thesis submit's truong quoc viet

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FACTORS EFFECT JOB SATISFACTION AND ORGANIZATIONAL COMMITMENT

A CASE STUDY OF TRAN DUC GROUP

BY TRUONG QUOC VIET

(VIETNAM)

COACH Dr. VO VAN HUY

This proposal was submitted in partial fulfillment of the requirements for the Masters of Business Administration (MBA) degree at the Maastricht School of Management (MSM), Maastricht, the Netherlands, April 2009.

Maastricht School of Management P.O. Box 1203 6201 BE Maastricht The Netherlands

C/o HCMC University of Technology, 268 Ly Thuong Kiet, D.10, HCM City Vietnam, Tel: (84-8) 8660 898 - Fax: (84-8) 8660 899 - E-mail: [email protected]

Maastricht MBA

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ACKNOWLEDGEMENTS

First of all, I would like to express my deepest gratitude and great appreciation to Dr. Vo Van

Huy, my coach, for his guidance, valuable advices and great support in developing my thesis.

I would like to express my sincere thankfulness to Mr. Hoang Trong for giving me his inspiration, thoughtful guidance and sharing his valuable knowledge about SPSS program for

the completion of my thesis.

Also thanks go to my colleagues and staff at Tran Duc Group who assisted me in collecting data during the fieldwork stage, to people at MSM office for their continuous support during last

years.

Last, but not least I would like to thanks all professors, lectures, tutors, and my classmate for their support during my learning time at the MBA program of the MSM

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ABSTRACT

This study examines what factors motivates the worker involved in the wood industry in Tran Duc group, their level of job satisfaction and relationship between job satisfaction and organizational commitment. Wood industry is a critical industry which accommodates an increasing export up to 300% in three years. Data collected by a survey of stratified random sampling of 350 manufacturing workers at three factories of Tran Duc group. A Likert-scale type questionnaire was used to detect employment attitudes, job satisfaction and organizational commitment.

Hierarchical regression analysis was used to analyze the data of the study. Companys vision, job security, leadership support, pay & benefits, and co-worker relation are found significant determinants of job satisfaction and organizational commitment. The finding of this study provide valuable insights for the management of Tran Duc group understanding the factors

effecting job satisfaction and organizational commitment as well as relationship between job satisfaction and organizational commitment.

Key words: Job satisfaction, organizational commitment, turnover.

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TABLE OF CONTENTS

I. Introduction ................................................................................................... 9

1.1 Vietnam wood industry introduction ....................................................... 9

1.2 Tran Duc group introduction................................................................. 10

1.3 Statement of the problem ...................................................................... 11

1.4 Purpose of research & objectives .......................................................... 12 1.5 Scope & Limitations ............................................................................. 13

1.6 Thesis structure..................................................................................... 13

II. Review of literature ................................................................................... 15

2.1 Job satisfaction ..................................................................................... 15

2.2 Factors affecting to job satisfaction ........................................................ 16 2.3 Job satisfaction theories ........................................................................ 17

2.3.1 Two-Factor Theory (Motivation-Hygiene Theory) ........................ 17 2.3.2 Affect Theory................................................................................ 18

2.3.3 Dispositional Theory..................................................................... 18

2.3.4 Equity Theory ............................................................................... 18

2.4 Theory application ................................................................................ 19

2.5. Organizational commitment ................................................................. 20

2.6. Factors affecting to organizational commitment ................................... 22

2.6.1 Personal characteristics ................................................................. 22

2.6.2 Organization structure ................................................................... 22

2.6.3 Work experience ........................................................................... 22

2.7. Models of Retention-Turnover .............................................................. 23

2.8 Importance of job satisfaction and organizational commitment .............. 24 2.9 HR practice in Tran Duc group ............................................................. 26

2.9.1 Regulations and Policy.................................................................. 26

2.9.2 Job description ............................................................................. 26

2.9.3 Recruitment process ...................................................................... 27

2.9.4 Training ....................................................................................... 27

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2.9.5 Skill evaluation ............................................................................ 28

2.9.6 Pay, allowance, benefits and bonus................................................ 28

III. Research Methodology: ................................................................................. 29 3.1 Proposal research model ....................................................................... 29 3.2 Instruments ........................................................................................... 29

3.3 Participation .......................................................................................... 29

3.4 Translation and pre-test reliability of questionnaire ................................ 29

3.5 Research hypotheses ............................................................................. 30

3.6 Research methodology .......................................................................... 32

3.7 Data collection ...................................................................................... 32

3.7.1 Primary data.................................................................................. 33

3.7.2 Secondary data .............................................................................. 33 3.8 Method of analysis. ................................................................................ 33

3.8.1 Assessment of measurement of scale ............................................. 33

3.9 Measurement scales of the questionnaire................................................ 34

3.10 Source of measurement scales.............................................................. 34

IV. Research findings:............................................................................................. 38

4.1 Sample characteristics ........................................................................... 38

4.1.1 Sample ......................................................................................... 38

4.1.2 Gender .......................................................................................... 38 4.1.3 Age ............................................................................................... 38

4.1.4 Marital status................................................................................. 38

4.1.5 Education level.............................................................................. 39

4.1.6 Year of experience ....................................................................... 39

4.1.7 Salary............................................................................................ 39

4.2 Assessment of measurement scale ......................................................... 40

4.2.1 EFA for scale of factors................................................................. 40

4.2.2 EFA for all scale of factors together .............................................. 42

4.3 Testing model and hypotheses .............................................................. 45 4.3.1 Revising the research model.......................................................... 45

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4.4 Finding and discussion .......................................................................... 51

4.5 Finding ................................................................................................. 52

4.6 Managerial implications......................................................................... 56

V. Conclusion, discussion and recommendations .................................................... 58 5.1 Conclusion ............................................................................................ 58

5.2 Recommendations.................................................................................. 60

5.2.1 Building a skillful team ................................................................. 60

5.2.2 Building a training system............................................................. 60

5.2.3 Building a skill matrix system and skill-base salary increase ......... 60

5.2.4 Building a reward & recognition System ...................................... 60

5.2.5 Designing job levels. ..................................................................... 60 5.2.6 Building organization culture. ....................................................... 61

5.2.7 Upgrade or invest high-tech processing machine ........................... 61

5.2.8 Monthly performance feedback ..................................................... 61

5.3 Limitations............................................................................................. 61

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LIST OF TABLES

Table 1.1 : Vietnam wood industry revenue ................................................................... 9

Table 1.2: Tran Duc JS resignation rate in 2008............................................................ 11

Table 3.1: Measurement scales of Job dissatisfaction and organizational commitment.. 36

Table 4.1: Sample distribution by gender .................................................................... 38

Table 4.2: Sample distribution by age........................................................................... 38

Table 4.3: Sample distribution by marital status ........................................................... 39

Table 4.4: Sample distribution by education level......................................................... 39

Table 4.5: Sample distribution by year of experience.................................................... 39

Table 4.6: Sample distribution by salary ....................................................................... 40

Table 4-7: Unidimentionality and reliability test results ................................................ 41

Table 4.8: KMO and Bartlett's Test .............................................................................. 43

Table 4.9: Total Variance Explained ............................................................................ 43

Table 4.10: Result of joint factor analysis for 7 scales .................................................. 44

Table 4.11 Revised undimentionality and reliability for 2 new factors ..45

Table 4.12: Model Summary (b)................................................................................... 46 Table 4.13: Anova (b) .................................................................................................. 46 Table 4.14: Coefficients (a) .......................................................................................... 46 Table 4.15: Levels of importance factors on Job Satisfaction........................................ 48

Table 4.16: Model Summary (b)................................................................................... 48 Table 4.17: Anova (b) .................................................................................................. 49 Table 4.18: Coefficients (a) .......................................................................................... 49 Table 4.19: Levels of importance factors on Organizational commitment ..................... 51

Table 4.20: R square value ........................................................................................... 52

Table 4.21: Regression result between job satisfaction and organizational commitment 52 Table 4.22: F and Sig. value ......................................................................................... 52

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LIST OF FIGURES

Figure 2.1: Job Satisfaction Model (Justin Field 2008) .................................................. 16

Figure 2.2: Adams Equity Theory diagram - job motivation......................................... 20

Figure 2.3: Factors Affecting Job Satisfaction and Organizational Commitment ........... 23

Figure 2.4: Research model proposals .......................................................................... 25

