled the issue of small enterprises, employment and

micro-finance, none of these research tried to assess the kind of relationship that exists

between offering micro finance and employment creation in the small enterprises.

There are many reasons (or factors) are influencing employee but there is no study that

researches what the factors more affect to employee, which factors are influencing

organizational commitment and intention to stay of employee in the SMEs. Those questions

are the problem of labour force in SMEs and that will be answered in the study.

1.2. Research objective

In the thesis, we will review relevant theories and previous researches on factors that have

impact on the intention to stay of core employees stay in SMEs. Specially, the study will

investigates what factors influencing the intention to stay of core employees and measure

how deep the influencing factors effect organizational commitment and intention to stay of

core employees.

1.3. Scope of the study

Purpose of the research investigate and determine the factors the affective staying decision of

core employees in SMEs, it will exam the relative between the factors and identify the

factors which are strongly affective the organizational commitment and intention to stay of

core employees in SMEs. The result of this research can be applied to SMEs in HCMC and

help SME directors re-construct company and give new human resource policies that to

retain core employees

1.4. Significances of the study:

HCMC is the biggest trading, financial and service center of Vietnam. There are over

170.000 SMEs, among of 38 per cent of SMEs in Vietnam. SMEs in HCMC is very flexible

so they are not only achieve the best result but also get bad influence with any negative

chances. There are many companies among 26.324 companies that quit in 6 months in

beginning 2012 face difficult situation to retain core employees. Because of the importance

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of core employees and their position of HCMC, this research focus in retention core

employees in SMEs in HCMC.

In general, core employees are normal employees with some special specification such as

working period, their importance in organizations,...So besides normal requested as normal

employees, they need more request and to meet their requests is one of the key to retain them

in organizations. In next chapter, the study will show the request of core employees

1.5. Structure of the study

The study consists of five main content

Introduction: Overview of SMEs such as the importance of SMEs, the facts of labor force

in SMEs, research objective, scope of study and Significances of the study

Literature review: Some relative concept and definition of the study will be explained in

this chapter such as small and medium companies, core employees, core employee retention

as well as review of previous study about training and Career path; leadership; working

environment; remuneration & reward; organizational culture and policies; organizational

commitment and intention to stay. Proposal research hypotheses will be introduced in this

chapter

Methodology: Research process will be introduced in this chapter. This chapter also

introduces the methodologies of questionnaire design, measure of variable, draft

questionnaire, pilot study as well as the way to collect data and methodologies of data

analysis.

Data analysis: Collected data will be analyzed in this chapter. This analysis include testing

of Reliability, exploratory factor analysis (EFA) and hypotheses testing: Multiple Regression

Analysis

Finding, discussion, limitation and suggestion for future study : This is the result of the

study distribution of study for theory and applied, the limitation of the study and suggest to

later study

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CHAPTER 2: LITERATURE REVIEW

2.1. Chapter introduction

There are many previous study for the factors that influencing organizational commitment

and intention to stay of core employee in the world. In this chapter, the definition of core

employee, SMEs, core employee retention and the factors influencing organizational

commitment and intention to stay of core employee are introduced. Hypotheses, proposal

scales are introduction is also showed in this chapter

2.2. Relative concepts and definition 2.2.1.Small and medium companies

That is synonymous definition between small and medium companies and small and

medium sized enterprises. The abbreviation "SME" for small and medium sized companies

is used in the European Union and by international organizations such as the WB, and WTO.

The term "small and medium businesses" (or SMBs) is predominantly used in the USA. In

most economies, smaller enterprises outnumber large companies by a wide margin. SMEs

are said to be responsible for driving innovation and competition in many economic sectors.

Wikipedia (2012) defined that are the companies whose personnel number fall below certain

limit. The certain limits are different from the countries. The EC definite SMEs are three

broad parameters which define SMEs: micro-entities are companies with up to 10

employees; small companies employ up to 50 workers, whilst medium-sized enterprises have

up to 250 employees.

In Vietnam, Decree No. 56/2009/ND-CP dated 30/6/2009 of the Government defined SMEs

are the organizations that are less than 200 employees or capital less than 100 billion

Vietnam Dong,. More detail show in table 2.1

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Table 2.1: Classification of SMEs in Vietnam (Decree No. 56/2009/ND-CP)

Scope of business Micro company

Small company Medium company

Employees Employees Capital (bil) Employees Capital (bil)Agriculture, Forestry, Less 10 10-200 Less 20 20-200 20-100 Industry and construction

Less 10 10- 200 Less 20 20-200 20-100

Trading and services Less 10 10-50 Less 10 50-100 10-50

2.2.2. Core employees

Core employee are permanent employees comprising the central and foundational group that

provides the skills essential to the survival and growth of an organization. Core employees

are supported in their work by contingent or peripheral employees. (Business Dictionary)

Critical job functions will be retained by small group, relatively permanent "core" of

employees with board skill allowing them to tackle a variety of jobs (Janet, 2004). As

definition from Renee (2012) a core employee is a full-time attendance. Core employee

usually are required to work at least 40 hours per week. Core employees are necessary for a

business to function. A contingent worker is usually a temporary worker.

Definition of core employee in the research is person who works full time (Renee, 2012),

they are the persons who respond multi job and affect on other person (Janet, 2004) and

work for organization more than 6 months

2.2.3. Core employee retention

Once a SME finds an employee, it's very hard to find knowledgeable people who is suitable

to expect position because some disadvantage of SMEs. Hiring knowledgeable people for

the job is essential for an employer. But retention is even more important than hiring. In

order to keep employees motivated and willing to stay with the organization, the company do

not only pay more but also make motivation working environment.

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Harvard Manage Mentor Journal (2012) said Core employee retention is to keep that people

who will help the organization remain competitive to competitors in the market

In other hand, when core employee leaves, the organization will loss many things: the

turnover is high so the cost of turnover (including hiring costs, training costs and

productivity loss) is high; When an employee leaves, valuable knowledge about the

company, customers, current projects and past history will go with him, employer must pay

much time and money has been spent on the employee in expectation of a future return.

When the employee leaves, the investment is not realized; customers and clients do business

with a company in part because of the employee. Relationships are developed that encourage

continued sponsorship of the business. When an employee leaves, the relationships that

employee built for the company are severed, which could lead to potential customer loss.

When an employee terminates, the effect is felt throughout the organization. Co-workers are

often required to pick up the slack. The unspoken negativity often intensifies for the

remaining staff. The goodwill of a company is maintained when the attrition rates are low.

Higher retention rates motivate potential employees to join the organization. If an employee

resigns, then good amount of time is lost in hiring a new employee and then training him/her

and this goes to the loss of the company directly which many a times goes unnoticed. And

even after this you cannot assure us of the same efficiency from the new employee

Employee retention is beneficial for the organization as well as the employee. They are not

the ones who don’t have good opportunities in hand. As soon as they feel dissatisfied with

the current employer or the job, they switch over to the next job, and when they left, with

their effectiveness, other employees will be left or their willing go down in a period.. A good

employer should know how to attract and retain its employees.

The question of SME leaders is how to retain their employee, especially core employee as

long as possible. The problems that are companies should found desire of core employees,

but that is very difficult because each employee has different desire even it are different in

each stage of their life.

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2.3. Review of previous study

Best employees searching will be very difficult things in coming years for organizations,

core employee retention is a process not only to maintain existing core employees but also

recruits right person to appropriately position. In the scope of study, researcher studies

factors to maintain core employees in SMEs

There are several previous research about employee retention topic with various result and

ideas to applied to organizations.

Retention can be possible by many ways but one of the most used in organizations is paying

more than they are earning. Hansen (2002) argued that pay more to the employees in order to

achieve better financial position and retain those employees who lead from the front to attain

business goals. Short and long term incentives should be given according to the goals of

business that will help to have more organized and strong management team for long term

results. Lawler II (2005) stated that in these days organizations are competing for talent

rather than counting employees loyalty. They are focusing on attracting, hiring and retaining

the required core persons. For this purpose organizations must utilize those practices which

are in favor of both employees and employers leading them towards higher performance

levels.

We have closed look to development of employee retention concept to now (2012):

From 1975, Dubin et al., found a strong relationship between central life interests of

workers and their commitment to the organization. This research show the relationship

between work value and commitment to the organization.

Ans et al., (2003) found employee’s staying in decision has found some positive effects on

the job content, social atmosphere, work-life balance, career development.

Janet (2004) in her PhD thesis for retention of core employee in SMEs in Australia, argued

that core employees retention higher if they get high human commitment: with human

resource practice and organization factors such as selection (organization fit), remuneration

and rewards. Training and career develop, challenging work and opportunities and

18

organization commitment such as leadership, team work, organizational culture and policies,

work environment;

Prateek et al., (2011) said Organization commitment (ownership, loyalty, attachment),

Career Advancement (career needs, career path, career planning and management), quality of

work life (fair compensation, working condition, job Involvement) has some direct and

independent effects organizational commitment and intention to stay of core employee.

Bhavna & Swati (2012) researched the quality of working relationships, workplace

leadership, having a say, clear values, being safe, the built environment, recruitment, pay and

conditions, getting Feedback, autonomy and uniqueness, a sense of ownership and identity,

learning, passion, having fun, community connections, that can influence iorganizational

commitment and intention to stay of core employee in the organization

2.3.1. Organizational commitment

The concept of organizational commitment has attracted considerable attention over recent

years and has become a central objective of human resource management. As Guest (1987)

indicated, HRM policies are designed to maximize organizational integration, employee

commitment, flexibility and quality of work. For the topic in question our focal interest

refers to “Commitment ” which can be described as attachment and loyalty. Individuals can

display this attachment and loyalty at a variety of levels: their job, profession, department,

boss or organization. Realistically then, commitment may therefore be diverse and divided

between any of these. More specifically, organizational commitment has been defined by

Mowdray (1992) as consisting of three components: an identification with the goal’s and

values of the organization, a desire to belong to the organization and a willingness to display

effort on behalf of the organization.

