MEDIATING EFFECT OF JOB SATISFACTION ON effect of job satisfaction on employee commitment and retention in response to human resource management practices in calicut airport

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  • MEDIATING EFFECT OF JOB SATISFACTION ON EMPLOYEE

    COMMITMENT AND RETENTION IN RESPONSE TO HUMAN

    RESOURCE MANAGEMENT PRACTICES IN CALICUT AIRPORT

    Dr. M.DHANABHAKYAM1

    NISAMUDHEEN.T 2

    1 Associate Professor, School of Commerce, Bharathiar University, Coimbatore

    2 Senior Research Fellow, School of Commerce, Bharathiar University, Coimbatore.

    ABSTRACT

    Human Resource Management involves all management decisions and practices that directly

    affects or influence the people who works for the organization. HRM practices are investigated from

    the perspective of job satisfaction, employee commitment and employee retention. The main objective

    of the study is to measure the mediating effect of job satisfaction on employee commitment and

    retention in response to HRM practices. The data used in this paper is primary in nature and collected

    through personal interviews in the form of questionnaire from a sample of 232 employees in Calicut

    Airport. Structural Equation Modeling (SEM) is used for the study as a tool. The study concluded that

    the job satisfaction has a strong mediating role between HRM practices and employee commitment

    and retention.

    Keywords: Employee commitment, Employee retention, Human Resource Management practices and

    Job satisfaction

    INTRODUCTION

    Human resource is the most strategic resource and no other resource can be fully utilized to

    generate income and wealth of a nation without the active involvement of this resource. Human

    resource accounts for a large part of national output and there is a wide scope for increasing national

    wealth through their proper development. It is pertinent to mention that human resources are

    responsible for making use of physical resources and for the transformation of traditional economies

    into modern and industrial economies. HRM is management function that helps managers to recruit,

    select, train and develop members for an organization.

    HRM is concerned with the people dimensions in management. Since every organization is

    made up of people, acquiring their services, developing their skills, motivating them to higher levels

    of performance and ensuring that they continue to maintain their commitment to the organization are

    essential for achieving the organizational objectives. Human Resource Management involves all

    management decisions and practices that directly affects or influence the people who works for the

    organization. HRM practices are investigated from the perspective of job satisfaction, employee

    commitment and employee retention.

    Employee commitment is one of the factors of HRM policy that binds an individual to a

    course of action that is relevant to a particular target. A number of human resource experts (Babakus

    et al., 19961; Guest, 1997

    2) focuses on organizational commitment and found three assumptions. First

    assumption is that the more committed employees are to the organization, they would be more willing

    to work above and beyond contract. Second, these approaches presume that committed employees feel

    greater responsibilities, and reduces managers need to monitor and supervise. Third committed

    INTERCONTINENTAL JOURNAL OF HUMAN RESOURCE RESEARCH REVIEWISSN: 2320-9704 - ONLINE ISSN:2347-1662 - PRINT IMPACT FACTOR:1.615VOLUME 4, ISSUE 1, JANUARY 2016

    www.icmrr.org 1 icmrrjournal@gmail.com

  • employees are expected to be less likely to be leaving the organization, resulting in the reduction of

    recruitment and selection expenditure.

    Air line industry is one of the biggest service organizations with huge manpower which

    strictly follows HRM practices to recruit and select the employees. But the same industry faces

    ineffective and unfair practices in human resource practices such as selection, training, career

    development opportunities, shifting, compensating, rewarding and performance appraisal which

    ultimately reduces the level of job satisfaction and employee commitment and that may lead to less

    employee retention. Thus the present study focuses on the mediating role of job satisfaction on

    employee commitment and retention in response to HRM practices followed in the Airline industry.

    REVIEW OF LITERATURE

    Human resources are considered as one group of key success factors in organizations

    (Dessler, 20103; Barney et al., 2001

    4). Lado and Wilson (1994

    5) describe human resource practices as

    a set of distinct but interrelated activities, functions, and processes that are directed at attracting,

    developing, and maintaining a firms human resources. In general terms, HRM comprise practices

    and activities of acquiring, retaining, empowering, and motivating employees. In this study, HRM

    practices are investigated from the perspective of job satisfaction, employee commitment and

    retention. Recruitment and selection enables business firms to acquire the appropriate human

    resources in line with its aims and objectives (Dessler, 20106; Huselid ,1995

    7). Training programs

    help employees to obtain the necessary knowledge, skills, and abilities to work effectively in

    sustaining and improving current work activities. Well trained employees, in general, not only require

    less supervision (Gutteridge et al.,19938) but also tend to have higher morale and lower levels of

    attrition. Training is believed to nullify the influence of factors which cause dissatisfaction of

    employees at work (Xiao, 19969). Thus, employees may be provided with extensive training programs

    in multiple functions and training on job skills (Ahmad and Schroeder, 200310

    ). In addition to training,

    employees need to be rewarded and provided with appropriate incentives so as to produce the required

    levels of performance (Mohinder et al., 201011

    ; Guest, 199712

    ; Lee 200013

    ). Incentives also influence

    the level of employee satisfaction (Lawler, 2000)14

    . When incentives are used properly, they may

    prove to make important contributions to the survival and growth of an organization (Dessler, 2010;

    Mowday, 198215

    ).