Figure 4.1: Revised model ........................................................................................... 55

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CHAPTER I

INTRODUCTION

1.1 Vietnam wood industry introduction

Vietnams wood and furniture industry has grown tremendously in the past few years. In merely

4 years, the industrys total export volume rose by 300% from USD 460.2 million in 2002 to USD 1932.8 million in 2006 and 2800 million in 2008. This made Vietnam the second largest exporter of wooden goods in Southeast Asia. Furthermore, the wood processing industry has become an important industry in Vietnam, as it is today the fifth largest source of export earnings in Vietnam after oil, garment & textiles, footwear, seafood & rice, etc

Table 1.1 Vietnam wood industry revenue

Vietnam 2003 2004 2005 2006 2007 2008 2009 (est)

Volume (US mil) 600 1100 1600 2000 2500 2800 3200

Source: www.vietnamnews.vnagency.com.vn

Vietnam has developed into the fourth biggest wood product exporter in ASEAN, following Malaysia, Indonesia and Thailand. It can be said that Vietnams wood industry has great potentiality as despite its position among Vietnams leading export industries, Vietnams wood products now account for only 0.78 % of the global market share. So far, China is considered as

the most redoubtable competitor of Vietnam in term of wood processing, having the leading position in wood product exporter.

Despite a lot of advantages for development, Vietnams wood processing and fine art industry

is, like other industries, facing with series of difficulties and severe challenges, especially the impacts put by the international economic crisis. Recent new regulations provided by the two export markets, US and EU, such as the FSC (Forest Stewardship Council) requirement, have posed barriers to Vietnams wood product exporters. In addition, the 80 % dependence on

imported materials has brought about a lot of difficulties in entering these two big markets.

Another problem that most of Vietnamese wood furniture companies facing is productivity of

labor and capital. Productivity of Vietnams worker reached USD 10,000 per year in 2008 meanwhile Chineses reached USD 15,000. The productivity rising in 2008 could not cover high interest rate, price hikes and investment cost. In spite of efforts to overcome the difficulties,

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several Vietnamese wood companies have to stop production, even suffering from loss and bankruptcy. Productivity of capital has a problem due to poor financial management which can result from poor cash flow and a lack of experience. If calculating capital effect (fixed and working capital), Vietnam need VND 0.91 to create a VND 1 in 2008

The big problem accompanying with growth up of industry is demand for wood processing

worker in wood furniture industry has continuously been increasing during the recent years, especially in 2008 needed 170,000 workers. However, Vietnam lacking of resources through training and education wood processing, so almost skilled workers learned by working. The given situation has resulted in the movement of the wood skilled workers between

organizations. In front of such situation, many of companies become awkward because of the leaking and lacking skilled workers serving their jobs. They understand that losing the skilled workers is a big problem since may it cause a threat to the success of their businesses. High rate of labor turnover rate in wood processing business is affecting to whole of industry. Researching on causes of labor turnover of the industry is necessary to work out measures to reduce this rate

and stabilize the workforce of the industry and opportunity for employees. Managers in many companies wondered how to retain skilled workers and whether satisfying their work related needs would help.

1.2 Tran Duc group introduction

The Tran Duc Group is one of the leading manufacturers of garden and indoor furniture and

flooring in Vietnam. Operating since 2000 the Tran Duc Group has successfully developed a reputation for quality furniture and service excellence.

The group currently consists of five companies owned and operated wholly by the Tran Duc

Group. Tran Duc Joint Stock and Furniture Global Corporation are responsible for manufacturing the entire garden furniture program while Tran Duc One is the indoor furniture facility. Sao Nam currently manufactures our indoor flooring and packaging and also hosts the log yard and drying facilities.

In addition to manufacturing the Tran Duc Group in 2007 created the Tran Duc Forest Management Services Company which is responsible for the acquisition and management of plantation forests in Vietnam. Currently the Tran Duc Group owns two plantation areas in

central Vietnam holding 1500 ha of Acacia trees which are under Tropical Forest Trust certification.

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1.3. Statement of the problem

During the past decade, employee turnover has become a very serious problem for organizations. Managing retention and keeping the turnover rate below target and industry norms is one of the most challenging issues facing business. All indication points toward the issue are compounding in the future and, even as economic times changed, turnover will

continue to be an important issue for most job groups. Yet despite these facts employee turnover continues to be the most unappreciated and undervalued issue facing business leaders. There are a variety of reasons for this, for example, the true cost of employee turnover is often

underestimated. The causes of turnover are not adequately identified, and solutions are often not

matched with the causes, so they failed. Preventive measures are either not in place or do not target the issues properly, and therefore have little or no effect, and a method for measuring progress and identify monetary value on retention does not exist in most organizations.

Being aware of the critical role of skilled workers in the wood furniture company, Tran Duc Group, which specialized in processing indoor and outdoor wood furniture with over 2,500 workers facing the same issue are striving to attract and retain skilled workers by various measures such as increasing salary much higher than Government law about the limit salary,

house & fuel allowance, skill allowance. However, turnover rate among workers has still increased during last year even though that is high season, low season or year end.

Table 1.2 Tran Duc JS resignation rate in 2008

Month Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

Resignation (#) 105 76 97 150 134 149 121 69 42 66 79 89

Rate (%) 10 8 10 17 17 23 23 14 8 12 13 12

Source: Tran Duc HR department

Turnover intension impacts negatively on product quality, productivity and performance of the company. Moreover, it is costly and not easy to figure out for this hidden cost. Cost of labor

turnover includes expenses on procedures for separations and on training replacements, losses of productivity when skilled workers spend time training new apprentices, waste caused by production of more bad products by new laborers. To obtain enough skill for a stage of production line, the worker needs at least trained 15 days before their skills are fully estimated. Therefore, stable front-line workforces with artistic skills and honesty at whole production process are valued to the company. The shortage of labor resource adds more difficulty to the company which its key resource is man power. The labor shortage may slowdown the operation

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expansion of the company and leads to miss business opportunities, delaying delivery, resulting in customer canceling contracts.

Why turnover is high after company spent more effort? What does the worker want? What are their needs? Are they satisfied with their current jobs, current salaryies and allowances? Is there relationship between satisfaction and worker retention? In order to has right solution to this

problem in wood furniture industry under current social-economic context, The Board of Management needs to understand in more details about those issues namely are the worker preferring better salary, promotion opportunity or motivation, working environment, good relationship with boss/peers, or company culture? Research all factors effect to retain worker is

necessary not only in adds an insight into the issue of humane resource management in Tran Duc Group but also responding to this situation in the long run

1.4. Purpose of research & objectives

Frederick Herzbergs two factor theory attempts to explain satisfaction and motivation in the workplace. This theory states that satisfaction and dissatisfaction are driven by different factors motivation and hygiene factors, respectively. An employees motivation to work is continually

related to job satisfaction of a subordinate. Motivation can be seen as an inner force that drives individuals to attain personal and organization goals (Hoskinson, Porter, & Wrench, p.133). Motivating factors are those aspects of the job that make people want to perform, and provide people with satisfaction, for example achievement in work, recognition, promotion

opportunities. These motivating factors are considered to be intrinsic to the job, or the work carried out. Hygiene factors include aspects of the working environment such as pay, company policies, supervisory practices, and other working conditions.

Besides job dissatisfaction, the low level of organizational commitment is also correlated to turnover (Angle & Perry 1981, Arnold & Feldman 1982, OReilly & Chatmen 1986, Porter at al 1976.). Studies of job satisfaction and organizational commitment to predict factors effected to personnel retention and productivity. Charles Glisson and Mark Durick 1988 reported that a combination of both satisfaction and commitment may form employee morale. Defining factors that impact on employee satisfaction and commitment are potential paths to find a solution to reduce turnover

The purpose of this study was to determine factors effected to job satisfaction and relationship between job satisfaction and organization commitment. Vietnams economic comes down due to worlds economic crisis, unemployment rate increase, so almost employees try to keep their

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jobs, therefore level of turnover is low. However, what happens when world economy was recovered? The waves of workforces moving will re-occur, turnover may be increased in next few years. A research result is necessary to the Tran Duc Groups Board of Management find

out long-term solutions for retaining skilled workers

In response to the above stated problems, this is the aim of research :

1. To quantitatively determine antecedent factors effecting to job satisfaction and organizational commitment of production workers in Tran Duc group

2. To determine relationship between level of job satisfaction and that of organizational commitment, this study investigated relationship between the level of satisfaction of each of facets of job satisfaction and that of organizational commitment

3. To draw recommendations to improve retention of worker in Tran Duc Group

1.5. Scope & Limitations

Given the limited of sources and time, the research only focuses on the production workers and a survey will be taken place at Tran Duc Joint Stock, and Furniture Global and Tran Duc One Factory.