Shorter meaning of organizational commitment in the study that is satiability of core

employees in SMEs

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2.3.2. Training

That definition is called by different way by the authors: Learning, training opportunities

(Bhavna. & Swati., 2012; Waleed., 2011) training and career development (Muhammad,

2011), coaching (Liette, 2010), training and development, (Mohammad A. & Mohd H.R. J.,

2009), learning and development (Andy et al., 2003), amount of training available, training

methods (Karen, 2001), training and career develop (Janet, 2004)

As Dawn R. Mc. K (2012) Career development, a major aspect of human development, is the

process through which an individual's work identity is formed. It spans one's entire lifetime.

Career development begins with a person's earliest awareness of the ways in which people

make a living, continues as he or she explores occupations and ultimately decides what

career to pursue, prepares for it, applies for and gets a job and advances in it. It may, and

probably will include, changing careers and jobs.

If the SME leaders help core employee set their career path, that is weapon to retain them

because they feel ensuring their jobs in the future Career path is a system which is organized,

formalized and it’s a planned effort of achieving a balance between the individual career

needs and the organization’s workforce requirements (Leiboiwitz et al, 1986).

H 1: Training and career path has positive impact on organizational commitment

2.3.3. Leadership

That was defined by different words as Workplace leadership (Bhavna & Swati, 2012)

Management style and lack of opportunities (Waleed, 2011), good leadership (Petra, 2011),

supervision (Kazi & Sisi, 2011), a sense of ownership and identity (Bhavna & Swati, 2012),

leadership behavior (Mohammad & Mohd, 2009), trust in supervisor (Fleischlin, 2008),

having a say (Agarwal & Gupta , 2012), supervisor support (Muhammad, 2011), leadership

(Janet, 2004)

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Leadership is definite as behavior of an individual that result in none-coercive influent when

that person in directing and cooperating the activities of a group towards the accomplishment

of the shared goal (Bryman, 1992). That affect directly to retain core employees.

One of the most important factors that have impact on commitment is the relationship

between a core employee and a supervisor. Leaders are the “human face” of an SMEs.

(Eisenberger, 1990), leader interact as a link to practice applications among stated goals and

expectations. By harmonizing the competing demands, they support in managing both inside

and outside the work environment. If the relationship does not exceed then employee will

seek to any other opportunity for new employment and vice versa. The leader support is so

essential to retention that it can be said that employees leave bosses, not jobs (Ontario,

2004). If the leader focuses towards the employee’s progress, other than the formal

evaluation process; this improves the employee’s retention and commitment towards the

SMEs. (Freyermuth, 2007).

H 2: Leadership is has positive impact on organizational commitment.

2.3.4.Working environment

There are many alternative names with the same meaning: The quality of working

relationships (Bhavna & Swati, 2012), the built environment, work place environment

(Bhavna & Swati, 2012., Waleed, 2011), work place culture (Waleed, 2011), work

environment (Muhammad, 2011), working environment (Yasir & Hussain, 2011), working

environment (Mohammad & Mohd, 2009), trust in company (Fleischlin, 2008), being safe

(Bhavna & Swati, 2012), positive and negative situations (Waleed, 2011), having fun

(Bhavna & Swati, 2012), freedom and autonomy (Petra, 2011), highly incentive work (Petra

2011), working environment (Yasir & Hussain, 2011), working environment, (Mohammad &

Mohd, 2009) having job security (Elizabeth et al., 2008), internal communications (Andy et

al, 2003), Social atmosphere (Ans et al., 2003), work environment (Janet, 2004)

The purpose of the study by Nadeem et al., (2011) was to determine what relationships

between working environment and organizational commitment. That is support of the

21

organization for flexible time working, working stress. Working environment is one of the

factors that affect core employee’s decision to stay with the SMEs. It’s very important to

recognize the emerging needs of individuals to keep them committed and provide the work

environment as necessitate (Ramlall, 2003). Milory (2004) reported that people enjoy

working, and strive to work in those SMEs that provide positive work environment where

they feel they are making difference and where most people in the organization are proficient

and pulling together to move the organization forward. Workspace designs have a profound

impact on workers and tend to live with job as long as satisfied (Brill et al., 2001).

H 3: Working environment has positive impact on organizational commitment.

2.3.5. Remuneration and reward

That is defined by some researchers by different words: compensation and rewards is more

popular and was called by Waleed (2011) Muhammad (2011) Kazi & Sisi (2011),

Mohammad & Mohd (2009) and Elizabeth et al.(2008); Waleed (2011) called it is pay and

conditions, Muhammad (2011) called it is salary and wages rewards, Janet (2004) called it is

remuneration and rewards

The term ‘reward’ is discussed frequently in the literature as something that the organization

gives to the employees in response of their contributions and performance and also

something which is desired by the employees (Agarwal, 1998). A reward can be extrinsic or

intrinsic it can be a cash reward such as bounces or it can be recognition such as naming a

worker employee of the month, and at other times a reward refers to a tangible incentive,

reward is the thing that an organization gives to the employee in response of their

contribution or performance so that the employees become motivated for future positive

behavior. In a corporate environment rewards can take several forms. It includes, cash

bonuses, recognition awards, free merchandise and free trips. It is very important that the

rewards have a lasting impression on the employee and it will continue to substantiate the

employee’s perception that they are valued (Silbert, 2005). That income is correlation

between compensation and employee's performance. (Shun., 2003, Sriyan, 2010)

22

H 4: Remuneration and rewards has positive impact on organizational commitment

2.3.6. Organizational culture and policies

It has been defined by the words: organization justice (Muhammad, 2011), Culture (Kazi &

Sisi, 2011), autonomy and uniqueness (Bhavna & Swati, 2012), organizational culture and

policy (Mohammad & Mohd, 2009), culture (Andy et al., 2003), organizational culture

(Karen, 2001), organizational culture and policies (Janet, 2004)

Organizational culture and policies: Culture is invisible that are management philosophy and

type, communication protocol, ritual and taboo to create the uniqueness of each company

(Furnham, 2002). The complement of organizational culture is structure: job design and

work pattern. That is including control, reporting relationship. That expresses how work to

be done and business conduct.

It is very importance in SMEs because there are a few of persons (especially for the SMEs

that is less ten employees)

H 5: Organization culture and policies has positive impact on organizational

commitment.

3.3.7. Intention to stay

According to Fishbein & Ajzen, "the best single predictor of an individual's behavior will be

a measure of the intention to perform that behaviour" (1975, p. 369). Empirical evidence

strongly supports the position that intent to stay or leave is strongly and consistently related

to voluntary turnover (Dalessio et al., 1986; Griffeth & Hom 1988; Mathieu & Zajac., 1990).

H 6: organizational commitment positive is correlated to intent to stay.

Although Janet (2004) researched very carefully for core employee retention but her

research has some limits to apply to SMEs in HCMC because with specific of characteristics,

SMEs in HCMC is different from SMEs in Australia such as they are not competitive with

bigger companies or FDI in recruitment the best person, so they cannot choose right person

23

to right position. As Hang (2001), SMEs have several characteristics: Management:

management is usually directly from owner and because of that, relationship between

Owner-Director and employees is closed; capital: it's usually from owner's saving or from

owner's friends loan; there are not many employees and some of them are owner-family

relation, because of small number of employee, factors training and career development in

SMEs usually are together so they are combine into unique factor in this study

There are several previous research from Eastern countries to Western countries about

employee retention topic but each research has some limits to apply to SMEs in HCMC.

Because of characteristics of SMEs as above, the study focuses only in some factors such as:

training/career path (development), leadership, work environment, remuneration and rewards

and organizational culture and policies.

2.4. Proposal research hypotheses

The study builds research model base on five factors and it is adapt with the model of Janet

(2004).

Figure 2.1: proposal research hypothesis

Training and career

path

Leadership

Working Environment

Remuneration and

rewards

Organizational culture

and policies

organizational commitment

Intention to stay

H1

H2

H3

H4

H5

H6

24

H 1 Training and career path has positive impact on organizational commitment.

H 2: Leadership is has positive impact on organizational commitment.

H 3: Working environment has positive impact on organizational commitment.

H 4: Remuneration and rewards has positive impact on organizational commitment

H 5: Organizational culture and policies has positive impact on organizational commitment.

H 6: organizational commitment positively is correlated to intent to stay.

2.5. Chapter conclusion

Although there are many factors that influence organizational commitment and intention to

stay of core employees in HCMC but the study focuses in five factors: training & career

path, leadership, working environment remuneration rewards and organizational culture &

policies.

The influencing of the factors to organizational commitment and intention to stay of core

employees will be introduced in chapter 4

25

CHAPTER 3: METHODOLOGY

Methodologies will be explained in this chapter to collect the data to address the research

issues of this study. It starts with the research design process, questionnaire design. It

provides information about the sample demography. It further describes the instruments, the

data collection processes and the type of analysis carried out on each phase of the study.