    Human resource management in an organization is very important. These activities include

    recruitment, selection, training, career development, compensation, and performance appraisal. They

    are the basic functions of an organization (Tsaur and Lin, 200216

    ; Reid et al., 200217

    ). Human resource

    management practices are able to provide an organization with a competitive advantage in local,

    international, and global environment. They can assist job satisfaction and may increase the

    organizational success and lead to employee commitment and retention (Burke, 200318

    ; Pare et al.,

    200119

    ; Bond, 200420

    ). If human resource management practices are not effective, efficient, and fair,

    an employee will lack commitment and loyalty toward the organization. Lack of trust in business

    causes the demoralization of employees (Astrachan et al., 200221

    ).

    A number of human resource management scholars studied the relationship between the job

    satisfaction and organizational commitment such as Fiedler (199322

    ) who proved a strong positive

    relationship between employee satisfaction and organizational commitment. LePine et al., (200223

    )

    and Podsakoff et al. (199624

    ) in two different Meta analysis studies demonstrated a significant positive

    correlation between employee organizational commitment and job satisfaction. Many number of

    literature reviews revealed the relationship between job satisfaction and employee retention by the

    INTERCONTINENTAL JOURNAL OF HUMAN RESOURCE RESEARCH REVIEWISSN: 2320-9704 - ONLINE ISSN:2347-1662 - PRINT IMPACT FACTOR:1.615VOLUME 4, ISSUE 1, JANUARY 2016

    www.icmrr.org 2 icmrrjournal@gmail.com

  • effect of employee commitment. Employee retention is considered as one of the important human

    resource strategies of the organization. It commences with the recruiting of right people and continues

    with practicing programmes to keep them engaged and committed to the organization (Madamba,

    199725

    ). Mattila et al., (200426

    ) identified the impact of HRM practices on employee retention and

    explained the positive relationship between employee commitment and retention from the influence of

    HRM practices.

    OBJECTIVES OF THE STUDY

    To measure the mediating effect of job satisfaction on employee commitment and retention in

    response to HRM practices.

    CONCEPTUAL MODEL OF THE STUDY

    H2

    H1 H4

    H3

    HYPOTHESES OF THE STUDY

    H01: HRM practices have no positive effect on job satisfaction.

    H02: Job satisfaction has no positive effect on Employee commitment.

    H03: Job satisfaction has no positive effect on Employee Retention.

    H04: Employee commitment has no positive effect on Employee Retention.

    RESEARCH METHODOLOGY

    The present study examines the mediating role of job satisfaction on employee commitment

    and retention in response to HRM practices among the employees of Calicut Airport. This study is

    descriptive and empirical in nature. A well-structured questionnaire consisting of Thirteen items scale

    of Human resource management practices index developed by Price & Mueller (198627

    ), Nine items

    scale of job satisfaction developed by Maslach and Jackson (198628

    ), Eight item scale of employee

    commitment developed by Allen & Meyer (199029

    ) and Five item scale of employee retention

    developed by Mobley, et al., (197930

    ) was adopted to collect the data from the sample respondents.

    Total 250 questionnaires were distributed randomly among the employees of Calicut Airport, out of

    which 232 questionnaires have been returned completed in all respect and valid for the study yielded a

    response rate of 92.8%. Reliability analysis has been applied to measure the reliability of data using

    HRM

    Practices

    Employee

    Retention

    Employee

    Commitment

    Job

    Satisfaction

    INTERCONTINENTAL JOURNAL OF HUMAN RESOURCE RESEARCH REVIEWISSN: 2320-9704 - ONLINE ISSN:2347-1662 - PRINT IMPACT FACTOR:1.615VOLUME 4, ISSUE 1, JANUARY 2016

    www.icmrr.org 3 icmrrjournal@gmail.com

  • SPSS 20 while factor loading has been tested through Confirmatory Factor Analysis (CFA) using

    AMOS 20 and Structural Equation Model (SEM) using AMOS 20 has been applied to test the

    hypotheses among the study variables such as HRM practices, job satisfaction, employee commitment

    and employee retention.