1.6 Thesis structure

This study report is presented in five chapters as follow:

Chapter 1 - Introduction provides a brief introduction to wood industry, overview of Tran Duc group, the research problem, core objectives, scope of the study and structure of the research report.

Chapter 2 - Literature Review provides some conceptual definitions of human resource construction, theories of Job Satisfaction and Organizational Commitment. Also it reports

several literature reviews of Job Satisfaction and Organizational Commitment and a discussion of previous researches on Job Satisfaction, Organizational Commitment and Employee Turnover.

Chapter 3 - Research Methodology introduces the research model and hypotheses. Then it justifies the methods used to evaluate measurement scales and test the research model and hypotheses. This chapter is covers the general approach and construct measurement of the study,

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the source of primary and secondary information to be used, data collection method including the design of questionnaire and sampling method.

Chapter 4 - Data Analysis and Findings presents the description of the sample and response rate of the survey, the practical assessment and refinement of measurement construction, results of testing theoretical model and hypotheses.

Chapter 5 - Conclusion, Discussion and Recommendations summarizes and discusses the key findings of the research, then suggests recommendations for improving job satisfaction and organizational commitment.

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CHAPTER II:

REVIEW OF LITERATURE

Over the years, many studies relating to personal in term of human needs, job satisfaction and organizational commitment have been conducted, however, almost focus on staff but worker. In this literature review, factors effect job satisfaction and organizational commitment will be represented. Then, the model of job satisfaction and organizational commitment will be proposed for this specific study, which provides a basis for development for hypotheses.

2.1 Job satisfaction

Job satisfaction and motivation have widely been investigated in many job situations and against many different theoretical formulations. Frederick Herzberg's motivation-hygiene factor theory, although considered nontraditional when it was introduced in 1959, has become one of the most used, known, and widely respected theories for explaining motivation and job satisfaction. For instance, Maidani (1991) made a comparative study of Herzberg's theory in private and public sector jobs. His analysis showed that, for employees in both sectors, the motivation to work tended to emphasize intrinsic, or motivating, factors. One interesting result of his work was that

public-sector workers tended to value extrinsic, or hygiene, factors significantly more than did workers in the private sectors.

Herzberg's theory divides motivation and job satisfaction into two continua. The theory differentiates between factors that are considered to be intrinsic to a job, such as responsibility, and factors that are extrinsic but important to a job, such as working conditions. The factors that are inherent to the job are those that affect motivation. To put it in Herzberg's (1968) own words, "The only way to motivate the employee is to give him challenging work in which he can

assume responsibility." Conversely, the extrinsic factors affect job satisfaction. Moreover, problems in the job satisfaction factors can serve as barriers to motivation, even if the motivating factors themselves are addressed satisfactorily.

Job satisfaction means the degree in which an individual feels towards different sides of their job (pay, promotion, supervision, fringe benefits, contingent rewards, operating procedures, coworkers, nature of work and communication) which determine their work performance. ( Paul E. Spector 1997)

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Figure 2.1: Job Satisfaction Model (Justin Field 2008)

2.2 Factors affecting to job satisfaction

Growth Aspect: This is one of the key factors, without which there can not be job satisfaction. For some individuals personal growth in terms of skills and knowledge gained is only important whereas for some others in addition to knowledge, growth in hierarchy is important. In either case advancement is a key factor to fulfillment.

Money talks: Adequate compensation drives ones interest in the job execution and their performance, so let us not fool our self that money does not matter. There are a few among us who work not only earn a living but also keep themselves occupied, even if this is the case it

becomes necessary that such individuals be paid as per the industry standard.

Responsibility & Accountability: Responsibility or May I say freedom of action is another important factor that needs to be considered while you measure your job satisfaction. Responsibility and accountability boosts most peoples level of interest in the job.

Job Security: Stability and Security is vital to everyone and at all times. Security in terms of job is no exception. Insecurity in job is very likely to affect performance, morale and confidence.

Recognition: Let be true to ourselves and agree that we all love to be recognized and

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appreciated for the work that we do. Recognition is essential as it helps increase confidence and self esteem. It is highly important to know the outcome of a task assigned in terms of good or bad appraisal so as to help them to improve their potentiality.

Enjoyment: It would be wise if everyone asks himself / herself if he/she enjoys his/her work. Enjoyment at work comes with satisfaction. Do you look forward to going to work? Do you await results of some important tasks that you complete the previous day? Even if your job is some kind of routine work if you feel a sense of pride and achievement then you definitely enjoy your job.

People you work with: Being comfortable with the people we work with high necessity.

Unpleasant relationships at the work place are indication to start looking for a new job as it is very difficult to work with those who you hate or can not relate to. One should not try to find best friends in their co-workers but its important that you get along well with all.

Working hours & conditions: Long hours induces fatigue and tiredness among individuals, which might induce oversight in them and in such condition people make mistakes which take more time to be solved. One does and should have a life outside work. Long hours without breaks should be a strict no! If one is required to put in long hours make sure you are getting

compensation or getting knowledge and experience that you can not afford to loose. Working conditions should be comfortable.

Perks: Perks last but not the least is another important factor in terms of job satisfaction. Your designation derived from your talent and knowledge should be eligible for some privileges.

2.3 Job satisfaction theories

2.3.1 Two-Factor Theory (Motivation-Hygiene Theory)

Frederick Herzbergs two factor theory attempts to explain satisfaction and motivation in the

workplace. This theory states that satisfaction and dissatisfaction are driven by different factors motivation and hygiene factors, respectively. An employees motivation to work is continually related to job satisfaction of a subordinate. Motivation can be seen as an inner force that drives individuals to attain personal and organization goals (Hoskinson, Porter, & Wrench, p.133). Motivating factors are those aspects of the job that make people want to perform, and provide people with satisfaction, for example achievement in work, recognition, promotion

opportunities. These motivating factors are considered to be intrinsic to the job, or the work

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carried out. Hygiene factors include aspects of the working environment such as pay, company policies, supervisory practices, and other working conditions.

While Hertzberg's model has stimulated much research, researchers have been unable to reliably empirically prove the model, with Hackman & Oldham suggesting that Hertzberg's original formulation of the model may have been a methodological artifact. Furthermore, the theory is

not considered as individual differences, conversely predicting all employees will react in an identical manner to changes in motivating/hygiene factors. Finally, the model has been criticized in that it does not specify which motivating/hygiene factors are to be measured.

2.3.2 Affect Theory

Edwin A. Lockes Range of Affect Theory (1976) is arguably the most famous job satisfaction model. The main premise of this theory is that satisfaction is determined by a discrepancy

between what one wants in a job and what one has in a job. Further, the theory states that how much one values a given side of work (e.g. the degree of autonomy in a position) moderates how satisfied/dissatisfied one becomes when expectations are/arent met. When a person values a particular side of a job, his satisfaction is more greatly impacted both positively (when expectations are met) and negatively (when expectations are not met), compared to one who doesnt value that side. This theory also states that too many of particular ones will produce stronger feelings of dissatisfaction the more a worker values that facet.

2.3.3 Dispositional Theory

Another well-known job satisfaction theory is the Dispositional Theory. It is a very general theory that suggests that people have innate dispositions that cause them to have tendencies toward a certain level of satisfaction, regardless of ones job. This approach became a notable explanation of job satisfaction in light of evidence that job satisfaction tends to be stable over time and across careers and jobs. Research also indicates that identical twins have similar levels of job satisfaction.

A significant model that narrowed the scope of the Dispositional Theory was the Core Self-evaluations Model, proposed by Timothy A. Judge in 1998. Judge argued that there are four Core Self-evaluations that determine ones disposition towards job satisfaction: self-esteem, general self-efficacy, focus of control, and neuroticism. This model states that higher levels of self-esteem and general self-efficacy lead to higher work satisfaction.