3.1 Research process

Figure 3.1 – Research Design Process

Initial

questionnaireLiterature

review

Back-translated

questionnaire

QU

ESTI

ON

NA

IRE

DES

IGN

Revision Draft

questionnaire

Delete low item-total correlation

items (<0.30), and low

cronbach's anpha (<0.60)

Delete low factor

loading items (<0.40)

A survey of 335

responses

MA

IN S

UR

VEY

EFA

Reliability

analysis

Regression

Result

An interview of

10 responses

PILO

T SU

RV

EY

Revision

Final

questionnaire

26

3.2. Questionnaire design 3.2.1 Measure of variable

The measurement of the factor is founded and developed by many researchers:

Training and Career Development: Training adequacy, job design, job control. This

measurement was developed by Blau (1989), Cammann at al., (1979), Hausknecht at al.,

(2002), Jones et al (2001), Warr at al., (1979) and the study adapted from Janet (2004) 5

items

Table 3.1. Measurement of training and career development

Leadership: Transformational leadership effectiveness, performance and satisfaction those

factors are including organization leader and team leader, that origin is 8 items from Alimo-

Metcalfe & Alban Metcalfe (2001), Bass & Avolio (1995), Podsakoff at al.(1996), Singh at

al., (2000), Yammariono at al., (1990), Bass & Avolio (1995), Bishop at al., (1997).

Table 3.2. Measurement of leadership

Training 1- " People are properly orientated and trained upon joining this organization."

Training 2- "This organization does provide regular opportunities for personal and career development ."

Training 3- "The organisation has career development activities to help an employee identify/improve abilities, goals, strengths & weaknesses."

Leader 4-"The leadership practices in this organization help me to become a high performing employee"

Leader 5 "The leadership practices in this organization enhance my satisfaction with my job"

Leader 6 "The organizational leadership practices are consistent with my personal values"

27

Working environment That measure humanistic and socialization, physical working

conditions and organization climate, origin of that measurement is from 7 items by Bateman

& Strasser (1984), Ashford at al., (1992). Mathieu at al., (1990) Mottaz (1988), it was

develop to 4 items by Janet (2004)

Table 3.3. Measurement of working environment

Remuneration and Reward: Job characteristics, intrinsic and extrinsic, rewards. This

variable was measured by 4 items, that is founded and developed by Broadfoot & Ashkanasy

(1994), Cammann at al., (1979), Hackman & Oldham (1975), Idaszak & Drasgow (1987),

Rhoades at al., ( 2001), Seashore at al., (1982), Warr & Wall (1979) and Janet (2004)

Leader 7 "The organizational leadership practices make a positive contribution to the overall effectiveness of the organization"

Leader 8 "This organisation keeps employees well-informed on matters important to them"

Leader 9 "Sufficient effort is made to determine the thought and responses of people who work here"

Leader 10 "Communications across all levels in this organisation tend to be good"

Leader 11 "Organisational structure encourages horizonal and vertical communication

Environment 12 "My working life balances with my family life"

Environment 13 "Overall this organization is a harmonious place to work"

Environment 14 "This organization regards welfare of its employees as its first priority"

Environment 15 "For the work I do , The physical working conditions are very pleasant"

28

Table 3.4. Measurement of remuneration and rewards

Organizational culture and policies Measures the degree the organizational structure limits

the action of employees, testing the focus on the influence of policies and procedures, the

organizational goal clarity and planning. The origin is 5 questions from Broadfoot &

Ashkanasy (1994), Kabanoff (2000), O’Reilly at al (1991), Morita at al., (1989), Sheridan

(1992), Janet (2005) developed to 5 items

Table 3.5. Measurement of company policies

Organizational commitment That measures the feedback of employees for the company's

affection, It founded from Meyer & Allen (1997); Porter at al., (1974) with 5 items and Janet

(2004) developed to 9 items

Remuneration 16 "Employees are given positive recognition when they produce high quality work"

Remuneration 17 "This organization pays well"

Remuneration 18 "This organization offers a good benefits package compared to other organizations"

Remuneration 19 "This organization values individual excellence over teamwork"

Remuneration 20 "This organization offers good opportunities for promotion"

Policies 21 "Organizational policies and procedures are helpful, well understood and up to date"

Policies 22 "Progress towards meeting planned objectives is periodically reviewed"

Policies 23 "The organizational structure facilitates the way we do things."

Policies 24 " This organization has a defined vision/mission to meet its goals"

29

Table 3.6. Measurement of organizational commitment

Intention to stay That is measurement the trend of stay or leave the organization of

employees. That is 4 items, founded and developed by Cammann at al., (1979); Dalessio at

al., (1986), Griffeth at al., (2000), Lambert at al., (2001) Mathieu & Zajac (1990),

McCloskey & McCain 1987; Mueller & Wallace (1992), Seashore at al., (1982).

Table 3.7. Measurement of intention to stay

Commitment 25 "I feel a strong sense of belonging to this organization"

Commitment 26 "I could just as well working for a different organization if the type of work was similar (negative) "

Commitment 27 "I find it difficult to agree with this organization's policies (negative)

Commitment 28 "This organisation really inspires the very best in me in the way of job performance"

Commitment 29 "My values and this organisation's values are very similar"

Commitment 30 "There is little to be gained by sticking with this organization indefinitely (negative) "

Commitment 31 "I am willing to put in a great deal more effort than normally expected to help this organisation be successful"

Commitment 32 "I am proud to tell others that I am part of this organization"

Commitment 33 "I really care about the future of this organization"

Intention 34 "I plan to work at my present job for as long as possible"

Intention 35 " I will most certainly look for a new job in the near future (negative) "

Intention 36 "I plan to stay in this job for at least two to three years"

Intention 34 "I would hate to quit this job"

30

3.2.2. Draft questionnaire

All references are English but interviewees are Vietnamese so it is necessary to translate the

reference questionnaire from English into Vietnamese. To prevent misunderstanding or

unclear meaning, the Vietnamese version questionnaire (that just translated from English)

should translated into English again by other person to ensure similar meaning with the

original questionnaire

The questionnaire was designed to allow the researcher to collect the relevant information to

test proposed model. Forty four questions were incorporated into the questionnaire for the

purpose of this study. Detail is in Appendix 3.1

PART A: This part to choose core employees: There are 4 questions in this section. The core

employees will be chosen base on the answer of questions, in which the chosen candidate

interviewees should be not company owner, work for the company longer six months, they

are fulltime employees, and they are people who support the organizational culture and

vision. The interview will be cancel if one of question does not meet requirement

PART B: Demographic Profile is in this part: That data help the author understand about

their interviewee and know deeply research objective. That data also help the author in SPSS

regression to deeply research the factors influencing the core employee's age, gender,

education and field of working

PART C: Main questions: this part is base on designed Likert scales: that part show the

action and attitude of core employee about their company such as training, leadership,

working environment, remuneration and policies also.

3.3. Pilot study

The main purpose of pilot study is to test the questionnaire on a small sample of respondents

by trying to identify and excluding potential problems (Malhotra, 2004). It can also help to

increase the reliability and to assure the appropriateness of the data collection instrument

(Wong & Ko, 2009). According to Malhotra (2004), the sample size of pilot study is small,

which is around 10 to 30 respondents.

31

The pilot study of this research involved distribution of questionnaire to 10 interviewees

randomly chosen from 2 companies, and the feedback answers used to revision

questionnaire. Once the data for pilot study was entered into the questionnaire, it was double-

checked for accuracy.

Likert scales is chosen to use in the study.

After pilot surveying, Vietnamese questionnaire change in "Rất không đồng ý" to "hoàn

toàn không đồng ý" and "Rất đồng ý" to "hoàn toàn đồng ý"

3.4 Main survey

The purpose of this study was to examine the relationship between retention and training and

career path, leadership, working environment, remuneration and rewards organizational

culture and policies.

3.4.1. Sample method

That are convenience sampling, this method is chosen because its advantage is low cost,

quick responsibility, face to face interview.

Interviewees are core employees in SMEs in HCMC, if one of question in part A reject

(company owner, working part time, working less 6 months, not support the organizational

culture and vision), this interview cancels and that questionnaire do not record

3.4.2. Sample size

Sampling size for EFA is ratio of number of question and sampling is from 5/1to 10/1 (Hair

at al., 2006) .There are 37 items in the research so requested is 185 to 370 data is enough

(there are 421 data in the research)

Requested sampling size for regression is more than 50+8m (Tabachnick at al., 1996) so the

requested sampling size is more than 50+8x(37)= 346 (there are 421 data in the research)

32

3.5. Data analysis technique

All data were initially analyzed via SPSS Version 20 (Statistical Package for the Social

Sciences).

3.5.1. Recoding data

Because there are four items have positive meaning so it is necessary to recode them

(Nancy., 2005, p.42). That are the items COM26, COM27, COM30 and INT35

3.5.2. Testing of Reliability

According to Connely (2011), “Cronbach’s alpha is used as only one criterion for judging

instruments or scales. It only indicates if the items “hang together;” it does not determine if

they are measuring the attribute they are supposed to measure. Therefore, scales also should

be judged on their content and construct validity”.

Internal reliability refers to the core to which measures are free from random error and

therefore yield consistent results (Nancy et al., 2005). The scales of the seven factorized

variables were checked for reliability using Cronbach’s Alpha (Nancy et al., 2005). An alpha

of 0.70 or above is considered to be reliable as suggested by many researchers (Leech et al.,

2007) how ever 0.60-0.69 should be accepted in common articles (Nancy et al., 2005).