    RESULTS AND DISCUSSION

    Confirmatory Factor analysis and Reliability Testing

    Figure 1: CFA Measurement Model

    Table 1: Results of Goodness of fit test

    GFI AGFI NFI CFI RMSEA RMR Chi-Square CMIN/df P

    .984 .975 .989 .992 .045 .042 42.598 2.341 .000

    CFA model yielded a good model fit of GFI was .984, AGFI = .975, NFI = .989, CFI =

    .992, RMSEA = .045, RMR= .042, chi-square = 42.598, CMIN/df = 2.341 and Probability level (p

    value) = .000 (Anderson and Gerbing, 198831

    ; Hair et al., 199532

    , Tabachnick and Fidell, 200133

    ;

    Kline, 200534

    ). Keeping in view the CFA models conducted in the studies of Par & Tremblay

    (200735

    ) and Nasurdin, Ahmad, & Lin, (200936

    ), decided that the factor loading of an item statement

    must be .40 to be retained in its respective scale whereas, insignificant and negatively

    significant/insignificant statements (< .40) were removed from their respective scale. Thus, it is noted

    that all items of HRM practices, Job satisfaction, and employee commitment and retention have been

    INTERCONTINENTAL JOURNAL OF HUMAN RESOURCE RESEARCH REVIEWISSN: 2320-9704 - ONLINE ISSN:2347-1662 - PRINT IMPACT FACTOR:1.615VOLUME 4, ISSUE 1, JANUARY 2016

    www.icmrr.org 4 icmrrjournal@gmail.com

  • retained in the respective scale. All scales used in the study found to be reliable as the internal

    consistency of scales was tested using Reliability Analysis which shows the Cronbachs alphas of

    HRM practices, Job satisfaction, and employee commitment and retention are 0.75, 0.89, 0.71, 0.85

    respectively. The research has proved that the value of this alpha is greater than 0.5 and is acceptable

    in social sciences (Nunally & Bernstein, 197837

    ).

    Results of Structural Equation Modeling and Hypotheses testing

    Figure 2: Structural Equation Model

    Table 2: Results of Goodness of Fit for Structural Equation Model

    Indices CMIN/df P GFI AGFI NFI TLI CFI RMSEA RMR

    Model Value 1.135 .248 .996 .989 .995 .997 .961 .026 .005

    Recommended

    value 0.05 >0.90 >0.90 >0.90 >0.90 >0.95

  • commitment and employee retention (Shamila et al., 201344

    ; Mohammedbagher Gorji, 201145

    ).

    Employee commitment found to have significant positive effects on employee retention ( = .72, p-

    value

  • 6. Dessler, Gary (2010). Human Resource Management: The Strategic Role of Human Resource

    Management, Prentice Hall, Inc.: NJ, NJ.

    7. Huselid, M. (1995). Human Resource Management Practices on Turnover, Productivity, and

    Corporate Financial Performance. Academy of Management Journal, 38 (3), 635672.

    8. Gutteridge, T.G., Leibowitz, Z.B., and Shore, J.E. (1993). Organizational Career

    Development, San Francisco, CA: Jossey-Bass.

    9. Xiao, J. (1996). The Relationship between Organizational Factors and the Transfer of

    Training in the Electronics Industry in Shenzhen, China. Human Resource Development

    Quarterly, 7 (1), 5573.

    10. Ahmad, S., and Schroeder, R.G. (2003). The Impact of Human Management Practices on

    Operational Performance: Recognizing Country and Industry Differences. Journal of

    Operations Management, 21, 1943.

    11. Mohinder ,Chand (2010). The impact of HRM practices on service quality, customer

    satisfaction and performance in the indian hotel industry The International Journal of Human

    Resource Management, 21(4) March ,551-556.

    12. Guest, D.E. (1997). Human Resource Management and Performance: A Review and Research

    Agenda. International Journal of Human Resource Management, 8, 263276.

    13. Lee, S. H. and Heard, A. (2000). A managerial perspective of the objectives of HRM

    practices in Singapore: an exploratory study. Singapore Management Review, 22, 6582.

    14. Lawler, E.E. (2005). Creating high performance organizations. Asia Pacific Journal of Human

    Resources, 43(1), 10-17

    15. Mowday, R.T., Porter, L.W., Steers, R.M. (1982). Employee-Organization linkages: the

    psychology of commitment, absenteeism, and turnover. Academic press: NY, NY.

    16. Tsaur, H., Lin, C.Y. (2002). Promoting service quality in tourist hotels: the role of HRM

    practices and service behavior. Tourism Management, 25 (1), 471-81.

    17. Reid, R., Morrow, T., Kelly, B., Cartan, M.P. (2002). People management in SMES: an

    analysis of human resource strategies in family and non-family businesses. Journal of Small

    Business and Enterprise Development, 9 (3), 245-59.

    18. Burke, R.J. (2003). Nursing staff attitudes followin...

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