2.3.4 Equity Theory

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John Stacey Adams, a workplace and behavioral psychologist, puts forward his Equity Theory on job motivation in 1963. There are similarities with Charles Handy's extension and interpretation of previous simpler theories of Maslow, Herzberg and other pioneers of

workplace psychology, in that the theory acknowledges that subtle and variable factors affect each individual's assessment and perception of their relationship with their work, and thereby their employer. However, awareness and cognizance of the wider situation - and crucially comparisons - feature more strongly in Equity Theory than in many other earlier motivational

models.

When people feel fairly or advantageously treated they are more likely to be motivated; when

they feel unfairly treated they are highly prone to feelings of disaffection and de-motivation. The way that people measure this sense of fairness is at the heart of Equity Theory. The basic idea following the Equity Theory is that workers, in an attempt to balance what they put in to their jobs and what they get from them, will unconsciously assign values to each of his various contributions. Workers contribute their experience, their qualifications, and their capability in

addition to their personal strength such as acumen and ambition, the most highly motivated employee is the one who perceives his rewards are equal to his contributions. If he feels that he is working and being rewarded at about the same rate as his peers, then he will judge that he is being treated fairly.

Equity, and thereby the motivational situation we might seek to assess using the model, is not dependent on the extension to which a person believes reward exceeds effort, nor does even

necessarily on the belief that reward exceed effort at all. Rather, Equity, and the sense of fairness which commonly underpins motivation, is dependent on the comparison a person makes between his or here reward/investment ratio with the ratio enjoyed (or suffered) by others considered to be in a similar situation.

2.4 Theory application

Equity theory states that, worker fells satisfaction and motivation if they treaded fairly in the

organization. Dispositional theory mentions that higher levels of self-esteem and general self-efficacy lead to higher work satisfaction. Meanwhile affecting theory states that the main premise of this theory is that satisfaction is determined by a discrepancy between what one wants in a job and what one has in a job.

Motivation-Hygiene theory states that satisfaction and dissatisfaction are driven by different factors motivation and hygiene factors, respectively. This theory covers all the factors from

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other theory that lead to low or high turnover. Thus, in this research we use Motivation-Hygiene theory for hypothesis testing

Figure 2.2 Adams Equity Theory diagram - job motivation

2.5. Organizational commitment

Traditionally, within the employment relationship, employees exchanged their loyalty and hard work for the promise of job security. In the contemporary environment, changes in organizational structure towards more flexible work practices and the decline in job security have altered the psychological contract between employer and employee (Allan, 2002; Wiens-Tuers, 2001). The new form of psychological contract is visible in placement practices, which see organizations focus on non-core and part-time workers to gain flexibility at lower cost

(Cappelli, 1999; Kalleberg, 2000). Because of these organization-wide changes, the essence of attachment between employer and employee has changed.

The old contract of employee loyalty in exchange for job security and fair work has dissolved (Overman, 1998). Current employer emphasizes "employability" rather than long-term loyalty in a specific job (Cappelli, 1999; Ko, 2003). The trend these days seems to be geared towards having a 'career portfolio (Handy, 1995; Hays & Kearney, 2001). Replacing the old employment deal, the new psychological contract suggests that the employer and the employee meet each

other's needs for the moment but are not making long-term commitments.

It is suggested that commitment to one's professional growth has replaced organizational

commitment (Bozeman & Perrewe, 2001; Powers, 2000). Instead of job security, employees

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now seek job resiliency; opportunities for skill development and flexibility in order to quickly respond to shifting employer requirements (Barner 1994). Employees seem to take greater responsibility for their own professional growth in order to increase their career marketability

(Finegan, 2000).

Commitment is a belief which reflects "the strength of a person's attachment to an organization"

(Grusky, 1966, p. 489). Researchers have suggested that reciprocity be a mechanism underlying commitment (Angle & Perry, 1983; Scholl, 1981) and that employees will offer their commitment to the organization in reciprocation for the organization having fulfilled its psychological contract (Angle & Perry 1983; Robinson, Kraatz & Rousseau, 1994). By fulfilling obligations relating to, for example, pay, job security, and career development, employers are creating a need for employees to reciprocate, and this can take the form of attitudinal reciprocity through enhanced commitment and consequently influence employees to stay with the organization (Becker & Huselid, 1998; Capelli, 2000; Furnham, 2002; Oakland & Oakland, 2001; Wagar, 2003)

Previous studies of the concept of commitment (Mowday, Porter & Steers, 1982; Meyer & Allen 1991) have substantiated that employee commitment to the organization has a positive influence on job performance and a negative influence on intention to leave or employee turnover. In addition, empirical evidence also strongly supports the position that intent to stay or leave is strongly and consistently related to voluntary turnover (Dalessio, Silverman & Schuck, 1986; Fishbein & Ajzen 1975; Griffeth, Hom & Gaertner, 2000; Lambert, Hogan & Barton, 2001; Mathieu & Zajac, 1990).

According to Mayer and Allens (1991) three commonly cited components of commitment, (i.e. continuance, normative and affective) effective commitment is the most studied dimension (Aven, Parker & McEvoy, 1993; Dunham, Grube & Castaneda, 1994; Wahn, 1998). Affective commitment is considered to be an affect-focused attitude towards the organization, which represents an emotional bond between an employee and his or her organization (Allen, 1996). Individuals possessing high levels of affective commitment identify with, are involved in, and

enjoy membership in the organization and are therefore more likely to remain with the organization.

Ulrich (1998) has suggested that engaging employees' emotional energy gains commitment toward the organization. The most fundamental of those processes thought to influence affective commitment is an employee's personal fulfillment based on met needs and positive work experiences (Meyer & Allen, 1997). Although employees may develop affective commitment

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through relatively unconscious associations with positive work experiences (classical conditioning), research suggests that affective commitment can be consciously influenced by human resource practices such as collaboration and team work, high autonomy job design, training and development, rewards, and participation in decision making (Agarwala, 2003, Meyer & Allen, 1997, Ulrich, 1998).

2.6. Factors affecting to organizational commitment

Mayer et al, 1991 defined general patterns that have emerged in the previous researches. The drivers of commitment have belonged to three categories as personal characteristics,

organizational structure and work experiences.

2.6.1 Personal characteristics: age, gender, experience and education. Most of findings of the previous studies proved that there is a positive relationship between age, experience and

commitment.

2.6.2 Organization structure: Through not many researches examine the relation of organization structure and commitment. However, some evidences showed that commitment is

related to decentralization of making decision and formulation of policy and procedure.

2.6.3 Work experience: According to Mayer et al, 1991 the variables of work experience should be divided into two groups, one refer to comfortable feeling including equity in reward distribution, organizational dependability, role clarity and freedom form conflict, supervisor support, pre-entry expectation and the other refer to competencies feeling in workers position including accomplishment, autonomy, reward equity, job challenges, job scope, opportunity for advancement, opportunity for self-expression, participation in making decision .

According to Leigh Branham in The 7 hidden reasons employees leave: How to recognize the subtle signs and act before its too late, the first step in addressing turnover, is to understand the

reasons. Here they are:

Reason #1: The job or workplace is not satisfactory as expected.

Reason #2: The mismatch between job and person.

Reason #3: Too little coaching and feedback.

Reason #4: Too few growth and advancement opportunities.

Reason #5: Feeling devalued and unrecognized.

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Reason #6: Stress from overwork and work-life imbalance.

Reason #7: Loss of trust and confidence in senior leaders.

Figure 2.3 Factors Affecting Job Satisfaction and Organizational Commitment

Source: Human resource Management, twelfth edition, Robert L. Mathis, John H. Jackson

2.7. Models of Retention-Turnover

More than two decades, many researchers have defined a part of variables that appeared to contribute to either job satisfaction or organizational commitment. These variables may be divided into three groups: (1) variables that describe characteristics of job tasks; (2) variables describe that organization; (3) variables describe that worker (Charles Glisson & Mark Durick, 1998).

Also, Price, Mueller, and colleagues (Kim et al. 1996; Mueller & Price 1990; Price1977; and Price & Mueller 1986a, 1986b) was developed a retention-turnover model that identifies impacts of structural, environmental, and personal variables on job satisfaction and organizational commitment. Job satisfaction and organizational commitment are identified as intervening variables affecting stay/quit intentions. The model describes intentions as the

immediate precursor to turnover/retention behaviour (Kim et al. 1996; Mobley et al. 1979).