Leech et al. (2007) provide the following techniques show in table 3.8

Table 3.8: Cronbach’s alpha reliability coefficient

Cronbach’s alpha Internal consistency

α ≥ 0.7 Excellent

0.6 ≤ α < 6.9 Acceptable

0.5 ≤ α < 0.6 Poor

α < 0.5 Unacceptable

33

3.5.3. Exploratory factor analysis (EFA)

In the study, that is used the Extraction Method: Principal Axis Factoring. Rotation Method: Promax with Kaiser Normalization

Norris & Lecavalier (2010, p.9) supposed that “EFA is based upon a testable model and can

be evaluated in terms of its fit to the hypothesized population model; fit indices can be

generated to help with model interpretation”. And “EFA’s purpose is to identify latent

constructs underlying a set of manifest variables”. Nancy at al.(2005) argued that KMO

Measure of Sampling Adequacy above 0.7 is accepted.

Hair et al. (1998, cited in Lee and Hooley, 2005, p.376) claimed that with samples of 350 or

more, a factor loading of the attribute higher than 0.3 is significant. And, with samples of

200, a factor loading of 0.4 or greater will take to indicate. Therefore, the researchers must

carefully consider the sample size for choosing significant factor loadings. Moreover, factors

with a total eigenvalue of 1 or greater will take into account; hence any factors with an

eigenvalue of less than 1 are discounted (Kim & Mueller, 1978, cited in Lee & Hooley,

2005, p.376). Based on these studies, any factors with eigenvalues greater than 1 will be

retained. And, any factor loadings of 0.3 or higher on a factor are counted.

3.5. 4. Hypotheses testing: Multiple Regression Analysis

Loading factors above 0.4, this means indication that is efficient item for this factor (Nancy

et al., 2005) (there is 0.88 in the study) (The regression model selected for this study is

stepwise regression and the dependent variables examined were organizational commitment

and intent to stay, there are thirty seven items. The purpose of stepwise regression analysis

was to develop a group of independent variables that are useful in predicting the dependent

variables and to eliminate those independent variables that do not provide any additional

prediction to the independent variables already in the equation. In this study, the stepwise

regression analysis was conducted to test the relationship between the five independent

variables of the study: remuneration and recognition, training and career development,

leadership and policies and one dependent variables: organizational commitment-Intent to

stay.

34

Significant is less than 0.05 to assure this correlation matrix is significant different from an

identify matrix (Nancy et al., 2005)

Means, and standard deviations and correlations Correlation coefficients were calculated for

initial exploration of the relationships between variables. Correlation is used to measure the

size and direction of the relationship between two variables (Tabachnick & Fidell, 2001). In

this study, a correlation analysis was carried out to measure the inter-relationship between

independent variables (remuneration and recognition, training and career development,

leadership, policies, and work environment), dependent variables (organizational

commitment and intention to stay) On completion of the correlation analysis, a regression

analysis was conducted in order to further evaluate and understand the relationships between

the dependent and independent variables of the study, and to test the hypotheses of interest.


This chapter provided an overall explanation of the research methodologies used for this

study. There are 4 main parts of the chapter: questionnaire design, pilot survey, main survey

and data analysis. The development of the instruments for data analysis was described.

Subsequent Chapter 4will report the results of main survey base on methodologies in this

chapter .

35

CHAPTER 4: DATA ANALYSIS

SPSS version 20 is used in the study, this chapter shows the collected data, coding, reliable

testing as well as EFA and multi regression to check proposal model.

4.1. Sample description and data clearance

There are 600 questionnaires that have sent, there are 421 collected questionnaire (rate 70

percent). Among 421 collected questionnaires, there are 335 valid questionnaires (79.57

percent). The reasons of invalid questionnaire is missing data, interviewer's mistake in

interview part time employee, company owner,...

Although data collecting and typing is very carefully but the data collected in this study had

missing data scattered randomly throughout the data matrix.. All missing data were treated

with list wise deletion. Factor analysis is best suited to identifying the interrelationships

among a set of items in a scale, all designed to measure the same construct.

4.2. Demography Sampling

The respondents of this study consisted of core employees from some organizations of

different field of working. As in table 4.1, twenty two percent of these respondents were

from technical companies, thirty two percent from trading company, nine percent from

banking and thirty seven per cent from the others. As stable 4.1, the occupations of the

respondents consisted of twenty three technicians, thirty three percent office employees,

seventeen percent salesman, fourteen per cent managers, thirteen percent others. As shown in

As stable 4.1, education of the respondents consisted of twenty eight percent high school,

thirty percent college, thirty seven percent bachelor and five percent upper bachelor. This

study surveyed a good range of employment services and therefore provided a much broader

scope for generating the research. More detail refer in appendix 4.2

36

Table 4.1 Sample Demography

Frequency Percent Valid Percent

Cumulative Percent

Technical 78 23.3 23.3 23.3 Trading 108 32.2 32.2 55.5 Working Banking 28 8.4 8.4 63.9 field Others 121 36.1 36.1 100.0 High school 88 26.3 26.3 26.3 College 97 29.0 29.0 55.2 Education Bachelor 136 40.6 40.6 95.8 Upper

Bachelor 14 4.2 4.2 100.0

male 198 59.1 59.1 59.1 Gender female 137 40.9 40.9 100.0 Married Single 190 56.7 56.7 56.7 married 145 43.3 43.3 100.0 Total 335 100.0 100.0 4.4. Testing of Reliability

As Nancy at al., (2007) factors are accepted if corrected item total correlation above 0.3 so

item 30 is omitted because its corrected item total correlation 0.276, item 27 (0.218) is

deleted. Similarly is for item 35 because its corrected item total correlation is 0.181

So after testing reliable, there are three items omitted, it means there are 34 items in EFA,

overview reliability of variables is show in table 4.2, more detail refers in appendix 4.3 to

appendix 4.9.2

Table 4.2: Cronbach’s alpha reliability coefficient of variable

Variable Cronbach's anpha

Number of item

Status

Training .834 3 Excellent Leadership .893 8 Excellent Environment .821 4 Excellent Remuneration and rewards .852 5 Excellent POL .866 4 Excellent Commitment .842 7 Excellent Intention to stay .685 3 Acceptable

37

4. 5. Exploratory factor analysis (EFA)

There are 5 independent variables training, leadership, remuneration & rewards and policies.

In the first time running EFA, the items cluster into 5 groups define by high loadings

In the second time, lea4 is loading into 2 factors at .377 and .277 so it is omitted.

In the third time, the variables are loading into 4 factors. env12, env13 and env14 are loading

into 2 factors so they are omitted.

In the fourth time, the item rem20 is omitted. All items cluster into 4 groups with high

loading

More detail refers in appendix 4.4.1 to appendix 4.4.4

Pattern matrix in last time result shows in table 4.3

Table 4.3: Pattern matrix in the last time (the fourth time) of regression analysis

Pattern Matrixa Factor

1 2 3 4 TRA 01 .839TRA 02 .848TRA 03 .713LEA 05 .500 LEA 06 .604 LEA 07 .760 LEA 08 .828 -.246 LEA 09 .664 LEA 10 .594 LEA 11 .681 ENV 15 .472 REM 16 .736 REM 17 .958 REM 18 .601 REM 19 .780

38

POL 21 .903 POL 22 .921 POL 23 .623 POL 24 .565 Extraction Method: Principal Axis Factoring. Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 6 iterations.

Group 1: TRA01 (loading 0.839),TRA02 (loading 0.848), TRA03 (loading 0.713)

Group 2: LEA05 (loading 0.500), LEA06 (loading 0.604), LEA07 (loading 0.760), LEA08

(loading 0.828), LEA09 (loading 0.664), LEA10 (loading 0.594), LEA11 (loading 0.681)

Group 3: ENV15 (loading 0.472), REM16 (loading 0.736), REM17 (loading 0.958), REM18

(loading 0.601), REM19 (loading 0.780)

Group 4: POL21 (loading 0.903), POL 22 (loading 0.921), POL23 (loading 0.623), POL24

(loading 0.565)

Because all the independent variables and dependent variable run separately so it must run

correlate with option bi variable. if the Pearson correlation is less that .700 that is accepted.

As result of running, all Pearson correlation are less than 0.7, that means no independent

variable has high correlation together high (Julie, 2011)

As the result of analysis software, most of item in working environment is deleted, item

ENV15 is merged to remuneration & rewards variable. There are 2 type of looks to see that

problem: base on result of SPSS: it meets condition because all of their items have loading

less than 0.4; base on the fact: there are almost ten to twenty employees in SMEs in HCMC,

especially there are three to five employees in some SMEs so working environment in those

SMEs naturally is good and the core employees in there do not feel it is important for them.

Compute transform variable: In this session, methodology for compute is statistical function

group, special variables are using sum function.

39

Group 1: All of items in this group belong to TRA factors so it is called TRA (F1) when

compute transform variable

Group 2: that is similar with group 1: it is called LEA (F2) when compute transform variable

Group 3 has REM 17 that is highest loading so that group is called REM (F3) when compute

transform variable.

Group 4: All POL factors are loading into that group so it called POL (F4)

As result of EFA, there are three items of ENV are omitted, and one item combined to REM,

that means that variable is not reliable.

There are 2 times to run regression analysis

4.6.1 Model 1: Multiple Regression Analysis with all independent variables and COM

In this model, the independent variables are TRA, LEA, REM and POL with dependent variable is COM.

Table 4.4 Correlations model 1 COM TRA LEADER REM POL

Pearson Correlation

COM 1.000 .439 .635 .600 .686TRA .439 1.000 .521 .529 .494LEADER .635 .521 1.000 .667 .603REM .600 .529 .667 1.000 .600POL .686 .494 .603 .600 1.000

Table 4.5 Model Summary b model 1

Model R R Squar

e

Adjusted R

Square

Std. Error of the

Estimate

Change Statistics R

Square Chang

e

F Change

df1 df2 Sig. F Change

1 .749a .561 .556 2.80282 .561 105.525 4 330 .000a. Predictors: (Constant), POL, TRA, LEADER, REM b. Dependent Variable: COM

40

Table 4.6 ANOVA a of model 1 Model Sum of

Squares Df Mean Square F Sig.

1 Regression 3315.937 4 828.984 105.525 .000b

Residual 2592.422 330 7.856 Total 5908.358 334

a. Dependent Variable: COM b. Predictors: (Constant), POL, TRA, LEADER, REM

Table 4.7. Coefficients a of model 1 Model Unstandardized

Coefficients Standardize

d Coefficients

t Sig. Collinearity Statistics

B Std. Error

Beta Tolerance VIF

1

(Constant) 6.151 1.057 5.818 .000 TRA .004 .089 .002 .047 .963 .646 1.549LEADER .259 .051 .268 5.045 .000 .472 2.116REM .208 .067 .166 3.123 .002 .470 2.126POL .651 .076 .424 8.591 .000 .546 1.831

a. Dependent Variable: COM

In result in Appendix, Adjusted R square is 55.6 percent indicates that value of the variance

(COM) can be predicted from independent variable (LEA, REM, POL) ( (Nancy at al., 2005,

p.95). The issue from that researcher also explained for sig. number in Anova table. That

indicates the combination of TRA, LEA, REM and POL predicts dependent variable is COM

(ρ ≤.001)

Sig in Coefficients a table in appendix shows value of TRA that is .963. That value is

extremely high and indicates that variable does not affect into dependent variable (COM) so

it is omitted in model.

Meyers at al., (2006, p.152) and Hair et al. (2010, p.156) proposed that the multiple

regression standardized score equation is as follows (with all the variables are measured on

the same metric):

Y = β1X1 + β2X2 + … + βnXn

Where in: β is called beta weight, standardized regression coefficient, or beta coefficient

41

X is the predictor entered into the equation in a single step

βX represents the score of a predictor and its associated beta weight

In addition, Hair et al. (2010) claimed that there is the difference between the actual

and predicted values of dependent variable. That means the random error will occur when

predicting sample data. It is call the residual (ε or e).

Based on these studies, the multiple regression formula will be

Y = a + β1X1 + β2X2 + … + βnXn + ε

Moreover, Meyers et al. (2006, p.161) introduced the value of R2 indicating how much

variance of the dependent variable is accounted for by the full regression model. Therefore,

the higher the value of R2, the greater the explanatory power of the regression equation (Hair

et al., 2010)

Although below formula is less accuracy because TRA omit but it indicates the correlation of

all independent variables (LEA, REM, POL) to dependent variable (COM). Detail formula

as below:

Y=6.151 + 0.268X1+0.166X2+0.424 X3+ε

Where in:

Y: indicates COM variable

a= 6.151: indicates constant number

X1: indicates LEA variable

X2: indicates REM variable

X3: indicates POL variable

ε: the residual

42

4.6.2 Model 2- Multiple Regression Analysis with commitment variables as independent

variables and intention to stay as dependent variable

In this time, COM variable is independence, the dependent variable is INT

Table 4.8. Model Summary b

Model

R R Squar

e

Adjusted R Square

Std. Error of the

Estimate

Change Statistics R Square Change

F Change


1 .621a .385 .383 1.83378 .385 208.607 1 333 .000a. Predictors: (Constant), COM b. Dependent Variable: INT

Table 4.9. Coefficients a Model Unstandardized

Coefficients Standardized Coefficients

t Sig.

B Std. Error

Beta

1 (Constant) 2.074 .637 3.255 .001 COM .345 .024 .621 14.443 .000

a. Dependent Variable: INT The Adjusted R square is 38.3 percent indicates that value of the variance (INT) can be predicted from independent variable (COM). COM variable affects INT variable as beta value (62.1 percent)

Z=2.074+ 0.621Y+ε1

Where in:

Z: indicates INT variable

Y: indicates COM variable

a= 2.074: indicates constant number; ε1: the residual

As result of study, figure 4.1 is final model

43

Figure 4.1: Final model

H 2: Leadership is positively correlated to organizational commitment.

H 4: Remuneration and rewards negatively is correlated to organizational commitment

H 5: organizational culture and policies negatively is correlated to organizational

commitment.

H 6: organizational commitment negatively is correlated to intent to stay.


With the data collected, the study's result as below:

Hypothesis for influencing of training & career path factors and organizational

commitment (H1) is rejected. Because the sig. is 9.9 percent that is not affecting the

organizational commitment of employees

Hypothesis for influencing of leadership factors and organizational commitment (H2) is

confirmed with sig. is 2.8 percent, beta coefficient of 12.8 percent.

Hypothesis for influencing of working environment factors and organizational commitment

(H3) is omitted.

Hypothesis for influencing of remuneration & rewards and organizational commitment(H4)

is confirmed with sig. is 2.8 percent, beta coefficient of 29.4 percent

Leadership

Remuneration and

rewards

Company culture and

policies

organizational commitment Intent to stay

H2

H4

H5

H6

.621

.268

.166

.424

44

Hypothesis for influencing of companies factors and organizational commitment (H5) is

confirmed with sig. is 00 percent, beta coefficient of 32.6 percent

Hypothesis for influencing of organization commitment to retention to stay (H6) is

confirmed with sig. is 00 percent, beta coefficient of 61.2 percent

45

CHAPTER 5: FINDING, DISCUSSION, LIMITATION and FURTURE RESEARCH

In this chapter, after show the finding of study, author will discuss about result, compare it

with previous study, indicating limitations of study and also suggestion for future research

5.1. Finding and discussion

When the model in study adapts with previous model, there are 5 proposed factors that are

influencing organizational commitment and intention to stay of core employees. The original

factors that are in proposed model are: training & career path, leadership, working

environment, remuneration & rewards and company policies. After studying, working

environment factor omitted, training & career path is rejected. So there are only 3 factors in

the final that are influencing organizational commitment and retention to stay of core

employees in HCMC. They are company policies, remuneration & rewards and leadership.

Company policies is the most influencing than the others. That result is accuracy because the

policies is the proof of person-organization relationship and employee-employer relationship.

. That means if the owner want to core employees have high commitment (it also means

retention so stay of core employees) they should have useful policies that suitable core

employee. Back to questionnaire for that variables as in the table 5.1

Table 5.1. Questionnaire for company policies

Organizational policies and procedures are helpful, well understood and up to date.

Progress towards meeting planned objectives is periodically reviewed.

The organizational structure facilitates the way we do things.

This organization has a defined vision/mission to meet its goals.

The policies are helpful and well understood that means that policies should clearly and

easily to apply to the company. That policies should be accepted by core employees. Besides

that, the policies of company should revise and update periodically, purpose of that action is

made the core employees understand those policies are take cared by employer. The structure

of the company is "flat" and flexible to adapt reactive of core employee is one of the

46

important policies because if that is not flexible, the policies are not flexible either, another

important thing of policies is that should support the company structure and the company

structure should support back into policies

The second factor that is influencing commitment is remuneration & rewards because

income or benefit of employee is the first thing they consider to work for the company or

not.

The factor that is less influencing commitment is leadership. That factor has coefficient rate

only 12.8 percent.

The study also founded if the employee have high organizational commitment, they are

willing to stay in the company with coefficient is 62.1 percent

The finding of the study is similar with some previous study such as Janet (2004) found the

stay decision of core employee depend on remuneration, reward and recognition, leadership

behavior, organizational culture and policies, Jyotsna B(2007) said retention of employees

affect with exciting work/challenge career growth, working with great people, fair pay and

supportive management/great boss.

Although there are some similar but the study shows some different things from other

researchers that our result is the organizational commitment and retention to stay is not

influencing by working environment and training. That is strange result and should be study

more and careful with more sample in more working field.

Conclusion: The factors that are influencing organizational commitment of core employees

in SMEs in HCMC are organizational culture &policies, leadership, remuneration& rewards

with the level of influencing is 32.6, 29.3 and 12.8 percent. And stay decision is affected by

organization commitment is 62.1 percent.

5.2. Limitation

Although author try all the best but by limitation of time, knowledge and experience so there

are some limitation of research as below:

47

VIF in EFA of variable leader and remuneration is greater than 2.00. that make less

efficiency of the study. That is because of data survey.

The first limitation of the study is focusing only to retain the existing core employees but to

build a strong labor force that should pay attention to other works such as: recruitment,.. The

second limitation of the study is our research to a small and medium sized companies in

(HCMC). The big companies or in other geographic areas are not in the study is the third

limitation.

5.3. Suggestion for future Research

An obvious complement to this study is to conduct longitudinal research. Some of the

arguments and findings of this study may well be a good starting point for such research.

Longitudinal studies are needed to establish causal direction among the relationships

investigated in this study. For example, in a longitudinal study, it may be possible to observe

over time if turnover intention measured at one point is associated with negative beliefs and

outcomes at a later point. It would provide more robust data. In addition, a longitudinal study

would be able to further examine the changing nature of organizational commitment

throughout an employee's tenure, with emphasis on management's policies and reactions to

maintain equity and fairness in the exchange agreement.