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2.8 Importance of job satisfaction and organizational commitment There is a link between job dissatisfaction with withdrawal and aggressive or violent behaviors in the workplace (Glomb, 1999; Rosse, 1983 et al.). When the gap between dissatisfaction and employees expectancy are big enough, withdrawal and aggressive or violent behaviors can appear.

Besides job dissatisfaction, the low level of organizational commitment is also correlated to turnover. Studies of job satisfaction and organizational commitment are attempts to increase understanding of personnel retention and productivity. A combination of both satisfaction and commitment may form employees morale (Charles Glisson and Mark Durick 1988).

According to the empirical research conducted since 1972 by Price, Mueller and their colleagues, job satisfaction and organizational commitment are intervening variables of turnover. The research indicated seven structural variables that may impact on job satisfaction and organizational commitment such as: autonomy, justice, stress, pay, promotional chances, rountinization, and social support.

Following Job Satisfaction Survey (JSS) developed by Paul E. Spector (1994) including nine sides. Pay, Promotion, Supervision, Fringe, Benefit, Contingent Reward, Operating Procedures, Coworker, Nature of Work and Communication.

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Figure 2.4 Research model proposals

Opportunity for Growth

Co-workers relation

Reward & Recognition

Supervision

Companys Vision

Pay & Benefits

Working Conditions

Opportunities for Promotions

Job Security

Job Satisfaction Organizational Commitment

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2.9 HR practice in Tran Duc group

2.9.1 Regulations and Policy

Regulations

Besides common regulations applied at most companies such as: working hours (8 hours/day and 6 days/week), annual leave (12 days/year), wearing uniform while working, punishment of violating rules and regulations, labor contract will co-sign if worker pass temporary contract

Insurance Policy

All human resources policies conform to the Vietnamese law. The company offers to all

workers who working in risk areas a health insurance 24/24 and pay full wage, allowances and medicine cost if there are any safety incident happen.

2.9.2 Job description

There are no official systems or working instruction designs for each department or each variance, all based on working experience. There are five difference departments in the

manufacturing process, those are cutting and planning, shaping and drilling, assembling and sanding, painting and oiling, and packing. The tasks are very complex however they are assigned in verbal by team leader to worker. Production is following process, each department carries about fifteen steps of the process. Therefore, job description for each worker is complex, each worker carries some tasks. Worker who has high skills is assigned to do complicated steps. However, the worker was not officially recognized their skill level. There is not a job ladder or skill level to distinguish worker qualifications officially.

2.9.3 Recruitment process

Recruitment process of workers as below: Request from manufacturing department Factory manager approval HR department Select candidates Pre-interview by HR Final interview by request department Employment

Selected workers must be graduated from secondary school at least. However, in the recent

years, due to shortage of labor source have reduced selection standard to obtain enough the quantity of personnel in need. Then, workers graduated from primary school are acceptable. Therefore the quality of workers has decreased in talent as well as morals.

2.9.4 Training

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There isnt official process for training new workers, after a half-day regulation training conducted by HR, they starting working. Production team leader and supervisor will coach them from simple tasks to complicated task.

Almost team leaders promoted from worker as well as supervisors were promoted from line leader therefore they were very good in technical skills but not in management. There were no training courses of management for these supervisors before taking over the positions.

2.9.5 Skill evaluation

There are no systems to measure the skill of workers. Each supervisor sets up by themselves an

evaluation standard based on standard time, assiduity, attitude of worker And it is quite different from supervisor to supervisor. The skill of worker is evaluated qualitatively by supervisor. No test or exam to ensure that there is not bias in evaluation. The skill of worker is just recognized by the supervisor and it is not official to the company.

2.9.6 Pay, allowance, benefits and bonus

No skill-based pay structure is employed. All workers, who have no specific skills start at the

minimum level of salary. The salary for worker in probation time is 75% of 1,030,000 VND. If they can pass probation, they can be offered at the minimum salary level of contractual staffs. The salary for contractual worker is 1,030,000 VND.

Company pay allowance for housing, transportation, attendant, health care maximum 300,000

VND

Salary is reviewed based on performance standard designed by department heads or supervisors based on their skill increasing. The company review salary manually, increase rate base on business result.

Workers received one month salary bonus on end of year and 200,000 VND for each year of seniority

In addition, workers are offered a lunch and a dinner if they work over time.

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CHAPTER III

RESEARCH METHODOLOGY

In order to test the model and hypotheses stated in previous chapter, this research adopts quantitative approach in which the data were by means of questionnaire survey.

3.1 Proposal research model

This research model is depicted in Figure 2.4; Studies of job satisfaction and organizational commitment have a common purpose that is to increase understanding of personnel retention

and productivity. Defining factors leading to worker turnover should be done through defining factors that impact on employee satisfaction and commitment. A model of turnover predictors with assumption of worker turnover related to the level of job satisfaction and organizational commitment was developed for this study. This model was developed based on the

HERZBERGs two-factor theory and adopting the works of Meyer et al, 1991, Price, Mueller, and colleagues (Kim et al. 1996; Mueller & Price 1990).

3.2 Instruments

A survey instrument is designed to measure and identify demographic characteristics, levels of job satisfaction and organizational commitment among worker of Tran Duc Group. A cover letter briefly explained the purpose of the study and further explanations are given when requested. The respondents received and answered the questionnaires at their work place. Participation is voluntary. The questionnaire consisted of three sections as follow:

Section 1 - Job satisfaction scale: A self-developed, combined and refined job satisfaction questionnaires are adapted from John H. McConnell, 2003, Kim et al 1996, Hilb 2003 and Paul E. Spector 1994. The nine most common job satisfaction domains are chosen for inclusion in the questionnaire. These included: Company policy, job security, opportunity for growth, supervision, pay & benefit, working condition, opportunity for promotion, reward & recognition, co-worker relation. A further some questions are also included in the questionnaire: worker asked about their overall job satisfaction and intention to leave the organization if they received a good offer from other companies. The questionnaire utilizes a Likert type scale with

five response alternatives ranging from Strongly disagree (weighted 1) to Strongly agree (weight 5).

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Section 2 Organizational commitment scale: This variable is measured using the questionnaires developed by Mowday, Steers and Porter. Ratings are completed on a five point scale from Strongly disagree (weighted 1) to Strongly agree (weight 5).

Section 3 Demographics: The questionnaire gathered data related to participants (a) gender; (b) Marital status; (c) age; (d) year of experience; (e) education level; (f) monthly salary

3.3 Participation

The population of the study will be the total number of the worker at Tran Duc Group up to

May. 31th, 2009, respondents are 333 workers. Refer to the sample size defined in the webpage http://www.surveysystem.com/ . The researcher expected about 70% respondent. Thus, 475 questionnaires are issued and they equal to 20% of population. (Total workers of the Tran Duc Group are 1,500).

N = Z2 * p * (1-p) / C2

Where: Z = 1.96 for 95% confidence level p = 0.5 percentage picking a choice, expressed as decimal c = 5 confidence interval, expressed as decimal

3.4 Translation and pre-test reliability of questionnaire

The questionnaire was adapted and developed in English. However, the target respondents were Vietnamese workers. Therefore, the questionnaire should be translated into Vietnamese as

understandable as possible.

A pilot study is undertaken to test the relevance and clarity of the questions and to refine them

as needed to avoid misunderstand. A small sample of 45 workers were randomly selected, who are not included in the sample, received the questionnaire. Pilot test result found that questionnaires need to modified or new developed to avoid confuse by workers who have low education level

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3.5 Research hypotheses

The research model consists of nine independent variables (Company vision , Job security, Opportunity for Growth, Supervision, Pay & benefits, Working condition, Opportunity for Promotion , Reward & recognition and co-worker relation) and two dependent ones (job satisfaction and organizational commitment). Therefore, nine pairs of hypotheses were developed as follow:

1. Company vision: The competency is designed to survey feelings toward company vision. A good vision is one that arranges the activities of the enterprise in such a way that they contribute

to the goals of the organization. Specifically, this topic investigates whether employees clearly understand about future of company

H1: There is a positive impact of company vision on job satisfaction and/or organizational commitment.

2. Job security: This competency is designed to measure how employees view their job security within organization. In todays often volatile or contingent labor market, its crucial to understand the level of security employees feel about their jobs. Studies show that employees who do not feel secure in their jobs are less likely to be committed to best assisting customers. This competency can be especially useful if your organization has suffered recent layoffs or firings.

H2: There is a positive impact of job security on job satisfaction and/or organizational commitment.