This research has highlighted the mediating role of organizational commitment on person

organizational culture and policies and the partially mediating role on remuneration and

reward, training and career development and work environment. Clearly, there is a need for

greater analysis of the factors identified. For example, other aspects of the work environment

than those that were measured in this study, such as formalization, role ambiguity, and

instrumental communication should be examined. Hence a better understanding of the

interrelationships among these variables would serve to illuminate and provide further

insights for academics and practitioners. Further, testing of the model in many industries, and

over longer periods of time would also be beneficial.

In conclusion, this study has gone a substantial way towards meeting its main objective,

which was to determine the factors that influence the retention of core employees in SMEs in

48

HCMC. The study was able to produce a new model (in figure 4.1) suitable for future use by

the owner who would like retain their critical employees.

49

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55

APPENDIX

APPENDIX 1.1: QUESTIONAIRE (English version)

I am Huynh Thien Hai, currently student of the program "Master of Business

Administration" of International School Of Business - University of Economics Ho Chi

Minh City. To analyze the factors influencing core employees to stay in small-medium sized

companies (SMEs) in Hochiminh City, I am looking forward to you spend free time to

implement the survey below. With this survey, you will help us complete the paper and

provide an opportunity for SMEs activities more affective

A- General information:

B- Interviewee information

Question

Are you company's owner? yes no

How long have you worked for the company? less 6 months more 6 months

Do you work full time? yes no

Support the organizational culture and vision. yes no

Gender Male Female

Marital status Single Married

Age <30

30-40

41-50 51-60

Education High school

Colleges

Bachelor Upper bachelor

56

C- Survey content:

Please you indicate level of agreement on the following

statements by mark X in the appropriate box:

[1] Strongly disagree;

[2] Disagree;

[3] Neutral;

[4] Agree;

[5] Strongly agree.

Stro

ngly

dis

agre

e

disa

gree

No

idea

agre

e

Stro

ngly

agr

ee

Scale 1 2 3 4 5

I TRAINING and CAREER DEVELOPMENT

1 People are properly orientated and trained upon joining

this organization.

2 This organization does provide regular opportunities

for personal and career development.

3

The organisation has career development activities to

help an employee identify/improve abilities, goals,

strengths &

weaknesses.

II LEADERSHIP

4 The leadership practices in this organization help me to

become a high performing employee.

5 The leadership practices in this organization enhance

my satisfaction with my job.

What is your occupation? Technician Office employee

Sales Manager

Other

What is your industry? Engineer Trading

Banking Other

57

6 The organizational leadership practices are consistent

with my personal values.

7

The organizational leadership practices make a positive

contribution to the overall effectiveness of the

organization.

8 This organization keeps employees well-informed on

matters important to them

9 Sufficient effort is made to determine the thought and

responses of people who work here

10 Communications across all levels in this organization

tend to be good

11 Organizational structure encourages horizontal and

vertical communication

II WORKING ENVIRONMENT

12 My working life balances with my family life.

13 Overall this organization is a harmonious place to

work.

14 This organization regards welfare of its employees as

its first priority.

15 For the work I do , The physical working conditions

are very pleasant.

IV REMUNERATION AND REWARD

16 Employees are given positive recognition when they

produce high quality work.

17 This organization pays well.

18 This organization offers a good benefits package

compared to other organizations.

19 This organization values individual excellence over

teamwork.

58

20 This organization offers good opportunities for

promotion.

V ORGANISATIONAL POLICIES

21 Organizational policies and procedures are helpful,

well understood and up to date.

22 Progress towards meeting planned objectives is

periodically reviewed.

23 The organizational structure facilitates the way we do

things.

24 This organization has a defined vision/mission

to meet its goals.

VI COMMITMENT

25 I feel a strong sense of belonging to this organization

26 I could just as well working for a different organization

if the type of work was similar (negative)

27 I find it difficult to agree with this organization's

policies (negative)

28 This organization really inspires the very best in me in

the way of job performance

29 My values and this organization's values are very

similar

30 There is little to be gained by sticking with this

organization indefinitely

31

I am willing to put in a great deal more effort than

normally expected to help this organization be

successful.

32 I am proud to tell others that I am part of this

organization

33 I really care about the future of this organization

59

VII INTENTION TO STAY

34 I plan to work at my present job for as long as possible

35 I will most certainly look for a new job in the near

future

36 I plan to stay in this job for at least two to three years.

37 I would hate to quit this job

APPENDIX 1.2: QUESTIONAIRE (Vietnamese version)

PHIẾU THU THẬP THÔNG TIN

Tôi tên Huỳnh Thiên Hải, hiện là học viên Cao học ngành Quản Trị Kinh Doanh của Viện Đào tạo Quốc tế- Trường Đại học Kinh tế Tp. Hồ Chí Minh, hiện nay tôi đang thực hiện đề tài tốt nghiệp "những yếu tố ảnh hưởng đến sự giữ chân nhân viên nồng cốt trong công ty có qui mô vừa và nhỏ tại Tp. HCM" Tôi rất mong các Anh/Chị dành chút thời gian thực hiện bảng khảo sát bên dưới về ý kiến của anh chị về các chính sách hiện nay ở quý công ty mà hiện nay anh chị đang công tác. Tất cả những ý kiến của Anh/Chị sẽ giúp cho tôi hoàn thành được công trình nghiên cứu và giúp các doanh nghiệp vừa và nhỏ ở TPHCM cải thiện cách quản lý và hoạt động có hiệu quả hơn. A- Thông tin chung:

B- Thông tin người được phỏng vấn

Anh/chị có phải là chủ công ty không? có không Anh/chị đã làm việc tại công ty này bao lâu? ít hơn 6 tháng lâu hơn 6 tháng Anh/chị có làm việc toàn thời gian không có không Anh/chị tạo sự ảnh hưởng đến định hướng hoạt động trong tương lai cũng như ảnh hưởng đến môi trường làm việc trong công ty không?

có không

Giới tính Nam Nữ Tình trạng hôn nhân Độc thân Đã kết hôn Tuổi <30 30-40

41-50 51-60 Trình độ Trung học Cao đẳng

Đại học Trên đại học Nghề nghiệp N.viên kỹ thuật N.viên v.phòng

60

C- Bảng khảo sát:

Anh/Chị vui lòng cho biết mức độ đồng ý về các phát biểu dưới

đây bằng việc đánh dấu chéo (X) vào ô tương ứng:

[1] hoàn toàn không đồng ý.

[2] đồng ý.

[3] Trung hòa (không có ý kiến).

[4] Đồng ý.

[5] Hoàn toàn đồng ý.