3. Opportunity for growth: This competency explores issues such as internal growth opportunities, potential for advancement, career development importance, and the relationship between job performance and career advancement. The question set examines whether employees believe they have a chance to grow within the organization. Studies show that lack of

career opportunity is one of the top reasons employees leave an organization. Also, continually

hiring open positions from outside the organization can be detrimental to morale when a qualified candidate is available internally. Topics covered in this competency are perceived opportunity for advancement, existence of a career development plan, and organizational

commitment to staff development.

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H3: There is a positive impact of opportunity for growth on job satisfaction and/or organizational commitment.

4. Supervision: This competency is designed to reflect employees feelings regarding their direct manager or supervisor. The manager/supervisor competency covers topics such as clarity of goals, manager support, coaching and feedback, and regular reviews of performance. The old adage People leave their managers, not organizations is often true. Of all the workplace stressors, a bad immediate manager is one of the worst and can directly affect the emotional

health, productivity, and retention of an employee. This organizational topic can be especially insightful if organization is losing quality employees while compensation and benefit packages are equivalent with industry standards.

H4: There is a positive of supervision on job satisfaction and/or organizational commitment.

5. Pay & benefits: This competency focuses in detail on how employees feel regarding their compensation and benefits packages. The questions included in this organizational topic can help organization determine whether employees feel they are fairly paid for the work they perform when compared to a similar job at a different company. This competency also queries their feelings regarding the adequacy and quality of their benefits package. A fair and attractive

compensation package is critical for hiring and retaining quality employees. A high satisfaction level in this competency requires that your compensation structure and benefits package be fair, balanced, and understood by present employees.

H5: There is a positive impact of pay & benefits on job satisfaction and/or organizational commitment.

6. Working condition: This competency is designed to measure how employees feel about their physical and environmental working conditions, the quality of their equipment and tools, and

overall attention to safety within the workplace. Every organization is responsible for ensuring the health and safety of its employees. An unsafe working environment can lead to accidents, lawsuits, and missed work. Such incidents can result in significant costs to organization. The questions included in this organizational topic investigate whether your employees are satisfied with the organizations facilities, whether they believe business is being conducted in a safe

manner, and whether the tools and equipment provided are adequate to successfully and safely complete their jobs.

H6: There is a positive impact of working condition on job satisfaction and/or organizational commitment.

7. Opportunity for promotion:

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H7: There is a positive impact of opportunity for promotion on job satisfaction and/or organizational commitment.

8. Reward & recognition: This competency examines whether employees believe they are properly and fairly recognized for their efforts. This organizational topic also explores what type of behavior is appreciated and rewarded within organization. Studies show that employees who receive regular recognition and praise are more likely to raise their individual productivity levels, increase engagement with their colleagues, and stay longer at the organization. This

organizational topic can be especially insightful if organization is experiencing low productivity levels or ineffective teamwork

H8: There is a positive impact of reward & recognition on job satisfaction and/or organizational commitment.

9. Co-workers: This competency is designed to examine issues surrounding effective cooperation, collaboration, and communication among the workers in organization. Whereas the Team Dynamics competency focuses on relationships within a single group, this competency is

written to target coworker topics spanning the entire organization over multiple work units. This

organizational topic investigates team members ability to successfully partner on projects with one another and between groups to reach the common goals of the organization. This competency also examines whether employees feel they are treated fairly and equally in relation to other workers and sections of the organization.

H9: There is a positive impact of co-workers on job satisfaction and/or organizational commitment.

3.6 Research methodology

Questionnaire survey is designed to collect information of workers opinion. Exploratory study will help to discover the level of workers commitment and satisfaction. Respondents will be asked to disagree or agree with Likert scale anchored by 1 strongly disagree to 5 strongly agree.

Face-to-face interviews help to explore the employers view of HR practices are currently

deployed in the organization.

In-depth interviews with managers will help to collect their view about certain things which would be important factors led their worker commitment.

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In-depth interviews with left workers help to explore reasons of their leave and what they expect or obtain from the new place. This data need to support references for analysis.

3.7 Data collection

I will use both primary and secondary data for all the analytical methods.

3.7.1 Primary data

Questionnaire survey was designed to collect information of workers opinion. Exploratory study was used to discover factors having impact on the level of workers commitment and satisfaction. The questionnaire included three sections:

Questionnaire Design: included 3 sections

1. Survey about job satisfaction factors

2. Survey about organizational commitment factors.

3. Survey about Personal background information

3.7.2 Secondary data

Secondary data is collected from Human Resource Department. Also, it is gathered from Consulting reports, Economics News and Journal of Management Study.

3.8 Method of analysis.

Computer Statistic Package for Social Science (SPSS) version 11.5 will be used as the main tool for analysis of the quantitative data. Descriptive statistical analyses: percentage, median, means, standard deviation, Cronbach alpha, EFA and correlation coefficient. Multiple regression analysis is used to study the correlation and to test the research model. The analysis process is implemented as follow

3.8.1 Assessment of measurement of scale

The multi item scale developed above have to be evaluated for their reliability, unidimensionality and validity. Cronbach alpha is the most commonly use approach test reliability. Cronbach alpha will be high if the scale is highly correlative (Hair et al., 1998). Unidimensionality is defined as the existence of one construct of underlying a set of items

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(Garver and Mentzer, 1999). Unidimensionality should be test before doing reliability tests because reliability such as Cronbach alpha does not ensure unidimensionality but instead assumes it exists (Hair et al., 1998). In the current research, the main assessment method is exploratory factor analysis (EFA). There are two methods used to extracting factors in EFA, common factor analysis and principal component factor analysis. While principal component factor analysis is used mainly for item reduction and test unidimensionality, reliability, common factor analysis is for exploring the latent dimensions represented in the original variables

(Conway and Huffcutt, 2003) and test convergent validity, discriminant validity. The analyses were implemented through two respective steps:

The first step, EFA with principal component, eigenvalue >= 1 and VARIMAX rotation was applied to 9 constructs under investigation (Conway and Huffcutt, 2003). The main purpose of this step is to see whether the scale for each constructs under investigation is unidimensional or multidimensional. For a scale to be empirically unidimensional, the factor analysis must result in only one factor extracted. Moreover, item with low factor loading < 0.40 were eliminated

because they do not converge properly with the latent construct they were designed to measure (Hair et al., 1998). Then, reliability analysis was applied to each set of items to assess and refine the measurement item. Items having low Cronbach alpha < = 0.60 item to total correlation coefficient

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3.10 Source of measurement scales

(1) Company vision: Questionnaires were developed by the author basing on web-side

(2) Job security: This construct consisted of five items. Question no. 5 & 6 were developed by Oldham 1986 and adapted by Deery et al. 1994. Question no. 7, 8, 9 was designed by the author base on we-side

(3) Opportunity for growth: This scale was measured by four variables, question no. 10, 11, 12, 13 was modified from web-side

(4) Supervision: This construct was measured by four variables, Q14, Q15, Q16 were developed from John H. McConnell 2003.

(5) Pay & benefits: Salary and benefits were measured by four items from question Q18 to Q21. These scale were developed from sample questionnaires by John H. McConnell 2003 and survey questionnaires by Paul E Spector 1994

(6) Working condition: This construct consisted of 4 items, from item Q22 to Q25 adapted from Kim et al. 1996

(7) Opportunity for promotion: Opportunity for promotion questionnaires from item Q26 to Q29 were developed by the author based on web-side

(8) Reward & recognition: Four items, Q30 to Q33 were developed by the author based on web-side

(9) Co-worker relation: Three items, Q34, Q36 were developed from sample questionnaires by John H. McConnell 2003, Q37 from survey questionnaires by Paul E Spector 1994

(10) Job satisfaction: The construct of satisfaction in this research was measured by 5 scales. The content of questions was adapted from facet-free job satisfaction of Quinnn Saines 1979 (page 476, Handbook of organizational measurement).

(11) Commitment: The scales of commitment in this research included 10 items that were applied from the 15 items of organizational commitment questionnaire (OCQ) of Mowday, Porter and Steers, 1974

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Table 3.1 Measurement scales of Job dissatisfaction and organizational commitment CON

STRUCT CODE ITEM ITEMS OF MEASUREMENT SCALES SOURCE

VISI1 Q1 I am optimistic about the future of the company. Modified

VISI2 Q2 I am optimistic about my future success with the company

Modified

VISI3 Q3 The company is a leader in the industry in important ways

Modified

Com

pan

ys

Visi

on

VISI4 Q4 The company is a strong competitor in key growth areas.

Modified

SECU1 Q5 I am confident that I will be able to work for this company as long as I do a good job. Oldham 1986

SECU2 Q6 My job is a secure one. Oldham 1986

SECU3 Q7 I feel that working for the company will lead to the kind of future I want. Modified

SECU4 Q8 I am confident that the company growth will bring us the security of job.

Modified Job

Secu

rity

SECU5 Q9 I feel that the company cares about its people Modified GROW1 Q10 I am encouraged to learn from my mistakes Modified GROW2 Q11 My work is challenging and stimulating Modified

GROW3 Q12 I receive the training I need to do my job well Modified

GROW4 Q13 My manager encourages and supports my development. Modified

SUPE1 Q14 Employee performance evaluations are fair and appropriate.

John H. McConnell 2003

SUPE2 Q15 My manager treats all employees fairly. John H. McConnell 2003 SUPE3 Q16 My manager always treats me with respect. John H. McConnell 2003

Su

perv

isio

n O

ppo

rtu

nity

fo

r

G

row

th

SUPE4 Q17 My manager gives me praise and recognition when I do a good job John H. McConnell 2003

PAY1 Q18 The benefits we receive are as good as most other organization offer. Paul E Spector 1994

PAY2 Q19 The salary I receive compare well to my co-worker basing on skill, efficiency and responsibility. John H. McConnell 2003

PAY3 Q20 I feel I am being paid a fair amount for the work I do Paul E Spector 1994

Pay

& Be

nef

its

PAY4 Q21 My salary is competitive with similar jobs I might find elsewhere John H. McConnell 2003

COND1 Q22 My workplace is a physically comfortable place to work Kim et al. 1996

COND2 Q23 I have the resources I need to do my job well. Kim et al. 1996 COND3 Q24 I have adequate protecting equipment to do my job. Kim et al. 1996 W

orki

ng

con

ditio

n

COND4 Q25 My workplace is safe Kim et al. 1996

PROM1 Q26 Company is frequency evaluate workers skill Modified

PROM2 Q27 The procedures used to determine salary increases are base on workers skill.

Modified

PROM3 Q28 I am satisfied with my skill evaluated by the company

Modified

Opp

ort

un

ity fo

r

Prom

otio

n

PROM4 Q29 My salary is adequate to my skill Modified

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REWA1 Q30 Company rewards workers who did the good job. Modified

REWA2 Q31 Company rewords workers who did improvements with benefic

Modified

REWA3 Q32 The rewards I receive are adequate to my contribution

Modified

Rew

ard

&

Rec

ogn

ition

REWA4 Q33 When I do good job, I receive the recognition for it that I should. Modified

COWO1 Q34 I like people I work with

Paul E Spector 1994

COWO2 Q35 My co-workers are friendly. John H. McConnell 2003 COWO3 Q36 I receive supporting from my co-workers John H. McConnell 2003 Co

-work

ers

COWO4 Q37 The employees in my department work well as a team. John H. McConnell 2003

SATI1 Q38 Company is good place for you to work Hilb 2003

SATI2 Q39 I like to work with company Hilb 2003

SATI3 Q40 I want to built company prestige Hilb 2003

SATI4 Q41 I trying to fulfill company work well Hilb 2003 Job

satis

fact

ion

SATI5 Q42 I satisfy with my current job Hilb 2003

COMM1 Q43 I am willing to put in a great deal of effort beyond that normally expected in order to help this organization be successful.

Mowday, Steers, Porter 1974

COMM2 Q44 I would accept almost any type of job assignment in order to keep working for this organization


COMM3 Q45 I feel very much loyalty to this organization Mowday, Steers, Porter 1974 COMM4 Q46 I am proud to tell others I am part of this

organization Mowday, Steers, Porter 1974

COMM5 Q47 I could just as well be working for a difference organization as long as the type of work is similar


COMM6 Q48 It would take very little change in my present circumstances to cause me to leave this organization


COMM7 Q49 I am extremely glad that I chose this organization to work for over others I was considering at the time I jointed


COMM8 Q50 For me this is the best of all possible organizations for which to work


COMM9 Q51 I feel more committed to a career with the company this year than I did a year ago. Mowday, Steers, Porter 1974

Org

aniz

atio

nal

C

om

mitm

ent

COMM10 Q52 I really care about the fate of this organization Mowday, Steers, Porter 1974

1 Gender 2 Marital status 3 Salary 4 Year of experience 5 Age D

emogr

aph

y

6 Educational level

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CHAPTER IV

RESEARCH FINDINGS

This chapter presents sample characteristics, the assessment, and refinement of the measurement scale based on the data of set 350 cases, the results from the statistical estimation, the discuss and managerial implications.

4.1 Sample characteristics

4.1.1 Sample

The data collected from 475 questionnaires delivered through directly contact, the total numbers of the collected questionnaires were 405, respond rate is 85%. After filtering, the number of questionnaires were eliminated is 55 due to many missing. As a result, 350 questionnaires were officially used in the data analysis.

4.1.2 Gender 60.3% respondents were female and 39.7% were male. This ratio is the same as the ratio of gender population in the factories.

Table 4.1 Sample distribution by gender

Frequency Percent Valid Percent Cumulative Percent Valid male 139 39.7 39.7 39.7 female 211 60.3 60.3 100.0 Total 350 100.0 100.0

4.1.3 Age Most age of workers were from 20 to 25 years. There were 14% under 20 years of age, 44.9% in the range of 20 to 25 years of age, 27.4% in the range of 26 to 30 years of age, and 13.7% above 30 years of age

Table 4.2: Sample distribution by age

Frequency Percent Valid Percent Cumulative

Percent Valid under

20 49 14.0 14.0 14.0 20-25 157 44.9 44.9 58.9 26-30 96 27.4 27.4 86.3 over 30 48 13.7 13.7 100.0 Total 350 100.0 100.0

4.1.4 Marital status 44.3% respondents had got married meanwhile 54.3% single, the rest 1.4% divorced.

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Table 4.3 Sample distribution by marital status

Frequency Percent Valid Percent Cumulative Percent Valid married 155 44.3 44.3 44.3 single 190 54.3 54.3 98.6 divorce 5 1.4 1.4 100.0 Total 350 100.0 100.0

4.1.5 Education level 13.1% respondents have not yet passed primary school, 47.4% respondents graduated from secondary school, 38.6% respondents graduated from high school, there was only 0.9% graduated from college.

Table 4.4 Sample distribution by education level

Frequency Percent Valid Percent Cumulative Percent Valid Primary 46 13.1 13.1 13.1 Secondary 166 47.4 47.4 60.6 high 135 38.6 38.6 99.1 college 3 .9 .9 100.0 Total 350 100.0 100.0

4.1.6 Year of experience Most tenure of workers was from 1 to 3 years. 11.7% respondents were under 6 months, 35.4% from 7 to 12 months, 39.1% from 1 year to 3 years, 10.9% from 3 years to 5 years and 2.9% over 5 years.

Table 4.5 Sample distribution by year of experience

Frequency Percent Valid Percent Cumulative Percent Valid under 6 months 41 11.7 11.7 11.7 from 7 to 12

months 124 35.4 35.4 47.1 from 1 to 3 years 137 39.1 39.1 86.3 from 3 to 5 years 38 10.9 10.9 97.1 over 5 years 10 2.9 2.9 100.0 Total 350 100.0 100.0

4.1.7 Salary Most workers take home 1.5 to 2 million VND per month (75.1%), 15.7% workers received 1 to 1.5 million VND per month, 8% workers received over 2 million VND per month, the rest 1.1% received minimum level of salary under 1 million VND per month.

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Table 4.6 Sample distribution by salary

Frequency Percent Valid Percent Cumulative Percent Valid under 1 million VND 4 1.1 1.1 1.1 1-1.5 million VND 55 15.7 15.7 16.9 1.5-2 million VND 263 75.1 75.1 92.0 over 2 million VND 28 8.0 8.0 100.0 Total 350 100.0 100.0

4.2 Assessment of measurement scale As mentioned in Chapter 3, each model comprises nine independent varieties and one dependent

variety. To assess internal consistency and unidimentionality of each construct, reliability test and a factor analysis of single construct are employed. Reliability test may be done if an

assumption of unidimentionality was justified (Hair et al., 1998). Therefore, before testing the reliability of measurement scale, a test for unidimensionality of a measurement scale may be undertaken.