Hoà

n to

àn k

hông

đồn

g ý

khôn

g đồ

ng ý

Khô

ng ý

kiế

n

đồng

ý

Hoà

n to

àn đồn

g ý

1 2 3 4 5

I ĐÀO TẠO VÀ PHÁT TRIỂN NGHỀ NGHIỆP

1 Tính cách và hiểu biết của anh/chị phù hợp với công ty

2 Công ty luôn cung cấp cơ hội để anh chị phát triển bản thân và sự nghiệp

3 Công ty có những hoạt động giúp anh/chị hiểu hơn về khả năng, mục tiêu cũng như điểm mạnh, điểm yếu của mình

II LÃNH ĐẠO

4 Lãnh đạo công ty sẵn sàng hỗ trợ để anh/chị nâng cao năng lực của mình

5 Lãnh đạo công ty giúp anh/chị yêu nghề hơn

6 Lãnh đạo công ty cư xử phù hợp với vai trò và giá trị của anh/chị

7 Lãnh đạo công ty giúp công ty hoạt động một cách hiệu quả

8 Công ty luôn thông báo những vấn đề quan trọng với nhân viên

9 Công ty quan tâm đến suy nghĩ và phản ứng của nhân viên

10 Thông tin giữa các cấp quản lý trong công ty rất tốt

11 Tổ chức trong công ty giúp thông tin rất tốt trong hệ thống dọc và

N.viên b.hàng Quản lý Khác

Lĩnh vực làm việc Kỹ thuật Thương mại Ngân hàng Khác

61

hệ thống ngang của công ty III MÔI TRƯỜNG LÀM VIỆC

12 Công việc hài hoà với cuộc sống của anh/chị

13 Công ty là một nơi hài hoà để làm việc

14 Phúc lợi của nhân viên là yếu tố hàng đầu của công ty

15 Công ty có các công cụ hỗ trợ cho công việc của anh chị rất tốt

IV THÙ LAO VÀ KHEN THƯỞNG

16 Anh chị luôn được trân trọng khi đạt hiệu quả cao

17 Công ty trả lương cho anh/chị phù hợp với công việc của anh chị

18 Công ty chi trả thưởng thoả đáng hơn so với các công ty khác

19 Công ty có thưởng riêng cho các nhân xuất sắc

20 Công ty tạo điều kiện thăng tiến cho anh/chị

V CHÍNH SÁCH CỦA CÔNG TY

21 Chính sách công ty mang lại lợi ích cho anh chị, chính sách này dễ hiểu và được cập nhật thường xuyên

22 Những chính sách về mục tiêu được xem xét thường xuyên

23 Cơ cấu tổ chức của công ty hỗ trợ tốt cho công việc.

24 Công ty luôn có những định hướng rõ ràng để hoàn thành mục tiêu đề ra

VI ĐÁP ỨNG NHU CẦU

25 Anh chị cảm thấy mình hoàn toàn phù hợp với công ty

26 Anh chị vẫn có thể làm tốt công việc này ở môi trường công ty khác

27 Anh chị thấy khó có thể chấp nhận chính sách của công ty

28 Công ty luôn tạo động lực để anh chị làm công việc tốt nhất

29 Anh chị thấy quyền lợi của mình gắn kết quyền lơi của công ty

30 Anh chị không có nhiều lợi ích khi làm việc lâu dài với công ty

31 Anh chị sẵn lòng làm hết mình để công ty thành công

32 Anh chị tự hào khi anh chị là thành viên của công ty

33 Anh chị quan tâm đến tương lai của công ty

VII XU HƯỚNG Ở LẠI CÔNG TY

62

34 Anh chị muốn làm công việc hiện nay càng lâu càng tốt

35 Anh chị sẽ tìm công việc khác

36 Anh chị muốn làm công việc hiện tại ít nhất 2-3 năm nữa

37 Anh chị không muốn từ bỏ công việc này

Trân trọng cảm ơn anh/chị

APPENDIX 4.1 CODING

item Name Label and value

1 Owner Owner (1=yes, 2=no)

2 Long How long's (1= longer 6 months 2= less 6 months

3 Time Fulltime (1= yes, 2=no)

4 Devote Devote (1= yes, 2=no)

5 Gender Gender (1= male, 2=female)

6 Mari Marred (1= yes, 2=no)

7 Age Age (1=less 30, 2=31-40, 3=41-50, 4=51-60)

8 Edu Education (1=high school, 2=college, 3= bachelor, 4=upper bachelor)

9 Pro Professional (1=technician, 2=office employee, 3=sales, 4=manager, 5=others)

10 Field Working field (1=technical, 2=trading, 3= banking, 4=others)

Main survey (1=strongly disagree to 5=strongly agree)

TRAINING and CAREER DEVELOPMENT

11 Tra1 Training 1- " People are properly orientated and trained upon joining this organization."

12 Tra2 Training 2- "This organization does provide regular opportunities for personal and career development ."

13 Tra3 Training 3- "The organisation has career development activities to help an employee identify/improve abilities, goals, strengths & weaknesses."

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LEADERSHIP

14 Led4 Leader 4-"The leadership practices in this organization help me to become a high performing employee"

15 Led5 Leader 5 "The leadership practices in this organization enhance my satisfaction with my job"

16 Led6 Leader 6 "The organizational leadership practices are consistent with my personal values"

17 Led7 Leader 7 "The organizational leadership practices make a positive contribution to the overall effectiveness of the organization"

18 Led8 Leader 8 "This organization keeps employees well-informed on matters important to them"

19 Led9 Leader 9 "Sufficient effort is made to determine the thought and responses of people who work here"

20 Led10 Leader 10 "Communications across all levels in this organization tend to be good"

21 Led11 Leader 11 "Organizational structure encourages horizontal and vertical communication

WORKING ENVIRONMENT

22 Env12 Environment 12 "My working life balances with my family life"

23 Env13 Environment 13 "Overall this organization is a harmonious place to work"

24 Env14 Environment 14 "This organization regards welfare of its employees as its first priority"

25 Env15 Environment 15 "For the work I do , The physical working conditions are very pleasant"

REMUNERATION AND REWARD

26 Rem16 Remuneration 16 "Employees are given positive recognition when they produce high quality work"

27 Rem17 Remuneration 17 "This organization pays well"

28 Rem18 Remuneration 18 "This organization offers a good benefits package compared to other organizations"

29 Rem19 Remuneration 19 "This organization values individual excellence over teamwork"

30 Rem20 Remuneration 20 "This organization offers good opportunities for promotion"

ORGANISATIONAL POLICIES

31 Pol21 Policies 21 "Organizational policies and procedures are helpful, well understood and up to date"

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32 Pol22 Policies 22 "Progress towards meeting planned objectives is periodically reviewed"

33 Pol23 Policies 23 "The organizational structure facilitates the way we do things."

34 Pol24 Policies 24 " This organization has a defined vision/mission to meet its goals"

COMMITMENT

35 Com25 Commitment 25 "I feel a strong sense of belonging to this organization"

36 Com26 Commitment 26 "I could just as well working for a different organization if the type of work was similar (negative) "

37 Com27 Commitment 27 "I find it difficult to agree with this organization's policies (negative)

38 Com28 Commitment 28 "This organisation really inspires the very best in me in the way of job performance"

39 Com29 Commitment 29 "My values and this organisation's values are very similar"

40 Com30 Commitment 30 "There is little to be gained by sticking with this organization indefinitely (negative) "

41 Com31 Commitment 31 "I am willing to put in a great deal more effort than normally expected to help this organisation be successful"

42 Com32 Commitment 32 "I am proud to tell others that I am part of this organization"

43 Com33 Commitment 33 "I really care about the future of this organization"

INTENTION TO STAY

44 Int34 Intention 34 "I plan to work at my present job for as long as possible"

45 Int35 Intention 35 " I will most certainly look for a new job in the near future (negative) "

46 Int36 Intention 36 "I plan to stay in this job for at least two to three years"

47 Int37 Intention 34 "I would hate to quit this job"

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Appendix 4.2 Demography

Frequency Percent Valid Percent

Cumulative Percent

Technical 78 23.3 23.3 23.3AREA FIELD Trading 108 32.2 32.2 55.5 Banking 28 8.4 8.4 63.9 Others 121 36.1 36.1 100.0 High school 88 26.3 26.3 26.3EDU College 97 29.0 29.0 55.2 Bachelor 136 40.6 40.6 95.8 Upper Bachelor 14 4.2 4.2 100.0GENDER Male 198 59.1 59.1 59.1 Female 137 40.9 40.9 100.0MARRIED Single 190 56.7 56.7 56.7STATUS Married 145 43.3 43.3 100.0 Appendix 4.3: Testing of reliability variables

Item-Total Statistics Group Times Cronbach's

Alpha Variable Corrected

Item-Total Correlation

Cronbach's Alpha if Item

Deleted TRA 01 .673 .792Training 1st time/1 .834 TRA 02 .760 .706 TRA 03 .655 .810 LEA 04 .653 .881 LEA 05 .759 .870Leader 1st time/1 .893 LEA 06 .719 .875 LEA 07 .678 .878 LEA 08 .545 .891 LEA 09 .662 .880 LEA 10 .678 .878 LEA 11 .679 .878 ENV 12 .659 .769Environment 1st time/1 .821 ENV 13 .712 .745 ENV 14 .587 .804 ENV 15 .629 .782 REM 16 .667 .822

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Remunerations 1st time/1 .852 REM 17 .708 .810& rewards REM 18 .630 .832 REM 19 .733 .803 REM 20 .590 .841 POL 21 .763 .808Organizational 1st time/1 .866 POL 22 .752 .813Policies POL 23 .712 .831 POL 24 .639 .859 COM 25 .617 .760Commitment 1st time/2 .797 COM 26 .367 .792 COM27 .317 .803 COM 28 .492 .776 COM 29 .593 .763 COM30 .276 .812 COM 31 .611 .762 COM 32 .638 .758 COM 33 .614 .761 COM 25 .629 .776 2nd time/2 .812 COM 26 .343 .817 COM27 .218 .842 COM 28 .542 .788 COM 29 .641 .774 COM 31 .656 .773 COM 32 .661 .772 COM 33 .643 .774 INT 34 .524 .430Intention 1st time/3 .606 INT35 .181 .685 INT 36 .424 .507 INT 37 .449 .485 INT 34 .524 .430 2nd time/3 .606 INT35 .181 .685 INT 36 .424 .507 INT 37 .449 .485 INT 34 .442 .661 2nd time/3 .685 INT 36 .547 .529 INT 37 .509 .578

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Appendix 4.4 . EFA for all independent variables Appendix 4.4 .1. EFA for all independent variables (The first time in 4 times)

Total Variance Explained The first time in 4 times

Factor Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation Sums of Squared

Loadingsa Total % of

Variance Cumulative

% Total % of

VarianceCumulative

% Total

1 10.800 45.002 45.002 10.399 43.330 43.330 7.6622 1.591 6.627 51.629 1.250 5.209 48.539 8.3293 1.414 5.893 57.522 1.038 4.327 52.865 6.3924 1.273 5.303 62.825 .867 3.614 56.479 6.6665 1.023 4.264 67.089 .685 2.856 59.335 4.6076 .905 3.773 70.862 7 .815 3.396 74.258 8 .664 2.766 77.024 9 .599 2.494 79.518 10 .529 2.203 81.721 11 .498 2.075 83.796 12 .456 1.899 85.694 13 .432 1.800 87.495 14 .390 1.625 89.119 15 .375 1.564 90.683 16 .335 1.397 92.080 17 .311 1.295 93.375 18 .277 1.153 94.528 19 .268 1.117 95.645 20 .248 1.034 96.679 21 .227 .944 97.624 22 .205 .852 98.476 23 .200 .835 99.311 24 .165 .689 100.000 Extraction Method: Principal Axis Factoring. a. When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.

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Pattern Matrix The first time in 4 times Factor

1 2 3 4 5 TRA 01 .825 TRA 02 .856 TRA 03 .756 LEA 04 .366 .277 LEA 05 .545 LEA 06 .586 LEA 07 .260 .798LEA 08 .405 -.294 .569LEA 09 .607 LEA 10 .605 LEA 11 .721 ENV 12 .313 .457 ENV 13 .277 .503 ENV 14 .356 .258 ENV 15 .221 .537 REM 16 .741 REM 17 .849 REM 18 .555 REM 19 .749 REM 20 -.273 .377 .525 .248POL 21 .253 .821 -.242POL 22 .347 .786 POL 23 .566 POL 24 -.251 .634 .232Extraction Method: Principal Axis Factoring. Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 9 iterations.