The process of assessment and refinement of measurement scale are implemented through two

steps using SPSS 11.5 software. The first step is EFA and Cronbach alpha to assess unidimentionality and reliability. The second step is EFA with all scales together in order to assess convergent validity and discriminant validity. In this process, the items dont meet evaluating criteria are eliminated. After refinement, reliability of scale is re-assessed by

Cronbach alpha. Criteria of refinement of item included factor loading > 0.40, item-total correlation > 0.35, Cronbach alpha > 0.60, % of variance (Hair et al., 1998).

4.2.1 EFA for scale of factors

Following the procedure and criteria described above, the EFA results show that all of the scales were loading for only one factor and immediately acceptable

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Table 4-7 Unidimentionality and reliability test results

Construct / Items

Item Description Factor loading

% of total

variance

Corrected item-total

correlation Q1 I am optimistic about the future of the

company. .846 .7173

Q2 I am optimistic about my future success with the company .859 .7341

Q3 The company is a leader in the industry in important ways .863 .7441

Company' vision (Alpha = .8658; Eigenvalue = 2.858)

Q4 The company is a strong competitor in key growth areas. .812

71.441

.6698

Q5 I am confident that I will be able to work for this company as long as I do a good job. .771 .6458

Q6 My job is a secure one. .862 .7623 Q7 I feel that working for the company will lead to

the kind of future I want. .837 .7341

Q8 I am confident that the company growth will bring us the security of job. .849 .7500

Job Security (Alpha = .8769; Eigenvalue = 3.313)

Q9 I feel that the company cares about its people 782

67.458

.6638 Q10 I am encouraged to learn from my mistakes .827 .6912 Q11 My work is challenging and stimulating .871 .7531 Q12 I receive the training I need to do my job well .871 .8125

Opportunity for Growth (Alpha = .8665 ; Eigenvalue = 2.874) Q13 My manager encourages and supports my

development. .820

71.843

.6846

Q14 Employee performance evaluations are fair and appropriate. .806 .6596

Q15 My manager treats all employees fairly. .858 7343 Q16 My manager always treats me with respect. .854 4246

Supervision (Alpha = .8605 ; Eigenvalue = 2.822)

Q17 My manager gives me praise and recognition when I do a good job .841

70.546

7089 Q18 The benefits we receive are as good as most

other organizations offer. .827 .6805

Q19 The salary I receive is compared well to my co-worker based on skill, efficiency and responsibility.

.855 .7195

Q20 I feel I am being paid a fair amount for the work I do .823 .6956

Pay & benefits (Alpha = .8420; Eigenvalue = 2.724)

Q21 My salary is competitive with similar jobs I might find elsewhere .782

68.098

.6205

Q22 My workplace is a physically comfortable place to work .791 .6339

Q23 I have the resources I need to do my job well. .871 .7466 Q24 I have adequate protecting equipment to do my

job. .871 .7504

Working condition (Alpha = .8491 ; Eigenvalue = 2.759)

Q25 My workplace is safe .784

68.967

.6279 Q26 Company frequently evaluate workers skills .839 .7153 Q27 The procedures used to determine the salary

increased based on workers skills. .837 .7130

Q28 I am satisfied with my skill evaluated by the company .889 .7905

Opportunity for Promotion (Alpha = .8843 ; Eigenvalue = 2.973)

Q29 My salary is adequate to my skill .882

74.326

.7782

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Construct / Items

Item Description Factor loading

% of total

variance

Corrected item-total

correlation Q30 Company rewards workers who did the good

job. .851 .7242 Q31 Company rewords workers who did

improvements with benefit .876 .7555

Q32 The rewards I receive are adequate to my contribution .883 .7805

Reward & Recognition (Alpha = .8707 ; Eigenvalue = 2.904)

Q33 When I do a good job, I receive the recognition for it that I should. .796

72.588

.6548 Q34 I like people I work with

.852 .7207

Q35 My co-workers are friendly. .898 7919

Q36 I receive support from my co-workers .861 .7373

Co-workers (Alpha = .8625 ; Eigenvalue = 2.850)

Q37 The employees in my department work well as a team. .759

71.240

.6048

Q38 Company is a good place for you to work 0.8358 .7354 Q39 I like to work for company 0.8724 .7848 Q40 I want to built company prestige 0.8500 .7578 Q41 I try to fulfill company work well 0.8052 .6974

Job Satisfaction (Alpha = .8918 ; Eigenvalue = 3.502)

Q42 I am satisfied with my current job 0.8190

70.030

.7134

Q43 I am willing to put in a great deal of effort beyond that normally expected in order to help this organization be successful. 0.7427 .6757

Q44 I would accept almost any type of job assignment in order to keep working for this organization 0.8078 .7472

Q45 I feel very much loyalty to this organization 0.8107 .7540 Q46 I am proud to tell others I am part of this

organization 0.7395 .6751 Q47 I could just as well be working for a difference

organization as long as the type of work is similar 0.6819 .6124

Q48 It would take very little change in my present circumstances to cause me to leave this organization 0.7600 .6965

Q49 I am extremely glad that I chose this organization to work for over others I was considering at the time I joined 0.8209 .7625

Q50 For me this is the best of all possible organizations for which to work 0.7795 .7175

Q51 I feel more committed to a career with the company this year than I did a year ago. 0.7583 .6949

Commitment (Alpha = .9200 ; Eigenvalue = 5.842)

Q52 I really care about the fate of this organization 0.7313

58.421

.6633

4.2.2 EFA for all scale of factors together

After establishing the unidimensionality and reliability of each scale, all 37 items were jointly subjected to a common factor analysis. This approach allows all items to correlate with every factor without being constrained to correlate only with its underlying factor (Kline, 1998). In this procedure, Item loaded highly on more than two factors were eliminated, loading of items smaller threshold value of 0.40 are eliminated. The result of this procedure was shown in table

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4.10. In which 9 factors consist 37 items were retained which together explain 69.012% of the total variance. Factor loading of each of the 37 items vary from 0.657 to 0.871 which are higher than 0.40 (table 4.9). In this testing, rotation method: Equamax with Kaiser Normalization was applied providing better reliability. There are two pairs of sets of items loaded highly on one factor, so I re-named they were Leadership support (Opportunity for growth & Supervision) and Workplace (Working condition & Opportunity for promotion). The result of Bartletts Test of Sphericity and KMO measure indicated that the degree of inter-correlation among the items

were suitable for EFA procedure as table 4.8 (Chi-square = 8193, df = 666, Sig = .000)

Table 4.8 KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.901

Approx. Chi-Square 8193.062 df 666

Bartlett's Test of Sphericity

Sig. .000

Table 4.9 Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared

Loadings Rotation Sums of Squared

Loadings

Total % of

Variance Cumulative

% Total % of

Variance Cumulative

% Total % of

Variance Cumulative

% 1 8.522 23.033 23.033 8.522 23.033 23.033 5.035 13.609 13.609 2 6.278 16.968 40.000 6.278 16.968 40.000 4.844 13.093 26.702 3 3.934 10.633 50.633 3.934 10.633 50.633 3.490 9.434 36.135 4 2.284 6.174 56.807 2.284 6.174 56.807 3.151 8.518 44.653 5 1.982 5.356 62.164 1.982 5.356 62.164 3.141 8.490 53.143 6 1.480 4.001 66.165 1.480 4.001 66.165 3.022 8.168 61.311 7 1.053 2.847 69.012 1.053 2.847 69.012 2.849 7.701 69.012

Extraction Method: Principal Component Analysis.

After two steps for individual and scale and all scales together, nine constructions consist of 37 items were retained. In conclusion, unidimensionality, reliability, convergent validity, and

discriminant validity of the nine scales of factors have been assessed by the data set. The 37 items for the nine scales are accepted for further analysis.

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Table 4.10 Result of joint factor analysis for 7 scales

Component 1 2 3 4 5 6 7 I am optimistic about the future of the company.

.821 I am optimistic about my future success with the company

.834 The company is a leader in the industry in important ways

.823 The company is a strong competitor in key growth areas.

.766 I am confident that I will be able to work for this company as long as I do a good job. .749 My job is a secure one.

.827

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