Appendix 4.4.2: EFA with all independent variable (the second time in 4 times)

Total Variance Explained the second time in 4 times

Factor Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation Sums of Squared


Variance Cumulative

% Total % of

Variance Cumulative

% Total

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1 10.320 44.869 44.869 9.922 43.137 43.137 7.0882 1.580 6.871 51.740 1.237 5.380 48.517 7.9813 1.407 6.116 57.856 1.038 4.513 53.030 6.1954 1.257 5.466 63.322 .855 3.717 56.747 6.1925 1.022 4.444 67.766 .683 2.968 59.715 4.5486 .876 3.810 71.577

7 .746 3.245 74.822 8 .610 2.652 77.474 9 .597 2.595 80.069 10 .526 2.285 82.354 11 .482 2.095 84.449 12 .452 1.967 86.416 13 .432 1.878 88.294 14 .382 1.661 89.955 15 .356 1.547 91.502 16 .326 1.418 92.920 17 .295 1.283 94.204 18 .275 1.198 95.401 19 .250 1.087 96.489 20 .228 .993 97.482 21 .209 .909 98.391 22 .201 .874 99.264 23 .169 .736 100.000 Extraction Method: Principal Axis Factoring. a. When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.

Pattern Matrixa the second time in 4 times Factor

1 2 3 4 5 TRA 01 .843 TRA 02 .845 TRA 03 .730 LEA 05 .494 LEA 06 .553 LEA 07 .245 .803LEA 08 .404 -.303 .577LEA 09 .599 LEA 10 .593 LEA 11 .728 ENV 12 .329 .440

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ENV 13 .291 .489 -.207 ENV 14 .373 .241 ENV 15 .224 .532 REM 16 .735 REM 17 .858 REM 18 .559 REM 19 .752 REM 20 -.261 .377 .508 .248POL 21 .240 .830 -.242POL 22 .332 .792 POL 23 .560 POL 24 -.251 .626 .235Extraction Method: Principal Axis Factoring. Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 10 iterations. Appendix 4.4 .3. EFA for all independent variables (The third time in 4 times)

Total Variance Explained The third time in 4 times Factor Initial Eigen values Extraction Sums of Squared

Loadings Rotation Sums of Squared


Variance Cumulative

% Total % of

Variance Cumulative

% Total

1 9.074 45.369 45.369 8.659 43.295 43.295 7.0222 1.484 7.420 52.789 1.040 5.201 48.496 6.8593 1.365 6.826 59.615 1.006 5.032 53.529 6.2734 1.220 6.099 65.714 .820 4.100 57.628 5.4335 .995 4.973 70.687 6 .677 3.387 74.074 7 .604 3.019 77.093 8 .581 2.905 79.998 9 .509 2.545 82.543 10 .485 2.426 84.969 11 .456 2.279 87.247 12 .403 2.015 89.262 13 .358 1.792 91.055 14 .322 1.610 92.665 15 .316 1.582 94.247 16 .268 1.341 95.588 17 .241 1.204 96.791 18 .230 1.148 97.940

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19 .225 1.127 99.067 20 .187 .933 100.000 Extraction Method: Principal Axis Factoring. a. When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.

Pattern Matrixa The third time in 4 times Factor

1 2 3 4 TRA 01 .863TRA 02 .846TRA 03 .677LEA 05 .567 LEA 06 .656 LEA 07 .634 LEA 08 .694 LEA 09 .706 LEA 10 .672 LEA 11 .766 ENV 15 .228 .446 REM 16 .699 REM 17 .873 REM 18 .610 REM 19 .755 REM 20 .448 .481 POL 21 .835 POL 22 .848 POL 23 .642 POL 24 .201 .663 Extraction Method: Principal Axis Factoring. Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 6 iterations. Appendix 4.4 .4. EFA for all independent variables (The fourth time in 4 times)

Variance Explained The fourth time in 4 times Factor Initial Eigenvalues Extraction Sums of Squared

Loadings Rotation Sums of Squared


Variance Cumulative

% Total % of

Variance Cumulative

% Total

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1 8.658 45.570 45.570 8.248 43.411 43.411 6.7562 1.444 7.600 53.170 1.019 5.364 48.775 6.6803 1.310 6.895 60.064 .973 5.120 53.895 5.9724 1.209 6.365 66.430 .803 4.226 58.122 5.2765 .881 4.635 71.065 6 .677 3.563 74.629 7 .601 3.161 77.790 8 .571 3.003 80.793 9 .498 2.621 83.415 10 .465 2.446 85.861 11 .450 2.368 88.229 12 .364 1.918 90.147 13 .358 1.883 92.030 14 .317 1.671 93.701 15 .298 1.568 95.269 16 .241 1.267 96.536 17 .233 1.224 97.760 18 .228 1.200 98.960 19 .198 1.040 100.000 Extraction Method: Principal Axis Factoring. a. When factors are correlated, sums of squared loadings cannot be added to obtain a total variance.

Pattern Matrixa The fourth time in 4 times Factor

1 2 3 4 TRA 01 .839TRA 02 .848TRA 03 .713LEA 05 .500 LEA 06 .604 LEA 07 .760 LEA 08 .828 -.246 LEA 09 .664 LEA 10 .594 LEA 11 .681 ENV 15 .472 REM 16 .736 REM 17 .958 REM 18 .601 REM 19 .780 POL 21 .903 POL 22 .921

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POL 23 .623 POL 24 .565 Extraction Method: Principal Axis Factoring. Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 6 iterations. Appendix 4.5. Regression, model 1. Independent variables: Training, leadership, remuneration and company policies; dependent variable: Commitment

Model 1: Correlations COM TRA LEADER REM POL

Pearson Correlation

COM 1.000 .439 .635 .600 .686TRA .439 1.000 .521 .529 .494LEADER .635 .521 1.000 .667 .603REM .600 .529 .667 1.000 .600POL .686 .494 .603 .600 1.000

Sig. (1-tailed)

COM . .000 .000 .000 .000TRA .000 . .000 .000 .000LEADER .000 .000 . .000 .000REM .000 .000 .000 . .000POL .000 .000 .000 .000 .

Model 1: Model Summary b

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

Change Statistics R

Square Change

F Change


1 .749a .561 .556 2.80282 .561 105.525 4 330 .000a. Predictors: (Constant), POL, TRA, LEADER, REM b. Dependent Variable: COM

Model 1: ANOVAa Model Sum of

Squares Df Mean Square F Sig.

1 Regression 3315.937 4 828.984 105.525 .000b

Residual 2592.422 330 7.856 Total 5908.358 334

a. Dependent Variable: COM b. Predictors: (Constant), POL, TRA, LEADER, REM

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Model 1. Coefficients a

Model Unstandardized Coefficients

Standardized Coefficients


B Std. Error

Beta Tolerance VIF

1

(Constant) 6.151 1.057 5.818 .000 TRA .004 .089 .002 .047 .963 .646 1.549LEADER .259 .051 .268 5.045 .000 .472 2.116REM .208 .067 .166 3.123 .002 .470 2.126POL .651 .076 .424 8.591 .000 .546 1.831

a. Dependent Variable: COM

Model 1: Collinearity Diagnostics a Model Dimension Eigenvalue Condition

Index Variance Proportions

(Constant) TRA LEADER REM POL

1

1 4.942 1.000 .00 .00 .00 .00 .002 .018 16.461 .34 .30 .02 .08 .333 .017 17.102 .57 .67 .01 .00 .004 .013 19.222 .04 .02 .10 .42 .665 .009 22.988 .06 .00 .87 .50 .01

a. Dependent Variable: COM Model 1: Residuals Statistics a

Minimum Maximum Mean Std. Deviation N Predicted Value 16.5801 33.4782 26.3731 3.15087 335Residual -9.24474 16.76302 .00000 2.78599 335Std. Predicted Value -3.108 2.255 .000 1.000 335Std. Residual -3.298 5.981 .000 .994 335a. Dependent Variable: COM

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Charts

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Appendix 4.6. Regression, model 2. Independent variables: Organizational Commitment; dependent variable: intention to stay

Model 2: Model Summaryb Model R R

Square Adjusted R Square

Std. Error of the

Estimate

Change Statistics R Square Change

F Change


1 .621a .385 .383 1.83378 .385 208.607 1 333 .000a. Predictors: (Constant), COM b. Dependent Variable: INT

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Model 2: ANOVAa Model Sum of

Squares df Mean Square F Sig.

1 Regression 701.496 1 701.496 208.607 .000b Residual 1119.800 333 3.363 Total 1821.296 334

a. Dependent Variable: INT b. Predictors: (Constant), COM

Model 2: Coefficientsa Model Unstandardized

Coefficients Standardized Coefficients


B Std. Error

Beta Tolerance VIF

1 (Constant) 2.074 .637 3.255 .001 COM .345 .024 .621 14.443 .000 1.000 1.000

a. Dependent Variable: INT

Model 2: Collinearity Diagnosticsa Model Dimension Eigenvalue Condition

Index Variance Proportions (Constant) COM

1 1 1.988 1.000 .01 .01 2 .012 12.639 .99 .99

a. Dependent Variable: INT

Model 2: Residuals Statistics a

Minimum Maximum Mean Std. Deviation N Predicted Value 6.2086 14.1338 11.1612 1.44924 335Residual -6.99891 3.65652 .00000 1.83104 335Std. Predicted Value -3.417 2.051 .000 1.000 335Std. Residual -3.817 1.994 .000 .999 335a. Dependent Variable: INT

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Charts

Factors Influencing Employee Commitment

Documents

Transcript of Factors Influencing Employee Commitment